Document:

<PAGE>
                                                                  EXHIBIT 4.3(a)

                                AMENDMENT TO THE
                          SECOND AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                         SALTON/MAXIM HOUSEWARES, INC.
                        (PURSUANT TO SECTION 242 OF THE
                      GENERAL CORPORATION LAW OF DELAWARE)

     It is hereby certified that:

     1.   The name of the corporation (hereinafter called the "corporation") is:

                         SALTON/MAXIM HOUSEWARES, INC.

     2.   This Amendment to the Second Amended and Restated Certificate of
Incorporation hereby amends Article FIRST of the Second Amended and Restated
Certificate of Incorporation of the corporation as set forth herein.

     3.   Article First is hereby deleted in its entirety and the following
shall be inserted herein:

               FIRST: THE NAME OF THE CORPORATION IS SALTON, INC.

     4.   This Amendment to the Second Amended and Restated Certificate of
Incorporation has been duly adopted by the required vote of stockholders in
accordance with Section 242 of the General Corporation Law of Delaware.

     Signed and attested to on January 13, 1999.

                                             By: /s/ William B. Rue
                                                 ----------------------------
                                                 William B. Rue
                                             Title: President

Attest:

/s/ Neal Aizenstein
----------------------------
Neal Aizenstein<PAGE>

                                                                  EXHIBIT 4.3(b)

                                AMENDMENT TO THE
                          SECOND AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                                  SALTON, INC.
                        (PURSUANT TO SECTION 242 OF THE
                      GENERAL CORPORATION LAW OF DELAWARE)

     It is hereby certified that:

     1.   The name of the corporation (hereinafter called the "corporation") is:

                                  SALTON, INC.

     2.   This Amendment to the Second Amended and Restated Certificate of
          Incorporation hereby amends the first paragraph of Article Fourth of
          the Second Amended and Restated Certificate of Incorporation of the
          corporation as set forth herein.

     3.   The first paragraph of Article Fourth is hereby deleted in its
          entirety and the following first paragraph of Article Fourth shall be
          inserted herein:

          FOURTH: the total number of shares of capital stock which the
          corporation shall have authority to issue in the aggregate is
          Forty-Two Million (42,000,000), of which Forty Million (40,000,000)
          shares shall be common stock with a par value of $0.01 per share, and
          Two Million (2,000,000) shares shall be preferred stock with a par
          value of $0.01 per share.

     4.   This Amendment to the Second Amended and Restated Certificate of
          Incorporation has been duly adopted by the required vote of
          stockholders in accordance with Section 242 of the General Corporation
          Law of Delaware.

     Signed and attested to on January 13, 2000.

                                             By:  /s/ WILLIAM B. RUE
                                                -----------------------
                                                     WILLIAM B. RUE

                                             Title:  Chief Operating Officer
                                                   ---------------------------

Attest:

 /s/  MARC LEVENSTEIN
-----------------------
    Marc Levenstein
    Asst. Secretary<PAGE>

                                                                    Item No. 4.5
                                                                       Exhibit A

                                                                  Execution Copy

                                 AMENDMENT NO. 1
                             TO CREDIT AGREEMENT AND
                    AMENDMENT NO. 1 TO POST CLOSING AGREEMENT

         This AMENDMENT NO. 1 TO CREDIT AGREEMENT AND AMENDMENT NO. 1 TO POST
CLOSING AGREEMENT (this "Amendment"), dated as of January 26, 2001 (the
"Effective Date") is made among GENCORP INC., an Ohio corporation ("Borrower"),
BANKERS TRUST COMPANY, for itself, as a Lender and as Administrative Agent for
the Lenders ("Administrative Agent"), and the other Lenders signatory to the
hereinafter defined Credit Agreement.

                                    RECITALS

         A. The Administrative Agent, the Lenders and the Borrower are party to
that certain Credit Agreement dated as of December 28, 2000 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement").

         B. On and subject to the terms and conditions hereof, the
Administrative Agent, the Lenders and the Borrower wish to amend certain
provisions of the Credit Agreement.

         C. Pursuant to that certain Post Closing Agreement dated December 28,
2000 among the Borrower and the Administrative Agent (the "Post Closing
Agreement"), the Borrower has agreed to take or cause to be taken on its behalf
certain actions with respect to Collateral to be provided to the Administrative
Agent on behalf of the Secured Creditors.

         D. The Borrower has requested that the Lenders provide additional time
for the Borrower to take such actions under the Post Closing Agreement by
amending the Post Closing Agreement as set forth herein.

         E. On and subject to the terms and conditions hereof, the
Administrative Agent, the Lenders and the Borrower wish to amend certain
provisions of the Post Closing Agreement.

         F. This Amendment shall constitute a Loan Document and these Recitals
shall be construed as part of this Amendment; capitalized terms used herein
without definition are so used as defined in the Credit Agreement.

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

         1. Amendments to Credit Agreement. Subject to the conditions set forth
in Section 4 hereof, the Credit Agreement is hereby amended as follows:

                  (a) The definition of "Standby Letters of Credit" contained in
         Article I of the Credit Agreement is hereby deleted in its entirety and
         the following is substituted therefor:
<PAGE>
                           ""Standby Letters of Credit" means any of the
                  irrevocable standby letters of credit issued for the account
                  of the Borrower or any of its Subsidiaries pursuant to this
                  Agreement, in form acceptable to the Facing Bank, together
                  with any increases or decreases in the Stated Amount thereof
                  and any renewals, amendments and/or extensions thereof."

                  (b) Subsection (a)(i) of Section 2.10 of the Credit Agreement
         is hereby amended by inserting the words "or any of its Subsidiaries"
         immediately following the words "for the account of the Borrower".

                  (c) Subsection (b)(C) of Section 2.10 of the Credit Agreement
         is hereby amended by inserting the words "or any of its Subsidiaries"
         immediately following the words "the Borrower".

         2. Amendments to Post Closing Agreement. Subject to the conditions set
forth in Section 4 hereof, the Post Closing Agreement is amended as follows:

                  (a) Paragraph 2 of the Post Closing Agreement is amended by
         deleting the words "sixty (60)" where they appear in the first line of
         paragraph 2 and replacing such words with the words "ninety (90)".

                  (b) Paragraph 3 of the Post Closing Agreement is amended by
         deleting the words "sixty (60)" where they appear in the first line of
         paragraph 3 and replacing such words with the words "ninety (90)".

                  (c) Paragraph 4 of the Post Closing Agreement is amended by
         deleting the words "thirty (30)" where they appear in the first line of
         paragraph 4 and replacing such words with the words "sixty (60)".

                  (d) Subparagraphs (a), (b) and (c) of Paragraph 7 of the Post
         Closing Agreement are deleted in their entirety and the following are
         substituted therefor:

                           "(a) amend Annex B to the Subsidiary Pledge Agreement
                  to reflect the pledge by Penn International Inc. of its pro
                  rata share of 65% of the total stock of GDX Automotive BV;

                           (b) amend Annex B to the Borrower Pledge Agreement to
                  reflect the pledge by the Borrower of its pro rata share of
                  65% of the total stock of GDX Automotive BV;

                           (c) execute documentation, make filings and
                  otherwise take such actions and deliver such documents as the
                  Administrative Agent may require to (i) cause Penn
                  International Inc. to grant a lien and security interest to
                  the Collateral Agent for the benefit of the Lenders of its pro
                  rata share of 65% of the total stock of GDX Automotive BV and
                  to perfect such security interest and (ii) cause the Borrower
                  to grant a lien and security interest to the Collateral Agent
                  for the benefit of the Lenders of its pro rata share of 65% of
                  the total stock of GDX

                                       2
<PAGE>
                  Automotive BV and to perfect such security interest, all under
                  the laws of the Netherlands;"

                  (e) Subparagraphs (a) and (g) of Paragraph 12 of the Post
         Closing Agreement are deleted in their entirety and the following are
         substituted therefor in the appropriate alphabetical order:

                           "(a) (i) grant mortgages on its real estate located
                  in (A) Batesville, Arkansas, (B) Marion, Indiana, and (C)
                  Wabash, Indiana and (ii) use its best efforts to grant a
                  leasehold mortgage on its real estate located in Berger,
                  Missouri;"

                           "(g) execute documentation, make filings and
                  otherwise take such actions and deliver or cause to be
                  delivered such documents, including, without limitation,
                  landlord's consents and estoppel letters as the Administrative
                  Agent may require in order to create, perfect and preserve the
                  Collateral Agent's security interest and mortgage or leasehold
                  mortgage, as applicable, in the real estate-related Collateral
                  and to carry into effect the purposes of this paragraph 12."

         3. Representations and Warranties. As of the date hereof, the Borrower
hereby represents and warrants to the Administrative Agent and the Lenders as
follows:

                  (a) After giving effect to this Amendment (i) no Unmatured
         Event of Default or Event of Default shall have occurred or be
         continuing and (ii) the representations and warranties of the Borrower
         contained in the Loan Documents shall each be true and correct in all
         material respects at and as of the date hereof to the same extent as
         though made on and as of such date, except to the extent such
         representations and warranties expressly relate to an earlier date in
         which event such representation and warranties shall be true and
         correct as of such specified date.

                  (b) The execution, delivery and performance, as the case may
         be, by the Borrower of this Amendment and the other documents and
         transactions contemplated hereby are within the Borrower's corporate
         powers, have been duly authorized by all necessary corporate action
         (including, without limitation, all necessary shareholder approvals) of
         the Borrower, shall have received all necessary governmental approvals,
         and do not and will not contravene or conflict with any provision of
         law applicable to the Borrower, the certificate or articles of
         incorporation or bylaws of the Borrower, or any order, judgment or
         decree of any court or other agency of government or any contractual
         obligation binding upon the Borrower.

                  (c) Each of this Amendment, the Credit Agreement, the Post
         Closing Agreement and any other Loan Document is the legal, valid and
         binding obligation of the Borrower enforceable against the Borrower in
         accordance with its respective terms, except to the extent
         enforceability is limited by bankruptcy, insolvency or similar laws
         affecting the rights of creditors generally or by application of
         general principles of equity.

                                       3
<PAGE>
         4. Conditions. This Amendment shall become effective as of the
Effective Date, provided that as of the Effective Date (except as otherwise
noted), this Amendment, duly executed by the Borrower, the Subsidiary
Guarantors, the Administrative Agent and the Required Lenders, shall have been
received by the Administrative Agent.

         5. Affirmation of Subsidiary Guarantors. By its signature set forth
below, each Subsidiary Guarantor hereby confirms to the Administrative Agent and
the Lenders that, after giving effect to this Amendment and the transactions
contemplated hereby, the Subsidiary Guaranty of such Subsidiary Guarantor and
each other Loan Document to which such Subsidiary Guarantor is a party continues
in full force and effect and is the legal, valid and binding obligation of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.

         6. Successors and Assigns. This Amendment shall be binding on and shall
inure to the benefit of the Borrower, the Administrative Agent, the Lenders and
their respective successors and assigns; provided that the Borrower may not
assign its rights, obligations, duties or other interests hereunder without the
prior written consent of the Administrative Agent and the Lenders. The terms and
provisions of this Amendment are for the purpose of defining the relative rights
and obligations of the Borrower, the Administrative Agent and the Lenders with
respect to the transactions contemplated hereby and there shall be no third
party beneficiaries of any of the terms and provisions of this Amendment.

         7. Entire Agreement. This Amendment, the Credit Agreement (as amended
hereby), the Post Closing Agreement (as amended hereby) and the other Loan
Documents constitute the entire agreement of the parties with respect to the
subject matter hereof.

         8. Incorporation of Credit Agreement. The provisions contained in
Sections 12.9 and 12.10 of the Credit Agreement are incorporated herein by
reference to the same extent as if reproduced herein in their entirety with
respect to this Amendment.

         9. Amendment; Waiver. The parties hereto agree and acknowledge that
nothing contained in this Amendment in any manner or respect limits or
terminates any of the provisions of the Credit Agreement, the Post Closing
Agreement or any of the other Loan Documents other than as amended as expressly
set forth herein and further agree and acknowledge that the Credit Agreement (as
amended hereby), the Post Closing Agreement (as amended hereby) and each of the
other Loan Documents remain and continue in full force and effect and are hereby
ratified and confirmed. Except to the extent expressly set forth herein, the
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any rights, power or remedy of the Lenders or the Administrative Agent
under the Credit Agreement, the Post Closing Agreement or any other Loan
Document, nor constitute a waiver of any provision of the Credit Agreement, the
Post Closing Agreement or any other Loan Document. No delay on the part of any
Lender or the Administrative Agent in exercising any of their respective rights,
remedies, powers and privileges under the Credit Agreement, the Post Closing
Agreement or any of the Loan Documents or partial or single exercise thereof,
shall constitute a waiver thereof. On and

                                       4
<PAGE>
after the Effective Date each reference in the Credit Agreement or the Post
Closing Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import, and each reference to the Credit Agreement or to the Post
Closing Agreement in the Loan Documents and all other documents delivered in
connection with the Credit Agreement shall mean and be a reference to the Credit
Agreement or the Post Closing Agreement, as applicable, as amended hereby.

         10. Captions. Section captions used in this Amendment are for
convenience only, and shall not affect the construction of this Amendment.

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

         12. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Amendment by telecopy shall be
effective as delivery of a manually executed counterpart of this Amendment.

                            [signature pages follow]

                                       5
<PAGE>
         IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.

                                            GENCORP INC.

                                            By: /s/ TERRY L. HALL
                                                --------------------------------
                                            Name:  Terry L. Hall
                                            Title: Senior Vice President and
                                                    Chief Financial Officer

                       Signature Page to Amendment No. 1
                              to Credit Agreement
                 and Amendment No. 1 to Post Closing Agreement
<PAGE>
                                            AEROJET-GENERAL CORPORATION,
                                            as Subsidiary Guarantor

                                            By: /s/ TERRY L. HALL
                                                --------------------------------
                                            Name:  Terry L. Hall
                                            Title: Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                 and Amendment No. 1 to Post Closing Agreement
<PAGE>
                                            AEROJET ORDNANCE TENNESSEE, INC.,
                                            as Subsidiary

                                            By: /s/ TERRY L. HALL
                                                --------------------------------
                                            Name:  Terry L. Hall
                                            Title: Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                 and Amendment No. 1 to Post Closing Agreement
<PAGE>
                                            GENCORP PROPERTY INC., as Subsidiary
                                            Guarantor

                                            By: /s/ TERRY L. HALL
                                                --------------------------------
                                            Name:  Terry L. Hall
                                            Title: President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                 and Amendment No. 1 to Post Closing Agreement
<PAGE>
                                           PENN INTERNATIONAL INC, as Subsidiary
                                           Guarantor

                                           By: /s/ TERRY L. HALL
                                               ---------------------------------
                                           Name:  Terry L. Hall
                                           Title: President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                 and Amendment No. 1 to Post Closing Agreement
<PAGE>
                                            GDX LLC, as Subsidiary Guarantor

                                            By: /S/ TERRY L. HALL
                                                --------------------------------
                                            Name:  Terry L. Hall
                                            Title: President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            GDX AUTOMOTIVE INC.,
                                            as Subsidiary Guarantor

                                            By: /s/ Yasmin R. Seyal
                                                --------------------------------
                                                Name:  Yasmin R. Seyal
                                                Title: Treasurer

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                           BANKERS TRUST COMPANY
                                           as Lender and as Administrative Agent

                                           By: /s/ Marguerite Sutton
                                               --------------------------------
                                               Name:  Marguerite Sutton
                                               Title: Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                           BANKERS ONE, NA.
                                           as Lender

                                           By: /s/ Stephanie A. Mack
                                               ---------------------------------
                                               Name:  Stephanie A. Mack
                                               Title: Commercial Banking Officer

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            ABN AMRO Bank N.V.,
                                            as Lender

                                            By: /s/ R. Clay Jackson
                                                --------------------------------
                                                Name:  R. Clay Jackson
                                                Title: Senior Vice President

                                            By: /s/ Gina M. Brusatori
                                                --------------------------------
                                                Name:  Gina M. Brusatori
                                                Title: Senior Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            THE BANK OF NEW YORK
                                            as Lender

                                            By: /s/ Mehrasa Raygani
                                                -------------------------------
                                                Name:  Mehrasa Raygani
                                                Title: Assistant Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            THE BANK OF NOVA SCOTIA
                                            as Lender

                                            By: /s/ Mark Sparrow
                                                --------------------------------
                                                Name:  Mark Sparrow
                                                Title: Director

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            NATIONAL CITY BANK
                                            as Lender

                                            By: /s/ Tom Gurbach
                                                --------------------------------
                                                Name:  Tom Gurbach
                                                Title: Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            THE NORTHERN TRUST COMPANY,
                                            as Lender

                                            By: /S/ David J. Mitchell
                                                --------------------------------
                                                Name:  David J. Mitchell
                                                Title: Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            WELLS FARGO BANK, N.A.,
                                            as Lender

                                            By: /s/ Daniel G. Adams
                                                --------------------------------
                                                Name:  Daniel G. Adams
                                                Title: Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            CONTINENTAL ASSURANCE CORPORATION
                                            as Lender

                                            By: TCW Asset Management Company
                                                As Attorney-in-Fact

                                            By: /s/ Richard F. Kurth
                                                --------------------------------
                                                Name:  Richard F. Kurth
                                                Title: Vice President

                                            By: /s/ Mark L. Gold
                                                --------------------------------
                                                Name:  Mark L. Gold
                                                Title: Managing Director

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            KATONAH II, LTD
                                            as Lender

                                            By: Katonah Capital LLC, as Manager

                                            By: /s/ Joyce C. DeLucca
                                                --------------------------------
                                                Name:  Joyce C. De Lucca
                                                Title: Managing Principal

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            KZH CRESENT LLC
                                            as Lender

                                            By: /s/ Kimberly Rowe
                                                --------------------------------
                                                Name:  Kimberly Rowe
                                                Title: Authorized Agent

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            KZH CRESENT-2 LLC
                                            as Lender

                                            By: /s/ Kimberly Rowe
                                                --------------------------------
                                                Name:  Kimberly Rowe
                                                Title: Authorized Agent

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            KZH CRESENT-3 LLC
                                            as Lender

