Document:

<PAGE>
                                                                    Exhibit 10.3

                                                                  EXECUTION COPY

                                CREDIT AGREEMENT

                          Dated as of December 20, 2002

                                      among

                    ALION SCIENCE AND TECHNOLOGY CORPORATION,

                                AS THE BORROWER,

                       THE INSTITUTIONS FROM TIME TO TIME
                           PARTIES HERETO AS LENDERS,

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,

                             AS ADMINISTRATIVE AGENT

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

                        LASALLE BANK NATIONAL ASSOCIATION
                                   AS ARRANGER

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

                           SIDLEY AUSTIN BROWN & WOOD
                                 Bank One Plaza
                            10 South Dearborn Street
                             Chicago, Illinois 60603

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>
ARTICLE I:  DEFINITIONS......................................................................1
        1.1    Certain Defined Terms; Plural Terms...........................................1
        1.2    References...................................................................30
        1.3    Supplemental Disclosure......................................................30
        1.4    Knowledge With Respect to Representations and Warranties.....................31

ARTICLE II:  THE TERM LOAN AND REVOLVING LOAN FACILITIES....................................31
        2.1    Term Loans...................................................................31
        2.2    Revolving Loans..............................................................33
        2.3    Swing Line Loans.............................................................34
        2.4    Rate Options for all Advances; Maximum Interest Periods......................36
        2.5    Optional Payments; Mandatory Prepayments.....................................36
        2.6    Reduction of Commitments.....................................................38
        2.7    Method of Borrowing..........................................................38
        2.8    Method of Selecting Types and Interest Periods for Advances..................39
        2.9    Minimum Amount of Each Advance...............................................39
        2.10   Method of Selecting Types and Interest Periods for Conversion and
               Continuation of Advances.....................................................39
        2.11   Default Rate.................................................................40
        2.12   Method of Payment; Collection Account Arrangements...........................40
        2.13   Evidence of Debt.............................................................41
        2.14   Telephonic Notices...........................................................42
        2.15   Promise to Pay; Interest and Commitment Fees; Interest Payment Dates;
               Interest and Fee Basis; Taxes; Loan and Control Accounts.....................42
        2.16   Notification of Advances, Interest Rates, Prepayments and Aggregate
               Revolving Loan Commitment Reductions.........................................47
        2.17   Lending Installations........................................................48
        2.18   Non-Receipt of Funds by the Administrative Agent.............................48
        2.19   Termination Conditions.......................................................48
        2.20   Replacement of Certain Lenders...............................................48

ARTICLE III:  THE LETTER OF CREDIT FACILITY.................................................49
        3.1    Obligation to Issue Letters of Credit........................................49
        3.2    Transitional Provision.......................................................49
        3.3    Types and Amounts............................................................49
        3.4    Conditions...................................................................50
        3.5    Procedure for Issuance of Letters of Credit..................................50
        3.6    Letter of Credit Participation...............................................51
        3.7    Reimbursement Obligation.....................................................51
        3.8    Letter of Credit Fees........................................................52
        3.9    Issuing Bank Reporting Requirements..........................................52
        3.10   Indemnification; Exoneration.................................................53
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                       <C>

        3.11   Cash Collateral..............................................................54

ARTICLE IV:  CHANGE IN CIRCUMSTANCES........................................................54
        4.1    Yield Protection.............................................................54
        4.2    Changes in Capital Adequacy Regulations......................................55
        4.3    Availability of Types of Advances............................................56
        4.4    Funding Indemnification......................................................56
        4.5    Lender Statements; Survival of Indemnity.....................................56

ARTICLE V:  CONDITIONS PRECEDENT............................................................57
        5.1    Initial Advances and Letters of Credit.......................................57
        5.2    Each Advance and Letter of Credit............................................62

ARTICLE VI:  REPRESENTATIONS AND WARRANTIES.................................................62
        6.1    Organization; Powers.........................................................62
        6.2    Authority, Execution and Delivery; Transaction Documents.....................62
        6.3    No Conflict; Governmental Consents...........................................63
        6.4    Financial Statements.........................................................64
        6.5    No Material Adverse Change...................................................64
        6.6    Taxes........................................................................65
        6.7    Litigation; Loss Contingencies and Violations................................65
        6.8    Subsidiaries.................................................................66
        6.9    ERISA........................................................................68
        6.10   Accuracy of Information......................................................69
        6.11   Securities Activities........................................................70
        6.12   Material Agreements..........................................................70
        6.13   Compliance with Laws.........................................................70
        6.14   Assets and Properties........................................................70
        6.15   Statutory Indebtedness Restrictions..........................................70
        6.16   Insurance....................................................................71
        6.17   Labor Matters................................................................71
        6.18   IITRI Acquisition and ESOT Transaction.......................................71
        6.19   Environmental Matters........................................................71
        6.20   Solvency.....................................................................72
        6.21   Additional ESOP Provisions...................................................72
        6.22   Subordinated Indebtedness....................................................74
        6.23   No Exercise of Set-Off.......................................................74

ARTICLE VII:  COVENANTS.....................................................................75
        7.1    Reporting....................................................................75
        7.2    Affirmative Covenants........................................................82
        7.3    Negative Covenants...........................................................86
        7.4    Financial Covenants..........................................................98

ARTICLE VIII:  DEFAULTS....................................................................101
        8.1    Defaults....................................................................101
        8.2    Termination of Commitments; Acceleration....................................105
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                       <C>
ARTICLE IX:  AMENDMENTS, WAIVERS AND REMEDIES..............................................105
        9.1    Amendments..................................................................105
        9.2    Preservation of Rights......................................................106

ARTICLE X:  GENERAL PROVISIONS.............................................................106
        10.1   Survival of Representations.................................................106
        10.2   Governmental Regulation.....................................................107
        10.3   Performance of Obligations..................................................107
        10.4   Headings....................................................................107
        10.5   Entire Agreement............................................................107
        10.6   Several Obligations; Benefits of this Agreement.............................108
        10.7   Expenses; Indemnification...................................................108
        10.8   Numbers of Documents........................................................110
        10.9   Accounting..................................................................110
        10.10  Severability of Provisions..................................................110
        10.11  Nonliability of Lenders.....................................................110
        10.12  GOVERNING LAW...............................................................110
        10.13  CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.....................111
        10.14  Other Transactions..........................................................112
        10.15  Subordination of Intercompany Indebtedness..................................112
        10.16  Lender's Not Utilizing Plan Assets..........................................114

ARTICLE XI:  THE ADMINISTRATIVE AGENT......................................................114
        11.1   Appointment; Nature of Relationship.........................................114
        11.2   Powers......................................................................114
        11.3   General Immunity............................................................114
        11.4   No Responsibility for Loans, Creditworthiness, Recitals, Etc................115
        11.5   Action on Instructions of Lenders; Actions with Respect to Defaults.........115
        11.6   Employment of Agents and Counsel............................................115
        11.7   Reliance on Documents; Counsel..............................................116
        11.8   The Administrative Agent's Reimbursement and Indemnification................116
        11.9   Rights as a Lender..........................................................116
        11.10  Lender Credit Decision......................................................116
        11.11  Successor Administrative Agent..............................................117
        11.12  Collateral Documents; Subordination Agreements; Collateral..................117
        11.13  Arranger....................................................................118

ARTICLE XII:  SETOFF; RATABLE PAYMENTS.....................................................119
        12.1   Setoff......................................................................119
        12.2   Ratable Payments............................................................119
        12.3   Application of Payments.....................................................119
        12.4   Relations Among Lenders.....................................................120

ARTICLE XIII:  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...........................121
        13.1   Successors and Assigns......................................................121
        13.2   Participations..............................................................121
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                       <C>
        13.3   Assignments.................................................................122
        13.4   Confidentiality.............................................................125
        13.5   Dissemination of Information................................................125

ARTICLE XIV:  NOTICES......................................................................125
        14.1   Giving Notice...............................................................125
        14.2   Change of Address...........................................................126

ARTICLE XV:  COUNTERPARTS..................................................................126
</TABLE>

                                       iv
<PAGE>

                             EXHIBITS AND SCHEDULES

                                    EXHIBITS

<TABLE>
<S>             <C>
EXHIBIT A       --  Commitments (Definitions)
EXHIBIT B       --  Form of Borrowing/Election Notice (Section 2.3 and Section 2.8 and Section 2.10)
EXHIBIT C       --  Form of Request for Letter of Credit (Section 3.4)
EXHIBIT D       --  Form of Assignment and Acceptance Agreement (Sections 2.20 and 13.3)
EXHIBIT E       --  Form of Borrower's Counsel's Opinion (Section 5.1)
EXHIBIT F       --  List of Closing Documents (Section 5.1)
EXHIBIT G       --  Form of Officer's Certificate (Sections 5.2 and 7.1(A)(iv))
EXHIBIT H       --  Form of Compliance Certificate (Sections 5.2 and 7.1(A)(iv))
EXHIBIT I-1     --  Form of Guaranty (Definitions)
EXHIBIT I-2     --  Form of Pledge Agreement (Borrower) (Definitions; Section 7.2(K))
EXHIBIT I-3     --  Form of Security Agreement (Definitions)
EXHIBIT J       --  Form of Borrowing Base Certificate (Definitions)
EXHIBIT K-1     --  Form of Revolving Loan Note (If Requested)
EXHIBIT K-2     --  Form of Term Loan Note (If Requested)
EXHIBIT L       --  Form of L/C Master Agreement (Definitions)
</TABLE>

                                       v
<PAGE>

                                    SCHEDULES

<TABLE>
<S>                  <C>    <C>
Schedule 1.1.1       --     Permitted Existing Indebtedness (Definitions)
Schedule 1.1.2       --     Permitted Existing Investments (Definitions)
Schedule 1.1.3       --     Permitted Existing Liens (Definitions)
Schedule 1.1.4       --     Permitted Existing Contingent Obligations (Definitions)
Schedule 1.1.5       --     ESOP Plan Documents (Definitions)
Schedule 1.1.6       --     ESOT Transaction Documents (Definitions)
Schedule 3.2         --     Transitional Letters of Credit (Section 3.2)
Schedule 6.3         --     Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4         --     Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.7         --     Disclosed Litigation (Section 6.7)
Schedule 6.8         --     Subsidiaries (Section 6.8)
Schedule 6.9         --     ERISA (Section 6.9)
Schedule 6.12        --     Material Agreements (Section 6.12)
Schedule 6.16        --     Insurance (Sections 6.16 and 7.2(E))
Schedule 6.18        --     IITRI Acquisition and ESOT Transaction Conditions (Section 6.18)
Schedule 6.19        --     Environmental Matters (Section 6.19)
</TABLE>

                                       vi
<PAGE>

                                CREDIT AGREEMENT

                This Credit Agreement dated as of December 20, 2002 is entered
into among Alion Science and Technology Corporation, a Delaware corporation, the
institutions from time to time parties hereto as Lenders, whether by execution
of this Agreement or an Assignment Agreement pursuant to Section 13.3, and
LaSalle Bank National Association, in its capacity as contractual representative
for itself and the other Lenders (the "ADMINISTRATIVE AGENT"). The parties
hereto agree as follows:

                             ARTICLE I: DEFINITIONS

                1.1 Certain Defined Terms; Plural Terms.

                (A) Certain Defined Terms. In addition to the terms defined
        above, the following terms used in this Agreement shall have the
        following meanings:

                "ACCOUNTING CHANGE" is defined in Section 10.9.

                "ACCOUNT DEBTOR" means the account debtor or obligor with
respect to any of the Receivables and/or the prospective purchaser with respect
to any contract right, and/or any party who enters into or proposes to enter
into any contract or other arrangement with the Borrower or any Guarantor.

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

                "ADMINISTRATIVE AGENT" means LaSalle in its capacity as
contractual representative for itself and the Lenders pursuant to Article XI
hereof and any successor Administrative Agent appointed pursuant to Article XI
hereof.

                "ADVANCE" means a borrowing hereunder consisting of the
aggregate amount of the several Loans made by some or all of the Lenders to the
Borrower of the same Type and, in the case of Eurodollar Rate Advances, for the
same Interest Period.

                "AFFECTED LENDER" is defined in Section 2.20.

                "AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if the
controlling Person is the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of greater than fifty percent (50%) or more of
the Voting Stock of the controlled Person or possesses, directly or indirectly,

<PAGE>

the power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of Capital Stock, by contract or
otherwise.

                "AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as may be adjusted from time to
time pursuant to the terms hereof. The initial Aggregate Revolving Loan
Commitment is Twenty-Five Million and 00/100 Dollars ($25,000,000).

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

                "AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted
accounting principles as in effect in the United States from time to time,
applied in a manner consistent with that used in preparing the financial
statements of the Borrower referred to in Section 5.1(B)(xix)(c), as the same
may be adjusted from time to time in accordance with the provisions of Section
10.9.

                "ALTERNATE BASE RATE" means, for any day, a fluctuating rate of
interest per annum equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.

                "APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under Section 2.15(C)(i) hereof determined in accordance with the
provisions of Section 2.15(D)(ii) hereof.

                "APPLICABLE EURODOLLAR MARGINS" means, as at any date of
determination, the rate per annum then applicable to Eurodollar Rate Loans which
are Revolving Loans or Term Loans, as applicable, determined in accordance with
the provisions of Section 2.15(D)(ii) hereof.

                "APPLICABLE FLOATING RATE MARGINS" means, as at any date of
determination, the rate per annum then applicable to Floating Rate Loans which
are Revolving Loans or Term Loans, as applicable, determined in accordance with
the provisions of Section 2.15(D)(ii) hereof.

                "APPLICABLE L/C FEE PERCENTAGE" means, as at any date of
determination, a rate per annum equal to the Applicable Eurodollar Margin in
effect on such date.

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

                "ARRANGER" means LaSalle Bank National Association, in its
capacity as arranger.

                "ASSET PURCHASE AGREEMENT" means that certain Fourth Amended and
Restated Asset Purchase Agreement, dated as of November 18, 2002, with effect as
of June 4, 2002, by

                                       2
<PAGE>

and between the Borrower, as the purchaser, and IITRI, as the seller, as in
effect on the Closing Date and without giving effect to any subsequent amendment
or modification thereto.

                "ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction, and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person,
but not the Equity Interests of such Person) to any Person (other than the
Borrower or any of its wholly-owned Subsidiaries) other than (i) the licensing
of the Borrower's and its Subsidiaries' intellectual property in the ordinary
course of business and (ii) the sale of products manufactured by or on behalf of
the Borrower and its Subsidiaries in the ordinary course of business.

                "ASSIGNMENT AGREEMENT" means an assignment and acceptance
agreement entered into in connection with an assignment pursuant to Section 13.3
hereof in substantially the form of Exhibit D.

                "AUTHORIZED OFFICER" means any of the president, chief financial
officer, controller, treasurer or assistant treasurer of the Borrower, acting
singly.

                "BENEFIT PLAN" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) which is intended to be
qualified under Section 401(a) of the Code in respect of which the Borrower or
any other member of the Controlled Group is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA.

                "BORROWER" means Alion Science and Technology Corporation, a
Delaware corporation, together with its permitted successors and assigns,
including a debtor-in-possession on behalf of Alion Science and Technology
Corporation.

                "BORROWER PLEDGE AGREEMENT" means that certain Pledge Agreement
of even date herewith executed by the Borrower in favor of the Administrative
Agent for the benefit of the Holders of Secured Obligations, as amended,
restated or otherwise modified from time to time, pledging 100% of the Capital
Stock of each Subsidiary, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

                "BORROWING BASE (MONTHLY)" means, as of any date of calculation,
an amount, as set forth on the most current Borrowing Base Certificate delivered
to the Administrative Agent, equal to the sum of (i) eighty-five percent (85%)
of the Net Amount of Eligible Receivables that are Eligible Billed Government
Accounts Receivable as of such date, plus (ii) eighty percent (80%) of the Net
Amount of Eligible Receivables that are Eligible Billed Commercial Accounts
Receivable as of such date, plus (iii) fifty percent (50%) of the gross amount
of Eligible Unbilled Government Receivables as of such date, provided that
amounts under this clause (iii) shall not exceed twenty-five percent (25%) of
the Borrowing Base (Monthly) as of such date.

                "BORROWING BASE (SENIOR DEBT)" means, (i) for the fiscal year
ending September 30, 2003, an amount, as set forth on the most current Borrowing
Base Certificate delivered to the Administrative Agent, equal to the sum of (a)
ninety percent (90%) of all billed Receivables from any Account Debtor (other
than the Borrower, any Guarantor or an Affiliate of the

                                       3
<PAGE>

Borrower or any Guarantor) ("TOTAL BILLED RECEIVABLES") which are outstanding
less than one hundred twenty-one (121) days from the date of original invoice as
of such date, plus (b) sixty percent (60%) of Total Billed Receivables which are
outstanding one hundred twenty-one (121) days or more from the date of original
invoice, plus (c) seventy-five percent (75%) of all unbilled Receivables which
may in accordance with Agreement Accounting Principles be included as current
assets of the Borrower or any of its Subsidiaries notwithstanding that such
amounts have not yet been billed, plus (d) fifty percent (50%) of net property,
plants and equipment of the Borrower and its consolidated Subsidiaries as of
such date determined in accordance with Agreement Accounting Principles, (ii)
for the fiscal periods ending December 19, 2003, March 12, 2004, July 2, 2004,
September 30, 2004, an amount, as set forth on the most current Borrowing Base
Certificate delivered to the Administrative Agent, equal to the sum of (a)
ninety percent (90%) of the Net Amount of Eligible Receivables that are Eligible
Billed Government Accounts Receivable as of such date, plus (b) eighty-five
percent (85%) of the Net Amount of Eligible Receivables that are Eligible Billed
Commercial Accounts Receivable as of such date, plus (c) sixty-five percent
(65%) of the gross amount of Eligible Unbilled Government Receivables as of such
date, and (iii) as of any date of determination thereafter, the Borrowing Base
(Monthly).

                "BORROWING BASE CERTIFICATE" means a certificate, in
substantially the form of Exhibit J attached hereto and made a part hereof,
setting forth the Borrowing Base (Monthly) and, with respect to the Borrowing
Base Certificate delivered for the periods ending September 30, 2003, December
19, 2003, March 12, 2004, July 2, 2004, September 30, 2004 and each four-week
period thereafter, the Borrowing Base (Senior Debt), and in each case the
component calculations thereof.

                "BORROWING DATE" means a date on which an Advance or Swing Line
Loan is made hereunder.

               "BORROWING/ELECTION NOTICE" is defined in Section 2.8.

                "BORROWING REPRESENTATIVE" means any Authorized Officer or any
duly authorized employee of the Borrower; provided that the Administrative Agent
shall have received a manually signed certificate of the Secretary of the
Borrower as to the incumbency of, and bearing a specimen signature of, such duly
authorized person or employee.

                "BUSINESS DAY" means (i) with respect to any borrowing, payment
or rate selection of Loans bearing interest at the Eurodollar Rate, a day (other
than a Saturday or Sunday) on which banks are open for business in Chicago,
Illinois and on which dealings in Dollars are carried on in the London interbank
market and (ii) for all other purposes a day (other than a Saturday or Sunday)
on which banks are open for business in Chicago, Illinois.

                "CAPITAL EXPENDITURES" means, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Lease Obligations and Permitted Purchase Money Indebtedness) by the
Borrower and its consolidated Subsidiaries during that period that, in
conformity with Agreement Accounting Principles, are required to be included in
or reflected by the property, plant, equipment or similar fixed asset accounts
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries.

                                       4
<PAGE>

                "CAPITALIZED LEASE" means, with respect to any Person, any lease
of property by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement Accounting
Principles.

                "CAPITALIZED LEASE OBLIGATIONS" means, with respect to any
Person, the amount of the obligations of such Person under Capitalized Leases
which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.

                "CAPITAL STOCK" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) 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.

                "CASH EQUIVALENTS" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States government and backed
by the full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies, the long-term
indebtedness of which institution at the time of acquisition is rated A- (or
better) by S&P or A3 (or better) by Moody's, and which certificates of deposit
and time deposits are fully protected against currency fluctuations for any such
deposits with a term of more than ninety (90) days; (iii) shares of money
market, mutual or similar funds having assets in excess of $100,000,000 and the
investments of which are limited to (a) investment grade securities (i.e.,
securities rated at least Baa by Moody's or at least BBB by S&P) and (b)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or better) by S&P or P-1 (or better) by Moody's (all such institutions being,
"QUALIFIED INSTITUTIONS"); and (iv) commercial paper of Qualified Institutions;
provided that the maturities of such Cash Equivalents shall not exceed three
hundred sixty-five (365) days from the date of acquisition thereof.

                "CASH INTEREST EXPENSE" means, for any period, the total
interest expense of the Borrower and its consolidated Subsidiaries, whether paid
or accrued (including the interest component of Capitalized Leases), but
excluding interest expense not payable in cash (including amortization of
discount and financing fees), in each case, as determined in conformity with
Agreement Accounting Principles.

                "CASH MANAGEMENT AGREEMENT" means that certain Cash Management
Agreement dated as of even date herewith, by and between the Borrower and
LaSalle, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

                "CHANGE" is defined in Section 4.2.

                "CHANGE OF CONTROL" means an event or series of events by which:

                                       5
<PAGE>

                (i) Any Person (other than IITRI (or any of its direct assignees
        or transferees) or the ESOT, together with their "affiliates" within the
        meaning of Rule 12b2 of the Commission under the Exchange Act) shall
        acquire beneficial ownership (including beneficial ownership resulting
        from the formation of a "group" within the meaning of Rule13d-5 of the
        Commission under the Exchange Act) of fifty percent (50%) or more of the
        combined voting power of the outstanding Capital Stock of the Borrower,
        ordinarily having the right to vote at any election of directors; or

                (ii) The ESOT ceases to be the "beneficial owner" (as defined in
        Rules 13d-3 and 13d-5 of the Commission under the Exchange Act),
        directly or indirectly, of more than fifty percent (50%) (on a fully
        diluted, as if converted, basis) of the combined voting power of the
        outstanding Capital Stock of the Borrower ordinarily having the right to
        vote at any election of directors; or

                (iii) the majority of the board of directors of the Borrower
        fails to consist of Continuing Directors; or

                (iv) except as expressly permitted under the terms of this
        Agreement, the Borrower consolidates with or merges into another Person
        or conveys, transfers or leases all or substantially all of its property
        to any Person in one or a series of transactions, or any Person
        consolidates with or merges into the Borrower, in either event pursuant
        to a transaction in which the outstanding Capital Stock of the Borrower
        is reclassified or changed into or exchanged for cash, securities or
        other property; or

                (v) except as otherwise expressly permitted under the terms of
        this Agreement, the Borrower shall cease to own and control, directly or
        indirectly, at least eighty percent (80%) of the economic and voting
        rights associated with all of the outstanding Capital Stock of each of
        the Borrower's Material Subsidiaries; or

                (vi) any "Change of Control" (as such term is defined in any of
        the Securities Purchase Agreements, the Seller Warrants or the Rights
        Agreement) shall have occurred.

                "CLOSING DATE" means December 20, 2002.

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

                "COLLATERAL" means all property and interests in property now
owned or hereafter acquired by the Borrower or any of its Subsidiaries in or
upon which a security interest, lien or mortgage is granted to the
Administrative Agent, for the benefit of the Holders of Secured Obligations, or
to the Administrative Agent, for the benefit of the Lenders, whether under the
Security Agreement, under any of the other Collateral Documents or under any of
the other Loan Documents.

                "COLLATERAL DOCUMENTS" means all agreements, instruments and
documents executed in connection with this Agreement, including, without
limitation, the Security

                                       6
<PAGE>

Agreement, the Pledge Agreements, the Intellectual Property Security Agreements,
the Guaranties, and all other security agreements, mortgages, loan agreements,
notes, guarantees, subordination agreements, pledges, lockbox agreements, powers
of attorney, consents, assignments, contracts, fee letters, notices, leases,
financing statements and all other written matter whether heretofore, now, or
hereafter executed by or on behalf of the Borrower or any of its Subsidiaries
and delivered to the Administrative Agent or any of the Lenders, together with
all agreements and documents referred to therein or contemplated thereby.

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

                "COMMITMENT" means, for each Lender, collectively, such Lender's
Revolving Loan Commitment and Term Loan Commitment.

                "COMMITMENT TERMINATION DATE" means the earlier of (i) the
Revolving Loan Termination Date, and (ii) the date of termination in whole of
the Aggregate Revolving Loan Commitment pursuant to Section 2.6 hereof or the
Commitments pursuant to Section 8.2 hereof.

                "CONSOLIDATED TOTAL INDEBTEDNESS" means, as of any date of
determination, the total amount of that portion of the Indebtedness of the
Borrower and its Subsidiaries which is interest bearing or with respect to which
interest expense accrues or is attributable under Agreement Accounting
Principles, including, without limitation, interest bearing accounts payable not
payable in the ordinary course of business, notes payable, Contingent
Obligations, Capitalized Lease Obligations, reimbursement obligations in respect
of commercial letters of credit, and Off-Balance Sheet Liabilities.

                "CONSTITUENT DOCUMENTS" means, as applied to any Person, the
certificate of incorporation, articles of incorporation or certificate of
formation, by-laws or operating agreement and any other applicable
organizational document of such Person.

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

                "CONTINGENT OBLIGATION" means, as applied to any Person, any
Contractual Obligation, contingent or otherwise, of that Person with respect to
any indebtedness of another or other obligation or liability of another,
including, without limitation, any such indebtedness, obligation or liability of
another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including Contractual Obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain

                                       7
<PAGE>

solvency, assets, level of income, or other financial condition, or to make
payment other than for value received. The amount of any Contingent Obligation
shall be equal to the present value of the portion of the obligation so
guaranteed or otherwise supported, in the case of known recurring obligations,
and the reasonably anticipated liability in respect of the portion of the
obligation so guaranteed or otherwise supported assuming such Person is required
to perform thereunder, in all other cases.

                "CONTINUING DIRECTOR" means, with respect to any person as of
any date of determination, any member of the board of directors of such Person
who (i) was a member of such board of directors on the Closing Date, or (ii) was
nominated for election or elected to such board of directors with the approval
of the required majority of the Continuing Directors who were members of such
board at the time of such nomination or election; provided that an individual
who is so elected or nominated in connection with a merger, consolidation,
acquisition or similar transaction shall not be a Continuing Director unless
such individual was a Continuing Director prior thereto.

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

                "CONTROLLED GROUP" means the group consisting of (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as the Borrower; (ii) a
partnership or other trade or business (whether or not incorporated) which is
under common control (within the meaning of Section 414(c) of the Code) with the
Borrower; and (iii) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as the Borrower, any corporation
described in clause (i) above or any partnership or trade or business described
in clause (ii) above.

                "CUSTOMARY PERMITTED LIENS" means:

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

                        (ii) statutory Liens of landlords and Liens of
                suppliers, mechanics, carriers, materialmen, warehousemen,
                service providers or workmen and other similar Liens imposed by
                law created in the ordinary course of business for amounts not
                yet due or which are being contested in good faith by
                appropriate proceedings properly instituted and diligently
                conducted and with respect to

                                       8
<PAGE>

                which adequate reserves or other appropriate provisions are
                being maintained in accordance with Agreement Accounting
                Principles;

                        (iii) Liens (other than Environmental Liens and Liens in
                favor of the IRS or the PBGC) incurred or deposits made in the
                ordinary course of business in connection with workers'
                compensation, unemployment insurance or other types of social
                security benefits or to secure the performance of bids, tenders,
                sales, contracts (other than for the repayment of borrowed
                money), surety, appeal and performance bonds; provided that (A)
                all such Liens do not in the aggregate materially detract from
                the value of the Borrower's or its Subsidiary's assets or
                property taken as a whole or materially impair the use thereof
                in the operation of the businesses taken as a whole, and (B) all
                Liens securing bonds to stay judgments or in connection with
                appeals that do not secure at any time an aggregate amount
                exceeding $100,000;

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

                        (v) Liens of attachment or judgment with respect to
                judgments, writs or warrants of attachment, or similar process
                against the Borrower or any of its Subsidiaries which do not
                constitute a Default under Section 8.1(H) hereof; and

                        (vi) any interest or title of the lessor in the property
                subject to any operating lease entered into by the Borrower or
                any of its Subsidiaries in the ordinary course of business.

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

                "DESIGNATED PREPAYMENT" is defined in Section 2.5(B)(i)(e).

                "DISCLOSED LITIGATION" is defined in Section 6.7.

                "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), 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 thereof, in whole or in part, on or prior to the date
that is ninety-one (91) days after the latest of (i) the Revolving Loan
Termination Date, and (ii) the Term Loan Final Maturity Date.

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

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

                                       9
<PAGE>

                "DOMESTIC SUBSIDIARY" means a Subsidiary of the Borrower
organized under the laws of a jurisdiction located in the United States of
America.

                "EBITDAE" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, calculated in each case in accordance with Agreement Accounting
Principles, of (i) Net Income, plus (ii) Interest Expense to the extent deducted
in computing Net Income, plus (iii) charges against income for foreign, federal,
state and local taxes to the extent deducted in computing Net Income, plus (iv)
depreciation expense to the extent deducted in computing Net Income, plus (v)
amortization expense, including, without limitation, amortization of goodwill
and other intangible assets to the extent deducted in computing Net Income, plus
(vi) cash contributions to the ESOP in respect of the repurchase liability of
the Borrower under the ESOP Plan Documents to the extent deducted in computing
Net Income, plus (vii) non-cash ESOP Compensation Expense to the extent deducted
in computing Net Income, plus (viii) other extraordinary and nonrecurring
non-cash charges to the extent deducted in computing Net Income up to an amount
not to exceed $1,000,000, minus (ix) other extraordinary and nonrecurring
non-cash credits to the extent added in computing Net Income up to an amount not
to exceed $1,000,000, plus (x) non-cash charges classified as minority interest
to the extent deducted in computing Net Income, plus (xi) other nonrecurring
adjustments and charges to the extent deducted in computing Net Income for
periods prior to the Closing Date, plus (xii) non-cash expenses associated with
the recognition of the difference between the fair market value of the Seller
Warrants and the exercise price of the Seller Warrants to the extent deducted in
computing Net Income, plus (xiii) non-cash Management Compensation Expense to
the extent deducted in computing Net Income.

                "ELIGIBLE BILLED GOVERNMENT ACCOUNTS RECEIVABLE" means all
Receivables arising from Government Contracts, or written contracts as a first-
or second-tier subcontractor to a Government Contract, which (i) are outstanding
less than one hundred twenty-one (121) days from the date of original invoice;
(ii) represent amounts due and owing for products actually delivered or services
actually performed or rendered by or on behalf of, or contractually billable
amounts due to, the Borrower or any Guarantor pursuant to a Government Contract;
(iii) have been properly billed; (iv) arise in the ordinary course of the
Borrower's or any Guarantor's business; (v) are due, owing and not subject to
any defense, set-off or counterclaim; and (vi) are not otherwise Ineligible
Receivables.

                "ELIGIBLE BILLED COMMERCIAL ACCOUNTS RECEIVABLE" means all
domestic Receivables (other than Receivables arising from Government Contracts)
from any Account Debtor (other than the Borrower, any Guarantor or an Affiliate
of the Borrower or any Guarantor) which (i) are outstanding less than ninety-one
(91) days from the date of original invoice; (ii) represent amounts due and
owing for products actually delivered or services actually performed or rendered
by or on behalf of, or contractually billable amounts due to, the Borrower or
any Guarantor to or for the benefit of any Account Debtor (other than the
Borrower, any Guarantor or an Affiliate of the Borrower or any Guarantor, or any
Governmental Authority); (iii) have been properly billed; (iv) arise in the
ordinary course of the Borrower's or any Guarantor's business; (v) are due,
owing and not subject to any defense, set-off or counterclaim; and (vi) are not
otherwise Ineligible Receivables.

                                       10
<PAGE>

                "ELIGIBLE UNBILLED GOVERNMENT RECEIVABLES" means all costs
actually incurred and arising out of work actually performed by the Borrower or
any Guarantor under Government Contracts which (i) are properly billable to the
Government in accordance with the applicable Government Contract within thirty
(30) days of the certification date of the related Borrowing Base Certificate;
(ii) may, in accordance with the Agreement Accounting Principles, be included as
current assets of the Borrower or any Guarantor, even though such amounts have
not been billed to the applicable Governmental Authority; (iii) satisfy all
requirements of the definition of "Eligible Billed Government Receivables" other
than clause (iii) thereof (and are therefore not yet due and payable); and (iv)
are not (a) cost or profit retentions, (b) variances from approved government
reimbursement rates, (c) final invoices or (d) would, if billed, be deemed
Ineligible Receivables.

                "ELIGIBLE DESIGNEE" means a special purpose corporation,
partnership, limited partnership or limited liability company that is
administered by a Lender or an Affiliate of a Lender and (i) is organized under
the laws of the United States of America or any state thereof, (ii) is engaged
primarily in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business and (iii) issues (or the parent of which
issues) commercial paper rated at least A-1 or the equivalent thereof by S&P or
the equivalent thereof by Moody's.

                "ELIGIBLE RECEIVABLES" means, as applicable, Eligible Billed
Government Accounts Receivable and Eligible Billed Commercial Accounts
Receivable, which Receivables are and at all times shall continue to meet
standards of eligibility hereunder.

                "ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to foreign, federal, state and
local laws, statutes, codes, ordinances, rules, regulations, permits, orders or
determinations (including administrative orders and consent decrees) of any
Governmental Authority regulating, relating to or addressing pollution or
protection of the environment, or protection of worker health or safety,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Occupational
Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq., and the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., in each
case including any amendments thereto, any successor statutes, and any
regulations or guidance promulgated thereunder, and any state or local
equivalent thereof.

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

                "ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable
requirement of law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the closure of any property or the
transfer, sale or lease of any property or deed or title for any property for
environmental reasons, including, but not limited to, any so-called "Industrial
Site Recovery Act" or "Responsible Property Transfer Act."

                "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

                                       11
<PAGE>

exchangeable for, Capital Stock). Equity Interests will not include any
Incentive Arrangements or obligations or payments thereunder.

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

                "ESOP" means the employee benefit plan titled "The Alion Science
and Technology Corporation Employee Ownership, Savings and Investment Plan" and
adopted and maintained by the Borrower pursuant to the applicable ESOP Plan
Documents.

                "ESOP COMPENSATION EXPENSE" means, for any period, expenses
charged with respect to the ESOP to Net Income for such period in accordance
with Agreement Accounting Principles.

                "ESOP FIDUCIARY" means the named fiduciary under ERISA of the
ESOP. As of the Closing Date, the ESOP Fiduciary is the ESOP Committee of the
Borrower.

                "ESOP PLAN DOCUMENTS" means, collectively, the documents
identified in Schedule 1.1.5 to this Agreement, each as may be amended,
supplemented or modified as provided herein.

                "ESOT" means the trust titled "The Alion Science and Technology
Corporation Employee Ownership, Savings and Investment Trust" and adopted and
maintained by the Borrower pursuant to the applicable ESOP Plan Documents.

                "ESOT STOCK" means all Capital Stock of the Borrower held by the
ESOT other than Capital Stock of the Borrower which has been allocated to the
accounts of participants in the ESOP pursuant to the ESOP Plan Documents.

                "ESOT STOCK PURCHASE AGREEMENT" means that certain Stock
Purchase Agreement dated as of December 20, 2002, by and between the Borrower
and the ESOT Trustee, as in effect on the Closing Date.

                "ESOT TRANSACTION" means the series of transactions contemplated
by and described in the ESOT Transaction Documents, including but not limited to
the ESOT's purchase of up to 100% of the Capital Stock of the Borrower pursuant
to the ESOT Stock Purchase Agreement.

                "ESOT TRANSACTION DOCUMENTS" means, collectively, the ESOT Stock
Purchase Agreement and the other documents identified on Schedule 1.1.6 to this
Agreement, as each may be amended, supplemented or modified as provided herein.

                "ESOT TRUSTEE" means the trustee of the ESOT. As of the Closing
Date the ESOT Trustee is State Street Bank and Trust Company.

                "EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate
Loan for the relevant Interest Period, a rate of interest equal to the per annum
rate of interest at which United

                                       12
<PAGE>

States dollar deposits in an amount comparable to the principal balance of such
Eurodollar Rate Loan and for a period equal to the relevant Interest Period are
offered in the London Interbank Eurodollar market at 11:00 a.m. (London time)
two (2) Business Days prior to the commencement of such Interest Period, as
displayed in Bloomberg Financial Markets system, or other authoritative source
selected by the Administrative Agent in its sole discretion, divided by a number
determined by subtracting from 1.00 the maximum reserve percentage for
determining reserves to be maintained by member banks of the Federal Reserve
System for Eurocurrency liabilities, such rate to remain fixed for such Interest
Period. The Administrative Agent's determination of the Eurodollar Base Rate
shall be conclusive, absent manifest error.

                "EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan
for the relevant Interest Period, the Eurodollar Base Rate applicable to such
Interest Period plus the then Applicable Eurodollar Margin, changing as and when
the Applicable Eurodollar Margin changes.

                "EURODOLLAR RATE ADVANCE" means an Advance, the several Loans in
respect of which bear interest at the Eurodollar Rate.

                "EURODOLLAR RATE LOAN" means a Loan made on a fully syndicated
basis pursuant to Section 2.2, which bears interest at the Eurodollar Rate.

                "EXCESS CASH FLOW" means, without duplication, an amount, for
the Borrower and its consolidated Subsidiaries, equal to:

                                (i) EBITDAE for such period,

                minus           (ii) Cash Interest Expense for such period,

                minus           (iii) charges against income for foreign,
federal, state and local taxes paid in cash for such period,

                minus           (iv) scheduled amortization of the principal
portion of the Term Loans, prepayments of the Term Loans and scheduled
amortization of the principal portion of all other Indebtedness of the Borrower
and its Subsidiaries during such period;

                minus           (v) permitted cash Capital Expenditures paid
during such period, commencing with the fiscal year ending September 30, 2002,

                minus           (vi) the net repurchase liability of the
Borrower under the ESOP Plan Documents;

                minus           (vii) the Purchase Price of all Permitted
Acquisitions paid in cash during such period;

                plus (minus)    (viii) reductions (additions) to Working Capital
for such fiscal year exclusive of any change to Working Capital attributable to
assets acquired in any Acquisition as determined by the Administrative Agent in
its reasonable judgment,

                                       13
<PAGE>

                in each case as calculated in accordance with Agreement
Accounting Principles. All such amounts shall be calculated assuming that the
Borrower and its Subsidiaries have conducted their business in the ordinary
course and in accordance with past practices.

                "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                "EXISTING CREDIT AGREEMENT" means that certain Business Loan and
Security Agreement, dated as of December 22, 1999, by and among IITRI, Human
Factors Applications, Inc., and the other borrower parties from time to time
parties thereto, and First Union National Bank, as the lender, as amended,
restated, supplemented or otherwise modified as of the Closing Date.

                "FACILITY TERMINATION DATE" means the date on which all of the
Termination Conditions have been satisfied.

                "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10:00 a.m.
(Chicago, Illinois time) on such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent in its sole discretion.

                "FINANCING" means, with respect to any Person, the issuance or
sale by such Person of any Disqualified Stock, Equity Interests of such Person
or any Indebtedness consisting of debt securities of such Person.

                "FIRREA" means the Financial Institutions Reform, Recovery, and
Enforcement Act of 1983, as amended, modified or supplemented from time to time.

                "FIXED CHARGE COVERAGE RATIO" is defined in Section 7.4(C).

                "FLOATING RATE" means, for any day for any Loan, a rate per
annum equal to the Alternate Base Rate for such day, changing when and as the
Alternate Base Rate changes, plus the then Applicable Floating Rate Margin.

                "FLOATING RATE ADVANCE" means an Advance, the several Loans in
respect of which bear interest at the Floating Rate.

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

                "FOREIGN SUBSIDIARY" means a Subsidiary of the Borrower which is
not a Domestic Subsidiary.

                "GOVERNMENTAL ACTS" is defined in Section 3.10(A).

                                       14
<PAGE>

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

                "GOVERNMENT CONTRACT" means any written prime contracts of the
Borrower or any Guarantor with a Governmental Authority.

                "GROSS NEGLIGENCE" means recklessness, or actions taken or
omitted with conscious indifference to or the complete disregard of consequences
or rights of others affected. Gross Negligence does not mean the absence of
ordinary care or diligence, or an inadvertent act or inadvertent failure to act.
If the term "gross negligence" is used with respect to the Administrative Agent
or any Lender or any indemnitee in any of the other Loan Documents, it shall
have the meaning set forth herein.

                "GUARANTOR(s)" means (i) each of the Borrower's Material
Subsidiaries; and (ii) all other Material Subsidiaries which become Guarantors
in satisfaction of the provisions of Section 7.2(K), in each case, and together
with their respective successors and assigns.

                "GUARANTY" means each of that certain Guaranty (and any and all
supplements thereto) executed from time to time by each Guarantor in favor of
the Administrative Agent for the benefit of itself and the Holders of Secured
Obligations, in substantially the form of Exhibit I-1 attached hereto, as
amended, restated, supplemented or otherwise modified from time to time.

                "HEDGING AGREEMENTS" is defined in Section 7.3(P).

                "HEDGING ARRANGEMENTS" is defined in the definition of Hedging
Obligations below.

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

                "HOLDERS OF SECURED OBLIGATIONS" means the holders of the
Secured Obligations from time to time and shall include (i) each Lender in
respect of its Loans, (ii) each Issuing Bank in respect of Reimbursement
Obligations owed to it, (iii) the Administrative Agent, the Lenders and the
Issuing Banks in respect of all other present and future obligations and
liabilities of the Borrower or any of its Subsidiaries of every type and
description arising under or in connection with this Agreement or any other Loan
Document, (iv) each Indemnitee in respect of the

                                       15
<PAGE>

obligations and liabilities of the Borrower or any of its Subsidiaries to such
Person hereunder or under the other Loan Documents, (v) each Lender (or
affiliate thereof), in respect of all Hedging Obligations of the Borrower and
its Subsidiaries to such Lender (or such affiliate) as exchange party or
counterparty under any Hedging Agreements, and (vi) their respective successors,
transferees and assigns.

                "IITRI" means IIT Research Institute, a not-for-profit Illinois
corporation ("IITRI") controlled by the Illinois Institute of Technology, a
not-for-profit Illinois corporation ("IIT").

                "IITRI ACQUISITION" means the purchase by the Borrower of the
"Transferred Assets" and "Transferred Business" of IITRI pursuant to the terms
and conditions set forth in the Asset Purchase Agreement as in effect on the
Closing Date and without giving effect to any subsequent amendment or
modification thereto.

                "INCENTIVE ARRANGEMENTS" means any stock ownership, restricted
stock, warrants, stock option, or stock appreciation rights plans, "phantom"
stock plans, deferred compensation arrangements, employment agreements,
non-competition agreements, subscription and stockholders agreements and other
incentive and bonus plans and similar arrangements made in connection with the
retention of directors, executives, officers or employees of the Borrower and
its Subsidiaries.

                "INDEBTEDNESS" means, with respect to any Person, without
duplication, such Person's (i) obligations for borrowed money, including,
without limitation, subordinated indebtedness, (ii) obligations representing the
deferred purchase price of property or services rendered, including, without
limitation earn-outs and other similar forms of contingent purchase prices (but
excluding accounts payable arising in the ordinary course of such Person's
business payable on terms customary in the trade), (iii) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production from
property or assets now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, other instruments,
letters of credit or letter of credit reimbursement arrangements, (v)
Capitalized Lease Obligations, (vi) Contingent Obligations, (vii) obligations
with respect to letters of credit, (viii) the Net Mark-To-Market Exposure under
all Hedging Arrangements, (ix) Off-Balance Sheet Liabilities, and (x)
Disqualified Stock. The amount of Indebtedness of any Person at any date shall
be, without duplication, (a) the outstanding balance at such date of all
unconditional obligations as described above and the reasonably anticipated
liability of any such Contingent Obligations at such date and (b) in the case of
Indebtedness of others secured by a Lien to which the property or assets owned
or held by such Person is subject, the lesser of the fair market value at such
date of any asset subject to a Lien securing the Indebtedness of others and the
amount of the Indebtedness secured.

                "INDEMNIFIED MATTERS" is defined in Section 10.7(B).

                "INDEMNITEES" is defined in Section 10.7(B).

                "INELIGIBLE RECEIVABLES" means Receivables which are (i)
evidenced by a promissory note or similar instrument; (ii) owed or payable by an
Account Debtor pursuant to a

                                       16
<PAGE>

Commercial Contract, if such Account Debtor is more than ninety (90) days past
due from the date of original invoice in the payment of fifty percent (50%) or
more of the aggregate balance due from such Account Debtor to the Borrower or
any Guarantor, as applicable; (iii) owed or payable by an Account Debtor
pursuant to a Government Contract, if such Account Debtor is more than one
hundred twenty (120) days past due from the date of original invoice in the
payment of fifty percent (50%) or more of the aggregate balance due under such
Government Contract; (iv) owing from any person that is the subject of any (a)
suit, lien, levy or judgment which could reasonably be expected to affect the
collectibility of said account(s), or (b) bankruptcy, insolvency or a similar
process or proceeding; (v) owing from foreign Account Debtors; (vi) unbilled as
a result of rate variances or retainage provisions; (vii) bonded Receivables;
(viii) final invoices more than ninety (90) days past due; (ix) not subject to a
valid and enforceable first-priority, perfected security interest in favor of
the Administrative Agent; (x) subject to any other lien or other encumbrance;
(xi) consigned or otherwise assigned to any other Person for collection or
otherwise; (xii) arising under a Government Contract that expressly prohibits
assignment of claims under the Assignment of Claims Act of 1940, as amended.

                "INTELLECTUAL PROPERTY SECURITY AGREEMENTS" means each
trademark, patent, copyright or other intellectual property security agreement
executed from time to time by the Borrower or any of the Subsidiaries of the
Borrower in favor of the Administrative Agent for the benefit of the Holders of
Secured Obligations in satisfaction of the provisions of Section 7.2(L), in each
case as amended, restated, supplemented or otherwise modified from time to time.

                "INTEREST EXPENSE" means, for any period, the total interest
expense of the Borrower and its consolidated Subsidiaries, whether paid or
accrued (including the interest component of Capitalized Leases, commitment and
letter of credit fees and the discount or implied interest component (or other
fees or charges in securitization transactions) of Off-Balance Sheet
Liabilities), and net payments (if any) pursuant to Hedging Arrangements
relating to interest rate protection, all as determined in conformity with
Agreement Accounting Principles.

                "INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan,
a period of one (1), two (2), three (3) months or six (6) months commencing on a
Business Day selected by the Borrower on which a Eurodollar Rate Advance is made
to the Borrower pursuant to this Agreement; provided, however, notwithstanding
anything in this Agreement to the contrary for the period from the Closing Date
to the earlier of (y) the date that is 60 days after the Closing Date and (z)
the date upon which the Arranger confirms that the loan syndication process has
been complete (the "SYNDICATION PERIOD"), "Interest Period" means, with respect
to a Eurodollar Rate Advance, a period of not more than fourteen (14) days
selected by the Borrower. Other than during the Syndication Period, such
Interest Period shall end on (but exclude) the day which corresponds numerically
to such date one, two, three or six months thereafter; provided, however, that
if there is no such numerically corresponding day in such next, second, third or
sixth succeeding month, such Interest Period shall end on the last Business Day
of such next, second, third or sixth succeeding month. If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided, however, that if said
next succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.

                                       17
<PAGE>

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

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

                "ISSUING BANKS" means LaSalle or any of the other Lenders, or
any of their respective Affiliates in its separate capacity as an issuer of
Letters of Credit pursuant to Section 3.1. The designation of any Lender as an
Issuing Bank after the date hereof shall be subject to the prior written consent
of the Administrative Agent.

                "JUNIOR SUBORDINATED NOTES" means those certain notes due 2010,
issued by the Borrower to IITRI in the aggregate principal amount of $39,900,000
pursuant to the Junior Subordinated Securities Purchase Agreement, as amended,
supplemented or modified in accordance with Section 7.3(BB) hereof.

                "JUNIOR SUBORDINATED SECURITIES PURCHASE AGREEMENT" means that
certain Seller Note Securities Purchase Agreement by and between the Borrower
and IITRI of even date herewith, as in effect on the date hereof and as the same
may be amended, supplemented, and modified in accordance with Section 7.3(BB)
hereof.

                "LASALLE" means LaSalle Bank National Association, in its
individual capacity, and its successors.

                "L/C DOCUMENTS" is defined in Section 3.4.

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

                "L/C INTEREST" is defined in Section 3.6.

                "L/C MASTER AGREEMENT (LASALLE)" means that certain Master
Letter of Credit Agreement, dated as of even date herewith, by and between the
Borrower and LaSalle, in its capacity as an Issuing Bank, in substantially the
form of Exhibit L hereto, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

                "L/C OBLIGATIONS" means, without duplication, an amount equal to
the sum of (i) the aggregate of the amount then available for drawing under each
of the Letters of Credit, (ii) the amount equal to the stated amount of all
outstanding L/C Drafts corresponding to the Letters of Credit, which L/C Drafts
have been accepted by the applicable Issuing Bank, (iii) the

                                       18
<PAGE>

aggregate outstanding amount of all Reimbursement Obligations at such time and
(iv) the aggregate amount equal to the stated amount of all Letters of Credit
requested by the Borrower but not yet issued (unless the request for an unissued
Letter of Credit has been denied).

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

                "LENDING INSTALLATION" means, with respect to a Lender or the
Administrative Agent, any office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent selected by such Lender or the Administrative Agent
pursuant to Section 2.17.

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

                "LEVERAGE RATIO" is defined in Section 7.4(B).

                "LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).

                "LOAN(s)" means, with respect to a Lender, such Lender's portion
of any Advance made pursuant to Section 2.1 or Section 2.2 hereof, and in the
case of the Swing Line Bank, any Swing Line Loan made pursuant to Section 2.3
hereof, and collectively, all Term Loans, Revolving Loans and Swing Line Loans,
whether made or continued as or converted to Floating Rate Loans or Eurodollar
Rate Loans.

                "LOAN ACCOUNT" is defined in Section 2.13(A).

                "LOAN DOCUMENTS" means this Agreement, the Guaranty, the L/C
Master Agreement, the Cash Management Agreement, the Collateral Documents, and
all other documents, instruments, notes and agreements executed in connection
therewith or contemplated thereby, as the same may be amended, restated or
otherwise modified and in effect from time to time.

                "LOAN PARTIES" is defined in Section 5.1(B)(i).

                "MANAGEMENT COMPENSATION EXPENSES" means, for any period,
expenses charged to Net Income for such period with respect to stock
appreciation rights plans, "phantom" stock plans, the Junior Subordinated Notes
and accretion of the Seller Warrants, in each case in connection with the
retention of directors, executives, officers or employees of the Borrower and
its Subsidiaries, in accordance with Agreement Accounting Principles.

                "MARGIN STOCK" shall have the meaning ascribed to such term in
Regulation U.

                                       19
<PAGE>

                "MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(i) the business, assets, condition (financial or otherwise), operations,
performance, properties, results of operations or prospects of the Borrower, any
Guarantor, or the Borrower and its Subsidiaries in each case taken as a whole,
(ii) the ability of the Borrower, any Guarantor or the Borrower and its
Subsidiaries to perform their respective obligations under the Loan Documents,
(iii) the ability of the Lenders or the Administrative Agent to enforce the
Obligations, (iv) the validity or enforceability of this Agreement, the Loan
Documents to which the Borrower or any Guarantor is a party, or the rights or
remedies of the Administrative Agent and Lenders hereunder and thereunder, (v)
the value of a Substantial Portion of the Collateral, or (vi) the perfection or
priority of the Administrative Agent's Liens with respect to a Substantial
Portion of the Collateral.

                "MATERIAL SUBSIDIARY" shall mean, in respect of the Borrower,
any Subsidiary that (i) has total assets (determined as of the last day of the
most recently completed fiscal quarter in accordance with Agreement Accounting
Principles) which constitute ten percent (10%) or more of the total assets of
the Borrower and its consolidated Subsidiaries as of such date of determination,
or (ii) has revenue (determined as of the last day of the most recently
completed fiscal quarter for the four-quarter period then ending in accordance
with Agreement Accounting Principles) which constitutes five percent (5%) or
more of the revenue of the Borrower and its consolidated Subsidiaries for such
period, or (iii) has EBITDAE (determined as of the last day of the most recently
completed fiscal quarter for the four-quarter period then ending in accordance
with Agreement Accounting Principles) which constitutes five percent (5%) or
more of the EBITDAE of the Borrower and its consolidated Subsidiaries for such
period; provided that if (a) a Material Subsidiary no longer satisfies any
condition set forth above and (b) the Board of Directors of the Borrower
determines that such Subsidiary is not material to the consolidated financial
condition or operations of the Borrower and its Subsidiaries and the
Administrative Agent shall have received written notice of such determination
from the Borrower, and (c) no Default shall be continuing, then for so long as
such Subsidiary satisfies none of the conditions in clauses (i) through (iii)
above, such Subsidiary shall not be a Material Subsidiary.

                "MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular time,
the lesser of (i) the Aggregate Revolving Loan Commitment at such time and (ii)
the Borrowing Base (Monthly) at such time.

                "MOODY'S" means Moody's Investors Service, Inc.

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

                "NET AMOUNT OF ELIGIBLE RECEIVABLES" means the outstanding face
amount of Eligible Receivables of the Borrower and the Guarantors, determined in
accordance with Agreement Accounting Principles, consistently applied, less (i)
all finance charges, late fees and other fees that are unearned in respect of
such Eligible Receivables and (ii) the value of any accrual which has been
recorded by the Borrower or any Guarantor with respect to downward price
adjustments in respect of such Eligible Receivables.

                                       20
<PAGE>

                "NET CASH PROCEEDS" means, with respect to any Asset Sale or
Financing by any Person, cash or Cash Equivalents (freely convertible into
Dollars) received by such Person or any Subsidiary of such Person from such
Asset Sale (including cash received as consideration for the assumption or
incurrence of liabilities incurred in connection with or in anticipation of such
Asset Sale) or Financing, after (i) provision for all income or other taxes
measured by or resulting from such Asset Sale or Financing, (ii) payment of all
brokerage commissions and other fees and expenses and commissions related to
such Asset Sale or Financing, and (iii) deduction of all amounts used to repay
Indebtedness (and any premium or penalty thereon) secured by a Lien on any asset
disposed of in such Asset Sale or which is or may be required (by the express
terms of the instrument governing such Indebtedness or by applicable law) to be
repaid in connection with such Asset Sale (including payments made to obtain or
avoid the need for the consent of any holder of such Indebtedness).

                "NET INCOME" means, for any period, an amount equal to the net
earnings (or loss) after taxes of the Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with Agreement Accounting Principles.

                "NET MARK-TO-MARKET EXPOSURE" of a Person means, as of any date
of determination, the excess (if any) of all unrealized losses over all
unrealized profits of such Person arising from Hedging Arrangements. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Hedging Arrangement as of the date of determination (assuming the Hedging
Arrangement to be terminated as of that date), and "unrealized profits" means
the fair market value of the gain to such Person of replacing such Hedging
Arrangement as of the date of determination (assuming such Hedging Arrangement
were to be terminated as of that date).

                "NON-ERISA COMMITMENTS" means

                        (i) each pension, medical, dental, life, accident
                insurance, disability, group insurance, sick leave, profit
                sharing, deferred compensation, bonus, stock option, stock
                purchase, retirement, savings, severance, stock ownership,
                performance, incentive, hospitalization or other insurance, or
                other welfare, benefit or fringe benefit plan, policy or trust;
                and

                        (ii) each employee collective bargaining agreement and
                each agreement, understanding or arrangement of any kind, with
                or for the benefit of any present or prior officer, director or
                employee (including, without limitation, each employment,
                compensation, deferred compensation or severance or arrangement
                and any agreement or arrangement associated with a change in
                control of the Borrower or any member of the Controlled Group);

                to which the Borrower or any member of the Controlled Group is a
party or with respect to which the Borrower or any member of the Controlled
Group is or will be required to make any payment, other than any Plans.

                "NOTICE OF ASSIGNMENT" is defined in Section 13.3(B).

                                       21
<PAGE>

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

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

                "OTHER TAXES" is defined in Section 2.15(E)(ii).

                "PARTICIPANTS" is defined in Section 13.2(A).

                "PAYMENT DATE" means each of (i) the last Business Day of each
fiscal quarter of the Borrower, (ii) the Commitment Termination Date and (iii)
the Facility Termination Date.

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

                "PERMITTED ACQUISITION" is defined in Section 7.3(G).

                "PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
Obligations of the Borrower and its Subsidiaries identified as such on Schedule
1.1.4 to this Agreement.

                "PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.1 to this
Agreement.

                "PERMITTED EXISTING INVESTMENTS" means the Investments of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.2 to this
Agreement.

                                       22
<PAGE>

                "PERMITTED EXISTING LIENS" means the Liens on assets of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.3 to this
Agreement.

                "PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in Section
7.3(A)(vii).

                "PERMITTED REFINANCING INDEBTEDNESS" means any replacement,
renewal, refinancing or extension of any Indebtedness permitted under Section
7.3(A)(ii) that (i) does not exceed the aggregate principal amount (plus accrued
interest and any applicable premium and associated fees and expenses) of the
Indebtedness being replaced, renewed, refinanced or extended, (ii) does not have
a Weighted Average Life to Maturity at the time of such replacement, renewal,
refinancing or extension that is less than the Weighted Average Life to Maturity
of the Indebtedness being replaced, renewed, refinanced or extended, (iii) does
not rank at the time of such replacement, renewal, refinancing or extension
senior to the Indebtedness being replaced, renewed, refinanced or extended, and
(iv) does not contain terms (including, without limitation, terms relating to
security, amortization, interest rate, premiums, fees, covenants, subordination,
events of default and remedies), taken as a whole, materially less favorable to
the Borrower, its Subsidiaries or the Lenders than those applicable to the
Indebtedness being replaced, renewed, refinanced or extended.

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

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

                "PLEDGE AGREEMENTS" means (i) the Borrower Pledge Agreement, and
(ii) one or more Pledge Agreements substantially in the form of Exhibit I-2
hereto, duly executed and delivered by the applicable Subsidiary of the Borrower
from time to time pursuant to the terms of clause (i) of Section 7.2(K) in favor
of the Administrative Agent for the benefit of the Holders of Secured
Obligations, in each case, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

                "PRIME RATE" means the prime rate of interest announced by
LaSalle or its parent from time to time (which is not necessarily the lowest
rate charged to any customer), changing when and as said prime rate changes.

                "PRO RATA SHARE" means, with respect to any Lender, (i) at any
time prior to the Closing Date, the percentage obtained by dividing (a) such
Lender's Commitments at such time (in each case, as adjusted from time to time
in accordance with the provisions of this Agreement) by (b) the sum of the Term
Loan Commitments and the Aggregate Revolving Loan Commitment at such time and
(ii) at any time after the Closing Date, the percentage obtained by dividing (a)
the sum of such Lender's Term Loans and Revolving Loan Commitment at such time
(in each case, as adjusted from time to time in accordance with the provisions
of this Agreement) by (b)

                                       23
<PAGE>

the sum of the aggregate amount of all of the Term Loans and the Aggregate
Revolving Loan Commitment at such time; provided, however, if all of the
Commitments are terminated pursuant to the terms of this Agreement, then "Pro
Rata Share" means the percentage obtained by dividing (x) the sum of (A) such
Lender's Term Loans and Revolving Loans, plus (B) such Lender's share of the
obligations to purchase participations in Swing Line Loans and Letters of
Credit, by (y) the sum of (A) the aggregate outstanding amount of all Term Loans
and Revolving Loans, plus (B) the aggregate outstanding amount of all Swing Line
Loans and all Letters of Credit.

                "PURCHASE PRICE" means the total consideration and other amounts
payable in connection with any Acquisition, including, without limitation, any
portion of the consideration payable in cash, the value of any Capital Stock or
other equity interests of the Borrower or any Subsidiary of the Borrower issued
as consideration for such Acquisition, all Indebtedness, liabilities and
Contingent Obligations incurred or assumed in connection with such Acquisition
and all transaction costs and expenses (including all investment banking and
other consultant fees and expenses) incurred in connection with such
Acquisition.

                "PURCHASERS" is defined in Section 13.3(A)(i).

                "RATE OPTION" means the Eurodollar Rate or the Floating Rate, as
applicable.

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

                "REGISTER" is defined in Section 13.3(C).

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

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

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

                "REIMBURSEMENT OBLIGATION" is defined in Section 3.7.

                                       24
<PAGE>

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

                "REPLACEMENT LENDER" is defined in Section 2.20.

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

                "REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the
aggregate, are sixty-six and two-thirds percent (66 2/3%) or more; provided,
however, that, if any of the Lenders shall have failed to fund its Revolving
Loan Pro Rata Share of (i) any Revolving Loan requested by the Borrower, (ii)
any Revolving Loan required to be made in connection with reimbursement for any
L/C Obligations, or (iii) any participation in any Swing Line Loan as requested
by the Administrative Agent, which such Lenders are obligated to fund under the
terms of this Agreement and any such failure has not been cured, then for so
long as such failure continues, "Required Lenders" means Lenders (excluding all
Lenders whose failure to fund their respective Revolving Loan Pro Rata Shares of
such Revolving Loans or any participation in Swing Line Loans has not been so
cured) whose Pro Rata Shares represent sixty-six and two-thirds percent (66
2/3%) or more of the aggregate Pro Rata Shares of such Lenders; provided,
further, however, that, if the Commitments have been terminated pursuant to the
terms of this Agreement, "Required Lenders" means Lenders (without regard to
such Lenders' performance of their respective obligations hereunder) whose
aggregate Pro Rata Shares of the aggregate outstanding principal balance of all
Loans and L/C Obligations are sixty-six and two-thirds percent (66 2/3%) or
more.

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

                "RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any Equity Interests of the
Borrower now or hereafter outstanding, except a dividend payable solely in the
Borrower's Capital Stock (other than Disqualified Stock) or in

                                       25
<PAGE>

options, warrants or other rights to purchase such Capital Stock, (ii) any
redemption, retirement, purchase or other acquisition for value, direct or
indirect, of any Equity Interests of the Borrower or any of its Subsidiaries now
or hereafter outstanding, other than in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Subsidiary of the Borrower)
of other Equity Interests of the Borrower (other than Disqualified Stock), (iii)
any redemption, purchase, retirement, defeasance, prepayment (by setoff or
otherwise) or other acquisition for value, direct or indirect, of any
Indebtedness other than the Obligations, and (iv) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any Indebtedness (other than the Obligations) or any Equity
Interests of the Borrower or any of its Subsidiaries, or of a claim for
reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission, (v) any payment of management fees owing
to any holder of Capital Stock of the Borrower or any of its Subsidiaries or
investment banking fees (or other fees of a similar nature) other than pursuant
to a Permitted Acquisition, (vi) any payment in respect of a purchase price
adjustment, earn-out or other similar form of contingent purchase price (by
setoff or otherwise), (vii) any payment or prepayment (whether consisting of
principal, interest, premium or otherwise) with respect to the Subordinated
Notes or any other subordinated Indebtedness permitted under Section 7.3(A), and
(viii) any contribution or other payment (other than in Capital Stock) of any
type by the Borrower or any of its Subsidiaries to the ESOT.

                "REVOLVING CREDIT AVAILABILITY" means, at any particular time,
the amount by which (i) the Maximum Revolving Credit Amount at such time exceeds
(ii) the amount of the Revolving Credit Obligations outstanding at such time.