                                            By: /s/ Kimberly Rowe
                                                --------------------------------
                                                Name:  Kimberly Rowe
                                                Title: Authorized Agent

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            SEQUILS I, LTD.,
                                            as Lender

                                            By: TWC Advisers, Inc.
                                                 as its Collateral Manager

                                            By: /s/ Richard F. Kurth
                                                --------------------------------
                                                Name:  Richard F. Kurth
                                                Title: Vice President

                                            By: /s/ Mark L. Gold
                                                --------------------------------
                                                Name:  Mark L. Gold
                                                Title: Managing Director

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            SEQUILS IV, LTD.
                                            as Lender

                                            By: /s/ Richard F. Kurth
                                                --------------------------------
                                                Name:  Richard F. Kurth
                                                Title: Vice President

                                            By: /s/ Mark L. Gold
                                                --------------------------------
                                                Name:  Mark L. Gold
                                                Title: Managing Director

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                 TCW LEVERAGED INCOME TRUST IV, LP.,
                                 as Lender

                                 By:  TWC (LINC IV), L.L.C.
                                      as General Partner

                                      By:  TWC Asset Management Company,
                                      As managing member of the General Partner

                                 By: /s/ Richard F. Kurth
                                     -------------------------------------------
                                     Name:  Richard F. Kurth
                                     Title: Vice President

                                 By: /s/ Mark L. Gold
                                     -------------------------------------------
                                     Name:  Mark L. Gold
                                     Title: Managing Director

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            TORONTO DOMINION (NEW YORK), INC.,
                                            as Lender

                                            By: Stacey Malek
                                                --------------------------------
                                                Name:  Stacey Malek
                                                Title: Vice President

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                            UNITED OF OMAHA
                                            LIFE INSURANCE
                                            COMPANY, as Lender

                                            By: TCW Asset Management
                                                Company,
                                                its Investment Advisor

                                            By: /s/ Richard F. Kurth
                                                --------------------------------
                                                Name:  Richard F. Kurth
                                                Title: Vice President

                                            By: /s/ Mark L. Gold
                                                --------------------------------
                                                Name:  Mark L. Gold
                                                Title: Managing Director

                        Signature Page to Amendment No. 1
                               to Credit Agreement
                   and Amendment No. 1 Post Closing Agreement
<PAGE>
                                                                  Execution Copy

                                 AMENDMENT NO. 2
                      TO CREDIT AGREEMENT, AMENDMENT NO. 2
                   TO POST CLOSING AGREEMENT, AMENDMENT NO. 1
                   TO COLLATERAL AGREEMENTS AND LIMITED WAIVER

         This AMENDMENT NO. 2 TO CREDIT AGREEMENT, AMENDMENT NO. 2 TO POST
CLOSING AGREEMENT, AMENDMENT NO. 1 TO COLLATERAL AGREEMENTS AND LIMITED WAIVER
(this "Amendment No. 2"), dated as of August 31, 2001 (the "Effective Date") is
made among GENCORP INC., an Ohio corporation ("Borrower"), BANKERS TRUST
COMPANY, for itself, as a Lender and as Administrative Agent for the Lenders
("Administrative Agent"), and the other Lenders signatory to the hereinafter
defined Credit Agreement.

                                    RECITALS

         A.       The Administrative Agent, the Lenders and the Borrower are
party to that certain Credit Agreement dated as of December 28, 2000 (as amended
by that certain Amendment No. 1 to Credit Agreement and Amendment No. 1 to Post
Closing Agreement dated as of January 26, 2001 ("Amendment No. 1") and as
further amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement").

         B.       On and subject to the terms and conditions hereof, the
Administrative Agent, the Lenders and the Borrower wish to amend certain
provisions of the Credit Agreement.

         C.       Pursuant to that certain Post Closing Agreement dated December
28, 2000 among the Borrower and the Administrative Agent (as amended by
Amendment No. 1 and as further amended, restated, supplemented or otherwise
modified from time to time, the "Post Closing Agreement"), the Borrower has
agreed to take or cause to be taken on its behalf certain actions with respect
to Collateral to be provided to the Administrative Agent on behalf of the
Secured Creditors.

         D.       The Borrower has requested that the Lenders provide additional
time for the Borrower to take such actions under the Post Closing Agreement by
amending, and on a limited basis waiving, certain provisions of the Post Closing
Agreement as set forth herein.

         E.       On and subject to the terms and conditions hereof, the
Administrative Agent, the Lenders and the Borrower wish to amend and waive, on a
limited basis, certain provisions of the Post Closing Agreement.

         F.       The Administrative Agent and the Borrower are party to that
certain Borrower Security Agreement dated as of December 28, 2000 (as amended,
restated, supplemented or otherwise modified from time to time, the "Borrower
Security Agreement"), the Administrative Agent and the Borrower are party to
that certain Borrower Pledge Agreement dated as of December 28, 2000 (as
amended, restated, supplemented or otherwise modified from time to

                                       2
<PAGE>
time, the "Borrower Pledge Agreement"), the Administrative Agent and certain
Subsidiaries of the Borrower (the "Assignors") are party to that certain
Subsidiary Security Agreement dated as of December 28, 2000 (as amended,
restated, supplemented or otherwise modified from time to time, the "Subsidiary
Security Agreement") and the Administrative Agent and certain Subsidiaries of
the Borrower (the "Pledgors") are party to that certain Subsidiary Pledge
Agreement dated as of December 28, 2000 (as amended, restated, supplemented or
otherwise modified from time to time, the "Subsidiary Pledge Agreement").

         G.       On and subject to the terms and conditions hereof, to reflect
changes in the Uniform Commercial Code applicable thereto, the Administrative
Agent (with the consent of the Required Lenders) and the Borrower wish to amend
certain provisions of the Borrower Security Agreement and the Borrower Pledge
Agreement, the Administrative Agent (with the consent of the Required Lenders)
and the Assignors wish to amend certain provisions of the Subsidiary Security
Agreement and the Administrative Agent (with the consent of the Required
Lenders) and the Pledgors wish to amend certain provisions of the Subsidiary
Pledge Agreement.

         H.       This Amendment No. 2 shall constitute a Loan Document and
these Recitals shall be construed as part of this Amendment; capitalized terms
used herein without definition are so used as defined in the Credit Agreement.

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

         1.       Amendments to Credit Agreement. Subject to the conditions set
forth in Section 10 hereof, the Credit Agreement is hereby amended as follows:

                  (a)      Section 1.1 of the Credit Agreement is amended by
         deleting the definitions of "Scheduled Term A Repayments", "Scheduled
         Term B Repayments", "Subordination Agreement" and "Subsidiary
         Guarantor" in their entirety and by inserting the following definitions
         of "Scheduled Term A Repayments", "Scheduled Term B Repayments", and
         "Subsidiary Guarantor" in lieu thereof in the appropriate alphabetical
         order:

                           "Scheduled Term A Repayments" means, with respect to
                  the principal payments on the Term A Loans for each date set
                  forth below, the Dollar amount set forth opposite thereto, as
                  reduced from time to time pursuant to Sections 4.3 and 4.4:

<TABLE>
<CAPTION>
                           Term A Loan Scheduled
                           Repayment Date                    Repayment Amount
                           ---------------------             ----------------
<S>                                                          <C>
                           March 28, 2001                    $3,750,000.00
                           June 28, 2001                     $3,750,000.00
                           September 28, 2001                $2,373,903.51
                           December 28, 2001                 $2,373,903.51
</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>
                               Term A Loan Scheduled        Repayment
                               Repayment Date               Amount
                               ---------------------        ---------
<S>                                                         <C>
                               March 28, 2002               $4,747,807.02
                               June 28, 2002                $4,747,807.02
                               September 28, 2002           $4,747,807.02
                               December 28, 2002            $4,747,807.02
                               March  28, 2003              $4,747,807.02
                               June 28, 2003                $4,747,807.02
                               September 28, 2003           $4,747,807.02
                               December 28, 2003            $4,747,807.02
                               March 28, 2004               $4,747,807.02
                               June 28, 2004                $4,747,807.02
                               September 28, 2004           $4,747,807.02
                               December 28, 2004            $4,747,807.02
                               March 28, 2005               $7,121,710.52
                               June 28, 2005                $7,121,710.52
                               September 28, 2005           $7,121,710.52
                               December 28, 2005            $7,121,710.49
</TABLE>

                           "Scheduled Term B Repayments" means, with respect to
                  the principal payments on the Term B Loans for each date set
                  forth below, the Dollar amount set forth opposite thereto, as
                  reduced from time to time pursuant to Sections 4.3 and 4.4:

<TABLE>
<CAPTION>
                               Term B Loan Scheduled        Repayment
                               Repayment Date               Amount
                               ---------------------        ---------
<S>                                                         <C>
                               March 28, 2001               $500,000.00
                               June 28, 2001                $500,000.00
                               September 28, 2001           $664,886.93
                               December 28, 2001            $664,886.93
                               March 28, 2002               $664,886.93
                               June 28, 2002                $664,886.93
                               September 28, 2002           $664,886.93
                               December 28, 2002            $664,886.93
                               March 28, 2003               $664,886.93
                               June 28, 2003                $664,886.93
                               September 28, 2003           $664,886.93
                               December 28, 2003            $664,886.93
                               March 28, 2004               $664,886.93
                               June 28, 2004                $664,886.93
                               September 28, 2004           $664,886.93
</TABLE>

                                       3
<PAGE>
<TABLE>
<S>                                                         <C>
                               December 28, 2004            $    664,886.93
                               March 28, 2005               $    664,886.93
                               June 28, 2005                $    664,886.93
                               September 28, 2005           $    664,886.93
                               December 28, 2005            $    664,886.93
                               March 28, 2006               $    664,886.93
                               June 28, 2006                $    664,886.93
                               September 28, 2006           $    664,886.93
                               December 28, 2006            $250,662,000.03
</TABLE>

                           ""Subsidiary Guarantor" means each Material Domestic
                  Subsidiary of the Borrower, any Domestic Subsidiary of the
                  Borrower which is a party to the Subsidiary Guaranty and any
                  Subsidiary of the Borrower that becomes a party to the
                  Subsidiary Guaranty or delivers a guaranty pursuant to Section
                  7.12 or 7.14."

                  (b)      Section 7.1 of the Credit Agreement is amended by
         inserting the following new subsection (d) immediately after subsection
         (c) therein:

                           "(d)     Interim Financial Statements. Within thirty
                  (30) days after the end of the Fiscal Year of the Borrower
                  ended as of November 30, 2001, unaudited financial statements
                  consisting of a consolidated and consolidating balance sheet
                  and statement of stockholders' equity of the Borrower and its
                  Subsidiaries as at the end of such Fiscal Year and a
                  consolidated and consolidating statement of income of the
                  Borrower and its Subsidiaries for such Fiscal Year, all in
                  reasonable detail and certified on behalf of the Borrower by a
                  Responsible Officer of the Borrower as having been prepared,
                  to the best knowledge of such Responsible Officer, in
                  accordance with generally accepted accounting principles
                  consistently applied (other than for normal year-end
                  adjustments and, unless then required by the Borrower's
                  reporting obligations to the Securities and Exchange
                  Commission or by generally accepted accounting principles,
                  footnote disclosure); provided, however, if as of November 30,
                  2001, the EIS Business Sale has occurred, this Section 7.1(d)
                  shall not apply to the Borrower."

                  (c)      Subsection (b) of Section 7.2 of the Credit Agreement
         is deleted in its entirety and the following is substituted in lieu
         thereof:

                           "(b)     Officer's Certificates. Concurrently with
                  the delivery of the financial statements referred to in
                  Sections 7.1(a), 7.1(b) and 7.1(d) (if such statements are
                  required to be delivered by the terms of said Section 7.1(d)),
                  a certificate of a Responsible Financial Officer substantially
                  in the form of Exhibit 7.2(b) stating that, to the best of
                  such officer's knowledge, (i) such financial statements
                  present fairly, in accordance with GAAP, the financial
                  condition and results of operations of the Borrower and its
                  Subsidiaries for the period referred to therein (subject, in
                  the case of interim statements, to normal recurring
                  adjustments), (ii) no Event of Default or Unmatured Event of
                  Default has occurred, except as specified in such certificate
                  and, if so specified, the action

                                       4
<PAGE>
                  which the Borrower proposes to take with respect thereto,
                  which certificate shall set forth detailed computations to the
                  extent necessary to establish the Borrower's compliance with
                  the covenants set forth in Article IX of this Agreement and
                  (iii) setting forth the then current outstanding amount of
                  each Intercompany Loan;"

                  (d)      The last sentence of Section 8.1 of the Credit
         Agreement is deleted in its entirety and the following is substituted
         in lieu thereof:

                           "Notwithstanding the foregoing clauses (a) through
                  (g) of this Section 8.1, the Borrower agrees that it will not,
                  nor will it permit any of its Subsidiaries to pledge, encumber
                  or otherwise suffer to exist thereon any Lien (other than
                  Customary Permitted Liens), on (w) any real property owned by
                  the Borrower or any of its Subsidiaries which is located in
                  the State of California or the State of Nevada, (x) the
                  Borrower's membership interest in AFC or the Borrower's rights
                  as lender under the AFC Credit Agreement, (y) the Borrower's
                  interest in the capital stock of Next Pharma or (z) (A) the
                  Borrower's interest in the capital stock of GDX Automotive
                  (Pribor) s.r.o. and of LNR Capital s.r.o. or (B) any real or
                  personal property of either GDX Automotive (Pribor) s.r.o. or
                  LNR Capital s.r.o."

                  (e)      Subsections (g) and (h) of Section 8.2 of the Credit
         Agreement are deleted in their entirety and the following are
         substituted in lieu thereof:

                           "(g)     unsecured Indebtedness of the Borrower and
                  its Subsidiaries to the Borrower or any of its Subsidiaries;
                  provided, however, that (x) in the case of such intercompany
                  Indebtedness consisting of a loan or advance by a Credit
                  Party, each such loan or advance made on or after the Closing
                  Date shall be evidenced by an Intercompany Note payable to the
                  Credit Party, in form and substance satisfactory to
                  Administrative Agent, which Intercompany Notes shall be
                  delivered and pledged to the Collateral Agent as part of the
                  Collateral, and (y) in the case of such intercompany
                  Indebtedness consisting of a loan or advance to a Subsidiary
                  of the Borrower which is not a Credit Party, each such loan or
                  advance, together with all other outstanding Indebtedness
                  permitted by this clause (g)(y), plus the amount of all
                  outstanding Indebtedness referred to in clause (h)(y) below
                  that is incurred by Subsidiaries that are not Credit Parties,
                  shall not exceed in the aggregate at any time $60,000,000
                  (without giving effect to Indebtedness issued as consideration
                  in, or to provide all or any portion of the funds utilized to
                  consummate the Draftex Acquisition);

                           (h)      Indebtedness incurred by a Foreign
                  Subsidiary to the Borrower or any of its Subsidiaries;
                  provided, however, that (x) in the case of such Indebtedness
                  consisting of a loan or advance by a Credit Party, each such
                  loan or advance made on or after the Closing Date shall be
                  evidenced by an Intercompany Note payable to the Credit Party,
                  in form and substance satisfactory to Administrative Agent,
                  which Intercompany Notes shall be delivered and pledged to the
                  Collateral Agent as part of the Collateral and (y) in the case
                  of such Indebtedness consisting of a loan or advance to a
                  Foreign Subsidiary of the

                                       5
<PAGE>
                  Borrower which is not a Credit Party, each such loan or
                  advance, together with all other outstanding Indebtedness
                  permitted by this clause (h)(y), plus the amount of all
                  outstanding Indebtedness referred to in clause (g)(y) above
                  that is incurred by Foreign Subsidiaries that are not Credit
                  Parties, shall not exceed in the aggregate at any time
                  $60,000,000 (without giving effect to Indebtedness issued as
                  consideration in, or to provide all or any portion of the
                  funds utilized to consummate the Draftex Acquisition);"

                  (f)      Subsection (k) of Section 8.2 of the Credit Agreement
         is amended by deleting the word "and" immediately before the phrase
         "(y) to support obligations of Subsidiaries" in the first sentence and
         inserting the word "or" in lieu thereof.

                  (g)      Subsection (n) of Section 8.2 of the Credit Agreement
         is amended by deleting the phrase "; and" and inserting in lieu thereof
         ";".

                  (h)      Subsection (o) of Section 8.2 of the Credit Agreement
         is amended by (i) deleting the phrase "; and" immediately before the
         phrase "(4) GenCorp's and AFC's obligations under the Indemnity
         Agreement" and inserting ";" in lieu thereof, and (ii) inserting the
         following immediately after clause (4) therein:

                           "and (5) GenCorp's obligation to make advances to AFC
                  in accordance with the AFC Credit Facility and AFC's
                  obligation to repay such advances; and"

                  (i)      Section 8.2 of the Credit Agreement is amended by
         inserting the following new subsection (p) immediately after subsection
         (o) therein:

                           "(p)     Indebtedness of the Borrower consisting of
                  unsecured Guarantee Obligations in favor of the United States
                  Environmental Protection Agency which are incurred on behalf
                  of Aerojet in connection with the EIS Business Sale or in
                  connection with future carve-outs of restricted real property;
                  provided, that such Guarantee Obligations permitted under this
                  clause (p) shall not at any time exceed $100,000,000."

                  (j)      Subsection (g) of Section 8.7 of the Credit Agreement
         is deleted in its entirety and the following is substituted in lieu
         thereof:

                           "(g)     the Borrower may make intercompany loans and
                  advances (x) to any of its Wholly-Owned Subsidiaries, any
                  Subsidiary of the Borrower may make intercompany loans and
                  advances to the Borrower, and any Subsidiary of the Borrower
                  may make intercompany loans and advances to any other
                  Wholly-Owned Subsidiary of the Borrower (collectively,
                  "Intercompany Loans"), in accordance with and to the extent
                  permitted by Section 8.2(g) and (h) and (y) to AFC in
                  accordance with the terms and conditions of the AFC Credit
                  Facility;"

                  (k)      Section 9.3 of the Credit Agreement is deleted in its
         entirety and the following is substituted in lieu thereof:

                                       6
<PAGE>
                           "Section 9.3     Interest Coverage Ratio.

                           The Borrower will not permit the Interest Coverage
                  Ratio for any Test Period ending on the last day of each
                  Fiscal Quarter set forth below to be less than the ratio set
                  forth opposite such date:

<TABLE>
<CAPTION>
                                 Fiscal Quarter                      Ratio
                                 ---------------                     -----
<S>                                                                <C>
                               February 28, 2001                   3.50 to 1.00
                               May 31, 2001                        3.50 to 1.00
                               August 31, 2001                     2.75 to 1.00
                               November 30, 2001                   3.50 to 1.00
                               February 28, 2002                   3.75 to 1.00
                               May 31, 2002                        3.75 to 1.00
                               August 31, 2002                     3.75 to 1.00
                               November 30, 2002 and thereafter    4.00 to 1.00"
</TABLE>

                  (l)      Section 9.4 of the Credit Agreement is amended by
         deleting the ratio "3.25 to 1.00" directly across from the Fiscal
         Quarter ended August 31, 2001 and by inserting the ratio "4.25 to 1.00"
         in lieu thereof.

         2. Reallocation of Certain Commitments and Loans. In order to provide
financial flexibility and additional liquidity to the Borrower prior to the
completion of the EIS Business Sale, the Borrower hereby requests approval by
the Lenders of the following actions:

                           (a)      that the Term B Commitment be increased by
                  an aggregate principal amount of $65,625,000.03 (the "Term B
                  Commitment Increase Amount"), subject to the terms and
                  conditions of this Amendment No. 2, such that the aggregate
                  principal amount of the Term B Commitment shall equal
                  $264,625,000.03 as of the date of this Amendment No. 2; and
                  Bank One, NA, BT and ABN Amro Bank, B.V. each hereby agree to
                  advance, severally, the entire amount of the Term B Commitment
                  Increase Amount on the terms and conditions set forth in this
                  Amendment No. 2, namely that: (i) $6,666,666.67 principal
                  amount of Revolving Loans outstanding as of the date hereof
                  and owing to BT and $6,666,666.67 principal amount of
                  Revolving Loans outstanding as of the date hereof and owing to
                  Bank One, NA, shall be reallocated from the Revolving Facility
                  to the Term B Facility in satisfaction (together with the
                  reallocation described in (ii) below) of the funding of the
                  Term B Commitment Increase Amount, provided, that such
                  reallocation of Loans from the Revolving Facility shall not
                  cause a reduction in the Revolving Commitments of either BT or
                  Bank One, NA (other than in accordance with (b) below); and
                  (ii) $20,083,333.35 principal amount of Term A Loans
                  outstanding as of the date hereof and owing to BT,
                  $20,083,333.35 principal amount of Term A Loans outstanding as
                  of the date hereof and owing to Bank One, NA, and
                  $12,124,999.99 principal amount of Term A Loans outstanding as
                  of the date hereof and owing to ABN Amro Bank, B.V., shall be
                  reallocated from the Term A Facility to the Term B Facility in
                  satisfaction (together with the reallocation described in (i)
                  above) of the funding of the

                                       7
<PAGE>
                  Term B Commitment Increase Amount, thereby reducing the
                  aggregate principal amount of the Term A Facility to
                  $90,208,333.31 as of the date of this Amendment No. 2;

                           (b)      that, on or prior to the earlier of 5:00
                  p.m. (New York City time) (a) on October 15, 2001 or (b) on
                  the date of closing of the EIS Business Sale, the Borrower
                  shall cause the Revolving Commitment to be permanently
                  reduced, in part, in the aggregate principal amount of
                  $13,333,333.34, and shall cause any Revolving Loans relating
                  thereto to be paid in full, provided, that such reduction of
                  Revolving Commitment and repayment of Revolving Loans, if any,
                  shall be applied solely to the Revolving Commitments and/or
                  related Revolving Loans, as the case may be, of BT and Bank
                  One, NA, on a pro rata basis, and shall not apply to the
                  Revolving Commitments or Revolving Loans of any other
                  Revolving Lender;

                           (c)      that, upon the effectiveness of this
                  Amendment No. 2, (i) Schedule 1.1(a) to the Credit Agreement
                  shall be deemed modified to reflect the revised Term A
                  Commitment and the revised Term B Commitment and (ii) in all
                  necessary respects, the Credit Agreement, including, without
                  limitation, Sections 4.1, 4.3, 4.4(k) and 4.5 of the Credit
                  Agreement, shall be deemed amended without further action by
                  any Lender to reflect such revised Term A Commitment and
                  revised Term B Commitment and the terms of this Section 2 of
                  this Amendment No. 2; and

                           (d)      Bank One, NA, BT and ABN Amro Bank, B.V.
                  each hereby agree to waive any compensation which they are
                  otherwise entitled to pursuant to Section 3.5 of the Credit
                  Agreement for funding losses resulting from the reallocation
                  of Loans described in the preceding clauses.

         3. Amendments to Post Closing Agreement. Subject to the conditions set
forth in Section 10 hereof, the Post Closing Agreement is hereby amended as
follows:

                           (a)      Paragraph 2 (including the subsections
                  therein) of the Post Closing Agreement is deleted in its
                  entirety and the words "Intentionally Omitted" are substituted
                  in lieu thereof.

                           (b)      Paragraph 3 (including the subsections
                  therein) of the Post Closing Agreement is deleted in its
                  entirety and the words "Intentionally Omitted" are substituted
                  in lieu thereof.

                           (c)      Subparagraph (a) of Paragraph 4 of the Post
                  Closing Agreement is amended by deleting the phrase "GDX LLC"
                  where it appears and by inserting the phrase "HENNIGES
                  Elastomer-und Kunststofftechnik GmbH & Co. KG" in lieu
                  thereof.

                           (d)      Paragraph 8 of the Post Closing Agreement is
                  amended by deleting the first line thereof and clauses (a),
                  (b) and (c) in their entirety and by inserting the phrase
                  "Intentionally Omitted" in lieu thereof.

                                       8
<PAGE>
                           (e)      Subparagraph (b) of Paragraph 9 of the Post
                  Closing Agreement is deleted in its entirety and the following
                  is substituted in lieu thereof:

                                    "(b)     execute documentation, make filings
                           and otherwise take such actions and deliver such
                           documents as the Administrative Agent may require to
                           cause the Borrower to grant a lien and security
                           interest to the Collateral Agent for the benefit of
                           the Lenders in 65% of the stock of GDX Automotive SAS
                           and to perfect such security interest, all under the
                           laws of France;"

                           (f)      Paragraph 10 (including the subsections
                  therein) of the Post Closing Agreement is deleted in its
                  entirety and the words "Intentionally Omitted" are substituted
                  in lieu thereof.

                           (g)      Subparagraph (a) of Paragraph 11 of the Post
                  Closing Agreement is deleted in its entirety and the following
                  is substituted in lieu thereof:

                                    "(a)     execute documentation, make filings
                           and otherwise take such actions and deliver such
                           documents as the Administrative Agent may require to
                           cause Penn International Inc. to grant a lien and
                           security interest to the Collateral Agent for the
                           benefit of the Lenders in 65% of the stock of GenCorp
                           GmbH and to perfect such security interest, all under
                           the laws of Germany;"

                  (h)      (i) Subparagraph (c) of Paragraph 11 of the Post
         Closing Agreement is amended by deleting the phrase "; and" and by
         inserting "." in lieu thereof, and (ii) subparagraph (d) of Paragraph
         11 of the Post Closing Agreement is deleted in its entirety.

                  (i)      Subparagraph (a) of Paragraph 12 of the Post Closing
         Agreement is amended by deleting the phrase "Berger, Missouri" where it
         appears in clause (ii) and by inserting the phrase "New Haven,
         Missouri" in lieu thereof.

         4. Amendments to Borrower Security Agreement. Subject to the conditions
set forth in Section 10 hereof, the Borrower Security Agreement is amended as
follows:

                  (a)      Article I of the Borrower Security Agreement is
         amended by deleting the definition of "Investment Property" in its
         entirety and inserting in lieu thereof the following:

                           ""Investment Property" shall have the meaning
                  ascribed thereto in Section 9-102 of the New York UCC and
                  shall include, without limitation (i) all securities, whether
                  certificated or uncertificated, including, without limitation,
                  stocks, bonds, interests in limited liability companies,
                  partnership interests, treasury securities, certificates of
                  deposit, and mutual fund shares; (ii) all securities
                  entitlements of the Borrower, including without limitation,
                  the rights of the Borrower to any securities account and the
                  financial assets held by a securities intermediary in such
                  securities account and any free credit balance or other money
                  owing by any securities intermediary with respect to that
                  account; (iii) all

                                       9
<PAGE>
                  securities accounts held by the Borrower; (iv) all commodity
                  contracts held by the Borrower; and (v) all commodity accounts
                  held by the Borrower."

                  (b)      Article I of the Borrower Security Agreement is
         amended by inserting the following definitions in the appropriate
         alphabetical order:

                           "Deposit Accounts" shall have the meaning provided in
                  the New York UCC.

                           "Letter-of-Credit Rights" shall have the meaning
                  provided in the New York UCC".

                           "Software" shall have the meaning provided in the New
                  York UCC.

                           "Supporting Obligations" shall have the meaning
                  provided in the New York UCC.

                  (c)      Subsection (a) of Section 2.1 of the Borrower
         Security Agreement is deleted in its entirety and the following is
         substituted in lieu thereof:

                           "(a) As security for the prompt and complete payment
                  and performance when due of all of the Obligations, the
                  Borrower does hereby collaterally assign and transfer unto the
                  Collateral Agent, for the benefit of the Secured Creditors,
                  and does hereby pledge and grant to the Collateral Agent for
                  the benefit of the Secured Creditors, a continuing security
                  interest of first priority (subject to Liens evidenced by
                  Permitted Filings and other Permitted Liens) in, all of the
                  right, title and interest of the Borrower in, to and under all
                  of the personal property of the Borrower, wherever located,
                  whether now existing or hereafter from time to time acquired,
                  including the following: (i) each and every Receivable, (ii)
                  all Contracts, together with all Contract Rights, (iii) all
                  Inventory, (iv) all Equipment, (v) all Marks, together with
                  the registrations and right to all renewals thereof, and the
                  goodwill of the business of the Borrower symbolized by the
                  Marks, (vi) all Patents and Copyrights, and all reissues,
                  renewals or extensions thereof, (vii) all Software of the
                  Borrower and all intellectual property rights therein and all
                  other proprietary information of the Borrower, including, but
                  not limited to, Trade Secrets, (viii) all other Goods, General
                  Intangibles, Chattel Paper, Documents, Investment Property and
                  Instruments, (ix) all Supporting Obligations and
                  Letter-of-Credit Rights, (x) all cash, accounts, deposits,
                  Deposit Accounts, securities and insurance policies now or at
                  any time hereafter in the possession or under control of the
                  Borrower or its respective bailees and any interest thereon,
                  (xi) all other personal property of the Borrower, whether now
                  owned or hereafter acquired, (xii) all documents of title
                  evidencing or issued with respect to any of the foregoing, and
                  (xiii) all Proceeds and products of any and all of the
                  foregoing (including, without limitation, all insurance and
                  claims for insurance effected or held for the benefit of the
                  Borrower in respect thereof) (all of the above, collectively,
                  the "Collateral")."

                                       10
<PAGE>
                  (d)      Section 3.7 of the Borrower Security Agreement is
         deleted in its entirety and the following is substituted in lieu
         thereof:

                           "3.7. Trade Names; Change of Name. The Borrower has
                  not operated nor does operate in any jurisdiction under, or in
                  the preceding 12 months has had nor has operated in any
                  jurisdiction under, any trade names, fictitious names or other
                  names (including, without limitation, any names of divisions
                  or operations) except its legal name (which is as set forth in
                  the preamble of this Agreement) and such other trade,
                  fictitious or other names as are listed on Annex D hereto. The
                  Borrower shall not change its legal name nor assume or operate
                  in any jurisdiction under any trade, fictitious or other name
                  in any manner which might make any financing statement or
                  continuation statement filed in connection therewith seriously
                  misleading within the meaning of Section 9-506 of the UCC
                  unless and until (i) it shall have given to the Collateral
                  Agent not less than 30 days' prior written notice of its
                  intention so to do, clearly describing such new name and the
                  jurisdictions in which such new name shall be used and
                  providing such other information in connection therewith as
                  the Collateral Agent may reasonably request, (ii) with respect
                  to such new name, it shall have taken all action to maintain
                  the security interest of the Collateral Agent in the
                  Collateral intended to be granted hereby at all times fully
                  perfected and in full force and effect, (iii) at the request
                  of the Collateral Agent, it shall have furnished an opinion of
                  counsel reasonably acceptable to the Collateral Agent to the
                  effect that all financing or continuation statements and
                  amendments or supplements thereto have been filed in the
                  appropriate filing office or offices, and (iv) upon its
                  reasonable request, the Collateral Agent shall have received
                  evidence that all other actions (including, without
                  limitation, the payment of all filing fees and taxes, if any,
                  payable in connection with such filings) have been taken, in
                  order to perfect (and maintain the perfection and priority of)
                  the security interest granted hereby."

                  (e)      Article III of the Borrower Security Agreement is
         amended by inserting the following immediately after Section 3.7
         therein:

                           "3.8. State of Incorporation. The state of
                  incorporation of the Borrower is Ohio. The Borrower shall not
                  change the state in which it is incorporated. The Borrower
                  shall preserve its corporate existence and not, in one
                  transaction or a series of related transactions, merge into or
                  consolidate with any other entity, or sell all or
                  substantially all of its assets."

                  (f)      Article IV of the Borrower Security Agreement is
         amended by (i) inserting the words "OTHER COLLATERAL" to the title of
         said Article immediately after the words "RIGHTS; INSTRUMENTS;" and
         (ii) inserting the following immediately after Section 4.6 therein:

                           "4.7. Other Collateral. If the Borrower owns or
                  acquires any Deposit Accounts, Investment Property,
                  Letter-of-Credit Rights or electronic chattel paper
                  constituting Collateral, the Borrower will within 15 days
                  notify the Collateral

                                       11
<PAGE>
                  Agent thereof, and upon request by the Collateral Agent will
                  cooperate with the Collateral Agent in obtaining control with
                  respect to such Collateral. The Borrower will not create any
                  Chattel Paper without placing a legend on the Chattel Paper
                  acceptable to the Collateral Agent indicating that the
                  Collateral Agent has a security interest in the Chattel
                  Paper."

                  (g)      Section 7.4 of the Borrower Security Agreement is
         deleted in its entirety and the following is substituted in lieu
         thereof:

                           "7.4. Financing Statements. The Borrower authorizes
                  the Collateral Agent to file such financing statements, in
                  form acceptable to the Collateral Agent, as the Collateral
                  Agent may from time to time request or as are necessary or
                  desirable in the opinion of the Collateral Agent to establish
                  and maintain a valid, enforceable, first priority perfected
                  security interest (subject only to Permitted Liens) in the
                  Collateral as provided herein and the other rights and
                  security contemplated hereby all in accordance with the UCC or
                  other relevant law as enacted from time to time in any
                  relevant jurisdiction. The Borrower will pay any applicable
                  filing fees, recordation taxes and related expenses relating
                  to its Collateral."

         5. Amendments to Subsidiary Security Agreement. Subject to the
conditions set forth in Section 10 hereof, the Subsidiary Security Agreement is
hereby amended as follows:

                  (a)      Article I of the Subsidiary Security Agreement is
         amended by deleting the definition of "Investment Property" in its
         entirety and substituting in lieu thereof the following:

                           ""Investment Property" shall have the meaning
                  ascribed thereto in Section 9-102 of the New York UCC and
                  shall include, without limitation (i) all securities, whether
                  certificated or uncertificated, including, without limitation,
                  stocks, bonds, interests in limited liability companies,
                  partnership interests, treasury securities, certificates of
                  deposit, and mutual fund shares; (ii) all securities
                  entitlements of any Assignor, including without limitation,
                  the rights of any Assignor to any securities account and the
                  financial assets held by a securities intermediary in such
                  securities account and any free credit balance or other money
                  owing by any securities intermediary with respect to that
                  account; (iii) all securities accounts held by any Assignor;
                  (iv) all commodity contracts held by any Assignor; and (v) all
                  commodity accounts held by any Assignor."

                  (b)      Article I of the Subsidiary Security Agreement is
         amended by inserting the following definitions in the appropriate
         alphabetical order:

                           ""Deposit Accounts" shall have the meaning provided
                  in the New York UCC.

                           "Letter-of-Credit Rights" shall have the meaning
                  provided in the New York UCC.

                                       12
<PAGE>
                           "Software" shall have the meaning provided in the New
                  York UCC.

                           "Supporting Obligations" shall have the meaning
                  provided in the New York UCC."

                  (c)      Subsection (a) of Section 2.1 of the Subsidiary
         Security Agreement is deleted in its entirety and the following is
         substituted in lieu thereof:

                           "(a)     As security for the prompt and complete
                  payment and performance when due of all of the Obligations,
                  each Assignor does hereby collaterally assign and transfer
                  unto the Collateral Agent, for the benefit of the Secured
                  Creditors, and does hereby pledge and grant to the Collateral
                  Agent for the benefit of the Secured Creditors, a continuing
                  security interest of first priority (subject to Liens
                  evidenced by Permitted Filings and other Permitted Liens) in,
                  all of the right, title and interest of such Assignor in, to
                  and under all of the personal property of such Assignor,
                  wherever located, whether now existing or hereafter from time
                  to time acquired, including the following: (i) each and every
                  Receivable, (ii) all Contracts, together with all Contract
                  Rights, (iii) all Inventory, (iv) all Equipment, (v) all
                  Marks, together with the registrations and right to all
                  renewals thereof, and the goodwill of the business of such
                  Assignor symbolized by the Marks, (vi) all Patents and
                  Copyrights, and all reissues, renewals or extensions thereof,
                  (vii) all Software of the Borrower and all intellectual
                  property rights therein and all other proprietary information
                  of such Assignor, including, but not limited to, Trade
                  Secrets, (viii) all other Goods, General Intangibles, Chattel
                  Paper, Documents, Investment Property and Instruments, (ix)
                  all Supporting Obligations and Letter-of-Credit Rights, (x)
                  all cash, accounts, deposits, Deposit Accounts, securities and
                  insurance policies now or at any time hereafter in the
                  possession or under control of such Assignor or its respective
                  bailees and any interest thereon, (xi) all other personal
                  property of such Assignor, whether now owned or hereafter
                  acquired, (xii) all documents of title evidencing or issued
                  with respect to any of the foregoing, and (xiii) all Proceeds
                  and products of any and all of the foregoing (including,
                  without limitation, all insurance and claims for insurance
                  effected or held for the benefit of such Assignor in respect
                  thereof) (all of the above, collectively, the "Collateral").