                "REVOLVING CREDIT OBLIGATIONS" means, at any particular time,
the sum of (i) the outstanding principal amount of the Revolving Loans at such
time, plus (ii) the outstanding principal amount of the Swing Line Loans at such
time, plus (iii) the outstanding L/C Obligations at such time.

                "REVOLVING LOAN" is defined in Section 2.2.

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

                "REVOLVING LOAN PRO RATA SHARE" means, with respect to any
Lender, the percentage obtained by dividing (i) the then aggregate amount of
such Lender's Revolving Loan Commitment (as adjusted from time to time in
accordance with the provisions of this Agreement) by (ii) the Aggregate
Revolving Loan Commitment at such time; provided, however, if all of the
Commitments are terminated pursuant to the terms of this Agreement, then
"Revolving Loan Pro Rata Share" means the percentage obtained by dividing (a)
the sum of (x) such Lender's Revolving Loans, plus (y) such Lender's share of
the obligations to purchase participations in Swing Line Loans and Letters of
Credit, L/C Drafts and unreimbursed drawings

                                       26
<PAGE>

under Letters of Credit, by (b) the sum of (x) the aggregate outstanding amount
of all Revolving Loans, plus (y) the aggregate outstanding amount of all Swing
Line Loans and all Letters of Credit, L/C Drafts and unreimbursed drawings under
Letters of Credit.

                "REVOLVING LOAN TERMINATION DATE" means December 20, 2007.

                "RIGHTS AGREEMENT" means that certain Rights Agreement, dated as
of December 20, 2002, by and among the Borrower, the ESOT and each other holder
of any shares (or warrants or options therefor) issued by the Borrower.

                "RISK-BASED CAPITAL GUIDELINES" is defined in Section 4.2.

                "S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.

                "SECURED OBLIGATIONS" means, collectively, (i) the Obligations
and (ii) all Hedging Obligations owing under Hedging Agreements to any Lender or
any Affiliate of any Lender, which Hedging Obligations are required pursuant to
the terms of this Agreement.

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

                "SECURITIES PURCHASE AGREEMENTS" means the Senior Subordinated
Securities Purchase Agreement and the Junior Subordinated Securities Purchase
Agreement.

                "SECURITY AGREEMENT" means that certain Security Agreement of
even date herewith executed by the Borrower and each of the Subsidiaries of the
Borrower listed on Schedule 6.8 in favor of the Administrative Agent for the
benefit of the Holders of Secured Obligations, as amended, restated,
supplemented or otherwise modified from time to time.

                "SELLER WARRANTS" shall mean the Mezzanine Warrant and the
Seller Note Warrant, each as defined in and issued by the Borrower to IITRI
pursuant to the Asset Purchase Agreement as of the Closing Date.

                "SENIOR LEVERAGE RATIO" is defined in Section 7.4(A).

                "SENIOR SUBORDINATED NOTES" means those certain notes due 2008,
issued by the Borrower in the aggregate principal amount of $20,343,435.37 and
purchased by IITRI pursuant to the Senior Subordinated Securities Purchase
Agreement, as amended, supplemented or modified in accordance with Section
7.3(BB) hereof.

                "SENIOR SUBORDINATED SECURITIES PURCHASE AGREEMENT" means that
certain Mezzanine Note Securities Purchase Agreement by and between the Borrower
and IITRI of even date herewith, as in effect on the date hereof and as the same
may be amended, supplemented, and modified in accordance with Section 7.3(BB)
hereof.

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

                                       27
<PAGE>

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

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

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

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

                "SUBORDINATED NOTES" means, collectively, the Senior
Subordinated Notes and the Junior Subordinated Notes

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

                "SUBSTANTIAL PORTION OF THE COLLATERAL" means, as of any date of
determination, Collateral having a book value (calculated in accordance with
Agreement Accounting Principles) greater than $1,000,000 in the aggregate.

                "SWING LINE BANK" means LaSalle or any other Lender as a
successor Swing Line Bank pursuant to the terms hereof.

                "SWING LINE COMMITMENT" means the commitment of the Swing Line
Bank, in its sole discretion, to make Swing Line Loans up to a maximum principal
amount of $5,000,000 at any one time outstanding.

                "SWING LINE LOAN" means a Loan made available to the Borrower by
the Swing Line Bank pursuant to Section 2.3 hereof.

                "SYNDICATION PERIOD" shall have the meaning set forth in the
definition of "Interest Period" above.

                "TAXES" is defined in Section 2.15(E)(i).

                "TERMINATION CONDITIONS" is defined in Section 2.19.

                                       28
<PAGE>

                "TERMINATION EVENT" means (i) a Reportable Event with respect to
any Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group which,
in either event, could reasonably be expected to have a Material Adverse Effect
or otherwise result in liability to the Borrower or any of its Subsidiaries that
are members of the Controlled Group in an amount in excess of $1,000,000; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC or any similar
foreign governmental authority of proceedings to terminate a Benefit Plan; (v)
any event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Benefit
Plan; or (vi) the partial or complete withdrawal of the Borrower or any member
of the Controlled Group from a Multiemployer Plan which could reasonably be
expected to have a Material Adverse Effect or otherwise result in liability to
the Borrower or any of its Subsidiaries that are members of the Controlled Group
in an amount in excess of $1,000,000.

                "TERM LOAN" is defined in Section 2.1(A).

                "TERM LOAN COMMITMENT" means, for each Lender, the obligation of
such Lender to make its Term Loan pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth on Exhibit
A to this Agreement opposite its name thereon under the heading "Term Loan
Commitment", as such amount may be modified from time to time pursuant to the
terms hereof.

                "TERM LOAN FINAL MATURITY DATE" means December 20, 2007.

                "TERM LOAN LENDER" means any Lender with a Term Loan Commitment.

                "TERM LOAN PRO RATA SHARE" means, (i) at any particular time
prior to making of the Term Loans and with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the then aggregate
amount of such Lender's Term Loan Commitment and the denominator of which shall
be the then aggregate amount of all Term Loan Commitments, and (ii) at any time
after the Term Loans are made and with respect to any Lender, a fraction
(expressed as a percentage) the numerator of which shall be the outstanding
principal balance of such Lender's Term Loans and the denominator of which shall
be the then outstanding principal balance of the Term Loans.

                "TRANSACTION DOCUMENTS" means the Loan Documents and the
documents executed and delivered, or adopted, by the Borrower or any of its
Subsidiaries or the ESOT Trustee or the ESOP Fiduciary in connection with the
IITRI Acquisition, the ESOT Transaction and the issuance of the Subordinated
Notes, including, without limitation, the Asset Purchase Agreement, the Seller
Warrants, the Rights Agreement, the ESOT Transaction Documents, the

                                       29
<PAGE>

Subordinated Notes and the Securities Purchase Agreements, but excluding the
ESOP Plan Documents.

                "TRANSFEREE" is defined in Section 13.5.

                "TYPE" means, with respect to any Advance or Loan, its nature as
a Floating Rate Advance or Floating Rate Loan, as applicable, or a Eurodollar
Rate Advance or Eurodollar Rate Loan.

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

                "U.S. QUALIFIED PERSON" shall mean any Person that is (i) a
"U.S. person", within the meaning of Section 7701(a)(30) of the Code and (ii) a
United States citizen or United States entity not owned, controlled or
influenced, directly or indirectly, by any foreign person (or any term of like
meaning) under the National Industrial Security Program Operating Manual (or any
successor document) as amended from time to time.

                "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 thereof, 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 (ii) the then outstanding principal
amount of such Indebtedness.

                "WORKING CAPITAL" means, as at any date of determination and in
conformity with Agreement Accounting Principles, the excess, if any, of (i)
Borrower's consolidated current assets, except cash and Cash Equivalents, over
(ii) the Borrower's consolidated current liabilities, except current maturities
of long-term Indebtedness and Revolving Credit Obligations as of such date and
all accrued interest as of such date.

                (B) Singular and Plural Forms; Accounting Terms. The foregoing
        definitions shall be equally applicable to both the singular and plural
        forms of the defined terms. Any accounting terms used in this Agreement
        which are not specifically defined herein shall have the meanings
        customarily given them in accordance with Agreement Accounting
        Principles.

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

                1.3 Supplemental Disclosure. At any time at the reasonable
request of the Administrative Agent and at such additional times as the Borrower
determines in its discretion, the Borrower shall supplement each schedule or
representation herein or in the other Loan Documents 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 schedule or as

                                       30
<PAGE>

an exception to such representation or which is necessary to correct any
information in such schedule or representation which has been rendered
inaccurate thereby. Notwithstanding that any such supplement to such schedule or
representation may disclose the existence or occurrence of events, facts or
circumstances which are either prohibited by the terms of this Agreement or any
other Loan Documents or which result in the breach of any representation or
warranty, such supplement to such schedule or representation shall not be deemed
either an amendment thereof or a waiver of such breach unless expressly
consented to in writing by Administrative Agent and the Required Lenders, and no
such amendments, except as the same may be consented to in a writing which
expressly includes a waiver, shall be or be deemed a waiver by the
Administrative Agent or any Lender of any Default disclosed therein. Any items
disclosed in any such supplemental disclosures shall be included in the
calculation of any limits, baskets or similar restrictions contained in this
Agreement or any of the other Loan Documents.

                1.4 Knowledge With Respect to Representations and Warranties.
Each of the representations and warranties made herein and in each of the other
Loan Documents (including, without limitation any certificates delivered
thereunder) are made to the Knowledge of the Borrower. "Knowledge" means, at any
time and relative to any matter, knowledge that the chairman of the Board of
Directors of the Borrower, any Authorized Officer, any Senior Vice President,
any legal officer or the secretary of the Borrower or any Material Subsidiary
would reasonably be expected to have obtained in the ordinary course exercise of
his or her duties and responsibilities regarding such matter.

             ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES

                2.1 Term Loans.

                (A) Amounts of Term Loans. Subject to the terms and conditions
        set forth in this Agreement, each Term Loan Lender on the Closing Date
        severally and not jointly agrees to make on the Closing Date, a term
        loan, in Dollars, to the Borrower in an aggregate amount equal to such
        Lender's Term Loan Commitment (each individually, a "TERM LOAN" and,
        collectively, the "TERM LOANS"). All Term Loans shall be made by the
        Lenders on the Closing Date simultaneously and proportionately to their
        respective Term Loan Pro Rata Shares, it being understood that no Lender
        shall be responsible for any failure by any other Lender to perform its
        obligation to make any Term Loan hereunder nor shall the Term Loan
        Commitment of any Lender be increased or decreased as a result of any
        such failure.

                (B) Borrowing/Election Notice. The Borrower shall deliver to the
        Administrative Agent a Borrowing/Election Notice, signed by it, on the
        Closing Date. Such Borrowing/Election Notice shall specify (i) the
        aggregate amount of the Term Loans being requested and (ii) instructions
        for the disbursement of proceeds of such Term Loans. The Term Loans
        shall initially be Floating Rate Loans and thereafter may be continued
        as Floating Rate Loans or converted into Eurodollar Rate Loans in the
        manner provided in Section 2.10 and subject to the other conditions and
        limitations therein set forth and set forth in this Article II. Any
        Borrowing/Election Notice given pursuant to this Section 2.1(B) shall be
        irrevocable.

                                       31
<PAGE>

                (C) Making of Term Loans. Promptly after receipt of the
        Borrowing/Election Notice under Section 2.1(B) in respect of the Term
        Loans, the Administrative Agent shall notify each Lender by telecopy, or
        other similar form of transmission, of the proposed Advance. Each Lender
        shall deposit an amount equal to its Term Loan Pro Rata Share of the
        Term Loans with the Administrative Agent at its office in Chicago,
        Illinois, in immediately available funds, on the Closing Date, as
        specified in the Borrowing/Election Notice. Subject to the fulfillment
        of the conditions precedent set forth in Sections 5.1 and 5.2, as
        applicable, the Administrative Agent shall make the proceeds of such
        amounts received by it available to the Borrower at the Administrative
        Agent's office in Chicago, Illinois on such date and shall disburse such
        proceeds in accordance with the Borrower's disbursement instructions set
        forth in such Borrowing/Election Notice. The failure of any Lender to
        deposit the amount described above with the Administrative Agent on such
        date shall not relieve any other Lender of its obligations hereunder to
        make its Term Loan on such date.

                (D) Repayment of the Term Loans.

                (i) The Term Loans shall be repaid in twenty (20) consecutive
        quarterly installments, payable on the last Business Day of each fiscal
        quarter of the Borrower, commencing on March 14, 2003 and continuing
        thereafter until the Term Loan Final Maturity Date, and the Term Loans
        shall be permanently reduced by the amount of each installment on the
        date payment thereof is made hereunder. The installments shall be in the
        aggregate amounts set forth below:

<TABLE>
<CAPTION>
             Installment Date                      Term Loan Installment Amount
             ----------------                      ----------------------------
        <S>                                        <C>
        March 14, 2003                                  $ 1,250,000
        July 4, 2003                                    $ 1,250,000
        September 30, 2003                              $ 1,250,000
        December 19, 2003                               $ 1,250,000

        March 12, 2004                                  $ 1,250,000
        July 2, 2004                                    $ 1,250,000
        September 30, 2004                              $ 1,250,000
        December 17, 2004                               $ 1,250,000

        March 11, 2005                                  $ 1,875,000
        July 1, 2005                                    $ 1,875,000
        September 30, 2005                              $ 1,875,000
        December 16, 2005                               $ 1,875,000

        March 10, 2006                                  $ 2,125,000
        June 30, 2006                                   $ 2,125,000
        September 30, 2006                              $ 2,125,000
        December 15, 2006                               $ 2,125,000

        March 9, 2007                                   $ 2,250,000
</TABLE>

                                       32
<PAGE>

<TABLE>
<CAPTION>
             Installment Date                      Term Loan Installment Amount
             ----------------                      ----------------------------
        <S>                                        <C>

        June 29, 2007                                   $ 2,250,000
        September 30, 2007                              $ 2,250,000
        Term Loan Final Maturity Date                   $ 2,250,000
</TABLE>

                (ii) Notwithstanding the foregoing, the final installment shall
        be in the amount of the then outstanding principal balance of the Term
        Loans. No installment of any Term Loan may be reborrowed once repaid.

                (E) Voluntary Prepayments. In addition to the scheduled payments
        on the Term Loans, the Borrower (i) may make the voluntary prepayments
        described in Section 2.5(A) for credit against the scheduled payments on
        the Term Loans pursuant to Section 2.5(A) and (ii) shall make the
        mandatory prepayments prescribed in Section 2.5(B) for credit against
        the scheduled payments on the Term Loans pursuant to Section 2.5(B).

                2.2 Revolving Loans.

                (A) Amount of Revolving Loans. Upon the satisfaction of the
        conditions precedent set forth in Sections 5.1 and 5.2, as applicable,
        from and including the Closing Date and prior to the Commitment
        Termination Date, each Lender severally and not jointly agrees, on the
        terms and conditions set forth in this Agreement, to make revolving
        loans to the Borrower from time to time, in Dollars, in an aggregate
        amount with respect to any such Loan not to exceed such Lender's
        Revolving Loan Pro Rata Share of Revolving Credit Availability at such
        time (each individually, a "REVOLVING LOAN" and, collectively, the
        "REVOLVING LOANS"); provided, however, at no time shall the Revolving
        Credit Obligations exceed the Maximum Revolving Credit Amount. Subject
        to the terms of this Agreement, the Borrower may borrow, repay and
        reborrow Revolving Loans at any time prior to the Commitment Termination
        Date. The Revolving Loans made on the Closing Date or on or before the
        third (3rd) Business Day thereafter shall initially be Floating Rate
        Loans and thereafter may be continued as Floating Rate Loans or
        converted into Eurodollar Rate Loans in the manner provided in Section
        2.10 and subject to the other conditions and limitations therein set
        forth and set forth in this Article II and set forth in the definition
        of Interest Period. Revolving Loans made after the third (3rd) Business
        Day after the Closing Date shall be, at the option of the Borrower,
        selected in accordance with Section 2.10, either Floating Rate Loans or
        Eurodollar Rate Loans. On the Commitment Termination Date, the Borrower
        shall repay in full the outstanding principal balance of the Revolving
        Loans. Each Advance under this Section 2.2 shall consist of Revolving
        Loans made by each Lender ratably in proportion to such Lender's
        respective Revolving Loan Pro Rata Share.

                (B) Borrowing/Election Notice. In connection with each Revolving
        Loan request, the Borrower shall deliver to the Administrative Agent a
        Borrowing/Election Notice, signed by it, in accordance with the terms of
        Section 2.8.

                (C) Making of Revolving Loans. Promptly after receipt of the
        Borrowing/Election Notice under Section 2.8 in respect of Revolving
        Loans, the

                                       33
<PAGE>

        Administrative Agent shall notify each Lender with a Revolving Loan
        Commitment greater than zero by telecopy, or other similar form of
        transmission, of the requested Revolving Loan. Each Lender with a
        Revolving Loan Commitment greater than zero shall make available its
        Revolving Loan in accordance with the terms of Section 2.7. The
        Administrative Agent will promptly make the funds so received from the
        Lenders available to the Borrower at the Administrative Agent's office
        in Chicago, Illinois on the applicable Borrowing Date and shall disburse
        such proceeds in accordance with the Borrower's disbursement
        instructions set forth in such Borrowing/Election Notice. The failure of
        any Lender to deposit the amount described above with the Administrative
        Agent on the applicable Borrowing Date shall not relieve any other
        Lender of its obligations hereunder to make its Revolving Loan on such
        Borrowing Date.

                2.3 Swing Line Loans.

                (A) Amount of Swing Line Loans. Upon the satisfaction of the
        conditions precedent set forth in Section 5.1 and 5.2, as applicable,
        from and including the Closing Date and prior to the Commitment
        Termination Date, the Swing Line Bank agrees, on the terms and
        conditions set forth in this Agreement, to make swing line loans to the
        Borrower from time to time, in Dollars, in an amount not to exceed the
        Swing Line Commitment (each, individually, a "SWING LINE LOAN" and
        collectively, the "SWING LINE LOANS"); provided, however, at no time
        shall the amount of the Revolving Credit Obligations exceed the Maximum
        Revolving Credit Amount; and provided, further, that at no time shall
        the sum of (a) the Swing Line Bank's Revolving Loan Pro Rata Share of
        the Swing Line Loans, plus (b) the outstanding amount of Revolving Loans
        made by the Swing Line Bank pursuant to Section 2.2, exceed the Swing
        Line Bank's Revolving Loan Commitment at such time. Subject to the terms
        of this Agreement, the Borrower may borrow, repay and reborrow Swing
        Line Loans at any time prior to the Commitment Termination Date.

                (B) Borrowing/Election Notice. The Borrower shall deliver to the
        Administrative Agent and the Swing Line Bank a Borrowing/Election
        Notice, signed by it, not later than 2:00 p.m. (Chicago, Illinois time)
        on the Borrowing Date of each Swing Line Loan, specifying (i) the
        applicable Borrowing Date (which date shall be a Business Day and which
        may be the same date as the date the Borrowing/Election Notice is
        given), and (ii) the aggregate amount of the requested Swing Line Loan
        which shall be an amount not less than $50,000 (and increments of
        $50,000 if in excess thereof). The Swing Line Loans shall at all times
        be Floating Rate Loans.

                (C) Making of Swing Line Loans. Promptly after receipt of the
        Borrowing/Election Notice under Section 2.3(B) in respect of Swing Line
        Loans, the Administrative Agent shall notify each Lender by telex or
        telecopy, or other similar form of transmission, of the requested Swing
        Line Loan, provided that the Administrative Agent shall use commercially
        reasonable efforts to deliver such notice to the Lenders within two (2)
        hours after receipt of such Borrowing/Election Notice. Not later than
        4:00 p.m. (Chicago, Illinois time) on the applicable Borrowing Date, the
        Swing Line Bank shall make available its Swing Line Loan, in funds
        immediately available in Chicago to the Administrative Agent at its
        address specified pursuant to Article XIV. The

                                       34
<PAGE>

        Administrative Agent will promptly make the funds so received from the
        Swing Line Bank available to the Borrower on the Borrowing Date at the
        Administrative Agent's aforesaid address.

                (D) Repayment of Swing Line Loans. Each Swing Line Loan shall be
        paid in full by the Borrower on or before the fifth (5th) Business Day
        after the Borrowing Date for such Swing Line Loan. The Borrower may at
        any time pay, without penalty or premium, all outstanding Swing Line
        Loans or, in a minimum amount of $50,000 and increments of $10,000 in
        excess thereof, any portion of the outstanding Swing Line Loans, upon
        notice to the Administrative Agent and the Swing Line Bank. In addition,
        the Administrative Agent (i) may at any time in its sole discretion with
        respect to any outstanding Swing Line Loan, or (ii) shall on the fifth
        (5th) Business Day after the Borrowing Date of any Swing Line Loan,
        require each Lender (including the Swing Line Bank) to make a Revolving
        Loan in the amount of such Lender's Revolving Loan Pro Rata Share of
        such Swing Line Loan, for the purpose of repaying such Swing Line Loan.
        Not later than 2:00 p.m. (Chicago, Illinois time) on the date of any
        notice received pursuant to this Section 2.3(D), each Lender shall make
        available its required Revolving Loan or Revolving Loans, in funds
        immediately available in Chicago to the Administrative Agent at its
        address specified pursuant to Article XIV. Revolving Loans made pursuant
        to this Section 2.3(D) shall initially be Floating Rate Loans and
        thereafter may be continued as Floating Rate Loans or converted into
        Eurodollar Rate Loans in the manner provided in Section 2.10 and subject
        to the other conditions and limitations therein set forth and set forth
        in this Article II. Unless a Lender shall have notified the Swing Line
        Bank, prior to its making any Swing Line Loan, that any applicable
        condition precedent set forth in Sections 5.1 and 5.2, as applicable,
        had not then been satisfied, such Lender's obligation to make Revolving
        Loans pursuant to this Section 2.3(D) to repay Swing Line Loans shall be
        unconditional, continuing, irrevocable and absolute and shall not be
        affected by any circumstances, including, without limitation, (a) any
        set-off, counterclaim, recoupment, defense or other right which such
        Lender may have against the Administrative Agent, the Swing Line Bank,
        the Borrower or any other Person for any reason whatsoever; (b) the
        occurrence or continuance of any Default or Unmatured Default; (c) any
        adverse change in the condition (financial or otherwise) of the Borrower
        or any of its Subsidiaries or any other Person; (d) any breach of this
        Agreement by the Borrower or its Subsidiaries or any other Person; (e)
        any inability of the Borrower to satisfy the conditions precedent to
        borrowing set forth in this Agreement on the date upon which such
        Advance is to be made or such participating interest is to be purchased;
        (f) the termination of the Commitments hereunder; or (g) any other
        circumstance, happening or event whatsoever, whether or not similar to
        any of the foregoing. In the event that any Lender fails to make payment
        to the Administrative Agent of any amount due under this Section 2.3(D),
        the Administrative Agent shall be entitled to receive, retain and apply
        against such obligation the principal and interest otherwise payable to
        such Lender hereunder until the Administrative Agent receives such
        payment from such Lender or such obligation is otherwise fully
        satisfied. In addition to the foregoing, if for any reason any Lender
        fails to make payment to the Administrative Agent of any amount due
        under this Section 2.3(D), such Lender shall be deemed, at the option of
        the Administrative Agent, to have unconditionally and irrevocably
        purchased from the Swing Line Bank, without recourse or warranty, an
        undivided interest and participation in the applicable

                                       35
<PAGE>

        Swing Line Loan in the amount of such Revolving Loan, and such interest
        and participation may be recovered from such Lender together with
        interest thereon at the Federal Funds Effective Rate for each day during
        the period commencing on the date of demand and ending on the date such
        amount is received. On the Commitment Termination Date, the Borrower
        shall repay in full the outstanding principal balance of the Swing Line
        Loans.

                2.4 Rate Options for all Advances; Maximum Interest Periods. The
Swing Line Loans shall be Floating Rate Advances at all times. The Revolving
Loans and Term Loans may be Floating Rate Advances or Eurodollar Rate Advances,
or a combination thereof, selected by the Borrower in accordance with Section
2.10; provided, however, notwithstanding anything herein to the contrary, the
Borrower may not select Interest Periods for Eurodollar Rate Advances made
during the Syndication Period which exceed fourteen (14) days and the Interest
Periods with respect to all such Eurodollar Rate Advances made during the
Syndication Period shall be required to expire on the same date. The Borrower
may select, in accordance with Section 2.10, Rate Options and Interest Periods
applicable to portions of the Revolving Loans and the Term Loans; provided that
there shall be no more than five (5) Interest Periods in effect with respect to
all Eurodollar Rate Loans at any time.

                2.5 Optional Payments; Mandatory Prepayments.

                (A) Optional Payments. The Borrower may from time to time and at
        any time after notice delivered to the Administrative Agent no later
        than 2:00 p.m. (Chicago, Illinois time) on such date of repayment or
        prepayment, repay or prepay, without penalty or premium, all or any part
        of outstanding Floating Rate Advances in an aggregate minimum amount of
        $500,000 and in integral multiples of $100,000 in excess thereof.
        Eurodollar Rate Advances may be voluntarily repaid or prepaid prior to
        the last day of the applicable Interest Period, subject to the
        indemnification provisions contained in Section 4.4, in an aggregate
        minimum amount of $100,000 and in integral multiples of $100,000 in
        excess thereof (unless such Eurodollar Rate Advance is repaid or prepaid
        in whole); provided, that the Borrower may not so prepay Eurodollar Rate
        Advances unless it shall have provided at least three (3) Business Days'
        prior written notice to the Administrative Agent of such prepayment.

                (B) Mandatory Prepayments.

                (i) Mandatory Prepayments of Term Loans.

                        (a) Asset Sales and Loss Proceeds. Upon (1) the
                consummation of any Asset Sale (other than any Asset Sale
                permitted under clauses (i) through (iii) of Section 7.3(b)) by
                the Borrower or any Subsidiary of the Borrower, except to the
                extent that the Net Cash Proceeds of such Asset Sale, when
                combined with the Net Cash Proceeds of all such Asset Sales
                during the immediately preceding twelve-month period, do not
                exceed $1,000,000, for any such Asset Sale or series of related
                Asset Sales or (2) the receipt by Borrower or any of its
                Subsidiaries of proceeds from insurance in connection with any
                property loss or casualty (other than proceeds received in
                respect of business interruption insurance) ("LOSS

                                       36
<PAGE>

                PROCEEDS"), except to the extent that such Loss Proceeds, when
                combined with all other Loss Proceeds received during the then
                current fiscal year, do not exceed $500,000, and, in each case,
                except as provided in the second sentence of this Section
                2.5(B)(i)(a), within thirty-five (35) days after the Borrower's
                or any of its Subsidiaries' (x) receipt of any Net Cash Proceeds
                from any such Asset Sale or any such Loss Proceeds, or (y)
                conversion to cash or Cash Equivalents of non-cash proceeds
                (whether principal or interest and including securities, release
                of escrow arrangements or lease payments) received from any
                Asset Sale, the Borrower shall make a mandatory prepayment of
                the Obligations in an amount equal to one hundred percent (100%)
                of such Net Cash Proceeds or such Loss Proceeds or such proceeds
                converted from non-cash to cash or Cash Equivalents. In the
                event that the Borrower shall have given the Administrative
                Agent written notice within thirty (30) days after an Asset Sale
                or event giving rise to such Loss Proceeds of its intention to
                replace the assets or use such Net Cash Proceeds or Loss
                Proceeds, as applicable, to acquire other like-kind assets
                (which shall include, without limitation, assets acquired
                pursuant to a Permitted Acquisition) within six (6) months
                following such Asset Sale or the receipt of such Loss Proceeds,
                as applicable, then such Net Cash Proceeds or Loss Proceeds
                shall not be subject to the provisions of the first sentence of
                this Section 2.5(B)(i)(a) unless and to the extent that such
                applicable period shall have expired without such replacement
                having been made.

                        (b) Excess Cash Flow. Simultaneously with the delivery
                of the annual audited financial statements required to be
                delivered pursuant to Section 7.1(A)(iii) for each fiscal year
                beginning with the fiscal year ending September 30, 2003, the
                Borrower shall calculate Excess Cash Flow for such fiscal year
                and shall make a mandatory prepayment of the Obligations,
                payable not later than thirty (30) days after the date such
                financial statements are required to be delivered pursuant to
                Section 7.1(A)(iii), in an amount equal to seventy-five percent
                (75%) of such Excess Cash Flow.

                        (c) Financings. With the exception of the issuance of
                Capital Stock in connection with any Incentive Arrangement, or
                the refinancing of the Subordinated Notes to the extent
                otherwise permitted hereunder, upon the consummation of any
                Financing by the Borrower or any Subsidiary of the Borrower,
                within three (3) Business Days after the Borrower's or any of
                its Subsidiaries' receipt of any Net Cash Proceeds from such
                Financing, the Borrower shall make a mandatory prepayment of the
                Obligations in an amount equal to one hundred percent (100%) of
                such Net Cash Proceeds.

                        (d) No Consent. Nothing in this Section 2.5(B)(i) shall
                be construed to constitute the Lenders' consent to any
                transaction referred to in clause (a) or (c) above which is
                expressly prohibited by the terms of this Agreement.

                        (e) Application of Designated Prepayments. Each
                mandatory prepayment required by clauses (a), (b) and (c) of
                this Section 2.5(B)(i) shall be

                                       37
<PAGE>

                referred to herein as a "Designated Prepayment." Designated
                Prepayments shall be allocated and applied to the Obligations as
                follows:

                                (1) the amount of each Designated Prepayment
                        shall be applied to outstanding accrued interest and
                        then ratably to each of the then remaining installments
                        payable under the Term Loans; and

                                (2) following the payment in full of the Term
                        Loans, the amount of each Designated Prepayment shall be
                        applied to repay Revolving Loans (and may, if requested
                        by the Borrower, reduce the Revolving Loan Commitments)
                        and following the payment in full of the Revolving
                        Loans, the amount of each Designated Prepayment shall be
                        applied first to interest on the Reimbursement
                        Obligations, then to principal on the Reimbursement
                        Obligations, then to fees on account of Letters of
                        Credit and then, to the extent any L/C Obligations are
                        contingent, deposited with the Administrative Agent as
                        cash collateral in respect of such L/C Obligations.

                (ii) Mandatory Prepayments of Obligations. In addition to
        repayments under Section 2.5(B)(i)(e)(2), if at any time and for any
        reason (x) the amount of the Revolving Credit Obligations are greater
        than the Maximum Revolving Credit Amount or (b) the amount of the
        Revolving Credit Obligations plus the aggregate outstanding principal
        amount of the Term Loans are greater than the Borrowing Base (Senior
        Debt) as in effect at such time, the Borrower shall immediately make a
        mandatory prepayment of the Obligations in an amount equal to such
        excess.

                (iii) Application of Prepayments. On the date any Designated
        Prepayments or any prepayment under clause (ii) above is received by the
        Administrative Agent, such prepayment shall be applied first to Floating
        Rate Loans and to any Eurodollar Rate Loans maturing on such date and
        then to subsequently maturing Eurodollar Rate Loans in order of
        maturity.

                2.6 Reduction of Commitments. The Borrower may permanently
reduce the Aggregate Revolving Loan Commitment in whole, or in part ratably
among the Lenders, in an aggregate minimum amount of $1,000,000 with respect to
each such Commitment and integral multiples of $500,000 in excess of that amount
with respect to each such Commitment (unless the Aggregate Revolving Loan
Commitment is reduced in whole), upon at least five (5) Business Days' prior
written notice to the Administrative Agent, which notice shall specify the
amount of any such reduction; provided, however, that the amount of the
Aggregate Revolving Loan Commitment may not be reduced below the aggregate
principal amount of the outstanding Revolving Credit Obligations. All accrued
commitment fees shall be payable on the effective date of any termination of all
or any part of the obligations of the Lenders to make Loans hereunder.

                2.7 Method of Borrowing. Not later than 2:00 p.m. (Chicago,
Illinois time) on each Borrowing Date, each Lender shall make available its
Revolving Loan or Term Loan, in immediately available funds in Dollars to the
Administrative Agent at its address specified

                                       38
<PAGE>

pursuant to Article XIV. The Administrative Agent will promptly make the funds
so received from the Lenders available to the Borrower at the Administrative
Agent's aforesaid address.

                2.8 Method of Selecting Types and Interest Periods for Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Rate Advance and the Interest Period applicable to each Advance from
time to time. The Borrower shall give the Administrative Agent irrevocable
notice in substantially the form of Exhibit B hereto (a "BORROWING/ELECTION
NOTICE") not later than 12:00 noon (Chicago, Illinois time) (A) on or before the
Borrowing Date of each Floating Rate Advance, and (B) three (3) Business Days
before the Borrowing Date for each Eurodollar Rate Advance, specifying: (i) the
Borrowing Date (which shall be a Business Day) of such Advance; (ii) the
aggregate amount of such Advance; (iii) the Type of Advance selected; and (iv)
in the case of each Eurodollar Rate Advance, the Interest Period applicable
thereto. The Borrower shall select Interest Periods so that, to the best of its
knowledge, it will not be necessary to prepay all or any portion of any
Eurodollar Rate Loan prior to the last day of the applicable Interest Period in
order to make mandatory prepayments as required pursuant to the terms hereof.
With respect to the Term Loans, the Borrower may not select an Interest Period
that ends after the Term Loan Final Maturity Date. With respect to the Revolving
Loans, the Borrower may not select an Interest Period that ends after the
Revolving Loan Termination Date. Each Floating Rate Advance and all Obligations
other than Loans shall bear interest from and including the date of the making
of such Advance, in the case of Loans, and the date such Obligation is due and
owing in the case of such other Obligations, to (but not including) the date of
repayment thereof at the Floating Rate, changing when and as such Floating Rate
changes. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Loan will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurodollar Rate Advance shall bear
interest from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined as applicable to such Eurodollar Rate Advance and shall
change as and when the Applicable Eurodollar Margin changes.

                2.9 Minimum Amount of Each Advance. Each Floating Rate Advance
(other than an Advance to repay Swing Line Loans or a Reimbursement Obligation)
shall be in the minimum amount of $1,000,000 and in multiples of $500,000 if in
excess thereof, provided, however, that any Floating Rate Advance may be in the
amount of the unused Aggregate Revolving Loan Commitment. Each Eurodollar Rate
Advance shall be in the minimum amount of $2,500,000 and in multiples of
$500,000 if in excess thereof.

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

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

                (B) Automatic Conversion and Continuation. Floating Rate Loans
        shall continue as Floating Rate Loans unless and until such Floating
        Rate Loans are converted

                                       39
<PAGE>

        into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
        Eurodollar Rate Loans until the end of the then applicable Interest
        Period therefor, at which time such Eurodollar Rate Loans shall be
        automatically converted into Floating Rate Loans unless the Borrower
        shall have given the Administrative Agent notice in accordance with
        Section 2.10(D) requesting that, at the end of such Interest Period,
        such Eurodollar Rate Loans continue as a Eurodollar Rate Loan.

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

                (D) Borrowing/Election Notice. The Borrower shall give the
        Administrative Agent irrevocable notice (a "BORROWING/ELECTION NOTICE")
        of each conversion of a Floating Rate Loan into a Eurodollar Rate Loan
        or continuation of a Eurodollar Rate Loan not later than 12:00 noon
        (Chicago, Illinois time) three (3) Business Days prior to the date of
        the requested conversion or continuation, specifying: (1) the requested
        date (which shall be a Business Day) of such conversion or continuation;
        (2) the amount and Type of the Loan to be converted or continued; and
        (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
        converted or continued and the duration of the Interest Period
        applicable thereto.

                2.11 Default Rate. After the occurrence and during the
continuance of a Default, at the option of the Administrative Agent or at the
direction of the Required Lenders, and in any event automatically upon the
occurrence of a Default under Section 8.1(F), (G) or (I), the interest rate(s)
applicable to (i) all Eurodollar Rate Advances shall be calculated based on the
highest Applicable Eurodollar Margin under the pricing grid set forth in Section
2.15(D)(ii) plus two percent (2.00%) per annum, (ii) all Floating Rate Advances
and all other Obligations and all other fees (including the fees payable under
Section 3.8 with respect to Letters of Credit) shall be calculated based on the
highest Applicable Floating Rate Margins under the pricing grid set forth in
Section 2.15(D)(ii) plus two percent (2.00%) per annum.

                2.12 Method of Payment; Collection Account Arrangements.

                (A) Method of Payment. All payments of principal, interest,
        fees, reimbursements, commissions, L/C Obligations and other Obligations
        hereunder shall be made, without setoff, deduction or counterclaim
        (unless indicated otherwise in Section 2.15(E)), in immediately
        available funds to the Administrative Agent at the Administrative
        Agent's address specified pursuant to Article XIV, or at any other
        Lending Installation of the Administrative Agent specified in writing by
        the Administrative Agent to the Borrower, by 1:00 p.m. (Chicago,
        Illinois time) on the date when due and shall be made ratably among the
        Lenders (unless such amount is not to be shared ratably in accordance
        with the terms hereof). Each payment delivered to the Administrative
        Agent for the account of any Lender shall be delivered promptly by the
        Administrative Agent to such Lender in the same type of funds that the
        Administrative Agent received at its address specified pursuant to
        Article XIV or at any Lending

                                       40
<PAGE>

        Installation specified in a notice received by the Administrative Agent
        from such Lender. The Borrower authorizes the Administrative Agent to
        charge the account of the Borrower maintained with LaSalle for each
        payment of principal, interest, fees, commissions and L/C Obligations as
        it becomes due hereunder. Each reference to the Administrative Agent in
        this Section 2.12 shall also be deemed to refer, and shall apply
        equally, to each Issuing Bank, in the case of payments required to be
        made by the Borrower to any Issuing Bank pursuant to Article III.

                (B) Cash Management Arrangements. On or prior to the Closing
        Date, the Borrower shall have entered into and shall thereafter maintain
        cash management arrangements acceptable to the Administrative Agent and
        the Borrower.

                2.13 Evidence of Debt.

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

                (B) Register. The Register maintained by the Administrative
        Agent pursuant to Section 13.3(C) shall include a control account, and a
        subsidiary account for each Lender, in which accounts (taken together)
        shall be recorded (i) the date and the amount of each Loan made
        hereunder, the Type thereof and the Interest Period, if any, applicable
        thereto, (ii) the amount of any principal or interest due and payable or
        to become due and payable from the Borrower to each Lender hereunder,
        (iii) the effective date and amount of each Assignment Agreement
        delivered to and accepted by it and the parties thereto pursuant to
        Section 13.3, (iv) the amount of any sum received by the Administrative
        Agent hereunder for the account of the Lenders and each Lender's share
        thereof, and (v) all other appropriate debits and credits as provided in
        this Agreement, including, without limitation, all fees, charges,
        expenses and interest.

                (C) Entries in Loan Account and Register. The entries made in
        the Loan Account, the Register and the other accounts maintained
        pursuant to clauses (A) or (B) of this Section shall be conclusive and
        binding for all purposes, absent manifest error, unless the Borrower
        objects to information contained in the Loan Accounts, the Register or
        the other accounts within thirty (30) days of the Borrower's receipt of
        such information; provided that the failure of any Lender or the
        Administrative Agent to maintain such accounts or any error therein
        shall not in any manner affect the obligation of the Borrower to repay
        the Loans in accordance with the terms of this Agreement.

                (D) Notes Issued Upon Request. Any Lender may request that the
        Revolving Loans or Term Loans made, or to be made, by it each be
        evidenced by a promissory note in substantially the forms of Exhibit K-1
        or K-2, respectively, to evidence such Lender's Revolving Loans or Term
        Loans, as applicable. In such event, the Borrower shall prepare, execute
        and deliver to such Lender a promissory note for such Loans payable to
        the order of such Lender and in a form approved by the Administrative
        Agent and consistent with the terms of this Agreement. Thereafter, the
        Loans evidenced by such

                                       41
<PAGE>

        promissory note and interest thereon shall at all times (including after
        assignment pursuant to Section 13.3) be represented by one or more
        promissory notes in such form payable to the order of the payee named
        therein.

                2.14 Telephonic Notices. The Borrower authorizes the Lenders and
the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be a Borrower Representative. The Borrower agrees to
deliver promptly to the Administrative Agent a written confirmation, signed by
an Authorized Officer, if such confirmation is requested by the Administrative
Agent or any Lender, of each telephonic notice. In case of disagreement
concerning such notices, if the Administrative Agent has recorded telephonic
borrowing notices, such recordings will be made available to the Borrower upon
its request therefor.

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

                (A) Promise to Pay. All Revolving Loans shall be paid in full by
        the Borrower on the earlier of (i) the Commitment Termination Date and
        (ii) the Facility Termination Date. All Term Loans shall be paid in full
        by the Borrower on the earlier of the (i) Term Loan Final Maturity Date
        and (ii) the Facility Termination Date. The Borrower unconditionally
        promises to pay when due the principal amount of each Loan and all other
        Obligations incurred by it, and to pay all unpaid interest accrued
        thereon, in accordance with the terms of this Agreement and the other
        Loan Documents.

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

                (C) Commitment Fees; Fee Letter.

                (i) The Borrower shall pay to the Administrative Agent, for the
        account of the Lenders in accordance with their Revolving Loan Pro Rata
        Shares, from and after the Closing Date until the date on which the
        Aggregate Revolving Loan Commitment shall be terminated in whole, a
        commitment fee accruing at the rate of the then Applicable Commitment
        Fee Percentage, multiplied by the average daily amount by which (A) the
        Aggregate Revolving Loan Commitment exceeds (B) the Revolving

                                       42
<PAGE>

        Credit Obligations (excluding the outstanding principal amount of the
        Swing Line Loans). All such commitment fees payable under this clause
        (C) shall be payable quarterly in arrears on each Payment Date occurring
        after the Closing Date (with the first such payment being calculated for
        the period from the Closing Date and ending on the first Payment Date
        thereafter), and, in addition, on any date on which the Aggregate
        Revolving Loan Commitment shall be terminated in whole.

                (ii) The Borrower agrees to pay to the Administrative Agent for
        the sole account of the Administrative Agent and the Arranger (unless
        otherwise agreed between the Administrative Agent and the Arranger and
        any Lender) the fees set forth in the letter agreement between the
        Administrative Agent and the Borrower, dated May 23, 2002, payable at
        the times and in the amounts set forth therein.

                (D) Interest and Fee Basis; Applicable Floating Rate Margins,
        Applicable Eurodollar Margins and Applicable Commitment Fee Percentage.

                (i) Interest on all Eurodollar Rate Loans and on all fees shall
        be calculated for actual days elapsed on the basis of a 360-day year.
        Interest on all Floating Rate Loans shall be calculated for actual days
        elapsed on the basis of a 365-, or when appropriate 366-, day year.
        Interest shall be payable for the day an Obligation is incurred but not
        for the day of any payment on the amount paid if payment is received
        prior to 2:00 p.m. (Chicago, Illinois time) at the place of payment. If
        any payment of principal of or interest on a Loan or any payment of any
        other Obligations shall become due on a day which is not a Business Day,
        such payment shall be made on the next succeeding Business Day and, in
        the case of a principal payment, such extension of time shall be
        included in computing interest, fees and commissions in connection with
        such payment.

                (ii) The Applicable Floating Rate Margins, Applicable Eurodollar
        Margins and Applicable Commitment Fee Percentage shall be determined
        from time to time by reference to the tables set forth below, (a) in the
        case of the Applicable Floating Rate Margins and Applicable Eurodollar
        Margins, on the basis of the then applicable Leverage Ratio as described
        in this Section 2.15(D)(ii), and (b) in the case of the Applicable
        Commitment Fee Percentage, on the basis of the then outstanding amount
        of the Revolving Credit Obligations as a percentage of the Aggregate
        Revolving Loan Commitment in effect at such time:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
         LEVERAGE RATIO              APPLICABLE FLOATING RATE     APPLICABLE EURODOLLAR MARGINS
                                             MARGINS
-----------------------------------------------------------------------------------------------
<S>                                  <C>                          <C>
 Greater than or equal to 3.00               2.00%                           3.50%
            to 1.00
-----------------------------------------------------------------------------------------------
 Greater than or equal to 2.50
  to 1.0 and less than 3.00 to               1.75%                           3.25%
              1.00
-----------------------------------------------------------------------------------------------
 Greater than or equal to 2.00
  to 1.0 and less than 2.50 to               1.50%                           3.00%
              1.00
-----------------------------------------------------------------------------------------------
</TABLE>

                                       43
<PAGE>

<TABLE>
<S>                                  <C>                          <C>
-----------------------------------------------------------------------------------------------
     Less than 2.00 to 1.00                  1.25%                           2.75%
-----------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------
             USAGE                  APPLICABLE COMMITMENT FEE
                                            PERCENTAGE
----------------------------------------------------------------
<S>                                 <C>
  Revolving Credit Obligations
  are greater than or equal to
   forty percent (40%) of the                0.50%
    Aggregate Revolving Loan
    Commitment at such time
----------------------------------------------------------------
  Revolving Credit Obligations
  are less than forty percent
     (40%) of the Aggregate                  1.00%
  Revolving Loan Commitment at
           such time
----------------------------------------------------------------
</TABLE>

                For purposes of this Section 2.15(D)(ii), the Leverage Ratio
shall be calculated as provided in Section 7.4(B). Upon receipt of the financial
statements delivered pursuant to Sections 7.1(A)(ii) and (iii), as applicable,
the Applicable Floating Rate Margins and Applicable Eurodollar Margins shall be
adjusted, such adjustment being effective five (5) Business Days following the
Administrative Agent's receipt of such financial statements and the compliance
certificate required to be delivered in connection therewith pursuant to Section
7.1(A)(iv); provided, that if the Borrower shall not have timely delivered its
financial statements in accordance with Section 7.1(A)(ii) or (iii), as
applicable, then commencing on the date upon which such financial statements
should have been delivered and continuing until five (5) Business Days following
the date such financial statements are actually delivered, the Applicable
Floating Rate Margins and Applicable Eurodollar Margins shall be the Applicable
Floating Rate Margins and Applicable Eurodollar Margins, as applicable, under
the pricing grid set forth in this Section 2.15(D)(ii) in effect on the date
such financial statements were required to be delivered under Section 7.1(A)(ii)
or (iii), as applicable; provided that if upon delivery of such financial
statements any increase of the Applicable Floating Rate Margins or the
Applicable Eurodollar Rate Margins shall be required under this Section 2.15(D),
such adjustment shall be made retroactively to the date such financial
statements were initially required to be delivered under Section 7.1(a)(ii) or
(iii), as applicable. The Applicable Commitment Fee Percentage shall be adjusted
on a daily basis based upon the average outstanding daily balance of the
Revolving Credit Obligations of such date.

                (iii) Notwithstanding anything herein to the contrary, from the
        Closing Date to but not including the fifth (5th) Business Day following
        receipt of the Borrower's financial statements delivered pursuant to
        Section 7.1(A)(ii) for the fiscal year ending on or about September 30,
        2003, the Applicable Floating Rate Margins and the Applicable Eurodollar
        Margins shall be determined based upon a Leverage Ratio greater than or
        equal to 3.0 to 1.0.

                                       44
<PAGE>

                (E) Taxes.

                (i) Any and all payments by the Borrower hereunder (whether in
        respect of principal, interest, fees or otherwise) shall be made free
        and clear of and without deduction for any and all present or future
        taxes, levies, imposts, deductions, charges or withholdings or any
        interest, penalties and liabilities with respect thereto, including,
        without duplication of amounts otherwise reimbursable under Section
        4.1(A), those arising after the date hereof as a result of the adoption
        of or any change in any law, treaty, rule, regulation, guideline or
        determination of a Governmental Authority or any change in the
        interpretation or application thereof by a Governmental Authority, but
        excluding, in the case of each Lender and the Administrative Agent, such
        taxes (including income taxes, franchise taxes and branch profit taxes)
        as are imposed on or measured by such Lender's or the Administrative
        Agent's, as the case may be, net income by the United States of America
        or any Governmental Authority of the jurisdiction under the laws of
        which such Lender or the Administrative Agent, as the case may be, is
        organized (all such non-excluded taxes, levies, imposts, deductions,
        charges, withholdings, and liabilities which the Administrative Agent or
        a Lender determines to be applicable to this Agreement, the other Loan
        Documents, the Revolving Loan Commitments, the Loans or the Letters of
        Credit being hereinafter referred to as "TAXES"). If the Borrower shall
        be required by law to deduct or withhold any Taxes from or in respect of
        any sum payable hereunder or under the other Loan Documents to any
        Lender or the Administrative Agent, (a) the sum payable shall be
        increased as may be necessary so that after making all required
        deductions or withholdings (including deductions applicable to
        additional sums payable under this Section 2.15(E)) such Lender or the
        Administrative Agent (as the case may be) receives an amount equal to
        the sum it would have received had no such deductions or withholdings
        been made, (b) the Borrower shall make such deductions or withholdings,
        and (c) the Borrower shall pay the full amount deducted or withheld to
        the relevant taxation authority or other authority in accordance with
        applicable law. If a withholding tax of the United States of America or
        any other Governmental Authority shall be or become applicable (y) after
        the date of this Agreement, to such payments by the Borrower made to the
        Lending Installation or any other office that a Lender may claim as its
        Lending Installation, or (z) after such Lender's selection and
        designation of any other Lending Installation, to such payments made to
        such other Lending Installation, such Lender shall use reasonable
        efforts to make, fund and maintain the affected Loans through another
        Lending Installation of such Lender in another jurisdiction so as to
        reduce the Borrower's liability hereunder, if the making, funding or
        maintenance of such Loans through such other Lending Installation of
        such Lender does not, in the judgment of such Lender, otherwise
        adversely affect such Loans, or obligations under the Revolving Loan
        Commitments of such Lender.

                (ii) In addition, the Borrower agrees to pay any present or
        future stamp or documentary taxes or any other excise or property taxes,
        charges, or similar levies which arise from any payment made hereunder,
        from the issuance of Letters of Credit hereunder, or from the execution,
        delivery or registration of, or otherwise with respect

                                       45
<PAGE>

        to, this Agreement, the other Loan Documents, the Revolving Loan
        Commitments, the Loans or the Letters of Credit (hereinafter referred to
        as "OTHER Taxes").

                (iii) The Borrower indemnifies each Lender and the
        Administrative Agent for the full amount of Taxes and Other Taxes
        (including, without limitation, any Taxes or Other Taxes imposed by any
        Governmental Authority on amounts payable under this Section 2.15(E))
        paid by such Lender or the Administrative Agent (as the case may be) and
        any liability (including penalties, interest, and expenses) arising
        therefrom or with respect thereto, whether or not such Taxes or Other
        Taxes were correctly or legally asserted. This indemnification shall be
        made within thirty (30) days after the date such Lender or the
        Administrative Agent (as the case may be) makes written demand therefor.
        If the Taxes or Other Taxes with respect to which the Borrower or any
        Subsidiary has made either a direct payment to the taxation or other
        authority or an indemnification payment hereunder are subsequently
        refunded to any Lender, such Lender will return to the Borrower, if no
        Default has occurred and is continuing, an amount equal to the lesser of
        the indemnification payment or the refunded amount. And if a Default
        shall have occurred, such refunded amount shall be applied in the same
        manner as Designated Prepayments set forth in Section 2.5(B)(i)(e)
        hereof. A certificate as to any additional amount payable to any Lender
        or the Administrative Agent under this Section 2.15(E) submitted to the
        Borrower and the Administrative Agent (if a Lender is so submitting) by
        such Lender or the Administrative Agent shall show in reasonable detail
        the amount payable and the calculations used to determine such amount
        and shall, absent manifest error, be final, conclusive and binding upon
        all parties hereto. With respect to such deduction or withholding for or
        on account of any Taxes and to confirm that all such Taxes have been
        paid to the appropriate Governmental Authorities, the Borrower shall
        promptly (and in any event not later than thirty (30) days after
        receipt) furnish to each Lender and the Administrative Agent such
        certificates, receipts and other documents as may be required (in the
        reasonable judgment of such Lender or the Administrative Agent) to
        establish any tax credit to which such Lender or the Administrative
        Agent may be entitled.

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

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

                (vi) Each Lender shall promptly furnish to the Borrower and the
        Administrative Agent such additional documents as may be reasonably
        required by the Borrower or the Administrative Agent to establish any
        exemption from or reduction of any Taxes or Other Taxes required to be
        deducted or withheld and which may be obtained without undue expense to
        such Lender (collectively, the "EXEMPTION DOCUMENTS"). Notwithstanding
        any other provision of this Section 2.15(E), the Borrower shall not be
        obligated to gross up any payments to any Lender

                                       46
<PAGE>

        pursuant to Section 2.15(E)(i), or to indemnify any Lender pursuant to
        Section 2.15(E)(iii), in respect of United States federal withholding
        taxes to the extent imposed as a result of (x) the failure of such
        Lender to deliver to the Borrower the Exemption Documents, or (y) the
        Lender designating a successor Lending Installation at which it
        maintains its Loans which has the effect of causing such Lender to
        become obligated for tax payments in excess of those in effect
        immediately prior to such designation; provided, however, that the
        Borrower shall be obligated to gross up any payments to any such Lender
        pursuant to Section 2.15(E)(i), and to indemnify any such Lender
        pursuant to Section 2.15(E)(iii), in respect of United States federal
        withholding taxes if (x) any such failure to deliver any Exemption
        Documents or the failure of such Exemption Documents to establish a
        complete exemption from U.S. federal withholding tax or inaccuracy or
        untruth contained therein resulted from a change in any applicable
        statute, treaty, regulation or other applicable law or any
        interpretation of any of the foregoing occurring after the date hereof,
        which change rendered such Lender no longer legally entitled to deliver
        such Exemption Documents or otherwise ineligible for a complete
        exemption from U.S. federal withholding tax, or rendered the information
        or the certifications made in such Exemption Documents untrue or
        inaccurate in any material respect, (y) the redesignation of the
        Lender's Lending Installation was made at the request of the Borrower or
        (z) the obligation to gross up payments to any such Lender pursuant to
        Section 2.15(E)(i), or to indemnify any such Lender pursuant to Section
        2.15(E)(iii), is with respect to a Purchaser that becomes a Purchaser as
        a result of an assignment made at the request of the Borrower.

                (vii) Upon the request, and at the expense of the Borrower, each
        Lender to which the Borrower is required to pay any additional amount
        pursuant to this Section 2.15(E), shall reasonably afford the Borrower
        the opportunity to contest, and shall reasonably cooperate with the
        Borrower in contesting, the imposition of any Tax giving rise to such
        payment; provided, that (a) such Lender shall not be required to afford
        the Borrower the opportunity to so contest unless the Borrower shall
        have confirmed in writing to such Lender its obligation to pay such
        amounts pursuant to this Agreement; and (b) the Borrower shall reimburse
        such Lender for its reasonable attorneys' and accountants' fees and
        disbursements incurred in so cooperating with the Borrower in contesting
        the imposition of such Tax; provided, however, that notwithstanding the
        foregoing, no Lender shall be required to afford the Borrower the
        opportunity to contest, or cooperate with the Borrower in contesting,
        the imposition of any Taxes, if such Lender reasonably and in good faith
        determines that to do so would have an adverse effect on it.

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

                                       47
<PAGE>

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

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

                2.19 Termination Conditions. All of the rights and remedies
under this Agreement and the other Loan Documents shall survive until (A) all of
the Secured Obligations (other than contingent indemnity obligations) shall have
been fully and indefeasibly paid and satisfied in cash, (B) the Commitments and
all financing arrangements among the Borrower and the Lenders shall have been
terminated (including under Hedging Agreements or other agreements with respect
to Hedging Obligations) and (C) all of the Letters of Credit shall have expired,
been cancelled or terminated, or cash collateralized pursuant to the terms of
this Agreement or supported by a letter of credit acceptable to the
Administrative Agent (collectively, the "TERMINATION CONDITIONS").

                2.20 Replacement of Certain Lenders. In the event a Lender
("AFFECTED LENDER") shall have: (A) failed to fund its Pro Rata Share of any
Advance requested by the Borrower, or to fund a Revolving Loan in order to repay
Swing Line Loans pursuant to Section 2.3(D), which such Lender is obligated to
fund under the terms of this Agreement and which failure has not been cured, (B)
requested compensation from the Borrower under Sections 2.15(E), 4.1 or 4.2 to
recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (C) delivered a
notice pursuant to Section 4.3 claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (D) has invoked Section 10.2; then, in any such case, after
engagement of one or more "Replacement Lenders" (as defined below) by the
Borrower and/or the Administrative Agent, the Borrower or the Administrative
Agent may (but shall not be obligated to) make written demand on such Affected

                                       48
<PAGE>

Lender (with a copy to the Administrative Agent in the case of a demand by the
Borrower and a copy to the Borrower in the case of a demand by the
Administrative Agent) for the Affected Lender to assign, and such Affected
Lender shall use commercially reasonable efforts to assign pursuant to one or
more duly executed Assignment Agreements five (5) Business Days after the date
of such demand, to one or more financial institutions that comply with the
provisions of Section 13.3(A) which the Borrower or the Administrative Agent, as
the case may be, shall have engaged for such purpose ("REPLACEMENT LENDER"), all
of such Affected Lender's rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, its Revolving Loan
Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, L/C Drafts and unreimbursed drawings under Letters
of Credit, and its obligation to participate in additional Letters of Credit and
Swing Line Loans hereunder) in accordance with Section 13.3. The Administrative
Agent is authorized (but not required) to execute one or more of such assignment
agreements as attorney-in-fact for any Affected Lender failing to execute and
deliver the same within five (5) Business Days after the date of such demand.
Further, with respect to such assignment the Affected Lender shall have
concurrently received, in cash, all amounts due and owing to the Affected Lender
hereunder or under any other Loan Document, including, without limitation, the
aggregate outstanding principal amount of the Loans owed to such Lender,
together with accrued interest thereon through the date of such assignment,
amounts payable under Sections 2.15(E), 4.1, and 4.2 with respect to such
Affected Lender and compensation payable under Section 2.15(C) in the event of
any replacement of any Affected Lender under clause (B) or clause (C) of this
Section 2.20; provided that upon such Affected Lender's replacement, such
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.15(E), 4.1, 4.2, 4.4, and 10.7 (with
respect to all amounts arising under such Sections while such Lender was a party
hereto), as well as to any fees accrued for its account hereunder and not yet
paid, and shall continue to be obligated under Section 11.8.

                   ARTICLE III: THE LETTER OF CREDIT FACILITY

                3.1 Obligation to Issue Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations,
warranties and covenants of the Borrower herein set forth, each Issuing Bank
hereby agrees to issue for the account of the Borrower through such Issuing
Bank's branches as it and the Borrower may jointly agree, one or more Letters of
Credit denominated in Dollars in accordance with this Article III, from time to
time during the period, commencing on the Closing Date and ending on the sixth
(6th) Business Day prior to the Commitment Termination Date.

                3.2 Transitional Provision. Schedule 3.2 contains a schedule of
certain letters of credit issued for the account of the Borrower and its
Subsidiaries by any of the Lenders prior to the Closing Date. Subject to the
satisfaction of the conditions contained in Sections 5.1 and 5.2, from and after
the Closing Date such letters of credit shall be deemed to be Letters of Credit
issued pursuant to this Article III.

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

                                       49
<PAGE>

                (A) issue (or amend) any Letter of Credit if on the date of
        issuance (or amendment), before or after giving effect to the Letter of
        Credit requested hereunder, (i) the amount of the Revolving Credit
        Obligations at such time would exceed the Maximum Revolving Credit
        Amount at such time, or (ii) the aggregate outstanding amount of the L/C
        Obligations would exceed $3,000,000 calculated as of the date of
        issuance of any Letter of Credit; or

                (B) issue (or amend) any Letter of Credit which has an
        expiration date later than the date which is the earlier of (i) one (1)
        year after the date of issuance thereof or (ii) five (5) Business Days
        immediately preceding the Commitment Termination Date; provided, that
        any Letter of Credit with a one year tenor may provide for the renewal
        thereof for additional one year periods (which in no event shall extend
        beyond the date referred to in clause (ii) above).

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

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

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

                (C) in the case of LaSalle acting in its capacity as Issuing
        Bank, the Borrower shall have duly executed and delivered to LaSalle the
        L/C Master Agreement and the Borrower shall be in compliance therewith;
        provided that in the event that the terms and conditions of the L/C
        Master Agreement (or any similar agreement entered into with any other
        Issuing Bank) shall conflict with the terms and conditions of this
        Agreement, the terms and conditions of this Agreement shall govern and
        control to the extent of such conflict.

                3.5 Procedure for Issuance of Letters of Credit.

                                       50
<PAGE>

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

                (B) Notice. The applicable Issuing Bank shall give the
        Administrative Agent written notice and or telephonic notice confirmed
        promptly thereafter in writing, of the issuance of a Letter of Credit,
        provided, however, that the failure to provide such notice shall not
        result in any liability on the part of such Issuing Bank.

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

                3.6 Letter of Credit Participation. On the date of this
Agreement, with respect to the Letters of Credit identified on Schedule 3.2, and
immediately upon the issuance of each Letter of Credit hereunder, each Lender
with a Revolving Loan Pro Rata Share shall be deemed to have automatically,
irrevocably and unconditionally purchased and received from the applicable
Issuing Bank an undivided interest and participation in and to such Letter of
Credit, the obligations of the Borrower in respect thereof, and the liability of
such Issuing Bank thereunder (collectively, an "L/C INTEREST") in an amount
equal to the amount available for drawing under such Letter of Credit multiplied
by such Lender's Revolving Loan Pro Rata Share. Each Issuing Bank will notify
each Lender promptly upon presentation to it of an L/C Draft or upon any other
draw under a Letter of Credit. On or before the Business Day on which an Issuing
Bank makes payment of each such L/C Draft or, in the case of any other draw on a
Letter of Credit, on demand by the Administrative Agent or the applicable
Issuing Bank, each Lender shall make payment to the Administrative Agent, for
the account of the applicable Issuing Bank, in immediately available funds in
Dollars in an amount equal to such Lender's Revolving Loan Pro Rata Share of the
amount of such payment or draw. The obligation of each Lender to reimburse the
Issuing Banks under this Section 3.6 shall be unconditional, continuing,
irrevocable and absolute. In the event that any Lender fails to make payment to
the Administrative Agent of any amount due under this Section 3.6, the
Administrative Agent shall be entitled to receive, retain and apply against such
obligation the principal and interest otherwise payable to such Lender hereunder
until the Administrative Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied; provided, however, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the applicable Issuing Bank for such amount in accordance with this
Section 3.6.

                3.7 Reimbursement Obligation. The Borrower agrees
unconditionally, irrevocably and absolutely to pay immediately to the
Administrative Agent, for the account of the Lenders, the amount of each advance
drawn under or pursuant to a Letter of Credit or an L/C Draft related thereto
(such obligation of the Borrower to reimburse the Administrative Agent for an
advance made under a Letter of Credit or L/C Draft being hereinafter referred to
as a

                                       51
<PAGE>

"Reimbursement Obligation" with respect to such Letter of Credit or L/C Draft),
each such reimbursement to be made by the Borrower no later than the Business
Day on which the applicable Issuing Bank makes payment of each such L/C Draft
or, if the Borrower shall have received notice of a Reimbursement Obligation
later than 12:00 noon (Chicago, Illinois time), on any Business Day or on a day
which is not a Business Day, no later than 12:00 noon (Chicago, Illinois time),
on the immediately following Business Day or, in the case of any other draw on a
Letter of Credit, the date specified in the demand of such Issuing Bank. If the
Borrower at any time fails to repay a Reimbursement Obligation pursuant to this
Section 3.7, the Borrower shall be deemed to have elected to borrow Revolving
Loans from the Lenders, as of the date of the advance giving rise to the
Reimbursement Obligation, equal in amount to the amount of the unpaid
Reimbursement Obligation. Such Revolving Loans shall be made as of the date of
the payment giving rise to such Reimbursement Obligation, automatically, without
notice and without any requirement to satisfy the conditions precedent otherwise
applicable to an Advance of Revolving Loans. Such Revolving Loans shall
constitute a Floating Rate Advance, the proceeds of which Advance shall be used
to repay such Reimbursement Obligation. If, for any reason, the Borrower fails
to repay a Reimbursement Obligation on the day such Reimbursement Obligation
arises and, for any reason, the Lenders are unable to make or have no obligation
to make Revolving Loans, then such Reimbursement Obligation shall bear interest
from and after such day, until paid in full, at the interest rate applicable to
a Floating Rate Advance.

                3.8 Letter of Credit Fees. The Borrower agrees to pay:

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

                (B) on the date of issuance of each standby Letter of Credit, to
        the applicable Issuing Bank, a letter of credit fronting fee equal to
        0.25% of the stated amount available for drawing under such Letter of
        Credit; and

                (C) to the applicable Issuing Bank, all customary fees and other
        issuance, amendment, cancellation, document examination, negotiation,
        transfer and presentment expenses and related charges in connection with
        the issuance, amendment, cancellation, presentation of L/C Drafts,
        negotiation, transfer and the like customarily charged by such Issuing
        Banks with respect to standby and commercial Letters of Credit,
        including, without limitation, standard commissions with respect to
        commercial Letters of Credit, payable at the time of invoice of such
        amounts.

                3.9 Issuing Bank Reporting Requirements. In addition to the
notices required by Section 3.5(B), each Issuing Bank shall, no later than the
tenth Business Day following the last day of each month, provide to the
Administrative Agent, upon the Administrative Agent's request, schedules, in
form and substance reasonably satisfactory to the Administrative Agent, showing
the date of issue, account party and amount in Dollars, expiration date and the
reference number of each Letter of Credit issued by it outstanding at any time
during such month and the aggregate amount payable by the Borrower during such
month. In addition, upon the request of

                                       52
<PAGE>

the Administrative Agent, each Issuing Bank shall furnish to the Administrative
Agent copies of any Letter of Credit and any application for or reimbursement
agreement with respect to a Letter of Credit to which the Issuing Bank is party
and such other documentation as may reasonably be requested by the
Administrative Agent. Upon the request of any Lender, the Administrative Agent
will provide to such Lender information concerning such Letters of Credit.

                3.10 Indemnification; Exoneration.

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

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

                                       53
<PAGE>

                (C) No Liability. In furtherance and extension and not in
        limitation of the specific provisions hereinabove set forth, any action
        taken or omitted by any Issuing Bank under or in connection with the
        Letters of Credit or any related certificates shall not, in the absence
        of negligence in the Issuing Bank's performance or non-performance of
        the express terms of this Agreement or willful misconduct, as determined
        by the final judgment of a court of competent jurisdiction, put the
        applicable Issuing Bank, the Administrative Agent or any Lender under
        any resulting liability to the Borrower or relieve the Borrower of any
        of its obligations hereunder to any such Person.

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

                3.11 Cash Collateral. Notwithstanding anything to the contrary
herein or in any application for a Letter of Credit, after the occurrence and
during the continuance of a Default, the Borrower shall, on the Business Day
that it receives Administrative Agent's demand, deliver to the Administrative
Agent for the benefit of the Lenders and the Issuing Banks, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to one hundred and five percent (105%) of the
aggregate amount of the outstanding L/C Obligations. Any such collateral shall
be held by the Administrative Agent in a separate account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Administrative Agent for the benefit of
the Lenders and the Issuing Banks as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Letters of Credit and
L/C Drafts. Such amounts shall be applied to reimburse the Issuing Banks for
drawings or payments under or pursuant to Letters of Credit or L/C Drafts, or if
no such reimbursement is required, to payment of such of the other Obligations
as the Administrative Agent shall determine. If no Default shall be continuing,
amounts remaining in any cash collateral account established pursuant to this
Section 3.11 which are not to be applied to reimburse an Issuing Bank for
amounts actually paid or to be paid by such Issuing Bank in respect of a Letter
of Credit or L/C Draft, shall be promptly returned to the Borrower, after
deduction of the Administrative Agent's expenses incurred in connection with
such cash collateral account.

                       ARTICLE IV: CHANGE IN CIRCUMSTANCES

                4.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,

                (A) subjects any Lender or any applicable Lending Installation
        to any tax, duty, charge or withholding on or from payments due from the
        Borrower (other than

                                       54
<PAGE>

        taxation of the overall net income of any Lender or taxation of a
        similar basis, which are governed by Section 2.15(E)), or changes the
        basis of taxation of payments to any Lender in respect of its Revolving
        Loan Commitment, Loans, its L/C Interests, the Letters of Credit or
        other amounts due it hereunder, or

                (B) imposes or increases or deems applicable any reserve,
        assessment, insurance charge, special deposit or similar requirement
        against assets of, deposits with or for the account of, or credit
        extended by, any Lender or any applicable Lending Installation (other
        than reserves and assessments taken into account in determining the
        interest rate applicable to Eurodollar Rate Loans) with respect to its
        Revolving Loan Commitment, Loans, L/C Interests or the Letters of
        Credit, or

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

                and the result of any of the foregoing is to increase the cost
to that Lender of making, renewing or maintaining its Revolving Loan Commitment,
Loans, L/C Interests, or Letters of Credit or to reduce any amount received
under this Agreement, then, within fifteen (15) days after receipt by the
Borrower of written demand by such Lender pursuant to Section 4.5, the Borrower
shall pay such Lender that portion of such increased expense incurred or
reduction in an amount received which such Lender determines is attributable to
making, funding and maintaining its Loans, L/C Interests, Letters of Credit and
its Revolving Loan Commitment; provided that the Borrower shall be responsible
for any such of the foregoing amounts that has accrued or been assessed to any
Lender not more than 180 days prior to such written demand (or, if longer, such
period during which because of the retroactive application of such law, rule,
regulation, policy, guideline or directive such Lender did not know in good
faith that such amount would arise or accrue).

                4.2 Changes in Capital Adequacy Regulations. If a Lender
reasonably determines (A) the amount of capital required or expected to be
maintained by such Lender, any Lending Installation of such Lender or any
corporation controlling such Lender is increased as a result of a "Change" (as
defined below), and (B) such increase in capital will result in an increase in
the cost to such Lender of maintaining its Revolving Loan Commitment, Loans, L/C
Interests, the Letters of Credit or its obligation to make Loans hereunder,
then, within fifteen (15) days after receipt by the Borrower of written demand
by such Lender pursuant to Section 4.5, the Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is attributable
to this Agreement, its Revolving Loan Commitment, its Loans, its L/C Interests,
the Letters of Credit or its obligation to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy). "Change" means (i)
any change after the date of this Agreement

                                       55
<PAGE>

in the "Risk-Based Capital Guidelines" (as defined below) excluding, for the
avoidance of doubt, the effect of any phasing in of such Risk-Based Capital
Guidelines or any other capital requirements passed prior to the date hereof, or
(ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.

                4.3 Availability of Types of Advances. If (A) any Lender
reasonably determines that maintenance of its Eurodollar Rate Loans at a
suitable Lending Installation would violate any applicable law, rule, regulation
or directive of any Governmental Authority, whether or not having the force of
law, or (B) the Required Lenders reasonably determine that, other than during
the Syndication Period, deposits of a type or maturity appropriate to match fund
Eurodollar Rate Loans are not available, then the Administrative Agent shall
suspend the availability of the affected Type of Advance and, in the case of any
occurrence set forth in clause (A), require any Advances of the affected Type to
be repaid or converted into another Type, provided that such repayment or
conversion shall entitle the Lenders to funding indemnification contained in
Section 4.4 with respect to any Eurodollar Rate Advance only upon the occurrence
of a change in a law, rule or regulation occurring after the Borrowing Date of
such Eurodollar Rate Advance.

                4.4 Funding Indemnification. If any payment of a Eurodollar Rate
Loan occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment, or otherwise, or a
Eurodollar Rate Loan is not made on the date specified by the Borrower for any
reason other than default by the Lenders, or a Eurodollar Rate Loan is not
prepaid on the date specified by the Borrower for any reason, the Borrower
indemnifies each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the Eurodollar Rate Loan. In connection
with any assignment by any Lender of any portion of the Loans made pursuant to
Section 13.3 and made during the Syndication Period, and if, notwithstanding the
provisions of Section 2.4, the Borrower has requested and the Administrative
Agent has consented to the use of the Eurodollar Rate, the Borrower shall be
deemed to have repaid all outstanding Eurodollar Rate Advances as of the
effective date of such assignment and reborrowed such amount as a Floating Rate
Advance and/or Eurodollar Rate Advance (chosen in accordance with the provisions
of Section 2.4) and the indemnification provisions under this Section 4.4 shall
apply.

                4.5 Lender Statements; Survival of Indemnity. If reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Rate Loan to reduce any liability of the Borrower to
such Lender under Sections 4.1 and 4.2 or to avoid the unavailability of a Type
of Advance under Section 4.3, so long as such designation is not, in the

                                       56
<PAGE>

reasonable judgment of the Lender, disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender to the Borrower (with a copy to
the Administrative Agent) as to the amount due, if any, under Section 2.15(E),
4.1, 4.2 or 4.4 and shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of demonstrable error. Determination of
amounts payable under such Sections in connection with a Eurodollar Rate Loan
shall be calculated as though each Lender funded its Eurodollar Rate Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such statement. The
obligations of the Borrower under Sections 2.15(E), 4.1, 4.2 and 4.4 shall
survive payment of the Obligations and termination of this Agreement.

                         ARTICLE V: CONDITIONS PRECEDENT

                5.1 Initial Advances and Letters of Credit. The Lenders shall
not be required to make the initial Loans or issue any Letters of Credit unless
(A) such initial Loans are made not later than December 31, 2002; and (B) the
Borrower has furnished to the Administrative Agent each of the following, with
sufficient copies for the Lenders, all in form and substance satisfactory to the
Administrative Agent and the Lenders in their sole and absolute discretion:

                (i) Copies of the Certificate of Incorporation or Articles of
        Incorporation or other applicable organizational document of the
        Borrower and each of the Guarantors as of the Closing Date
        (collectively, the "LOAN PARTIES"), together with all amendments and a
        certificate of good standing, both certified as of a recent date by the
        appropriate governmental officer in its jurisdiction of organization;

                (ii) Copies, certified by the Secretary or Assistant Secretary
        of each of the Loan Parties of their respective by-laws or operating
        agreement and of their respective Board of Directors' resolutions (and
        resolutions of other bodies, if any are deemed necessary by counsel for
        any Lender) authorizing the execution of the Loan Documents entered into
        by it;

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

                (iv) A certificate, in form and substance satisfactory to the
        Administrative Agent and the Arranger, signed by the Chief Financial
        Officer of the Borrower, certifying that on the Closing Date (a) all the
        representations in this Agreement are true and correct in all material
        respects (unless such representation and warranty is made as of a
        specific date, in which case, such representation and warranty shall be
        true and correct as of such date), (b) no Default or Unmatured Default
        has occurred

                                       57
<PAGE>

        and is continuing, and (c) since September 30, 2001 no material adverse
        change in the business, financial condition, operations or results of
        operations of the Borrower, any Guarantor, the Borrower and its
        Subsidiaries, in each case taken as a whole, or the assets acquired
        pursuant to the terms of the Asset Purchase Agreement shall have
        occurred;

                (v) The written opinion of the Loan Parties' counsel, addressed
        to the Administrative Agent, the Arranger and the Lenders, in
        substantially the form attached hereto as Exhibit E;

                (vi) A copy of (a) an opinion of Duff & Phelps, LLC, including
        to the effect that (1) the consideration to be paid by the ESOT for the
        "Shares" under (and as defined in) the ESOT Stock Purchase Agreement is
        not in excess of "adequate consideration," within the meaning of Section
        3(18) of ERISA and (2) the transactions contemplated in connection with
        the ESOT Transaction Documents are fair to the ESOT from a financial
        point of view, which opinion shall be in full force and effect and not
        withdrawn as of the Closing Date, and (b) the stock repurchase liability
        forecasts and stock and cash allocations in respect of the ESOP prepared
        by Benefits Consulting, Inc.;

                (vii) Evidence satisfactory to the Administrative Agent and the
        Arranger that (a) all conditions precedent to the consummation of the
        IITRI Acquisition and the ESOT Transaction have been satisfied or waived
        with the approval of the Administrative Agent and the Arranger (which
        approval shall not be unreasonably withheld), (b) the IITRI Acquisition
        and the ESOT Transaction have been approved by all necessary action of
        the Borrower's Board of Directors and shareholders and of the ESOT
        Trustee, and the ESOP Plan Documents (including all amendments, waivers
        and other modifications thereto as of the Closing Date) are reasonably
        acceptable to the Administrative Agent and the Arranger, (c) the IITRI
        Acquisition has been approved by the members of IITRI, (d) the
        representations and warranties in the Asset Purchase Agreement and the
        ESOT Transaction Documents shall be accurate in all material respects as
        of the Closing Date, and (e) the ESOT shall own not less than one
        hundred percent (100%) of the Capital Stock of the Borrower as of the
        Closing Date; and the Administrative Agent, the Arranger and the Lenders
        shall have received an opinion of counsel satisfactory to them as to the
        enforceability of the Asset Purchase Agreement and the ESOT Transaction
        Documents and the Borrower's, the ESOT Trustee's and the ESOT's
        compliance with law in respect thereof;

                (viii) Evidence reasonably satisfactory to the Administrative
        Agent that the Borrower shall have (x) issued Senior Subordinated Notes
        to IITRI pursuant to the Securities Purchase Agreements in partial
        satisfaction of the "Purchase Price" under (and as defined in) the Asset
        Purchase Agreement in an aggregate amount not to exceed $20,400,000, (y)
        issued Junior Subordinated Notes to IITRI in partial satisfaction of the
        "Purchase Price" under (and as defined in) the Asset Purchase Agreement
        in an amount not to exceed $39,900,000 plus the amount of any
        adjustments under the Asset Purchase Agreement, and (z) received not
        less than

                                       58
<PAGE>

        $25,000,000 in proceeds from the issuance of Capital Stock to the ESOT,
        which amount is received by the ESOT from the rollover pension and
        tax-sheltered annuity plans of employees of IITRI as of the Closing
        Date, on the terms and conditions set forth in the ESOT Transaction
        Documents;

                (ix) Evidence satisfactory to the Administrative Agent,
        including, without limitation, opinion letters from the ESOT Trustee's
        counsel addressed to the Administrative Agent and the Lenders, to the
        effect that (a) the ESOT has been duly organized and is a validly
        existing trust and has all the requisite powers and authority to execute
        and deliver the Transaction Documents and the ESOP Plan Documents which
        have been or are to be executed by it and to perform its obligations
        under and the transactions contemplated by the Transaction Documents and
        the ESOP Plan Documents, (b) the execution and delivery by the ESOT of
        the Transaction Documents and the ESOP Plan Documents have been duly
        authorized and completed by all necessary actions of it and such
        executions and deliveries and the performance by it of its obligations
        under and the transactions contemplated by the Transaction Documents and
        the ESOP Plan Documents do not contravene any provision of law and the
        Transaction Documents and the ESOP Plan Documents which have been or are
        to be executed by it are legal, valid and binding obligations of it
        enforceable against it in accordance with the terms thereof, except as
        the enforceability thereof may be limited by bankruptcy, insolvency,
        reorganization, or moratorium or other similar laws relating to the
        enforcement of creditors' rights generally and by general equitable
        principles other than general equitable principles as may be applicable
        to any prohibited transactions described in Section 406 of ERISA or
        Section 4975 of the Code; (c) the ESOT Transaction does not constitute,
        nor will it constitute a prohibited transaction described in Section 406
        of ERISA or Section 4975 of the Code, (d) the ESOP is qualified under
        Section 401(a) of the Code, (e) the ESOP is an employee stock ownership
        plan as defined in Section 4975(e)(7) of the Code, and (f) neither the
        Borrower nor any of its Subsidiaries shall be subject to the tax imposed
        by Section 4978 of the Code with respect to any "disposition" by the
        ESOT of any Capital Stock of the Borrower occurring as a result of the
        ESOT Transaction;

                (x) Evidence reasonably satisfactory to the Administrative Agent
        (which satisfaction may come through the opinions referenced in other
        clauses of this Section 5.1(B)) that as of the Closing Date and
        effective for the tax year ending September 30 2002, the Borrower shall
        be an "S corporation" as such term is defined in Section 1361 of the
        Code and the ESOT shall not be subject to tax imposed under the Code
        with respect to any item of income or loss of the Borrower or any
        Subsidiary of the Borrower;

                (xi) Copies of the Asset Purchase Agreement, the ESOP Plan
        Documents and the ESOT Transaction Documents that will be in effect on
        and after the date of this Agreement all in form and substance
        satisfactory to the Administrative Agent and their counsel in their
        reasonable discretion, and which documents and agreements shall be in
        material compliance with ERISA and any applicable rules and regulations
        of the United States Treasury Department;

                                       59
<PAGE>

                (xii) Evidence reasonably satisfactory to the Administrative
        Agent that all necessary governmental and third party approvals and
        consents, if any, related to the Asset Purchase Agreement and the ESOT
        Transaction have been obtained and all related filings made and any
        applicable waiting periods shall have expired or been terminated;

                (xiii) Evidence reasonably satisfactory to the Administrative
        Agent and the Arranger that there exists no injunction or temporary
        restraining order which, in the reasonable judgment of the
        Administrative Agent and the Arranger, would prohibit the making of the
        Loans or the consummation of the IITRI Acquisition or the ESOT
        Transaction and the other transactions contemplated by the Transaction
        Documents and the ESOP Plan Documents or any litigation seeking such an
        injunction or restraining order or which could reasonably be expected to
        result in a Material Adverse Effect;

                (xiv) The ESOP Plan Documents together with the Borrower's most
        recently filed information return Form 5500 Series and all schedules and
        attachments thereto (if available) for the ESOP, the ESOT Transaction
        Documents and such other documents as the Administrative Agent shall
        reasonably require in connection therewith, all in form and substance
        satisfactory to the Administrative Agent in its reasonable discretion;

                (xv) A field examination conducted by the Administrative Agent's
        internal auditors (or similar outside auditors), including satisfactory
        reviews of Receivables, contracts, contract collection and reimbursement
        provisions, and pension and tax-sheltered annuity add-backs,
        satisfactory to the Administrative Agent and the Lenders;

                (xvi) Evidence reasonably satisfactory to the Administrative
        Agent that there exists no action, suit, investigation, litigation, or
        proceeding pending or threatened in any court or before any arbitrator
        or governmental instrumentality that in Administrative Agent's
        reasonable judgment could reasonably be expected to have a Material
        Adverse Effect;

                (xvii) Such other documents as the Administrative Agent or any
        Lender or its counsel may have reasonably requested, including, without
        limitation, all of the documents reflected on the List of Closing
        Documents attached as Exhibit F to this Agreement;

                (xviii) (a) The audited financial statements of IITRI and its
        consolidated Subsidiaries for the 12-month period ending as of September
        30, 2001, (b) the unaudited quarterly financial statements of IITRI and
        its consolidated Subsidiaries for the fiscal quarter ending as of
        September 30, 2002 certified by the chief financial officer of the
        Borrower, (c) the audited financial statements of the business and
        assets of IITRI to be acquired by the Borrower pursuant to the Asset
        Purchase Agreement for the 12-month period ending as of September 30,
        2001, (d) the unaudited quarterly financial statements of the business
        and assets of IITRI to be acquired by the

                                       60
<PAGE>

        Borrower pursuant to the Asset Purchase Agreement for the fiscal quarter
        ending as of September 30, 2002 certified by the chief financial officer
        of the Borrower, and (e) the pro forma opening consolidated financial
        statements of the Borrower and its Subsidiaries, based on the September
        30, 2002 financial statements described in clause (d) above after giving
        effect to the transactions contemplated by the Transaction Documents,
        which financial statements shall demonstrate, in the reasonable
        judgement of the Administrative Agent and the Arranger, together with
        all other information then available to the Administrative Agent and the
        Arranger, the ability of the Borrower and its Subsidiaries to repay
        their debts and satisfy their respective other obligations as and when
        due, and to comply with the financial covenants set forth in Section 7.4
        hereof;

                (xix) Evidence reasonably satisfactory to the Administrative
        Agent and the Arranger of (i) the payment of all principal, interest,
        fees and premiums, if any, on all Indebtedness under the Existing Credit
        Agreement, and the agreement to release all Liens and the termination of
        the applicable agreements relating thereto and (ii) the payment of all
        principal, interest, fees and premiums, if any, on all Indebtedness
        under that certain Business Loan Agreement, dated as of September 30,
        2002, by and between the Borrower and LaSalle Bank National Association,
        and related Promissory Note dated as of September 30, 2002 issued by the
        Borrower thereunder, and the agreement to terminate the applicable
        agreements relating thereto, in each case taking effect concurrently
        with the effectiveness of this Agreement and the consummation of the
        IITRI Acquisition and the ESOT Transaction;

                (xx) An initial executed Borrowing Base Certificate dated as of
        the Closing Date, reflecting the calculation of the Borrowing Base
        (Monthly) as of November 22, 2002, together with an initial compliance
        certificate, substantially in the form of Exhibit H attached hereto,
        signed by an Authorized Officer, setting forth calculations for the
        period ending November 22, 2002 for (a) the Senior Leverage Ratio, which
        Senior Leverage Ratio shall be not more than 2.50 to 1.00 and (b)
        EBITDAE attributable to the business and assets of IITRI acquired by the
        Borrower pursuant to the Asset Purchase Agreement, but exclusive of
        non-recurring costs and expenses associated with this Agreement, the
        ESOT Transaction Documents and the Asset Acquisition Agreement, which
        EBITDAE shall be not less than $17,000,000;

                (xxi) A financial condition certificate, together with
        appropriate supporting factual information, in form and substance
        reasonably satisfactory to it from the Chief Financial Officer of the
        Borrower supporting the conclusions that after giving effect to the ESOT
        Transaction, the Borrower and its Subsidiaries on a consolidated basis
        are Solvent and will be Solvent subsequent to incurring the Indebtedness
        contemplated under the Transaction Documents, would reasonably be
        expected to be able to pay its debts and liabilities as they become due
        and will not be left with unreasonably small capital with which to
        engage in its business;

                (xxii) Evidence satisfactory to the Administrative Agent and the
        Arranger that the Borrower has paid to the Administrative Agent and the
        Arranger the fees agreed

                                       61
<PAGE>

        to in the fee letter dated May 23, 2002, between the Administrative
        Agent and the Borrower.

                5.2 Each Advance and Letter of Credit. The Lenders shall not be
required to make any Advance, or convert or continue any Advance, or issue any
Letter of Credit and no Swing Line Bank shall be required to make any Swing Line
Loans hereunder, unless on the applicable Borrowing Date, or in the case of a
Letter of Credit, the date on which the Letter of Credit is to be issued:

                (A) No Defaults. There exists no Default or Unmatured Default;

                (B) Representations and Warranties. All of the representations
        and warranties contained in Article VI are true and correct as of such
        Borrowing Date (unless such representation and warranty is made as of a
        specific date, in which case, such representation and warranty shall be
        true and correct as of such date) except for changes in the Schedules to
        this Agreement reflecting transactions permitted by or not in violation
        of this Agreement; and

                (C) Maximum Revolving Credit Amount. The Revolving Credit
        Obligations do not, and after making such proposed Advance or issuing
        such Letter of Credit would not, exceed the Maximum Revolving Credit
        Amount.

                Each Borrowing/Election Notice with respect to each such Advance
and the letter of credit application with respect to each Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 5.2(A), (B) and (C) have been satisfied.

                   ARTICLE VI: REPRESENTATIONS AND WARRANTIES

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

                6.1 Organization; Powers. The Borrower and each of its
Subsidiaries (A) is a corporation, limited liability company, or partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (B) is duly qualified to do business as a
foreign entity and is in good standing under the laws of each jurisdiction in
which failure to be so qualified and in good standing could reasonably be
expected to have a Material Adverse Effect, and (C) has all requisite power and
authority to own, operate and encumber its property and to conduct its business
as presently conducted and as proposed to be conducted.

                6.2 Authority, Execution and Delivery; Transaction Documents.

                (A) Power and Authority. The Borrower and each of its
        Subsidiaries has the requisite power and authority to execute, deliver
        and perform each of the Transaction

                                       62
<PAGE>

        Documents which are to be executed by it in connection with the IITRI
        Acquisition and the ESOT Transaction or which have been executed by it
        as required by this Agreement and the other Loan Documents and (ii) to
        file the Transaction Documents which must be filed by it in connection
        with IITRI Acquisition or the ESOT Transaction or which have been filed
        by it as required by this Agreement, the other Loan Documents or
        otherwise with any Governmental Authority.

                (B) Execution and Delivery. The execution, delivery, performance
        and filing, as the case may be, of each of the Transaction Documents
        which must be executed or filed by the Borrower or any of its
        Subsidiaries in connection with the IITRI Acquisition or the ESOT
        Transaction or which have been executed or filed as required by this
        Agreement, the other Loan Documents or otherwise and to which the
        Borrower or any of its Subsidiaries is party, and the consummation of
        the transactions contemplated thereby, have been duly approved by the
        respective boards of directors and, if necessary, the stockholders or
        unitholders of the Borrower and its Subsidiaries, and such approvals
        have not been rescinded. No other action or proceedings on the part of
        the Borrower or its Subsidiaries are necessary to consummate such
        transactions.

                (C) Transaction Documents. Each of the Transaction Documents to
        which the Borrower or any of its Subsidiaries is a party has been duly
        executed, delivered or filed, as the case may be, by it and constitutes
        its legal, valid and binding obligation, enforceable against it in
        accordance with its terms (except as enforceability may be limited by
        bankruptcy, insolvency, or similar laws affecting the enforcement of
        creditors' rights generally), is in full force and effect, and no
        material term or condition thereof has been amended, modified or waived
        from the terms and conditions contained in the Transaction Documents
        delivered to the Administrative Agent pursuant to Section 5.1 without
        the prior written consent of the Administrative Agent, and the Borrower
        and its Subsidiaries have, and, to the best of the Borrower's and its
        Subsidiaries' knowledge, all other parties thereto have, performed and
        complied with all the terms, provisions, agreements and conditions set
        forth therein and required to be performed or complied with in all
        material respects by such parties, and no unmatured default, default or
        breach of any covenant by any such party exists thereunder.

                6.3 No Conflict; Governmental Consents. The execution, delivery
and performance of each of the Loan Documents and other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not (A)
conflict with the Constituent Documents of the Borrower or any such Subsidiary,
(B) (i) constitute a tortious interference with any Contractual Obligation of
any Person or (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law
(including, without limitation, any Environmental Property Transfer Act) or
Contractual Obligation of the Borrower or any such Subsidiary, or require
termination of any Contractual Obligation of the Borrower or any such Subsidiary
which, in the case of this clause (ii), could be reasonably anticipated to
result in a Material Adverse Effect, (C) result in or require the creation or
imposition of any Lien whatsoever upon any of the property or assets of the
Borrower or any such Subsidiary, other than Liens permitted or created by the
Transaction Documents, or (D) require any approval of the Borrower's or any such
Subsidiary's Board of Directors or shareholders or unitholders except such as
have been obtained. Except as set forth on Schedule

                                       63
<PAGE>

6.3 to this Agreement, the execution, delivery and performance of each of the
Transaction Documents to which the Borrower or any of its Subsidiaries is a
party do not and will not require any registration with, consent or approval of,
or notice to, or other action to, with or by any Governmental Authority,
including under any Environmental Property Transfer Act, except filings,
consents or notices which have been made, obtained or given, or which, if not
made, obtained or given, individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.

              6.4 Financial Statements.

              (A) Pro Forma Financials. The combined, projected pro forma
       balance sheet, income statements and statements of cash flow of the
       Borrower and its Subsidiaries, copies of which are attached hereto as
       Schedule 6.4 to this Agreement, present on a pro forma basis the
       financial condition of the Borrower and such Subsidiaries as of such
       date, and reflect on a pro forma basis those liabilities reflected in the
       notes thereto and resulting from consummation of the IITRI Acquisition,
       the ESOT Transaction, the issuance of the Subordinated Notes and the
       other transactions contemplated by this Agreement, and the payment or
       accrual of all transaction costs payable on the Closing Date with respect
       to any of the foregoing. The projections and assumptions expressed in the
       pro forma financials referenced in this Section 6.4(A) were prepared in
       good faith and represent management's opinion based on the information
       available to the Borrower at the time so furnished and, since the
       preparation thereof and up to the Closing Date, there has occurred no
       change in the business, financial condition, operations, or prospects of
       the Borrower or any of its Subsidiaries, or the Borrower and its
       Subsidiaries taken as a whole which has had or could reasonably be
       expected to have a Material Adverse Effect.

              (B) Audited Financial Statements. Complete and accurate copies of
       the audited financial statements and the audit reports related thereto of
       IITRI and its consolidated Subsidiaries as at September 30, 2001 and of
       the business and assets of IITRI to be acquired by the Borrower pursuant
       to the Asset Purchase Agreement as at September 30, 2001, and (ii) the
       unaudited financial statements of IITRI and its consolidated Subsidiaries
       as of September 30, 2002 and of the business and assets of IITRI to be
       acquired by the Borrower pursuant to the Asset Purchase Agreement as of
       September 30, 2002, have been delivered to the Administrative Agent.

              6.5    No Material Adverse Change.

              (A) Prior to Closing Date. Since September 30, 2001 up to the
       Closing Date, there has occurred no change in the business, properties,
       condition (financial or otherwise), performance, results of operations or
       prospects of IITRI and its consolidated Subsidiaries, the Borrower, any
       Guarantor, or the Borrower and its Subsidiaries, in each case, taken as a
       whole or any other event which has had or could reasonably be expected to
       have a Material Adverse Effect.

              (B) From and After Closing Date. Since the Closing Date, there has
       occurred no change in the business, properties, condition (financial or
       otherwise), performance, results of operations or prospects of the
       Borrower, any Guarantor or the Borrower and its

                                       64
<PAGE>

       Subsidiaries, in each case, taken as a whole or any other event which has
       had or could reasonably be expected to have a Material Adverse Effect.

              6.6 Taxes.

              (A) Tax Examinations. All deficiencies which have been asserted
       against the Borrower or any of the Borrower's Subsidiaries as a result of
       any federal, state, local or foreign tax examination for each taxable
       year in respect of which an examination has been conducted have been
       fully paid or finally settled or are being contested in good faith, and
       no issue has been raised by any taxing authority in any such examination
       which, by application of similar principles, could reasonably be expected
       to result in assertion by such taxing authority of a material deficiency
       for any other year not so examined which has not been reserved for in the
       Borrower's consolidated financial statements to the extent, if any,
       required by Agreement Accounting Principles. Except as permitted pursuant
       to Section 7.2(D), neither the Borrower nor any of the Borrower's
       Subsidiaries anticipates any tax liability with respect to the years
       which have not been closed pursuant to applicable law.

              (B) Payment of Taxes. All tax returns and reports of the Borrower
       and its Subsidiaries required to be filed have been timely filed, and all
       taxes, assessments, fees and other governmental charges thereupon and
       upon their respective property, assets, income and franchises which are
       shown in such returns or reports to be due and payable have been paid
       except those items which are being contested in good faith and have been
       reserved for in accordance with Agreement Accounting Principles. The
       Borrower has no knowledge of any proposed tax assessment against the
       Borrower or any of its Subsidiaries that will have or could reasonably be
       expected to have a Material Adverse Effect.

              (C) Subchapter S Status; ESOT Tax-Exempt Status. As of the Closing
       Date, the Borrower will have executed the applicable election forms or
       other filings required to be made for purposes of the Borrower's election
       to be taxed as an "S corporation" as such term is defined in Section 1361
       of the Code. Beginning with the Borrower's taxable year ending September
       30, 2002, the Borrower is taxable as an S corporation. The ESOT is not
       subject to tax imposed under the Code with respect to any item of income
       or loss of the Borrower or any Subsidiary of the Borrower.

              6.7 Litigation; Loss Contingencies and Violations.

              (A) Litigation. Except as set forth in Schedule 6.7 (the
       "DISCLOSED LITIGATION"), there is no action, suit, proceeding,
       arbitration or, to the Borrower's knowledge, investigation before or by
       any Governmental Authority or private arbitrator pending or, to the
       Borrower's knowledge, threatened against or affecting the Borrower or any
       of its Subsidiaries or any property of any of them. Neither any of the
       Disclosed Litigation nor any action, suit, proceeding, arbitration or
       investigation which has commenced since the Closing Date (or the most
       recent update of the Disclosed Litigation) (i) challenges the validity or
       the enforceability of any material provision of the Transaction Documents
       or (ii) has or could reasonably be expected to have a Material

                                       65
<PAGE>

       Adverse Effect. Neither the Borrower nor any of its Subsidiaries is (x)
       in violation of any applicable Requirements of Law which violation will
       have or could reasonably be expected to have a Material Adverse Effect,
       or (y) subject to or in default with respect to any final judgment, writ,
       injunction, restraining order or order of any nature, decree, rule or
       regulation of any court or Governmental Authority which will have or
       could reasonably be expected to have a Material Adverse Effect. To the
       Borrower's knowledge, neither the ESOP Fiduciary nor the ESOT Trustee has
       made any assertion with respect to the ESOP or ESOT contrary to or
       inconsistent with the accuracy of any representation or warranty set
       forth at Section 6.6(C) or Section 6.20 that could reasonably be expected
       to result in a Material Adverse Effect.

              (B) Loss Contingencies. There is no material loss contingency
       within the meaning of Agreement Accounting Principles which has not been
       reflected in the consolidated financial statements of the Borrower
       prepared and delivered pursuant to Section 7.1(A) for the fiscal period
       during which such material loss contingency was incurred.

              6.8    Subsidiaries.

              (A) Subsidiaries and Redemption Rights. Schedule 6.8(A) to this
       Agreement (i) contains a description of the corporate structure of the
       Borrower and its Subsidiaries; and (ii) accurately sets forth (a) the
       correct legal name, the jurisdiction of incorporation and the
       jurisdictions in which each of the Borrower and the direct and indirect
       Subsidiaries of the Borrower are qualified to transact business as a
       foreign corporation, (b) the authorized, issued and outstanding shares of
       each class of Capital Stock of the Borrower and each of its Subsidiaries
       and the owners of such shares, and (c) a summary of the direct and
       indirect partnership, joint venture, or other Equity Interests, if any,
       of the Borrower and each of its Subsidiaries in any Person. None of the
       Borrower's Subsidiaries is a Foreign Subsidiary. Except for (a) mandatory
       redemption or repurchase of Capital Stock of the Borrower as a result of
       distributions by the ESOT to participants of the ESOP pursuant to the
       ESOP Plan Documents subsequent to their termination of employment with
       the Borrower or any Controlled Group member, (b) the requirements of
       Section 401(a)(28) of the Code or any substantially similar Requirement
       of Law or as otherwise permitted by Section 7.3(F) hereto, (c) the
       vesting provisions of the ESOP, (d) the Incentive Arrangements, (e) the
       put and call rights contained in the Seller Warrants and (f) agreements
       otherwise disclosed on Schedule 6.8(A), none of the issued and
       outstanding Capital Stock of the Borrower or any of the Borrower's
       Subsidiaries is subject to any vesting, redemption, or repurchase
       agreement, and there are no warrants or options outstanding with respect
       to such Capital Stock, except for the Seller Warrants and except as may
       be in effect from time to time with respect to Incentive Arrangements.
       The outstanding Capital Stock of the Borrower and each of its
       Subsidiaries is duly authorized, validly issued, fully paid and
       nonassessable and is not Margin Stock.

              (B)    As of the Closing Date:

              (i) except as provided in the Rights Agreement and the Seller
       Warrants, the Borrower's Capital Stock is not subject to any preemptive
       right, right of first refusal

                                       66
<PAGE>

       or offer or similar right on the part of any other Person, and all of
       such Capital Stock has been (or will have been) offered and issued in
       accordance with all applicable laws; and, except as set forth on Schedule
       6.8(B)(i) and except to the extent Persons may be deemed beneficial
       owners by virtue of familial relationships with a holder of Capital Stock
       or in connection with a trust established for the benefit of family
       members by a holder of Capital Stock, the owners of the Capital Stock
       indicated on Schedule 6.8(B)(i) own the Capital Stock indicated on such
       exhibit free of any Lien, proxy, voting agreement, voting trust,
       stockholders agreement (other than the Rights Agreement) or similar
       agreement or restriction; and, except as set forth on Schedule 6.8(B)(i),
       neither the Constituent Documents nor any other agreement, document or
       instrument binding on or applicable to the Borrower or any of its
       Subsidiaries or any of its stockholders contains any provision requiring
       a higher voting requirement with respect to action taken (and/or to be
       taken) by its board of directors or stockholders than that which would
       apply in the absence of such provision;

              (ii) except as provided in the Rights Agreement and the Seller
       Warrants and except as set forth on Schedule 6.8(B)(ii) attached hereto
       (after giving effect to the consummation of the transactions consummated
       on the Closing Date under the Transaction Documents), (a) there are no
       outstanding securities convertible into or exercisable or exchangeable
       for any Capital Stock of the Borrower or any of its Subsidiaries and no
       outstanding agreements for the purchase from, or sale or issuance by, the
       Borrower or any of its Subsidiaries of any of their respective Capital
       Stock or any securities convertible into or exercisable or exchangeable
       for such Capital Stock; (b) there are no agreements on the part of the
       Borrower or any of its Subsidiaries to issue, sell or distribute any of
       their respective Capital Stock, other securities or assets; (c) neither
       the Borrower nor any of its Subsidiaries has any obligation (contingent
       or otherwise) to purchase, redeem or otherwise acquire any of their
       respective Capital Stock or other securities or any interest therein or
       to pay any dividend or make any distribution in respect thereof; and (d)
       no Person is entitled to any rights with respect to the registration of
       any Capital Stock or other securities of the Borrower or any of its
       Subsidiaries under the Securities Act (or the securities laws of any
       other jurisdiction); and

              (iii) the aggregate number of shares of common stock of the
       Borrower issuable upon exercise in full of the Seller Warrants issued
       pursuant to the terms of the Senior Subordinated Securities Purchase
       Agreement immediately after the Closing is approximately 523,871, which,
       if then issued, would constitute approximately twelve and fifty-four
       one-hundredths of one percent (12.54%) of the common stock of the
       Borrower (calculated assuming the conversion, exercise and exchange of
       all outstanding securities convertible into and exercisable or
       exchangeable for shares of common stock of the Borrower, including,
       without limitation, the Seller Warrants). The Borrower has reserved
       approximately 523,871 shares of common stock of the Borrower solely for
       issuance upon exercise of the Seller Warrants issued pursuant to the
       terms of the Senior Subordinated Securities Purchase Agreement. The
       Borrower has adopted a stock appreciation rights plan. The Borrower has
       not reserved any shares of common stock of the Borrower pursuant to the
       Borrower's stock appreciation rights plan.

                                       67
<PAGE>

              6.9    ERISA.

              (A) List of Plans. Set forth in Schedule 6.9(A) is a true and
       complete list of each material Plan that, as of the date of this
       Agreement, is or was an "employee pension benefit plan" (as such term is
       defined in Section 3(2) of ERISA). Set forth in Schedule 6.9(A) is a true
       and complete list of each material Plan that, as of the date of this
       Agreement, is or was an "employee welfare benefit plan" (as such term is
       defined in Section 3(1) of ERISA).

              (B) List of Non-ERISA Commitments. Set forth in Schedule 6.9(B) is
       a true and complete list of each material Non-ERISA Commitment adopted by
       the Borrower or any of its Subsidiaries and in effect as of the date of
       this Agreement. Upon the Request of the Administrative Agent, the
       Borrower will deliver to the Administrative Agent true and complete
       copies in existence as of the date of this Agreement of (i) all written
       Non-ERISA Commitments disclosed on Schedule 6.9(B) and (ii) all insurance
       and annuity policies and contracts and other funding arrangements and
       other documents relevant to any Non-ERISA Commitment disclosed on
       Schedule 6.9(B).

              (C) Plan Documents. The ESOP Plan Documents identified in Schedule
       1.1.5 (each as may be amended from time to time as provided herein) are
       all of the material documents pursuant to which the ESOP and ESOT are
       maintained by the Borrower, or concerning the Borrower's obligations with
       respect to the ESOP and ESOT. The ESOT Transaction Documents identified
       in Schedule 1.1.6 (without any modifications or amendments thereto),
       together with the ESOP Plan Documents identified in Schedule 1.1.5
       (without any modifications or amendments thereto), are all duly adopted
       by the Borrower to the extent intended to be so adopted.

              (D) Plan Events. The representations and warranties in this
       Section 6.9(D) are subject to the disclosures made on Schedule 6.9 (D).
       No Benefit Plan has incurred any material accumulated funding deficiency
       (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
       whether or not waived. Neither the Borrower nor any member of the
       Controlled Group has incurred any material liability to the PBGC which
       remains outstanding other than the payment of premiums, and there are no
       premium payments which have become due which are unpaid. With respect to
       each Benefit Plan, Schedule B to the most recent annual report filed with
       the IRS with respect to such plan is complete and accurate in all
       material respects. Since the date of each such Schedule B, there has been
       no material adverse change in the funding status or financial condition
       of the Benefit Plan relating to such Schedule B. As of the last day of
       the most recent prior plan year, the market value of assets under each
       Benefit Plan, other than any Multiemployer Plan, was not by a material
       amount less than the present value of benefit liabilities thereunder
       (determined in accordance with the actuarial valuation assumptions
       described therein). Neither the Borrower nor any member of the Controlled
       Group has (i) failed to make a required contribution or payment to a
       Multiemployer Plan of a material amount or (ii) incurred a material
       complete or partial withdrawal under Sections 4203 or 4205 of ERISA from
       a Multiemployer Plan. Neither the Borrower nor any member of the
       Controlled Group has failed to make a required installment or any other
       required payment under Section 412 of the Code on or before the due date
       for such installment or

                                       68
<PAGE>

       other payment. Neither the Borrower nor any member of the Controlled
       Group is required to provide security of a material amount to a Benefit
       Plan pursuant to Section 401(a)(29) of the Code due to a Plan amendment
       that results in an increase in current liability for the plan year.
       Except as set forth on Schedule 6.9, neither the Borrower nor any of its
       Subsidiaries maintains or contributes to any employee welfare benefit
       plan within the meaning of Section 3(1) of ERISA or any other arrangement
       which provides benefits to one or more employees, officers, directors, or
       consultants after termination of employment other than as required by
       Section 601 of ERISA or Section 4980(B) of the Code or applicable law and
       other than any such plan or arrangement with respect to which the
       Borrower and its Subsidiaries do not have any liability of a material
       amount. Each Plan which is intended to be qualified under Section 401(a)
       of the Code as currently in effect is designed to be qualified, and each
       trust related to any such Plan is designed to be exempt from federal
       income tax under Section 501(a) of the Code as currently in effect. With
       respect to each Plan, the Borrower and each of its Subsidiaries and the
       ESOP Fiduciary and, to the best knowledge of the Borrower, the ESOT
       Trustee are in compliance in all material respects with the
       responsibilities, obligations and duties, if any, imposed on them by
       ERISA and the Code. Each Plan and Non-ERISA Commitment complies in all
       material respects in form, and has been administered in all material
       respects in accordance with its terms and, in accordance with all
       applicable laws and regulations, including but not limited to ERISA and
       the Code. On the Closing Date and, to the best knowledge of the Borrower,
       at all times thereafter, there is no material action, suit or claim
       pending or threatened with respect to any Plan other than routine claims
       for benefits. On the Closing Date and, to the best knowledge of the
       Borrower, at all times thereafter, there have been no and there is no
       non-exempt prohibited transaction described in Sections 406 of ERISA or
       4975 of the Code which could reasonably be expected to subject the
       Borrower to material liability. Neither the Borrower nor any member of
       the Controlled Group has taken or failed to take any action which would
       constitute or result in a Termination Event, which action or inaction
       could reasonably be expected to subject the Borrower or any of its
       Subsidiaries to liability, individually or in the aggregate, in excess of
       $1,000,000. Neither the Borrower nor any Subsidiary is subject to any
       material liability under, or to the best of Borrower's knowledge, has any
       potential material liability under, Sections 4063, 4064, 4069, 4204 or
       4212(c) of ERISA and no other member of the Controlled Group is subject
       to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
       ERISA. Except as set forth on Schedule 6.9(D), neither the Borrower nor
       any of its Subsidiaries has, by reason of the ESOT Transaction or the
       making of any Advances hereunder, any obligation to make any payment to
       any current or former employee, director, officer or consultant pursuant
       to any Plan or Non-ERISA Commitment or any obligation to make any such
       payment at a time earlier than when it would be otherwise payable except
       for any payment to be made upon termination of employment. For purposes
       of this Section 6.9(D), "material" means any amount, noncompliance or
       basis for liability which could reasonably be expected to subject the
       Borrower or any of its Subsidiaries to liability, individually or in the
       aggregate, in excess of $1,000,000.

              6.10 Accuracy of Information. The information, exhibits and
reports (i) prepared by the Borrower and (ii) prepared by any other Person, in
each case, furnished by or on behalf of the Borrower and any of its Subsidiaries
to the Administrative Agent or to any Lender

                                       69
<PAGE>

in connection with the negotiation of, or compliance with, the Loan Documents,
the representations and warranties of the Borrower and its Subsidiaries
contained in the Loan Documents, and all certificates and documents delivered to
the Administrative Agent and the Lenders pursuant to the terms thereof, taken as
a whole, do not contain, and with respect to the information, exhibits and
reports identified in clause (ii) above, to the best of the Borrower's knowledge
do not contain, as of the date furnished any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.

              6.11 Securities Activities. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock. Margin Stock constitutes less than 25% of
the value of those assets of the Borrower and its Subsidiaries which are subject
to any limitation on sale, pledge, or other restriction hereunder.

              6.12 Material Agreements. Neither the Borrower nor any of its
Subsidiaries is a party to any Contractual Obligation or subject to any charter
or other corporate restriction which individually or in the aggregate has had or
could reasonably be expected to have a Material Adverse Effect. Except as set
forth on Schedule 6.12, neither the Borrower nor any of its Subsidiaries has
received notice or has knowledge that (A) it is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any Contractual Obligation applicable to it, or (B) any condition
exists which, with the giving of notice or the lapse of time or both, would
constitute a default with respect to any such Contractual Obligation, in each
case, except where such default or defaults, if any, individually or in the
aggregate will not have or could not reasonably be expected to have a Material
Adverse Effect.

              6.13 Compliance with Laws. The Borrower and its Subsidiaries are
in compliance with all Requirements of Law applicable to them and their
respective businesses, in each case where the failure to so comply individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect.

              6.14 Assets and Properties. The Borrower and each of its
Subsidiaries has good and marketable title to all of its assets and properties
(tangible and intangible, real or personal) owned by it and a valid leasehold
interest in all of its leased assets (except insofar as marketability may be
limited by any laws or regulations of any Governmental Authority affecting such
assets), and all such assets and property are free and clear of all Liens,
except Liens permitted under Section 7.3(C). Substantially all of the assets and
properties owned by, leased to or used by the Borrower and/or each such
Subsidiary of the Borrower are in adequate operating condition and repair,
ordinary wear and tear excepted. Neither this Agreement nor any other
Transaction Document, nor any transaction contemplated under any such agreement,
will affect any right, title or interest of the Borrower or such Subsidiary in
and to any of such assets in a manner that would have or could reasonably be
expected to have a Material Adverse Effect.

              6.15 Statutory Indebtedness Restrictions. Neither the Borrower nor
any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
or the Investment Company Act of 1940, or

                                       70
<PAGE>

any other foreign, federal or state statute or regulation which limits its
ability to incur indebtedness or its ability to consummate the transactions
contemplated hereby.

              6.16 Insurance. Schedule 6.16 to this Agreement accurately sets
forth as of the Closing Date all insurance policies and programs currently in
effect with respect to the respective properties and assets and business of the
Borrower and its Subsidiaries, specifying, for each such policy and program, (A)
the amount thereof, (B) the risks insured against thereby, (C) the name of the
insurer and each insured party thereunder, (D) the policy or other
identification number thereof, (E) the expiration date thereof, and (F) any
reserves relating to any self-insurance program that is in effect. Such
insurance policies and programs reflect coverage that is reasonably consistent
with prudent industry practice, and shall include, without limitation, property
and liability (and, if appropriate, business interruption) insurance.

              6.17 Labor Matters. As of the Closing Date, no attempt to organize
the employees of the Borrower or any of its Subsidiaries, and no labor disputes,
strikes or walkouts affecting the operations of the Borrower or any of its
Subsidiaries, is pending, or, to the Borrower's knowledge, threatened, planned
or contemplated.

              6.18 IITRI Acquisition and ESOT Transaction. As of the Closing
Date and immediately prior to the making of the initial Loans:

              (A) The Asset Purchase Agreement and the ESOT Transaction
       Documents are in full force and effect, no material breach, default or
       waiver of any term or provision thereof by the Borrower or any of its
       Subsidiaries, which are parties thereto, or, to the best of the
       Borrower's knowledge, the other parties thereto, has occurred (except for
       such breaches, defaults and waivers, if any, consented to in writing by
       the Administrative Agent) and no action has been taken by any competent
       authority which restrains, prevents or imposes any material adverse
       condition upon, or seeks to restrain, prevent or impose any material
       adverse condition upon, the IITRI Acquisition or the ESOT Transaction;

              (B) The representations and warranties of the Borrower contained
       in the ESOT Stock Purchase Agreement are true and correct in all material
       respects; and

              (C) Except as set forth in Schedule 6.18 to this Agreement, all
       conditions precedent to, and all consents necessary to permit, the
       funding of the IITRI Acquisition and the ESOT Transaction have been
       satisfied or waived with the approval of the Administrative Agent (such
       approval not to be unreasonably withheld).

              6.19 Environmental Matters.

              (A) Environmental Representations. Except as disclosed on Schedule
       6.19 to this Agreement:

              (i) the operations of the Borrower and its Subsidiaries comply in
       all material respects with Environmental, Health or Safety Requirements
       of Law;

                                       71
<PAGE>

              (ii) the Borrower and its Subsidiaries have all material permits,
       licenses or other authorizations required under Environmental, Health or
       Safety Requirements of Law and are in material compliance with such
       permits;

              (iii) neither the Borrower, any of its Subsidiaries nor any of
       their respective present property or operations, or, to the Borrower's or
       any of its Subsidiaries' knowledge, any of their respective past property
       or operations, are subject to or the subject of, any investigation known
       to the Borrower or any of its Subsidiaries, any judicial, administrative
       or regulatory proceeding (including enforcement proceeding), order,
       judgment, decree, settlement or other agreement respecting: (a) any
       alleged or actual material violation of Environmental, Health or Safety
       Requirements of Law; (b) any material remedial action; or (c) any
       material claims or liabilities arising from the Release or threatened
       Release of a Contaminant into the environment;

              (iv) there is not now, nor to the Borrower's or any of its
       Subsidiaries' knowledge has there ever been, on or in the property of the
       Borrower or any of its Subsidiaries any landfill, waste pile, underground
       storage tanks, aboveground storage tanks, surface impoundment or
       hazardous waste or hazardous material storage facility of any kind, any
       polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
       transformers or other equipment, or any asbestos containing material nor
       any improperly stored, handled or disposed of contaminant of any kind not
       maintained or operated in compliance with Environmental, Health or Safety
       Requirements of Law; and

              (v) neither the Borrower nor any of its Subsidiaries has any
       material Contingent Obligation in connection with any Release or
       threatened Release of a Contaminant into the environment.

              (B) Materiality. For purposes of this Section 6.19 "material"
       means any noncompliance or basis for liability which could reasonably be
       likely to subject the Borrower or any of its Subsidiaries to liability,
       individually or in the aggregate, in excess of $1,000,000.

              6.20 Solvency. After giving effect to (A) the Loans to be made on
the Closing Date or such other date as Loans requested hereunder are made, (B)
the other transactions contemplated by this Agreement and the other Transaction
Documents, including the consummation of the ESOT Transaction and (C) the
payment and accrual of all transaction costs with respect to the foregoing, the
Borrower and its Subsidiaries taken as a whole are Solvent.

              6.21 Additional ESOP Provisions.

              (A) Organization and Powers. As of the Closing Date and, to the
       best of Borrower's knowledge at all times thereafter, the ESOT has been
       duly organized and is a validly existing trust and has all the requisite
       powers and authority to execute and deliver the Transaction Documents and
       the ESOP Plan Documents which have been or are to be executed by it and
       to perform its obligations under and the transactions contemplated by the
       Transaction Documents and the ESOP Plan Documents. As of the Closing Date
       and,

                                       72
<PAGE>

       to the best of Borrower's knowledge at all times thereafter, the
       execution and delivery by the ESOT of the Transaction Documents and the
       ESOP Plan Documents have been duly authorized and completed by all
       necessary actions of it and such executions and deliveries and the
       performance by it of its obligations under and the transactions
       contemplated by the Transaction Documents and the ESOP Plan Documents do
       not contravene any provision of law and the Transaction Documents and the
       ESOP Plan Documents which have been or are to be executed by it are
       legal, valid and binding obligations of it enforceable against it in
       accordance with the terms thereof, except as the enforceability thereof
       may be limited by bankruptcy, insolvency, reorganization, or moratorium
       or other similar laws relating to the enforcement of creditors' rights
       generally and by general equitable principles other than general
       equitable principles as may be applicable to any non-exempt prohibited
       transactions described in Section 406 of ERISA or Section 4975 of the
       Code. Each of such Transaction Documents and the ESOP Plan Documents is
       in full force and effect and no term or condition thereof has been
       amended, modified or waived from the terms and conditions contained in
       the Transaction Documents and the ESOP Plan Documents delivered to the
       Administrative Agent pursuant to Section 5.1 without the consent of the
       Administrative Agent (which consent shall not be unreasonably withheld),
       except to the extent such amendment, modification or waiver could not
       reasonably be anticipated to have a material adverse effect upon the
       Administrative Agent or any of the Lenders or otherwise have a Material
       Adverse Effect. As of the Closing Date and, to the best of Borrower's
       knowledge at all times thereafter, the ESOT has performed and complied
       with all the material terms, provisions, agreements and conditions set
       forth therein and required to be performed or complied with by the ESOT,
       and no unmatured default, default or breach of any covenant by any such
       party exists thereunder.

              (B) No Conflicts. As of the Closing Date and, to the best of
       Borrower's knowledge at all times thereafter, the execution, delivery and
       performance of each of the Transaction Documents and the ESOP Plan
       Documents to which the ESOT is a party do not (i) conflict with the ESOP
       Plan Documents, (ii) conflict with any Requirement of Law, or (iii)
       require a registration with, consent or approval of, or notices to, or
       other action to, with or by any Governmental Authority, other than
       filings as required by Section 7.2(M).

              (C) Assets of ESOP and ESOT. As of the Closing Date and, to the
       best of the Borrower's knowledge, at all times thereafter, none of the
       assets of the Borrower constitute, for any purpose of ERISA or Section
       4975 of the Code, assets of the ESOP or any other "plan" as defined in
       Section 3(3) of ERISA or Section 4975 of the Code.

              (D) No Prohibited Transaction. As of the Closing Date and, to the
       best knowledge of the Borrower, at all times thereafter, no non-exempt
       prohibited transaction described in Section 406 of ERISA or Section 4975
       of the Code has occurred with respect to the ESOP, and neither any Loan
       hereunder nor the ESOT Transaction constitute or shall constitute or give
       rise to any such non-exempt prohibited transaction.

                                       73
<PAGE>

              (E) Qualification. The ESOP is qualified under Section 401(a) of
       the Code, and the ESOP is an employee stock ownership plan as defined in
       Section 4975(e)(7) of the Code.

              (F) ESOP Documents. The Borrower has provided the Administrative
       Agent a complete and true copy of the ESOP Plan Documents pursuant to
       which the ESOP and ESOT are maintained by the Borrower, or which concern
       the Borrower's obligations with respect to the ESOP and ESOT, as of the
       Closing Date and the ESOT Transaction Documents and has not subsequently
       amended or in any other way modified or replaced such ESOP Plan Documents
       or ESOT Transaction Documents in any manner adverse to the interests of
       the Lenders without the prior written consent of the Administrative Agent
       except for any amendment, modification or replacement required by the IRS
       or by applicable law (and the Borrower shall use its best efforts to
       deliver a copy of any such amendment, modification or replacement to the
       Agent prior to the execution thereof).

              (G) Exempt Loan. To the Borrower's knowledge, no Loan hereunder is
       for any purpose of Section 406 of ERISA or Section 4975 of the Code a
       direct or indirect loan or other transaction between the Administrative
       Agent or any of the Lenders and the ESOT which, if it is assumed that the
       Administrative Agent and Lenders are "parties in interest" and
       "disqualified persons" (as defined in Section 3(14) of ERISA and Section
       4975 of the Code), is a non-exempt prohibited transaction described in
       Section 406 of ERISA or Section 4975 of the Code.

              (H) No Taxable Event. Neither the Borrower nor any of its
       Subsidiaries is or shall be subject to the tax imposed by Section 4978 of
       the Code with respect to any "disposition" by the ESOT of any shares of
       Capital Stock of the Borrower.

              (I) No Investigations. To the Borrower's knowledge, there is no
       investigation or review by any Governmental Agency, or action, suit,
       proceeding or arbitration, pending or concluded, concerning any matter
       with respect to the ESOP or ESOT relevant as to whether any
       representation set forth at Section 6.6(C) or this Section 6.21 was, or
       has or will at anytime become, inaccurate or breached or, if were to be
       made at any time prior to the satisfaction of all Obligations, would be
       inaccurate when made (other than in respect of (i) periodic requests to
       the IRS to issue a favorable determination letter to the effect that the
       ESOP is and continues to be a qualified plan and employee stock ownership
       plan and (ii) Annual Reports (IRS Form 5500 Series) for the ESOP), and
       neither the ESOP Fiduciary nor, to the best knowledge of the Borrower,
       the ESOT Trustee has made any assertion with respect to the ESOP or ESOT
       contrary to or inconsistent with the accuracy of any such representation
       which assertion could reasonably be expected to have a Material Adverse
       Effect.

              6.22 Subordinated Indebtedness. The subordination provisions of
the Subordinated Notes are enforceable against the holders of the Subordinated
Notes.

              6.23 No Exercise of Set-Off. No Account Debtor with respect to any
Government Contract has exercised any right of set-off against any Receivable
owing to the

                                       74
<PAGE>

Borrower or any Guarantor under any such Government Contract that, individually
or in the aggregate with all other Account Debtors, exceeds $1,000,000.

                             ARTICLE VII: COVENANTS

              The Borrower covenants and agrees that so long as any Commitments
are outstanding and thereafter until all of the Termination Conditions have been
satisfied, unless the Required Lenders shall otherwise give prior written
consent:

              7.1 Reporting. The Borrower shall:

              (A) Financial Reporting. Furnish to the Administrative Agent (with
       sufficient copies for each of the Lenders):

              (i) Monthly Reports. As soon as practicable, and in any event
       within thirty (30) days after the end of each four-week fiscal period
       (other than the end of a fiscal quarter), the consolidated and
       consolidating balance sheet of the Borrower and its Subsidiaries as at
       the end of such period and the related consolidated and consolidating
       statements of income and statement of cash flow of the Borrower and its
       Subsidiaries for such fiscal period and cumulatively for the period from
       the beginning of the then current fiscal year to the end of such fiscal
       period, certified by the chief financial officer of the Borrower on
       behalf of the Borrower as fairly presenting the consolidated and
       consolidating financial position of the Borrower and its Subsidiaries as
       at the dates indicated and the results of their operations and cash flow
       for the fiscal periods indicated in accordance with Agreement Accounting
       Principles, subject to normal year end adjustments, and in comparative
       form (a) the corresponding figures as set forth in the budget delivered
       pursuant to clause (v) of this Section 7.1(A) for such period, and (b)
       the actual financial position of the Borrower and its Subsidiaries for
       the period ending on the corresponding fiscal period in the previous
       fiscal year.

              (ii) Quarterly Reports. As soon as practicable, and in any event
       within forty-five (45) days after the end of each fiscal quarter, the
       consolidated and consolidating balance sheet of the Borrower and its
       Subsidiaries as at the end of such period and the related consolidated
       and consolidating statements of income, stockholder's equity and cash
       flows of the Borrower and its Subsidiaries for such fiscal quarter and
       cumulatively for the period from the beginning of the then current fiscal
       year to the end of such fiscal quarter, certified by the chief financial
       officer of the Borrower on behalf of the Borrower as fairly presenting
       the consolidated and consolidating financial position of the Borrower and
       its Subsidiaries as at the dates indicated and the results of their
       operations and cash flows for the periods indicated in accordance with
       Agreement Accounting Principles, subject to normal year-end audit
       adjustments, together with (x) in comparative form (a) the corresponding
       figures as set forth in the budget, if any, delivered pursuant to clause
       (v) of this Section 7.1(A) for such period, and (b) the corresponding
       figures of the Borrower and its Subsidiaries for the period ending on the
       corresponding calendar quarter in the previous fiscal year if such
       corresponding calendar quarter began after the Closing Date, and (y) any

                                       75
<PAGE>

       management discussion and analysis of such financial statements prepared
       for presentation to the Board of Directors of the Borrower.

              (iii) Annual Reports. As soon as practicable, and in any event
       within ninety (90) days after the end of each fiscal year, (a) the
       consolidated balance sheet of the Borrower and its Subsidiaries as at the
       end of such fiscal year and the related consolidated statements of
       income, stockholders' equity and cash flows of the Borrower and its
       Subsidiaries for such fiscal year, and in comparative form the
       corresponding figures for the previous fiscal year along with
       consolidating schedules in form and substance sufficient to calculate the
       financial covenants set forth in Section 7.4, (b) a schedule from the
       Borrower setting forth for each item in clause (a) hereof, the
       corresponding figures from the consolidated financial budget for the
       current fiscal year most recently delivered pursuant to Section
       7.1(A)(v), and (c) an audit report on the items listed in clause (a)
       hereof (other than the consolidating schedules) of KPMG LLP or any other
       independent certified public accountants of recognized national standing,
       which audit report shall be unqualified and shall state that such
       financial statements fairly present the consolidated and consolidating
       financial position of the Borrower and its Subsidiaries as at the dates
       indicated and the results of their operations and cash flows for the
       periods indicated in conformity with Agreement Accounting Principles and
       that the examination by such accountants in connection with such
       consolidated and consolidating financial statements has been made in
       accordance with generally accepted auditing standards. The deliveries
       made pursuant to this clause (iii) shall be accompanied by (x) any
       management letter prepared by the above-referenced accountants, and (y) a
       copy of a certificate of such accountants that, in the course of their
       examination necessary for their certification of the foregoing, they have
       obtained no knowledge of any Default in respect of the financial
       covenants set forth in Section 7.4, or if, in the opinion of such
       accountants, any such Default shall exist, stating the nature and status
       thereof.