                  (d)      Section 3.7 of the Subsidiary Security Agreement is
         deleted in its entirety and the following is substituted in lieu
         thereof:

                           "3.7.    Trade Names; Change of Name. Each Assignor
                  has not operated nor does operate in any jurisdiction under,
                  or in the preceding 12 months has had nor has operated in any
                  jurisdiction under, any trade names, fictitious names or other
                  names (including, without limitation, any names of divisions
                  or operations) except its legal name (which is as set forth in
                  Annex B to this Agreement) and such other trade, fictitious or
                  other names as are listed on Annex D hereto. Each Assignor
                  shall not change its legal name nor assume or operate in any
                  jurisdiction under any trade, fictitious or other name in any
                  manner which might make any financing statement or
                  continuation statement filed in connection therewith

                                       13
<PAGE>
                  seriously misleading within the meaning of Section 9-506 of
                  the UCC unless and until (i) it shall have given to the
                  Collateral Agent not less than 30 days' prior written notice
                  of its intention so to do, clearly describing such new name
                  and the jurisdictions in which such new name shall be used and
                  providing such other information in connection therewith as
                  the Collateral Agent may reasonably request, (ii) with respect
                  to such new name, it shall have taken all action to maintain
                  the security interest of the Collateral Agent in the
                  Collateral intended to be granted hereby at all times fully
                  perfected and in full force and effect, (iii) at the request
                  of the Collateral Agent, it shall have furnished an opinion of
                  counsel reasonably acceptable to the Collateral Agent to the
                  effect that all financing or continuation statements and
                  amendments or supplements thereto have been filed in the
                  appropriate filing office or offices, and (iv) upon its
                  reasonable request, the Collateral Agent shall have received
                  evidence that all other actions (including, without
                  limitation, the payment of all filing fees and taxes, if any,
                  payable in connection with such filings) have been taken, in
                  order to perfect (and maintain the perfection and priority of)
                  the security interest granted hereby."

                  (e)      Article III of the Subsidiary Security Agreement is
         amended by inserting the following immediately after Section 3.7
         therein:

                           "3.8.    State of Incorporation. The state of
                  incorporation of each Assignor is set forth on Annex B hereto.
                  Each Assignor shall not change the state in which it is
                  incorporated. Each Assignor shall preserve its corporate
                  existence and not, in one transaction or a series of related
                  transactions, merge into or consolidate with any other entity,
                  or sell all or substantially all of its assets."

                  (f)      Article IV of the Subsidiary Security Agreement is
         amended by (i) inserting the words "OTHER COLLATERAL" to the title of
         said Article immediately after the words "RIGHTS; INSTRUMENTS;" and
         (ii) inserting the following immediately after Section 4.6 therein:

                           "4.7.    Other Collateral. If any Assignor owns or
                  acquires any Deposit Accounts, Investment Property,
                  Letter-of-Credit Rights or electronic chattel paper
                  constituting Collateral, such Assignor will within 15 days
                  notify the Collateral Agent thereof, and upon request by the
                  Collateral Agent will cooperate with the Collateral Agent in
                  obtaining control with respect to such Collateral. Each
                  Assignor will not create any Chattel Paper without placing a
                  legend on the Chattel Paper acceptable to the Collateral Agent
                  indicating that the Collateral Agent has a security interest
                  in the Chattel Paper."

                  (g)      Section 7.4 of the Subsidiary Security Agreement is
         deleted in its entirety and the following is substituted in lieu
         thereof:

                           "7.4.    Financing Statements. Each Assignor
                  authorizes the Collateral Agent to file such financing
                  statements, in form acceptable to the Collateral Agent, as the
                  Collateral Agent may from time to time request or as are
                  necessary

                                       14
<PAGE>
                  or desirable in the opinion of the Collateral Agent to
                  establish and maintain a valid, enforceable, first priority
                  perfected security interest (subject only to Permitted Liens)
                  in the Collateral as provided herein and the other rights and
                  security contemplated hereby all in accordance with the UCC or
                  other relevant law as enacted from time to time in any
                  relevant jurisdiction. Each Assignor will pay any applicable
                  filing fees, recordation taxes and related expenses relating
                  to its Collateral."

                  (h)      Annex B of the Subsidiary Security Agreement is
         deleted in its entirety and Annex B attached to this Amendment No. 2 is
         substituted in lieu thereof.

         6. Amendments to Borrower Pledge Agreement. Subject to the conditions
set forth in Section 10 hereof, the Borrower Pledge Agreement is hereby amended
as follows:

                  (a)      Section 2.2 of Borrower Pledge Agreement is amended
         by inserting the word "Pledged" immediately preceding the word "Notes"
         in the first sentence thereof.

                  (b)      Section 2.3 of Borrower Pledge Agreement is deleted
         in its entirety and the following is substituted in lieu thereof:

                           "2.3.    Uncertificated Securities. Notwithstanding
                  anything to the contrary contained in Sections 2.1 and 2.2
                  hereof, if any Securities (whether now owned or hereafter
                  acquired) are uncertificated securities, the Pledgor shall
                  promptly notify the Pledgee thereof, and shall promptly take
                  all actions required to perfect the security interest of the
                  Pledgee under applicable law (including cooperating with the
                  Collateral Agent in obtaining control with respect to such
                  Securities). The Pledgor further agrees to take such actions
                  as the Pledgee deems reasonably necessary or desirable to
                  effect the foregoing and to permit the Pledgee to exercise any
                  of its rights and remedies hereunder, and agrees to provide an
                  opinion of counsel reasonably satisfactory to the Pledgee with
                  respect to any such pledge of uncertificated Securities
                  promptly upon request of the Pledgee."

         7. Amendments to Subsidiary Pledge Agreement. Subject to the conditions
set forth in Section 10 hereof, the Subsidiary Pledge Agreement is hereby
amended as follows:

                  (a)      Section 2.2 of Subsidiary Pledge Agreement is amended
         by inserting the word "Pledged" immediately preceding the word "Notes"
         in the first sentence thereof.

                  (b)      Section 2.3 of Subsidiary Pledge Agreement is deleted
         in its entirety and the following is substituted in lieu thereof:

                           "2.3.    Uncertificated Securities. Notwithstanding
                  anything to the contrary contained in Sections 2.1 and 2.2
                  hereof, if any Securities (whether now owned or hereafter
                  acquired) are uncertificated securities, the respective
                  Pledgor shall promptly notify the Pledgee thereof, and shall
                  promptly take all actions required to perfect the security
                  interest of the Pledgee under applicable law

                                       15
<PAGE>
                  (including cooperating with the Collateral Agent in obtaining
                  control with respect to such Securities). Each Pledgor further
                  agrees to take such actions as the Pledgee deems reasonably
                  necessary or desirable to effect the foregoing and to permit
                  the Pledgee to exercise any of its rights and remedies
                  hereunder, and agrees to provide an opinion of counsel
                  reasonably satisfactory to the Pledgee with respect to any
                  such pledge of uncertificated Securities promptly upon request
                  of the Pledgee."

         8. Limited Waiver. The Lenders hereby waive (a) for the period
commencing April 1, 2001 and ending on September 15, 2001, any Event of Default
or Unmatured Event of Default arising solely as a result of the Borrower's
failure to meet, in the time frames provided therein, the requirements of
Paragraphs 4, 9 and 12 of the Post Closing Agreement (as amended by Amendment
No. 1) and (b) for the period commencing May 31, 2001 and ending on October 31,
2001, any Event of Default or Unmatured Event of Default arising solely as a
result of the Borrower's failure to meet, in the time frame provided therein,
the requirements of Section 7.11 of the Credit Agreement (as amended by
Amendment No. 1). Upon expiration of the waiver set forth in clause (a) of the
preceding sentence without compliance by the Borrower with the requirements
specified therein, such waiver shall be automatically revoked and the
requirements of the Post Closing Agreement (as amended by Amendment No. 1)
waived thereby shall again be in full force with retroactive effect to the dates
specified in the Post Closing Agreement (as amended by Amendment No. 1). Upon
expiration of the waiver set forth in clause (b) of the second preceding
sentence without compliance by the Borrower with the requirements specified
therein, such waiver shall be automatically revoked and the requirements of the
Credit Agreement (as amended by Amendment No. 1) waived thereby shall again be
in full force with retroactive effect to the date specified in the Credit
Agreement (as amended by Amendment No. 1). In each case, following such
expiration and noncompliance as described in the respective preceding sentences,
the Administrative Agent and the Lenders shall have all rights and remedies
under the Post Closing Agreement, the Credit Agreement and any other Loan
Document or otherwise that the Administrative Agent and the Lenders would have
had if any such waiver had never been granted.

         9. Representations and Warranties. As of the date hereof, the Borrower
hereby represents and warrants to the Administrative Agent and the Lenders as
follows:

                  (a)      After giving effect to this Amendment No. 2 (i) no
         Unmatured Event of Default or Event of Default shall have occurred or
         be continuing and (ii) the representations and warranties of the
         Borrower contained in the Loan Documents shall each be true and correct
         in all material respects at and as of the date hereof to the same
         extent as though made on and as of such date, except to the extent such
         representations and warranties expressly relate to an earlier date in
         which event such representation and warranties shall be true and
         correct as of such specified date.

                  (b)      The execution, delivery and performance, as the case
         may be, by the Borrower of this Amendment No. 2 and the other documents
         and transactions contemplated hereby are within the Borrower's
         corporate powers, have been duly authorized by all necessary corporate
         action (including, without limitation, all necessary shareholder
         approvals) of the Borrower, shall have received all necessary
         governmental

                                       16
<PAGE>
         approvals, and do not and will not contravene or conflict with any
         provision of law applicable to the Borrower, the certificate or
         articles of incorporation or bylaws of the Borrower, or any order,
         judgment or decree of any court or other agency of government or any
         contractual obligation binding upon the Borrower.

                  (c)      Each of this Amendment No. 2, the Credit Agreement,
         the Post Closing Agreement and any other Loan Document is the legal,
         valid and binding obligation of the Borrower enforceable against the
         Borrower in accordance with its respective terms, except to the extent
         enforceability is limited by bankruptcy, insolvency or similar laws
         affecting the rights of creditors generally or by application of
         general principles of equity.

         10.      Conditions. This Amendment No. 2 shall become effective as of
the date first above written; provided, that the Administrative Agent shall have
received:

                  (a)      counterparts of this Amendment No. 2 duly executed by
         the Borrower, the Subsidiary Guarantors, the Assignors (solely with
         respect to Section 5 above), the Pledgors (solely with respect to
         Section 7 above), the Administrative Agent and the percentage of
         Lenders required by the Credit Agreement; and

                  (b)      from the Borrower all fees and expenses of legal
         counsel due and payable pursuant to Section 12.4 of the Credit
         Agreement (to the extent then invoiced).

         11.      Affirmation of Subsidiary Guarantors. By its signature set
forth below, each Subsidiary Guarantor hereby confirms to the Administrative
Agent and the Lenders that, after giving effect to this Amendment No. 2 and the
transactions contemplated hereby, the Subsidiary Guaranty of such Subsidiary
Guarantor and each other Loan Document to which such Subsidiary Guarantor is a
party continues in full force and effect and is the legal, valid and binding
obligation of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.

         12.      Amendment Fee. The Borrower hereby agrees to pay, without
setoff, deduction or counterclaim, a non-refundable amendment fee for the
account of each Lender, other than the Agents or ABN Amro Bank, N.V., that has
executed and delivered (including delivery of way of telecopy) a copy of this
Amendment No. 2 to the attention of Kay McNab at Winston & Strawn, 35 West
Wacker Drive, Chicago, Illinois 60601, telecopy number 312-558-5700, at or prior
to noon, New York City time, on Friday, August 31, 2001, in an amount equal to
0.10% of such Lender's Commitment. The aggregate amount of such amendment fee
shall be paid at or prior to noon, New York City time, on Tuesday, September 4,
2001 to the Administrative Agent for the pro rata account of the Lenders
entitled to receive such amendment fee.

         13.      Successors and Assigns. This Amendment No. 2 shall be binding
on and shall inure to the benefit of the Borrower, the Administrative Agent, the
Lenders and their respective successors and assigns; provided that the Borrower
may not assign its rights, obligations, duties or other interests hereunder
without the prior written consent of the Administrative Agent and the Lenders.
The terms and provisions of this Amendment No. 2 are for the purpose of defining
the

                                       17
<PAGE>
relative rights and obligations of the Borrower, the Administrative Agent and
the Lenders with respect to the transactions contemplated hereby and there shall
be no third party beneficiaries of any of the terms and provisions of this
Amendment No. 2.

         14.      Entire Agreement. This Amendment No. 2, the Credit Agreement
(as amended hereby), the Post Closing Agreement (as amended hereby) and the
other Loan Documents (as amended hereby, if applicable) constitute the entire
agreement of the parties with respect to the subject matter hereof.

         15.      Incorporation of Credit Agreement. The provisions contained in
Sections 12.4, 12.9 and 12.10 of the Credit Agreement are incorporated herein by
reference to the same extent as if reproduced herein in their entirety with
respect to this Amendment No. 2.

         16.      Amendment; Waiver. The parties hereto agree and acknowledge
that nothing contained in this Amendment No. 2 in any manner or respect limits
or terminates any of the provisions of the Credit Agreement, the Post Closing
Agreement or any of the other Loan Documents other than as amended as expressly
set forth herein and further agree and acknowledge that the Credit Agreement (as
amended hereby), the Post Closing Agreement (as amended hereby) and each of the
other Loan Documents (as amended hereby, if applicable) remain and continue in
full force and effect and are hereby ratified and confirmed. Except to the
extent expressly set forth herein, the execution, delivery and effectiveness of
this Amendment No. 2 shall not operate as a waiver of any rights, power or
remedy of the Lenders or the Administrative Agent under the Credit Agreement,
the Post Closing Agreement or any other Loan Document, nor constitute a waiver
of any provision of the Credit Agreement, the Post Closing Agreement or any
other Loan Document. No delay on the part of any Lender or the Administrative
Agent in exercising any of their respective rights, remedies, powers and
privileges under the Credit Agreement, the Post Closing Agreement or any of the
Loan Documents or partial or single exercise thereof, shall constitute a waiver
thereof. On and after the Effective Date each reference in the Credit Agreement
or the Post Closing Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import, and each reference to the Credit Agreement,
the Post Closing Agreement in the Loan Documents and all other documents
delivered in connection with the Credit Agreement shall mean and be a reference
to the Credit Agreement, the Post Closing Agreement, the Borrower Security
Agreement, the Subsidiary Security Agreement, the Borrower Pledge Agreement or
the Subsidiary Pledge Agreement, as applicable, as amended hereby.

         17.      Captions. Section captions used in this Amendment No. 2 are
for convenience only, and shall not affect the construction of this Amendment
No. 2.

         18.      Severability. Whenever possible each provision of this
Amendment No. 2 shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Amendment No. 2 shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Amendment.

                                       18
<PAGE>
         19.      Counterparts. This Amendment No. 2 may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Delivery
of an executed counterpart of a signature page to this Amendment No. 2 by
telecopy shall be effective as delivery of a manually executed counterpart of
this Amendment No. 2.

                            [signature pages follow]

                                       19
<PAGE>
         IN WITNESS WHEREOF, this Amendment No. 2 has been duly executed as of
the date first written above.

                                    GENCORP INC.