              (iv) Officer's Certificate. Together with each delivery of any
       financial statement (a) pursuant to clauses (i), (ii) and (iii) of this
       Section 7.1(A), an Officer's Certificate of the Borrower, substantially
       in the form of Exhibit G attached hereto and made a part hereof, stating
       that (1) the representations and warranties of the Borrower contained in
       Article VI hereof shall have been true and correct (unless such
       representation or warranty is made as of a specific date, in which case,
       such representation and warranty shall be true and correct as of such
       date) at all times during the period covered by such financial statements
       and as of the date of such Officer's Certificate and (2) as of the date
       of such Officer's Certificate no Default or Unmatured Default exists, or
       if any Default or Unmatured Default exists, stating the nature and status
       thereof and (b) pursuant to clauses (ii) and (iii) of this Section
       7.1(A), a compliance certificate, substantially in the form of Exhibit H
       attached hereto and made a part hereof, signed by an Authorized Officer,
       setting forth calculations for the period then ended for purposes of
       compliance with Section 2.5(B), if applicable, which demonstrate
       compliance, when applicable, with the provisions of Sections 7.3(A)
       through (G) and Section 7.4, and which calculates the Leverage Ratio for
       purposes of determining the then Applicable Floating Rate Margin,
       Applicable Eurodollar Margin and Applicable Commitment Fee Percentage.

                                       76
<PAGE>

              (v) Budgets; Business Plans; Financial Projections. As soon as
       practicable and in any event not later than (a) sixty (60) days after the
       beginning of each fiscal year commencing with the fiscal year beginning
       on or about October 1, 2003, a copy of the Borrower's fiscal year
       operating budget for such fiscal year, and (b) ninety (90) days after the
       beginning of each fiscal year commencing with the fiscal year beginning
       on or about October 1, 2003, a copy of the plan and forecast (including a
       projected balance sheet, income statement, a statement of cash flow and
       related footnotes) of the Borrower and its Subsidiaries for the upcoming
       five (5) fiscal years, in each case prepared in such detail as shall be
       reasonably satisfactory to the Administrative Agent.

              (vi) Borrowing Base Certificate. As soon as practicable, and in
       any event within twenty-five (25) days after the close of each four-week
       period, commencing with the four-week period ending on December 20, 2002
       (and, during the continuation of any Default, more often if reasonably
       requested by the Administrative Agent or the Required Lenders), the
       Borrower shall provide the Administrative Agent and the Lenders with a
       Borrowing Base Certificate substantially in the form of Exhibit J hereto,
       together with such supporting documents as the Administrative Agent
       reasonably deems desirable, all certified as being true and correct by an
       Authorized Officer of the Borrower. The Borrower may update the Borrowing
       Base Certificate and supporting documents more frequently than required
       under this clause (vi) and the most recently delivered Borrowing Base
       Certificate shall be the applicable Borrowing Base Certificate for
       purposes of determining the Borrowing Base (Monthly) and Borrowing Base
       (Senior Debt) at any time.

              (B) Notices of Default, Set-Off and Other Events. Promptly upon
       any of the chief executive officer, chief financial officer, controller,
       chief legal officer or general counsel of the Borrower obtaining
       knowledge (i) of any condition or event which constitutes a Default or
       Unmatured Default, or becoming aware that any Lender or Administrative
       Agent has given any written notice with respect to a claimed Default or
       Unmatured Default under this Agreement, or (ii) that any Person has given
       any written notice to the Borrower or any Subsidiary of the Borrower or
       taken any other action with respect to a claimed default or event or
       condition of the type referred to in Section 8.1(E), or (iii) any Account
       Debtor with respect to any Government Contract exercising any right of
       set-off against any Receivable owing to the Borrower or any Guarantor
       under any such Government Contract, or (iv) that any other development,
       financial or otherwise, which could reasonably be expected to have a
       Material Adverse Effect has occurred, the Borrower shall deliver to the
       Administrative Agent (with sufficient copies for each of the Lenders) an
       Officer's Certificate specifying (a) the nature and period of existence
       of any such claimed default, Default, Unmatured Default, condition or
       event, (b) the notice given or action taken by such Person in connection
       therewith, and (c) what action the Borrower has taken, is taking and
       proposes to take with respect thereto.

              (C) Lawsuits.

              (i) Promptly upon the Borrower obtaining knowledge of the
       institution of, or written threat of, any action, suit, proceeding,
       governmental investigation or

                                       77
<PAGE>
       arbitration, by or before any Governmental Authority, against or
       affecting the Borrower or any of its Subsidiaries or any property of the
       Borrower or any of its Subsidiaries not previously disclosed pursuant to
       Section 6.7, which action, suit, proceeding, governmental investigation
       or arbitration exposes, or in the case of multiple actions, suits,
       proceedings, governmental investigations or arbitrations arising out of
       the same general allegations or circumstances which, in the Borrower's
       reasonable judgment, will result in liability to the Borrower or any of
       its Subsidiaries in an amount aggregating $1,000,000 or more (exclusive
       of claims covered by insurance policies of the Borrower or any of its
       Subsidiaries unless the insurers of such claims have disclaimed coverage
       or reserved the right to disclaim coverage on such claims and exclusive
       of claims covered by the indemnity of a financially responsible
       indemnitor in favor of the Borrower or any of its Subsidiaries unless the
       indemnitor has disclaimed or reserved the right to disclaim coverage
       thereof), give written notice thereof to the Administrative Agent (with
       sufficient copies for each of the Lenders), and, subject to preservation
       of the attorney-client privilege and to the extent not prejudicial to the
       Borrower or any of its Subsidiaries, provide such other information as
       may be reasonably available to enable each Lender and the Administrative
       Agent and its counsel to evaluate such matters; and

              (ii) Within five (5) days of the Borrower or any of its
       Subsidiaries obtaining knowledge of any material adverse developments
       with respect to any of the Disclosed Litigation, give written notice
       thereof to the Administrative Agent (with sufficient copies for each of
       the Lenders) and provide such other information as may be reasonably
       available to enable each Lender and the Administrative Agent and its
       counsel to evaluate such matters; and

              (iii) In addition to the requirements set forth in clauses (i) and
       (ii) of this Section 7.1(C), upon written request of the Administrative
       Agent or the Required Lenders, promptly give written notice of the status
       of any Disclosed Litigation or any action, suit, proceeding, governmental
       investigation or arbitration covered by a report delivered pursuant to
       clause (i) above and provide such other information as may be reasonably
       available to it that would not jeopardize any attorney-client privilege
       or otherwise be prejudicial to the Borrower or its Subsidiaries, by
       disclosure to the Lenders to enable each Lender and the Administrative
       Agent and its counsel to evaluate such matters.

              (D) ERISA Notices. Deliver or cause to be delivered to the
       Administrative Agent (with sufficient copies for each of the Lenders), at
       the Borrower's expense, the following information and notices as soon as
       reasonably possible, and in any event:

              (i) (a) within ten (10) Business Days after the Borrower obtains
       knowledge that a Termination Event has occurred, a written statement of
       the chief financial officer of the Borrower describing such Termination
       Event and the action, if any, which the Borrower has taken, is taking or
       proposes to take with respect thereto, and when known, any action taken
       or threatened by the IRS, DOL or PBGC with respect thereto and (b) within
       ten (10) Business Days after any member of the Controlled Group obtains
       knowledge that a Termination Event has occurred which could

                                       78
<PAGE>

       reasonably be expected to subject the Borrower to liability in excess of
       $250,000, a written statement of the chief financial officer, treasurer
       or designee of the Borrower describing such Termination Event and the
       action, if any, which the member of the Controlled Group has taken, is
       taking or proposes to take with respect thereto, and when known, any
       action taken or threatened by the IRS, DOL or PBGC with respect thereto;

              (ii) within ten (10) Business Days after the Borrower or any of
       its Subsidiaries obtains knowledge that a material non-exempt prohibited
       transaction (defined in Section 406 of ERISA and Section 4975 of the
       Code) has occurred with respect to the ESOP or to any other Plan, or that
       the IRS or DOL or any other Governmental Authority is investigating
       whether any such material non-exempt prohibited transaction might have
       occurred, a statement of the chief financial officer, treasurer or
       designee of the Borrower describing such transaction and the action which
       the Borrower or such Subsidiary has taken, is taking or proposes to take
       with respect thereto;

              (iii) within ten (10) Business Days after the material increase in
       the benefits of any Benefit Plan or Non-ERISA Commitment in existence on
       the date of this Agreement or the establishment of any new material
       Benefit Plan or Non-ERISA Commitment or the commencement of, or
       obligation to commence, material contributions to any Benefit Plan or
       Multiemployer Plan to which the Borrower or any member of the Controlled
       Group was not previously contributing, notification of such increase,
       establishment, commencement or obligation to commence and the amount of
       such contributions;

              (iv) within ten (10) Business Days after the Borrower or any of
       its Subsidiaries receives written notice (whether preliminary, final or
       otherwise but excluding any notice of any proposed amendments) of any
       unfavorable determination letter from the IRS regarding the qualification
       of a Plan under Section 401(a) of the Code or status of the ESOP as an
       employee stock ownership plan (as defined in Section 4975(e)(7) of the
       Code), copies of each such letter;

              (v) within ten (10) Business Days after the filing thereof with
       the DOL, IRS or PBGC, copies of each annual report (Form 5500 series),
       including Schedule B thereto, filed with respect to each Benefit Plan;

              (vi) within ten (10) Business Days after receipt by the Borrower
       or any member of the Controlled Group of each actuarial report for any
       Benefit Plan or Multiemployer Plan and each annual report for any
       Multiemployer Plan, copies of each such report;

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

                                       79
<PAGE>

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

              (ix) within ten (10) Business Days after receipt by the Borrower
       or any member of the Controlled Group of a notice from a Multiemployer
       Plan regarding the imposition of material withdrawal liability, copies of
       each such notice;

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

              (xi) within ten (10) Business Days after the Borrower or any
       member of the Controlled Group knows that (a) a material Multiemployer
       Plan has been terminated, (b) the administrator or plan sponsor of a
       Multiemployer Plan intends to terminate a material Multiemployer Plan, or
       (c) the PBGC has instituted or will institute proceedings under Section
       4042 of ERISA to terminate a material Multiemployer Plan;

              (xii) within ten (10) Business Days after receipt by the Borrower
       or any of its Subsidiaries of notice of any audit, investigation,
       litigation or inquiry by the DOL or IRS relating to the ESOP or the ESOT,
       which would reasonably be expected to subject the Borrower or any of its
       Subsidiaries to liability, individually or in the aggregate, in excess of
       $1,000,000, copies of such notice and copies of all subsequent
       correspondence relating thereto within ten (10) Business Days of receipt
       of such correspondence;

              (xiii) together with the financial statements delivered pursuant
       to Section 7.1(A)(iii) or upon the written request of the Administrative
       Agent, any amendment to any of the ESOP Plan Documents or ESOT
       Transaction Documents; and

              (xiv) within ten (10) Business Days after an Authorized Officer of
       the Borrower obtains knowledge that at any time on or after the Closing
       Date the Borrower is not taxable as an "S corporation" as such item is
       defined in Section 1361 of the Code or that the ESOT is subject to tax
       imposed under the Code with respect to any item of income or loss of the
       Borrower or any Subsidiary of the Borrower, written notice of such
       knowledge.

              For purposes of this Section 7.1(D), the Borrower, any of its
Subsidiaries and any member of the Controlled Group shall be deemed to know all
facts known by the administrator of any Plan of which the Borrower or any member
of the Controlled Group or such Subsidiary is the plan sponsor. In addition, for
purposes of this Section 7.1(D), "material" means any noncompliance or basis for
liability which could reasonably be likely to subject the Borrower or any of its
Subsidiaries to liability, individually or in the aggregate, in excess of
$1,000,000.

              (E) Labor Matters. Notify the Administrative Agent in writing
       (with sufficient copies for each of the Lenders), promptly upon an
       Authorized Officer learning

                                       80
<PAGE>

       of (i) any material labor dispute to which the Borrower or any of its
       Subsidiaries may become a party, including, without limitation, any
       strikes, lockouts or other disputes relating to such Persons' plants and
       other facilities and (ii) any material Worker Adjustment and Retraining
       Notification Act liability incurred with respect to the closing of any
       plant or other facility of the Borrower or any of its Subsidiaries.

              (F) Other Reports. Deliver or cause to be delivered to the
       Administrative Agent (with sufficient copies for each of the Lenders)
       copies of (i) all financial statements, reports and notices, if any, sent
       or made available generally by the Borrower to its securities holders or
       filed with the Commission by the Borrower, and (ii) all press releases,
       if any, made available generally by the Borrower or any of the Borrower's
       Subsidiaries to the public concerning material developments in the
       business of the Borrower or any such Subsidiary.

              (G) Environmental Notices. As soon as possible and in any event
       within ten (10) days after receipt by the Borrower, provide written
       notice to the Administrative Agent (with sufficient copies for each of
       the Lenders) of, and which notice shall describe in reasonable detail,
       (i) any notice or claim to the effect that the Borrower or any of its
       Subsidiaries is or may be liable to any Person as a result of the Release
       by the Borrower, any of its Subsidiaries, or any other Person of any
       Contaminant into the environment, and (ii) any notice alleging any
       violation of any Environmental, Health or Safety Requirements of Law by
       the Borrower or any of its Subsidiaries if, in either case, such notice
       or claim relates to an event which could reasonably be expected to
       subject the Borrower and each of its Subsidiaries to liability
       individually or in the aggregate in excess of $1,000,000.

              (H) Other Information. Promptly upon receiving a written request
       therefor from the Administrative Agent, prepare and deliver to the
       Administrative Agent such other information with respect to the Borrower,
       any of its Subsidiaries, or the Collateral, including, without
       limitation, schedules identifying and describing the Collateral and any
       dispositions thereof or any Asset Sale or Financing (and the use of the
       Net Cash Proceeds thereof), as from time to time twice during any fiscal
       year (unless a Default shall be continuing or in the event of an Asset
       Sale) may be reasonably requested by the Administrative Agent.

              (I) ESOP Valuation, Audit and Repurchase Liability Study. As soon
       as practicable and in any event (i) within one hundred eighty (180) days
       after the end of each fiscal year of the Borrower, commencing with the
       fiscal year ending September 30, 2003, deliver to the Administrative
       Agent copies of the annual valuation report and audit prepared for the
       ESOP for such fiscal year and (ii) on the date that is the earlier of (a)
       one hundred eighty (180) days after the date of any Permitted Acquisition
       with a Purchase Price in excess of $10,000,000 or the target of which
       shall employ 100 or more employees, and (b) the second anniversary of the
       delivery of the most recent repurchase liability study of the Borrower
       prepared for the ESOP, deliver to the Administrative Agent (with
       sufficient copies for each of the Lenders) copies of a repurchase
       liability study of the Borrower prepared for the ESOP as of a recent
       date, in each case in form and substance reasonably acceptable to the
       Administrative Agent.

                                       81
<PAGE>

              7.2 Affirmative Covenants.

              (A) Existence, Etc. Except as permitted pursuant to Section
       7.3(I), the Borrower shall, and shall cause each of its Material
       Subsidiaries to, at all times maintain its existence and preserve and
       keep, or cause to be preserved and kept, in full force and effect its
       rights and franchises material to its businesses.

              (B) Powers; Conduct of Business. The Borrower shall, and shall
       cause each of its Material Subsidiaries to, qualify and remain qualified
       to do business in each jurisdiction in which the nature of its business
       requires it to be so qualified and where the failure to be so qualified
       will have or could reasonably be expected to have a Material Adverse
       Effect. The Borrower will, and will cause each Material Subsidiary to,
       carry on and conduct its business in substantially the same manner and in
       substantially the same fields of enterprise as it is presently conducted
       and logical extensions thereof.

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

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

              (E) Insurance. The Borrower shall maintain for itself and its
       Material Subsidiaries, or shall cause each of its Material Subsidiaries
       to maintain in full force and effect, the insurance policies and programs
       listed on Schedule 6.16 to this Agreement or substantially similar
       policies and programs or other policies and programs as reflect coverage
       that is reasonably consistent with prudent industry practice. Subject to
       the provisions of Section 2.5(B)(i)(a) above, the Borrower shall deliver
       to the Administrative Agent certificates evidencing (a) all "All Risk"
       physical damage insurance policies on all of the Borrower's tangible real
       and personal property and assets (and, if appropriate, business
       interruption insurance), policies naming the Administrative Agent
       lender's loss

                                       82
<PAGE>

       payee, and (b) all general liability and other liability policies naming
       the Administrative Agent an additional insured. In the event the Borrower
       or any of its Subsidiaries at any time or times hereafter shall fail to
       obtain or maintain any of the policies or insurance required herein or to
       pay any premium in whole or in part relating thereto, then the
       Administrative Agent, without waiving or releasing any obligations or
       resulting Default hereunder, may at any time or times thereafter (but
       shall be under no obligation to do so) obtain and maintain such policies
       of insurance and pay such premiums and take any other action with respect
       thereto which the Administrative Agent deems advisable. All sums so
       disbursed by the Administrative Agent shall constitute part of the
       Obligations, payable as provided in this Agreement.

              (F) Inspection of Property; Books and Records; Discussions. The
       Borrower shall permit and cause each of the Borrower's Material
       Subsidiaries to permit, any authorized representative(s) designated by
       either the Administrative Agent or any Lender to visit and inspect any of
       the properties of the Borrower or any of its Material Subsidiaries, to
       examine, audit, check and make copies of their respective financial and
       accounting records, books, journals, orders, receipts and any
       correspondence and other data relating to their respective businesses or
       the transactions contemplated hereby (including, without limitation, in
       connection with environmental compliance, hazard or liability, subject to
       preservation of the attorney-client privilege), and to discuss their
       affairs, finances and accounts with their officers and their independent
       certified public accountants (and such accountants are hereby authorized
       to disclose to the Administrative Agent any and all financial statements
       and other supporting financial documents with respect to the business,
       financial conditions and other affairs of the Borrower and its Material
       Subsidiaries), all upon reasonable notice and at such reasonable times
       during normal business hours. Such inspections and audits described in
       the preceding sentence (i) by or on behalf of any Lender shall, unless
       occurring at a time when a Default shall be continuing, be at such
       Lender's expense and (ii) by or on behalf of the Administrative Agent,
       other than the first such inspection or audit occurring during any
       calendar year or any inspections and audits occurring at a time when a
       Default be continuing, shall be at the Administrative Agent's expense;
       all other such inspections and visitations shall be at the Borrower's
       expense. The Borrower shall keep and maintain, and cause each of the
       Borrower's Material Subsidiaries to keep and maintain, in all material
       respects, proper books of record and account in which entries in
       conformity with Agreement Accounting Principles shall be made of all
       dealings and transactions in relation to their respective businesses and
       activities. If a Default has occurred and is continuing, the Borrower,
       upon the Administrative Agent's request, shall provide copies of such
       records to the Administrative Agent or its representatives.

              (G) ERISA Compliance. The Borrower shall, and shall cause each of
       the Borrower's Material Subsidiaries to, establish, maintain and operate
       all Plans and Non-ERISA Commitments to comply in all material respects
       with the applicable provisions of ERISA, the Code, all other applicable
       laws, and the regulations and interpretations thereunder and the
       respective requirements of the governing documents for such Plans and
       Non-ERISA Commitments.

                                       83
<PAGE>

              (H) Maintenance of Property. The Borrower shall cause all property
       reasonably deemed by the Borrower as necessary to the conduct of its
       business or the business of any Material Subsidiary to be maintained and
       kept in good condition, repair and working order and supplied with all
       necessary equipment and shall cause to be made all necessary repairs,
       renewals, replacements, betterments and improvements thereof, all as in
       the judgment of the Borrower may be necessary so that the business
       carried on in connection therewith may be properly and advantageously
       conducted at all times.

              (I) Environmental Compliance. The Borrower and its Subsidiaries
       shall comply with all Environmental, Health or Safety Requirements of
       Law, except where noncompliance will not have or is not reasonably likely
       to subject the Borrower or any of its Subsidiaries to liability,
       individually or in the aggregate, in excess of $1,000,000.

              (J) Use of Proceeds. The Borrower shall use the proceeds of the
       Term Loans made on the Closing Date to fund the Asset Acquisition and to
       refinance the Indebtedness under the Existing Credit Agreement. The
       Borrower shall use the proceeds of Revolving Loans made on and after the
       Closing Date to fund the Asset Acquisition, to pay fees and expenses
       incurred in connection with this Agreement, the Asset Acquisition and the
       ESOT Transaction, for Capital Expenditures, and for the additional
       working capital needs and other general corporate purposes of the
       Borrower and its Material Subsidiaries, including, without limitation,
       the financing of Permitted Acquisitions. The Borrower will not, nor will
       it permit any Material Subsidiary to, use any of the proceeds of the
       Loans to purchase or carry any Margin Stock or to make any Acquisition,
       other than a Permitted Acquisition pursuant to Section 7.3(G).

              (K) Material Subsidiary Collateral Documents; Pledge Agreements;
       Guarantors. The Borrower shall execute or cause to be executed:

              (i) within ten (10) Business Days of the date any Subsidiary
       becomes a Subsidiary of the Borrower, a Pledge Agreement (or supplement
       thereto) in favor of the Administrative Agent for the benefit of the
       Holders of Secured Obligations with respect to all of the Capital Stock
       of such Material Subsidiary owned by the Borrower and its Material
       Subsidiaries in the form of Exhibit I-2 hereto;

              (ii) within ten (10) Business Days after an Authorized Officer or
       legal officer of the Borrower has knowledge that any Subsidiary has
       become a Material Subsidiary, an executed Guaranty in the form of Exhibit
       I-1 hereto (or a supplement thereto) pursuant to which such Material
       Subsidiary shall become a Guarantor;

              (iii) within ten (10) Business Days after an Authorized Officer or
       legal officer of the Borrower has knowledge that any Subsidiary has
       become a Material Subsidiary, a supplement to the Security Agreement in
       the form of Annex I thereto and the other documents required thereby; and

              (iv) within thirty (30) days after the Administrative Agent's
       request, obtain waivers in respect of landlord's Liens on the Collateral,
       owned by such Material

                                       84
<PAGE>

       Subsidiary from each of the lessors of real property at which the
       Material Subsidiary shall maintain Collateral with a book value of
       $1,000,000 or more;

and the Borrower shall deliver to the Administrative Agent all such Pledge
Agreements, Guarantees, supplements to the Security Agreement and other
Collateral Documents, together with appropriate corporate resolutions and other
documentation (including opinions, UCC financing statements, the stock
certificates representing the Capital Stock subject to such pledge, stock powers
with respect thereto executed in blank, and such other documents as shall be
reasonably requested to perfect the Lien of such pledge) in each case in form
and substance reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall be reasonably satisfied that it has a first priority
perfected pledge of or charge over the Collateral related thereto.

              (L) Borrower and Other Collateral Documents; Intellectual Property
       Security Agreements. The Borrower shall, within thirty (30) Business Days
       of the Administrative Agent's request, use reasonable efforts to obtain
       waivers in respect of landlord's Liens on the Collateral from each of the
       lessors of real property at which the Borrower shall maintain Collateral.
       Within ten (10) Business Days after an Authorized Officer or legal
       officer of the Borrower has knowledge that the net book value of the
       Borrower's and its Subsidiaries' patents, trademarks, copyrights and
       other intellectual property rights shall equal or exceed $1,000,000 in
       the aggregate, the Borrower shall execute, and shall cause each
       applicable Subsidiary to execute, such Intellectual Property Security
       Agreements as shall reasonably be requested by the Administrative Agent
       to perfect a first-priority Lien in favor of the Administrative Agent,
       for the benefit of the Holders of Secured Obligations, in all such
       intellectual property.

              (M) Determination Letter. The Borrower shall promptly submit a
       request to the IRS to issue a favorable determination letter to the
       effect that the ESOP is a qualified plan and employee stock ownership
       plan within the meanings of Section 401(a) and 4975(e)(7), respectively,
       of the Code.

              (N) Hedging Agreements. Within one hundred twenty days after the
       Closing Date, the Borrower shall enter into, and shall thereafter
       maintain, Hedging Agreements on terms determined by the Borrower and
       reasonably acceptable to the Administrative Agent by which the Borrower
       is protected, by means of an interest rate swap, cap or collar, during
       the three-year period beginning on the Closing Date against increases in
       interest rates from and after the date of such contracts as to a notional
       amount of at least $17,500,000. In the event a Lender elects to enter
       into any Hedging Agreement with the Borrower, the obligations of the
       Borrower with respect to such Hedging Agreement shall be Secured
       Obligations secured by the Collateral.

              (O) Perfection Matters; Federal Assignment of Claims Act
       Compliance; Proceeds of Eligible Government Contracts. The Borrower and
       each Guarantor shall execute and deliver and pay the costs of recording
       and filing financing statements, continuation statements, termination
       statements, assignments and other documents, as the Administrative Agent
       may from time to time deem necessary or appropriate for the perfection of
       any Liens granted to the Administrative Agent for the benefit of the
       Holders

                                       85
<PAGE>

       of Secured Obligations pursuant hereto or pursuant to any other Loan
       Document. The Borrower and each Guarantor shall execute and deliver, or
       cause to be executed and delivered, to the Administrative Agent all
       documents or materials necessary or appropriate in order to comply with
       the Assignment of Claims Act of 1940, as amended (the "GOVERNMENT
       CONTRACT ASSIGNMENTS") in connection with the assignment of payments due
       under each Government Contract, which Government Contract Assignments
       shall satisfy such requirement when executed and delivered by the
       Borrower to the Administrative Agent (and which shall not be delivered to
       any relevant Governmental Authority unless a Default shall be
       continuing); it being understood and agreed that no Government Contract
       Assignment is being required for any Government Contract which (a)(i) has
       a remaining value of less than $1,000,000 and (ii) has a remaining term
       of less than twelve (12) months or (b) expressly prohibits assignment of
       claims under the Assignment of Claims Act of 1940, as amended. The
       Borrower shall not assign payments due under any Government Contract to
       any Person other than the Administrative Agent as Collateral hereunder.
       All costs and expenses incurred in connection with the Government
       Contract Assignments shall be borne solely by the Borrower. The Borrower
       shall use its best efforts to cause all Receivables of Government
       Contracts to be received into an account subject to the terms of the Cash
       Management Agreement or otherwise subject to control in favor of the
       Administrative Agent on terms and conditions reasonably acceptable to the
       Administrative Agent.

              7.3    Negative Covenants.

              (A) Indebtedness. Neither the Borrower nor any of its Subsidiaries
       shall directly or indirectly create, incur, assume or otherwise become or
       remain directly or indirectly liable with respect to any Indebtedness,
       except:

              (i) the Secured Obligations;

              (ii) Permitted Existing Indebtedness and Permitted Refinancing
       Indebtedness in respect thereof;

              (iii) Indebtedness in respect of obligations secured by Customary
       Permitted Liens;

              (iv) Indebtedness constituting Contingent Obligations permitted by
       Section 7.3(E);

              (v) subject to the terms of Section 7.3(Q), Indebtedness arising
       from intercompany loans and advances (a) from any Subsidiary to the
       Borrower or any wholly-owned Subsidiary or (b) from the Borrower to any
       wholly-owned Subsidiary; provided, that such Indebtedness shall be
       expressly subordinate to the payment in full in cash of the Secured
       Obligations on terms satisfactory to the Administrative Agent;

              (vi) Indebtedness in respect of Hedging Obligations permitted
       under Section 7.3(P);

                                       86
<PAGE>

              (vii) secured or unsecured purchase money Indebtedness (including
       Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
       after the Closing Date to finance the acquisition of fixed assets, if (a)
       at the time of such incurrence, no Default or Unmatured Default has
       occurred and is continuing or would result from such incurrence, (b) such
       Indebtedness has a scheduled maturity and is not due on demand, (c) such
       Indebtedness does not exceed the lower of the fair market value or the
       cost of the applicable fixed assets on the date acquired, (d) such
       Indebtedness does not exceed $1,000,000 in the aggregate principal amount
       outstanding at any time, and (e) any Lien securing such Indebtedness is
       permitted under Section 7.3(C) (such Indebtedness being referred to
       herein as "PERMITTED PURCHASE MONEY INDEBTEDNESS");

              (viii) Indebtedness with respect to surety, appeal and performance
       bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
       course of business;

              (ix) Indebtedness incurred by the Borrower or any of its
       Subsidiaries (whether assumed by the Borrower or such Subsidiary or
       issued to the seller) in any Permitted Acquisition as part of the
       consideration therefor, provided that such Indebtedness is unsecured and
       is subordinated to the Obligations on terms reasonably acceptable to the
       Administrative Agent (including, without limitation those with respect to
       amount, maturity (which shall not be prior to six (6) months after the
       Commitment Termination Date), amortization, interest rate, premiums,
       fees, covenants, subordination, events of default and remedies);

              (x) Indebtedness evidenced by the Subordinated Notes and Permitted
       Refinancing Indebtedness in respect thereof;

              (xi) guaranties by the Borrower of Indebtedness permitted to be
       incurred by any Subsidiary;

              (xii) Indebtedness arising in connection with the Borrower's or
       any of its Subsidiaries' credit card programs maintained with any of the
       Lenders; and

              (xiii) additional unsecured Indebtedness in an aggregate amount at
       any time outstanding not exceeding $1,000,000.

              (B) Sales of Assets. Neither the Borrower nor any of its Material
       Subsidiaries shall consummate any Asset Sale, except:

              (i) subject to the limitations set forth in the Intellectual
       Property Security Agreements, licenses or sublicenses (but not the sale
       of any licensing rights) by the Borrower or its Material Subsidiaries of
       software, customer lists, trademarks, service marks, patents, trade names
       and copyrights and other intellectual property in the ordinary course of
       business; provided, that such licenses or sublicenses shall not interfere
       in any respect with the business of the Borrower or any such Material
       Subsidiary;

                                       87
<PAGE>

              (ii) the disposition in the ordinary course of business of
       equipment that is obsolete, excess or no longer used or useful in the
       Borrower's or its Material Subsidiaries' businesses;

              (iii) transfers of assets between the Borrower and any
       wholly-owned Material Subsidiary of the Borrower or between wholly-owned
       Material Subsidiaries of the Borrower not otherwise prohibited by this
       Agreement, provided, that the security interests granted pursuant to the
       Security Agreement in the assets so transferred shall remain in full
       force and effect and perfected (to at least the same extent as in effect
       immediately prior to such transfer); and

              (iv) sales, assignments, transfers, leases, conveyances or other
       dispositions of other assets if such transaction (a) is for consideration
       consisting at least seventy-five percent (75%) of cash, (b) is for not
       less than fair market value (as determined in good faith by the
       Borrower's board of directors), and (c) when combined with all such other
       transactions (each such transaction being valued at net book value) (i)
       during the immediately preceding twelve-month period, represents the
       disposition of not greater than $1,000,000, and (ii) during the period
       from the Closing Date to the date of such proposed transaction,
       represents the disposition of not greater than $2,000,000.

              (C) Liens. Neither the Borrower nor any of its Material
       Subsidiaries shall directly or indirectly create, incur, assume or permit
       to exist any Lien on or with respect to any of their respective property
       or assets except:

              (i) Liens created by the Loan Documents or otherwise securing the
       Secured Obligations;

              (ii) Permitted Existing Liens;

              (iii) Customary Permitted Liens; and

              (iv) purchase money Liens (including the interest of a lessor
       under a Capitalized Lease and Liens to which any property is subject at
       the time of acquisition thereof) securing Permitted Purchase Money
       Indebtedness; provided that such Liens shall not apply to any property of
       the Borrower or its Material Subsidiaries other than that purchased or
       subject to such Capitalized Lease;

              (v) Liens with respect to property acquired by the Borrower or any
       of its Material Subsidiaries after the Closing Date (and not created in
       contemplation of such acquisition) pursuant to a Permitted Acquisition;
       provided, that such Liens shall extend only to the property so acquired,
       shall not secure any working capital financing of the business acquired
       and shall secure Indebtedness permitted pursuant to the terms of Section
       7.3(A);

              (vi) Liens incurred in connection with sale leaseback transactions
       permitted under Section 7.3(J);

                                       88
<PAGE>

              (vii) Environmental Liens securing obligations not to exceed
       $1,000,000 in the aggregate; and

              (viii) other Liens securing Indebtedness (other than subordinated
       Indebtedness) not to exceed $250,000 in the aggregate.

              In addition, neither the Borrower nor any of its Material
       Subsidiaries shall become a party to any agreement, note, indenture or
       other instrument, or take any other action, which would prohibit the
       creation of a first priority Lien on any of its properties or other
       assets in favor of the Administrative Agent for the benefit of itself and
       the Holders of Secured Obligations, as collateral for the Obligations;
       provided that any agreement, note, indenture or other instrument in
       connection with Permitted Purchase Money Indebtedness (including
       Capitalized Leases) incurred in compliance with the terms of this
       Agreement may prohibit the creation of a Lien in favor of the
       Administrative Agent for the benefit of itself and the Holders of Secured
       Obligations on the items of property obtained with the proceeds of such
       Permitted Purchase Money Indebtedness.

              (D) Investments. Except to the extent permitted pursuant to
       Section 7.3(G), neither the Borrower nor any of its Material Subsidiaries
       shall directly or indirectly make or own any Investment except:

              (i) Investments in cash and Cash Equivalents;

              (ii) Permitted Existing Investments in an amount not greater than
       the amount thereof on the Closing Date;

              (iii) Investments consisting of trade receivables or received in
       connection with the bankruptcy or reorganization of suppliers and
       customers and in settlement of delinquent obligations of, and other
       disputes with, customers and suppliers arising in the ordinary course of
       business;

              (iv) Investments consisting of deposit accounts maintained by the
       Borrower and its Material Subsidiaries in the ordinary course of business
       in connection with its cash management system;

              (v) Investments consisting of non-cash consideration from a sale,
       assignment, transfer, lease, conveyance or other disposition of property
       permitted by Section 7.3(B);

              (vi) Investments consisting of (a) intercompany loans from any
       Material Subsidiary of the Borrower to the Borrower or any other Material
       Subsidiary permitted by Section 7.3(A)(v), (b) intercompany loans from
       the Borrower to its Material Subsidiaries permitted under Section 7.3(Q)
       and (c) Equity Interests in Material Subsidiaries;

              (vii) Investments constituting Permitted Acquisitions;

                                       89
<PAGE>

              (viii) Investments constituting Indebtedness permitted by Section
       7.3(A) or Contingent Obligations permitted by Section 7.3(E) or
       Restricted Payments permitted by Section 7.3(F);

              (ix) Investments consisting of loans or advances made by any party
       to the Loan Documents to employees and officers of the Borrower or any of
       the Borrower's wholly-owned Material Subsidiaries for travel,
       entertainment and relocation expenses in the ordinary course of business
       in an aggregate principal amount outstanding at any one time not to
       exceed $500,000;

              (x) Investments in addition to those permitted elsewhere in this
       Section 7.3(D) in an amount not to exceed $500,000 in the aggregate at
       any time outstanding;

provided, however, that the Investments described in clauses (vii) or (x) above
shall not be permitted to be made at a time when a Default shall have occurred
and be continuing or would result therefrom.

              (E) Contingent Obligations. Neither the Borrower nor any of its
       Material Subsidiaries shall directly or indirectly create or become or be
       liable with respect to any Contingent Obligation, except: (i) recourse
       obligations resulting from endorsement of negotiable instruments for
       collection in the ordinary course of business; (ii) Permitted Existing
       Contingent Obligations; (iii) obligations, warranties, guaranties,
       reserves and indemnities, not relating to Indebtedness of any Person,
       which have been or are undertaken or made in the ordinary course of
       business and not in favor of an Affiliate of the Borrower or such
       Material Subsidiary (unless entered into on terms substantially similar
       to those applicable to a third party transaction at arm's length); (iv)
       obligations, warranties, and indemnities of Borrower to IITRI arising out
       of the Asset Purchase Agreement and the Exhibits thereto; (v) Contingent
       Obligations with respect to surety, appeal and performance bonds obtained
       by the Borrower or any Material Subsidiary in the ordinary course of
       business, (vi) Contingent Obligations of the Subsidiaries of the Borrower
       under the Guaranty and the other Collateral Documents to which they are a
       party, (vii) Contingent Obligations in connection with (x) the redemption
       or repurchase of any Capital Stock of the Borrower as a result of
       distributions by the ESOT to participants in the ESOP pursuant to the
       ESOP Plan Documents subsequent to their termination of employment with
       the Borrower or any Controlled Group member or (y) the requirements of
       Section 401(a)(28) of the Code or any substantially similar Requirement
       of Law, and (viii) guarantees of Indebtedness permitted by Section
       7.3(A), provided, that to the extent such Indebtedness shall be
       subordinated to the Obligations, each such guarantee shall be
       subordinated to the Obligations on terms reasonably acceptable to the
       Administrative Agent.

              (F) Restricted Payments. The Borrower shall not declare or make
       any Restricted Payment, except:

              (i) Restricted Payments made in connection with the defeasance,
       redemption or repurchase of any Indebtedness with the Net Cash Proceeds
       of Permitted Refinancing Indebtedness; and

                                       90
<PAGE>

              (ii) Restricted Payments of any Subsidiary of the Borrower to the
       Borrower or to another wholly-owned Subsidiary of the Borrower; and

              (iii) Restricted Payments made in connection with claims for
       reimbursement, indemnification or contribution arising out of or related
       to the Asset Purchase Agreement; and

              (iv) any Restricted Payment that constitutes a payment in respect
       of a purchase price adjustment, earn-out or other similar form of
       contingent purchase price in connection with any Acquisition (including
       the IITRI Acquisition) consummated on or before the Closing Date and any
       Permitted Acquisition; and

              (v) Restricted Payments that constitute mandatory payments of
       interest due on the Senior Subordinated Notes pursuant to the Senior
       Subordinated Securities Purchase Agreement and the Senior Subordinated
       Notes, unless such payments are prohibited by the terms of such
       Indebtedness (or any subordination agreement applicable thereto);

              (vi) Restricted Payments made (v) in connection with the
       redemption or repurchase for value of any Capital Stock of the Borrower
       as a result of distributions by the ESOT of such Capital Stock to
       participants in the ESOP pursuant to the ESOP Plan Documents subsequent
       to their termination of employment with the Borrower or any Controlled
       Group member, (w) as required by Section 401(a)(28) of the Code or any
       substantially similar Requirement of Law, (x) in good faith and believed
       by the Borrower to be made with respect to the payments described in the
       preceding clauses (v) or (w) but which do not so qualify for the status
       described in the preceding clause (v) or (w), as applicable,on account of
       administrative error or mistake, provided that such payment would not
       otherwise result in a Default or Unmatured Default and either (1) such
       payments do not collectively exceed $250,000 during the period from the
       Closing Date through the date of such payment or (2) such payment is
       recovered by the Borrower within thirty (30) days thereof and the
       Borrower's books and records are accordingly adjusted to reflect such
       recovery and such payment, together with all other such payments under
       this subclause (2), do not collectively exceed $1,000,000 during the
       period from the Closing Date through the date of such payment, or (y) in
       the form of administrative fees or expenses of the ESOP or the ESOT
       including, without limitation, the fees of the ESOT Trustee; or (z) as
       contributions to the ESOT as required under the ESOP Plan Documents;

              (vii) Restricted Payments made in connection with stock
       appreciation rights plans, phantom stock plans and other equity-based
       incentive compensation arrangements or plans to the extent such payments
       would not be in violation of the terms of this Agreement or any other
       Loan Document;

provided, however, that in no event shall any Restricted Payments (other than
(1) to the Borrower, (2) as permitted by clause (ii) above, and (3) Restricted
Payments resulting from distributions by the ESOT to participants in the ESOP
pursuant to the ESOP Plan Documents (x) subsequent to the termination by
participants in the ESOP of employment with the Borrower or

                                       91
<PAGE>

any Controlled Group member or (y) as required by Section 401(a)(28) of the Code
or any substantially similar Requirement of Law, and (4) Restricted Payments
resulting from contributions to the ESOT as required under the ESOP Plan
Documents) be declared or made if either a Default or an Unmatured Default shall
have occurred and be continuing at the date of declaration or payment thereof or
would result therefrom; provided, further, that in no event shall any Restricted
Payment be permitted under clause (v) above unless the Borrower shall have
delivered to the Administrative Agent a compliance certificate in substantially
the form of Exhibit H hereto for the most recently completed fiscal quarter
calculated giving effect to such Restricted Payment as of the last day of such
prior fiscal quarter and certifying that the Borrower is in compliance with the
financial covenants in Section 7.4 as of the last day of such prior fiscal
quarter.

              (G) Conduct of Business; Subsidiaries; Acquisitions. Neither the
       Borrower nor any of its Material Subsidiaries shall engage in any
       business other than the businesses engaged in by the Borrower and its
       Material Subsidiaries on the Closing Date and any business or activities
       which are substantially similar, related or incidental thereto or logical
       extensions thereof. The Borrower shall not create, acquire or capitalize
       any Material Subsidiary after the Closing Date unless (i) no Default
       shall have occurred and be continuing or would result therefrom; (ii)
       after such creation, acquisition or capitalization, all of the
       representations and warranties contained herein shall be true and correct
       (unless such representation and warranty is made as of a specific date,
       in which case, such representation or warranty shall be true and correct
       as of such date); and (iii) after such creation, acquisition or
       capitalization the Borrower and such Material Subsidiary shall comply
       with the terms of Section 7.2(K). Neither the Borrower nor its
       Subsidiaries shall make any Acquisitions, other than (a) the IITRI
       Acquisition and (b) Acquisitions meeting the following requirements or
       otherwise approved by the Required Lenders (each such Acquisition
       constituting a "PERMITTED ACQUISITION"):

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

              (ii) in the case of an Acquisition of Equity Interests of an
       entity, (x) if such Acquisition shall be consummated pursuant to a
       merger, the acquired entity shall be merged with and into the Borrower or
       any wholly-owned Subsidiary of the Borrower immediately following such
       Acquisition, with the Borrower or such wholly-owned Subsidiary being the
       surviving corporation following such merger and (y) the results of
       operations of such entity shall be reported on a consolidated basis with
       the Borrower and its consolidated Subsidiaries;

              (iii) the purchase is consummated on a non-hostile basis and
       approved by the target company's board of directors (and shareholders, if
       necessary) prior to the consummation of the Acquisition; and the
       acquisition documents in respect of which are satisfactory to the
       Administrative Agent (including, without limitation, in respect of
       representations, indemnities and opinions) and the results of due
       diligence in respect of such purchase are satisfactory to the
       Administrative Agent;

                                       92
<PAGE>

              (iv) the Purchase Price for the Acquisition shall not exceed
       without the prior written consent of the Required Lenders an amount equal
       to $5,000,000 (including the incurrence or assumption of any Indebtedness
       in connection therewith), and in any event shall not exceed, together
       with all other Permitted Acquisitions permitted under this Section
       7.3(G), $10,000,000 (including the incurrence or assumption of any
       Indebtedness in connection therewith) in the aggregate during the term of
       this Agreement, and the Borrower shall have complied with all of the
       requirements of the Collateral Documents in respect thereof;

              (v) the businesses being acquired shall be substantially similar,
       related or incidental to the businesses or activities engaged in by the
       Borrower and its Subsidiaries on the Closing Date;

              (vi) effective as of the date of each such Acquisition (taking
       into account the effect of such purchase and any Indebtedness incurred in
       connection therewith), the Borrower shall deliver to the Administrative
       Agent a Borrowing Base Certificate, which Borrowing Base Certificate
       shall demonstrate that Revolving Credit Availability shall not be less
       than $7,000,000; and

              (vii) prior to each such Acquisition the Purchase Price of which
       (including the incurrence or assumption of any Indebtedness in connection
       therewith) shall be $1,000,000 or more, the Borrower shall deliver to the
       Administrative Agent and the Lenders a certificate from one of the
       Authorized Officers, demonstrating to the satisfaction of the
       Administrative Agent that after giving effect to such Acquisition and the
       incurrence of any Indebtedness permitted by Section 7.3(A) in connection
       therewith, on a pro forma basis using historical audited
       or reviewed unaudited financial statements obtained from the seller(s) in
       respect of each such Acquisition as if the Acquisition and such
       incurrence of Indebtedness had occurred on the first day of the
       twelve-month period ending on the last day of the Borrower's most
       recently completed fiscal quarter, the Borrower would have been in
       compliance with the financial covenants in Section 7.4 and not otherwise
       in Default.

              (H) Transactions with Shareholders and Affiliates. Neither the
       Borrower nor any of its Subsidiaries shall directly or indirectly enter
       into or permit to exist any transaction (including, without limitation,
       the purchase, sale, lease or exchange of any property or the rendering of
       any service) with, or make loans or advances to any holder or holders of
       any of the Equity Interests of the Borrower, or with any Affiliate of the
       Borrower or any other Person controlling or controlled by any Person that
       is the "beneficial owner" (as defined in Rule 13d-3 of the Commission
       under the Exchange Act) of greater than five percent (5%) or more of any
       class of voting securities (or other voting interests) of the Borrower or
       any of its Subsidiaries, in either case which is not a Subsidiary of the
       Borrower, on terms that are less favorable to the Borrower or any of its
       Subsidiaries, as applicable, than those that could reasonably be obtained
       in an arm's length transaction at the time from Persons who are not such
       a holder or Affiliate, except for (a) Restricted Payments permitted by
       Section 7.3(F) and Investments permitted by Section 7.3(D) (b) the
       transactions contemplated under the Asset Purchase Agreement, the ESOT
       Transaction Documents and the ESOP Plan Documents, (c) the incurrence of

                                       93
<PAGE>

       Indebtedness described in Section 7.3(A)(v) hereof, (d) sales of assets
       described in Section 7.3(B)(iii) hereof, (e) any Investment permitted by
       Section 7.3(D)(vi) hereof, and (f) any deferred compensation plans or
       arrangements, employment contracts, employee benefits, Incentive
       Arrangements and other, similar contracts or arrangements with or for the
       benefit of officers or directors of the Borrower or Subsidiaries of the
       Borrower to the extent the terms thereof are in violation of the terms of
       this Agreement or any other Loan Document.

              (I) Restriction on Fundamental Changes. Neither the Borrower nor
       any of its Subsidiaries shall enter into any merger or consolidation, or
       liquidate, wind-up or dissolve (or suffer any liquidation or
       dissolution), or convey, lease, sell, transfer or otherwise dispose of,
       in one transaction or series of transactions, all or substantially all of
       the Borrower's consolidated business or property (each such transaction a
       "FUNDAMENTAL CHANGE"), whether now or hereafter acquired, except (i)
       Fundamental Changes permitted under Sections 7.3(B), 7.3(D) or 7.3(G),
       (ii) a Subsidiary of the Borrower may be merged into or consolidated with
       the Borrower (in which case the Borrower shall be the surviving
       corporation) or any wholly-owned Subsidiary of the Borrower provided the
       Borrower owns, directly or indirectly, a percentage of the equity of the
       merged entity not less than the percentage it owned of the Subsidiary
       prior to such Fundamental Change and if the predecessor Subsidiary was a
       Guarantor, the surviving Subsidiary shall be a Guarantor hereunder, (iii)
       any liquidation of any Subsidiary of the Borrower, into the Borrower or
       another Subsidiary of the Borrower, as applicable, and (iv) upon not less
       than thirty (30) days' prior written notice to the Administrative Agent,
       any merger or reincorporation of the Borrower or any Subsidiary solely
       for purposes of reincorporation in a different jurisdiction.

              (J) Sales and Leasebacks. Neither the Borrower nor any of its
       Subsidiaries shall become liable, directly, by assumption or by
       Contingent Obligation, with respect to any lease, whether an operating
       lease or a Capitalized Lease, of any property (whether real or personal
       or mixed), (i) which it or one of its Subsidiaries sold or transferred or
       is to sell or transfer to any other Person, or (ii) which it or one of
       its Subsidiaries intends to use for substantially the same purposes as
       any other property which has been or is to be sold or transferred by it
       or one of its Subsidiaries to any other Person in connection with such
       lease, unless in either case the sale involved is not prohibited under
       Section 7.3(B) and the lease involved is not prohibited under Section
       7.3(A) and any related Investment is not prohibited under Section 7.3(D).

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

              (L) ERISA. (i) The Borrower shall not

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

                                       94
<PAGE>

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

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

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

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

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

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

              (ii) For purposes of this Section 7.3(L), "material" means any
       noncompliance or basis for liability which could reasonably be likely to
       subject the Borrower or any of its Subsidiaries to liability,
       individually or in the aggregate, in excess of $1,000,000.

              (M) Constituent Documents. Neither the Borrower nor any of its
       Subsidiaries shall amend, modify or otherwise change any of the terms or
       provisions in any of their respective Constituent Documents as in effect
       on the Closing Date in any manner adverse to the interests of the
       Lenders, without the prior written consent of the Required Lenders other
       than to accommodate or facilitate transactions and changes otherwise
       expressly permitted by this Agreement.

              (N) Fiscal Year. Neither the Borrower nor any of its consolidated
       Subsidiaries shall change its fiscal year for accounting or tax purposes
       from a period consisting of a 52/53 calendar week year ending on
       September 30 of each year without the prior written consent of the
       Administrative Agent.

              (O) Subsidiary Covenants. The Borrower will not, and will not
       permit any Subsidiary to, create or otherwise cause to become effective
       or suffer to exist any consensual encumbrance (other than Permitted
       Liens) or restriction of any kind on the ability of any Subsidiary to pay
       dividends or make any other distribution on its stock, or

                                       95
<PAGE>

       make any other Restricted Payment, pay any Indebtedness or other
       Obligation owed to the Borrower or any other Subsidiary, make loans or
       advances or other Investments in the Borrower or any other Subsidiary, or
       sell, transfer or otherwise convey any of its property to the Borrower or
       any other Subsidiary, or merge, consolidate with or liquidate into the
       Borrower or any other Subsidiary.

              (P) Hedging Obligations. The Borrower shall not and shall not
       permit any of its Subsidiaries to enter into any Hedging Arrangements
       evidencing Hedging Obligations, other than Hedging Arrangements entered
       into by the Borrower or its Subsidiaries pursuant to which the Borrower
       or its Subsidiaries has hedged its actual or anticipated interest rate,
       foreign currency or commodity exposure, and which are non-speculative in
       nature. The agreements in respect of such permitted Hedging Arrangements
       entered into by the Borrower or its Subsidiaries and any Lender or any
       affiliate of any Lender including, without limitation, to hedge floating
       interest rate risk in an aggregate notional amount not to exceed at any
       time an amount equal to the outstanding balance of the Term Loans at such
       time are sometimes referred to herein as "Hedging Agreements." In the
       event a Lender or any of its Affiliates elects to enter into any Hedging
       Agreement with the Borrower or any of its Subsidiaries, the obligations
       of the Borrower and such Subsidiary with respect to such Hedging
       Agreement shall be Secured Obligations secured by the Collateral.

              (Q) Intercompany Loans. Neither the Borrower nor any of its
       Subsidiaries shall make any loans to any other Subsidiary of the Borrower
       except to the extent any such loans shall be evidenced by promissory
       notes which provide that (i) if any acceleration of the Obligations under
       this Agreement shall occur, the obligations under such promissory note
       shall immediately become due and payable without any election or action
       on the part of such Person, and (ii) such promissory notes shall be
       pledged to the Administrative Agent pursuant to the terms of the
       Collateral Documents.

              (R) Issuance of Disqualified Stock. From and after the Closing
       Date, neither the Borrower, nor any of its Subsidiaries shall issue any
       Disqualified Stock. All issued and outstanding Disqualified Stock shall
       be treated as Consolidated Total Indebtedness for all purposes of this
       Agreement (and as funded Indebtedness for purposes of Section 7.1(F)),
       and the amount of such deemed Indebtedness shall be the aggregate amount
       of the liquidation preference of such Disqualified Stock.

              (S) Loss of S Corporation Status. The Borrower shall not fail to
       be qualified as an "S corporation" as defined in Section 1361 of the Code
       at all times on or after the Closing Date.

              (T) Imposition of UBIT on ESOT. The ESOT shall not be subject to
       tax imposed under the Code with respect to any item of income or loss of
       the Borrower or any Subsidiary of the Borrower at any time on or after
       the Closing Date that could reasonably be anticipated to result in tax
       liability to the ESOT, the Borrower or any of its Subsidiaries in an
       amount in excess of $1,000,000.

                                       96
<PAGE>

              (U) ESOP Conflict. The Borrower shall not permit the performance
       of any of the Transaction Documents to which the ESOT is a party to
       conflict with the ESOP Plan Documents, conflict with any Requirement of
       Law, or require the registration with, consent or approval of, or notice
       to, or other action to, with or by any Governmental Authority other than
       (i) filings that are made regarding the status of the Borrower as an "S
       Corporation" as such term is defined in Section 1361 of the Code, which
       filings shall have been made on or prior to the Closing Date, (ii)
       filings as required by Section 7.2(M) and subsequent requests to the IRS
       to issue a favorable determination letter to the effect that the ESOP is
       and continues to be such a qualified plan and employee stock ownership
       plan, and (iii) Annual Reports (IRS Form 5500 series) for the ESOP.

              (V) Assets as Plan Assets. The Borrower shall not permit any of
       the assets of the Borrower to constitute, for any purpose of ERISA or
       Section 4975 of the Code, assets of the ESOP or any other "plan" as
       defined in Section 3(3) of ERISA or Section 4975 of the Code.

              (W) Prohibited Transaction. The Borrower shall not permit any
       material non-exempt prohibited transaction described in Section 406 of
       ERISA or Section 4975 of the Code to occur with respect to the ESOP.

              (X) Non-Qualification of ESOP. The Borrower shall not take any
       action, nor fail to take any action, the result of which action or
       inaction is that the ESOP shall fail to be qualified under Section 401(a)
       of the Code. The Borrower shall not permit the ESOP to fail to be an
       employee stock ownership plan as defined in Section 4975(e)(7) of the
       Code.

              (Y) Excise Tax. The Borrower and its Subsidiaries shall not be
       subject to the tax imposed by Section 4978 of the Code with respect to
       any "disposition" by the ESOT of any shares of Capital Stock of the
       Borrower occurring as a result of the ESOT Transaction.

              (Z) Lender/ESOT Transactions. No Loan hereunder shall for any
       purpose of Section 406 of ERISA or Section 4975 of the Code be a direct
       or indirect loan or other transaction between the Administrative Agent or
       any of the Lenders and the ESOT which, if it is assumed that the
       Administrative Agent and Lenders are "parties in interest" and
       "disqualified persons" (as defined in Section 3(14) of ERISA and Section
       4975 of the Code), is a non-exempt prohibited transaction described in
       Section 406 of ERISA or Section 4975 of the Code.

              (AA) ERISA Judgments and Determinations. There shall be no
       finding, holding, ruling or other determination not subject to cure made
       by any court or Governmental Authority, and there shall be no assertion
       by the ESOP Fiduciary or, to the best knowledge of the Borrower, the ESOT
       Trustee, concerning any matter with respect to the ESOP or ESOT contrary
       to or inconsistent with any covenant set forth in Section 7.3(S) through
       (Z) which assertion could reasonably be expected to have a Material
       Adverse Effect.

                                       97
<PAGE>

              (BB) Subordinated Indebtedness. The Borrower shall not and shall
       not permit any of its Subsidiaries to amend, supplement or modify the
       terms of the Subordinated Notes or the Securities Purchase Agreements, or
       make any payment required as a result of an amendment or change thereto,
       other than amendments, supplements or modifications which (i) (a)
       decrease the rate of interest payable on the Subordinated Notes, (b)
       provide for the payment in kind in lieu of cash of any portion of the
       interest on the Subordinated Notes, (c) provide for the extension of the
       maturity date with respect to any principal or interest payment to be
       made under the Subordinated Notes, (d) provide more flexibility to the
       Borrower or its Subsidiaries in connection with any covenants or (e)
       waive any defaults existing in connection with the Subordinated Notes or
       the Securities Purchase Agreements and (ii) do not adversely affect in
       any material respect the interests of the Administrative Agent or any
       Lender.

              7.4 Financial Covenants. The Borrower shall comply with the
following (provided that for purposes of calculating the following financial
covenants, EBITDAE shall be deemed to be equal to (i) $3,707,773 for the fiscal
quarter ending March 15, 2002, (ii) $6,013,561 for the fiscal quarter ending
July 5, 2002, and (iii) $5,487,256 for the fiscal quarter ending September 30,
2002):

              (A) Maximum Senior Leverage Ratio. The Borrower shall not permit
       the ratio (the "SENIOR LEVERAGE RATIO") of (i) the sum of the aggregate
       outstanding principal amount of all Term Loans and Revolving Credit
       Obligations to (ii) EBITDAE to be greater than:

              (i) 2.75 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 20, 2002
       through the fiscal quarter ending September 30, 2003;

              (ii) 2.50 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 19, 2003
       through the fiscal quarter ending September 30, 2004;

              (iii) 2.00 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 17, 2004
       through the fiscal quarter ending September 30, 2005;

              (iv) 1.75 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 16, 2005
       through the fiscal quarter ending September 30, 2006;

              (v) 1.30 to 1.00 as of the end of each fiscal quarter thereafter.

The Senior Leverage Ratio shall be calculated, in each case, as of the last day
of each fiscal quarter based upon (a) for Term Loans and Revolving Credit
Obligations, the principal amount of Term Loans and Revolving Credit Obligations
as of the last day of each such fiscal quarter; and (b) for EBITDAE, the actual
amount for the four-quarter period ending on such last day of such fiscal
quarter, taking into account Permitted Acquisitions and calculated, with respect
to Permitted Acquisitions, on a pro forma basis using historical audited and
reviewed unaudited

                                       98
<PAGE>

financial statements obtained from the seller(s) in such Permitted Acquisitions
(adjusted for non-recurring seller expenses and other add-backs to EBITDAE, in
each case, agreed upon by the Borrower and the Administrative Agent) and
reasonably acceptable to the Administrative Agent, broken down by fiscal quarter
in the Borrower's reasonable judgment and satisfactory to the Administrative
Agent.

              (B) Maximum Leverage Ratio. The Borrower shall not permit the
       ratio (the "LEVERAGE RATIO") of (i) the principal amount of Consolidated
       Total Indebtedness (other than the Junior Subordinated Notes) to (ii)
       EBITDAE to be greater than:

              (i) 4.00 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 20, 2002
       through the fiscal quarter ending September 30, 2003;

              (ii) 3.60 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 19, 2003
       through the fiscal quarter ending September 30, 2004;

              (iii) 3.25 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 17, 2004
       through the fiscal quarter ending September 30, 2005;

              (iv) 3.00 to 1.00 as of the end of each fiscal quarter for the
       period commencing with the fiscal quarter ending December 16, 2005
       through the fiscal quarter ending September 30, 2006;

              (v) 2.50 to 1.00 as of the end of each fiscal quarter thereafter.

The Leverage Ratio shall be calculated, in each case, as of the last day of each
fiscal quarter based upon (a) for Consolidated Total Indebtedness, the principal
amount of Consolidated Total Indebtedness as of the last day of each such fiscal
quarter; and (b) for EBITDAE, the actual amount for the four-quarter period
ending on such last day of such fiscal quarter, taking into account Permitted
Acquisitions and calculated, with respect to Permitted Acquisitions, on a pro
forma basis using historical audited and reviewed unaudited financial statements
obtained from the seller(s) in such Permitted Acquisitions (adjusted for
non-recurring seller expenses and other add-backs to EBITDAE, in each case,
agreed upon by the Borrower and the Administrative Agent) and reasonably
acceptable to the Administrative Agent, broken down by fiscal quarter in the
Borrower's reasonable judgment and satisfactory to the Administrative Agent.

              (C) Minimum Fixed Charge Coverage Ratio. The Borrower and its
       consolidated Subsidiaries shall maintain a ratio ("FIXED CHARGE COVERAGE
       RATIO") of (i) EBITDAE for such period minus Capital Expenditures for
       such period, to (ii) the sum of the amounts of (a) scheduled amortization
       during such period of the principal portion of the Term Loans and
       scheduled amortization during such period of the principal portion of all
       other Consolidated Total Indebtedness, plus (b) Restricted Payments paid
       in cash and, if positive, net ESOP repurchase obligations during such
       period, plus (c) all charges for foreign, federal, state and local income
       taxes paid in cash by the Borrower and its consolidated Subsidiaries
       during such period, plus (d) Cash Interest Expense during such

                                       99
<PAGE>

       period plus (e) cash payments in respect of purchase price adjustments,
       earn-outs or other similar forms of contingent purchase price during such
       period (exclusive of cash purchase price adjustments related to the IITRI
       Acquisition paid on the Closing Date), of at least (1) 1.20 to 1.00 as of
       the end of each fiscal quarter for the period commencing with the fiscal
       quarter ending on December 20, 2002 through the fiscal quarter ending
       September 30, 2003; (2) 1.25 to 1.00 as of the end of each fiscal quarter
       for the period commencing with the fiscal quarter ending on December 19,
       2003 through the fiscal quarter ending March 10, 2006; and (3) 1.35 to
       1.00 as of the end of each fiscal quarter thereafter.

              In each case, the Fixed Charge Coverage Ratio shall be determined
       as of the last day of each fiscal quarter for the four fiscal quarter
       period ending on such last day of such fiscal quarter, taking into
       account Permitted Acquisitions and calculated, with respect to Permitted
       Acquisitions, on a pro forma basis using historical audited and reviewed
       unaudited financial statements obtained from the seller(s) in such
       Permitted Acquisitions (adjusted for non-recurring seller expenses and
       other add-backs to EBITDAE, in each case, agreed upon by the Borrower and
       the Administrative Agent) and reasonably acceptable to the Administrative
       Agent, broken down by fiscal quarter in the Borrower's reasonable
       judgment and satisfactory to the Administrative Agent.

              (D) Minimum EBITDAE. The Borrower shall not permit EBITDAE to be
       less than the amounts set forth below for the fiscal periods ending on
       the dates set forth below:

<TABLE>
<CAPTION>
         Fiscal Quarter Ending On or About
         ---------------------------------
             the Date Set Forth Below                                  Minimum EBITDAE
             ------------------------                                  ---------------
<S>                                                                  <C>
         December 20, 2002                                           $17,000,000
         March 14, 2003                                              $17,000,000
         July 4, 2003                                                $17,000,000
         September 30, 2003                                          $17,000,000
         December 19, 2003                                           $17,000,000

         March 12, 2004                                              $17,500,000
         July 2, 2004                                                $18,000,000
         September 30, 2004                                          $18,000,000
         December 17, 2004                                           $18,500,000

         March 11, 2005                                              $18,500,000
         July 1, 2005                                                $18,500,000
         September 30, 2005                                          $18,500,000
         December 16, 2005                                           $19,000,000

         March 10, 2006                                              $19,000,000
         June 30, 2006                                               $19,000,000
         September 30, 2006                                          $19,000,000
         December 15, 2006 and each fiscal quarter
         thereafter                                                  $20,000,000
</TABLE>

                                      100
<PAGE>

              In each case EBITDAE shall be determined as of the last day of
       each fiscal quarter for the four-quarter period ending on such last day
       of such fiscal quarter, taking into account Permitted Acquisitions and
       calculated, with respect to Permitted Acquisitions, on a pro forma basis
       using historical audited and reviewed unaudited financial statements
       obtained from the seller(s) in such Permitted Acquisitions (adjusted for
       non-recurring seller expenses and other add-backs to EBITDAE, in each
       case, agreed upon by the Borrower and the Administrative Agent) and
       reasonably acceptable to the Administrative Agent, broken down by fiscal
       quarter in the Borrower's reasonable judgment and satisfactory to the
       Administrative Agent.