                                    By:   /s/ Yasmin R. Seyal
                                       -----------------------------------
                                          YASMIN R. SEYAL
                                          Treasurer

                        Signature Page to Amendment No. 2
<PAGE>
                                    AEROJET-GENERAL CORPORATION, as
                                    Subsidiary Guarantor, Assignor and Pledgor

                                    By:   /s/ Yasmin R. Seyal
                                       -----------------------------------
                                          YASMIN R. SEYAL
                                          Treasurer

                        Signature Page to Amendment No. 2
<PAGE>
                                    AEROJET ORDNANCE TENNESSEE, INC., as
                                    Subsidiary Guarantor, Assignor and Pledgor

                                    By:   /s/ Brian E. Sweeney
                                       -----------------------------------
                                          BRIAN E. SWEENEY
                                          Vice President and Secretary

                        Signature Page to Amendment No. 2
<PAGE>
                                    GENCORP PROPERTY INC., as Subsidiary
                                    Guarantor, Assignor and Pledgor

                                    By:  /s/ Yasmin R. Seyal
                                       -----------------------------------
                                         YASMIN R. SEYAL
                                         Treasurer

                        Signature Page to Amendment No. 2
<PAGE>
                                    PENN INTERNATIONAL INC., as Subsidiary
                                    Guarantor, Assignor and Pledgor

                                    By:  /s/ Robert C. Anderson
                                       -----------------------------------
                                         ROBERT C. ANDERSON
                                         Secretary

                        Signature Page to Amendment No. 2
<PAGE>
                                    GDX LLC, as Subsidiary Guarantor, Assignor
                                    and Pledgor

                                    By:  /s/ Yasmin R. Seyal
                                       ------------------------------------
                                         YASMIN R. SEYAL
                                         Treasurer

                        Signature Page to Amendment No. 2
<PAGE>
                                    GDX AUTOMOTIVE INC., as
                                    Subsidiary Guarantor, Assignor and Pledgor

                                    By:  /s/  Yasmin R. Seyal
                                       -------------------------------------
                                         YASMIN R. SEYAL
                                         Treasurer

                        Signature Page to Amendment No. 2
<PAGE>
                                    BANKERS TRUST COMPANY,
                                    as Lender, Administrative Agent and
                                    Collateral Agent

                                    By:  /s/  Marguerite Sutton
                                       ------------------------------------
                                            Name:    Marguerite Sutton
                                            Title:   Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    BANK ONE, NA,
                                    as Lender

                                    By:  /s/   Karen C. Ryan
                                       ------------------------------------
                                            Name:    Karen C. Ryan
                                            Title:   Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    ABN AMRO Bank N.V.,
                                    as Lender

                                    By:  /s/  Peter Hsu
                                       -----------------------------------
                                            Name:    PETER HSU
                                            Title:   Vice President

                                    By:  /s/  Edward John Hill III
                                       ------------------------------------
                                            Name:  EDWARD JOHN HILL III
                                            Title:   Assistant Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    THE BANK OF NEW YORK,
                                    as Lender

                               By:  /s/   Lisa Y. Brown
                                  ------------------------------------
                                       Name:    Lisa Y. Brown
                                       Title    Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    BANK OF NOVA SCOTIA,
                                    as Lender

                                    By:  /s/Mark Sparrow
                                       ---------------------------------
                                            Name:    Mark Sparrow
                                            Title:   Director

                        Signature Page to Amendment No. 2
<PAGE>
                                    THE NORTHERN TRUST COMPANY,
                                    as Lender

                                    By:  /s/Melissa A. Whitson
                                       -------------------------------------
                                            Name:    Melissa A. Whitson
                                            Title:   Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    WELLS FARGO BANK, N.A.,
                                    as Lender

                                    By:  /s/  Rick A. Souza
                                       -------------------------------------
                                            Name:    Rick A. Souza
                                            Title:   Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    CONTINENTAL ASSURANCE COMPANY,
                                    as Lender

                                    By: TCW Asset Management Company,

                                    By:   /s/ Richard F. Kurth
                                       ------------------------------------
                                             Name:    RICHARD F. KURTH
                                             Title:   Vice President

                                    By:   /s/ Mark L. Gold
                                       ------------------------------------
                                             Name:    MARK l. GOLD
                                             Title:   Managing Director

                        Signature Page to Amendment No. 2
<PAGE>
                                    KATONAH II, LTD ,
                                    as Lender

                                    By:  Katonah Capital LLC, as Manager

                                    By:  /s/  Ralph Della Rocca
                                       -----------------------------------
                                    Name:    Ralph Della Rocca
                                    Title:   Authorized Officer Katonah Capital,
                                             LLC As Manager

                        Signature Page to Amendment No. 2
<PAGE>
                                    KZH CRESCENT LLC,
                                    as Lender

                                    By:  /s/  Brian Turkfeld
                                       ------------------------------------
                                            Name:    BRIAN TURKFELD
                                            Title:   Authorized Agent

                        Signature Page to Amendment No. 2
<PAGE>
                                    KZH CRESCENT-2 LLC,
                                    as Lender

                                    By:  /s/    Brian Turkfeld
                                       -----------------------------------
                                    Name:    BRIAN TURKFELD
                                    Title:   Authorized Agent

                        Signature Page to Amendment No. 2
<PAGE>
                                    KZH CRESCENT-3 LLC,
                                    as Lender

                                     y:  /s/    Brian Turkfeld
                                       ----------------------------------
                                    Name:    BRIAN TURKFELD
                                    Title:   Authorized Agent

                        Signature Page to Amendment No. 2
<PAGE>
                                    SEQUILS I, LTD.,
                                    as Lender

                                    By: TCW Advisers, Inc.
                                        as its Collateral Manager

                                    By:    /s/  Richard F. Kurth
                                       -----------------------------------
                                    Name:    Richard F. Kurth
                                    Title:   Vice President

                                    By:  /s/ Mark L. Gold
                                       -----------------------------------
                                    Name:    Mark L. Gold
                                    Title:   Managing Director

                        Signature Page to Amendment No. 2
<PAGE>
                                    SEQUILS IV, LTD.,
                                    as Lender

                                    By: TCW Advisers, Inc.
                                        as its Collateral Manager

                                    By:    /s/  Richard F. Kurth
                                       ------------------------------------
                                    Name:    Richard F. Kurth
                                    Title:   Vice President

                                    By:  /s/ Mark L. Gold
                                       ------------------------------------
                                    Name:    Mark L. Gold
                                    Title:   Managing Director

                        Signature Page to Amendment No. 2
<PAGE>
                                    TCW LEVERAGED INCOME TRUST IV, L.P.,
                                    as Lender

                                    By: TCW (LINC IV), L.L.C.,
                                       as General Partner

                                       By: TCW Asset Management Company,
                                       as managing member of the General Partner

                                    By:    /s/  Richard F. Kurth
                                       ------------------------------------
                                    Name:    Richard F. Kurth
                                    Title:   Vice President

                                    By:  /s/ Mark L. Gold
                                       ------------------------------------
                                    Name:    Mark L. Gold
                                    Title:   Managing Director

                        Signature Page to Amendment No. 2
<PAGE>
                                    TORONTO DOMINION (NEW YORK), INC.,
                                    as Lender

                                    By:     /s/ Stacey Malek
                                       ------------------------------------
                                    Name:  STACEY MALEK
                                    Title:   Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    UNITED OF OMAHA LIFE INSURANCE
                                    COMPANY, as Lender

                                    By: TCW Asset Management Company,
                                        its Investment Advisor

                                    By:  /s/ Richard F. Kurth
                                      -----------------------------------
                                    Name:    RICHARD F. KURTH
                                    Title:   Vice President

                                    By:   /s/ Mark L. Gold
                                      -------------------------------
                                    Name:    MARK L. GOLD
                                    Title:   Managing Director

                        Signature Page to Amendment No. 2
<PAGE>
                                    FIRST UNION NATIONAL BANK,
                                    as Lender

                                    By: /s/ Frederick E. Blumer
                                        ---------------------------
                                            Name:  FREDERICK E. BLUMER
                                            Title:   Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    CIGNA COLLATERALIZED HOLDINGS 1999-1
                                    CDO, LIMITED, as Lender

                                    By:  /s/ John P. Connor
                                       ---------------------------
                                    Name:    John P. Connor
                                    Title:   Vice President

                        Signature Page to Amendment No. 2
<PAGE>
                                    CAPTIVA II FINANCE LTD.,
                                    as Lender

                                    By: /s/ David Dyer
                                        -------------------
                                            Name:  DAVID DYER
                                            Title:   Director

                        Signature Page to Amendment No. 2
<PAGE>
                                                                  Execution Copy

                                 LIMITED WAIVER

         This LIMITED WAIVER (this "Waiver"), dated as of October 15, 2001, is
made among GENCORP INC., an Ohio corporation (the "Borrower"), BANKERS TRUST
COMPANY, for itself, as Lender and as Administrative Agent for the Lenders (the
"Administrative Agent"), and the other Lenders signatory to the hereinafter
defined Credit Agreement.

                                    RECITALS

         A.       The Administrative Agent, the Lenders and the Borrower are
party to that certain Credit Agreement dated as of December 28, 2000 (as amended
by that certain Amendment No. 1 to Credit Agreement and Amendment No. 1 to Post
Closing Agreement dated as of January 26, 2001 (the "Amendment No. 1") and by
that certain Amendment No. 2 to Credit Agreement, Amendment No. 2 to Post
Closing Agreement, Amendment No. 1 to Collateral Agreements and Limited Waiver
dated as of August 31, 2001 (the "Amendment No. 2")) (collectively, the "Credit
Agreement"). Unless otherwise specified herein, capitalized terms used in this
Waiver shall have the meanings ascribed to them by the Facility Agreement.

         B.       Pursuant to Amendment No. 2, the Borrower agreed to cause the
Revolving Commitment to be permanently reduced in part, and Revolving Loans
relating thereto to be repaid, on the earlier of 5:00 p.m. (New York City time)
(a) on October 15, 2001 or (b) the date of closing of the EIS Business Sale

         C.       The Borrower has requested a waiver of, and the Lenders wish
to waive, on a limited basis the provision of Amendment No. 2 described in B.
above on the terms and conditions set forth below.

         NOW, THEREFORE, in consideration of the premises and the mutual
execution hereof and other good and valuable consideration, the parties hereto
agree as follows:

                  1.       Limited Waiver. The Lenders hereby waive, for the
period commencing October 15, 2001 and ending on October 31, 2001, any Event of
Default or Unmatured Event of Default arising solely out of the Borrower's
breach of Section 2(b) of Amendment No. 2 as result of the Borrower's failure to
permanently reduce the Revolving Commitment and repay Revolving Loans as
required by the terms of said Section. Upon expiration of the waiver set forth
in the preceding sentence without compliance by the Borrower with the
requirements specified therein, such waiver shall be automatically revoked and
the requirements of the Credit Agreement (as amended by Amendment No. 1 and
Amendment No. 2) waived thereby shall again be in full force with retroactive
effect to the dates specified in the Credit Agreement (as amended by Amendment
No. 1 and Amendment No. 2). In such case, following such expiration and
noncompliance as described in the preceding sentences, the Administrative Agent
and the Lenders shall have all rights and remedies under the Credit Agreement
(as amended by Amendment No. 1 and Amendment No. 2) and any other Loan Document
or otherwise that the
<PAGE>
Administrative Agent and the Lenders would have had if any such waiver had never
been granted.

                  2.       Representation and Warranty. As an inducement to the
Lenders to grant the foregoing waiver, the Borrower represents and warrants
that, after giving effect to this Waiver, as of the date hereof (a) there exists
no Event of Default or Unmatured Event of Default and (b) the representations
and warranties contained in the Credit Agreement are true and correct except to
the extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall have been true
and correct on and as of such earlier date.

                  3.       Effective Time. This Waiver shall become effective
upon the execution and delivery hereof by the Borrower, the Administrative Agent
and the Required Lenders.

                  4.       Miscellaneous.

                           (a)      The execution, delivery and effectiveness of
         this Waiver shall not operate as a waiver of any right, power or remedy
         of the Administrative Agent or any Lender under the Credit Agreement or
         any Loan Document, nor constitute a waiver of any Event of Default,
         Unmatured Event of Default, condition or provision of the Credit
         Agreement or any Loan Document, except as specifically set forth
         herein. Except as specifically waived above, the Credit Agreement and
         the other Loan Documents shall remain in full force and effect and are
         hereby ratified and confirmed. The Borrower hereby reaffirms its
         obligations under the Credit Agreement and all of the other Loan
         Documents to which it is a party.

                           (b)      Section headings in this Waiver are included
         herein for convenience of reference only and shall not constitute a
         part of this Waiver for any other purposes.

                           (c)      This Waiver may be executed in any number of
         counterparts, each of which when so executed shall be deemed an
         original but all such counterparts shall constitute one and the same
         instrument

                  5.       Affirmation of Subsidiary Guarantors. By its
signature set forth below, each Subsidiary Guarantor hereby confirms to the
Administrative Agent and the Lenders that, after giving effect to this Waiver
and the transactions contemplated hereby, the Subsidiary Guaranty of such
Subsidiary Guarantor and each other Loan Document to which such Subsidiary
Guarantor is a party continues in full force and effect and is the legal, valid
and binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.

                  6.       Successors and Assigns. This Waiver shall be binding
on and shall inure to the benefit of the Borrower, the Administrative Agent, the
Lenders and their respective successors and assigns; provided that the Borrower
may not assign its rights, obligations, duties or other interests hereunder
without the prior written consent of the Administrative Agent and the

                                       2
<PAGE>
Lenders. The terms and provisions of this Waiver are for the purpose of defining
the relative rights and obligations of the Borrower, the Administrative Agent
and the Lenders with respect to the transactions contemplated hereby and there
shall be no third party beneficiaries of any of the terms and provisions of this
Waiver.

                  7.       Incorporation of Credit Agreement. The provisions
contained in Sections 12.4, 12.9 and 12.10 of the Credit Agreement are
incorporated herein by reference to the same extent as if reproduced herein in
their entirety with respect to this Amendment No. 2.

                  8.       Counterparts. This Waiver may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Delivery
of an executed counterpart of a signature page to this Waiver by telecopy shall
be effective as delivery of a manually executed counterpart of this Waiver.

                            [signature pages follow]

                                       3
<PAGE>
IN WITNESS WHEREOF, this Waiver. has been duly executed as of the date first
written above.

                                       GENCORP INC.

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           YASMIN R. SEYAL

                        Signature Page to Limited Waiver
<PAGE>
                                       AEROJET-GENERAL CORPORATION,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  YASMIN R. SEYAL

                        Signature Page to Limited Waiver
<PAGE>
                                      AEROJET ORDANCE TENNESSEE, INC., as
                                      Subsidiary Guarantor, Assignor and Pledgor

                                      By:  /s/ Brian E. Sweeney
                                           -------------------------------------
                                           BRIAN E. SWEENEY
                                           Vice President and Secretary

                        Signature Page to Limited Waiver
<PAGE>
                                       GENCORP PROPERTY INC., as Subsidiary
                                       Guarantor, Assignor and Pledgor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           YASMIN R. SEYAL

                        Signature Page to Limited Waiver
<PAGE>
                                       PENN INTERNATIONAL INC., as Subsidiary
                                       Guarantor, Assignor and Pledgor

                                       By: /s/ Terry L. Hall
                                           -------------------------------------
                                           TERRY L. HALL

                        Signature Page to Limited Waiver
<PAGE>
                                       GDX LLC, as Subsidiary Guarantor,
                                       Assignor and Pledgor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           YASMIN R. SEYAL

                        Signature Page to Limited Waiver
<PAGE>
                                       GDX AUTOMOTIVE INC., as Subsidiary
                                       Guarantor, Assignor and Pledgor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           YASMIN R. SEYAL

                        Signature Page to Limited Waiver

<PAGE>
                                       BANKERS TRUST COMPANY,
                                       as Lender, Administrative Agent and
                                       Collateral Agent

                                       By: /s/ Marguerite Sutton
                                           -------------------------------------
                                           Name:  Marguerite Sutton
                                           Title: Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       BANK ONE, NA,
                                       as Lender

                                       By: /s/ Stephen C. Price
                                           -------------------------------------
                                           Name:  Stephen C. Price
                                           Title: First Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       ABN AMRO Bank, N.V.,
                                       as Lender

                                       By: /s/ Mary L. Honda
                                           -------------------------------------
                                           Name:  MARY L. HONDA
                                           Title: Group Vice President

                                       By: /s/ Edward John Hill III
                                           -------------------------------------
                                           Name:  EDWARD JOHN HILL III
                                           Title: Assistant Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       THE BANK OF NEW YORK,
                                       as Lender

                                       By: /s/ Elizabeth Ying
                                           -------------------------------------
                                           Name: Elizabeth Ying
                                           Title Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       BANK OF NOVA SCOTIA,
                                       as Lender

                                       By: /s/ Mark Sparrow
                                           -------------------------------------
                                           Name:  Mark Sparrow
                                           Title: Director

                        Signature Page to Limited Waiver
<PAGE>
                                       NATIONAL CITY BANK,
                                       as Lender

                                       By: /s/ Tom Gurbach
                                           -------------------------------------
                                           Name:  Tom Gurbach
                                           Title: Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       THE NORTHERN TRUST COMPANY,
                                       as Lender

                                       By: /s/ Patrick J. Connelly
                                           -------------------------------------
                                           Name:  Patrick J. Connelly
                                           Title: Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       WELLS FARGO BANK, N.A.,
                                       as Lender

                                       By: /s/ Rick A. Souza
                                           -------------------------------------
                                           Name:  Rick A. Souza
                                           Title: Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       KATONAH II, LTD.,
                                       as Lender

                                       By: Katonah Capital LLC, as Manager

                                       By: /s/ Ralph Della Rocca
                                           -------------------------------------
                                           Name:  Ralph Della Rocca
                                           Title: Authorized Officer Katonah
                                                  Capital, LLC As Manager

                        Signature Page to Limited Waiver
<PAGE>
                                       TORONTO DOMINION (NEW YORK), INC.,
                                       as Lender

                                       By: /s/ Stacey Malek
                                           -------------------------------------
                                           Name:  STACEY MALEK
                                           Title: Vice President

                        Signature Page to Limited Waiver
<PAGE>
                                       FIRST UNION NATIONAL BANK,
                                       as Lender

                                       By: /s/ Frederick E. Blumer
                                           -------------------------------------
                                           Name:  Frederick E. Blumer
                                           Title: Vice President

                        Signature Page to Limited Waiver
<PAGE>

           LIMITED WAIVER AND TEMPORARY COMMITMENT INCREASE AGREEMENT

         This LIMITED WAIVER AND TEMPORARY COMMITMENT INCREASE AGREEMENT (this
"Waiver and Agreement"), dated as of November 20, 2001, is made among GENCORP
INC., an Ohio corporation (the "Borrower"), BANKERS TRUST COMPANY, for itself,
as Lender and as Administrative Agent for the Lenders (the "Administrative
Agent"), and the other Lenders signatory to the hereinafter defined Credit
Agreement.

                                    RECITALS

         A. The Administrative Agent, the Lenders and the Borrower are party to
that certain Credit Agreement dated as of December 28, 2000 (as amended by that
certain Amendment No. 1 to Credit Agreement and Amendment No. 1 to Post Closing
Agreement dated as of January 26, 2001 ("Amendment No. 1") and by that certain
Amendment No. 2 to Credit Agreement, Amendment No. 2 to Post Closing Agreement,
Amendment No. 1 to Collateral Agreements and Limited Waiver dated as of August
31, 2001 ("Amendment No. 2")) (collectively, the "Credit Agreement"). Unless
otherwise specified herein, capitalized terms used in this Waiver shall have the
meanings ascribed to them by the Credit Agreement.

         B. Pursuant to Amendment No. 2, the Borrower agreed to cause the
Revolving Commitment to be permanently reduced in part, and Revolving Loans
relating thereto to be repaid, on the earlier of 5:00 p.m. (New York City time)
(a) on October 15, 2001 or (b) the date of closing of the EIS Business Sale.