              (E) Capital Expenditures. The Borrower will not, nor will it
       permit any Subsidiary to expend, for Capital Expenditures in the
       acquisition of fixed assets in any fiscal year, on a non-cumulative
       basis, in the aggregate for the Borrower and its Subsidiaries, in excess
       of:

              (i) $3,000,000 for the fiscal year ending September 30, 2003;

              (ii) $3,000,000 for the fiscal year ending September 30, 2004,
       plus any amount permitted to be expended in the immediately preceding
       fiscal year (pursuant to the absolute dollar limitation for such
       preceding fiscal year and not pursuant to any carryover provision from a
       prior fiscal year) but not expended;

              (iii) $3,500,000 for the fiscal year ending September 30, 2005,
       plus any amount permitted to be expended in the immediately preceding
       fiscal year (pursuant to the absolute dollar limitation for such
       preceding fiscal year and not pursuant to any carryover provision from a
       prior fiscal year) but not expended;

              (iv) $4,000,000 for the fiscal year ending September 30, 2006,
       plus any amount permitted to be expended in the immediately preceding
       fiscal year (pursuant to the absolute dollar limitation for such
       preceding fiscal year and not pursuant to any carryover provision from a
       prior fiscal year) but not expended; and

              (v) $4,500,000 for the fiscal year ending September 30, 2007, plus
       any amount permitted to be expended in the immediately preceding fiscal
       year (pursuant to the absolute dollar limitation for such preceding
       fiscal year and not pursuant to any carryover provision from a prior
       fiscal year) but not expended.

                             ARTICLE VIII: DEFAULTS

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

              (A) Failure to Make Payments When Due. The Borrower shall (i) fail
       to pay when due any of the Obligations consisting of principal with
       respect to the Loans or (ii) fail to pay within two (2) Business Days of
       the date when due any interest with respect to

                                      101
<PAGE>

       the Loans or any fees due under Sections 2.15(C) or 3.8 or (iii) fail to
       pay within thirty (30) days any other Obligations under this Agreement or
       the other Loan Documents.

              (B) Breach of Certain Covenants. The Borrower shall fail duly and
       punctually to perform or observe any agreement, covenant or obligation
       binding on the Borrower under:

              (i) Sections 7.1 or 7.2 and such failure shall continue unremedied
       for ten (10) Business Days after the occurrence thereof; or

              (ii) Sections 7.3 or 7.4.

              (C) Breach of Representation or Warranty. Any representation or
       warranty made or deemed made by the Borrower (i) to the Administrative
       Agent or any Lender herein or by the Borrower or any of its Material
       Subsidiaries in any of the other Loan Documents shall be false or
       misleading in any material respect as of the date as of which made (or
       deemed made) or (ii) in any other statement or certificate or information
       at any time given by any such Person pursuant to the Loan Documents shall
       be false or misleading in any material respect as of the date as of which
       made (or deemed made) if such misrepresentation would be reasonably
       anticipated to result in a Material Adverse Effect.

              (D) Other Defaults. The Borrower shall default in the performance
       of or compliance with any term contained in this Agreement (other than as
       covered by paragraphs (A) or (B) or (C) of this Section 8.1), or the
       Borrower or any of its Subsidiaries shall default in the performance of
       or compliance with any term contained in any of the other Loan Documents,
       and such default shall continue for thirty (30) days after the occurrence
       thereof.

              (E) Default as to Other Indebtedness. The Borrower or any of its
       Subsidiaries shall fail to make any payment when due (whether by
       scheduled maturity, required prepayment, acceleration, demand or
       otherwise) with respect to any Indebtedness (other than Indebtedness
       hereunder, but including, without limitation, Disqualified Stock), beyond
       any period of grace provided with respect thereto, which individually or
       together with other such Indebtedness as to which any such failure exists
       has an aggregate outstanding principal amount in excess of $5,000,000; or
       any breach, default or event of default (including any amortization event
       or event of like import in connection with any Off-Balance Sheet
       Liability) shall occur, or any other condition shall exist under any
       instrument, agreement or indenture pertaining to any such Indebtedness
       having such aggregate outstanding principal amount, beyond any period of
       grace, if any, provided with respect thereto, if the effect thereof is to
       cause an acceleration, mandatory redemption, a requirement that the
       Borrower offer to purchase such Indebtedness or other required repurchase
       or early amortization of such Indebtedness, or permit the holder(s) of
       such Indebtedness to accelerate the maturity of any such Indebtedness or
       require a redemption, early amortization or repurchase of such
       Indebtedness; or any such Indebtedness having such aggregate outstanding
       principal amount shall be otherwise declared to be due and payable (by
       acceleration or otherwise) or required to be prepaid,

                                      102
<PAGE>

       redeemed, amortized or otherwise repurchased by the Borrower or any of
       its Subsidiaries (other than by a regularly scheduled required
       prepayment) prior to the stated maturity thereof.

              (F) Involuntary Bankruptcy; Appointment of Receiver, Etc.

              (i) An involuntary case shall be commenced against the Borrower or
       any of the Borrower's Material Subsidiaries and the petition shall not be
       dismissed, stayed, bonded or discharged within sixty (60) days after
       commencement of the case; or a court having jurisdiction in the premises
       shall enter a decree or order for relief in respect of the Borrower or
       any of the Borrower's Material Subsidiaries in an involuntary case, under
       any applicable bankruptcy, insolvency or other similar law now or
       hereinafter in effect; or any other similar relief shall be granted under
       any applicable federal, state, local or foreign law.

              (ii) A decree or order of a court having jurisdiction in the
       premises for the appointment of a receiver, liquidator, sequestrator,
       trustee, custodian or other officer having similar powers over the
       Borrower or any of the Borrower's Subsidiaries or over all or a
       substantial part of the property of the Borrower or any of the Borrower's
       Subsidiaries shall be entered; or an interim receiver, trustee or other
       custodian of the Borrower or any of the Borrower's Subsidiaries or of all
       or a substantial part of the property of the Borrower or any of the
       Borrower's Subsidiaries shall be appointed or a warrant of attachment,
       execution or similar process against any substantial part of the property
       of the Borrower or any of the Borrower's Subsidiaries shall be issued and
       any such event shall not be stayed, dismissed, bonded or discharged
       within sixty (60) days after entry, appointment or issuance.

              (G) Voluntary Bankruptcy; Appointment of Receiver, Etc. The
       Borrower or any of the Borrower's Subsidiaries shall (i) commence a
       voluntary case under any applicable bankruptcy, insolvency or other
       similar law now or hereafter in effect, (ii) consent to the entry of an
       order for relief in an involuntary case, or to the conversion of an
       involuntary case to a voluntary case, under any such law, (iii) consent
       to the appointment of or taking possession by a receiver, trustee or
       other custodian for all or a substantial part of its property, (iv) make
       any assignment for the benefit of creditors or (v) take any corporate
       action to authorize any of the foregoing.

              (H) Judgments and Attachments. Any money judgment(s), writ or
       warrant of attachment, or similar process against the Borrower or any of
       its Subsidiaries or any of their respective assets involving in any
       single case or in the aggregate an amount in excess of $1,000,000 is or
       are entered and shall remain undischarged, unvacated, uninsured, unbonded
       or unstayed for a period of thirty (30) days or in any event later than
       fifteen (15) days prior to the date of any proposed sale thereunder.

              (I) Dissolution. Any order, judgment or decree shall be entered
       against the Borrower or any Subsidiary decreeing its involuntary
       dissolution or split up and such order shall remain undischarged and
       unstayed for a period in excess of sixty (60) days; or

                                      103
<PAGE>

       the Borrower or any Material Subsidiary shall otherwise dissolve or cease
       to exist except as specifically permitted by this Agreement.

              (J) Loan Documents. At any time, for any reason, any Loan Document
       as a whole that materially affects the ability of the Administrative
       Agent, or any of the Lenders to enforce the Obligations or enforce their
       rights against the Collateral ceases to be in full force and effect or
       the Borrower or any of the Borrower's Subsidiaries party thereto seeks to
       repudiate its obligations thereunder.

              (K) Termination Event. Any Termination Event occurs.

              (L) Waiver of Minimum Funding Standard. If the plan administrator
       of any Benefit Plan applies under Section 412(d) of the Code for a waiver
       of the minimum funding standards of Section 412(a) of the Code and any
       Lender believes the substantial business hardship upon which the
       application for the waiver is based could reasonably be expected to
       subject either the Borrower or any Controlled Group member to liability
       in excess of $1,000,000.

              (M) Change of Control. A Change of Control shall occur.

              (N) Environmental Matters. The Borrower or any of its Subsidiaries
       shall be the subject of any proceeding or investigation pertaining to (i)
       the Release by the Borrower or any of its Subsidiaries of any Contaminant
       into the environment, (ii) the liability of the Borrower or any of its
       Subsidiaries arising from the Release by any other Person of any
       Contaminant into the environment, or (iii) any violation of any
       Environmental, Health or Safety Requirements of Law which by the Borrower
       or any of its Subsidiaries, which, in any case, has or is reasonably
       likely to subject the Borrower to liability individually or in the
       aggregate in excess of $1,000,000.

              (O) Guarantor Revocation. Any guarantor of the Obligations shall
       terminate or revoke, or take any action to revoke, any of its duties or
       obligations under the applicable Guaranty or breach any of the material
       terms of such Guaranty.

              (P) Collateral Documents. Any of the following shall occur: (i)
       any Collateral Document shall for any reason fail to create a valid and
       perfected first priority security interest in any Substantial Portion of
       the Collateral purported to be covered thereby, except as permitted by
       the terms of any Collateral Document or any other Loan Document, (ii) any
       Collateral Document shall fail to remain in full force or effect, except
       with respect to any Collateral released pursuant to the express terms of
       the applicable Collateral Documents or any other Loan Document, or (iii)
       any action shall be taken to discontinue or to assert the invalidity or
       unenforceability of any Collateral Document.

              (Q) Negative Determination by IRS. The IRS shall notify the
       Borrower in writing that it has made a final determination not subject to
       cure that the ESOP is not a qualified plan and employee stock ownership
       plan within the meanings of Section 401(a) and 4975(e)(7), respectively,
       of the Code.

                                      104
<PAGE>

A Default shall be deemed "continuing" until cured or until waived in writing in
accordance with Section 9.1.

              8.2 Termination of Commitments; Acceleration. If any Default
described in Section 8.1(F) or 8.1(G) occurs with respect to the Borrower or any
Material Subsidiary, the obligations of the Lenders to make Loans hereunder and
the obligation of any Issuing Banks to issue Letters of Credit hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Administrative Agent
or any Lender. If any other Default occurs, the Required Lenders may terminate
or suspend the obligations of the Lenders to make Loans hereunder and the
obligation of the Issuing Banks to issue Letters of Credit hereunder, or declare
the Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower expressly waives.

              ARTICLE IX: AMENDMENTS, WAIVERS AND REMEDIES

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

              (A)  Postpone or extend the Revolving Loan Termination Date or the
        Term Loan Final Maturity Date or any other date fixed for any payment of
        principal of, or interest on, the Loans, the Reimbursement Obligations
        or any fees or other amounts payable to such Lender (except with respect
        to (i) any modifications of the provisions relating to amounts, timing
        or application of prepayments of Loans and other Obligations, which
        modification shall require only the approval of the Required Lenders
        (other than the provisions relating to the amounts, timing or
        application of prepayments of the Term Loans which modifications shall
        also require the approval of Term Loan Lenders with sixty-six and
        two-thirds percent (66 2/3%) or more of the then outstanding Term Loans)
        and (ii) a waiver of the application of the default rate of interest
        pursuant to Section 2.11 hereof which waiver shall require only the
        approval of the Required Lenders).

              (B)  Reduce the principal amount of any Loans or L/C Obligations,
        or reduce the rate or extend the time of payment of interest or fees
        thereon (other than (i) a waiver of the application of the default rate
        of interest pursuant to Section 2.11 hereof, and (ii) as a result of a
        change in the definition of Leverage Ratio or any of the components
        thereof or the method of calculation thereof).

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

                                      105

<PAGE>

              (D)  Increase the amount of the Revolving Loan Commitment or Term
        Loan Commitment of any Lender hereunder or increase any Lender's
        Revolving Loan Pro Rata Share, Term Loan Pro Rata Share or Pro Rata
        Share (except with respect to an increase in the amount, or other
        modification to the terms or components, of the Borrowing Base (Monthly)
        or Borrowing Base (Senior Debt)).

              (E)  Permit the Borrower to assign its rights under this
        Agreement.

              (F)  Other than pursuant to a transaction permitted by the terms
        of this Agreement, release all or substantially all of the Collateral
        which is subject to any Loan Document.

              (G)  Other than pursuant to a transaction permitted by the terms
        of this Agreement, release any guarantor from its obligations under the
        Guaranty.

              (H)  Amend Section 7.2(K), Section 12.2, Section 12.3 or this
        Section 9.1.

No amendment of any provision of this Agreement relating to (i) the
Administrative Agent shall be effective without the written consent of the
Administrative Agent, (ii) Swing Line Loans shall be effective without the
written consent of the Swing Line Bank and (iii) any Issuing Bank shall be
effective without the written consent of such Issuing Bank. The Administrative
Agent may waive payment of the fee required under Section 13.3(B) without
obtaining the consent of any of the Lenders. The Administrative Agent shall not
enter into any amendment or other modification of any subordination agreement in
respect of the Subordinated Notes without the prior consent of the Required
Lenders.

              9.2  Preservation of Rights. No delay or omission of the Lenders
or the Administrative Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan or the issuance of a Letter of
Credit notwithstanding the existence of a Default or the inability of the
Borrower to satisfy the conditions precedent to such Loan or issuance of such
Letter of Credit shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the requisite number of
Lenders required pursuant to Section 9.1, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan Documents or
by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Lenders until all of the Termination Conditions
shall have been satisfied.

                   ARTICLE X: GENERAL PROVISIONS

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

                                      106

<PAGE>

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

              10.3 Performance of Obligations. The Borrower agrees that the
Administrative Agent may, but shall have no obligation to (i) at any time, pay
or discharge taxes, liens, security interests or other encumbrances levied or
placed on or threatened against any property of the Borrower (including, without
limitation, the Collateral) to the extent the Borrower is required by the terms
hereof to pay any such amount, but has not done so (other than such taxes,
liens, security interests or other encumbrances as shall be actively and in good
faith contested by the Borrower and in respect of which the Borrower shall have
established reserves in accordance with Agreement Accounting Principles to the
extent such taxes, liens, security interests or other encumbrances would
otherwise be permitted hereunder) and (ii), after the occurrence and during the
continuance of a Default, to make any other payment or perform any act required
of the Borrower under any Loan Document or take any other action which the
Administrative Agent in its discretion deems necessary or desirable to protect
or preserve such property of the Borrower. The Administrative Agent shall use
its reasonable efforts to give the Borrower notice of any action taken under
this Section 10.3 prior to the taking of such action or promptly thereafter
provided the failure to give such notice shall not affect the Borrower's
obligations in respect thereof. The Borrower agrees to pay the Administrative
Agent, upon demand, the principal amount of all funds advanced by the
Administrative Agent under this Section 10.3, together with interest thereon at
the rate from time to time applicable to Floating Rate Loans from the date of
such advance until the outstanding principal balance thereof is paid in full. If
the Borrower fails to make payment in respect of any such advance under this
Section 10.3 within one (1) Business Day after the date the Borrower receives
written demand therefor from the Administrative Agent, the Administrative Agent
shall promptly notify each Lender and each Lender agrees that it shall thereupon
make available to the Administrative Agent, in Dollars in immediately available
funds, the amount equal to such Lender's Pro Rata Share of such advance. If such
funds are not made available to the Administrative Agent by such Lender within
one (1) Business Day after the Administrative Agent's demand therefor, the
Administrative Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Effective Rate for
each day during the period commencing on the date of such demand and ending on
the date such amount is received. The failure of any Lender to make available to
the Administrative Agent its Pro Rata Share of any such unreimbursed advance
under this Section 10.3 shall neither relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent such other Lender's Pro
Rata Share of such advance on the date such payment is to be made nor increase
the obligation of any other Lender to make such payment to the Administrative
Agent. All outstanding principal of, and interest on, advances made under this
Section 10.3 shall constitute Obligations secured by the Collateral until paid
in full by the Borrower.

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

              10.5 Entire Agreement. The Loan Documents and the letter agreement
between the Administrative Agent and the Borrower dated May 23, 2002 embody the
entire

                                      107

<PAGE>

agreement and understanding among the Borrower, the Administrative Agent and the
Lenders and supersede all prior agreements and understandings among the
Borrower, the Administrative Agent and the Lenders relating to the subject
matter thereof.

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

              10.7 Expenses; Indemnification.

              (A)  Expenses. The Borrower shall reimburse the Administrative
        Agent and the Arranger for any reasonable costs, and out-of-pocket
        expenses (including reasonable attorneys' and paralegals' fees and time
        charges of attorneys and paralegals for the Administrative Agent, paid
        or incurred by the Administrative Agent or the Arranger in connection
        with the preparation, negotiation, execution, delivery, syndication,
        distribution (including, via the internet), review, amendment,
        modification, and administration of the Loan Documents. The Borrower
        also agrees to reimburse the Administrative Agent and the Arranger and
        the Lenders for any costs, and out-of-pocket expenses (including
        reasonable attorneys' and paralegals' fees and time charges of attorneys
        and paralegals for the Administrative Agent and the Arranger and the
        Lenders) paid or incurred by the Administrative Agent or the Arranger or
        any Lender in connection with the collection of the Obligations and
        enforcement of their rights and remedies under the Loan Documents. In
        addition to expenses set forth above, the Borrower agrees to reimburse
        the Administrative Agent, promptly after the Administrative Agent's
        request therefor, for each audit, or other business analysis conducted
        in accordance with the terms hereof and performed by or for the benefit
        of the Lenders in connection with this Agreement or the other Loan
        Documents in an amount equal to the Administrative Agent's then
        customary charges for each person employed to perform such audit or
        analysis, plus all reasonable costs and expenses (including without
        limitation, travel expenses) incurred by the Administrative Agent in the
        performance of such audits or analysis. Administrative Agent shall
        provide the Borrower with a detailed statement of all reimbursements
        requested under this Section 10.7(A).

              (B)  Indemnity. The Borrower further agrees to defend, protect and
        indemnify the Administrative Agent, the Arranger and each and all of the
        Lenders and each of their respective Affiliates extending financial
        accommodations pursuant to any of the Loan Documents, and each of such
        Administrative Agent's, Arranger's, Lender's, or Affiliate's respective
        officers, directors, trustees, investment advisors, employees, attorneys
        and agents (including, without limitation, those retained in connection
        with the satisfaction or attempted satisfaction of any of the conditions
        set forth in Article V) (collectively, the "INDEMNITEES") from and
        against any and all liabilities, obligations, losses, damages,
        penalties, actions, judgments, suits, claims, costs, expenses of any
        kind or nature whatsoever (including, without limitation, the reasonable
        fees and disbursements of

                                      108

<PAGE>

        counsel for such Indemnitees in connection with any investigative,
        administrative or judicial proceeding), imposed on, incurred by, or
        asserted against such Indemnitees in any manner relating to or arising
        out of:

              (i)  this Agreement or any of the other Loan Documents or any of
           the Transaction Documents, or any act, event or transaction related
           or attendant thereto or to the IITRI Acquisition, the ESOT
           Transaction, the making of the Loans, and the issuance of and
           participation in Letters of Credit hereunder, the management of such
           Loans or Letters of Credit, the use or intended use of the proceeds
           of the Loans or Letters of Credit hereunder, or any of the other
           transactions contemplated by the Transaction Documents; or

              (ii) any costs, liabilities, obligations, responsibilities,
           losses, damages, personal injury, death, punitive damages, economic
           damages, consequential damages, treble damages, intentional, willful
           or wanton injury, damage or threat to the environment, natural
           resources or public health or welfare, costs and expenses (including,
           without limitation, reasonable attorney, expert and consulting fees
           and costs of investigation, feasibility or remedial action studies),
           fines, penalties and monetary sanctions, interest, direct or
           indirect, known or unknown, absolute or contingent, past, present or
           future relating to the violation or alleged violation of any
           Environmental, Health or Safety Requirements of Law arising from or
           in connection with the past, present or future operations of the
           Borrower, its Subsidiaries or any of their respective predecessors in
           interest, or, the past, present or future environmental, health or
           safety condition of any respective property of the Borrower or its
           Subsidiaries, the presence of asbestos-containing materials at any
           respective property of the Borrower or its Subsidiaries or the
           Release or threatened Release of any Contaminant into the environment
           (collectively, the "INDEMNIFIED MATTERS");

provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder (i) with respect to Indemnified Matters caused solely by or resulting
solely from the willful misconduct or Gross Negligence of such Indemnitee with
respect to the Loan Documents, as determined by the final non-appealed judgment
of a court of competent jurisdiction, or (ii) for reimbursement of amounts
asserted against any Indemnitee by the Borrower, any of its Subsidiaries or any
other Indemnitee (each a "Claimant") and paid by such Indemnitee on any final,
non-appealable judgement in the Claimant's favor against such Indemnitee by a
court of competent jurisdiction. If the undertaking to indemnify and pay set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, the Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnitees.

              (C) Waiver of Certain Claims; Settlement of Claims. The Borrower
        further agrees to assert no claim against any of the Indemnitees on any
        theory of liability seeking consequential, special, indirect, exemplary
        or punitive damages. No settlement shall be entered into by the Borrower
        or any of its Subsidiaries with respect to any claim, litigation,
        arbitration or other proceeding relating to the Indemnified Matters
        (whether or not the Administrative Agent or any Lender or any Indemnitee
        is a party thereto) unless such settlement releases all Indemnitees from
        any and all liability with respect thereto.

                                      109

<PAGE>

              (D) Survival of Agreements. The obligations and agreements of the
        Borrower under this Section 10.7 shall survive the termination of this
        Agreement.

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

              10.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.

              If any changes in generally accepted accounting principles are
hereafter required or permitted and are adopted by the Borrower or any of its
Subsidiaries with the agreement of its independent certified public accountants
and such changes result in a change in the method of calculation of any of the
financial covenants, tests, restrictions or standards herein or in the related
definitions or terms used therein ("Accounting Changes"), the parties hereto
agree, at the Borrower's request, to enter into negotiations, in good faith, in
order to amend such provisions in a credit neutral manner so as to reflect
equitably such changes with the desired result that the criteria for evaluating
the Borrower's and its Subsidiaries' financial condition shall be the same in
all material respects after such changes as if such changes had not been made;
provided, however, that no accounting change shall be given effect in such
calculations until such provisions are amended in a manner reasonably
satisfactory to the Required Lenders. In the event such amendment is entered
into, all references in this Agreement to Agreement Accounting Principles means
generally accepted accounting principles as of the date of such amendment. After
the occurrence of any such accounting change but until such time as such
amendment has been entered into, all financial statements and other financial
reports required to be delivered under this Agreement shall be prepared and
delivered in accordance with Agreement Accounting Principles.

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

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

              10.12 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND ANY
AGENT, ANY LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN

                                      110

<PAGE>

DOCUMENTS, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING
Section 735 ILCS 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS
OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS. THE PARTIES TO THIS AGREEMENT HAVE
VOLUNTARILY ELECTED THAT THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL LOANS
BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WHICH IS THE PRINCIPAL PLACE
OF BUSINESS OF THE ADMINISTRATIVE AGENT.

              10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

              (A) NON-EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION
        (B), EACH OF THE PARTIES HERETO AGREES AND ACCEPTS FOR ALL DISPUTES
        AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
        THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
        AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS THE NON-EXCLUSIVE
        JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED IN CHICAGO,
        ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
        COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO,
        ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT
        PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE
        LOCATION OF THE COURT CONSIDERING THE DISPUTE.

              (B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE
        ADMINISTRATIVE AGENT, ANY LENDER OR ANY OTHER HOLDER OF SECURED
        OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS
        RESPECTIVE PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO
        (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) REALIZE ON THE
        COLLATERAL, OR (3) IN ORDER TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
        ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT
        ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING THAT IS SEPARATE
        FROM ANY PROCEEDING BROUGHT UNDER CLAUSE (A) ABOVE AND THAT IS BROUGHT
        BY SUCH PERSON SOLELY TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR
        TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE
        BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
        COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
        SUBSECTION (B).

              (C) SERVICE OF PROCESS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED
        TO LIMIT THE ABILITY OF ANY AGENT OR THE HOLDERS OF THE OBLIGATIONS TO
        SERVE ANY WRITS, SERVICE OF PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR
        PROCEEDING ISSUED BY ANY

                                      111

<PAGE>

        COURT REFERRED TO IN THIS SECTION 10.13 IN ANY MANNER PERMITTED BY
        APPLICABLE LAW.

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

              (E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH
        OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND,
        SPECIFICALLY, THE PROVISIONS OF SECTION 10.7 AND THIS SECTION 10.13,
        WITH ITS COUNSEL.

              10.14 Other Transactions. Each of the Administrative Agent, the
Arranger, the Lenders, the Swing Line Bank, the Issuing Banks and the Borrower
acknowledge that the Lenders (or Affiliates of the Lenders) may, from time to
time, effect transactions for their own accounts or the accounts of customers,
and hold positions in loans or options on loans of the Borrower, the Borrower's
Subsidiaries and other companies that may be the subject of this credit
arrangement and nothing in this Agreement shall impair the right of any such
Person to enter into any such transaction (to the extent it is not expressly
prohibited by the terms of this Agreement) or give any other Person any claim or
right of action hereunder as a result of the existence of the credit
arrangements hereunder, all of which are hereby waived. In addition, certain
Affiliates of one or more of the Lenders are or may be securities firms and as
such may effect, from time to time, transactions for their own accounts or for
the accounts of customers and hold positions in securities or options on
securities of the Borrower, the Borrower's Subsidiaries and other companies that
may be the subject of this credit arrangement and nothing in this Agreement
shall impair the right of any such Person to enter into any such transaction (to
the extent it is not expressly prohibited by the terms of this Agreement) or
give any other Person any claim or right of action hereunder as a result of the
existence of the credit arrangements hereunder, all of which are hereby waived.
Each of the Administrative Agent, the Arranger, the Lenders, the Swing Line
Bank, the Issuing Banks and the Borrower acknowledges and consents to these
multiple roles, and further acknowledges that the fact that any such unit or
Affiliate is providing another service or product or proposal therefor to the
Borrower or any of its Subsidiaries does not mean that such service, product, or
proposal is or will be acceptable to any of the Administrative Agent, the
Arranger, the Lenders, the Swing Line Bank or the Issuing Banks.

              10.15 Subordination of Intercompany Indebtedness. The Borrower
agrees that any and all claims of the Borrower against any of its Subsidiaries
that is a Guarantor with respect to any "Intercompany Indebtedness" (as
hereinafter defined), any endorser, obligor or any other

                                      112
<PAGE>

guarantor of all or any part of the Obligations, or against any of its
properties shall be subordinate and subject in right of payment to the prior
payment, in full and in cash, of all Obligations and Hedging Obligations under
Hedging Arrangements entered into with the Lenders or any of their Affiliates
("DESIGNATED HEDGING AGREEMENTS"); provided that, and not in contravention of
the foregoing, so long as no Default has occurred and is continuing the Borrower
may make loans to and receive payments in the ordinary course with respect to
such Intercompany Indebtedness from each such Guarantor to the extent not
prohibited by the terms of this Agreement and the other Loan Documents.
Notwithstanding any right of the Borrower to ask, demand, sue for, take or
receive any payment from any Guarantor, all rights, liens and security interests
of the Borrower, whether now or hereafter arising and howsoever existing, in any
assets of any Guarantor shall be and are subordinated to the rights of the
holders of the Obligations and the Administrative Agent in those assets. The
Borrower shall have no right to possession of any such asset or to foreclose
upon any such asset, whether by judicial action or otherwise, unless and until
all of the Obligations (other than contingent indemnity obligations) and the
Hedging Obligations under Designated Hedging Agreements shall have been fully
paid and satisfied (in cash) and all financing arrangements pursuant to any Loan
Document or Designated Hedging Agreement have been terminated. If all or any
part of the assets of any Guarantor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Guarantor,
whether partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit
of creditors or any other action or proceeding, or if the business of any such
Guarantor is dissolved or if substantially all of the assets of any such
Guarantor are sold, then, and in any such event (such events being herein
referred to as an "INSOLVENCY EVENT"), any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Guarantor
to the Borrower ("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered
directly to the Administrative Agent for application on any of the Obligations
and the Hedging Obligations under Designated Hedging Agreements, due or to
become due, until such Obligations or Hedging Obligations (other than contingent
indemnity obligations) shall have first been fully paid and satisfied (in cash).
Should any payment, distribution, security or instrument or proceeds thereof be
received by the Borrower upon or with respect to the Intercompany Indebtedness
after an Insolvency Event prior to the satisfaction of all of the Obligations
(other than contingent indemnity obligations) and the Hedging Obligations under
Designated Hedging Agreements and the termination of all financing arrangements
pursuant to any Loan Document and/or Designated Hedging Agreement, the Borrower
shall receive and hold the same in trust, as trustee, for the benefit of the
holders of the Obligations and such Hedging Obligations and shall forthwith
deliver the same to the Administrative Agent, for the benefit of such Persons,
in precisely the form received (except for the endorsement or assignment of the
Borrower where necessary), for application to any of the Obligations and such
Hedging Obligations, due or not due, and, until so delivered, the same shall be
held in trust by the Borrower as the property of the holders of the Obligations
and such Hedging Obligations. If the Borrower fails to make any such endorsement
or assignment to the Administrative Agent, the Administrative Agent or any of
its officers or employees are irrevocably authorized to make the same. The
Borrower agrees that until the Obligations (other than the contingent indemnity
obligations) and such Hedging Obligations have been paid in full (in cash) and
satisfied and all financing arrangements pursuant to any Loan Document and all
Designated Hedging Agreements have been terminated, the Borrower will not

                                      113
<PAGE>

assign or transfer to any Person (other than the Administrative Agent) any claim
the Borrower has or may have against any Guarantor.

              10.16 Lender's Not Utilizing Plan Assets. Each Lender represents
and warrants to the Borrower and the Administrative Agent that none of the
consideration used by such Lender to make or fund its Loans constitutes for any
purpose of ERISA or Section 4975 of the Code assets of any "plan" as defined in
Section 3(3) of ERISA or Section 4975 of the Code and the rights and interests
of such Lender in and under the Loan Documents shall not constitute such "plan
assets" under ERISA.

                   ARTICLE XI: THE ADMINISTRATIVE AGENT

              11.1 Appointment; Nature of Relationship. LaSalle is appointed by
the Holders of Secured Obligations as the Administrative Agent hereunder and
under each other Loan Document, and each of the Holders of Secured Obligations
irrevocably authorizes the Administrative Agent to act as the contractual
representative of such Holder of Secured Obligations with the rights and duties
expressly set forth herein and in the other Loan Documents. The Administrative
Agent agrees to act as such contractual representative upon the express
conditions contained in this Article XI. Notwithstanding the use of the defined
term "Administrative Agent," it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Holder
of Secured Obligations by reason of this Agreement and that the Administrative
Agent is merely acting as the representative of the Holders of Secured
Obligations with only those duties as are expressly set forth in this Agreement
and the other Loan Documents. In its capacity as the Holders of Secured
Obligations' contractual representative, the Administrative Agent (A) does not
assume any fiduciary duties to any of the Holders of Secured Obligations, (B) is
a "representative" of the Holders of Secured Obligations within the meaning of
Section 9-102 of the Uniform Commercial Code and (C) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set
forth in this Agreement and the other Loan Documents. Each of the Holders of
Secured Obligations, for itself and on behalf of its affiliates as Holders of
Secured Obligations, agrees to assert no claim against the Administrative Agent
on any agency theory or any other theory of liability for breach of fiduciary
duty, all of which claims each Holder of Secured Obligations waives.

              11.2 Powers. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties or responsibilities to the Holders of Secured
Obligations, or any obligation to the Holders of Secured Obligations, to take
any action hereunder or under any of the other Loan Documents except any action
specifically provided by the Loan Documents required to be taken by the
Administrative Agent.

              11.3 General Immunity. Neither the Administrative Agent nor any of
its directors, officers, agents, employees or legal counsel shall be liable to
the Borrower, the Holders of Secured Obligations or any Holder of Secured
Obligations for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of

                                      114
<PAGE>

competent jurisdiction to have arisen solely from the Gross Negligence or
willful misconduct of such Person.

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

              11.5 Action on Instructions of Lenders; Actions with Respect to
Defaults. The Administrative Agent shall have the right to request instructions
from the Lenders at any time. If the Administrative Agent shall request
instructions from the Lenders with respect to any act or action (including the
failure to act) in connection with this Agreement or any other Loan Document,
the Administrative Agent shall be entitled to refrain from such act or taking
such action unless and until the Administrative Agent shall have received
instructions signed by the Required Lenders (or all of the Lenders in the event
that and to the extent that this Agreement or any other Loan Document expressly
requires such), and the Administrative Agent shall not incur liability to any
Person by reason of so refraining, and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Holders of
Secured Obligations and on all owners of Loans and on all Holders of Secured
Obligations. Without limiting the foregoing, no Holder of Secured Obligation
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of all of the Lenders. The Administrative Agent
shall be fully justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action. In addition to the Administrative Agent's right to take actions on its
own accord as permitted under this Agreement, the Administrative Agent shall
take such action with respect to an Unmatured Default or Default as shall be
directed by the Required Lenders; provided, that until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Unmatured Default or Default as it shall deem advisable and in
the best interests of the Holders of Secured Obligations.

              11.6 Employment of Agents and Counsel. The Administrative Agent
may execute any of its duties as the Administrative Agent hereunder and under
any other Loan

                                      115
<PAGE>

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

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

              11.8 The Administrative Agent's Reimbursement and Indemnification.
The Holders of Secured Obligations agree to reimburse and indemnify the
Administrative Agent ratably in proportion to its Pro Rata Share (A) for any
amounts not reimbursed by the Borrower for which the Administrative Agent is
entitled to reimbursement by the Borrower under the Loan Documents, (B) for any
other expenses incurred by the Administrative Agent on behalf of the Holders of
Secured Obligations, in connection with the enforcement of the Loan Documents
and (C) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of the Loan Documents
or any other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of any
such other documents, provided that no Holder of Secured Obligations shall be
liable for any of the foregoing to the extent any of the foregoing is found in a
final non-appealable judgment by a court of competent jurisdiction to have
arisen solely from the Gross Negligence or willful misconduct of the
Administrative Agent.

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

              11.10 Lender Credit Decision. Each Holder of Secured Obligations
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Arranger or any other Holder of Secured Obligations
and based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each Holder of Secured Obligations also acknowledges that it will,

                                      116
<PAGE>

independently and without reliance upon the Administrative Agent, the Arranger
or any other Holder of Secured Obligations and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.

              11.11 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
(with, so long as no Default is continuing, the Borrower's consent (which
consent shall not be unreasonably withheld or delayed)) to appoint, on behalf of
the Borrower and the Holders of Secured Obligations, a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Administrative Agent's giving notice of resignation, then the
retiring Administrative Agent may appoint (with, so long as no Default or
Unmatured Default is continuing, the Borrower's consent), on behalf of the
Borrower and the Holders of Secured Obligations, a successor Administrative
Agent. Notwithstanding anything herein to the contrary, so long as no Default
has occurred and is continuing, each such successor Administrative Agent shall
be subject to approval by the Borrower, which approval shall not be unreasonably
withheld or delayed. Such successor Administrative Agent shall be a commercial
bank or other financial institution having capital and retained earnings of at
least $500,000,000. Upon the acceptance of any appointment as the Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Administrative Agent hereunder and under the other Loan Documents.

              11.12 Collateral Documents; Subordination Agreements; Collateral.

              (A) Authority to Take Action. Each Holder of Secured Obligations
        authorizes the Administrative Agent to enter into each of the Collateral
        Documents and the subordination agreements in respect of the
        Subordinated Notes to which it is a party and to take all action
        contemplated by such documents. Each Holder of Secured Obligations
        agrees that no Holder of Secured Obligations (other than the
        Administrative Agent) shall have the right individually to seek to
        realize upon the security granted by any Collateral Document, it being
        understood and agreed that such rights and remedies may be exercised
        solely by the Administrative Agent for the benefit of the Holders of
        Secured Obligations upon the terms of the Collateral Documents.

              (B) Authority to Execute and Deliver. In the event that any
        Collateral is hereafter pledged by any Person as collateral security for
        the Obligations, the Administrative Agent is hereby authorized to
        execute and deliver on behalf of the Holders of Secured Obligations any
        Loan Documents necessary or appropriate to grant and perfect a Lien on
        such Collateral in favor of the Administrative Agent on behalf of the
        Holders of Secured Obligations.

                                      117
<PAGE>

              (C) Authority to Release Liens. The Holders of Secured Obligations
        hereby authorize the Administrative Agent, at its option and in its
        discretion, to release any Lien granted to or held by the Administrative
        Agent upon any Collateral (i) upon termination of the Commitments and
        payment in cash and satisfaction of all of the Obligations at any time
        arising under or in respect of this Agreement or the Loan Documents or
        the transactions contemplated hereby or thereby; (ii) as permitted by,
        but only in accordance with, the terms of the applicable Loan Document;
        or (iii) if approved, authorized or ratified in writing by the Required
        Lenders, unless such release is required to be approved by all of the
        Lenders hereunder. Upon request by the Administrative Agent at any time,
        the Lenders will confirm in writing the Administrative Agent's authority
        to release particular types or items of Collateral pursuant to this
        Section 11.12(C).

              (D) Additional Authority. Upon any sale or transfer of assets
        constituting Collateral which is expressly permitted pursuant to the
        terms of any Loan Document, or consented to in writing by the Required
        Lenders or all of the Lenders, as applicable, and upon at least five (5)
        Business Days' prior written request by the Borrower, the Administrative
        Agent shall (and is hereby irrevocably authorized by the Holders of
        Secured Obligations to) execute such documents as may be necessary to
        evidence the release of the Liens granted to the Administrative Agent
        for the benefit of the Holders of Secured Obligations herein or pursuant
        hereto upon the Collateral that was sold or transferred; provided,
        however, that (i) the Administrative Agent shall not be required to
        execute any such document on terms which, in the Administrative Agent's
        opinion, would expose the Administrative Agent to liability or create
        any obligation or entail any consequence other than the release of such
        Liens without recourse or warranty, and (ii) such release shall not in
        any manner discharge, affect or impair the Secured Obligations or any
        Liens upon (or obligations of the Borrower or any Subsidiary in respect
        of) all interests retained by the Borrower or any Subsidiary, including
        (without limitation) the proceeds of the sale, all of which shall
        continue to constitute part of the Collateral.

              (E) No Obligation to Monitor Collateral. The Administrative Agent
        shall have no obligation whatsoever to the Holders of Secured
        Obligations or to any other Person to assure that the Collateral exists
        or is owned by the Borrower or any of its Subsidiaries or is cared for,
        protected or insured or that the Liens granted to the Administrative
        Agent under the Loan Documents have been properly or sufficiently or
        lawfully created, perfected, protected or enforced or are entitled to
        any particular priority, or to exercise or to continue exercising at all
        or in any manner or under any duty of care, disclosure or fidelity any
        of the rights, authorities and powers granted or available to the
        Administrative Agent in this Article XI or in any of the Loan Documents,
        it being understood and agreed that in respect of the Collateral, or any
        act, omission or event related thereto, the Administrative Agent may act
        in any manner it may deem appropriate, in its sole discretion, given the
        Administrative Agent's own interest in the Collateral as one of the
        Holders of Secured Obligations and that the Administrative Agent shall
        have no duty or liability whatsoever to the Holders of Secured
        Obligations, except for its Gross Negligence or willful misconduct.

              11.13 Arranger. The Arranger shall have no right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such.

                                      118
<PAGE>

Without limiting the foregoing, the Arranger shall not have or be deemed to have
a fiduciary relationship with any Holder of Secured Obligations. Each Holder of
Secured Obligations hereby makes the same acknowledgements with respect to the
Arranger as it makes with respect to the Administrative Agent in Section 11.10.

                   ARTICLE XII: SETOFF; RATABLE PAYMENTS

              12.1 Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if any Default occurs and is continuing,
any Indebtedness from any Lender to the Borrower (including all account
balances, whether provisional or final and whether or not collected or
available) may be offset and applied toward the payment of the Obligations owing
to such Lender, whether or not the Obligations, or any part hereof, shall then
be due. Such Lender shall give prompt notice to the Borrower and the
Administrative Agent of any such offset.

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

              12.3 Application of Payments. The Administrative Agent shall,
unless otherwise specified at the direction of the Required Lenders which
direction shall be consistent with the last two sentences of this Section 12.3,
apply all payments and prepayments in respect of any Obligations and all
proceeds of the Collateral in the following order:

              (i) first, to pay interest on and then principal of any portion of
        the Loans which the Administrative Agent may have advanced on behalf of
        any Lender for which the Administrative Agent has not then been
        reimbursed by such Lender or the Borrower;

              (ii) second, to pay interest on and then principal of any advance
        made under Section 10.3 for which the Administrative Agent has not then
        been paid by the Borrower or reimbursed by the Lenders;

              (iii) third, to the ratable payment of the Obligations in respect
        of any fees, expenses, reimbursements or indemnities then due to the
        Administrative Agent;

              (iv) fourth, to pay Obligations in respect of any fees, expenses,
        reimbursements or indemnities then due to the Lenders and the issuer(s)
        of Letters of Credit;

              (v) fifth, to pay interest due in respect of Swing Line Loans;

                                      119
<PAGE>

              (vi) sixth, to pay interest due in respect of Loans.

              (vii) seventh, to the ratable payment or prepayment of principal
        outstanding on Swing Line Loans;

              (viii) eighth, to the ratable payment or prepayment of principal
        outstanding on the Term Loans;

              (ix) ninth, to the ratable payment or prepayment of principal
        outstanding on Loans (other than Swing Line Loans and Term Loans) and
        Reimbursement Obligations in such order as the Administrative Agent may
        determine;

              (x) tenth, to the ratable payment or prepayment of Hedging
        Obligations under Hedging Agreements in such order as the Administrative
        Agent may determine in its sole discretion;

              (xi) eleventh, to provide required cash collateral, if required
        pursuant to Section 3.11 and

              (xii) twelfth, to the ratable payment of all other Obligations.

Unless otherwise required by the terms of this Agreement, all principal payments
in respect of Loans (other than Swing Line Loans) shall be applied first, to
repay outstanding Floating Rate Loans, and then to repay outstanding Eurodollar
Rate Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
The order of priority set forth in this Section 12.3 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Administrative Agent, the Lenders, the Swing Line Bank and the issuer(s) of
Letters of Credit as among themselves. The order of priority set forth in
clauses (iv) through (x) of this Section 12.3 may at any time and from time to
time be changed at the direction of the Lenders without necessity of notice to
or consent of or approval by the Borrower, or any other Person; provided, that
the order of priority of payments in respect of Swing Line Loans may be changed
only with the prior written consent of the Swing Line Bank. The order of
priority set forth in clauses (i) through (iii) of this Section 12.3 may be
changed only with the prior written consent of the Administrative Agent, and, in
the case of clause (iii), with the prior written consent of the Arranger.

              12.4 Relations Among Lenders.

              (A) No Action Without Consent. Except with respect to the exercise
        of set-off rights of any Lender in accordance with Section 12.1, the
        proceeds of which are applied in accordance with this Agreement, each
        Lender agrees that it will not take any action, nor institute any
        actions or proceedings, against the Borrower or any other obligor
        hereunder or with respect to any Loan Document, without the prior
        written consent of the Required Lenders or, as may be provided in this
        Agreement or the other Loan Documents, with the consent of the
        Administrative Agent.

              (B) Not Partners; No Liability. The Lenders are not partners or
        co-venturers, and no Lender shall be liable for the acts or omissions
        of, or (except as otherwise set forth

                                      120
<PAGE>

        herein in case of the Administrative Agent) authorized to act for, any
        other Lender. The Administrative Agent shall have the exclusive right on
        behalf of the Lenders to enforce the payment of the principal of and
        interest on any Loan after the date such principal or interest has
        become due and payable pursuant to the terms of this Agreement.

      ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

              13.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (A) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents without the consent of all of the Lenders, and any such
assignment in violation of this Section 13.1(A) shall be null and void, and (B)
any assignment by any Lender must be made in compliance with Section 13.3
hereof. Notwithstanding clause (B) of this Section 13.1 or Section 13.3, (i) any
Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank and (ii) any Lender which is a fund or
commingled investment vehicle that invests in commercial loans in the ordinary
course of its business may at any time, without the consent of the Borrower or
the Administrative Agent, pledge or assign all or any part of its rights under
this Agreement to a trustee or other representative of holders of obligations
owed or securities issued by such Lender as collateral to secure such
obligations or securities; provided, however, that no such assignment or pledge
shall release the transferor Lender from its obligations hereunder, unless and
until the parties thereto have complied with the provisions of Section 13.3. The
Administrative Agent may treat each Lender as the owner of the Loans made by
such Lender hereunder for all purposes hereof unless and until such Lender
complies with Section 13.3 hereof in the case of an assignment thereof or, in
the case of any other transfer, a written notice of the transfer is filed with
the Administrative Agent. Any assignee or transferee of a Loan, Commitment, L/C
Interest or any other interest of a Lender under the Loan Documents agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of any
Loan, shall be conclusive and binding on any subsequent owner, transferee or
assignee of such Loan.

              13.2 Participations.

              (A) Permitted Participants; Effect. Subject to the terms set forth
in this Section 13.2, any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time sell to one or more banks or
other entities that are U.S. Qualified Persons ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Revolving Loan Commitment of
such Lender, any L/C Interest of such Lender or any other interest of such
Lender under the Loan Documents on a pro rata or non-pro rata basis. Notice of
such participation to the Borrower and the Administrative Agent shall be
required prior to any participation becoming effective with respect to a
Participant which is not a Lender or an Affiliate thereof. Upon receiving said
notice, the Administrative Agent shall record the participation in the Register
it maintains. Moreover, notwithstanding such recordation, such participation
shall not be considered an assignment under Section 13.3 of this Agreement and
such Participant shall not be considered a Lender. In the event of any such sale
by a Lender of participating interests

                                      121
<PAGE>

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

              (B) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any  Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than any
amendment, modification or waiver with respect to any Loan, Letter of Credit or
Revolving Loan Commitment in which such Participant has an interest which
forgives principal, interest or Letter of Credit or commitment fees or reduces
the interest rate or Letter of Credit or commitment fees payable pursuant to the
terms of this Agreement with respect to any such Loan or Revolving Loan
Commitment, or postpones any date fixed for any regularly-scheduled payment (but
not any prepayment) of principal of, or interest or Letter of Credit or
commitment fees on, any such Loan or Revolving Loan Commitment, or releases all
or substantially all of the Collateral, if any, securing any such Loan or Letter
of Credit.

              (C) Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 12.1 hereof in
respect to its participating interest in amounts owing under the Loan Documents
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 12.1 hereof with respect to
the amount of participating interests sold to each Participant except to the
extent such Participant exercises its right of setoff. The Lenders agree to
share with each Participant, and each Participant, by exercising the right of
setoff provided in Section 12.1 hereof, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 12.2 as if each Participant were a Lender.

              13.3 Assignments.

              (A) Permitted Assignments.

              (i) Any Lender (each such assigning Lender under this Section 13.3
           being a "SELLER") may, in accordance with applicable law, at any time
           assign to one or more banks or other entities (other than the
           Borrower or any of its Affiliates) that are U.S. Qualified Persons
           ("PURCHASERS") all or a portion of its rights and obligations under
           this Agreement and the other Loan Documents (including, without
           limitation, its Revolving Loan Commitment, all Loans owing to it, all
           of its participation interests in existing Letters of Credit and
           Swing Line Loans, and its obligation to participate in additional
           Letters of Credit and Swing Line Loans hereunder) in accordance with
           the provisions of this Section 13.3. Each assignment shall be of a
           constant, and not a

                                      122
<PAGE>

           varying, ratable percentage of all of the Seller's rights and
           obligations under this Agreement. Such assignment shall be
           substantially in the form of Exhibit D hereto and shall not be
           permitted hereunder unless such assignment is either for all of such
           Seller's rights and obligations under the Loan Documents or, without
           the prior written consent of the Administrative Agent, involves loans
           and commitments in an aggregate amount of at least $5,000,000 (or, if
           less, all of such Lender's rights and obligations under the Loan
           Documents, and which minimum amount shall not apply to any assignment
           between Lenders. The written consent of the Administrative Agent,
           and, prior to the occurrence of a Default, and only with respect to
           any assignment other than to another Lender, the Borrower (which
           consent, in each such case, shall not be unreasonably withheld or
           delayed), shall be required prior to an assignment becoming effective
           with respect to a Purchaser which is not a Lender, an Affiliate of
           such assigning Lender or Approved Fund of such assigning Lender;
           provided, no consent of the Borrower shall be required in connection
           with any assignment by any Lender consummated after consultation with
           the Borrower during the Syndication Period.

              (ii) Notwithstanding anything to the contrary contained herein,
           any Lender (each such Lender, a "GRANTING Bank") may grant to a
           special purpose funding vehicle (each such special purpose funding
           vehicle, a "SPC"), identified as such in writing from time to time by
           the applicable Granting Bank to the Administrative Agent and the
           Borrower, the option to provide to the Borrower all or any part of
           any Advance that such Granting Bank would otherwise be obligated to
           make to the Borrower pursuant to this Agreement; provided, that (i)
           nothing herein shall constitute a commitment by any SPC to make any
           Advance, (ii) if an SPC elects not to exercise such option or
           otherwise fails to provide all or any part of such Advance, the
           applicable Granting Bank shall be obligated to make such Advance
           pursuant to the terms hereof. The making of an Advance by any SPC
           hereunder shall utilize the Revolving Loan Commitment of the
           applicable Granting Bank to the same extent, and as if, such Advance
           were made by such Granting Bank. Each party hereto hereby agrees that
           no SPC shall be liable for any indemnity or other similar payment
           obligation under this Agreement (all liability for which shall remain
           with the applicable Granting Bank). All notices hereunder to any
           Granting Bank or the related SPC, and all payments in respect of the
           Obligations due to such Granting Bank or the related SPC, shall be
           made to such Granting Bank. In addition, each Granting Bank shall
           vote as a Lender hereunder without giving effect to any assignment
           under this Section 13.3(A)(ii), and no SPC shall have any vote as a
           Lender under this Agreement for any purpose. In furtherance of the
           foregoing, each party hereto hereby agrees (which agreement shall
           survive the termination of this Agreement) that, prior to the date
           that is one year and one day after the payment in full of all
           outstanding commercial paper or other senior indebtedness of any SPC,
           it will not institute against, or join any other person in
           instituting against, such SPC any bankruptcy, reorganization,
           arrangement, insolvency or liquidation proceedings under the laws of
           the United States or any State thereof in relation to matters arising
           under this Agreement. In addition, notwithstanding anything to the
           contrary contained in this Section 13.3, any SPC may (i) with notice
           to, but without the prior written consent of, the Borrower and the
           Administrative Agent and without paying any processing or

                                      123
<PAGE>

           administrative fee therefor, assign all or a portion of its interests
           in any Advances to the Granting Bank or to any financial institutions
           (consented to by the Borrower and the Administrative Agent in
           accordance with the terms of Section 13.3(A)(i)) providing liquidity
           and/or credit support to or for the account of such SPC to support
           the funding or maintenance of Advances and (ii) disclose on a
           confidential basis any non-public information relating to its
           Advances to any rating agency, commercial paper dealer or provider of
           any surety, guarantee or credit or liquidity enhancement to such SPC.
           This Section 13.3(A)(ii) may not be amended without the written
           consent of each SPC affected thereby.

              (B) Effect; Effective Date. Upon (i) delivery to the
        Administrative Agent of a notice of assignment, substantially in the
        form attached as Appendix I to Exhibit D hereto (a "NOTICE OF
        ASSIGNMENT"), together with any consent required by Section 13.3(A)
        hereof, (ii) payment of a $3,500 fee by the assignor to the
        Administrative Agent for processing such assignment, and (iii) the
        completion of the recording requirements in Section 13.3(C), such
        assignment shall become effective on the later of such date when the
        requirements in clauses (i), (ii), and (iii) are met or the effective
        date specified in such Notice of Assignment. The Notice of Assignment
        shall contain a representation by the Purchaser to the effect that none
        of the consideration used to make the purchase of the Commitment, Loans
        and L/C Obligations under the applicable assignment agreement are "plan
        assets" as defined under ERISA and that the rights and interests of the
        Purchaser in and under the Loan Documents will not be "plan assets"
        under ERISA. On and after the effective date of such assignment, such
        Purchaser, if not already a Lender, shall for all purposes be a Lender
        party to this Agreement and any other Loan Documents executed by the
        Lenders and shall have all the rights and obligations of a Lender under
        the Loan Documents, to the same extent as if it were an original party
        hereto, and no further consent or action by the Borrower, the Lenders or
        the Administrative Agent shall be required to release the Seller with
        respect to the percentage of the Aggregate Revolving Loan Commitment,
        Loans and Letter of Credit and Swing Line Loan participations assigned
        to such Purchaser. Upon the consummation of any assignment to a
        Purchaser pursuant to this Section 13.3(B), the Seller, the
        Administrative Agent and the Borrower shall make appropriate
        arrangements so that, to the extent notes have been issued to evidence
        any of the transferred Loans, replacement notes are issued to such
        Seller and new notes or, as appropriate, replacement notes, are issued
        to such Purchaser, in each case in principal amounts reflecting their
        Revolving Loan Commitment and their Term Loans, as adjusted pursuant to
        such assignment. Notwithstanding anything to the contrary herein, the
        Borrower shall not, at any time, be obligated to pay under Section
        2.15(E) to any Lender that is a Purchaser, assignee or transferee any
        sum in excess of the sum which the Borrower would have been obligated to
        pay in respect of such transferred Loan to the Lender that was the
        Seller, assignor or transferor had such assignment or transfer not been
        effected.

              (C) The Register. Notwithstanding anything to the contrary in this
        Agreement, the Borrower hereby designates the Administrative Agent, and
        the Administrative Agent, hereby accepts such designation, to serve as
        the Borrower's contractual representative solely for purposes of this
        Section 13.3(C). In this connection, the Administrative Agent shall
        maintain at its address referred to in Section 14.1 a copy

                                      124
<PAGE>

        of each assignment delivered to and accepted by it pursuant to this
        Section 13.3 and a register (the "REGISTER") for the recordation of the
        names and addresses of the Lenders and the Revolving Loan Commitment of,
        principal amount of and interest on the Loans owing to, each Lender from
        time to time and whether such Lender is an original Lender or the
        assignee of another Lender pursuant to an assignment under this Section
        13.3. The entries in the Register shall be conclusive and binding for
        all purposes, absent manifest error, and the Borrower and each of its
        Subsidiaries, the Administrative Agent and the Lenders may treat each
        Person whose name is recorded in the Register as a Lender hereunder for
        all purposes of this Agreement. The Register shall be available for
        inspection by the Borrower or any Lender at any reasonable time and from
        time to time upon reasonable prior notice.

              13.4 Confidentiality. Subject to Section 13.5, the Administrative
Agent and the Lenders and their respective representatives, consultants and
advisors shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement and identified as such by the Borrower in
accordance with such Person's customary procedures for handling confidential
information of this nature and in accordance with safe and sound commercial
lending or investment practices and in any event may make disclosure reasonably
required by a prospective Transferee in connection with the contemplated
participation or assignment or as required or requested by any Governmental
Authority or any securities exchange or similar self-regulatory organization or
representative thereof or pursuant to a regulatory examination or legal process,
or to any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor, and shall require any such
Transferee to agree (and require any of its Transferees to agree) to comply with
this Section 13.4. In no event shall the Administrative Agent or any Lender be
obligated or required to return any materials furnished by the Borrower;
provided, however, each prospective Transferee shall be required to agree that
if it does not become a participant or assignee it shall return all materials
furnished to it by or on behalf of the Borrower in connection with this
Agreement.

              13.5 Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries; provided that prior to any such
disclosure, such prospective Transferee shall agree to preserve in accordance
with Section 13.4 the confidentiality of any confidential information described
therein.

                              ARTICLE XIV: NOTICES

              14.1 Giving Notice. Except as otherwise permitted by Section 2.14
with respect to Borrowing/Election Notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Documents
shall be in writing or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. For all purposes
under this Agreement and the other Loan Documents, notice to any party hereto
from any other party hereto shall not be deemed to be effective until actually
received.

                                      125
<PAGE>

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

                            ARTICLE XV: COUNTERPARTS

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

                  [Remainder of This Page Intentionally Blank]

<PAGE>

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

                             ALION SCIENCE AND TECHNOLOGY
                             CORPORATION, as the Borrower

                             By:
                                 --------------------------------------------
                                 Name:
                                 Title:
                             Address: 1750 Tysons Boulevard
                                      Suite 1300
                                      McLean, VA 22102
                             ------------------------------------------------

                             ------------------------------------------------

                             ------------------------------------------------

                             Attention: Chief Financial Officer
                             Telephone No.:  (703) 918-4491
                                           ----------------------------------
                             Facsimile No.:  (703) 714-6508
                                           ----------------------------------

SIGNATURE PAGE TO CREDIT AGREEMENT DATED DECEMBER, 2002

<PAGE>

                             LASALLE BANK NATIONAL ASSOCIATION,
                             as Administrative Agent and as a Lender

                             By:
                                ---------------------------------------------
                                Name:
                                Title:
                             Address:
                             135 South LaSalle Street
                             ------------------------------------------------
                             Chicago, IL 60603
                             ------------------------------------------------

                             ------------------------------------------------

                             Attention: Anne Colgan
                             Telephone No.:   (312) 904-8939
                                            ---------------------------------
                             Facsimile No.:   (312) 904-0553
                                            ---------------------------------

SIGNATURE PAGE TO CREDIT AGREEMENT DATED DECEMBER, 2002
<PAGE>

                             U.S. BANK, N.A., as a Lender

                             By:
                                --------------------------------------------
                                Name:  Timothy A. Fossa
                                Title:  Vice President
                             Address:
                             30 North Michigan Avenue
                             -----------------------------------------------
                             Chicago, IL 60602
                             -----------------------------------------------

                             -----------------------------------------------

                             Attention: T. Fossa, Vice President
                             Telephone No.:   (312) 696-1347
                                           ---------------------------------
                             Facsimile No.:   (312) 696-1397
                                           ---------------------------------
                             E-mail:  Timothy.Fossa@usbank.com

SIGNATURE PAGE TO CREDIT AGREEMENT DATED DECEMBER, 2002
<PAGE>

                             ORIX FINANCIAL SERVICES, INC., as a Lender

                             By:
                                ----------------------------------------------
                                Name:  Christopher W. Coulomb
                                Title:  Vice President
                             Address:
                             846 E. Algonquin Road
                             -------------------------------------------------
                             Suite 101
                             -------------------------------------------------
                             Schaumburg, IL 60173-3854
                             -------------------------------------------------

                             -------------------------------------------------

                             Attention: Christopher Coulomb
                             Telephone No.:    (770) 970-8006
                                           -----------------------------------
                             Facsimile No.:    (770) 970-8056
                                           -----------------------------------
                             E-mail:  CCOULOMB@ORIXFIN.COM

SIGNATURE PAGE TO CREDIT AGREEMENT DATED DECEMBER, 2002
<PAGE>

                             NCB CAPITAL CORPORATION, as a Lender

                             By:
                                 ---------------------------------------------
                                 Name: Meg Shrum
                                 Title:  Vice President
                             Address:
                             1725 Eye Street, NW
                             -------------------------------------------------
                             Suite 600
                             -------------------------------------------------
                             Washington, D.C. 20006
                             -------------------------------------------------

                             -------------------------------------------------

                             Attention: Meg Shrum, Vice President
                             Telephone No.:        (202) 336-7785
                                           -----------------------------------
                             Facsimile No.:        (202) 336-7659
                                           -----------------------------------
                             E-mail: mshrum@ncb.com

SIGNATURE PAGE TO CREDIT AGREEMENT DATED DECEMBER, 2002
<PAGE>

                             BRANCH BANKING & TRUST COMPANY, as a Lender

                             By:
                                 ----------------------------------------------
                                 Name:  Roberts A. Bass
                                 Title:  Senior Vice President
                             Address:
                             BB&T Corporate Banking Division
                             --------------------------------------------------
                             200 W. 2nd Street, 16th Floor
                             --------------------------------------------------
                             Winston-Salem, NC 27104
                             --------------------------------------------------

                             --------------------------------------------------

                             Attention: Roberts A. Bass, Senior Vice President
                             Telephone No.:   (336) 733-2734
                                           ------------------------------------
                             Facsimile No.:   (336) 733-2740
                                           ------------------------------------
                             E-mail: rbass@bbandt.com

SIGNATURE PAGE TO CREDIT AGREEMENT DATED DECEMBER, 2002<PAGE>
                                                                    Exhibit 10.4

                    ALION SCIENCE AND TECHNOLOGY CORPORATION
                              1750 Tysons Boulevard
                                   Suite 1300
                             McLean, Virginia 22102

                 $20,343,435.37 12% Senior Subordinated Notes of
                    Alion Science and Technology Corporation
                              due December 20, 2008

                Warrants for 524,228.9 Shares of Common Stock of
        Alion Science and Technology Corporation (subject to adjustment)

                                 --------------

                  MEZZANINE NOTE SECURITIES PURCHASE AGREEMENT

                                 --------------

                                December 20, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>     <C>                                                                               <C>
1.      DESCRIPTION OF ACQUISITION..........................................................2

2.      AUTHORIZATION OF SECURITIES; ETC....................................................2

3.      SALE AND PURCHASE OF SECURITIES.....................................................3

4.      CLOSING.............................................................................3

5.      CONDITIONS TO CLOSING...............................................................3

        5.1    Representations and Warranties Correct.......................................3

        5.2    Performance; No Default......................................................3

        5.3    Related Transactions.........................................................3

        5.4    Compliance Certificate.......................................................4

        5.5    Opinion of Counsel for the Company...........................................4

        5.6    Opinion of Counsel for the ESOP..............................................4

        5.7    Opinion of Your Special Counsel..............................................5

        5.8    Legal Investment; Certificate................................................5

        5.9    Sale and Purchase Not Forbidden by Law.......................................5

        5.10   Payment of Transactions Costs................................................5

        5.11   Proceedings and Documents....................................................5

        5.12   Existence and Authority of the Company.......................................5

        5.13   Private Placement Number.....................................................5

        5.14   Consents and Approvals.......................................................5

        5.15   Absence of Litigation, Orders, Etc...........................................5

        5.16   Blue Sky.....................................................................6

        5.17   Satisfactory Proceedings.....................................................6

        5.18   Waiver of Conditions.........................................................6

6.      REPRESENTATIONS AND WARRANTIES......................................................6

        6.1    Organization; Powers.........................................................6

        6.2    Authority, Execution and Delivery; Transaction Documents.....................6

        6.3    No Conflict; Governmental Consents...........................................7

        6.4    Financial Statements.........................................................8
</TABLE>

                                       i
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>     <C>                                                                               <C>
        6.5    Taxes........................................................................8

        6.6    Litigation; Loss Contingencies...............................................9

        6.7    Subsidiaries; Capitalization.................................................9

        6.8    ERISA.......................................................................11

        6.9    Accuracy of Information.....................................................12

        6.10   Securities Activities.......................................................12

        6.11   Material Agreements.........................................................12

        6.12   Compliance with Laws........................................................13

        6.13   Assets and Properties.......................................................13

        6.14   Statutory Indebtedness Restrictions.........................................13

        6.15   Insurance...................................................................13

        6.16   [RESERVED]..................................................................13

        6.17   IITRI Acquisition and ESOT Transaction......................................13

        6.18   Environmental Matters.......................................................14

        6.19   Solvency....................................................................14

        6.20   Additional ESOP Provisions..................................................15

7.      USE OF PROCEEDS....................................................................16

8.      PREPAYMENT OF NOTES................................................................16

        8.1    Optional Prepayment With Premium of Notes...................................16

        8.2    Prepayment With Premium of the Notes at the Option of the Company
               upon a Qualified IPO........................................................17

        8.3    Prepayment With Premium of the Notes at the Option of Holders of Notes
               Upon a Change of Control....................................................18

        8.4    Allocation of Partial Prepayments of Notes..................................19

        8.5    Notice of Optional Prepayments of Notes.....................................19

        8.6    Maturity; Accrued Interest; Surrender, etc. of Notes........................19

        8.7    Purchase of Notes...........................................................20

        8.8    Payment on Non-Business Days................................................20

9.      SUBORDINATION OF NOTES AND SUBSIDIARY GUARANTEES...................................20
</TABLE>

                                       ii
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>     <C>                                                                               <C>
10.     REPORTING, AFFIRMATIVE AND NEGATIVE COVENANTS OF THE COMPANY.......................20

        10.1   Reporting...................................................................20

        10.2   Affirmative Covenants.......................................................26

        10.3   Negative Covenants..........................................................29

        10.4   Financial Covenants.........................................................41

11.     DEFINITIONS........................................................................45

        11.1   Definitions of Capitalized Terms............................................45

        11.2   Other Definitions...........................................................64

        11.3   Accounting Terms and Principles; Laws.......................................64

        11.4   Singular and Plural Forms; Accounting Terms.................................65

        11.5   References..................................................................65

12.     EVENTS OF DEFAULT; REMEDIES........................................................65

        12.1   Events of Default Defined; Acceleration of Maturity.........................65

        12.2   Suits for Enforcement, etc..................................................69

        12.3   No Election of Remedies.....................................................69

        12.4   Remedies Not Waived.........................................................70

        12.5   Application of Payments.....................................................70

13.     REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES..................................70

14.     REPLACEMENT OF SECURITIES..........................................................70

15.     APPOINTMENT OF DIRECTORS...........................................................70

16.     AMENDMENT AND WAIVER...............................................................71

17.     METHOD OF PAYMENT OF SECURITIES....................................................71

18.     EXPENSES; INDEMNITY................................................................72

19.     TAXES..............................................................................72

20.     COMMUNICATIONS.....................................................................72

21.     SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES, ETC........................73

22.     SUCCESSORS AND ASSIGNS; RIGHTS OF OTHER HOLDERS....................................73
</TABLE>

                                      iii
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>     <C>                                                                               <C>
23.     PURCHASE FOR INVESTMENT; ERISA.....................................................73

24.     ASSIGNMENT; RIGHT OF FIRST OFFER...................................................75

        24.1   Right of First Offer........................................................75

        24.2   Minimum Amount..............................................................76

        24.3   Company Pro Rata Offer to Purchase..........................................76

25.     GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL..................................78

26.     RULE 144A..........................................................................78

27.     MISCELLANEOUS......................................................................78

28.     CONFIDENTIAL INFORMATION...........................................................79
</TABLE>

                                       iv
<PAGE>

Schedule I              Schedule of holders
Schedule II             Bank Documents
Exhibit 2(a)            Form of Note
Exhibit 2(b)            Form of Warrant
Exhibit 2(d)            Form of Subsidiary Guarantee
Exhibit 5.3(a)          Form of Seller Note
Exhibit 5.3(b)          Outstanding Indebtedness
Exhibit 5.3(e)          Form of Rights Agreement
Exhibit 5.5             Opinion of Baker & McKenzie
Exhibit 5.6             Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
Exhibit 5.7             Opinion of McDermott, Will & Emery
Exhibit 6.3             Conflicts; Governmental Consents
Exhibit 6.4             Pro Forma Financial Statements
Exhibit 6.6             Disclosed Litigation
Exhibit 6.7             Subsidiaries
Exhibit 6.8(b)          Plan Events
Exhibit 6.15            Insurance
Exhibit 6.17            IITRI Acquisition and ESOT Transaction Conditions
Exhibit 6.18            Environmental Matters
Exhibit 7               Use of Proceeds
Exhibit 10.1(a)(iv)(a)  Form of Officers' Certificate
Exhibit 10.1(a)(iv)(b)  Form of Compliance Certificate
Exhibit 10.3(f)         Purchase Price Adjustments; Earn-Outs
Exhibit 11.1.1          Permitted Existing Contingent Obligations
Exhibit 11.1.2          Permitted Existing Indebtedness
Exhibit 11.1.3          Permitted Existing Investments
Exhibit 11.1.4          Permitted Existing Liens
Exhibit 11.1.5          ESOP Plan Documents
Exhibit 11.1.6          ESOT Transaction Documents

<PAGE>

                    ALION SCIENCE AND TECHNOLOGY CORPORATION
                              1750 Tysons Boulevard
                                   Suite 1300
                             McLean, Virginia 22102

                                                               December 20, 2002

To each of the Holders named
on Schedule I attached hereto

Ladies and Gentlemen:

        ALION SCIENCE AND TECHNOLOGY CORPORATION, a Delaware corporation

(the "Company"), agrees with you as follows.  Certain terms used herein are

defined in section 11.

1.      DESCRIPTION OF ACQUISITION. The Company has agreed to acquire
substantially all of the assets of IIT Research Institute, a not-for-profit
Illinois corporation ("IITRI") for consideration of $117,100,000 (subject to
certain adjustments as provided in the Asset Purchase Agreement) pursuant to the
Acquisition Documents. In order to consummate the IITRI Acquisition, the holders
have agreed to accept as a portion of the purchase price in Notes and Warrants
of the Company on the terms and pursuant to the conditions set forth in this
Agreement.

2.      AUTHORIZATION OF SECURITIES; ETC.

                (a) The Company has authorized the issue of its 12% Senior
Subordinated Notes due December 20, 2008 (herein, together with any notes issued
in exchange therefor or replacement thereof, called the "Notes") in the
aggregate principal amount of $20,343,435.37. The Notes are to be substantially
in the form of Exhibit 2(a) attached hereto.

                (b) The Company has authorized the issue of its warrants
evidencing rights to purchase 524,228.9 shares of its Common Stock (subject to
adjustment) (herein, together with any warrants issued in exchange therefor or
replacement thereof, called the "Warrants"). The Warrants are to be
substantially in the form of Exhibit 2(b) attached hereto.

                (c) Interest on the Notes shall accrue at 12% per annum computed
on the actual number of days elapsed in any year (based on a year of twelve
30-day months and a 360 day year). The first installment of interest on the
Notes is payable on March 31, 2003, and thereafter interest is payable on the
Notes, quarterly in arrears on the last Business Day of March, June, September
and December of each year, commencing March 31, 2003 and at maturity. In no
event shall the amount paid or agreed to be paid by the Company as interest and
premium on any Note exceed the highest lawful rate permissible under any law
applicable thereto.

                (d) Each Material Subsidiary of the Company and each Person, if
any, that hereafter becomes a Material Subsidiary of the Company shall
unconditionally guarantee the

<PAGE>

Notes and all other obligations of the Company and its Subsidiaries, if any,
under the Operative Documents pursuant to separate guarantees, each
substantially in the form of Exhibit 2(d) attached hereto (as amended, modified
and supplemented from time to time, each a "Subsidiary Guarantee"; collectively
the "Subsidiary Guarantees").

3.      SALE AND PURCHASE OF SECURITIES. The Company will issue to you as
consideration under the Asset Purchase Agreement and, subject to the terms and
conditions hereof and in reliance upon the representations and warranties of the
Company contained herein and in the other Operative Documents, you will accept
from the Company, at the Closing specified in section 4, such Securities as are
specified on that portion of Schedule I attached hereto as is applicable to you.

4.      CLOSING. The closing of the sale and delivery of the Securities
hereunder (the "Closing") shall take place at the office of Baker & McKenzie,
Chicago, on December 20, 2002 (or such other date to which you may agree) (the
"Closing Date"). At the Closing, the Company will deliver to you the Securities
in the form of one or more Notes and Warrants, in such denominations and
registered in such names as are specified on Schedule I attached hereto, and in
each case dated and, in the case of each Note, bearing interest from, the
Closing Date. If at the Closing the Company shall fail to tender the Securities
to be delivered to you thereat as provided herein, or if at the Closing any of
the conditions specified in section 5 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement or to close the acquisition transaction
contemplated by the Acquisition Documents, without thereby waiving any other
rights you may have by reason of such failure or such non-fulfillment.

5.      CONDITIONS TO CLOSING. Your obligation to accept the Securities to be
delivered to you hereunder at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following conditions:

        5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company herein and in the other Operative Documents shall
have been true and correct when made and shall be true and correct as of the
time of the Closing (after giving effect to the transactions consummated at the
Closing).

        5.2 PERFORMANCE; NO DEFAULT. The Company shall have performed all
agreements and complied with all conditions contained herein and in the other
Operative Documents required to be performed or complied with by it prior to or
at the Closing, and at the time of the Closing, no Default or Event of Default
shall exist and no condition shall exist which has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.

        5.3 RELATED TRANSACTIONS.

                (a) The IITRI Acquisition shall have been consummated in
accordance with the Acquisition Documents. No material term or condition of the
Acquisition Documents shall have been amended, modified, supplemented or waived,
other than as the same may be or may have been amended as of the Closing
pursuant to the terms and conditions of the applicable Acquisition Document
(true and correct copies of which have been or will be provided to you on

                                      -3-
<PAGE>

or prior to Closing). The purchase price of the Acquired Business shall be paid
at the time of the Closing as follows: (i) an aggregate of $56,000,000 shall be
paid in cash in immediately available funds, (ii) an aggregate of $39,900,000
shall be paid by the issuance of the Seller Notes, each in the form of Exhibit
5.3(a) attached hereto, and (iii) an aggregate of $20,343,435.37 shall be paid
by the issuance of the Notes hereunder. The terms of the Acquisition Documents
shall be satisfactory to you in all material respects.

                (b) The debt and equity capitalization of the Company and each
of its Subsidiaries shall be satisfactory to you in all material respects.
Without limiting the generality of the foregoing, after giving effect to the
IITRI Acquisition, as of the Closing, the Company shall not have any outstanding
Indebtedness other than that evidenced by the Notes and that which is specified
on Exhibit 5.3(b) attached hereto.

                (c) The Bank Documents shall have been executed and delivered
and shall be in full force and effect. The Company shall have established
pursuant thereto (i) a $25,000,000 five-year senior secured revolving credit
facility, and (ii) a $35,000,000 five-year senior secured term loan facility.
The terms of the Bank Documents, including, without limitation, those pursuant
to which the Notes are subordinated to the Bank Secured Obligations, shall be
satisfactory to you in all material respects.

                (d) The Organizational Documents of the Company and its
Subsidiaries shall be satisfactory to you in all material respects.

                (e) You, the ESOP and each other holder of any Shares (or
warrants or options therefor) issued by the Company shall have entered into a
rights agreement in substantially the form of Exhibit 5.3(e) attached hereto
(the "Rights Agreement"), the terms of which shall be satisfactory to you and
which shall be in full force and effect.

                (f) You, the ESOP and the Company shall have entered into a
Warrant in substantially the form of Exhibit 2(b) attached hereto, the terms of
which shall be satisfactory to you and which shall be in full force and effect.

        5.4 COMPLIANCE CERTIFICATE. At the Closing, you shall have received an
Officers' Certificate, dated the Closing Date, certifying that the conditions
specified in sections 5.1, 5.2 and 5.3 (a) and (c) have been fulfilled.

        5.5 OPINION OF COUNSEL FOR THE COMPANY. At the Closing, you shall have
received opinions, dated the Closing Date, from Baker & McKenzie, counsel to the
Company, in substantially the form of Exhibit 5.5 attached hereto.

        5.6 OPINION OF COUNSEL FOR THE ESOP. At the Closing, you shall have
received an opinion, dated the Closing Date, from Paul, Weiss, Rifkind, Wharton
& Garrison, special counsel to the ESOP, in substantially the form of Exhibit
5.6 attached hereto.

        5.7 OPINION OF YOUR SPECIAL COUNSEL. At the Closing, you shall have
received an opinion, dated the Closing Date, from McDermott, Will & Emery, your
special counsel, addressing such legal matters as you may reasonably request.

                                      -4-
<PAGE>

        5.8 LEGAL INVESTMENT; CERTIFICATE. Your acceptance of the Securities to
be issued pursuant hereto shall be permitted under the laws and regulations of
any jurisdiction to which you are subject (without resort to any provision of
any such law permitting limited investments by you without restriction as to the
character of the particular investment).

        5.9 SALE AND PURCHASE NOT FORBIDDEN BY LAW. The offer, issue, sale and
delivery by the Company of the Securities to be issued pursuant hereto and your
acceptance of such Securities at the Closing shall not be prohibited by and
shall not subject you to any tax, penalty or liability under or pursuant to any
law, statute, rule or regulation.

        5.10 PAYMENT OF TRANSACTIONS COSTS. The Company shall have paid in
immediately available funds all fees, expenses and disbursements incurred by you
at or prior to the time of the Closing (including reasonable fees and
disbursements of your special counsel) in connection with the transactions
contemplated by the Operative Documents to the extent and subject to the
limitations provided in the Asset Purchase Agreement.

        5.11 PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by the Operative Documents and all agreements,
documents and instruments incident to such transactions shall be satisfactory in
substance and form to you and your special counsel, and you and your special
counsel shall have received all such counterpart originals or copies of such
agreements, documents and instruments as you or they may reasonably request.

        5.12 EXISTENCE AND AUTHORITY OF THE COMPANY. On or prior to the Closing
Date, you shall have received a certificate of good standing with respect to the
Company and each Subsidiary Guarantor, certified copies of the Organizational
Documents of the Company and each Subsidiary Guarantor, certified copies of the
ESOP Plan Documents and the other Transaction Documents and evidence with
respect to the authorization by the Company, each Subsidiary Guarantor, the ESOT
and the ESOP of the transactions contemplated by this Agreement, the other
Operative Documents and the other Transaction Documents.

        5.13 PRIVATE PLACEMENT NUMBER. On or prior to the Closing Date, Baker &
McKenzie, special counsel for the Company, shall have duly made the appropriate
filings with Standard & Poor's CUSIP Service Bureau in order to obtain the
requisite private placement numbers for the Notes and the Warrants.

        5.14 CONSENTS AND APPROVALS. All necessary consents, approvals and
authorizations of, and declarations, registrations and filings with,
governmental bodies and non-governmental Persons required in order to consummate
the transactions contemplated herein, in the Bank Documents, the Acquisition
Documents, and the other Transaction Documents shall have been obtained or made
and shall be in full force and effect.

        5.15 ABSENCE OF LITIGATION, ORDERS, ETC. There shall not be pending or,
to the knowledge of the Company or its Subsidiaries, threatened, any action,
suit, proceeding, governmental investigation or arbitration against or affecting
any of the Company or its Subsidiaries, or the respective assets or property of
such Persons which seeks to enjoin or restrain any of the transactions
contemplated herein, in the other Operative Documents, in the

                                      -5-
<PAGE>

Bank Documents, or the Acquisition Documents or which is reasonably likely to
have a Material Adverse Effect. No order of any court, arbitrator or
governmental body shall be in effect which purports to enjoin or restrain any of
the transactions contemplated herein or which you reasonably believe in good
faith could constitute a Material Adverse Effect.

        5.16 BLUE SKY. The Company shall have made all filings reasonably
requested by you (if any shall be required) under applicable state securities
laws necessary to consummate the issuance of the Notes and Warrants pursuant to
this Agreement in compliance with such laws.

        5.17 SATISFACTORY PROCEEDINGS. All proceedings taken in connection with
the transactions contemplated by this Agreement, the Notes, the Warrants, the
Bank Documents, the Acquisition Documents, and the other Transaction Documents,
shall be satisfactory in form and substance to you and your special counsel, and
you shall have received a copy (executed or certified as may be appropriate) of
all legal documents or proceedings taken in connection with the consummation of
said transactions.

        5.18 WAIVER OF CONDITIONS. If the conditions specified in this section 5
have not been fulfilled, you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion determine. Nothing
in this section 5.18 shall operate to relieve the Company of its obligations
hereunder or to waive any of your rights against the Company.

6.      REPRESENTATIONS AND WARRANTIES. The Company represents and warrants that
as of the Closing (after giving effect to the transactions consummated at the
Closing under the Transaction Documents, including, without limitation, the
IITRI Acquisition):

        6.1 ORGANIZATION; POWERS. The Company and each of its Subsidiaries (a)
is a corporation validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) is duly qualified to do business as a
foreign entity and is in good standing under the laws of each jurisdiction in
which failure to be so qualified and in good standing could reasonably be
expected to have a Material Adverse Effect, and (c) has all requisite power and
authority to own, operate and encumber its property and to conduct its business
as presently conducted and as proposed to be conducted.

        6.2 AUTHORITY, EXECUTION AND DELIVERY; TRANSACTION DOCUMENTS.

                (a) Power and Authority. The Company and each of its
Subsidiaries has the requisite power and authority to execute, deliver and
perform this Agreement and the other Operative Documents, each of the
Transaction Documents which are to be executed by it in connection with the
IITRI Acquisition and the ESOT Transaction and which have been executed by it as
required by the Bank Documents and (ii) to file the Transaction Documents which
must be filed by it in connection with this Agreement and the other Operative
Documents, the IITRI Acquisition or the ESOT Transaction or which have been
filed by it as required by this Agreement, the other Operative Documents, the
Bank Documents or otherwise with any Governmental Authority.

                (b) Execution and Delivery. The execution, delivery, performance
and filing, as the case may be, of each of this Agreement and the other
Operative Documents, and each of

                                      -6-
<PAGE>

the other Transaction Documents which must be executed or filed by the Company
or any of its Subsidiaries in connection with the IITRI Acquisition or the ESOT
Transaction or which have been executed or filed as required by the Bank
Documents or otherwise and to which the Company or any of its Subsidiaries is
party, and the consummation of the transactions contemplated hereby and thereby,
have been duly approved by the respective boards of directors and, if necessary,
the stockholders of the Company and its Subsidiaries, and such approvals have
not been rescinded. No other action or proceedings on the part of the Company or
its Subsidiaries are necessary to consummate such transactions.

                (c) Transaction Documents. Each of this Agreement, the other
Operative Documents and the other Transaction Documents to which the Company or
any of its Subsidiaries is a party has been duly executed, delivered or filed,
as the case may be, by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally), is in full force and
effect, and no material term or condition thereof has been amended, modified or
waived from the terms and conditions contained in the Transaction Documents
delivered to the holders pursuant to section 5.3 of this Agreement without the
prior written consent of the Required Holders, and the Company and its
Subsidiaries have, and, to the best of the Company's and its Subsidiaries'
knowledge, all other parties thereto have, performed and complied with all the
terms, provisions, agreements and conditions set forth therein and required to
be performed or complied with in all material respects by such parties, and no
unmatured default, default or breach of any covenant by any such party exists
thereunder.

        6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of this Agreement, the other Operative Documents and the
other Transaction Documents to which the Company or any of its Subsidiaries is a
party do not and will not (a) conflict with the Organizational Documents of the
Company or any such Subsidiary, (b) (i) constitute a tortious interference with
any Contractual Obligation of any Person (ii) conflict with, result in a breach
of or constitute (with or without notice or lapse of time or both) a default
under any Requirement of Law (including, without limitation, any Environmental
Property Transfer Act) or Contractual Obligation of the Company or any such
Subsidiary, or require termination of any Contractual Obligation of the Company
or any such Subsidiary which, in the case of clause (ii), could be reasonably
expected to have a Material Adverse Effect, (c) result in or require the
creation or imposition of any Lien whatsoever upon any of the property or assets
of the Company or any such Subsidiary, other than Liens permitted or created by
the Transaction Documents, or (d) require any approval of the Company's or any
such Subsidiary's board of directors or stockholders except such as have been
obtained. Except as set forth on Exhibit 6.3 attached hereto, the execution,
delivery and performance of each of the Transaction Documents to which the
Company or any of its Subsidiaries is a party do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by any Governmental Authority, including under any Environmental
Property Transfer Act, except filings, consents or notices which have been made,
obtained or given, or which, if not made, obtained or given, individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.

                                      -7-
<PAGE>

        6.4 FINANCIAL STATEMENTS.

                (a) Pro Forma Financials. The combined, projected pro forma
balance sheet, income statements and statements of cash flow of the Company and
its Subsidiaries, copies of which are attached hereto as Exhibit 6.4, present on
a pro forma basis the financial condition of the Company and such Subsidiaries
as of such date, and reflect on a pro forma basis those liabilities reflected in
the notes thereto and resulting from consummation of the IITRI Acquisition, the
ESOT Transaction, the issuance of the Notes and the Seller Notes and the other
transactions contemplated by this Agreement, the other Operative Documents and
the Bank Documents, and the payment or accrual of all transaction costs payable
on the Closing Date with respect to any of the foregoing. The projections and
assumptions expressed in the pro forma financials referenced in this section
6.4(a) were prepared in good faith and represent management's opinion based on
the information available to the Company at the time so furnished and, since the
preparation thereof and up to the Closing Date, there has occurred no change in
the business, financial condition, operations, or prospects of the Company or
any of its Subsidiaries, or the Company and its Subsidiaries taken as a whole
which has had or could reasonably be expected to have a Material Adverse Effect.

                (b) Audited Financial Statements. Complete and accurate copies
of the audited financial statements and the audit reports related thereto of
IITRI and its consolidated Subsidiaries as at September 30, 2001 and of the
business and assets of IITRI to be acquired by the Company pursuant to the Asset
Purchase Agreement as at September 30, 2001, and (ii) the unaudited financial
statements of IITRI and its consolidated Subsidiaries as of September 30, 2002
and of the business and assets of IITRI to be acquired by the Company pursuant
to the Asset Purchase Agreement as of September 30, 2002, have been delivered to
the initial holders.

        6.5 TAXES.

                (a) Tax Examinations. All deficiencies which have been asserted
against the Company or any of the Company's Subsidiaries as a result of any
federal, state, local or foreign tax examination for each taxable year in
respect of which an examination has been conducted have been fully paid or
finally settled or are being contested in good faith, and no issue has been
raised by any taxing authority in any such examination which, by application of
similar principles, could reasonably be expected to result in assertion by such
taxing authority of a material deficiency for any other year not so examined
which has not been reserved for in the Company's consolidated financial
statements to the extent, if any, required by Agreement Accounting Principles.
Except as permitted pursuant to section 10.2(d), neither the Company nor any of
its Subsidiaries anticipates any tax liability with respect to the years which
have not been closed pursuant to applicable law.

                (b) Payment of Taxes. All tax returns and reports of the Company
and its Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. The Company has no knowledge of any

                                      -8-
<PAGE>

proposed tax assessment against the Company or any of its Subsidiaries that will
have or could reasonably be expected to have a Material Adverse Effect.

                (c) Subchapter S Status. As of the Closing Date, the Company has
executed and has caused all other Persons to execute the applicable election
forms or other filings required to be made for purposes of the Company's
election to be taxed as an "S corporation" as such term is defined in Section
1361 of the Code. Beginning with the Company's taxable year ending September 30,
2002, the Company was and as of the Closing Date remains taxable as an S
corporation. The ESOT is not subject to tax imposed under the Code with respect
to any item of income or loss of the Company or any Subsidiary of the Company.

        6.6 LITIGATION; LOSS CONTINGENCIES. Except as set forth in Exhibit 6.6
attached hereto (the "Disclosed Litigation"), there is no action, suit,
proceeding, arbitration or, to the Company's knowledge, investigation before or
by any Governmental Authority or private arbitrator pending or, to the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries or any property of any of them. Neither any of the Disclosed
Litigation nor any action, suit, proceeding, arbitration or investigation which
has commenced on or prior to the Closing Date (a) challenges the validity or the
enforceability of any material provision of the Transaction Documents or (b) has
or could reasonably be expected to have a Material Adverse Effect. There is no
material loss contingency within the meaning of Agreement Accounting Principles
which has not been reflected in the consolidated financial statements of the
Company prepared and delivered pursuant to section 6.4(b) for the fiscal period
during which such material loss contingency was incurred. Neither the Company
nor any of its Subsidiaries is (x) in violation of any applicable Requirements
of Law which violation will have or could reasonably be expected to have a
Material Adverse Effect, or (y) subject to or in default with respect to any
final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority which will
have or could reasonably be expected to have a Material Adverse Effect. To the
Company's knowledge, neither the ESOP Fiduciary nor the ESOT Trustee has made
any assertion with respect to the ESOP or the ESOT contrary to or inconsistent
with the accuracy of any representation or warranty set forth in section 6.5(c)
or section 6.19 that could reasonably be expected to have in a Material Adverse
Effect.

        6.7 SUBSIDIARIES; CAPITALIZATION.

                (a) Exhibit 6.7(a) attached hereto (i) contains a description of
the corporate structure of the Company or its Subsidiaries; and (ii) accurately
sets forth (A) the correct legal name, the jurisdiction of incorporation and the
jurisdictions in which each of the Company and the direct and indirect
Subsidiaries of the Company are qualified to transact business as a foreign
corporation, and (B) the authorized, issued and outstanding shares of each class
of Capital Stock of the Company and each of its Subsidiaries and the owners of
such shares (both as of the Closing Date and on a fully-diluted basis). Except
for (i) mandatory redemption or repurchase of Capital Stock of the Company as a
result of distributions by the ESOT to participants of the ESOP pursuant to the
ESOP Plan Documents subsequent to their termination of employment with the
Company or any Controlled Group member, (ii) the requirements of Section
401(a)(28) of the Code or any substantially similar Requirement of Law, (iii)
the Incentive Arrangements

                                      -9-
<PAGE>

disclosed on Exhibit 6.7(a), and the Warrants and the Seller Warrants, (iv) the
put and call rights contained in the Warrants and the Seller Warrants, (v) the
vesting provisions of the ESOP, or (vi) agreements otherwise disclosed on
Exhibit 6.7(a), none of the issued and outstanding Capital Stock of the Company
or any of the Company's Subsidiaries is subject to any vesting, redemption, or
repurchase agreement, and there are no warrants or options outstanding with
respect to such Capital Stock except for the Warrants and the Seller Warrants
and except as may be in effect from time to time with respect Incentive
Arrangements. The outstanding Capital Stock of the Company and each of its
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and is not Margin Stock; and, except as provided in the Rights Agreement, the
Warrants and the Seller Warrants, not subject to any preemptive right, right of
first refusal or offer or similar right on the part of any other Person, and all
of such Capital Stock has been (or will have been) offered and issued in
accordance with all applicable laws. Except as set forth on Exhibit 6.7(a)
attached hereto and except to the extent Persons may be deemed beneficial owners
by virtue of familial relationships with a holder of Capital Stock or in
connection with a trust established for the benefit of family members by a
holder of Capital Stock, the owners of the Capital Stock indicated on Exhibit
6.7(a) attached hereto own the Capital Stock indicated on such exhibit free of
any Lien, proxy, voting agreement, voting trust, stockholders agreement (other
than the Rights Agreement) or similar agreement or restriction. Except as set
forth on Exhibit 6.7(a) attached hereto, neither the Organizational Documents
nor any other agreement, document or instrument binding on or applicable to the
Company or any of its Subsidiaries or any of its stockholders contains any
provision requiring a higher voting requirement with respect to action taken
(and/or to be taken) by its board of directors or stockholders than that which
would apply in the absence of such provision.

                (b) Except as provided in the Rights Agreement, the Warrants,
the Seller Warrants and except as set forth on Exhibit 6.7(b) attached hereto
(after giving effect to the consummation of the transactions consummated at the
Closing under the Transaction Documents), (i) there are no outstanding
securities convertible into or exercisable or exchangeable for any Capital Stock
of the Company or any of its Subsidiaries and no outstanding agreements for the
purchase from, or sale or issuance by, the Company or any of its Subsidiaries of
any of their respective Capital Stock or any securities convertible into or
exercisable or exchangeable for such Capital Stock; (ii) there are no agreements
on the part of the Company or any of its Subsidiaries to issue, sell or
distribute any of their respective Capital Stock, other securities or assets;
(iii) neither the Company nor any of its Subsidiaries has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of their
respective Capital Stock or other securities or any interest therein or to pay
any dividend or make any distribution in respect thereof; and (iv) no Person is
entitled to any rights with respect to the registration of any Capital Stock or
other securities of the Company or any of its Subsidiaries under the Securities
Act (or the securities laws of any other jurisdiction).

                (c) The aggregate number of shares of Common Stock issuable upon
exercise in full of the Warrants immediately after the Closing is 524,228.9,
which, if then issued, would constitute 12.475% of the Common Stock (calculated
assuming the conversion, exercise and exchange of all outstanding securities
convertible into and exercisable or exchangeable for shares of Common Stock,
including, without limitation, the Warrants and the Seller Warrants). The
Company has reserved 524,228.9 shares of Common Stock solely for issuance upon
exercise of

                                      -10-
<PAGE>

the Warrants. The Company has adopted stock appreciation rights plan. The
Company has not reserved any shares of Common Stock pursuant to the Company's
stock appreciation rights plan.

        6.8 ERISA.

                (a) Plan Documents. The ESOP Plan Documents identified in
Exhibit 11.1.5 to this Agreement (each as may be amended from time to time as
provided therein) are all of the material documents pursuant to which the ESOP
and ESOT are maintained by the Company, or concerning the Company's obligations
with respect to the ESOP and ESOT. The ESOT Transaction Documents identified in
Exhibit 11.1.6 to this Agreement (without any modifications or amendments
thereto), together with the ESOP Plan Documents identified in Exhibit 11.1.5 to
this Agreement (without any modifications or amendments thereto), are all duly
adopted by the Company to the extent intended to be so adopted.

                (b) Plan Events. The representations and warranties in this
section 6.8(b) are subject to the disclosures made on Exhibit 6.8(b) attached
hereto. No Benefit Plan has incurred any material accumulated funding deficiency
(as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code) whether or
not waived. Neither the Company nor any member of the Controlled Group has
incurred any material liability to the PBGC which remains outstanding other than
the payment of premiums, and there are no premium payments which have become due
which are unpaid. With respect to each Benefit Plan, Schedule B to the most
recent annual report filed with the IRS with respect to such plan is complete
and accurate in all material respects. Since the date of each such Schedule B,
there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. As of the last day of
the most recent prior plan year, the market value of assets under each Benefit
Plan, other than any Multiemployer Plan, was not by a material amount less than
the present value of benefit liabilities thereunder (determined in accordance
with the actuarial valuation assumptions described therein). Neither the Company
nor any member of the Controlled Group has (i) failed to make a required
contribution or payment to a Multiemployer Plan of a material amount or (ii)
incurred a material complete or partial withdrawal under Sections 4203 or 4205
of ERISA from a Multiemployer Plan. Neither the Company nor any member of the
Controlled Group has failed to make a required installment or any other required
payment under Section 412 of the Code on or before the due date for such
installment or other payment. Neither the Company nor any member of the
Controlled Group is required to provide security of a material amount to a
Benefit Plan pursuant to Section 401(a)(29) of the Code due to a Plan amendment
that results in an increase in current liability for the plan year. Except as
set forth on Exhibit 6.8(b), neither the Company nor any of its Subsidiaries
maintains or contributes to any employee welfare benefit plan within the meaning
of Section 3(1) of ERISA or any other arrangement which provides benefits to one
or more employees, officers, directors, or consultants after termination of
employment other than as required by Section 601 of ERISA or Section 4980(B) of
the Code or applicable law and other than any such plan or arrangement with
respect to which the Company and its Subsidiaries do not have any liability of a
material amount. Each Plan is designed to be qualified under Section 401(a) of
the Code as currently in effect, and each trust related to any such Plan is
designed to be exempt from federal income tax under Section 501(a) of the Code
as currently in effect. With respect to each Plan, the Company and each of its
Subsidiaries, the ESOP Fiduciary and, to the best knowledge of the Company, the
ESOT Trustee

                                      -11-
<PAGE>

are in compliance in all material respects with the responsibilities,
obligations and duties, if any, imposed on them by ERISA and the Code. Each Plan
and Non-ERISA Commitment complies in all material respects in form, and has been
administered in all material respects in accordance with its terms and, in
accordance with all applicable laws and regulations, including but not limited
to ERISA and the Code. There is no material action, suit or claim pending or
threatened with respect to any Plan other than routine claims for benefits.
There have been no and there is no non-exempt prohibited transaction described
in Sections 406 of ERISA or 4975 of the Code which could reasonably be expected
to subject the Company to material liability. Neither the Company nor any member
of the Controlled Group has taken or failed to take any action which would
constitute or result in a Termination Event, which action or inaction could
reasonably be expected to subject the Company or any of its Subsidiaries to
liability, individually or in the aggregate, in excess of $1,500,000. Neither
the Company nor any Subsidiary is subject to any material liability under, or to
the best of Company's knowledge, has any potential material liability under,
Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA and no other member of the
Controlled Group is subject to any liability under Sections 4063, 4064, 4069,
4204 or 4212(c) of ERISA. Except as set forth on Exhibit 6.8(c), neither the
Company nor any of its Subsidiaries has, by reason of the ESOT Transaction or
any other transaction contemplated hereby, any obligation to make any payment to
any current or former employee, director, officer or consultant pursuant to any
Plan or Non-ERISA Commitment or any obligation to make any such payment at a
time earlier than when it would be otherwise payable except for any payment to
be made upon termination of employment. For purposes of this section 6.8(b),
"material" means any amount, noncompliance or basis for liability which could
reasonably be expected to subject the Company or any of its Subsidiaries to
liability, individually or in the aggregate, in excess of $1,500,000.

        6.9 ACCURACY OF INFORMATION. The information, exhibits and reports (i)
prepared by the Company and (ii) prepared by any other Person, in each case,
furnished by or on behalf of the Company and any of its Subsidiaries to the
holders in connection with the negotiation of, or compliance with, this
Agreement and the other Operative Documents, the representations and warranties
of the Company and its Subsidiaries contained in this Agreement and the other
Operative Documents, and all certificates and documents delivered to the holders
pursuant to the terms thereof, taken as a whole, do not contain, and with
respect to the information, exhibits and reports identified in clause (ii)
above, to the best of the Company's knowledge do not contain, as of the date
furnished any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.

        6.10 SECURITIES ACTIVITIES. Neither the Company nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock. Margin Stock constitutes less than 25% of
the value of the assets of the Company and its Subsidiaries.

        6.11 MATERIAL AGREEMENTS. Neither the Company nor any of its
Subsidiaries is a party to any Contractual Obligation or subject to any charter
or other corporate restriction which individually or in the aggregate has had or
could reasonably be expected to have a Material Adverse Effect. Except as set
forth in Exhibit 6.11, neither the Company nor any of its

                                      -12-
<PAGE>

Subsidiaries has received notice or has knowledge that (a) it is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable to it, or (b)
any condition exists which, with the giving of notice or the lapse of time or
both, would constitute a default with respect to any such Contractual
Obligation, in each case, except where such default or defaults, if any,
individually or in the aggregate will not have or could not reasonably be
expected to have a Material Adverse Effect.

        6.12 COMPLIANCE WITH LAWS. The Company and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.

        6.13 ASSETS AND PROPERTIES. The Company and each of its Subsidiaries has
good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it and a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets), and all
such assets and property are free and clear of all Liens, except Liens permitted
under section 10.3(c) of this Agreement. Substantially all of the assets and
properties owned by, leased to or used by the Company and/or each such
Subsidiary of the Company are in adequate operating condition and repair,
ordinary wear and tear excepted. Neither this Agreement, the other Operative
Documents nor any other Transaction Document, nor any transaction contemplated
under any such agreement, will affect any right, title or interest of the
Company or such Subsidiary in and to any of such assets in a manner that would
have or could reasonably be expected to have a Material Adverse Effect.

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

        6.15 INSURANCE. Exhibit 6.15 attached hereto accurately sets forth as of
the Closing Date all insurance policies and programs currently in effect with
respect to the respective properties and assets and business of the Company and
its Subsidiaries, specifying, for each such policy and program, (a) the amount
thereof, (b) the risks insured against thereby, (c) the name of the insurer and
each insured party thereunder, (d) the policy or other identification number
thereof, (e) the expiration date thereof, and (f) any reserves relating to any
self-insurance program that is in effect. Such insurance policies and programs
reflect coverage that is reasonably consistent with prudent industry practice,
and shall include, without limitation, property and liability (and, if
appropriate, business interruption) insurance.

        6.16 [RESERVED].

        6.17 IITRI ACQUISITION AND ESOT TRANSACTION. As of the Closing Date and
immediately prior to issuing the Notes:

                                      -13-
<PAGE>

                (a) The Asset Purchase Agreement and the ESOT Transaction
Documents are in full force and effect, no material breach, default or waiver of
any term or provision thereof by the Company or any of its Subsidiaries which
are parties thereto or, to the best of the Company's knowledge, the other
parties thereto, has occurred (except for such breaches, defaults and waivers,
if any, consented to in writing by the Required Holders) and no action has been
taken by any competent authority which restrains, prevents or imposes any
material adverse condition upon, or seeks to restrain, prevent or impose any
material adverse condition upon, the IITRI Acquisition or the ESOT Transaction;

                (b) The representations and warranties of the Company contained
in the ESOT Stock Purchase Agreement are true and correct in all material
respects; and

                (c) Except as set forth on Exhibit 6.17 attached hereto, all
conditions precedent to, and all consents necessary to permit, the funding of
the IITRI Acquisition and the ESOT Transaction have been satisfied or waived
with the approval of the Required Holders (such approval not to be unreasonably
withheld).

        6.18 ENVIRONMENTAL MATTERS.

                (a) Environmental Representations. Except as disclosed on
Exhibit 6.18 attached hereto:(i) the operations of the Company and its
Subsidiaries comply in all material respects with Environmental, Health or
Safety Requirements of Law;(ii) the Company and its Subsidiaries have all
material permits, licenses or other authorizations required under Environmental,
Health or Safety Requirements of Law and are in material compliance with such
permits; (iii) neither the Company, any of its Subsidiaries nor any of their
respective present property or operations, or, to the Company's or any of its
Subsidiaries' knowledge, any of their respective past property or operations,
are subject to or the subject of, any investigation known to the Company or any
of its Subsidiaries, any judicial, administrative or regulatory proceeding
(including enforcement proceeding), order, judgment, decree, settlement or other
agreement respecting: (A) any alleged or actual material violation of
Environmental, Health or Safety Requirements of Law; (B) any material remedial
action; or (c) any material claims or liabilities arising from the Release or
threatened Release of a Contaminant into the environment; (iv) there is not now,
nor to the Company's or any of its Subsidiaries' knowledge has there ever been,
on or in the property of the Company or any of its Subsidiaries any landfill,
waste pile, underground storage tanks, aboveground storage tanks, surface
impoundment or hazardous waste or hazardous material storage facility of any
kind, any polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material nor any
improperly stored, handled or disposed of contaminant of any kind not maintained
or operated in compliance with Environmental, Health or Safety Requirements of
Law; and (v) neither the Company nor any of its Subsidiaries has any material
Contingent Obligation in connection with any Release or threatened Release of a
Contaminant into the environment. (b) Materiality. For purposes of this section
6.18 "material" means any noncompliance or basis for liability which could
reasonably be likely to subject the Company or any of its Subsidiaries to
liability, individually or in the aggregate, in excess of $1,500,000.

        6.19 SOLVENCY. After giving effect to (a) the issuance of the Notes on
the Closing Date under this Agreement, (b) the other transactions contemplated
by the this Agreement, the other

                                      -14-
<PAGE>

Operative Documents and the other Transaction Documents, including the
consummation of the ESOT Transaction and (c) the payment and accrual of all
transaction costs with respect to the foregoing, the Company and its
Subsidiaries taken as a whole are Solvent.

        6.20 ADDITIONAL ESOP PROVISIONS.

                (a) Organization and Powers. The ESOT has been duly organized
and is a validly existing trust and has all the requisite powers and authority
to execute and deliver the Transaction Documents which have been or are to be
executed by it and to perform its obligations under and the transactions
contemplated by the Transaction Documents. The execution and delivery by the
ESOT of the Transaction Documents have been duly authorized and completed by all
necessary actions of it and such executions and deliveries and the performance
by it of its obligations under and the transactions contemplated by the
Transaction Documents do not contravene any provision of law and the Transaction
Documents which have been or are to be executed by it are legal, valid and
binding obligations of it enforceable against it in accordance with the terms
thereof, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, or moratorium or other similar laws relating to the
enforcement of creditors' rights generally and by general equitable principles
other than general equitable principles as may be applicable to any non-exempt
prohibited transactions described in Section 406 of ERISA or Section 4975 of the
Code. Each of such Transaction Documents is in full force and effect and no term
or condition thereof has been amended, modified or waived from the terms and
conditions contained in the Transaction Documents delivered to the holders
pursuant to Section 5.3 of this Agreement without the consent of the Required
Holders (which consent shall not be unreasonably withheld), except to the extent
such amendment, modification or waiver could not reasonably be expected to have
a material adverse effect upon the holders or otherwise have a Material Adverse
Effect (true and correct copies of which have been provided to you on or prior
to the Closing). The ESOT has performed and complied with all the material
terms, provisions, agreements and conditions set forth therein and required to
be performed or complied with by the ESOT, and no unmatured default, default or
breach of any covenant by any such party exists thereunder.

                (b) No Conflicts. The execution, delivery and performance of
each of the Transaction Documents to which the ESOT is a party do not (i)
conflict with the ESOP Plan Documents, (ii) conflict with any Requirement of
Law, or (iii) require a registration with, consent or approval of, or notices
to, or other action to, with or by any Governmental Authority, other than
filings as required by section 10.2(l).

                (c) Assets of ESOP and ESOT. None of the assets of the Company
constitute, for any purpose of ERISA or Section 4975 of the Code, assets of the
ESOP or any other "plan" as defined in Section 3(3) of ERISA or Section 4975 of
the Code.

                (d) No Prohibited Transaction. No non-exempt prohibited
transaction described in Section 406 of ERISA or Section 4975 of the Code has
occurred with respect to the ESOP, and neither issuance of the Notes pursuant to
this Agreement, the issuance of the Seller Notes, the loans under the Bank
Credit Agreement nor the ESOT Transaction constitute or give rise to any such
non-exempt prohibited transaction.

                                      -15-
<PAGE>

                (e) Qualification. The ESOP is qualified under Section 401(a) of
the Code, and the ESOP is an employee stock ownership plan as defined in Section
4975(e)(7) of the Code.

                (f) ESOP Documents. The Company has provided each holder of
Notes a complete and accurate copy of the ESOP Plan Documents pursuant to which
the ESOP and ESOT are maintained by the Company, or which concern the Company's
obligations with respect to the ESOP and ESOT, as of the Closing Date and the
ESOT Transaction Documents as in effect on the Closing Date and the ESOP Plan
Documents and the ESOT Transaction Documents are in full force and effect and
have not been amended or modified.

                (g) Exempt Transaction. To the Company's knowledge, neither the
issuance of the Notes or the Seller Notes is for any purpose of Section 406 of
ERISA or Section 4975 of the Code a direct or indirect loan or other transaction
between any holder of Notes or Seller Notes and the ESOT which, if it is assumed
that any holder is a "party in interest" and a "disqualified person" (as defined
in Section 3(14) of ERISA and Section 4975 of the Code), is a non-exempt
prohibited transaction described in Section 406 of ERISA or Section 4975 of the
Code.

                (h) No Taxable Event. Neither the Company nor any of its
Subsidiaries is or shall be subject to the tax imposed by Section 4978 of the
Code with respect to any "disposition" by the ESOT of any shares of Capital
Stock of the Company.

                (i) No Investigations. To the Company's knowledge, there is no
investigation or review by any Governmental Agency, or action, suit, proceeding
or arbitration, pending or concluded, concerning any matter with respect to the
ESOP or ESOT relevant as to whether any representation set forth at section
6.5(c) or this section 6.20 was, or has or will at anytime become, inaccurate or
breached or, if were to be made at any time prior to the satisfaction of all
obligations under this Agreement and the other Operative Documents, would be
inaccurate when made (other than in respect of (A) periodic requests to the IRS
to issue a favorable determination letter to the effect that the ESOP is and
continues to be a qualified plan and employee stock ownership plan and (B)
Annual Reports (IRS Form 5500 Series) for the ESOP, and neither the ESOP
Fiduciary nor, to the best knowledge of the Company, the ESOT Trustee, has made
any assertion with respect to the ESOP or ESOT contrary to or inconsistent with
the accuracy of any such representation which assertion could reasonably be
expected to have a Material Adverse Effect.

7.      USE OF PROCEEDS. The proceeds of the loans made on the Closing Date
under the Bank Credit Agreement will be used by the Company to pay certain fees
and expenses incurred in connection with the IITRI Acquisition, this Agreement
and the Seller Notes and to partially fund the purchase price paid in the IITRI
Acquisition, all as further specified on Exhibit 7 attached hereto.

8.      PREPAYMENT OF NOTES.

        8.1 OPTIONAL PREPAYMENT WITH PREMIUM OF NOTES.

                                      -16-
<PAGE>

                (a) At any time and from time to time after the second
anniversary of the Closing Date, the Company may, at its option, upon notice as
set forth in section 8.5, prepay all or any part (in an integral multiple of
$500,000 and a minimum of $1,000,000 or such lesser principal amount thereof as
shall then be outstanding) of the Notes, together with all accrued and unpaid
interest thereon, upon the concurrent payment of a premium (a percentage of the
principal amount so prepaid pursuant to this section 8.1) (the "Applicable
Premium") applicable in accordance with the following table depending on the
period in which the date fixed for such prepayment occurs:

<TABLE>
<CAPTION>
If the Prepayment Occurs                                               Applicable Premium
------------------------                                               ------------------
<S>                                                                    <C>
From and after December 20, 2004 to and including December 19, 2005    6%
From and after December 20, 2005 to and including December 19, 2006    3%
From and after December 20, 2006 to and including December 19, 2007    1%
From and after December 20, 2007                                       0%
</TABLE>

                (b) The Applicable Premium shall apply if, by reason of the
occurrence of an Event of Default and acceleration of the maturity of the Notes,
the principal amount of the Notes shall be prepaid, except that if such
prepayment occurs on or before the second anniversary of the Closing Date, the
Applicable Premium shall be deemed to be seven percent (7%).

        8.2 PREPAYMENT WITH PREMIUM OF THE NOTES AT THE OPTION OF THE COMPANY
UPON A QUALIFIED IPO.

                (a) In connection with a Qualified IPO, the Company may, at its
option, upon notice as set forth in section 8.5, prepay all or any part (in an
integral multiple of $500,000 and a minimum of $1,000,000) of the Notes upon the
concurrent payment of an amount equal to the Adjusted Applicable Premium if a
Qualified IPO occurs on or before the second anniversary of the Closing Date and
thereafter subject to payment of the Applicable Premium, provided that any
prepayment of the Notes pursuant to this section 8.2 must be made concurrently
with the closing of such Qualified IPO (such prepayment date being hereinafter
referred to as the "Qualified IPO Closing Date"). Each notice pursuant to
section 8.5 of a prepayment under this section 8.2 shall be accompanied by an
Officers' Certificate certifying and demonstrating that this section 8.2 is
being complied with in connection with such prepayment.

                (b) For purposes of this section 8.2:

                        (i) "Adjusted Applicable Premium" shall mean: (A) if the
                Investment IRR is equal to or greater than 25%, zero; (B) if the
                Investment IRR is less than 25%, such percentage as shall cause
                the Investment IRR (after giving effect to the payment of such
                amount) to be equal to 25%;

                                      -17-
<PAGE>

                        (ii) "Investment IRR" shall mean the internal per annum
                rate of return (compounded annually and determined in accordance
                with Agreement Accounting Principles as of the Qualified IPO
                Closing Date) earned on a combined basis by the holders of the
                Notes and Warrants on the $20,343,435.37 aggregate amount of
                Notes received on the Closing Date through the Qualified IPO
                Closing Date, but in any event (A) taking into account the
                payments (x) of principal, interest and premium and fees, if
                any, on the Notes and (y) on or in respect of the Warrants and
                Warrant Shares, if any, which were actually received prior to or
                concurrently with the Qualified IPO Closing Date, and (B)
                assuming (1) that the Notes are prepaid in full without premium
                (notwithstanding the provisions of this section 8 to the
                contrary) on the Qualified IPO Closing Date, and (2) that the
                holders of the Warrants and Warrant Shares receive on the
                Qualified IPO Closing Date a payment in respect of or in
                exchange for the Warrants and Warrant Shares equal to the
                aggregate number of Warrants and Warrant Shares then outstanding
                multiplied by the public offering price per Share (less all
                underwriting discounts and commissions);

                        (iii) "Qualified IPO" shall mean the consummation of one
                or more underwritten public offerings of the Company's Common
                Stock pursuant to an effective registration statement which
                results in gross aggregate proceeds to the sellers in such
                offerings of not less than U.S. $30,000,000 (excluding proceeds
                received in such offerings from "affiliates" of the Company,
                within the meaning of Rule 12b-2 of the SEC under the 34 Act
                (other than any holder of Notes) or the ESOP) and pursuant to
                which the Company obtains a listing for its shares on a United
                States national securities exchange, the Nasdaq National Market
                System, or an automated quotation system of nationally
                recognized standing

        8.3 PREPAYMENT WITH PREMIUM OF THE NOTES AT THE OPTION OF HOLDERS OF
NOTES UPON A CHANGE OF CONTROL.

                (a) Within five Business Days following the date upon which an
Authorized Officer of the Company first has knowledge that a Change of Control
has occurred or executes a definitive written agreement with respect to an
impending Change of Control, the Company shall give written notice of such
Change of Control (a "Change of Control Notice") to each holder of a Note, which
Change of Control Notice shall (i) describe the facts and circumstances of such
Change of Control in reasonable detail, (ii) refer to this section 8.3 and the
rights of the holders of Notes hereunder, (iii) contain an offer to prepay on a
date, which shall be no more than 60 days and not less than 30 days after the
date upon which an Authorized Officer of the Company first acquired knowledge of
such Change of Control, the entire unpaid principal amount of the Notes held by
such holder, together with interest thereon to the prepayment date and, together
with the Change of Control Premium with respect to each Note prepaid (showing in
such offer the amount of interest which would be paid on such prepayment date
and the Change of Control Premium), and (iv) request such holder to notify the
Company in writing by a stated date (a "Response Date"), which date is not less
than 10 days prior to the prepayment date and not more than 30 days after such
holder's receipt of the Change of Control Notice, of its acceptance or rejection
of such prepayment offer. If a holder does not notify the Company on or before
the

                                      -18-
<PAGE>

Response Date specified in the Change of Control Notice of such holder's
acceptance of the prepayment offer contained therein, then the holder shall be
deemed to have accepted such offer. On the date that the Change of Control
Premium, if any, can be calculated, the Company shall notify each holder which
has not rejected such prepayment offer by facsimile of the Change of Control
Premium payable to such holder on the prepayment date, showing the Company's
computation thereof in reasonable detail.

                (b) On the prepayment date specified in the Change of Control
Notice, the entire unpaid principal amount of the Notes held by each holder of a
Note who has accepted such prepayment offer, together with accrued and unpaid
interest thereon to the prepayment date and together with the Change of Control
Premium with respect to each such Note, shall become due and payable. Upon such
payment by the Company in accordance with the provisions of this section 8.3(b),
each such holder shall surrender the Notes held by it to the Company for
cancellation and the Notes shall be deemed to be no longer outstanding and
interest shall cease to accrue thereon.

                (c) The Company will promptly provide any holder of a Note with
all information in the possession of the Company or any Subsidiary which such
holder may reasonably request in order to enable such holder to evaluate the
effect of a Change of Control on such holder's investment in the Notes.

                (d) Each notice from the Company pursuant to this section 8.3
shall make explicit reference to this section 8.3 and shall state that the right
of any holders of the Notes to require prepayment of the Notes must be exercised
by the Response Date.

                (e) The provisions of this section 8.3 are applicable to
successive Changes of Control until the Notes are paid in full and no failure on
the part of any holder to exercise any right under this section 8.3 arising on
account of such Change of Control shall affect or impair any right of any holder
of Securities under this Agreement or any of the other Operative Documents
whether upon the occurrence of any other or any subsequent Change of Control or
otherwise.

        8.4 ALLOCATION OF PARTIAL PREPAYMENTS OF NOTES. In the case of each
partial prepayment of the Notes under section 8.1 and 8.2, the principal amount
to be prepaid shall be allocated among all of the Notes at the time outstanding
(excluding any Notes at the time owned by the Company or any of its Affiliates)
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof, with adjustments, to the extent practicable, to compensate for
any prior prepayments not made exactly in such proportion.

        8.5 NOTICE OF OPTIONAL PREPAYMENTS OF NOTES. In the case of each
prepayment under sections 8.1 and 8.2, the Company shall give written notice
thereof to each holder of any Notes not less than 30 nor more than 60 days prior
to the date fixed for such prepayment. Each such notice shall set forth: (a) the
date fixed for prepayment; (b) the aggregate principal amount of Notes to be
prepaid on such date; (c) the aggregate principal amount of Notes held by such
holder to be prepaid on such date; and (d) the amount of the accrued interest
and premium, if any, to be paid to such holder on such date (together with the
calculation of such premium, which calculation shall be satisfactory to each
holder of the Notes to be so prepaid).

                                      -19-
<PAGE>

        8.6 MATURITY; ACCRUED INTEREST; SURRENDER, ETC. OF NOTES. In the case of
each prepayment of all or any part of any Note, the principal amount to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the premium, if any, due thereon. Any Note prepaid in full shall be marked
"paid in full", surrendered to the Company at the Company's principal place of
business promptly following prepayment and canceled and shall not be reissued,
and no Note shall be issued in lieu of any prepaid principal amount of any Note.

        8.7 PURCHASE OF NOTES. The Company will not, and will not permit any of
its Affiliates to, directly or indirectly, purchase or otherwise acquire, or
offer to purchase or otherwise acquire, any outstanding Notes except by way of
payment or prepayment in accordance with the provisions of the Notes and this
Agreement.

        8.8 PAYMENT ON NON-BUSINESS DAYS. If any amount hereunder or under the
Notes shall become due on a day which is not a Business Day, such payment shall
be due on the next succeeding Business Day.

9.      SUBORDINATION OF NOTES AND SUBSIDIARY GUARANTEES. Notwithstanding
anything contained herein to the contrary, payments on the Notes and the
Subsidiary Guarantees (if any), and the rights of the holders of the Notes and
the Subsidiary Guarantees (if any), are subordinated to payments on, and the
rights of the holders of, Senior Indebtedness (as defined in the Subordination
Agreement set forth in clause (a) of the definition thereof), all as further
provided in such Subordination Agreement. To the extent the Company is not a
party to a Subordination Agreement, you agree to use reasonable efforts to
promptly furnish to the Company a copy of such Subordination Agreement; provided
the failure to provide such copy shall not result in any liability to any holder
or otherwise effect the obligations of the Company or any Subsidiary under this
Agreement or the other Operative Documents.

10.     REPORTING, AFFIRMATIVE AND NEGATIVE COVENANTS OF THE COMPANY. From and
after the date of this Agreement, and thereafter so long as any of the Notes
shall remain outstanding, the Company will duly perform and observe, for the
benefit of the holders of the Notes, each and all of the covenants and
agreements applicable to it as hereinafter set forth:

        10.1 REPORTING. The Company shall:

                (a) Financial Reporting. Furnish to each holder of Notes:

                        (i) Monthly Reports. As soon as practicable, and in any
                event within thirty (30) days after the end of each four-week
                fiscal period (other than the end of a fiscal quarter), the
                consolidated and consolidating balance sheet of the Company and
                its Subsidiaries as at the end of such period and the related
                consolidated and consolidating statements of income and
                statement of cash flow of the Company and its Subsidiaries for
                such fiscal period and cumulatively for the period from the
                beginning of the then current fiscal year to the end of such
                fiscal period, certified by the chief financial officer of the
                Company on behalf of the Company as fairly presenting the
                consolidated and consolidating financial position of the Company
                and its Subsidiaries as at the dates indicated and the

                                      -20-
<PAGE>

                results of their operations and cash flow for the fiscal periods
                indicated in accordance with Agreement Accounting Principles,
                subject to normal year end adjustments, and in comparative form
                (a) the corresponding figures as set forth in the budget
                delivered pursuant to clause (v) of this section 10.1(a) for
                such period, and (b) the actual financial position of the
                Company and its Subsidiaries for the period ending on the
                corresponding fiscal period in the previous fiscal year.

                        (ii) Quarterly Reports. As soon as practicable, and in
                any event within forty-five (45) days after the end of each
                fiscal quarter, the consolidated and consolidating balance sheet
                of the Company and its Subsidiaries as at the end of such period
                and the related consolidated and consolidating statements of
                income, stockholder's equity and cash flows of the Company and
                its Subsidiaries for such fiscal quarter and cumulatively for
                the period from the beginning of the then current fiscal year to
                the end of such fiscal quarter, certified by the chief financial
                officer of the Company on behalf of the Company as fairly
                presenting the consolidated and consolidating financial position
                of the Company and its Subsidiaries as at the dates indicated
                and the results of their operations and cash flows for the
                periods indicated in accordance with Agreement Accounting
                Principles, subject to normal year-end audit adjustments,
                together with (x) in comparative form (a) the corresponding
                figures as set forth in the budget, if any, delivered pursuant
                to clause (v) of this section 10.1(a) for such period, and (b)
                the corresponding figures of the Company and its Subsidiaries
                for the period ending on the corresponding calendar quarter in
                the previous fiscal year if such corresponding calendar quarter
                began after the Closing Date, and (y) any management discussion
                and analysis of such financial statements prepared for
                presentation to the Board of Directors of the Company.

                        (iii) Annual Reports. As soon as practicable, and in any
                event within ninety (90) days after the end of each fiscal year,
                (a) the consolidated balance sheet of the Company and its
                Subsidiaries as at the end of such fiscal year and the related
                consolidated statements of income, stockholders' equity and cash
                flows of the Company and its Subsidiaries for such fiscal year,
                and in comparative form the corresponding figures for the
                previous fiscal year along with consolidating schedules in form
                and substance sufficient to calculate the financial covenants
                set forth in section 10.4, (b) a schedule from the Company
                setting forth for each item in clause (a) hereof, the
                corresponding figures from the consolidated financial budget for
                the current fiscal year most recently delivered pursuant to
                section 10.1(a)(v), and (c) an audit report on the items listed
                in clause (a) hereof (other than the consolidating schedules) of
                KPMG LLP or any other independent certified public accountants
                of recognized national standing, which audit report shall be
                unqualified and shall state that such financial statements
                fairly present the consolidated and consolidating financial
                position of the Company and its Subsidiaries as at the dates
                indicated and the results of their operations and cash flows for
                the periods indicated in conformity with Agreement Accounting
                Principles and that the examination by such accountants in
                connection with such consolidated and consolidating financial
                statements has been made in accordance

                                      -21-
<PAGE>

                with generally accepted auditing standards. The deliveries made
                pursuant to this clause (iii) shall be accompanied by (x) any
                management letter prepared by the above-referenced accountants,
                and (y) a copy of a certificate of such accountants that, in the
                course of their examination necessary for their certification of
                the foregoing, they have obtained no knowledge of any Default in
                respect of the financial covenants set forth in section 10.4, or
                if, in the opinion of such accountants, any such Default shall
                exist, stating the nature and status thereof.

                        (iv) Officer's Certificate. Together with each delivery
                of any financial statement (a) pursuant to clauses (i), (ii) and
                (iii) of this section 10.1(a), an Officer's Certificate of the
                Company, substantially in the form of Exhibit 10(a)(iv)(a)
                attached hereto and made a part hereof, stating that as of the
                date of such Officer's Certificate no Event of Default or
                Default exists, or if any Default or Event of Default exists,
                stating the nature and status thereof and (b) pursuant to
                clauses (ii) and (iii) of this section 10.1(a), a compliance
                certificate, substantially in the form of Exhibit 10(a)(iv)(b)
                attached hereto and made a part hereof, signed by an Authorized
                Officer, setting forth calculations which demonstrate
                compliance, when applicable, with the provisions of sections
                10.3(a) through (g) and section 10.4, and which calculates the
                Leverage Ratio.

                        (v) Budgets; Business Plans; Financial Projections. As
                soon as practicable and in any event not later than (a) sixty
                (60) days after the beginning of each fiscal year commencing
                with the fiscal year beginning on or about October 1, 2003, a
                copy of the Company's fiscal year operating budget for such
                fiscal year, and (b) ninety (90) days after the beginning of
                each fiscal year commencing with the fiscal year beginning on or
                about October 1, 2003, a copy of the plan and forecast
                (including a projected balance sheet, income statement, a
                statement of cash flow and related footnotes) of the Company and
                its Subsidiaries for the upcoming five (5) fiscal years, in each
                case prepared in such detail as shall be comparable to any such
                budgets prepared for and delivered under the Bank Credit
                Agreement.

                (b) Notice of Default. Promptly upon any of the chief executive
officer, chief financial officer, controller, chief legal officer or general
counsel of the Company obtaining knowledge (i) of any condition or event which
constitutes an Event of Default or Default, or becoming aware that any holder of
Notes has given any written notice with respect to a claimed Event of Default or
Default under this Agreement, or (ii) of any condition or event which
constitutes an Event of Default within the meaning of the Bank Credit Agreement,
or (iii) that any Person has given any written notice to the Company or any
Subsidiary of the Company or taken any other action with respect to a claimed
default or event or condition of the type referred to in Section 12.1(h), or
(iv) that any other development, financial or otherwise, which could reasonably
be expected to have a Material Adverse Effect has occurred, the Company shall
deliver to each holder of Notes an Officer's Certificate specifying (a) the
nature and period of existence of any such claimed default, Default, Event of
Default, condition or event, (b) the notice given or action taken by such Person
in connection therewith, and (c) what action the Company has taken, is taking
and proposes to take with respect thereto; provided that the

                                      -22-
<PAGE>

Company's failure in good faith to deliver the foregoing notice pursuant to the
foregoing clause (ii) shall not result in liability to the Company so long as
the Company has received no written notice pursuant to the Bank Credit
Agreement.

                (c) Lawsuits.

                        (i) Promptly upon any Authorized Officer of the Company
                obtaining knowledge of the institution of, or written threat of,
                any action, suit, proceeding, governmental investigation or
                arbitration, by or before any Governmental Authority, against or
                affecting the Company or any of its Subsidiaries or any property
                of the Company or any of its Subsidiaries not previously
                disclosed pursuant to section 6.6, which action, suit,
                proceeding, governmental investigation or arbitration exposes,
                or in the case of multiple actions, suits, proceedings,
                governmental investigations or arbitrations arising out of the
                same general allegations or circumstances which, in the
                Company's reasonable judgment, could reasonably be expected to
                result in liability the Company or any of its Subsidiaries in an
                amount aggregating $1,500,000 or more (exclusive of claims
                covered by insurance policies of the Company or any of its
                Subsidiaries unless the insurers of such claims have disclaimed
                coverage or reserved the right to disclaim coverage on such
                claims and exclusive of claims covered by the indemnity of a
                financially responsible indemnitor in favor of the Company or
                any of its Subsidiaries unless the indemnitor has disclaimed or
                reserved the right to disclaim coverage thereof), give written
                notice thereof to the holders of the Notes and subject to
                preservation of the Company's or such Subsidiary's
                attorney-client privilege and to the extent not prejudicial to
                the Company or any of its Subsidiaries in any material respect,
                provide such other information as may be reasonably available to
                enable each such holder and its counsel to evaluate such
                matters; and

                        (ii) Within five (5) days the Company or any of its
                Subsidiaries obtaining knowledge of any material adverse
                developments with respect to any of the Disclosed Litigation,
                give written notice thereof to the holders of the Notes and
                provide such other information as may be reasonably available to
                enable each such holder and its counsel to evaluate such
                matters; and

                        (iii) In addition to the requirements set forth in
                clauses (i) and (ii) of this section 10.1(c), upon written
                request of the Required Holders, promptly give written notice of
                the status of any Disclosed Litigation or any action, suit,
                proceeding, governmental investigation or arbitration covered by
                a report delivered pursuant to clause (i) above and provide such
                other information as may be reasonably available to it that
                would not jeopardize any attorney-client privilege or otherwise
                be prejudicial to the Borrower or its Subsidiaries in any
                material respect by disclosure to the holders of the Notes to
                enable each holder of Notes and its counsel to evaluate such
                matters.