         C. The Borrower, the Lenders and the Administrative Agent are party to
that certain Limited Waiver dated as of October 15, 2001, pursuant to which the
Lenders agreed to waive, for the period commencing October 15, 2001 and ending
on October 31, 2001, any Event of Default or Unmatured Event of Default arising
solely out of the Borrower's breach of Section 2(b) of Amendment No. 2 (the
"Waived Section") as result of the Borrower's failure to permanently reduce the
Revolving Commitment and repay Revolving Loans, in part, as required by the
terms of said Section.

         D. Acting pursuant to Section 2.8 of the Credit Agreement, the Borrower
has elected to increase the aggregate Revolving Commitment by $2,833,333.33 (the
"Revolving Commitment Increase") to $152,833,333.33, on a temporary basis, and
has notified the Administrative Agent of such election.

         E. The Borrower has requested an extension of the limited waiver of the
Waived Section, and has requested certain additional waivers relating to the
Revolving Commitment Increase, and the Lenders are willing, on and subject to
the terms and conditions set forth below, to consent to such extension of the
limited waiver of the Waived Section and to consent to such other waivers, all
as provided below.

         NOW, THEREFORE, in consideration of the premises and the mutual
execution hereof and other good and valuable consideration, the parties hereto
agree as follows:

                     Signature Page to Waiver and Agreement
<PAGE>
         1. Limited Waiver. The Lenders hereby waive, for the period commencing
October 31, 2001 and ending on December 31, 2001, any Event of Default or
Unmatured Event of Default arising solely out of the Borrower's breach of
Section 2(b) of Amendment No. 2 as result of the Borrower's failure to
permanently reduce the Revolving Commitment and repay Revolving Loans, in part,
as required by the terms of said Section. Upon expiration of the waiver set
forth in the preceding sentence without compliance by the Borrower with the
requirements specified therein, such waiver shall be automatically revoked and
the requirements of the Credit Agreement (as amended by Amendment No. 1 and
Amendment No. 2) waived thereby shall again be in full force with retroactive
effect to the dates specified in the Credit Agreement (as amended by Amendment
No. 1 and Amendment No. 2). In such case, following such expiration and
noncompliance as described in the preceding sentences, the Administrative Agent
and the Lenders shall have all rights and remedies under the Credit Agreement
(as amended by Amendment No. 1 and Amendment No. 2) and any other Loan Document
or otherwise that the Administrative Agent and the Lenders would have had if any
such waiver had never been granted.

         2. Temporary Revolving Commitment Increase and related Waivers. In
accordance with Section 2.8 of the Credit Agreement, Bank One, NA hereby agrees
to increase its Revolving Commitment by the amount of $2,833,333.33 (the
"Revolving Commitment Increase"), effective for the period commencing October
31, 2001 and ending on December 31, 2001, for a total Revolving Commitment under
the Credit Agreement of $34,500,000 with respect to such Lender, and each of the
Administrative Agent and the Borrower consents to the foregoing additional,
temporary Revolving Commitment. The Borrower, the Administrative Agent and the
Lenders hereby acknowledge that, pursuant to Section 2.8 of the Credit
Agreement, the Credit Agreement is deemed amended without further action by any
party to reflect the revised Revolving Commitment of Bank One, NA. In connection
with the foregoing Revolving Commitment Increase, the Lenders hereby waive any
terms or conditions precedent provided for in said Section 2.8 of the Credit
Agreement with regard to the implementation of the Revolving Commitment
Increase, including, without limitation, the prescribed minimum amount of such
increase, advance notice of such increase, delivery of financial projections,
and the solicitation of the existing Lenders in connection with such increase,
and the Borrower, the Administrative Agent and the Lenders agree that the
Revolving Commitment Increase shall become effective on the effective date of
this Waiver and Amendment without further action on the part of the Borrower,
the Administrative Agent, Bank One, NA, or the Lenders. On or prior to 5:00 p.m.
(New York City time) on December 31, 2001, the Borrower shall cause the
Revolving Commitment to be permanently reduced, in part, in the aggregate
principal amount of the Revolving Commitment Increase, and shall cause any
Revolving Loans relating thereto to be paid in full.

         3. Limitation on Borrowings. Notwithstanding the foregoing paragraphs
1. and 2., the Borrower hereby agrees that at such time as the Borrower shall
request Revolving Loans which, together with the Assigned Dollar Value of all
outstanding Revolving Loans, would cause the then outstanding Revolving Loans
(including the proposed Revolving Loans) to exceed an Assigned Dollar Value of
$146,833,333.33, such proposed Revolving Loans shall be applied by the Borrower
solely to repay in full the Bank One, NA loan facility currently outstanding to
Henniges (as further identified on Schedule 8.2(b) to the Credit Agreement) (the
"Henniges Line of Credit") and, simultaneously with such repayment, the Borrower
shall cause the Henniges

                     Signature Page to Waiver and Agreement
<PAGE>
Line of Credit to be cancelled, with such repayment and cancellation occurring
not later than the second (2nd) Business Day following the distribution of
proceeds of such Revolving Loans to the Borrower from the Administrative Agent;
provided that in no event shall the Henniges Line of Credit be repaid and
cancelled later than November 30, 2001. Upon repayment and cancellation of the
Henniges Line of Credit, the limitation on the Borrower set forth in this
paragraph 3. shall expire and shall no longer apply to the Borrower or to the
aggregate Revolving Commitments.

         4. Representation and Warranty. As an inducement to the Lenders to
grant the foregoing waivers, the Borrower represents and warrants that, after
giving effect to this Waiver and Agreement, as of the date hereof (a) there
exists no Event of Default or Unmatured Event of Default and (b) the
representations and warranties contained in the Credit Agreement are true and
correct except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or warranty
shall have been true and correct on and as of such earlier date.

         5. Effective Time. This Waiver and Agreement shall become effective
upon the execution and delivery hereof by the Borrower, the Administrative Agent
and the Required Lenders.

         6. Miscellaneous.

                 (a) The execution, delivery and effectiveness of this
         Waiver and Agreement shall not operate as a waiver of any right, power
         or remedy of the Administrative Agent or any Lender under the Credit
         Agreement or any Loan Document, nor constitute a waiver of any Event of
         Default, Unmatured Event of Default, condition or provision of the
         Credit Agreement or any Loan Document, except as specifically set forth
         herein. Except as specifically waived above, the Credit Agreement and
         the other Loan Documents shall remain in full force and effect and are
         hereby ratified and confirmed. The Borrower hereby reaffirms its
         obligations under the Credit Agreement and all of the other Loan
         Documents to which it is a party.

                  (b) Section headings in this Waiver and Agreement are included
         herein for convenience of reference only and shall not constitute a
         part of this Waiver and Agreement for any other purposes.

                  (c) This Waiver and Agreement may be executed in any number of
         counterparts, each of which when so executed shall be deemed an
         original but all such counterparts shall constitute one and the same
         instrument

         7. Affirmation of Subsidiary Guarantors. By its signature set forth
below, each Subsidiary Guarantor hereby confirms to the Administrative Agent and
the Lenders that, after giving effect to this Waiver and Agreement and the
transactions contemplated hereby, including, the Revolving Commitment Increase,
the Subsidiary Guaranty of such Subsidiary Guarantor and each other Loan
Document to which such Subsidiary Guarantor is a party continues in full force
and effect and is the legal, valid and binding obligation of such Subsidiary
Guarantor, enforceable against such Subsidiary Guarantor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the

                     Signature Page to Waiver and Agreement
<PAGE>
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.

         8. Successors and Assigns. This Waiver and Agreement shall be binding
on and shall inure to the benefit of the Borrower, the Administrative Agent, the
Lenders and their respective successors and assigns; provided that the Borrower
may not assign its rights, obligations, duties or other interests hereunder
without the prior written consent of the Administrative Agent and the Lenders.
The terms and provisions of this Waiver and Agreement are for the purpose of
defining the relative rights and obligations of the Borrower, the Administrative
Agent and the Lenders with respect to the transactions contemplated hereby and
there shall be no third party beneficiaries of any of the terms and provisions
of this Waiver and Agreement.

         9. Incorporation of Credit Agreement. The provisions contained in
Sections 12.4, 12.9 and 12.10 of the Credit Agreement are incorporated herein by
reference to the same extent as if reproduced herein in their entirety with
respect to this Waiver and Agreement.

         10. Counterparts. This Waiver and Agreement may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Delivery
of an executed counterpart of a signature page to this Waiver and Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Waiver and Agreement.

                      [signature pages immediately follow]

                     Signature Page to Waiver and Agreement
<PAGE>
IN WITNESS WHEREOF, this Waiver. has been duly executed as of the date first
written above.

                                            GENCORP INC.

                                            By: /s/ Yasmin R. Seyal
                                                --------------------------------
                                                YASMIN R. SEYAL
                                                Senior Vice President, Finance

                     Signature Page to Waiver and Agreement
<PAGE>
                                            AEROJET-GENERAL CORPORATION,
                                            as Subsidiary Guarantor

                                            By: /s/ Yasmin R. Seyal
                                                --------------------------------
                                                YASMIN R. SEYAL
                                                Treasurer

                     Signature Page to Waiver and Agreement
<PAGE>
                                      AEROJET ORDANCE TENNESSEE, INC., as
                                      Subsidiary Guarantor, Assignor and Pledgor

                                      By: /s/ Brian E. Sweeney
                                          --------------------------------------
                                          BRIAN E. SWEENEY
                                          Vice President and Secretary

                     Signature Page to Waiver and Agreement
<PAGE>
                                            GENCORP PROPERTY INC., as Subsidiary
                                            Guarantor, Assignor and Pledgor

                                            By: /s/ Yasmin R. Seyal
                                                --------------------------------
                                                YASMIN R. SEYAL
                                                Treasurer

                     Signature Page to Waiver and Agreement
<PAGE>
                                         PENN INTERNATIONAL INC., as Subsidiary
                                         Guarantor, Assignor and Pledgor

                                         By: /s/ Terry L. Hall
                                             -----------------------------------
                                             TERRY L. HALL
                                             President

                     Signature Page to Waiver and Agreement
<PAGE>
                                  GDX LLC, as Subsidiary Guarantor, Assignor and
                                  Pledgor

                                  By: /s/ Yasmin R. Seyal
                                      ------------------------------------------
                                      YASMIN R. SEYAL
                                      Treasurer

                     Signature Page to Waiver and Agreement
<PAGE>
                                  GDX AUTOMOTIVE INC.,
                                  as Subsidiary Guarantor, Assignor and Pledgor

                                  By: /s/ Yasmin R. Seyal
                                      ------------------------------------------
                                      YASMIN R. SEYAL
                                      Treasurer

                     Signature Page to Waiver and Agreement
<PAGE>
                                 BANKERS TRUST COMPANY,
                                 as Lender, Administrative Agent and Collateral
                                 Agent

                                 By: /s/ Marguerite Sutton
                                     -------------------------------------------
                                     Name:  Marguerite Sutton
                                     Title: Vice President

                     Signature Page to Waiver and Agreement
<PAGE>
                                            BANK ONE, NA,
                                            as Lender

                                            By: /s/ Karen C. Ryan
                                                --------------------------------
                                                Name:  Karen C. Ryan
                                                Title: Director

                     Signature Page to Waiver and Agreement
<PAGE>
                                            ABN AMRO Bank, N.V.,
                                            as Lender

                                            By: /s/ Mary L. Honda
                                                --------------------------------
                                                Name:  MARY L. HONDA
                                                Title: Group Vice President

                                            By: /s/ Edward John Hill III
                                                --------------------------------
                                                Name:  EDWARD JOHN HILL III
                                                Title: Assistant Vice President

                     Signature Page to Waiver and Agreement
<PAGE>
                                            THE BANK OF NEW YORK,
                                            as Lender

                                            By: /s/ Elizabeth Ying
                                                --------------------------------
                                            Name:  Elizabeth Ying
                                            Title: Vice President

                     Signature Page to Waiver and Agreement
<PAGE>
                                            BANK OF NOVA SCOTIA,
                                            as Lender

                                            By: /s/ Mark Sparrow
                                                --------------------------------
                                                Name:   Mark Sparrow
                                                Title:  Director

                     Signature Page to Waiver and Agreement
<PAGE>
                                            WELLS FARGO BANK, N.A.,
                                            as Lender

                                            By: /s/ Rick A. Souza
                                                --------------------------------
                                                Name:  Rick A. Souza
                                                Title: Vice President

                     Signature Page to Waiver and Agreement
<PAGE>
                                            FIRST UNION NATIONAL BANK,
                                            as Lender

                                            By: /s/ Frederick E. Blumer
                                                --------------------------------
                                                Name:  Frederick E. Blumer
                                                Title: Vice President

                     Signature Page to Waiver and Agreement
<PAGE>

                          LIMITED WAIVER AND AMENDMENT

         This LIMITED WAIVER AND AMENDMENT (this "Waiver and Amendment"), dated
as of December 31, 2001, is made among GENCORP INC., an Ohio corporation (the
"Borrower"), BANKERS TRUST COMPANY, for itself, as Lender and as Administrative
Agent for the Lenders (the "Administrative Agent"), and the other Lenders
signatory to the hereinafter defined Credit Agreement.

                                    RECITALS

         A. The Administrative Agent, the Lenders and the Borrower are party to
that certain Credit Agreement dated as of December 28, 2000 (as amended by that
certain Amendment No. 1 to Credit Agreement and Amendment No. 1 to Post Closing
Agreement dated as of January 26, 2001 ("Amendment No. 1") and by that certain
Amendment No. 2 to Credit Agreement, Amendment No. 2 to Post Closing Agreement,
Amendment No. 1 to Collateral Agreements and Limited Waiver dated as of August
31, 2001 ("Amendment No. 2")) (collectively, the "Credit Agreement"). Unless
otherwise specified herein, capitalized terms used in this Waiver and Amendment
shall have the meanings ascribed to them by the Credit Agreement.

         B. Pursuant to Amendment No. 2, the Borrower agreed to cause the
Revolving Commitment to be permanently reduced in part, and Revolving Loans
relating thereto to be repaid, on the earlier of 5:00 p.m. (New York City time)
(a) on October 15, 2001 or (b) the date of closing of the EIS Business Sale.

         C. The Borrower, the Lenders and the Administrative Agent are party to
that certain Limited Waiver dated as of October 15, 2001, pursuant to which the
Lenders agreed to waive, for the period commencing October 15, 2001 and ending
on October 31, 2001, any Event of Default or Unmatured Event of Default arising
solely out of the Borrower's breach of Section 2(b) of Amendment No. 2 (the
"Waived Section") as result of the Borrower's failure to permanently reduce the
Revolving Commitment and repay Revolving Loans, in part, as required by the
terms of said Section.

         D. The Borrower, the Lenders and the Administrative Agent are party to
that certain Limited Waiver and Temporary Increase Agreement dated as of
November 20, 2001, pursuant to which (i) the Lenders agreed to waive, for the
period commencing October 31, 2001 and ending on December 31, 2001, any Event of
Default or Unmatured Event of Default arising solely out of the Borrower's
breach of the Waived Section as result of the Borrower's failure to permanently
reduce the Revolving Commitment and repay Revolving Loans, in part, as required
by the terms of said Section and (ii) acting pursuant to Section 2.8 of the
Credit Agreement, the Borrower elected to increase the aggregate Revolving
Commitment by $2,833,333.33 (the "Revolving Commitment Increase") to
$152,833,333.33, on a temporary basis, and Bank One, NA agreed to increase its
Revolving Commitment by the Revolving Commitment Increase for the period
commencing October 31, 2001 and ending on December 31, 2001.
<PAGE>
         E. By its terms, the Revolving Commitment Increase will terminate on
December 31, 2001 and the aggregate Revolving Commitment of the Lenders after
such date shall be equal to $150,000,000.

         F. The Borrower has requested an extension of the limited waiver of the
Waived Section and an amendment of the Credit Agreement to permit its
subsidiary, GenCorp Canada, Inc. to enter into a certain credit arrangement with
The Bank of Nova Scotia, and the Lenders are willing, on and subject to the
terms and conditions set forth below, (i) to consent to such extension of the
limited waiver of the Waived Section and (ii) to amend the Credit Agreement to
provide for the extension of credit to GenCorp Canada, Inc., all as provided
below.

         NOW, THEREFORE, in consideration of the premises and the mutual
execution hereof and other good and valuable consideration, the parties hereto
agree as follows:

         1. Limited Waiver. The Lenders hereby waive, for the period commencing
December 31, 2001 and ending on February 15, 2002, any Event of Default or
Unmatured Event of Default arising solely out of the Borrower's breach of
Section 2(b) of Amendment No. 2 as result of the Borrower's failure to
permanently reduce the Revolving Commitment and repay Revolving Loans, in part,
as required by the terms of said Section. Upon expiration of the waiver set
forth in the preceding sentence without compliance by the Borrower with the
requirements specified therein, such waiver shall be automatically revoked and
the requirements of the Credit Agreement (as amended by Amendment No. 1 and
Amendment No. 2) waived thereby shall again be in full force with retroactive
effect to the dates specified in the Credit Agreement (as amended by Amendment
No. 1 and Amendment No. 2). In such case, following such expiration and
noncompliance as described in the preceding sentences, the Administrative Agent
and the Lenders shall have all rights and remedies under the Credit Agreement
(as amended by Amendment No. 1 and Amendment No. 2) and any other Loan Document
or otherwise that the Administrative Agent and the Lenders would have had if any
such waiver had never been granted.

         2. Amendment of Credit Agreement. Section 8.2 of the Credit Agreement
is hereby amended by (i) in subsection (o) thereof, deleting the word "and"
immediately following the phrase "AFC's obligation to repay such advances" and
inserting in lieu thereof the following ";", (ii) in subsection (p) thereof,
deleting the period immediately following the phrase "any any time exceed
$100,000,000" and inserting in lieu thereof the phrase "; and", and (iii)
inserting the following new subsection (q) immediately after subsection (p)
therein:

                  "(q) Indebtedness of GenCorp Canada, Inc. under a credit
         facility made available by The Bank of Nova Scotia or such other
         lender; provided, that the amount of such Indebtedness shall not exceed
         $5,000,000 in the aggregate at any one time outstanding."

         3. Representation and Warranty. As an inducement to the Lenders to
grant the foregoing waiver and to consent to the foregoing amendment, the
Borrower represents and warrants that, after giving effect to this Waiver and
Amendment, as of the date hereof (a) there exists no Event of Default or
Unmatured Event of Default and (b) the representations and warranties contained
in the Credit Agreement are true and correct except to the extent any such

                                       2
<PAGE>
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct on
and as of such earlier date.

         4. Effective Time. This Waiver and Amendment shall become effective
upon the execution and delivery hereof by the Borrower, the Administrative Agent
and the Required Lenders.

         5. Miscellaneous.

                           (a) The execution, delivery and effectiveness of this
         Waiver and Amendment shall not operate as a waiver of any right, power
         or remedy of the Administrative Agent or any Lender under the Credit
         Agreement or any Loan Document, nor constitute a waiver of any Event of
         Default, Unmatured Event of Default, condition or provision of the
         Credit Agreement or any Loan Document, except as specifically set forth
         herein. Except as specifically waived or amended above, the Credit
         Agreement and the other Loan Documents shall remain in full force and
         effect and are hereby ratified and confirmed. The Borrower hereby
         reaffirms its obligations under the Credit Agreement and all of the
         other Loan Documents to which it is a party.

                  (b) Section headings in this Waiver and Amendment are included
         herein for convenience of reference only and shall not constitute a
         part of this Waiver and Amendment for any other purposes.

                  (c) This Waiver and Amendment may be executed in any number of
         counterparts, each of which when so executed shall be deemed an
         original but all such counterparts shall constitute one and the same
         instrument

         6. Affirmation of Subsidiary Guarantors. By its signature set forth
below, each Subsidiary Guarantor hereby confirms to the Administrative Agent and
the Lenders that, after giving effect to this Waiver and Amendment and the
transactions contemplated hereby, the Subsidiary Guaranty of such Subsidiary
Guarantor and each other Loan Document to which such Subsidiary Guarantor is a
party continues in full force and effect and is the legal, valid and binding
obligation of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.

         7. Successors and Assigns. This Waiver and Amendment shall be binding
on and shall inure to the benefit of the Borrower, the Administrative Agent, the
Lenders and their respective successors and assigns; provided that the Borrower
may not assign its rights, obligations, duties or other interests hereunder
without the prior written consent of the Administrative Agent and the Lenders.
The terms and provisions of this Waiver and Amendment are for the purpose of
defining the relative rights and obligations of the Borrower, the Administrative
Agent and the Lenders with respect to the transactions contemplated hereby and
there shall be no third party beneficiaries of any of the terms and provisions
of this Waiver and Amendment.

                                       3
<PAGE>
         8. Incorporation of Credit Agreement. The provisions contained in
Sections 12.4, 12.9 and 12.10 of the Credit Agreement are incorporated herein by
reference to the same extent as if reproduced herein in their entirety with
respect to this Waiver and Amendment.

         9. Counterparts. This Waiver and Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Delivery
of an executed counterpart of a signature page to this Waiver and Amendment by
telecopy shall be effective as delivery of a manually executed counterpart of
this Waiver and Amendment.

                      [signature pages immediately follow]

                                       4
<PAGE>
IN WITNESS WHEREOF, this Waiver. has been duly executed as of the date first
written above.

                                        GENCORP INC.

                                        By: /s/ Yasmin R. Seyal
                                                --------------------------------
                                                YASMIN R. SEYAL
                                                Senior Vice President, Finance

                     Signature Page to Waiver and Amendment
<PAGE>
                                        AEROJET-GENERAL CORPORATION,
                                        as Subsidiary Guarantor

                                        By: /s/ Yasmin R. Seyal
                                            ------------------------------------
                                            Name:  YASMIN R. SEYAL
                                            Title:   Treasurer

                     Signature Page to Waiver and Amendment
<PAGE>
                                      AEROJET ORDANCE TENNESSEE, INC., as
                                      Subsidiary Guarantor, Assignor and Pledgor

                                      By: /s/ Brian E. Sweeney
                                          --------------------------------------
                                          BRIAN E. SWEENEY
                                          Vice President and Secretary

                     Signature Page to Waiver and Amendment
<PAGE>
                                        GENCORP PROPERTY INC., as Subsidiary
                                        Guarantor, Assignor and Pledgor

                                        By: /s/ Yasmin R. Seyal
                                            ------------------------------------
                                            YASMIN R. SEYAL
                                            Treasurer

                     Signature Page to Waiver and Amendment
<PAGE>
                                        PENN INTERNATIONAL INC., as Subsidiary
                                        Guarantor, Assignor and Pledgor

                                        By: /s/ Terry L. Hall
                                            ------------------------------------
                                            TERRY L. HALL
                                            President

                     Signature Page to Waiver and Amendment
<PAGE>
                                  GDX LLC, as Subsidiary Guarantor, Assignor and
                                  Pledgor

                                  By: /s/ Yasmin R. Seyal
                                      ------------------------------------------
                                      YASMIN R. SEYAL
                                      Treasurer

                     Signature Page to Waiver and Amendment
<PAGE>
                                   GDX AUTOMOTIVE INC.,
                                   as Subsidiary Guarantor, Assignor and Pledgor

                                  By: /s/ Yasmin R. Seyal
                                      ------------------------------------------
                                      YASMIN R. SEYAL
                                      Treasurer

                     Signature Page to Waiver and Amendment
<PAGE>
                                  BANKERS TRUST COMPANY,
                                  as Lender, Administrative Agent and Collateral
                                  Agent

                                  By: /s/ Marguerite Sutton
                                      ------------------------------------------
                                      Name:  Marguerite Sutton
                                      Title: Vice President

                     Signature Page to Waiver and Amendment
<PAGE>
                                        BANK ONE, NA,
                                        as Lender

                                        By: /s/ Karen C. Ryan
                                            ------------------------------------
                                            Name:   Karen C. Ryan
                                            Title:  Director

                     Signature Page to Waiver and Amendment
<PAGE>
                                        ABN AMRO Bank, N.V.,
                                        as Lender

                                        By: /s/ Terrence J. Ward
                                            ------------------------------------
                                            Name:  TERRENCE J. WARD
                                            Title: Group Vice President

                                        By: /s/ Wendy E. Pace
                                            ------------------------------------
                                            Name:  WENDY E. PACE
                                            Title: Assistant Vice President

                     Signature Page to Waiver and Amendment
<PAGE>
                                        THE BANK OF NEW YORK,
                                        as Lender

                                        By: /s/ Lisa Y. Brown
                                            ------------------------------------
                                        Name:  LISA Y. BROWN
                                        Title: Vice President & Division Head

                     Signature Page to Waiver and Amendment
<PAGE>
                                        NATIONAL CITY BANK,
                                        as Lender

                                        By: /s/ Tom Gurbach
                                            ------------------------------------
                                            Name:  Tom Gurbach
                                            Title: Vice President

                     Signature Page to Waiver and Amendment
<PAGE>
                                        THE NORTHERN TRUST COMPANY,
                                        as Lender

                                        By: /s/ Joseph A. Wemhoff
                                            ------------------------------------
                                            Name:  JOSEPH A. WEMHOFF
                                            Title: Vice President

                     Signature Page to Waiver and Amendment
<PAGE>
                                        WELLS FARGO BANK, N.A.,
                                        as Lender

                                        By: /s/ Rick A. Souza
                                            ------------------------------------
                                            Name:  Rick A. Souza
                                            Title: Vice President

                     Signature Page to Waiver and Amendment
<PAGE>
                                        BANK OF NOVA SCOTIA, as Lender

                                        By: /s/ Mark Sparrow
                                            ------------------------------------
                                            Name:  MARK SPARROW
                                            Title: Director

                     Signature Page to Waiver and Amendment
<PAGE>
                                        FIRST UNION NATIONAL BANK,
                                        as Lender

                                        By: /s/ Frederick E. Blumer
                                            ------------------------------------
                                            Name:  FREDERICK E. BLUMER
                                            Title: Vice President

                     Signature Page to Waiver and Amendment
<PAGE>
                                 LIMITED WAIVER

         This LIMITED WAIVER (this "Waiver"), dated as of February 15, 2002, is
made among GENCORP INC., an Ohio corporation (the "Borrower"), BANKERS TRUST
COMPANY, for itself, as Lender and as Administrative Agent for the Lenders (the
"Administrative Agent"), and the other Lenders signatory to the hereinafter
defined Credit Agreement.

                                    RECITALS

         A.       The Administrative Agent, the Lenders and the Borrower are
party to that certain Credit Agreement dated as of December 28, 2000 (as amended
by that certain Amendment No. 1 to Credit Agreement and Amendment No. 1 to Post
Closing Agreement dated as of January 26, 2001 ("Amendment No. 1"), by that
certain Amendment No. 2 to Credit Agreement, Amendment No. 2 to Post Closing
Agreement, Amendment No. 1 to Collateral Agreements and Limited Waiver dated as
of August 31, 2001 ("Amendment No. 2") and by that certain Limited Waiver and
Amendment dated as of December 31, 2001 (the "Limited Waiver and Amendment"))
(collectively, the "Credit Agreement"). Unless otherwise specified herein,
capitalized terms used in this Waiver shall have the meanings ascribed to them
by the Credit Agreement.

         B.       Pursuant to Amendment No. 2, the Borrower agreed to cause the
Revolving Commitment to be permanently reduced in part, and Revolving Loans
relating thereto to be repaid, on the earlier of 5:00 p.m. (New York City time)
(a) on October 15, 2001 or (b) the date of closing of the EIS Business Sale.

         C.       The Borrower, the Lenders and the Administrative Agent are
party to that certain Limited Waiver dated as of October 15, 2001, pursuant to
which the Lenders agreed to waive, for the period commencing October 15, 2001
and ending on October 31, 2001, any Event of Default or Unmatured Event of
Default arising solely out of the Borrower's breach of Section 2(b) of Amendment
No. 2 (the "Waived Section") as result of the Borrower's failure to permanently
reduce the Revolving Commitment and repay Revolving Loans, in part, as required
by the terms of said Section.

         D.       The Borrower, the Lenders and the Administrative Agent are
party to that certain Limited Waiver and Temporary Commitment Increase Agreement
dated as of November 20, 2001, pursuant to which (i) the Lenders agreed to
waive, for the period commencing October 31, 2001 and ending on December 31,
2001, any Event of Default or Unmatured Event of Default arising solely out of
the Borrower's breach of the Waived Section as result of the Borrower's failure
to permanently reduce the Revolving Commitment and repay Revolving Loans, in
part, as required by the terms of said Section and (ii) acting pursuant to
Section 2.8 of the Credit Agreement, the Borrower elected to increase the
aggregate Revolving Commitment by $2,833,333.33 (the "Revolving Commitment
Increase") to $152,833,333.33, on a temporary basis, and Bank One, NA agreed to
increase its Revolving Commitment by the Revolving Commitment Increase for the
period commencing October 31, 2001 and ending on December 31, 2001.
<PAGE>
         E.       The Borrower, the Lenders and the Administrative Agent are
party to the Limited Waiver and Amendment, pursuant to which the Lenders agreed
to waive, for the period commencing December 31, 2001 and ending on February 15,
2002, any Event of Default or Unmatured Event of Default arising solely out of
the Borrower's breach of the Waived Section as result of the Borrower's failure
to permanently reduce the Revolving Commitment and repay Revolving Loans, in
part, as required by the terms of said Section.

         F.       By its terms, the Revolving Commitment Increase will terminate
on February 15, 2002 and the aggregate Revolving Commitment of the Lenders after
such date shall be equal to $150,000,000.

         G.       The Borrower has requested an extension of the limited waiver
of the Waived Section, and the Lenders are willing, on and subject to the terms
and conditions set forth below, to consent to such extension of the limited
waiver of the Waived Section, as provided below.

         NOW, THEREFORE, in consideration of the premises and the mutual
execution hereof and other good and valuable consideration, the parties hereto
agree as follows:

         1.       Limited Waiver. The Lenders hereby waive, for the period
commencing February 15, 2002 and ending on the earlier of (i) the date on which
the Borrower has completed an unsecured subordinated debt or equity financing of
not less than $35,000,000 or (ii) March 8, 2002, any Event of Default or
Unmatured Event of Default arising solely out of the Borrower's breach of
Section 2(b) of Amendment No. 2 as result of the Borrower's failure to
permanently reduce the Revolving Commitment and repay Revolving Loans, in part,
as required by the terms of said Section. Upon expiration of the waiver set
forth in the preceding sentence without compliance by the Borrower with the
requirements specified therein, such waiver shall be automatically revoked and
the requirements of the Credit Agreement (as amended by Amendment No. 1,
Amendment No. 2 and the Limited Waiver and Amendment) waived thereby shall again
be in full force with retroactive effect to the dates specified in the Credit
Agreement (as amended by Amendment No. 1, Amendment No. 2 and the Limited Waiver
and Amendment). In such case, following such expiration and noncompliance as
described in the preceding sentences, the Administrative Agent and the Lenders
shall have all rights and remedies under the Credit Agreement (as amended by
Amendment No. 1, Amendment No. 2 and the Limited Waiver and Amendment) and any
other Loan Document or otherwise that the Administrative Agent and the Lenders
would have had if any such waiver had never been granted.

         2.       Representation and Warranty. As an inducement to the Lenders
to grant the foregoing waiver, the Borrower represents and warrants that, after
giving effect to this Waiver, as of the date hereof (a) there exists no Event of
Default or Unmatured Event of Default and (b) the representations and warranties
contained in the Credit Agreement and the other Loan Documents are true and
correct except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or warranty
shall have been true and correct on and as of such earlier date.

         3.       Effective Time. This Waiver shall become effective upon the
execution and delivery hereof by the Borrower, the Administrative Agent and the
Required Lenders.

                                       2
<PAGE>
         4.       Miscellaneous.

                           (a)      The execution, delivery and effectiveness of
         this Waiver shall not operate as a waiver of any right, power or remedy
         of the Administrative Agent or any Lender under the Credit Agreement or
         any other Loan Document, or constitute a waiver of any Event of
         Default, Unmatured Event of Default, condition or provision of the
         Credit Agreement or any other Loan Document, except as specifically set
         forth herein. Except as specifically waived above, the Credit Agreement
         and the other Loan Documents shall remain in full force and effect and
         are hereby ratified and confirmed. The Borrower hereby reaffirms its
         obligations under the Credit Agreement and all of the other Loan
         Documents to which it is a party.

                           (b)      Section headings in this Waiver are included
         herein for convenience of reference only and shall not constitute a
         part of this Waiver for any other purposes.

                           (c)      This Waiver may be executed in any number of
         counterparts, each of which when so executed shall be deemed an
         original but all such counterparts shall constitute one and the same
         instrument

         6.       Affirmation of Subsidiary Guarantors. By its signature set
forth below, each Subsidiary Guarantor hereby confirms to the Administrative
Agent and the Lenders that, after giving effect to this Waiver and the
transactions contemplated hereby, the Subsidiary Guaranty of such Subsidiary
Guarantor and each other Loan Document to which such Subsidiary Guarantor is a
party continues in full force and effect and is the legal, valid and binding
obligation of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.

         7.       Successors and Assigns. This Waiver shall be binding on and
shall inure to the benefit of the Borrower, the Administrative Agent, the
Lenders and their respective successors and assigns; provided that the Borrower
may not assign its rights, obligations, duties or other interests hereunder
without the prior written consent of the Administrative Agent and the Lenders.
The terms and provisions of this Waiver are for the purpose of defining the
relative rights and obligations of the Borrower, the Administrative Agent and
the Lenders with respect to the transactions contemplated hereby and there shall
be no third party beneficiaries of any of the terms and provisions of this
Waiver.

         8.       Incorporation of Credit Agreement. The provisions contained in
Sections 12.4, 12.9 and 12.10 of the Credit Agreement are incorporated herein by
reference to the same extent as if reproduced herein in their entirety with
respect to this Waiver.

                                       3
<PAGE>
         9.       Counterparts. This Waiver may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Waiver by telecopy shall be
effective as delivery of a manually executed counterpart of this Waiver.

                      [signature pages immediately follow]

                                       4
<PAGE>
         IN WITNESS WHEREOF, this Waiver has been duly executed as of the date
first written above.

                                       GENCORP INC.

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  YASMIN R. SEYAL
                                           Title: Senior Vice President, Finance

                        Signature Page to GenCorp Waiver
<PAGE>
                                       AEROJET-GENERAL CORPORATION,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  YASMIN R. SEYAL
                                           Title: Treasurer

                        Signature Page to GenCorp Waiver
<PAGE>
                                       AEROJET ORDNANCE TENNESSEE, INC.,
                                       as Subsidiary

                                       By: /s/ Brian E. Sweeney
                                           -------------------------------------
                                           Name:  Brian E. Sweeney
                                           Title: Vice President and Secretary

                        Signature Page to GenCorp Waiver
<PAGE>
                                       PENN INTERNATIONAL INC, as Subsidiary
                                       Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  YASMIN R. SEYAL
                                           Title: Treasurer

                        Signature Page to GenCorp Waiver
<PAGE>
                                       GDX LLC, as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  YASMIN R. SEYAL
                                           Title: TREASURER

                        Signature Page to GenCorp Waiver
<PAGE>
                                       GDX AUTOMOTIVE INC.,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  Yasmin R. Seyal
                                           Title: Treasurer

                        Signature Page to GenCorp Waiver
<PAGE>

                                       GENCORP PROPERTY INC.,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  Yasmin R. Seyal
                                           Title: Treasurer

                        Signature Page to GenCorp Waiver

<PAGE>
                                       BANKERS TRUST COMPANY,
                                       as Lender and Administrative Agent

                                       By: /s/ Gregory Shefrin
                                           -------------------------------------
                                           Name:  GREGORY SHEFRIN
                                           Title: Director

                        Signature Page to GenCorp Waiver

<PAGE>
                                       BANK ONE, NA, as Lender

                                       By: /s/ Karen C. Ryan
                                           -------------------------------------
                                           Name:  KAREN C. RYAN
                                           Title: Director

                        Signature Page to GenCorp Waiver
<PAGE>
                                       THE BANK OF NEW YORK, as Lender

                                       By: /s/ Lisa Y. Brown
                                           -------------------------------------
                                           Name:  LISA Y. BROWN
                                           Title: Vice President & Division
                                                  Manager
                                           Title:

                        Signature Page to GenCorp Waiver
<PAGE>
                                       NATIONAL CITY BANK, as Lender

                                       By: /s/ Tom Gurbach
                                           -------------------------------------
                                           Name:  TOM GURBACH
                                           Title: Vice President

                        Signature Page to GenCorp Waiver
<PAGE>
                                       THE NORTHERN TRUST COMPANY,
                                       as Lender

                                       By: /s/ Melissa A. Whitson
                                           -------------------------------------
                                           Name:  MELISSA A. WHITSON
                                           Title: Vice President

                        Signature Page to GenCorp Waiver
<PAGE>
                                       WELLS FARGO BANK, N.A.,
                                       as Lender

                                       By: /s/ Rick A. Souza
                                           -------------------------------------
                                           Name:  RICK A. SOUZA
                                           Title: Vice President

                        Signature Page to GenCorp Waiver
<PAGE>
                                       ABN AMRO Bank N.V.,
                                       as Lender

                                       By: /s/ Terrence J. Ward
                                           -------------------------------------
                                           Name:  TERRENCE J. WARD
                                           Title: Group Vice President

                                       By: /s/ Edward John Hill III
                                           -------------------------------------
                                           Name:  EDWARD JOHN HILL III
                                           Title: Assistant Vice President

                        Signature Page to GenCorp Waiver
<PAGE>
                                                                  Execution Copy

                 AMENDMENT NO. 4 TO CREDIT AGREEMENT AND WAIVER

         This AMENDMENT NO. 4 TO CREDIT AGREEMENT AND WAIVER (this "Amendment
No. 4"), dated as of February 28, 2002 (the "Effective Date") is made among
GENCORP INC., an Ohio corporation ("Borrower"), BANKERS TRUST COMPANY, for
itself, as a Lender and as Administrative Agent for the Lenders ("Administrative
Agent"), and the other Lenders signatory to the hereinafter defined Credit
Agreement.