                                      -23-
<PAGE>

                (d) ERISA Notices. Deliver or cause to be delivered to the
holders of the Notes, at the Company's expense, the following information and
notices as soon as reasonably possible, and in any event:

                        (i) (a) within ten (10) Business Days after the Company
                obtains knowledge that a Termination Event has occurred, a
                written statement of the chief financial officer of the Company
                describing such Termination Event and the action, if any, which
                the Company has taken, is taking or proposes to take with
                respect thereto, and when known, any action taken or threatened
                by the IRS, DOL or PBGC with respect thereto and (b) within ten
                (10) Business Days after any member of the Controlled Group
                obtains knowledge that a Termination Event has occurred which
                could reasonably be expected to subject the Company to liability
                in excess of $500,000, a written statement of the chief
                financial officer, treasurer or designee of the Company
                describing such Termination Event and the action, if any, which
                the member of the Controlled Group has taken, is taking or
                proposes to take with respect thereto, and when known, any
                action taken or threatened by the IRS, DOL or PBGC with respect
                thereto;

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

                        (iii) within ten (10) Business Days after the material
                increase in the benefits of any Benefit Plan or Non-ERISA
                Commitment in existence on the date of this Agreement or the
                establishment of any new material Benefit Plan or Non-ERISA
                Commitment or the commencement of, or obligation to commence,
                material contributions to any Benefit Plan or Multiemployer Plan
                to which the Company or any member of the Controlled Group was
                not previously contributing, notification of such increase,
                establishment, commencement or obligation to commence and the
                amount of such contributions;

                        (iv) within ten (10) Business Days after the Company or
                any of its Subsidiaries receives written notice (whether
                preliminary, final or otherwise, but excluding any notice of
                proposed amendments) of any unfavorable determination letter
                from the IRS regarding the qualification of a Plan under Section
                401(a) of the Code or status of the ESOP as an employee stock
                ownership plan (as defined in Section 4975(e)(7) of the Code),
                copies of each such letter;

                        (v) within ten (10) Business Days after the filing
                thereof with the DOL, IRS or PBGC, copies of each annual report
                (Form 5500 series), including Schedule B thereto, filed with
                respect to each Benefit Plan;

                                      -24-
<PAGE>

                        (vi) within ten (10) Business Days after receipt by the
                Company or any member of the Controlled Group of each actuarial
                report for any Benefit Plan or Multiemployer Plan and each
                annual report for any Multiemployer Plan, copies of each such
                report;

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

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

                        (ix) within ten (10) Business Days after receipt by the
                Company or any member of the Controlled Group of a notice from a
                Multiemployer Plan regarding the imposition of material
                withdrawal liability, copies of each such notice;

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

                        (xi) within ten (10) Business Days after the Company or
                any member of the Controlled Group knows that (a) a material
                Multiemployer Plan has been terminated, (b) the administrator or
                plan sponsor of a Multiemployer Plan intends to terminate a
                material Multiemployer Plan, or (c) the PBGC has instituted or
                will institute proceedings under Section 4042 of ERISA to
                terminate a material Multiemployer Plan;

                        (xii) within ten (10) Business Days after receipt by the
                Company or any of its Subsidiaries of notice of any audit,
                investigation, litigation or inquiry by the DOL or IRS relating
                to the ESOP or the ESOT, which would reasonably be expected to
                subject the Company or any of its Subsidiaries to liability,
                individually or in the aggregate, in excess of $1,500,000,
                copies of such notice and copies of all subsequent
                correspondence relating thereto within ten (10) Business Days of
                receipt of such correspondence;

                        (xiii) together with the financial statements delivered
                pursuant to section 10.1(a)(iii) or upon the written request of
                any holder of Notes, any amendment to any of the ESOP Plan
                Documents or ESOT Transaction Documents; and

                        (xiv) within ten (10) Business Days after an Authorized
                Officer obtains knowledge that at any time on or after the
                Closing Date the Company is not taxable as an "S corporation" as
                such item is defined in Section 1361 of the Code or that the
                ESOT is subject to tax imposed under the Code with respect to
                any

                                      -25-
<PAGE>

                item of income or loss of the Company or any Subsidiary of the
                Company, written notice of such knowledge.

For purposes of this section 10.1(d), the Company, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the administrator of any Plan of which the Company or any member of the
Controlled Group or such Subsidiary is the plan sponsor. In addition, for
purposes of this section 10.1(d), "material" means any noncompliance or basis
for liability which could reasonably be likely to subject the Company or any of
its Subsidiaries to liability, individually or in the aggregate, in excess of
$1,500,000.

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

                (f) Other Reports. Deliver or cause to be delivered to the
holders of the Notes copies of (i) all financial statements, reports and
notices, if any, sent or made available generally by the Company to its
securities holders or filed with the Commission by the Company, and (ii) all
press releases, if any, made available generally by the Company or any of the
Company's Subsidiaries to the public concerning material developments in the
business of the Company or any such Subsidiary.

                (g) Environmental Notices. As soon as possible and in any event
within ten (10) days after receipt by the Company, provide written notice to the
holders of the Notes which notice shall describe in reasonable detail (i) any
notice or claim to the effect that the Company or any of its Subsidiaries is or
may be liable to any Person as a result of the Release by the Company, any of
its Subsidiaries, or any other Person of any Contaminant into the environment,
and (ii) any notice alleging any violation of any Environmental, Health or
Safety Requirements of Law by the Company or any of its Subsidiaries if, in
either case, such notice or claim relates to an event which could reasonably be
expected to subject the Company and each of its Subsidiaries to liability
individually or in the aggregate in excess of $1,500,000.

                (h) Other Information. Promptly upon receiving a written request
therefor from the Required Holders, prepare and deliver to the holders of the
Notes such other information with respect to the Company and any of its
Subsidiaries, as from time to time may be reasonably requested by the Required
Holders.

                (i) Repurchase Liability Study On the date that is the earlier
of (a) one hundred eighty (180) days after the date of any Permitted Acquisition
with a Purchase Price in excess of $12,000,000 or the target of which shall
employ 100 or more employees, and (b) the second anniversary of the delivery of
the most recent repurchase liability study of the Company prepared for the ESOP,
deliver to the holders of the Notes copies of a repurchase liability study of
the Company prepared for the ESOP as of a recent date, in each case in form and
substance reasonably acceptable to the Required Holders.

                                      -26-
<PAGE>

        10.2 AFFIRMATIVE COVENANTS.

                (a) Existence, Etc. Except as permitted pursuant to section
10.3(i), the Company shall, and shall cause each of its Material Subsidiaries
to, at all times maintain its existence and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises material
to its businesses.

                (b) Powers; Conduct of Business. The Company shall, and shall
cause each of its Material Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified and where the failure to be so qualified will have or could
reasonably be expected to have a Material Adverse Effect. Except as otherwise
permitted by this Agreement, the Company will, and will cause each Material
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and logical extensions thereof.

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

                (d) Payment of Taxes and Claims; Tax Consolidation. The Company
shall pay, and cause each of its Material Subsidiaries to pay when due, (i) all
taxes, assessments and other governmental charges imposed upon it or on any of
its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, and (ii) all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by section 10.3(c)) upon any of
the Company's or such Material Subsidiary's property or assets, prior to the
time when any penalty or fine shall be incurred with respect thereto; provided,
however, that no such taxes, assessments and governmental charges referred to in
clause (i) above or claims referred to in clause (ii) above (and interest,
penalties or fines relating thereto) need be paid if being contested in good
faith by appropriate proceedings diligently instituted and conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with Agreement Accounting Principles shall have been made therefor.

                (e) Insurance. The Company shall maintain for itself and its
Material Subsidiaries, or shall cause each of its Material Subsidiaries to
maintain in full force and effect, the insurance policies and programs listed on
Exhibit 6.15 to this Agreement or substantially similar policies and programs or
other policies and programs as reflect coverage that is reasonably consistent
with prudent industry practice.

                (f) Inspection of Property; Books and Records; Discussions. The
Company shall permit and cause each of the Company's Material Subsidiaries to
permit, any authorized representative(s) designated by any holder of the Notes
to visit and inspect any of the properties

                                      -27-
<PAGE>

of the Company or any of its Material Subsidiaries, to examine, audit, check and
make copies of their respective financial and accounting records, books,
journals, orders, receipts and any correspondence and other data relating to
their respective businesses or the transactions contemplated hereby (including,
without limitation, in connection with environmental compliance, hazard or
liability, subject to preservation of the attorney-client privilege), and to
discuss their affairs, finances and accounts with their officers and their
independent certified public accountants (and such accountants are hereby
authorized to disclose to such holder any and all financial statements and other
supporting financial documents with respect to the business, financial
conditions and other affairs of the Company and its Subsidiaries), all upon
reasonable notice and at such reasonable times during normal business hours.
Such inspections and audits in the preceding sentence (i) subject to clause (ii)
below on behalf of any holder shall, unless occurring at a time when an Event of
Default shall be continuing, be at such holders expense and (ii) by or on behalf
of the Required Holders or any holder owning at least 30% of the outstanding
principal amount of the Notes, other than first such inspection or audit
occurring during any calendar year or any inspections and audits occurring at a
time when a Default shall be continuing, shall be at the Required Holders or
such holder's expense; all other such inspections, visitations and audits shall
be at the Company's expense. The Company shall keep and maintain, and cause each
of the Company's Material Subsidiaries to keep and maintain, in all material
respects, proper books of record and account in which entries in conformity with
Agreement Accounting Principles shall be made of all dealings and transactions
in relation to their respective businesses and activities. If an Event of
Default has occurred and is continuing, the Company, upon the request of any
holder, shall provide copies of such records to such holder or such holder's
representatives.

                (g) ERISA Compliance. The Company shall, and shall cause each of
the Company's Material Subsidiaries to, establish, maintain and operate all
Plans and Non-ERISA Commitments to comply in all material respects with the
applicable provisions of ERISA, the Code, all other applicable laws, and the
regulations and interpretations thereunder and the respective requirements of
the governing documents for such Plans and Non-ERISA Commitments.

                (h) Maintenance of Property. The Company shall cause all
property reasonably deemed by the Borrower as necessary to the conduct of its
business or the business of any Material Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.

                (i) Environmental Compliance. The Company and its Subsidiaries
shall comply with all Environmental, Health or Safety Requirements of Law,
except where noncompliance will not have or is not reasonably likely to subject
the Company or any of its Subsidiaries to liability, individually or in the
aggregate, in excess of $1,500,000.

                (j) Use of Proceeds. The Company shall use the proceeds of
Revolving Loans (as defined in the Bank Credit Agreement) made on the Closing
Date of the Bank Credit

                                      -28-
<PAGE>

Agreement to pay fees and expenses incurred in connection with, the IITRI
Acquisition, the Bank Credit Agreement and the ESOT Transaction, for Capital
Expenditures, and for the additional working capital needs and other general
corporate purposes of the Company and its Material Subsidiaries, including,
without limitation, the financing of Permitted Acquisitions. The Company will
not, nor will it permit any Material Subsidiary to, use any of the proceeds of
the Loans to purchase or carry any Margin Stock.

                (k) Subsidiary Guarantors. Within ten (10) Business Days of the
date any Authorized Officer or legal officer of the Company has knowledge that
any Subsidiary has become a Material Subsidiary of the Company or a guarantor of
the Bank Secured Obligations, the Company shall cause such Subsidiary of the
Company, to execute a Subsidiary Guaranty in the form of Exhibit 2(d) hereto (or
a supplement thereto) pursuant to which such Subsidiary shall become a
Subsidiary Guarantor;

                (l) Determination Letter. The Company shall promptly submit a
request to the IRS to issue a favorable determination letter to the effect that
the ESOP is a qualified plan and employee stock ownership plan within the
meanings of Section 401(a) and 4975(e)(7), respectively, of the Code.

        10.3 NEGATIVE COVENANTS.

                (a) Indebtedness. Neither the Company nor any of its
Subsidiaries shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness,
except:

                        (i) Indebtedness evidenced by the Notes;

                        (ii) the Bank Secured Obligations in an aggregate
                principal amount not to exceed the Permitted Senior Additional
                Indebtedness and Permitted Refinancing Indebtedness in respect
                thereof, subject to the terms of the Subordination Agreement set
                forth in clause (a) of the definition of Subordination
                Agreements;

                        (iii) Permitted Existing Indebtedness and Permitted
                Refinancing Indebtedness in respect thereof;

                        (iv) Indebtedness in respect of obligations secured by
                Customary Permitted Liens;

                        (v) Indebtedness constituting Contingent Obligations
                permitted by section 10.3(e);

                        (vi) subject to the terms of section 10.3(q),
                Indebtedness arising from intercompany loans and advances (a)
                from any Subsidiary to the Company or any wholly-owned
                Subsidiary or (b) from the Company to any wholly-owned
                Subsidiary; provided, that such Indebtedness shall subordinated
                to the Notes on subordination terms set forth in Exhibit 10.3;

                                      -29-
<PAGE>

                        (vii) Indebtedness in respect of Hedging Obligations
                permitted under Section 7.3(p) of the Bank Credit Agreement as
                in effect on the Closing Date or under any Permitted Refinancing
                Indebtedness to the extent permitted under the Subordination
                Agreement set forth in clause (a) of the definition thereof;

                        (viii) secured or unsecured purchase money Indebtedness
                (including Capitalized Leases) incurred by the Company or any of
                its Subsidiaries after the Closing Date to finance the
                acquisition of fixed assets, if (a) at the time of such
                incurrence, no Default or Event of Default has occurred and is
                continuing or would result from such incurrence, (b) such
                Indebtedness has a scheduled maturity and is not due on demand,
                (c) such Indebtedness does not exceed the lower of the fair
                market value or the cost of the applicable fixed assets on the
                date acquired, (d) such Indebtedness does not exceed $1,500,000
                in the aggregate principal amount outstanding at any time, and
                (e) any Lien securing such Indebtedness is permitted under
                section 10.3(c) (such Indebtedness being referred to herein as
                "Permitted Purchase Money Indebtedness");

                        (ix) Indebtedness with respect to surety, appeal and
                performance bonds obtained by the Company or any of its
                Subsidiaries in the ordinary course of business;

                        (x) Indebtedness incurred by the Company or any of its
                Subsidiaries (whether assumed by the Company or such Subsidiary
                or issued to the seller) in any Permitted Acquisition as part of
                the consideration therefor, provided that such Indebtedness is
                unsecured and is subordinated to the Notes on terms reasonably
                acceptable to the Required Holders;

                        (xi) Indebtedness evidenced by the Seller Notes and
                Permitted Refinancing Indebtedness in connection therewith;

                        (xii) guaranties by the Company of Indebtedness
                permitted to be incurred by any Subsidiary;

                        (xiii) Indebtedness arising in connection with the
                Company's or any of its Subsidiaries' credit card programs
                maintained with any of the Bank Lenders; and

                        (xiv) additional unsecured Indebtedness in an aggregate
                amount at any time outstanding not exceeding $1,500,000.

                (b) Sales of Assets. Neither the Company nor any of its Material
Subsidiaries shall consummate any Asset Sale, except:

                        (i) licenses or sublicenses (but not the sale of any
                licensing rights) by the Company or its Material Subsidiaries of
                software, customer lists, trademarks, service marks, patents,
                trade names and copyrights and other intellectual property in
                the ordinary course of business; provided, that such licenses or
                sublicenses

                                      -30-
<PAGE>

                shall not interfere with the business of the Company or any such
                Material Subsidiary;

                        (ii) the disposition in the ordinary course of business
                of equipment that is obsolete, excess or no longer used or
                useful in the Company's or its Material Subsidiaries'
                businesses;

                        (iii) transfers of assets between the Company and any
                wholly-owned Material Subsidiary of the Company or between
                wholly-owned Material Subsidiaries of the Company not otherwise
                prohibited by this Agreement; and

                        (iv) sales, assignments, transfers, leases, conveyances
                or other dispositions of other assets if such transaction (a) is
                for consideration consisting at least seventy-five percent (75%)
                of cash, (b) is for not less than fair market value (as
                determined in good faith by the Company's board of directors),
                and (c) when combined with all such other transactions (each
                such transaction being valued at net book value) (i) during the
                immediately preceding twelve-month period, represents the
                disposition of not greater than $1,500,000 of the Company's
                Consolidated Tangible Assets determined as at the end of the
                fiscal year immediately preceding that in which such transaction
                is proposed to be entered into, and (ii) during the period from
                the Closing Date to the date of such proposed transaction,
                represents the disposition of not greater than $2,400,000;

provided that it shall not constitute an Event of Default under this section
10.3(b) if such sale or other transfer of assets results in a Change of Control
and the Company offers to prepay the Notes of all holders pursuant to section
8.3 and the Company prepays the Notes of all holders who elect to accept the
Company's offer to prepay the Notes.

                (c) Liens. Neither the Company nor any of its Material
Subsidiaries shall directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any of their respective property or assets
except:

                        (i) Liens created by the Bank Documents securing the
                Bank Secured Obligations and Permitted Refinancing Indebtedness
                in respect thereof;

                        (ii) Permitted Existing Liens;

                        (iii) Customary Permitted Liens; and

                        (iv) purchase money Liens (including the interest of a
                lessor under a Capitalized Lease and Liens to which any property
                is subject at the time of acquisition thereof) securing
                Permitted Purchase Money Indebtedness; provided that such Liens
                shall not apply to any property of the Company or its Material
                Subsidiaries other than that purchased or subject to such
                Capitalized Lease;

                        (v) Liens with respect to property acquired by the
                Company or any of its Material Subsidiaries after the Closing
                Date (and not created in contemplation of

                                      -31-
<PAGE>

                such acquisition) pursuant to a Permitted Acquisition; provided,
                that such Liens shall extend only to the property so acquired,
                shall not secure any working capital financing of the business
                acquired and shall secure Indebtedness permitted pursuant to the
                terms of section 10.3(a);

                        (vi) Liens incurred in connection with sale leaseback
                transactions permitted under section 10.3(j); and

                        (vii) Environmental Liens securing obligations not to
                exceed $1,500,000 in the aggregate; and

                        (viii) other Liens securing Indebtedness (other than
                subordinated Indebtedness) not to exceed $500,000 in the
                aggregate.

In addition, neither the Company nor any Material Subsidiary or Subsidiary
Guarantor shall become a party to any agreement, note, indenture or other
instrument, or take any other action, which would subordinate any of its
Indebtedness to the Bank Secured Obligations unless such Indebtedness shall, at
the Company's election, be pari passu with or subordinated to the Notes on
subordination terms set forth in Exhibit 10.3.

                (d) Investments. Except to the extent permitted pursuant to
section 10.3(g), neither the Company nor any of its Material Subsidiaries shall
directly or indirectly make or own any Investment except:

                        (i) Investments in cash and Cash Equivalents;

                        (ii) Permitted Existing Investments in an amount not
                greater than the amount thereof on the Closing Date;

                        (iii) Investments consisting of trade receivables or
                received in connection with the bankruptcy or reorganization of
                suppliers and customers and in settlement of delinquent
                obligations of, and other disputes with, customers and suppliers
                arising in the ordinary course of business;

                        (iv) Investments consisting of deposit accounts
                maintained by the Company and its Material Subsidiaries in the
                ordinary course of business in connection with its cash
                management system;

                        (v) Investments consisting of non-cash consideration
                from a sale, assignment, transfer, lease, conveyance or other
                disposition of property permitted by section 10.3(b);

                        (vi) Investments consisting of (a) intercompany loans
                from any Subsidiary of the Company to the Company or any other
                Material Subsidiary permitted by section 10.3(a)(v), (b)
                intercompany loans from the Company to its Material Subsidiaries
                permitted under section 10.3(q), and (c) Equity Interests in
                Material Subsidiaries;

                                      -32-
<PAGE>

                        (vii) Investments constituting Permitted Acquisitions;

                        (viii) Investments constituting Indebtedness permitted
                by Section 10.3(a) or Contingent Obligations permitted by
                section 10.3(e) or Restricted Payments permitted by section
                10.3(f);

                        (ix) Investments consisting of loans or advances made by
                any party to the Bank Documents to employees and officers of the
                Company or any of the Company's wholly-owned Material
                Subsidiaries for travel, entertainment and relocation expenses
                in the ordinary course of business in an aggregate principal
                amount outstanding at any one time not to exceed $1,000,000;

                        (x) Investments in addition to those permitted elsewhere
                in this section 10.3(d) in an amount not to exceed $1,000,000 in
                the aggregate at any time outstanding;

provided, however, that the Investments described in clauses (vii) or (x) above
shall not be permitted to be made at a time when a Default shall have occurred
and be continuing or would result therefrom.

                (e) Contingent Obligations. Neither the Company nor any of its
Material Subsidiaries shall directly or indirectly create or become or be liable
with respect to any Contingent Obligation, except: (i) recourse obligations
resulting from endorsement of negotiable instruments for collection in the
ordinary course of business; (ii) Permitted Existing Contingent Obligations;
(iii) obligations, warranties, guaranties, reserves and indemnities, not
relating to Indebtedness of any Person, which have been or are undertaken or
made in the ordinary course of business and not in favor of an Affiliate of the
Company or such Material Subsidiary (unless entered into on terms substantially
similar to those applicable to a non-Affiliate third party transaction at arm's
length); (iv) obligations, warranties and indemnities of the Company to IITRI
arising out of the Asset Purchase Agreement and the Exhibits thereto; (v)
Contingent Obligations with respect to surety, appeal and performance bonds
obtained by the Company or any Material Subsidiary in the ordinary course of
business, (v) Contingent Obligations of the Subsidiaries of the Company under
this Agreement and the other Operative Documents to which they are a party, (vi)
Contingent Obligations in connection with (x) the redemption or repurchase of
any Capital Stock of the Company as a result of distributions by the ESOT to
participants in the ESOP pursuant to the ESOP Plan Documents subsequent to their
termination of employment with the Company or any Controlled Group member or (y)
the requirements of Section 401(a)(28) of the Code or any substantially similar
Requirement of Law, (viii) guarantees of Indebtedness permitted by section
10.3(a), provided, that to the extent such Indebtedness shall be subordinated to
the Bank Secured Obligations, each such guarantee shall, at the Company's
election, be pari passu with or subordinated to the Notes on subordination terms
set forth in Exhibit 10.3, and (ix) Contingent Obligations for amounts that may
become due on the Securities pursuant to the Warrants and the Seller Warrants.

                (f) Restricted Payments. The Company shall not declare or make
any Restricted Payment, except:

                                      -33-
<PAGE>

                        (i) Restricted Payments made in connection with the
                defeasance, redemption or repurchase of any Indebtedness with
                the Net Cash Proceeds of Permitted Refinancing Indebtedness; and

                        (ii) Restricted Payments of any Subsidiary of the
                Company to the Company or to another wholly-owned Subsidiary of
                the Company; and

                        (iii) Restricted Payments made in connection with claims
                for reimbursement, indemnification or contribution arising out
                of or related to the Asset Purchase Agreement; and

                        (iv) any Restricted Payment that constitutes a payment
                in respect of a purchase price adjustment, earn-out or other
                similar form of contingent purchase price in connection with any
                Acquisition (including the IITRI Acquisition) consummated on or
                before the Closing Date as set forth on Exhibit 10.3(f) and any
                Permitted Acquisition; and

                        (v) Restricted Payments that constitute payments of
                principal, interest, premium, fees, expenses or other amounts
                due on the Securities pursuant to this Agreement and the other
                Operative Documents, and Restricted Payments that constitute
                mandatory payments of principal, interest, premium, fees or
                expenses due on or under the Seller Note Securities Purchase
                Agreement, the Seller Notes or the Seller Warrants or the other
                Operative Documents (as defined in the Seller Note Securities
                Purchase Agreement), in each case subject to the terms of the
                Subordination Agreements and any restrictions provided in the
                documents for such Indebtedness; and

                        (vi) Restricted Payments made (v) in connection with the
                redemption or repurchase for value of any Capital Stock of the
                Company as a result of distributions by the ESOT of such Capital
                Stock to participants in the ESOP pursuant to the ESOP Plan
                Documents subsequent to their termination of employment with the
                Company or any Controlled Group member, (w) as required by
                Section 401(a)(28) of the Code or any substantially similar
                Requirement of Law, (x) in good faith and belief by the Company
                to be made with respect to the payments described in the
                preceding clauses (v) or (w) but which do not so qualify for the
                status described in the preceding clauses (v) or (w) on account
                of administrative error or mistake, provided that such payment
                would not otherwise result in a Default or Event of Default
                hereunder and either (A) such payments do not collectively
                exceed $250,000 during the period from the Closing Date through
                the date of such payment or (B) such payment is recovered by the
                Company within thirty (30) days thereof and the Company's books
                and records are accordingly adjusted to reflect such recovery,
                together with all other such payments under this subclause (B),
                do not collectively exceed $1,000,000 during the period from the
                Closing Date through the date of such payment, or (y) in the
                form of administrative fees or expenses of the ESOP or the ESOT
                including, without limitation, the fees of the ESOT Trustee or
                (z) as contributions to the ESOT as required under the ESOP Plan
                Documents; and

                                      -34-
<PAGE>

                        (vii) Restricted Payments made in connection with stock
                appreciation rights plans, phantom stock plans and other
                equity-based incentive compensation arrangements or plans to the
                extent such payments would not be in violation of the terms of
                this Agreement or any other Operative Document.

provided, however, that in no event shall any Restricted Payments (other than
(1) to the Company, (2) as permitted by clause (ii) above, (3) Restricted
Payments (x) resulting from distributions by the ESOT to participants in the
ESOP pursuant to the ESOP Plan Documents subsequent to the termination by
participants in the ESOP of employment with the Company or any Controlled Group
member or (y) as required by Section 401(a)(28) of the Code or any substantially
similar Requirement of Law, and (4) Restricted Payments resulting from
contributions to the ESOT as required under the ESOP Plan Documents) be declared
or made if either a Default or an Event of Default shall have occurred and be
continuing at the date of declaration or payment thereof or would result
therefrom; provided, further, that in no event shall any Restricted Payment be
permitted under clause (v) above with respect to the Seller Notes, Seller
Warrants or other Operative Documents (as defined in the Seller Note Securities
Purchase Agreement) unless the Company shall have delivered to the holders of
the Notes a compliance certificate in substantially the form of Exhibit
10.1(a)(iv)(b) hereto for the most recently completed fiscal quarter calculated
giving effect to such Restricted Payment as of the last day of such prior fiscal
quarter and certifying that the Company is in compliance with the financial
covenants in section 10.4 as of the last day of such prior fiscal quarter.

                (g) Conduct of Business; Subsidiaries; Acquisitions. Neither the
Company nor any of its Material Subsidiaries shall engage in any business other
than the businesses engaged in by the Company and its Material Subsidiaries on
the Closing Date and any business or activities which are substantially similar,
related or incidental thereto or logical extensions thereof. The Company shall
not create, acquire or capitalize any Material Subsidiary after the Closing Date
unless (i) no Default or Event of Default shall have occurred and be continuing
or would result therefrom; (ii) after such creation, acquisition or
capitalization, all of the representations and warranties contained herein shall
be true and correct (unless such representation and warranty is made as of a
specific date, in which case, such representation or warranty shall be true and
correct as of such date); and (iii) after such creation, such creation,
acquisition or capitalization the Company and such Material Subsidiary shall
comply with the terms of Section 10.2(k). Neither the Company nor its
Subsidiaries shall make any Acquisitions, other than (a) the IITRI Acquisition
and (b) Acquisitions meeting the following requirements or otherwise approved by
the Required Holders (each such Acquisition constituting a "Permitted
Acquisition"):

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

                        (ii) in the case of an Acquisition of Equity Interests
                of an entity (x) such Acquisition shall be consummated as a
                merger the acquired entity shall be merged with and into the
                Company or any wholly-owned Subsidiary of the Company
                immediately following such Acquisition, with the Company or such
                wholly-

                                      -35-
<PAGE>

                owned Subsidiary being the surviving corporation following such
                merger and (y) the results of operations of such entity shall be
                reported on a consolidated basis with the Company and its
                consolidated Subsidiaries;

                        (iii) the purchase is consummated on a non-hostile basis
                and approved by the target company's board of directors (and
                stockholders, if necessary) prior to the consummation of the
                Acquisition; and the acquisition documents in respect of which
                are satisfactory to the Required Holders (including, without
                limitation, in respect of representations, indemnities and
                opinions) and the results of due diligence in respect of such
                purchase are satisfactory to the Required Holders;

                        (iv) the Purchase Price for the Acquisition shall not
                exceed without the prior written consent of the Required Holders
                an amount equal to $6,000,000 (including the incurrence or
                assumption of any Indebtedness in connection therewith), and in
                any event shall not exceed, together with all other Permitted
                Acquisitions permitted under this section 10.3(g), $12,000,000
                (including the incurrence or assumption of any Indebtedness in
                connection therewith) in the aggregate during the term of this
                Agreement;

                        (v) the businesses being acquired shall be substantially
                similar, related or incidental to the businesses or activities
                engaged in by the Company and its Subsidiaries on the Closing
                Date; (vi) effective as of the date of each such Acquisition
                (taking into account the effect of such purchase and any
                Indebtedness incurred in connection therewith), the Company
                shall deliver to the holders of the Notes a certificate of an
                Authorized Officer of the Company certifying the Company's
                compliance with the Bank Credit Agreement, including, without
                limitation, Section 7.3(G) thereof; and

                        (vii) prior to each such Acquisition, the Purchase Price
                of which (including the incurrence or assumption of any
                Indebtedness in connection therewith) shall be $1,500,000 or
                more, the Company shall deliver to the holders of the Notes a
                certificate from one of the Authorized Officers, demonstrating
                to the satisfaction of the Required Holders that after giving
                effect to such Acquisition and the incurrence of any
                Indebtedness permitted by section 10.3(a) in connection
                therewith, on a pro forma basis using historical audited or
                reviewed unaudited financial statements obtained from the
                seller(s) in respect of each such Acquisition as if the
                Acquisition and such incurrence of Indebtedness had occurred on
                the first day of the twelve-month period ending on the last day
                of the Company's most recently completed fiscal quarter, the
                Company would have been in compliance with the financial
                covenants in section 10.4 and not otherwise in Default.

                (h) Transactions with Stockholders and Affiliates. Neither the
Company nor any of its Subsidiaries shall directly or indirectly enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with,
or make loans or advances to any holder or holders of any of the Equity
Interests of the Company, or with any Affiliate of the Company or any other
Person

                                      -36-
<PAGE>

controlling or controlled by any Person that is the "beneficial owner" (as
defined in Rule 13d-3 of the Commission under the Exchange Act) of greater than
five percent (5%) or more of any class of Voting Stock (or other voting
interests) of the Company or any of its Subsidiaries, in either case which is
not a Subsidiary of the Company, on terms that are less favorable to the Company
or any of its Subsidiaries, as applicable, than those that could reasonably be
obtained in an arm's length transaction at the time from Persons who are not
such a holder or Affiliate, except for (a) Restricted Payments permitted by
section 10.3(f) and Investments permitted by section 10.3(d), (b) the
transactions contemplated under the Asset Purchase Agreement, the ESOT
Transaction Documents and the ESOP Plan Documents, (c) the incurrence of
Indebtedness described in Section 10.3(a) hereof, (d) sales of assets described
in section 10.3(b)(iii) hereof, (e) any Investment permitted by section
10.3(d)(vi) hereof, and (f) any deferred compensation plans or arrangements,
employment contracts, employee benefits, Incentive Arrangements and other
similar contracts or arrangements with or for the benefit of officers and
directors of the Company and Subsidiaries of the Company to the extent the terms
thereof are not in violation of the terms of this Agreement or any other
Operative Document.

                (i) Restriction on Fundamental Changes. Neither the Company nor
any of its Subsidiaries shall enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or substantially all of the Company's consolidated
business or property (each such transaction a "Fundamental Change"), whether now
or hereafter acquired, except (i) Fundamental Changes permitted under sections
10.3(b), 10.3(d) or 10.3(g), (ii) a Subsidiary of the Company may be merged into
or consolidated with the Company (in which case the Company shall be the
surviving corporation) or any wholly-owned Subsidiary of the Company provided
the Company owns, directly or indirectly, a percentage of the equity of the
merged entity not less than the percentage it owned of the Subsidiary prior to
such Fundamental Change and if the predecessor Subsidiary was a Subsidiary
Guarantor, the surviving Subsidiary shall be a Subsidiary Guarantor hereunder,
(iii) any liquidation of any Subsidiary of the Company, into the Company or
another Subsidiary of the Company, as applicable, and (iv) upon not less than
thirty (30) days' prior written notice to the holders of the Notes, any merger
or reincorporation of the Company or any Subsidiary solely for purposes of
reincorporation in a different jurisdiction.

                (j) Sales and Leasebacks. Neither the Company nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed), (i)
which it or one of its Subsidiaries sold or transferred or is to sell or
transfer to any other Person, or (ii) which it or one of its Subsidiaries
intends to use for substantially the same purposes as any other property which
has been or is to be sold or transferred by it or one of its Subsidiaries to any
other Person in connection with such lease, unless in either case the sale
involved is not prohibited under section 10.3(b) and the lease involved is not
prohibited under section 10.3(a) and any related Investment is not prohibited
under section 10.3(d).

                                      -37-
<PAGE>

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

                (l) ERISA.

                        (i) The Company shall not

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

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

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

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

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

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

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

                        (ii) For purposes of this section 10.3(l), "material"
                means any noncompliance or basis for liability which could
                reasonably be likely to subject the Company or any of its
                Subsidiaries to liability, individually or in the aggregate, in
                excess of $1,500,000.

                                      -38-
<PAGE>

                (m) Organizational Documents. Neither the Company nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective Organizational Documents as in effect on
the Closing Date in any manner adverse to the interests of the holders of the
Notes, without the prior written consent of the Required Holders.

                (n) Fiscal Year. Neither the Company nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of a 52/53 calendar week year ending on September 30 of each
year without the prior written consent of the Required Holders.

                (o) Subsidiary Covenants. Except as set forth in the Bank
Documents and this Agreement, the Company will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective or suffer to exist
any consensual encumbrance (other than Permitted Liens) or restriction of any
kind on the ability of any Subsidiary to pay dividends or make any other
distribution on its stock, or make any other Restricted Payment, pay any
Indebtedness or other obligation owed to the Company or any other Subsidiary,
make loans or advances or other Investments in the Company or any other
Subsidiary, or sell, transfer or otherwise convey any of its property to the
Company or any other Subsidiary, or merge, consolidate with or liquidate into
the Company or any other Subsidiary.

                (p) Hedging Obligations. The Company shall not and shall not
permit any of its Subsidiaries to enter into any Hedging Arrangements evidencing
Hedging Obligations, other than Hedging Arrangements entered into by the Company
or its Subsidiaries pursuant to which the Company or its Subsidiaries has hedged
its actual or anticipated interest rate, foreign currency or commodity exposure,
and which are non-speculative in nature. The agreements in respect of such
permitted Hedging Arrangements entered into by the Company or its Subsidiaries
and any Bank Lender or any affiliate of any Bank Lender including, without
limitation, to hedge floating interest rate risk in an aggregate notional amount
not to exceed at any time an amount equal to the outstanding balance of the Term
Loans at such time are sometimes referred to herein as "Hedging Agreements."

                (q) [RESERVED]

                (r) Issuance of Disqualified Stock. From and after the Closing
Date of this Agreement, neither the Company, nor any of its Subsidiaries shall
issue any Disqualified Stock. All issued and outstanding Disqualified Stock
shall be treated as Consolidated Total Indebtedness for all purposes of this
Agreement (and as funded Indebtedness for purposes of section 10.1(f)), and the
amount of such deemed Indebtedness shall be the aggregate amount of the
liquidation preference of such Disqualified Stock.

                (s) Loss of S Corporation Status. Except as a result of the
consummation of (i) an underwritten initial public offering of the Common Stock
of the Company pursuant to which the Company obtains a listing for its Common
Stock on a United States national securities exchange, the Nasdaq National
Market System, or an automated quotation system of nationally recognized
standing or (ii) the sale of Equity Interests by or the merger of the Company,
the proceeds of which are used to prepay the principal, interest, premium, fees
and expenses on the

                                      -39-
<PAGE>

Notes in full concurrently with the issuance of such Equity Interests or the
consummation of such merger, the Company shall not fail to be qualified as an "S
corporation" as defined in Section 1361 of the Code at all times on or after the
Closing Date.

                (t) Imposition of UBIT on ESOT. The ESOT shall not be subject to
tax imposed under the Code with respect to any item of income or loss of the
Company or any Subsidiary of the Company at any time on or after the Closing
Date that could reasonably be expected to result in tax liability to the ESOT,
the Company or any of its Subsidiaries in an amount in excess of $1,500,000.

                (u) ESOP Conflict. The Company shall not permit the performance
of any of the Transaction Documents to which the ESOT is a party to conflict
with the ESOP Plan Documents, conflict with any Requirement of Law, or require
the registration with, consent or approval of, or notice to, or other action to,
with or by any Governmental Authority other than (i) filings that are made
regarding the status of the Company as an "S Corporation" as such term is
defined in Section 1361 of the Code, which filings shall have been made on or
prior to the Closing Date, (ii) filings as required by section 10.2(m) and
subsequent requests to the IRS to issue a favorable determination letter to the
effect that the ESOP continues to be such a qualified plan and employee stock
ownership plan, and (iii) Annual Reports (IRS Form 5500 series) for the ESOP.

                (v) Assets as Plan Assets. The Company shall not permit any of
the assets of the Company to constitute, for any purpose of ERISA or Section
4975 of the Code, assets of the ESOP or any other "plan" as defined in Section
3(3) of ERISA or Section 4975 of the Code.

                (w) Prohibited Transaction. The Company shall not permit any
material non-exempt prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Code to occur with respect to the ESOP.

                (x) Non-Qualification of ESOP. The Company shall not take any
action, nor fail to take any action, the result of which action or inaction is
that the ESOP shall fail to be qualified under Section 401(a) of the Code. The
Company shall not permit the ESOP to fail to be an employee stock ownership plan
as defined in Section 4975(e)(7) of the Code.

                (y) Excise Tax. The Company and its Subsidiaries shall not be
subject to the tax imposed by Section 4978 of the Code with respect to any
"disposition" by the ESOT of any shares of Capital Stock of the Company
occurring as a result of the ESOT Transaction.

                (z) holder/ESOT Transactions. No deemed proceeds hereunder shall
for any purpose of Section 406 of ERISA or Section 4975 of the Code be a direct
or indirect loan or other transaction between any holder and the ESOT which, if
it is assumed that the holders of Notes are "parties in interest" and
"disqualified persons" (as defined in Section 3(14) of ERISA and Section 4975 of
the Code), is a non-exempt prohibited transaction described in Section 406 of
ERISA or Section 4975 of the Code.

                (aa) ERISA Judgments and Determinations. There shall be no
finding, holding, ruling or other determination not subject to cure made by any
court or Governmental

                                      -40-
<PAGE>

Authority, and there shall be no assertion by the ESOP Fiduciary, or, to the
best knowledge of the Company, the ESOT Trustee, concerning any matter with
respect to the ESOP or ESOT contrary to or inconsistent with any covenant set
forth in section 10.3(s) through (z) which assertion could reasonably be
expected to have a Material Adverse Effect.

                (bb) Junior Subordinated Indebtedness. The Company shall not and
shall not permit any of its Subsidiaries to amend, supplement or modify the
terms of the Junior Subordinated Notes, or make any payment required as a result
of an amendment or change thereto, other than amendments, supplements or
modifications which (i) (a) decrease the rate of interest payable on the Junior
Subordinated Notes, (b) provide for the payment in kind in lieu of cash of any
portion of the interest on the Junior Subordinated Notes, (c) provide for the
extension of the maturity date with respect to any principal or interest payment
to be made under the Junior Subordinated Notes, (d) provide more flexibility to
the Company or its Subsidiaries in connection with any covenants or (e) waive
any defaults existing in connection with the Junior Subordinated Notes and (ii)
do not adversely affect in any respect the interests of the holders of the
Notes.

        10.4 FINANCIAL COVENANTS. The Company shall comply with the following
(provided that for purposes of calculating the following financial covenants,
EBITDAE shall be deemed to be equal to (i) $3,707,773 for the fiscal quarter
ended March 15, 2002, (ii) $6,013,561 for the fiscal quarter ended July 5, 2002
and (iii) $5,487,256 for the fiscal quarter ended September 30, 2002):

                (a) Maximum Senior Leverage Ratio. The Company shall not permit
the ratio (the "Senior Leverage Ratio") of (i) the sum of the aggregate
outstanding principal amount of all Term Loans and Revolving Credit Obligations
to (ii) EBITDAE to be greater than:

                        (i) 3.25 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 20, 2002 through the fiscal quarter ending September
                30, 2003;

                        (ii) 2.90 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 19, 2003 through the fiscal quarter ending September
                30, 2004;

                        (iii) 2.30 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 17, 2004 through the fiscal quarter ending September
                30, 2005;

                        (iv) 2.00 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 16, 2005 through the fiscal quarter ending September
                30, 2006 and

                        (v) 1.5 to 1.00 as of the end of each fiscal quarter
                thereafter.

        The Senior Leverage Ratio shall be calculated, in each case, as of the
last day of each fiscal quarter based upon (a) for Term Loans and Revolving
Credit Obligations (each as defined

                                      -41-
<PAGE>

in the Bank Credit Agreement), the principal amount of Term Loans and Revolving
Credit Obligations as of the last day of each such fiscal quarter; and (b) for
EBITDAE, the actual amount for the four-quarter period ending on such last day
of such fiscal quarter, taking into account Permitted Acquisitions and
calculated, with respect to Permitted Acquisitions, on a pro forma basis using
historical audited and reviewed unaudited financial statements obtained from the
seller(s) in such Permitted Acquisitions (adjusted for reasonable non-recurring
seller expenses and other add-backs to EBITDAE; provided that such add-backs
have been approved in writing by 66 2/3% of the Bank Lenders if such add-backs
are required to permit the Company on a pro-forma basis to meet the maximum
Senior Leverage Ratio in connection with such Permitted Acquisitions).

                (b) Maximum Leverage Ratio. The Company shall not permit the
ratio (the "Leverage Ratio") of (i) the principal amount of Consolidated Total
Indebtedness (other than the Seller Notes) to (ii) EBITDAE to be greater than:

                        (i) 4.60 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 20, 2002 through the fiscal quarter ending September
                30, 2003;

                        (ii) 4.10 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 19, 2003 through the fiscal quarter ending September
                30, 2004; and

                        (iii) 3.75 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 17, 2004 through the fiscal quarter ending September
                30, 2005;

                        (iv) 3.50 to 1.00 as of the end of each fiscal quarter
                for the period commencing with the fiscal quarter ending
                December 16, 2005 through the fiscal quarter ending September
                30, 2006; and

                        (v) 2.75 to 1.00 as of the end of each fiscal quarter
                thereafter.

                The Leverage Ratio shall be calculated, in each case, as of the
        last day of each fiscal quarter based upon (a) for Consolidated Total
        Indebtedness, the principal amount of Consolidated Total Indebtedness as
        of the last day of each such fiscal quarter; and (b) for EBITDAE, the
        actual amount for the four-quarter period ending on such last day of
        such fiscal quarter, taking into account Permitted Acquisitions and
        calculated, with respect to Permitted Acquisitions, on a pro forma basis
        using historical audited and reviewed unaudited financial statements
        obtained from the seller(s) in such Permitted Acquisitions (adjusted for
        reasonable non-recurring seller expenses and other add-backs to EBITDAE;
        provided that such add-backs have been approved in writing by 66 2/3% of
        the Bank Lenders if such add-backs are required to permit the Company on
        a pro-forma basis to meet the maximum Leverage Ratio in connection with
        such Permitted Acquisitions).

                                      -42-
<PAGE>

                (c) Minimum Fixed Charge Coverage Ratio. The Company and its
consolidated Subsidiaries shall maintain a ratio ("Fixed Charge Coverage Ratio")
of (i) EBITDAE for such period minus Capital Expenditures for such period, to
(ii) the sum of the amounts of (a) scheduled amortization during such period of
the principal portion of the Term Loans and scheduled amortization during such
period of the principal portion of all other Consolidated Total Indebtedness,
plus (b) Restricted Payments paid in cash and, if positive, net ESOP repurchase
obligations during such period, plus (c) all charges for foreign, federal, state
and local income taxes paid in cash by the Company and its consolidated
Subsidiaries during such period, plus (d) Cash Interest Expense during such
period plus (e) cash payments in respect of a purchase price adjustment,
earn-out or other similar form of contingent purchase price during such period,
of at least (1) 1.00 to 1.00 as of the end of each fiscal quarter for the period
commencing with the fiscal quarter ending on December 20, 2002 through the
fiscal quarter ending September 30, 2003; (2) 1.05 to 1.00 as of the end of each
fiscal quarter for the period commencing with the fiscal quarter ending on
December 19, 2003 through the fiscal quarter ending March 10, 2006; and (3) 1.15
to 1.00 as of the end of each fiscal quarter thereafter.

        In each case, the Fixed Charge Coverage Ratio shall be determined as of
the last day of each fiscal quarter for the four fiscal quarter period ending on
such last day of such fiscal quarter, taking into account Permitted Acquisitions
and calculated, with respect to Permitted Acquisitions, on a pro forma basis
using historical audited and reviewed unaudited financial statements obtained
from the seller(s) in such Permitted Acquisitions (adjusted for reasonable
non-recurring seller expenses and other add-backs to EBITDAE; provided that such
add-backs have been approved in writing by 66 2/3% of the Bank Lenders if such
add-backs are required to permit the Company on a pro-forma basis to meet the
minimum Fixed Charge Coverage Ratio in connection with such Permitted
Acquisitions).

                (d) Minimum EBITDAE. The Company shall not permit EBITDAE to be
less than the amounts set forth below for the fiscal periods ending on the dates
set forth below:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Fiscal Quarter Ending On or About the Date Set Forth Below             Minimum EBITDAE
-------------------------------------------------------------------------------------------------
<S>                                                                    <C>
December 20, 2002                                                      $14,500,000
-------------------------------------------------------------------------------------------------
March 14, 2003                                                         $14,500,000
-------------------------------------------------------------------------------------------------
July 4, 2003                                                           $14,500,000
-------------------------------------------------------------------------------------------------
September 30, 2003                                                     $14,500,000
-------------------------------------------------------------------------------------------------
December 19, 2003                                                      $14,500,000
-------------------------------------------------------------------------------------------------
March 12, 2004                                                         $15,000,000
-------------------------------------------------------------------------------------------------
July 2, 2004                                                           $15,750,000
-------------------------------------------------------------------------------------------------
September 30, 2004                                                     $15,750,000
-------------------------------------------------------------------------------------------------
</TABLE>

                                      -43-
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Fiscal Quarter Ending On or About the Date Set Forth Below             Minimum EBITDAE
-------------------------------------------------------------------------------------------------
<S>                                                                    <C>
December 17, 2004                                                      $16,000,000
-------------------------------------------------------------------------------------------------
March 11, 2005                                                         $16,000,000
-------------------------------------------------------------------------------------------------
July 1, 2005                                                           $16,000,000
-------------------------------------------------------------------------------------------------
September 30, 2005                                                     $16,000,000
-------------------------------------------------------------------------------------------------
December 16, 2005                                                      $17,000,000
-------------------------------------------------------------------------------------------------
March 10, 2006                                                         $17,000,000
-------------------------------------------------------------------------------------------------
July 30, 2006                                                          $17,000,000
-------------------------------------------------------------------------------------------------
September 30, 2006                                                     $17,000,000
-------------------------------------------------------------------------------------------------
December 15, 2006 and each fiscal quarter thereafter                   $18,000,000
-------------------------------------------------------------------------------------------------
</TABLE>

        In each case EBITDAE shall be determined as of the last day of each
fiscal quarter for the four-quarter period ending on such last day of such
fiscal quarter, taking into account Permitted Acquisitions and calculated, with
respect to Permitted Acquisitions, on a pro forma basis using historical audited
and/or reviewed unaudited financial statements obtained from the seller(s) in
such Permitted Acquisitions (adjusted for reasonable non-recurring seller
expenses and other add-backs to EBITDAE; provided that such add-backs have been
approved in writing by 66 2/3% of the Bank Lenders if such add-backs are
required to permit the Company on a pro-forma basis to meet the minimum EBITDAE
in connection with such Permitted Acquisitions).

                (e) Capital Expenditures. The Company will not, nor will it
permit any Subsidiary to expend, for Capital Expenditures in the acquisition of
fixed assets in any fiscal year, on a non-cumulative basis, in the aggregate for
the Company and its Subsidiaries, in excess of:

                        (i) $3,600,000 for the fiscal year ending September 30,
                2003; and

                        (ii) $3,600,000 for the fiscal year ending September 30,
                2004, plus any amount permitted to be expended in the
                immediately preceding fiscal year (pursuant to the absolute
                dollar limitation for such preceding fiscal year and not
                pursuant to any carryover provision from a prior fiscal year)
                but not expended;

                        (iii) $4,200,000 for the fiscal year ending September
                30, 2005, plus any amount permitted to be expended in the
                immediately preceding fiscal year (pursuant to the absolute
                dollar limitation for such preceding fiscal year and not
                pursuant to any carryover provision from a prior fiscal year)
                but not expended;

                                      -44-
<PAGE>

                        (iv) $4,800,000 for the fiscal year ending September 30,
                2005, plus any amount permitted to be expended in the
                immediately preceding fiscal year (pursuant to the absolute
                dollar limitation for such preceding fiscal year and not
                pursuant to any carryover provision from a prior fiscal year)
                but not expended; and

                        (v) $5,400,000 for the fiscal year ending September 30,
                2007 and for each fiscal year thereafter, plus any amount
                permitted to be expended in the immediately preceding fiscal
                year (pursuant to the absolute dollar limitation for such
                preceding fiscal year and not pursuant to any carryover
                provision from a prior fiscal year) but not expended.

11.     DEFINITIONS.

        11.1 DEFINITIONS OF CAPITALIZED TERMS. The terms defined in this section
11.1, whenever used in this Agreement, shall, unless the context otherwise
requires, have the following respective meanings:

        "Acquired Business" means the Business, as described in the Acquisition
Documents.

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

        "Acquisition Documents" means the Asset Purchase Agreement and the other
agreements, documents and instruments related thereto or executed and delivered
in connection therewith.

        "Adjusted Applicable Premium" shall have the meaning specified in
section 8.2.

        "Administrative Agent" means the administrative agent in its capacity as
contractual representative for itself and the Lenders pursuant to the Bank
Credit Agreement and any successor Administrative Agent appointed pursuant to
the Bank Credit Agreement.

        "Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the controlling
Person is the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of greater than fifty percent (50%) or more of the Voting
Stock of the controlled Person or possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of Capital Stock, by contract or otherwise;
provided that, for purposes hereof, in no

                                      -45-
<PAGE>

event shall any holder or other institutional holder of Securities be deemed to
be an Affiliate of the Company or any of its Subsidiaries.

        "Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Company referred to in Section 5 of this Agreement as the same may be adjusted
from time to time in accordance with the provisions of this Agreement.

        "Applicable Premium" shall have the meaning specified in section 8.1.

        "Asset Purchase Agreement" means that certain Fourth Amended and
Restated Asset Purchase Agreement made on November 18, 2002 with effect as of
June 4, 2002, by and between the Company, as the purchaser, and IITRI, as the
seller, as in effect on the Closing Date and without giving effect to any
subsequent amendment or modification thereto. "Asset Sale" means, with respect
to any Person, the sale, lease, conveyance, disposition or other transfer by
such Person of any of its assets (including by way of a sale-leaseback
transaction, and including the sale or other transfer of any of the Equity
Interests of any Subsidiary of such Person, but not the Equity Interests of such
Person) to any Person (other than the Company or any of its wholly-owned
Subsidiaries) other than (i) the licensing of the Company's and its Subsidiaries
intellectual property in the ordinary course of business and (ii) the sale of
products manufactured by or on behalf of the Company and its Subsidiaries in the
ordinary course of business.

        "Authorized Officer" means any of the president, chief financial
officer, controller, treasurer or assistant treasurer of the Company, acting
singly.

        "Bank Credit Agreement" means the Credit Agreement dated as of December
20, 2002 by and among the Company, various financial institutions party thereto,
LaSalle Bank National Association, as agent, as amended, restated, supplemented,
refunded, substituted, modified, replaced or refinanced from time to time in
accordance with the terms of the Subordination Agreement.

        "Bank Documents" means the Bank Credit Agreement, the Collateral
Documents, and all other documents, instruments, notes and agreements executed
in connection therewith or contemplated thereby identified in Schedule II, as
the same may be amended, restated, supplemented, refunded, substituted,
modified, replaced or refinanced and in effect from time to time, subject to the
terms of the Subordination Agreement as set forth in clause (a) of the
definition thereof.

        "Bank Lenders" means the financial institutions from time to time who
may be lenders under the Bank Credit Agreement and their respective successors
and assigns.

        "Bank Obligations" means "Obligations" or other similar term as such
term is defined in the Bank Credit Agreement.

        "Bank Secured Obligations" means, collectively, (i) the Bank Obligations
and (ii) all Hedging Obligations owing under Hedging Agreements to any Bank
Lender or any Affiliate of

                                      -46-
<PAGE>

any Lender, which Hedging Obligations are permitted pursuant to the terms of the
Bank Credit Agreement.

        "Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) which is intended to be qualified
under Section 401(a) of the Code in respect of which the Company or any other
member of the Controlled Group is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA.

        "Business Day" means a day (other than a Saturday or Sunday) on which
banks are open for business in New York, New York and Chicago, Illinois.

        "Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Lease Obligations and Permitted Purchase Money Indebtedness) by the
Company and its consolidated Subsidiaries during that period that, in conformity
with Agreement Accounting Principles, are required to be included in or
reflected by the property, plant, equipment or similar fixed asset accounts
reflected in the consolidated balance sheet of the Company and its Subsidiaries.

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

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

        "Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) 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.

        "Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies, the long-term
indebtedness of which institution at the time of acquisition is rated A- (or
better) by S&P or A3 (or better) by Moody's, and which certificates of deposit
and time deposits are fully protected against currency fluctuations for any such
deposits with a term of more than ninety (90) days; (iii) shares of money
market, mutual or similar funds having assets in excess of $100,000,000 and the
investments of which are limited to (a) investment grade securities (i.e.,
securities rated at least Baa by Moody's or at least BBB by S&P) and (b)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or

                                      -47-
<PAGE>

better) by S&P or P-1 (or better) by Moody's (all such institutions being,
"Qualified Institutions"); and (iv) commercial paper of Qualified Institutions;
provided that the maturities of such Cash Equivalents shall not exceed three
hundred sixty-five (365) days from the date of acquisition thereof.

        "Cash Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Subsidiaries, whether paid or
accrued (including the interest component of Capitalized Leases), but excluding
interest expense not payable in cash (including amortization of discount and
financing fees), in each case, as determined in conformity with Agreement
Accounting Principles.

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

                (a) Any Person (other than IITRI (or any of its direct assignees
        or transferees) or the ESOT, together with their "affiliates" within the
        meaning of Rule 12b2 of the Commission under the Exchange Act) shall
        acquire beneficial ownership (including beneficial ownership resulting
        from the formation of a "group" within the meaning of Rule13d-5 of the
        Commission under the Exchange Act) of more than fifty percent (50%) of
        the combined voting power of the outstanding Capital Stock of the
        Company, ordinarily having the right to vote at any election of
        directors; or

                (b) Except as expressly permitted under the terms of this
        Agreement, the Company consolidates with or merges into another Person
        or conveys, transfers or leases all or substantially all of its property
        to any Person in one or a series of transactions, or any Person
        consolidates with or merges into the Company, in either event pursuant
        to a transaction in which the outstanding Capital Stock of the Company
        is reclassified or changed into or exchanged for cash, securities or
        other property.

        "Change of Control Premium" means an amount equal to 1% of the principal
amount of the Notes prepaid as a result of a Change of Control.

        "Closing" and "Closing Date" shall have the respective meanings
specified in section 4.

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

        "Collateral Documents" means all agreements, instruments and documents
provided under the Bank Credit Agreement evidencing liens or securities
interests of the Bank Lenders thereunder.

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

        "Common Stock" means the Common Stock, $.01 par value, of the Company as
constituted on the Closing Date and any shares into which such Common Stock
shall have been changed or any Shares resulting from any reclassification of
such Common Stock.

        "Company" shall have the meaning specified in the first paragraph of
this Agreement.

                                      -48-
<PAGE>

        "Competitor" means any Person which generated at least twenty percent
(20%) of its total revenue (on a consolidated basis together with its direct and
indirect subsidiary entities and its direct and indirect parent entities) from
government contracts in its last fiscal year preceding the proposed transfer,
other than any Financial Institution.

        "Consolidated Total Indebtedness" means, as of any date of
determination, the total amount of that portion of the Indebtedness of the
Company and its Subsidiaries which is interest bearing or with respect to which
interest expense accrues or is attributable under Agreement Accounting
Principles, including, without limitation, interest bearing accounts payable not
payable in the ordinary course of business, notes payable, Contingent
Obligations, Capitalized Lease Obligations, reimbursement obligations in respect
of commercial letters of credit, and Off-Balance Sheet Liabilities.

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

        "Contingent Obligation" means, as applied to any Person, any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
indebtedness of another or other obligation or liability of another, including,
without limitation, any such indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received. The amount of any Contingent
Obligation shall be equal to the present value of the portion of the obligation
so guaranteed or otherwise supported, in the case of known recurring
obligations, and the reasonably anticipated liability in respect of the portion
of the obligation so guaranteed or otherwise supported assuming such Person is
required to perform thereunder, in all other cases.

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

        "Controlled Group" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Company; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Company; and
(iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of

                                      -49-
<PAGE>

the Code) as the Company, any corporation described in clause (i) above or any
partnership or trade or business described in clause (ii) above.

        "Customary Permitted Liens" means:

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

                (b) statutory Liens of landlords and Liens of suppliers,
        mechanics, carriers, materialmen, warehousemen, service providers or
        workmen and other similar Liens imposed by law created in the ordinary
        course of business for amounts not yet due or which are being contested
        in good faith by appropriate proceedings properly instituted and
        diligently conducted and with respect to which adequate reserves or
        other appropriate provisions are being maintained in accordance with
        Agreement Accounting Principles;

                (c) Liens (other than Environmental Liens and Liens in favor of
        the IRS or the PBGC) incurred or deposits made in the ordinary course of
        business in connection with workers' compensation, unemployment
        insurance or other types of social security benefits or to secure the
        performance of bids, tenders, sales, contracts (other than for the
        repayment of borrowed money), surety, appeal and performance bonds;
        provided that (A) all such Liens do not in the aggregate materially
        detract from the value of the Company's or its Subsidiary's assets or
        property taken as a whole or materially impair the use thereof in the
        operation of the businesses taken as a whole, and (B) all Liens securing
        bonds to stay judgments or in connection with appeals that do not secure
        at any time an aggregate amount exceeding $200,000;

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

                (e) Liens of attachment or judgment with respect to judgments,
        writs or warrants of attachment, or similar process against the Company
        or any of its Subsidiaries which do not constitute a Default under
        section 12.1(i) of this Agreement; and (vi) any interest or title of the
        lessor in the property subject to any operating lease entered into by
        the Company or any of its Subsidiaries in the ordinary course of
        business.

        "Default" means any condition or event which constitutes or, after
notice or lapse of time or both, would constitute an Event of Default.

                                      -50-
<PAGE>

        "Disclosed Litigation" is defined in section 6.6 hereof.

        "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), 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 thereof, in whole or in part, on or prior to the date
that is ninety-one (91) days after the Maturity Date.

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

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

        "EBITDAE" means, for any period, on a consolidated basis for the Company
and its Subsidiaries, the sum of the amounts for such period, without
duplication, calculated in each case in accordance with Agreement Accounting
Principles, of (i) Net Income, plus (ii) Interest Expense to the extent deducted
in computing Net Income, plus (iii) charges against income for foreign, federal,
state and local taxes to the extent deducted in computing Net Income, plus (iv)
depreciation expense to the extent deducted in computing Net Income, plus (v)
amortization expense, including, without limitation, amortization of goodwill
and other intangible assets to the extent deducted in computing Net Income, plus
(vi) cash contributions to the ESOP in respect of the repurchase liability of
the Company under the ESOP Plan Documents to the extent deducted in computing
Net Income, plus (vii) non-cash ESOP Compensation Expense to the extent deducted
in computing Net Income, plus (viii) other extraordinary and nonrecurring
non-cash charges to the extent deducted in computing Net Income up to an amount
not to exceed $1,500,000, minus (ix) other extraordinary and nonrecurring
non-cash credits to the extent added in computing Net Income up to an amount not
to exceed $1,500,000, plus (x) non-cash charges classified as minority interest
to the extent deducted in computing Net Income, plus (xi) other nonrecurring
adjustments and charges to the extent deducted in computing Net Income for
periods prior to the Closing Date, plus (xii) non-cash expenses associated with
the recognition of the difference between the fair market value of the Warrants
and Seller Warrants and the exercise price of the Warrants and Seller Warrants
to the extent deducted in computing Net Income, plus (xiii) non-cash Management
Compensation Expense to the extent deducted in computing Net Income.

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

                                      -51-
<PAGE>

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

        "Environmental Property Transfer Act" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."

        "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 Interests will not
include any Incentive Arrangements or obligations or payments thereunder.

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

        "ERISA Affiliate" means each trade or business (whether or not
incorporated) that, together with the Company, would be treated as a single
employer under section 4001(b) of ERISA, or that is a member of a group of which
the Company is a member and that is a controlled group within the meaning of
section 4971(e)(2)(B) of the Code.

        "ESOP" means the employee benefit plan titled "The Alion Science and
Technology Corporation Employee Ownership, Savings and Investment Plan" and
adopted and maintained by the Company pursuant to the applicable ESOP Plan
Documents.

        "ESOP Compensation Expense" means, for any period, expenses charged with
respect to the ESOP to Net Income for such period in accordance with Agreement
Accounting Principles.

        "ESOP Fiduciary" means the named fiduciary under ERISA of the ESOP. As
of the Closing Date, the ESOP Fiduciary is the ESOP Committee of the Company.

        "ESOP Plan Documents" means, collectively, the documents identified in
Exhibit 11.1.5 to this Agreement and the ESOT Transaction Documents, each as may
be amended, supplemented or modified as provided herein.

        "ESOT" means the trust titled "The Alion Science and Technology
Corporation Employee Ownership, Savings and Investment Trust" and adopted and
maintained by the Company pursuant to the applicable ESOP Plan Documents.

        "ESOT Stock Purchase Agreement" means that certain Stock Purchase
Agreement dated as of December 20, 2002, by and between the Borrower and the
ESOT Trustee, as in effect on the Closing Date.

                                      -52-
<PAGE>

        "ESOT Transaction" means the series of transactions contemplated by and
described in the ESOT Transaction Documents, including but not limited to the
ESOT's purchase of up to 100% of the Capital Stock of the Company pursuant to
the ESOT Stock Purchase Agreement.

        "ESOT Transaction Documents" means, collectively, the ESOT Stock
Purchase Agreement and the other documents identified on Exhibit 11.1.6 to this
Agreement, as each may be amended, supplemented or modified as provided herein.

        "ESOT Trustee" means the trustee of the ESOT. As of the Closing Date the
ESOT Trustee is State Street Bank and Trust Company.

        "Event of Default" shall have the meaning specified in section 12.1.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.

        "Financial Institution" means any insurance company, bank, trust
company, pension fund (whether private, public or governmental), mutual fund or
any other entity which is primarily engaged in the business of investing for its
own account or accounts of others in debt or equity securities of issuers that
are not Affiliates of the Company, regardless of whether or not such Financial
Institution has an investment in a person or entity that generated at least 20%
of its total revenue from government contracts; provided that not more than 50%
of the Voting Stock of such Financial Institution is owned and controlled,
directly or indirectly, by a person or entity that generated at least 20% of its
total revenue on a consolidated basis from government contracts.

        "Financing" means, with respect to any Person, the issuance or sale by
such Person of any Disqualified Stock, Equity Interests of such Person or any
Indebtedness consisting of debt securities of such Person.

        "Fixed Charge Coverage Ratio" is defined in section 10.4(c).

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

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

        "Government Contract" means any prime contract of the Company or any
direct or indirect subsidiary of the Company with a Governmental Authority or
any sub-contract of the Company and its direct or indirect Subsidiaries with any
other Person with respect to any contract with a Governmental Authority.

                                      -53-
<PAGE>

        "Guaranty" means each of that certain Guaranty in substantially the form
of Exhibit 2(d) attached hereto, executed and delivered by Subsidiary Guarantors
from time to time as amended, restated, supplemented or otherwise modified from
time to time.

        "Hedging Agreements" is defined in section 10.3(p).

        "Hedging Arrangements" is defined in the definition of Hedging
Obligations below.

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

        "holders of Secured Obligations" has the meaning set forth in the Bank
Credit Agreement.

        "IITRI" means IIT Research Institute, a not-for-profit Illinois
corporation ("IITRI") controlled by the Illinois Institute of Technology, a
not-for-profit Illinois corporation ("IIT").

        "IITRI Acquisition" means the acquisition by the Company of the Acquired
Business pursuant to the Acquisition Documents.

        "Incentive Arrangements" means warrants, any stock ownership, restricted
stock, stock option, stock appreciation rights plans, "phantom" stock plans,
deferred compensation arrangements, employment agreements, non-competition
agreements, subscription and stockholders agreements and other incentive and
bonus plans and similar arrangements made in connection with the retention of
directors, executives, officers or employees of the Company and its
Subsidiaries.

        "Indebtedness" means, with respect to any Person, without duplication,
such Person's (i) obligations for borrowed money, including, without limitation,
subordinated indebtedness, (ii) obligations representing the deferred purchase
price of property or services rendered, including, without limitation earn-outs
and other similar forms of contingent purchase prices (but excluding accounts
payable arising in the ordinary course of such Person's business payable on
terms customary in the trade), (iii) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from property or
assets now or hereafter owned or acquired by such Person, (iv) obligations which
are evidenced by notes, acceptances, other instruments, letters of credit or
letter of credit reimbursement arrangements, (v) Capitalized Lease Obligations,
(vi) Contingent Obligations, (vii) obligations with respect to letters of
credit, (viii) the net mark-to-market exposure under all Hedging Arrangements,
(ix) Off-Balance Sheet

                                      -54-
<PAGE>

Liabilities, and (x) Disqualified Stock. The amount of Indebtedness of any
Person at any date shall be, without duplication, (a) the outstanding balance at
such date of all unconditional obligations as described above and the reasonably
anticipated liability of any such Contingent Obligations at such date and (b) in
the case of Indebtedness of others secured by a Lien to which the property or
assets owned or held by such Person is subject, the lesser of the fair market
value at such date of any asset subject to a Lien securing the Indebtedness of
others and the amount of the Indebtedness secured.

        "Indemnified Costs" shall have the meaning specified in section 18.

        "Indemnitee" shall have the meaning specified in section 18.

        "Interest Expense" means, for any period, the total interest expense of
the Company and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases, commitment and letter
of credit fees and the discount or implied interest component (or other fees or
charges in securitization transactions) of Off-Balance Sheet Liabilities), and
net payments (if any) pursuant to Hedging Arrangements relating to interest rate
protection, all as determined in conformity with Agreement Accounting
Principles.

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

        "Investment IRR" shall have the meaning specified in section 8.2.

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

        "Junior Subordinated Notes" means (a) any unsecured Indebtedness of the
Company and/or any of its Subsidiaries which has been subordinated to the Notes
and the Note Guarantees upon terms of subordination approved in writing by the
Required Holders of the Notes and (b) the Seller Notes.

        "LaSalle" means LaSalle Bank National Association, in its individual
capacity, and its successors.

        "Leverage Ratio" is defined in section 10.4(b).

        "Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential

                                      -55-
<PAGE>

arrangement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capitalized Lease or
other title retention agreement).

        "Management Compensation Expenses" means, for any period, expenses
charged to Net Income for such period with respect to stock appreciation rights
plans, "phantom" stock plans, the Junior Subordinated Notes and accretion of the
Seller Warrants, in each case in connection with the retention of directors,
executives, officers or employees of the Company and its Subsidiaries, in
accordance with Agreement Accounting Principles.

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

        "Material Adverse Effect" means a material adverse effect upon (i) the
business, assets, condition (financial or otherwise), operations, performance,
properties, results of operations or prospects of the Company, any Subsidiary
Guarantor, or the Company and its Subsidiaries in each case taken as a whole,
(ii) the ability of the Company, any Subsidiary Guarantor or the Company and its
Subsidiaries to perform their respective obligations under this Agreement and
the other Operative Documents, (iii) the ability of the Holders to enforce their
respective obligations under this Agreement and the other Operative Documents,
or (iv) the validity or enforceability of this Agreement, other Operative
Documents, or the rights or remedies of the Holders hereunder and thereunder.

        "Material Subsidiary" shall mean, in respect of the Company, any
Subsidiary that (a) has total assets (determined as of the last day of the most
recently completed fiscal quarter in accordance with Agreement Accounting
Principles) which constitute ten percent (10%) or more of the total assets of
the Company and its consolidated Subsidiaries as of such date of determination,
or (b) has revenue (determined as of the last day of the most recently completed
fiscal quarter for the four-quarter period then ending in accordance with
Agreement Accounting Principles) which constitutes five percent (5%) or more of
the revenue of the Company and its consolidated Subsidiaries for such period, or
(c) has EBITDAE (determined as of the last day of the most recently completed
fiscal quarter for the four-quarter period then ending in accordance with
Agreement Accounting Principles) which constitutes five percent (5%) or more of
the revenue of the Company and its consolidated Subsidiaries for such period, or
(d) has EBITDAE (determined as of the last day of the most recently completed
fiscal quarter for the four-quarter period then ending in accordance with
Agreement Accounting Principles) which constitutes five percent (5%) or more of
the EBITDAE of the Company and its consolidated Subsidiaries for such period;
provided that if (i) a Material Subsidiary no longer satisfies any condition set
forth above and (ii) the Board of Directors of the Company determines that such
Subsidiary is not material to the consolidated financial condition or operations
of the Company and its Subsidiaries and the holders of Notes shall have received
written notice of such determination from the Company, and (iii) no Event of
Default shall be continuing, then for so long as such Subsidiary satisfies none
of the conditions in clauses (a) through (d) above, such Subsidiary shall not be
a Material Subsidiary.

        "Maturity Date" means December 20, 2008.

        "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan"
means a

                                      -56-
<PAGE>

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

        "Net Cash Proceeds" means, with respect to any Asset Sale or Financing
by any Person, cash or Cash Equivalents (freely convertible into Dollars)
received by such Person or any Subsidiary of such Person from such Asset Sale
(including cash received as consideration for the assumption or incurrence of
liabilities incurred in connection with or in anticipation of such Asset Sale)
or Financing, after (i) provision for all income or other taxes measured by or
resulting from such Asset Sale or Financing, (ii) payment of all brokerage
commissions and other fees and expenses and commissions related to such Asset
Sale or Financing, and (iii) deduction of all amounts used to repay Indebtedness
(and any premium or penalty thereon) secured by a Lien on any asset disposed of
in such Asset Sale or which is or may be required (by the express terms of the
instrument governing such Indebtedness or by applicable law) to be repaid in
connection with such Asset Sale (including payments made to obtain or avoid the
need for the consent of any holder of such Indebtedness).

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

        "Non-ERISA Commitments" means

                (a) each pension, medical, dental, life, accident insurance,
        disability, group insurance, sick leave, profit sharing, deferred
        compensation, bonus, stock option, stock purchase, retirement, savings,
        severance, stock ownership, performance, incentive, hospitalization or
        other insurance, or other welfare, benefit or fringe benefit plan,
        policy, or trust; and

                (b) each employee collective bargaining agreement and each
        agreement, understanding or arrangement of any kind, with or for the
        benefit of any present or prior officer, director, employee (including,
        without limitation, each employment, compensation, deferred
        compensation, severance arrangement and any agreement or arrangement
        associated with a change in control of the Company or any member of the
        Controlled Group);

                (c) to which the Company or any member of the Controlled Group
        is a party or with respect to which the Company or any member of the
        Controlled Group is or will be required to make any payment other than
        any Plans.

        "Notes" shall have the meaning specified in section 2.

        "Off-Balance Sheet Liabilities" means, with respect to any Person, (i)
any repurchase obligation or liability of such Person or any of its Subsidiaries
with respect to Receivables sold by such Person or any of its Subsidiaries, (ii)
any liability of such Person or any of its Subsidiaries under any sale and
leaseback transaction which does not create a liability on the consolidated
balance sheet of such Person (iii) any liability of such Person or any of its

                                      -57-
<PAGE>

Subsidiaries under any financing lease or so-called "synthetic lease" or "tax
ownership operating lease" transaction, or (iv) any obligations of such Person
or any of its Subsidiaries arising with respect to any other transaction which
is the functional equivalent of or takes the place of borrowing but which does
not constitute a liability on the consolidated balance sheet of such Person and
its Subsidiaries.

        "Officers' Certificate" means a certificate signed on behalf of the
Company by an Authorized Officer.

        "Operative Documents" means this Agreement, the Securities, the Note
Guarantees, the Rights Agreement, the Subordination Agreements, and each of the
other agreements, documents and instruments executed in connection herewith and
therewith, each as it may from time to time be amended, modified or
supplemented.

        "Organizational Documents" means, as applied to any Person, the
certificate of incorporation, articles of incorporation or certificate of
formation, by-laws or operating agreement and any other applicable
organizational document of such Person.

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

        "Permitted Acquisition" is defined in section 10.3(g).

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

        "Permitted Existing Indebtedness" means the Indebtedness of the Company
and its Subsidiaries identified as such on Exhibit 11.1.2 to this Agreement.

        "Permitted Existing Investments" means the Investments of the Company
and its Subsidiaries identified as such on Exhibit 11.1.3 to this Agreement.

        "Permitted Existing Liens" means the Liens on assets of the Company and
its Subsidiaries identified as such on Exhibit 11.1.4 to this Agreement.

        "Permitted Purchase Money Indebtedness" is defined in section
10.3(a)(viii).

        "Permitted Refinancing Indebtedness" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted under section 10.3(a)(ii)
or 10.3(a)(iii) that (i) does not exceed the aggregate principal amount (plus
accrued interest and any applicable premium and associated fees and expenses) of
the Indebtedness being replaced, renewed, refinanced or extended, (ii) does not
have a Weighted Average Life to Maturity at the time of such replacement,
renewal, refinancing or extension that is less than the Weighted Average Life to
Maturity of the Indebtedness being replaced, renewed, refinanced or extended,
(iii) does not rank at the time of such replacement, renewal, refinancing or
extension senior to the Indebtedness being replaced, renewed, refinanced or
extended, and (iv) does not contain terms (including, without limitation, terms
relating to security, amortization, interest rate, premiums, fees, covenants,
subordination, events of default and remedies), taken as a whole, materially
less

                                      -58-
<PAGE>

favorable to the Company, its Subsidiaries or the holders of the Notes than
those applicable to the Indebtedness being replaced, renewed, refinanced or
extended, subject to the terms of the Subordination Agreements.

        "Permitted Senior Additional Indebtedness" means $72,000,000, less the
sum of (i) all regularly scheduled or optional payments on the Term Loans (as
defined in the Bank Credit Agreement) actually made, (ii) all regularly
scheduled or optional payments on the Revolving Loans (as defined in the Bank
Credit Agreement) to the extent the aggregate Revolving Loan Commitment (as
defined in the Bank Credit Agreement) is reduced as a result of such payment,
plus (A) all other mandatory prepayments of the Term Loans actually made (other
than in connection with a refinancing agreement (a "Refinancing Agreement")
thereof, and any guaranty of the Bank Secured Obligations under the Bank Credit
Agreement or any Refinancing Agreement, whether now existing or hereinafter
arising whether such obligations arise or accrue before or after the
commencement of any bankruptcy, insolvency or receivership proceedings,
including, without limitation, interest and fees accruing pre-petition or
post-petition at the rate or rates prescribed in the Bank Credit Agreement or
Refinancing Agreement and costs, expenses and attorneys' and paralegals' fees,
whenever incurred (and whether or not such claims, interest, costs, expenses or
fees are allowed or allowable in any such proceeding); plus (B) all obligations
under interest rate or foreign currency hedging, swap, cap, collar or similar
agreements of the Company and its Material Subsidiaries to the Bank Lenders, in
each case within the meaning of the Senior Subordination Agreement, entered into
to hedge the actual or anticipated interest rate or foreign currency exposure
with respect to the Bank Credit Agreement and which are non-speculative in
nature, whether now existing or hereinafter arising directly between the Company
and its Material Subsidiaries and the Bank Lenders, or acquired outright,
conditionally or as collateral security from another by the Bank Lenders,
together with any guaranty of such obligations by any Loan Party, (within the
meaning of the Subordination Agreement set forth in clause (a) of the definition
of Subordination Agreements) obligations arise or accrue before or after the
commencement of any bankruptcy, insolvency or receivership proceedings,
including, without limitation, interest and fees accruing pre-petition or
post-petition at the rate or rates prescribed in the applicable agreement and
costs, expenses and attorneys' and paralegals' fees whenever incurred (and
whether or not such claims, interest, costs, expenses or fees are allowed or
allowable in any such proceeding); plus (C) amounts disbursed or advanced
(including, without limitation, in connection with the provision of any
financing or other financial accommodations pursuant to Section 364 of the
United States Bankruptcy Code) by the Bank Lenders, which in their good faith
discretion they deem necessary or desirable to preserve or protect any
Collateral (as defined in the Bank Credit Agreement) or to enhance the
likelihood or maximize the amount of repayment of the amounts outstanding under
the Bank Credit Agreement, in an amount not to exceed $1,000,000, including, but
not limited to all protective advances, costs, expenses and attorneys' and
paralegals' fees, whenever made, advanced or incurred by the Bank Lenders in
connection with the Senior Credit Agreement or the Collateral.

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

                                      -59-
<PAGE>

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

        "Purchase Price" means the total consideration and other amounts payable
in connection with any Acquisition, including, without limitation, any portion
of the consideration payable in cash, the value of any Capital Stock or other
Equity Interests of the Company or any Subsidiary issued as consideration for
such Acquisition, all Indebtedness, liabilities and Contingent Obligations
incurred or assumed in connection with such Acquisition and all transaction
costs and expenses (including all investment banking and other consultant fees
and expenses) incurred in connection with such Acquisition.

        "Qualified IPO" shall have the meaning specified in section 8.2.

        "Qualified IPO Closing Date" shall have the meaning specified in section
8.2.

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

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

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

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

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

                                      -60-
<PAGE>

        "Rentals" means for any Person, for any period, the aggregate fixed
amounts paid by such Person on a consolidated basis with its Subsidiaries under
any lease of real or personal property and deducted in computing Net Income for
such period in accordance with Agreement Accounting Principles.

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

        "Required Holders" as applied to describe the requisite holder or
holders of any class of the Securities, shall mean, at any date, the holder or
holders of 51% or more in interest of such class of Securities at the time
outstanding (excluding all Securities at the time owned by the Company or any
Affiliate of the Company).

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

        "Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any Equity Interests of the Company now or
hereafter outstanding, except a dividend payable solely in the Company's Capital
Stock (other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Company or any of its Subsidiaries now or hereafter outstanding, other than in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Equity Interests of the
Company (other than Disqualified Stock), (iii) any redemption, purchase,
retirement, defeasance, prepayment (by setoff or otherwise) or other acquisition
for value, direct or indirect, of any Indebtedness other than the Obligations,
and (iv) any payment of a claim for the rescission of the purchase or sale of,
or for material damages arising from the purchase or sale of, any Indebtedness
(other than the Obligations) or any Equity Interests of the Company or any of
its Subsidiaries, or of a claim for reimbursement, indemnification or
contribution arising out of or related to any such claim for damages or
rescission, (v) any payment of management fees owing to any holder of Capital
Stock of the Company or any of its Subsidiaries or investment banking fees (or
other fees of a similar nature) other than pursuant to a Permitted Acquisition,
(vi) any payment in respect of a purchase price adjustment, earn-out or other
similar form of contingent purchase price (by setoff or otherwise), (vii) any
payment or prepayment

                                      -61-
<PAGE>

(whether consisting of principal, interest, premium or otherwise) with respect
to the Seller Notes or any other subordinated Indebtedness permitted under
section 10.3(a), and (viii) any contribution or other payment (other than in
Capital Stock) of any type by the Company or any of its Subsidiaries to the
ESOT.

        "Revolving Credit Obligations" or similar term, has the meaning set
forth in the Bank Credit Agreement.

        "Revolving Loan" has the meaning set forth in the Bank Credit Agreement.

        "Rights Agreement" shall have the meaning specified in section 5.3(e).

        "S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc.

        "Securities" means the Notes, the Warrants and, unless the context
clearly requires otherwise, the Warrant Shares, each of which is a "Security".

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

        "Seller Note Securities Purchase Agreement" means the Seller Note
Securities Purchase Agreement, dated as of December 20, 2002, among the Company
and the holders set forth in Schedule I thereto, as amended or modified in
accordance with the terms of the Subordination Agreement.

        "Seller Notes" means those certain 6% Junior Subordinated Notes due
2010, issued by the Company to IITRI in the aggregate principal amount of
$39,900,000 pursuant to the Asset Purchase Agreement, as amended, supplemented
or modified in accordance with section 10.3(bb) hereof.

        "Seller Warrants" means warrants of the Company evidencing rights to
purchase 1,080,436.80 shares of the Company's Common stock (subject to
adjustment) issued pursuant to the terms of the Seller Note Securities Purchase
Agreement to the holders of the Company's Seller Notes and includes any warrants
issued in exchange therefor or in replacement thereof.

        "Seller Warrant Shares" means any Shares or other securities issued or
issuable upon exercise of any Seller Warrant pursuant to the terms and
conditions of such Seller Warrant, each of which is a "Seller Warrant Share".

        "Senior Leverage Ratio" is defined in section 10.4(a).

        "Shares" of any Person shall include any and all shares of capital
stock, partnership interests, membership interests, or other shares, interests,
participations or other equivalents (however designated and of any class) in the
capital of, or other ownership interests in, such Person.

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

                                      -62-
<PAGE>

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

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

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

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

        "Source" shall have the meaning specified in section 23.

        "Subordination Agreements" means, collectively, (a) that certain
Subordination Agreement dated as of the date hereof by and among the Company,
the holders of the Notes and LaSalle Bank National Association, as agent, and
(b) that certain Subordination Agreement dated the date hereof by and among the
Company, the holders of the Notes and the holders of the Seller Notes.

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

        "Subsidiary Guarantee" shall have the meaning specified in section 2.

        "Subsidiary Guarantor(s)" means (i) each of the Company's Material
Subsidiaries; (ii) all other Material Subsidiaries which become Subsidiary
Guarantors in satisfaction of the provisions of section 10.2(k) and (iii) any
Subsidiary of the Company which has executed a guaranty under the Bank
Agreement, in each case, and together with their respective successors and
assigns.

        "Term Loans" has the meaning set forth in the Bank Credit Agreement.

        "Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Company or any member of the Controlled
Group from a Benefit Plan during a plan year in which the Company or such
Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Company or any member of the Controlled Group which, in
either event, could reasonably be expected to have a Material Adverse Effect or
otherwise result in

                                      -63-
<PAGE>

liability to the Company or any of its Subsidiaries that are members of the
Controlled Group in an amount in excess of $1,500,000; (iii) the imposition of
an obligation on the Company or any member of the Controlled Group under Section
4041 of ERISA to provide affected parties written notice of intent to terminate
a Benefit Plan in a distress termination described in Section 4041(c) of ERISA;
(iv) the institution by the PBGC or any similar foreign governmental authority
of proceedings to terminate a Benefit Plan; (v) any event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan; or (vi) the partial or
complete withdrawal of the Company or any member of the Controlled Group from a
Multiemployer Plan, which could reasonably be expected to have a Material
Adverse Effect or otherwise result in liability to the Company or any of its
Subsidiaries in an amount in excess of $1,500,000.

        "Transaction Documents" means this Agreement, the other Operative
Documents, the Bank Documents, and the documents executed and delivered, or
adopted, by the Company or any of its Subsidiaries or the ESOT Trustee or the
ESOP Fiduciary in connection with the IITRI Acquisition, the ESOT Transaction
and the issuance of the Seller Notes, including, without limitation, the Asset
Purchase Agreement, the ESOT Agreements, the ESOP Plan Documents, the Seller
Notes, the Warrants and the Seller Warrants.

        "U.S. Qualified Persons" means those persons that (i) are defined in the
U.S. persons in Section 7701(a)(3) of the Code and (ii) are U.S. citizens or
entities organized under U.S. federal or state laws which are not owned,
controlled or influenced, directly or indirectly, by a foreign person (or term
of like meaning) under the National Industrial Security Program Operating Manual
(or any successor document) as amended from time to time.

        "Voting Stock" shall mean Shares of a Person having ordinary voting
power for the election of a majority of the members of the board of directors of
the Person, other than Shares having such power only by reason of the happening
of a contingency.

        "Warrant Shares" means any Shares (or Other Securities (as defined in
the Warrants)) issued (or issuable, as applicable) upon exercise of any
Warrants, each of which is a "Warrant Share".

        "Warrants" shall have the meaning specified in section 2.

        "Weighted Average Life to Maturity" of any Indebtedness or obligation
shall mean, at any date, the number of years obtained by dividing the then
Remaining Dollar-years of such Indebtedness or obligation by the then
outstanding principal amount of such Indebtedness or obligation. For purposes of
this definition, the "Remaining Dollar-years" of any Indebtedness or obligation
shall mean, at any date, the total 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 thereof, by (b) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of such payment,
by (ii) the then outstanding principal amount of such Indebtedness.

                                      -64-
<PAGE>

        11.2 OTHER DEFINITIONS. The terms defined in this section 11.2, whenever
used in this Agreement, shall, unless the context otherwise requires, have the
respective meanings hereinafter specified.

                "this Agreement" (and similar references to any of the other
Operative Documents) shall mean, and the words "herein" (and "therein"),
"hereof" (and "thereof"), "hereunder" (and "thereunder") and words of similar
import shall refer to, such instruments as they may from time to time be
amended, modified or supplemented.

                "beneficial ownership" of any Shares or other securities of any
Person shall be determined in the manner set forth in Rule 13d-3 of the
Commission under the Exchange Act.

                a "class" of Securities shall refer to the Notes, the Warrants
and/or the Warrant Shares, as the case may be, each of which is a separate
class.

                "corporation" shall include an association, joint stock company,
business trust or other similar organization.

                "premium" when used in conjunction with references to principal
of and interest on the Notes, shall mean any amount due upon any payment or
prepayment of any of the Notes, other than principal and interest, and shall
include the premium specified in section 8.1.

        11.3 ACCOUNTING TERMS AND PRINCIPLES; LAWS.

                (a) All accounting terms used herein which are not expressly
defined in this Agreement shall have the respective meanings given to them in
accordance with Agreement Accounting Principles, all computations made pursuant
to this Agreement shall be made in accordance with Agreement Accounting
Principles, provided that if the Company notifies the holders of the Notes that
it wishes to amend any covenant in section 10 to eliminate or to take into
account the effect of any change in Agreement Accounting Principles on the
operation of such covenant (or if the Required Holders of the Notes notify the
Company that they wish to amend section 14 for such purpose), then compliance
with such covenant shall be determined on the basis of Agreement Accounting
Principles in effect immediately before the relevant change in Agreement
Accounting Principles became effective, until either such notice is withdrawn or
such covenant is amended in a manner satisfactory to the Company and the
Required Holders of the Notes. All financial statements shall be prepared in
accordance with Agreement Accounting Principles.

                (b) All references herein to laws, statutes, rules and
regulations shall, unless the context clearly requires otherwise, be deemed to
refer to any law, statute, rule, regulation and any other governmental
restriction, standard and/or requirement promulgated, issued and/or enforced by
any domestic or foreign federal, state or local government, governmental agency,
authority, court, instrumentality or regulatory body, including, without
limitation, those of the United States of America or any state thereof or the
District of Columbia.

        11.4 SINGULAR AND PLURAL FORMS; ACCOUNTING TERMS. The foregoing
definitions shall be equally applicable to both the singular and plural forms of
the defined terms. Any

                                      -65-
<PAGE>

accounting terms used in this Agreement which are not specifically defined
herein shall have the meanings customarily given them in accordance with
Agreement Accounting Principles.

        11.5 REFERENCES. Any references to the Company's Subsidiaries shall not
in any way be construed as consent by the holders of the Notes to the
establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.

12.     EVENTS OF DEFAULT; REMEDIES.

        12.1 EVENTS OF DEFAULT DEFINED; ACCELERATION OF MATURITY. If any one or
more of the following events ("Events of Default") shall occur (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), that is to say:

                (a) if default shall be made in the due and punctual payment of
all or any part of the principal of, or premium (if any) on, any Note when and
as the same shall become due and payable, whether at the stated maturity
thereof, by notice of or demand for prepayment, or otherwise; or

                (b) if default shall be made in the due and punctual payment of
any interest on any Note when and as such interest shall become due and payable
and such default shall have continued for a period of three Business Days; or

                (c) if (i) default shall be made in the performance or
observance of any covenant, agreement or condition contained in section 10.1 or
10.2 and such default shall continue unremedied for ten (10) Business Days after
the occurrence thereof or (ii) default shall be made in the performance or
observance of any covenant, agreement or condition contained in section 10.3 or
10.4; or

                (d) if default shall be made in the performance or observance of
any other of the covenants, agreements or conditions contained in this Agreement
or any of the other Operative Documents (other than as covered by paragraphs
(a), (b) and (c) of this Section 12.1) and such default shall have continued for
a period of 30 days after the occurrence thereof; or

                (e) if an involuntary case shall be commenced against the
Company or any of the Company's Material Subsidiaries and the petition shall not
be dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company or any of the
Company's Material Subsidiaries in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal, state, local
or foreign law.; or

                (f) if a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Company or any of the
Company's Subsidiaries or over all or a substantial part of the property of the
Company or any of the Company's Subsidiaries shall be

                                      -66-
<PAGE>

entered; or an interim receiver, trustee or other custodian of the Company or
any of the Company's Subsidiaries or of all or a substantial part of the
property of the Company or any of the Company's Subsidiaries shall be appointed
or a warrant of attachment, execution or similar process against any substantial
part of the property of the Company or any of the Company's Subsidiaries shall
be issued and any such event shall not be stayed, dismissed, bonded or
discharged within sixty (60) days after entry, appointment or issuance provided
that such Event of Default shall not arise in respect of any Subsidiary of the
Company that is not a Material Subsidiary and for which a waiver of any Event of
Default (or similar term within the meaning of the Bank Credit Agreement)
arising from the foregoing events has been granted to the Company by the
requisite percentage of Bank Lenders pursuant to the Bank Credit Agreement prior
to the expiry of the preceding sixty (60) day period; or

                (g) if the Company or any of the Company's Subsidiaries shall
(i) commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, (ii) consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, (iii) consent to the appointment
of or taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property, (iv) make any assignment for the benefit of
creditors or (v) take any corporate action to authorize any of the foregoing;
provided that such Event of Default shall not arise in respect of any Subsidiary
of the Company that is not a Material Subsidiary and for which a waiver of any
Event of Default (or similar term within the meaning of the Bank Credit
Agreement) arising from the foregoing events has been granted to the Company by
the requisite percentage of Bank Lenders pursuant to the Bank Credit Agreement
prior to taking any of the foregoing actions; or

                (h) if the Company or any of its Subsidiaries shall fail to (i)
make any payment due on any Indebtedness (other than the Notes or the Senior
Bank Obligations) or other obligation (including any in respect of any lease or
any Capital Stock upon the exercise by any Person of any put or call option or
other similar right of redemption or repurchase with regard to such Shares) when
due (subject to applicable grace periods), if the aggregate outstanding amount
thereof (and of any other Indebtedness or other obligation as to which the
Company or any of its Subsidiaries is in default) exceeds $6,000,000 (or the
equivalent thereof, as at any date of determination, in any other currency) or
(ii) perform, observe or discharge any covenant, condition or obligation in any
agreement, document or instrument evidencing, securing or relating to such
Indebtedness or other obligation, if the effect of any such failure of the
character described in this clause (ii) is to cause, or permit such Person to
cause, any payment in an aggregate amount of $6,000,000 (or the equivalent
thereof, as at any date of determination, in any other currency) or more to
become due and payable, or if any such Indebtedness or other obligation in an
aggregate amount of $6,000,000 (or the equivalent thereof, as at any date of
determination, in any other currency) or more shall become due and payable by
its terms and shall not be paid or extended; or

                (i) if a final judgment for the payment of money which, together
with all other outstanding final judgments for the payment of money against the
Company or any of its Subsidiaries, exceeds an aggregate of $1,500,000 (or the
equivalent thereof, as at any date of determination, in any other currency)
shall be rendered by a court of record against the

                                      -67-
<PAGE>

Company or any of its Subsidiaries, and the Company or any of its Subsidiaries
shall not discharge the same or provide for its discharge in accordance with its
terms, or procure a stay of execution thereof within 30 days from the date of
entry thereof and within such period of 30 days, or such longer period during
which execution of such judgment shall have been stayed, move to vacate such
judgment or appeal therefrom and cause the execution thereof to be stayed
pending determination of such motion or during such appeal; or

                (j) if any representation or warranty made by or on behalf of
the Company or any of its Subsidiaries in this Agreement or in any of the other
Operative Documents or in any agreement, document or instrument delivered under
or pursuant to any provision hereof or thereof shall prove to have been
materially false or incorrect on the date as of which made; or

                (k) if, at any time, this Agreement or any of the other
Operative Documents shall for any reason (other than the scheduled termination
thereof in accordance with its terms) expire, fail to be in full force and
effect or be disaffirmed, repudiated, canceled, terminated or declared to be
unenforceable, null and void; or

                (l) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a waiver of
such standards or extension of any amortization period is sought or granted
under section 412 of the Code, (ii) a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed with the PBGC or the PBGC
shall have instituted proceedings under section 4042 of ERISA to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit liabilities"
(within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined
in accordance with Title IV of ERISA, shall exceed $1,500,000 (or the equivalent
thereof, as at any date of determination, in any other currency), (iv) the
Company or any ERISA Affiliate shall have incurred or is reasonably expected to
incur any liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, (v) the Company
or any ERISA Affiliate withdraws from any Multiemployer Plan, (vi) the Company
or any Subsidiary of the Company establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in a manner that
would increase the liability of the Company and/or its Subsidiaries thereunder,
or (vii) any termination Event occurs; and any such event or events described in
clauses (i) through (vii) above, either individually or together with any other
such event or events, has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect;

                (m) acceleration of any Indebtedness under the Bank Credit
Agreement or the Seller Notes, subject to the terms of the Subordination
Agreements; or

                (n) the IRS shall notify Borrower in writing that it has made a
final determination not subject to cure that the ESOP is not a qualified plan
and employee stock ownership plan within the meanings of Section 401(a) and
4975(e)(7), respectively, of the Code;

then, in the case of any Event of Default (other than one of the character
described in subdivisions (e), (f) or (g) of this section 12.1 with respect to
the Company or any Material Subsidiary) and at the option of the Required
Holders of the Notes at the time outstanding

                                      -68-
<PAGE>

(excluding any Notes at the time owned by any of the Company or any of its
Affiliates), exercised by written notice to the Company, the principal of all
Notes shall forthwith become due and payable, together with interest accrued
thereon, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived, and the Company shall forthwith upon any
such acceleration pay to the holder or holders of all the Notes then outstanding
(i) the entire principal of and interest accrued on the Notes, and (ii) in
addition, to the extent permitted by applicable law, an amount equal to the
premium that would be payable upon a prepayment of the Notes pursuant to section
8.1 at such time, as liquidated damages and not as a penalty; provided that, in
the case of an Event of Default of the character described in subdivisions (a)
or (b) of this section 12.1 and irrespective of whether all of the Notes have
been declared due and payable by the Required Holders of the Notes at the time
outstanding, any holder of Notes who or which has not consented to any waiver
with respect to such Event of Default may, at the option of such holder, by
written notice to the Company, declare all Notes then held by such holder to be,
and such Notes shall thereupon become, forthwith due and payable, together with
interest accrued thereon, without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived, and the Company shall
forthwith upon any such acceleration pay to such holder (i) the entire principal
of and interest accrued on such Notes, and (ii) in addition, to the extent
permitted by applicable law, an amount equal to the premium that would be
payable upon a prepayment of the Notes pursuant to section 8.1 at such time, as
liquidated damages and not as a penalty; provided, further, that, in the case of
an Event of Default of the character described in subdivisions (e), (f) or (g)
of this section 12.1 with respect to the Company or any Material Subsidiary, the
principal of all Notes shall forthwith become due and payable, together with
interest accrued thereon (including any interest accruing after the commencement
of any action or proceeding under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable domestic or foreign federal or
state bankruptcy, insolvency or other similar law, and any other interest that
would have accrued but for the commencement of such proceeding, whether or not
any such interest is allowed as an enforceable claim in such proceeding),
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, and the Company shall forthwith upon any such
acceleration pay to the holder or holders of all the Notes then outstanding (i)
the entire principal of and interest accrued on the Notes, and (ii) in addition,
to the extent permitted by applicable law, an amount equal to the premium that
would be payable upon a prepayment of the Notes pursuant to section 8.1 at such
time, as liquidated damages and not as a penalty.

                Notwithstanding the foregoing provisions, at any time after the
occurrence of any Event of Default and of notice thereof, if any, by any holder
or holders of Notes and before any judgment, decree or order for payment of the
money due has been obtained by or on behalf of any holder or holders of the
Notes, the Required Holders of the Notes by written notice to the Company, may
rescind and annul such Event of Default and/or notice of such Event of Default
and the consequences thereof with respect to all of the Notes (including any
Notes which were accelerated pursuant to the first proviso in the preceding
paragraph by any holder or holders on account of an Event of Default of the
character described in subdivision (a) or (b) of this section 12.1) if:

                (1) the Company has paid a sum sufficient to pay

                                      -69-
<PAGE>

                        (A) all overdue installments of interest on all Notes at
                the rate specified in the Notes;

                        (B) the principal of (and premium, if any, on) any Notes
                which have become due otherwise than by such Event of Default or
                notice thereof and interest thereon at the rate for overdue
                amounts specified in such Notes; and

                        (C) to the extent that payment of such interest is
                lawful, interest upon overdue interest at the rate for overdue
                amounts specified in such Notes; and

                (2) all Defaults and Events of Default, other than the
                non-payment of the principal of Notes which have become due
                solely by such acceleration, have been cured or waived as
                provided in section 12. No such rescission shall affect any
                subsequent default or impair any right consequent thereon.

        12.2 SUITS FOR ENFORCEMENT, ETC. In case any one or more of the Events
of Default specified in section 12.1 shall have occurred, and irrespective of
whether any Notes have become or have been declared immediately due and payable
under section 12.1, the holder of any Note may proceed to protect and enforce
its rights either by suit in equity or by action at law, or both. The Company
stipulates that the remedies at law of the holder or holders of the Securities
in the event of any default or threatened default by the Company in the
performance of or compliance with any covenant or agreement in this Agreement or
any of the other Operative Documents are not and will not be adequate and that,
to the fullest extent permitted by law, such terms may be specifically enforced
by a decree for the specific performance thereof, whether by an injunction
against a violation thereof or otherwise.

        12.3 NO ELECTION OF REMEDIES. No remedy conferred in this Agreement or
in any of the other Operative Documents upon the holder of any Security is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or thereunder or now or hereafter existing at law or in equity or by
statute or otherwise.

        12.4 REMEDIES NOT WAIVED. No course of dealing between the Company
and/or any of its Subsidiaries, on the one hand, and any holder of any Security,
on the other hand, and no delay by any such holder in exercising any rights
hereunder or under any of the other Operative Documents shall operate as a
waiver of any rights of any such holder.

        12.5 APPLICATION OF PAYMENTS. In case any one or more of the Events of
Default specified in section 12.1 shall have occurred, all amounts to be applied
to the prepayment or payment of any Notes, shall be applied, after the payment
of all related costs and expenses incurred by the holders of the Notes
(including, without limitation, compensation to any and all trustees,
liquidators, receivers or similar officials and reasonable fees, expenses and
disbursements of counsel) first to premium, if any, then to interest and then to
the principal amount.

13.     REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES. Securities issued
hereunder shall be issued in registered form. The Company shall keep at its
principal executive office (which is

                                      -70-
<PAGE>

now located at the address set forth at the beginning of this Agreement),
registers in which it shall provide for the registration and transfer of the
Securities. The name and address of each holder of the Securities shall be
registered in such registers. The Company shall give to any institutional holder
of any Security promptly (but in any event within 10 days) following request
therefor, a complete and correct copy of the names and addresses of all
registered holders of the Securities issued by it and the amount and kind of
Securities held by each. Whenever any Security or Securities shall be
surrendered for transfer or exchange, the Company(ies) that issued such
Security, at its expense, will execute and deliver in exchange therefor a new
Security or Securities (in such denominations and registered in such name or
names as may be requested by the holder of the surrendered Security or
Securities), in the same aggregate unpaid principal amount (in the case of the
Notes) or exercisable for the same aggregate number of Shares (in the case of
any Warrants) or in the same aggregate number of Shares (in the case of any
Warrant Share), as applicable, as that of the Security or Securities so
surrendered. Each such new Note shall be dated and bear interest from the date
to which interest shall have been paid on the surrendered Note or dated the date
of the surrendered Note if no interest shall have been paid thereon. The Company
may treat the Person in whose name any Security is registered as the owner of
such Security for all purposes.

14.     REPLACEMENT OF SECURITIES. Upon receipt of satisfactory evidence of the
loss, theft, destruction or mutilation of any Security and (in the case of loss,
theft or destruction) of satisfactory indemnity, and (in the case of mutilation)
upon surrender of such Security, the Company(ies) that issued such Security at
its (or their) expense, will execute and deliver in lieu of such Security a new
Security of like tenor and, in the case of any new Note, dated so as not to
result in any loss of interest. Your unsecured agreement to indemnify and/or
affidavit and that of any other institutional holder shall constitute
satisfactory indemnity and/or satisfactory evidence of loss, theft or
destruction for the purpose of this section 14.

15.     APPOINTMENT OF DIRECTORS. As provided in the Rights Agreement and
subject to the terms thereof, (a) the Required Holders of the Notes shall have
the right to nominate one member of the board of directors of the Company,
provided that such nominee satisfies the eligibility criteria for board members
of the Company (as in effect on the Closing Date) and provided further that the
Company's board of directors shall consist of no more than twelve members, (b)
the ESOT trustee shall vote the ESOP's shares in favor of such nominee, subject
to the trustee's fiduciary obligations, and (c) the right granted under the
Rights Agreement with respect to the nomination of one member of the board of
directors shall exist until the earlier of (i) repayment in full of the Notes or
(ii) a Qualified IPO.

16.     AMENDMENT AND WAIVER.

                (a) Any term of this Agreement and, unless explicitly provided
otherwise therein, of any of the other Operative Documents may, with the consent
of the Company, be amended, or compliance therewith may be waived, in writing
only, by the Required Holders of each class of Securities entitled to the
benefits of such term, provided that (i) without the consent of the holders of
all of the Notes at the time outstanding, no such amendment or waiver shall (A)
change the amount of the principal of or any rate of interest on or the amount
of any premium payable with respect to any of the Notes or change the payment
terms of any of the

                                      -71-
<PAGE>

Notes, or, except as provided in the Notes (and the Note Guarantees),
subordinate the obligation of the Company (or any Subsidiary Guarantor) to pay
any amount due on the Notes (or on the Note Guarantees) to any other obligation,
or (B) change the percentage of holders of Notes required to approve any such
amendment, effectuate any such waiver or accelerate payment of the Notes.
Executed or true and correct copies of any amendment, waiver or consent effected
pursuant to this section 16 shall be delivered by the Company to each holder of
Securities forthwith (but in any event not later than five days) following the
effective date thereof.

                (b) The Company will not, directly or indirectly, request or
negotiate for, or offer or pay any remuneration or grant any security as an
inducement for, any proposed amendment or waiver of any of the provisions of
this Agreement or any of the other Operative Documents unless each holder of the
Securities (irrespective of the kind and amount of Securities then owned by it)
shall be informed thereof by the Company and, if such holder is entitled to the
benefit of any such provision proposed to be amended or waived, shall be
afforded the opportunity of considering the same, shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto and, if such offer is accepted by such holder, shall be
offered and paid such remuneration and granted such security on the same terms.

                (c) In determining whether the requisite holders of Securities
have given any authorization, consent or waiver under this section 16, any
Securities owned by the Company or any of their respective Affiliates shall be
disregarded and deemed not to be outstanding.

17.     METHOD OF PAYMENT OF SECURITIES. Irrespective of any provision hereof or
of the other Operative Documents to the contrary, so long as you or any other
institutional holder shall hold any Security, all payments due on such Security
shall be made to you or such other institutional holder by the method and at the
address for such purpose specified in Schedule I attached hereto or by such
other method or at such other address as you or such institutional holder may
designate in writing (given as provided in section 20), without requiring any
presentation or surrender of such Security, except that if any Security shall be
paid, prepaid and/or repurchased in full, such Security shall be surrendered to
the Company(ies) that issued such Security promptly following such payment,
prepayment or repurchase and canceled.

18.     EXPENSES; INDEMNITY. The Company will (without duplication as to any
holder), jointly and severally, pay or cause to be paid (or reimbursed, as the
case may be) and will defend, indemnify and hold you (and each other holder of
any of the Securities) and each of your (and such other holder's) directors,
officers, employees, agents, advisors and Affiliates (each, an "Indemnitee")
harmless in respect of all reasonable costs, losses, expenses (including,
without limitation, the reasonable fees, costs, expenses and disbursements of
counsel) and damages (collectively, "Indemnified Costs") incurred by or asserted
against any Indemnitee in connection with the negotiation, execution, delivery,
performance and/or enforcement of this Agreement or any of the other Operative
Documents (including, without limitation, so-called work-outs and/or
restructurings and all amendments, waivers and consents hereunder and
thereunder, whether or not effected) and/or the consummation of the transactions
contemplated hereby and thereby or which may otherwise be related in any way to
this Agreement or any other Operative Documents or such transactions or such
Indemnitee's relationship to the Company or any of their respective

                                      -72-
<PAGE>

Affiliates or any of their respective properties and assets arose solely and
directly as a result of the gross negligence, willful misconduct or bad faith of
such Indemnitee.

19.     TAXES. The Company will pay all taxes and fees (including interest and
penalties), including, without limitation, all issuance and documentary stamp
and similar taxes, which may be payable in respect of the execution and delivery
of this Agreement and each of the other Operative Documents.

20.     COMMUNICATIONS. Unless otherwise provided herein, any notice required or
permitted under this Agreement shall be given in writing and shall be delivered
(a) by hand, (b) by mail, certified mail, return receipt requested, or (c) by
facsimile to the party to be notified, at the address indicated for such party
on the signature page hereof, or at such other address as such party may
designate by prior written notice to the other party. Unless otherwise provided
herein, notices shall be deemed to have been given and served (a) where
delivered by hand, at time of delivery, (b) where delivered by mail, on
acknowledgement of receipt as shown by the date indicated on the return receipt
as having been received, and (c) where delivered by facsimile, 24 hours after
transmission confirmation by the transmitting machine unless within those 24
hours the intended recipient has informed the sender that the transmission was
received in an incomplete or unreadable form, or the transmission report of the
sender indicates a faulty or incomplete transmission. If such receipt is on a
day that is not a working day or is later than 5 p.m. (local time) on a working
day, the notice shall be deemed to have been given and served on the next
working day. Any such communication must be sent (i) if to the Company (or any
Subsidiary of the Company), to the Company (or such Subsidiary) at:

                      Alion Science and Technology Corporation
                      1750 Tysons Boulevard
                      Suite 1300
                      McLean, VA 22102
                      Attention: Stephen Trichka, Esq.
                      Telecopy No.: (703) 714-6508

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

                      Baker & McKenzie
                      815 Connecticut Avenue, N.W.
                      Washington, D.C.  20006
                      Attention: Marc R.  Paul
                      Telecopy No.: (202) 452-7074

or at such other address (or telecopy number) as may be furnished in writing by
the Company to each holder of any Security and (ii) if to you, at your address
for such purpose set forth in Schedule I attached hereto, with a copy (which
shall not constitute notice) to:

                      McDermott, Will & Emery
                      227 West Monroe
                      Suite 4700
                      Chicago, IL 60606

                                      -73-
<PAGE>

                      Attention: Michael L.  Boykins, Esq.
                      Telecopy No.: (312) 984-7700

and if to any other holder of any Security, at the address of such holder as it
appears on the applicable register maintained pursuant to section 13, or at such
other address as may be furnished in writing by you or by any other holder to
the Company. Communications under this section 20 shall be deemed given only
when actually received.

21.     SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES, ETC. All
agreements, representations and warranties of the Company contained herein and
in the other Operative Documents shall be deemed to have been relied upon by you
and shall survive the execution and delivery of this Agreement and each of the
other Operative Documents, the issue, sale and delivery of the Securities and
payment therefor and any disposition of the Securities by you, whether or not
any investigation at any time is made by you or on your behalf. All
indemnification provisions, shall survive the date upon which none of the
Securities shall be outstanding and the termination of this Agreement and each
of the other Operative Documents.

22.     SUCCESSORS AND ASSIGNS; RIGHTS OF OTHER HOLDERS. This Agreement and,
unless explicitly provided otherwise therein, each of the other Operative
Documents shall bind and inure to the benefit of and be enforceable by the
Company and you, successors to the Company and your successors and permitted
assigns, and, in addition, shall inure to the benefit of and be enforceable by
each holder from time to time of any Securities who, upon acceptance thereof,
shall, without further action, be entitled to enforce the applicable provisions
and enjoy the applicable benefits hereof and thereof. The Company may not assign
any of their rights or obligations hereunder or under any of the other Operative
Documents without the written consent of the Required Holders of each class of
Securities then outstanding.

23.     PURCHASE FOR INVESTMENT; ERISA.

                (a) You represent and warrant (i) that you have been furnished
with all information that you have requested for the purpose of evaluating your
proposed acquisition of the Notes to be issued to you pursuant hereto, (ii) that
you will acquire such Notes for your own account for investment and not for
distribution in any manner that would violate applicable securities laws, but
without prejudice to your rights to dispose of such Notes or a portion thereof
to a transferee or transferees, in accordance with such laws and the Rights
Agreement, if applicable, if at some future time you deem it advisable to do so
and (iii) that you are an "accredited investor", as defined in Regulation D of
the Commission under the Securities Act. The acquisition of such Notes by you at
the Closing shall constitute your confirmation of the foregoing representations
and warranties. You understand that such Notes are being sold to you in a
transaction which is exempt from the registration requirements of the Securities
Act, and that, in making the representations and warranties contained in section
5.16, each of the Company is relying, to the extent applicable, upon your
representations and warranties contained herein.

                (b) You represent that at least one of the following statements
is an accurate representation as to each source of funds (a "Source") to be used
by you to pay the purchase price of the Notes to be purchased by you hereunder:

                                      -74-
<PAGE>

                        (i) the Source is an "insurance company general account"
                as defined in Section V(e) of Prohibited Transaction Exemption
                ("PTE") 95-60 (issued July 12, 1995) and, except as you have
                disclosed to the Company in writing pursuant to this section
                (i), the amount of reserves and liabilities for the general
                account contract(s) held by or on behalf of any employee benefit
                plan or group of plans maintained by the same employer or
                employee organization do not exceed 10% of the total reserves
                and liabilities of the general account (exclusive of separate
                account liabilities) plus surplus as set forth in the NAIC
                Annual Statement filed with the state of domicile of the
                insurer; or

                        (ii) the Source is a separate account of an insurance
                company maintained by you in which an employee benefit plan (or
                its related trust) has an interest, which separate account is
                maintained solely in connection with your fixed contractual
                obligations under which the amounts payable, or credited, to
                such plan and to any participant or beneficiary of such plan
                (including any annuitant) are not affected in any manner by the
                investment performance of the separate account; or

                        (iii) the Source is either (A) an insurance company
                pooled separate account, within the meaning of PTE 90-1 (issued
                January 29, 1990), or (B) a bank collective investment fund,
                within the meaning of the PTE 91-38 (issued July 12, 1991) and,
                except as you have disclosed to the Company in writing pursuant
                to this section (iii), no employee benefit plan or group of
                plans maintained by the same employer or employee organization
                beneficially owns more than 10% of all assets allocated to such
                pooled separate account or collective investment fund; or

                        (iv) the Source constitutes assets of an "investment
                fund" (within the meaning of Part V of the QPAM Exemption)
                managed by a "qualified professional asset manager" or "QPAM"
                (within the meaning of Part V of the QPAM Exemption), no
                employee benefit plan's assets that are included in such
                investment fund, when combined with the assets of all other
                employee benefit plans established or maintained by the same
                employer or by an affiliate (within the meaning of Section
                V(c)(1) of the QPAM Exemption) of such employer or by the same
                employee organization and managed by such QPAM, exceed 20% of
                the total client assets managed by such QPAM, the conditions of
                Part I(c) and (g) of the QPAM Exemption are satisfied, neither
                the QPAM nor a person controlling or controlled by the QPAM
                (applying the definition of "control" in Section V(e) of the
                QPAM Exemption) owns a 5% or more interest in the Company and
                (A) the identity of such QPAM and (B) the names of all employee
                benefit plans whose assets are included in such investment fund
                have been disclosed to the Company in writing pursuant to this
                section (iv); or

                        (v) the Source is a governmental plan; or

                        (vi) the Source is one or more employee benefit plans,
                or a separate account or trust fund comprised of one or more
                employee benefit plans, each of

                                      -75-
<PAGE>

                which has been identified to the Company in writing pursuant to
                this section (vi); or

                        (vii) the Source does not include assets of any employee
                benefit plan, other than a plan exempt from the coverage of
                ERISA. As used in this section 23(b), the terms "employee
                benefit plan", "governmental plan", "party in interest" and
                "separate account" shall have the respective meanings assigned
                to such terms in Section 3 of ERISA, and the term "QPAM
                Exemption" means PTE 84-14 (issued March 13, 1984).

24.     ASSIGNMENT; RIGHT OF FIRST OFFER.

        24.1 RIGHT OF FIRST OFFER. Subject to the provisions of this section 24,
the Notes may not be assigned to any Person that (so long as no Event of Default
described in any of Sections 11.1(a), (b), (e), (f), or (g) has occurred) is
either (a) a Competitor (provided that this limitation shall be waived with
respect to a proposed transferee if the Company determines in its reasonable
discretion that such proposed transferee does not then compete with the Company
or any entity controlled by the Company) or (b) is not a U.S. Qualified Person
at the time of assignment. In other cases, the Company shall have a right of
first offer on such assignment as follows:

                (a) First Offer.

                        (i) If the holder proposes to sell or otherwise transfer
                the Notes or any portion thereof it holds at such time
                (collectively, the "Transfer Interests") to any third party
                other than an Affiliate of such holder (other than a sale or
                transfer in connection with a Demand Registration or Piggy-Back
                Registration under the Rights Agreement), the holder is required
                to first notify the Company, by delivering to the Company a
                written notice ("Sale Notice") in accordance with section 20,
                stating the holder's bona fide intention to sell or otherwise
                transfer the Transfer Interests. The Company shall have the
                exclusive right, for a period of thirty (30) days from its
                receipt of the Sale Notice, to make an offer to purchase the
                Transfer Interests at a price to be proposed by the Company.

                        (ii) Subject to Section 24.1(c) below, if either (x) the
                Company does not deliver to the holder written notice of an
                offer to purchase the Transfer Interests ("Purchase Notice")
                within thirty (30) days after the Company's receipt of the Sale
                Notice, or (y) the holder has rejected the Company's offer, the
                holder shall be entitled to sell the Transfer Interests at a
                price which is no less than ninety percent (90%) of the last
                price offered by the Company for the Transfer Interests (the
                "Last Offer Price"), to any third party that is not an Affiliate
                of the holder at any time during the period of nine (9) months
                following the date of delivery of the Sale Notice by the holder
                to the Company, without the obligation to provide any further
                offers or notices to the Company.

                (b) Second Offer.

                                      -76-
<PAGE>

                        (i) If the holder proposes to sell or otherwise transfer
                the Transfer Interests to a third party that is not an Affiliate
                of the holder at a price that is less than ninety percent (90%)
                of the Last Offer Price (the "Proposed Sale Price"), the holder
                shall, prior to consummating such sale or transfer of the
                Transfer Interests to the third party, make an offer to the
                Company in writing and in accordance with Section 20 (the
                "Second Sale Notice"), to sell the Transfer Interests to the
                Company at the Proposed Sale Price.

                        (ii) Subject to Section 24.1(c) below, if the Company
                does not deliver to the holder written notice of acceptance of
                any offer made pursuant to Section 24.1(b)(i) within thirty (30)
                days after the Company's receipt of the Second Sale Notice, the
                Company shall be deemed to have waived its rights to purchase
                the Transfer Interests, and the holder shall be entitled to sell
                or otherwise transfer the Transfer Interests at the Proposed
                Sale Price to such unrelated third party within nine (9) months
                following the date of delivery of the Sale Notice, without the
                obligation to provide any further offers or notices to the
                Company.

                (c) If the holder proposes to sell or otherwise transfer the
Transfer Interests to a third party that is not an Affiliate of the holder at
any time after the expiry of the nine-month period referenced in Section
24.1(a)(ii) or Section 24.1(b)(ii), as the case may be, then the holder shall
again be required to comply with all the obligations and requirements contained
in Sections 24.1(a) and 24.1(b).

                (d) Payment of the Purchase Price shall be made in cash in
immediately available funds within sixty (60) days after the date (if any) that
a purchase price is agreed for the Company's purchase of the Transfer Interests.

        24.2 MINIMUM AMOUNT. The Notes may be assigned in minimum amounts of
$2,500,000 and in increments of $500,000 in excess thereof, provided that the
Holder may assign the Notes in a smaller minimum amount in connection with the
transfer of all of the remaining Notes of such Holder.

        24.3 COMPANY PRO RATA OFFER TO PURCHASE.

                (a) Notwithstanding any provision in this section 24 to the
contrary, if the Company proposes to purchase any portion of the Notes of any
Holder (the "Selling Holder") pursuant to section 24.1(a) or (b), the Company
shall provide to each holder of Notes, at least 20 days prior to the closing of
such sale, written notice, in accordance with section 20 herein, of its
intention to purchase Notes from the Selling Holder, the aggregate principal
amount of Notes proposed to be purchased from the Selling Holder, the price and
other material terms under which the sale is proposed to be made and that the
holder is entitled to sell a certain principal amount of the Notes then held by
the holder to the Company on the terms and conditions contained therein (the
"First Offer Notice").

                (b) Upon receipt of the First Offer Notice, the holder shall
have the right, exercisable upon written notice in accordance with section 20
herein to the Company (which shall provide such notice to the Selling Holder),
sent within twenty (20) days after the holder's

                                      -77-
<PAGE>

receipt of the First Offer Notice (the "Participation Notice"), to sell to the
Company an aggregate principal amount of Notes then held by the holder in an
amount no greater than:

                      A X B
                          --
                          C

where: A = the aggregate principal amount of Notes to be sold by the Selling
           Holder to the Company (the "First Offer Notes");

where: B = the aggregate principal amount of Notes then held by the holder;

where: C = the total aggregate principal of Notes then outstanding.

Any Notes sold to the Company by the holder pursuant to this section 24.3 shall
be sold at the same price and on the same terms and conditions as specified in
the First Offer Notice or any modification thereof, but in no event less
favorable than the terms and conditions of Notes sold by the Selling Holder. The
Participation Notice shall be deemed given and served on the date the Company
receives the Participation Notice. Any prepayment of Notes in accordance with
this section 24.3 shall not be subject to any Applicable Premium pursuant to
Section 8.1; provided that nothing contained herein shall be deemed to otherwise
permit the Company to initiate any discussion with respect to, or solicit, any
purchase of the Notes of any holder except in compliance with the terms of
section 8 (including, without limitation, payment of any Applicable Premium).

                (c) The Selling Holder and the Company agree that the aggregate
principal amount of First Offer Notes that the Selling Holder may sell to the
Company in the transaction will be reduced by the aggregate principal amount of
Notes necessary to permit the sale of Notes by the other holders pursuant to any
Participation Notice delivered in accordance with the provisions of section
24.3(b). The Company agrees it will not purchase and the Selling Holder agrees
that it shall not be entitled to sell to the Company any of the First Offer
Notes unless the Notes of each holder set forth in the Participation Notice are
simultaneously purchased by the Company.

                (d) If the transaction that is the subject of the First Offer
Notice delivered by the Company to the holder in accordance with section 24.3(a)
herein is terminated then the first Offer Notice and corresponding Participation
Noted shall be deemed voided.

The provisions of this section 24.3 are applicable to successive purchases of
Notes by the Company under section 24.3(a) and (b) until the Notes are paid in
full and no failure on the part of any holder to exercise any right under this
section 24.3 shall affect or impair any right of any holder of Notes under this
Agreement or any of the other Operative Documents whether upon the occurrence of
any other or any subsequent purchase by the Company or otherwise.

25.     GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. This Agreement and,
unless explicitly provided otherwise therein, each of the other Operative
Documents, including the validity hereof and thereof and the rights and
obligations of the parties hereunder and thereunder,

                                      -78-
<PAGE>

and all amendments and supplements hereof and thereof and all waivers and
consents hereunder and thereunder, shall be construed in accordance with and
governed by the domestic substantive laws of the State of Illinois without
giving effect to any choice of law or conflicts of law provision or rule that
would cause the application of the domestic substantive laws of any other
jurisdiction. The Company, to the extent that it may lawfully do so, hereby
consents to service of process, and to be sued, in the State of Illinois and
consents to the jurisdiction of the courts of the State of Illinois and the
United States District Court for the Northern District of Illinois, as well as
to the jurisdiction of all courts to which an appeal may be taken from such
courts, for the purpose of any suit, action or other proceeding arising out of
any of its obligations hereunder or thereunder or with respect to the
transactions contemplated hereby or thereby, and expressly waives any and all
objections it may have as to venue in any such courts. The Company further
agrees that a summons and complaint commencing an action or proceeding in any of
such courts shall be properly served and shall confer personal jurisdiction if
served personally or by certified mail to it at its address set forth in section
20 or as otherwise provided under the laws of the State of Illinois.
Notwithstanding the foregoing, each of the Company agrees that nothing contained
in this section 25 shall preclude the institution of any such suit, action or
other proceeding in any jurisdiction other than the State of Illinois. THE
COMPANY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR
OTHER PROCEEDING INSTITUTED BY OR AGAINST IT IN RESPECT OF ITS OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

26.     RULE 144A. The Company will take, or will cause to be taken, such action
as any holder of Securities may reasonably request from time to time to
facilitate any sale or disposition by any such holder of any Securities without
registration under the Securities Act and/or any applicable securities laws
within the limitation of the exemptions provided by any rule or regulation
thereunder, including, without limitation, Rule 144A under the Securities Act.

27.     MISCELLANEOUS. The headings in this Agreement and in each of the other
Operative Documents are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof or thereof. This Agreement (together with
the other Operative Documents) embodies the entire agreement and understanding
between you and each of the Company and supersedes all prior agreements and
understandings relating to the subject matter hereof. Each covenant contained
herein and in each of the other Operative Documents shall be construed (absent
an express provision to the contrary) as being independent of each other
covenant contained herein and therein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. If any provision in this Agreement or in any
of the other Operative Documents refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable, whether such action is taken directly or indirectly by such
Person, whether or not expressly specified in such provision. In case any
provision in this Agreement or any of the other Operative Documents shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
This Agreement and, unless explicitly provided otherwise therein, each of the
other Operative Documents, may be executed in any number of counterparts and by
the parties hereto or thereto, as the case may be, on separate counterparts but
all such counterparts shall together constitute but one and the same instrument.

                                      -79-
<PAGE>

28.     CONFIDENTIAL INFORMATION.

                For the purposes of this Section 28, "Confidential Information"
means such information delivered to each holder by or on behalf of the Company
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
such holder as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (i) becomes publicly
available other than as a result of a breach of this Agreement, (ii) becomes
available to any holder on a non-confidential basis from a source other than the
Company or its Subsidiaries or (iii) was available to any holder on a
non-confidential basis prior to its disclosure to such holder.

                Each holder will use reasonable efforts to maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such holder in good faith to protect confidential information of
third parties delivered to such holder; provided that such holder may deliver or
disclose Confidential Information to (i) each holder's directors, trustees,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such holder's Notes), (ii) each holder's financial advisors and
other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 28, (iii)
any other holder, (iv) any Person to which any holder sells or offers to sell
its Notes or any part thereof or any participation therein (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 28), (v) any Person from whom any holder
offers to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 28), (vi) any federal or state regulatory authority
having jurisdiction over any holder, (vii) the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about such holder's investment
portfolio, (viii) each holder's investors or fund participants in the ordinary
course, (ix) any other Person to which such delivery or disclosure may be
necessary or appropriate (w) to effect compliance with any law, rule, regulation
or order applicable to such holder, (x) in response to any subpoena or other
legal process, (y) in connection with any litigation to which such holder is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such holder may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under its Notes and the other Operative Documents. Each holder, by
its acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 28 as though it were a party to this
Agreement.

           [The remainder of this page is intentionally left blank.]

                                      -80-
<PAGE>

                If you are in agreement with the foregoing, please sign the form
of agreement on the accompanying counterparts of this letter, whereupon this
letter shall become a binding agreement under seal among you and the Company.
Please then return one of such counterparts to the Company.

                                          Very truly yours,

                                          ALION SCIENCE AND TECHNOLOGY
                                          CORPORATION

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

The foregoing Agreement is hereby agreed to as of the date thereof.

IIT RESEARCH INSTITUTE

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

                                      -81-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}]]