                                    RECITALS

         A.       The Administrative Agent, the Lenders and the Borrower are
party to that certain Credit Agreement dated as of December 28, 2000 (as amended
by that certain Amendment No. 1 to Credit Agreement and Amendment No. 1 to Post
Closing Agreement dated as of January 26, 2001 ("Amendment No. 1"), that certain
Amendment No. 2 to Credit Agreement, Amendment No. 2 to Post Closing Agreement,
Amendment No. 1 to Collateral Agreements and Limited Waiver dated as of August
31, 2001 ("Amendment No. 2") and that certain Limited Waiver and Amendment dated
as of December 31, 2001 (the "Limited Waiver and Amendment")) (collectively with
Amendment No. 1, Amendment No. 2 and the Limited Waiver and Amendment, and as
further amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement").

         B.       On and subject to the terms and conditions hereof, the
Administrative Agent, the Lenders and the Borrower wish to amend certain
provisions of the Credit Agreement (i) to add a Term C Facility under the Credit
Agreement and (ii) to reflect certain modifications to the Credit Agreement as
set forth herein, all subject to the express terms and conditions specified in
this Amendment No. 4 and, in connection with the actions contemplated by such
amendments, waive certain provisions of the Credit Agreement.

         C.       On and subject to the terms and conditions hereof, and in
order to cause the Term C Lenders to extend additional credit to the Borrower
through the addition of the Term C Facility, the Borrower wishes to grant to the
Administrative Agent, on behalf of the Initial Term C Lenders, on a first
priority basis, a collateral interest in certain real estate located in
California and Nevada and in certain additional collateral, all subject to the
terms and conditions specified in this Amendment No. 4.

         D.       On and subject to the terms and conditions hereof, and in
order to cause the Lenders to (i) forbear from enforcement of an Event of
Default resulting from the Borrower's failure to a maintain a certain maximum
leverage ratio or a certain minimum interest coverage, each as of the Borrower's
fiscal quarter ended November 30, 2001, and (ii) amend certain provisions of the
Credit Agreement, including, without limitation, the maximum leverage ratio, the
minimum interest coverage ratio and the fixed charge coverage ratio applicable
to the Borrower under the Credit Agreement as described herein, the Borrower
wishes to grant to the Administrative Agent certain collateral interests, which
shall be held on behalf of the Initial Term C Lenders, on a first priority
basis, and on behalf of certain additional Lenders, on a second or third
priority basis, as the case may be, all subject to the terms and conditions
specified in this Amendment No. 4.
<PAGE>
         E.       This Amendment No. 4 shall constitute a Loan Document and
these Recitals shall be construed as part of this Amendment No. 4; capitalized
terms used herein without definition are so used as defined in the Credit
Agreement.

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

         1. Amendments to Credit Agreement. Subject to the conditions set forth
in Section 6 hereof, the Credit Agreement is hereby amended as follows:

                  (a)      Section 1.1 of the Credit Agreement shall be amended
         by deleting the lead-in paragraph to the definition of "Applicable Base
         Rate Margin" and by inserting in lieu thereof the following:

                  ""Applicable Base Rate Margin" means at any date, (i) with
                  respect to Revolving Loans and Term A Loans, the applicable
                  percentage set forth in the following table under the column
                  Applicable Base Rate Margin opposite the Most Recent Leverage
                  Ratio as of such date, (ii) with respect to Term B Loans,
                  2.25%, and (ii) with respect to Term C Loans, (A) 3.50% with
                  respect to Term C Loans with Interest Periods commencing on or
                  prior to June 28, 2002, (B) 4.00% with respect to Term C Loans
                  with Interest Periods commencing after June 28, 2002 but on or
                  prior to September 28, 2002, (C) 4.50% with respect to Term C
                  Loans with Interest Periods commencing after September 28,
                  2002 but on or prior to December 28, 2002, (D) 5.00% with
                  respect to Term C Loans with Interest Periods commencing after
                  December 28, 2002 but on or prior to March 28, 2003, (E) 5.50%
                  with respect to Term C Loans with Interest Periods commencing
                  after March 28, 2003 but on or prior to June 28, 2003, (F)
                  6.00% with respect to Term C Loans with Interest Periods
                  commencing after June 28, 2003 but on or prior to September
                  28, 2003, (G) 6.50% with respect to Term C Loans with respect
                  to Interest Periods commencing after September 28, 2003 but on
                  or prior to December 28, 2003, (H) 7.00% with respect to Term
                  C Loans with respect to Interest Periods commencing after
                  December 28, 2003 but on or prior to March 28, 2004 and (I)
                  7.50% with respect to Term C Loans with respect to Interest
                  Periods commencing after March 28, 2004:"

                  (b)      Section 1.1 of the Credit Agreement shall be amended
         by deleting the lead-in paragraph to the definition of "Applicable
         Eurocurrency Margin" and by inserting in lieu thereof the following:

                  ""Applicable Eurocurrency Margin" means at any date, (i) with
                  respect to Revolving Loans and Term A Loans, the applicable
                  percentage set forth in the following table under the column
                  Applicable Eurocurrency Margin opposite the Most Recent
                  Leverage Ratio on such date, (ii) with respect to Term B
                  Loans, 3.25%, and (iii) with respect to Term C Loans, (A)
                  4.50% with respect to Term C Loans with Interest Periods
                  commencing on or prior to June 28, 2002, (B) 5.00% with
                  respect to Term C Loans with Interest Periods commencing after
                  June 28, 2002 but on or prior to September 28, 2002, (C) 5.50%
                  with respect to Term C

                                       2
<PAGE>
                  Loans with Interest Periods commencing after September 28,
                  2002 but on or prior to December 28, 2002, (D) 6.00% with
                  respect to Term C Loans with Interest Periods commencing after
                  December 28, 2002 but on or prior to March 28, 2003, (E) 6.50%
                  with respect to Term C Loans with Interest Periods commencing
                  after March 28, 2003 but on or prior to June 28, 2003, (F)
                  7.00% with respect to Term C Loans with Interest Periods
                  commencing after June 28, 2003 but on or prior to September
                  28, 2003, (G) 7.50% with respect to Term C Loans with respect
                  to Interest Periods commencing after September 28, 2003 but on
                  or prior to December 28, 2003, (H) 8.00% with respect to Term
                  C Loans with respect to Interest Periods commencing after
                  December 28, 2003 but on or prior to March 28, 2004 and (I)
                  8.50% with respect to Term C Loans with respect to Interest
                  Periods commencing after March 28, 2004:"

                  (c)      Section 1.1 of the Credit Agreement shall be amended
         by deleting clause (ii) of the definition of "Asset Disposition" and by
         inserting in lieu thereof the following:

                  "(ii) a sale, transfer or other disposition of real property
                  by the Borrower or any of its Subsidiaries as part of its
                  trade or business shall not constitute an "Asset Disposition"
                  for purposes of this Agreement (provided that such real estate
                  sales, transfers or other dispositions subject to this clause
                  (ii), individually or in the aggregate, shall not exceed
                  $40,000,000 in any Fiscal Year, and provided, further, that
                  for so long as the Term C Loans shall be outstanding, this
                  clause (ii) shall not apply)."

                  (d)      Section 1.1 of the Credit Agreement shall be amended
         by deleting the definitions of "Commitment", "Facility", "Interest
         Payment Date", "Loan", "Maximum Commitment", "Scheduled Repayments",
         "Term C Facility", "Term Loans" and "Total Commitment" in their
         entirety and by inserting the following definitions of "Commitment",
         "Facility", "Interest Payment Date", "Loan", "Maximum Commitment",
         "Scheduled Repayments", "Term C Facility", "Term Loans" and "Total
         Commitment" in lieu thereof in the appropriate alphabetical order:

                  "Commitment" means, with respect to each Lender, the aggregate
                  of the Revolving Commitment, the Term A Commitment, the Term B
                  Commitment and the Term C Commitment of such Lender and
                  "Commitments" means such commitments of all of the Lenders
                  collectively."

                  "Facility" means any of the credit facilities established
                  under this Agreement, i.e., the Term A Facility, the Term B
                  Facility, the Term C Facility or the Revolving Facility."

                  "Interest Payment Date" means (i) as to any Base Rate Loan,
                  each Quarterly Payment Date to occur while such Loan is
                  outstanding, (ii) as to any Eurocurrency Loan, the last day of
                  the Interest Period applicable thereto and (iii) as to any
                  Eurocurrency Loan having an Interest Period longer than three
                  months, each three (3) month anniversary of the first day of
                  the Interest Period applicable thereto and the last day of the
                  Interest Period applicable thereto; provided,

                                       3
<PAGE>
                  however, that, in addition to the foregoing, each of (A) the
                  date upon which both the Revolving Commitments have been
                  terminated and the Revolving Loans have been paid in full and
                  (B) the Term A Loan Maturity Date, the Term B Loan Maturity
                  Date and the Term C Loan Maturity Date shall be deemed to be
                  an "Interest Payment Date" with respect to any interest which
                  is then accrued hereunder for such Loan."

                  "Loan" means any Term A Loan, Term B Loan, Term C Loan,
                  Revolving Loan or Swing Line Loan and "Loans" means all such
                  Loans collectively."

                  "Maximum Commitment" means, when used with reference to any
                  Lender, the aggregate of such Lender's Term A Commitment, its
                  Term B Commitment, its Term C Commitment, and its Revolving
                  Commitment in the amounts not to exceed those set forth
                  opposite the name of such Lender on Schedule 1.1(a) hereto,
                  subject to reduction from time to time in accordance with the
                  terms of this Agreement."

                  "Scheduled Repayments" means a Scheduled Term A Repayment, a
                  Scheduled Term B Repayment or a Scheduled Term C Repayment."

                  "Term C Facility" means the credit facility under this
                  Agreement evidenced by the Term C Commitments and the Term C
                  Loans."

                  "Term Loans" means the Term A Loans, the Term B Loans and the
                  Term C Loans collectively."

                  "Total Commitment" means, at the time any determination
                  thereof is made, the sum of the Term A Commitments, Term B
                  Commitments, Term C Commitments and the Revolving Commitments
                  at such time."

                  (e)      Section 1.1 of the Credit Agreement is amended by
         inserting the definitions of "1900 Lease", "AFC Assets", "AFC
         Collateral", "Amendment No. 4", "Assignment and Pledge Collateral",
         "California Collateral Valuation", "California Collateral Valuation
         Date", "Equity Capital", "Elliott Note", "Elliott Note Assignment and
         Pledge", "Fourth Amendment Effective Date", "Initial Term C Lenders",
         "Mortgaged California Real Estate", "Mortgaged Nevada/California Real
         Estate", "Nevada/California Collateral Valuation", "Nevada/California
         Collateral Valuation Date", "Scheduled Term C Repayments", "Second
         Drawing Amount," "Second Term C Lenders", "Subordinated Notes",
         "Subordinated Notes Issue Date", "Term C Commitment", "Term C
         Commitment Increase Amount", "Term C Lender", "Term C Lenders", "Term C
         Loan", "Term C Loan Maturity Date", "Term C Note", "Term C Percentage"
         and "Term C Pro Rata Share" in the appropriate alphabetical order:

                  "1900 Lease" means that certain Lease dated March 1, 1995, by
                  and between Aerojet and the State of California, acting by and
                  through the Director of the Department of General Services, as
                  such agreement may be modified or amended in accordance with
                  the terms thereof and hereof."

                                       4
<PAGE>
                  "AFC Assets" means all right, title and interest of AFC in, to
                  and under all of the following, whether now existing or
                  hereafter from time to time acquired, (i) each and every
                  receivable, (ii) all contracts, together with all contract
                  rights, (iii) all inventory, (iv) all equipment, (v) all
                  trademarks, together with the registrations and right to all
                  renewals thereof, and the goodwill of the business of AFC
                  symbolized by the trademarks, (vi) all patents and copyrights,
                  and all reissues, renewals or extensions thereof, (vii) all
                  software of AFC and all intellectual property rights therein
                  and all other proprietary information of AFC, including, but
                  not limited to, trade secrets, (viii) all other goods, general
                  intangibles, chattel paper, documents, investment property and
                  instruments, (ix) all supporting obligations and
                  letters-of-credit rights, (x) all cash, accounts, deposits,
                  deposit accounts, securities and insurance policies now or at
                  any time hereafter in the possession or under control of AFC
                  or its respective bailees and any interest thereon, (xi) all
                  other personal property of AFC, whether now owned or hereafter
                  acquired, (xii) all documents of title evidencing or issued
                  with respect to any of the foregoing, and (xiii) all proceeds
                  and products of any and all of the foregoing (including,
                  without limitation, all insurance and claims for insurance
                  effected or held for the benefit of AFC in respect thereof)."

                  "AFC Collateral" has the meaning assigned to that term in
                  Section 7.19(a)(i)."

                  "Amendment No. 4" means that certain Amendment No. 4 to Credit
                  Agreement and Waiver dated as of February 28, 2002, by and
                  among the Borrower, the Administrative Agent for the Lenders,
                  and the other Lenders signatory to the Credit Agreement."

                  "Assignment and Pledge Collateral" has the meaning assigned to
                  that term in Section 7.19(a)(ii)."

                  "California Collateral Valuation" means, as of the California
                  Collateral Valuation Date, the fair market value of the
                  Mortgaged California Real Estate as reflected in the appraisal
                  delivered to the Administrative Agent and the Term C Lenders
                  pursuant to Section 7.19(c)."

                  "California Collateral Valuation Date" has the meaning
                  assigned to that term in Section 7.19(c)."

                  "Equity Capital" means an equity contribution to the Borrower
                  by a third party which shall be evidenced through an issuance
                  of Capital Stock by the Borrower and/or any of its
                  Subsidiaries, the proceeds of which shall be applied in
                  accordance with Section 4.4(o)."

                  "Elliott Note" means that certain Promissory Note dated
                  November 28, 2001 from Elliott Whiterock, LLC in favor of
                  Aerojet Investments Ltd. in the principal amount of
                  $20,900,625.00, as secured by that certain Deed of Trust with

                                       5
<PAGE>
                  Assignment of Rents dated November 29, 2001, as such
                  Promissory Note or Deed may be amended or modified in
                  accordance with the term thereof and hereof."

                  "Elliott Note Assignment and Pledge" means, collectively, (i)
                  that certain endorsement of the Elliot Note dated as of the
                  Fourth Amendment Effective Date from Aerojet Investments Ltd.
                  in favor of the Collateral Agent on behalf of the Secured
                  Creditors, and (ii) that certain Assignment of Deed of Trust
                  and Secured Indebtedness dated as of the Fourth Amendment
                  Effective Date from Aerojet Investments Ltd. in favor of the
                  Collateral Agent on behalf of the Secured Creditors, as such
                  endorsement or assignment may be amended or modified in
                  accordance with the term thereof and hereof."

                  "Fourth Amendment Effective Date" means February 28, 2002."

                  "Initial Term C Lenders" has the meaning assigned to that term
                  in Section 2.1(e)(i)."

                  "Mortgaged California Real Estate" has the meaning assigned to
                  that term in Section 7.19(a)(iv)."

                  "Mortgaged Nevada/California Real Estate" has the meaning
                  assigned to that term in Section 7.19(a)(iii)."

                  "Nevada/California Collateral Valuation" means, as of the
                  Nevada/California Collateral Valuation Date, the fair market
                  value of the Mortgaged Nevada/California Real Estate, the
                  Elliot Note and the 1900 Lease, all as reflected in the
                  appraisal (or appraisals) delivered to the Administrative
                  Agent and the Initial Term C Lenders pursuant to Section
                  7.19(b)."

                  "Nevada/California Collateral Valuation Date" has the meaning
                  assigned to that term in Section 7.19(b)."

                  "Scheduled Term C Repayments" means, with respect to principal
                  payments on the Term C Loans, the Dollar amount payable on
                  each Quarterly Payment Date, commencing on June 28, 2002 (as
                  such amount may be reduced from time to time pursuant to
                  Sections 4.3 and 4.4), equal to 2.5% of the principal amount
                  of the Term C Loans; provided, that the last of such principal
                  payments shall be in an amount equal to the aggregate
                  principal amount of the Term C Loans outstanding on the Term C
                  Loan Maturity Date."

                  "Second Drawing Amount" has the meaning assigned to that term
                  in Section 2.1(e)(ii)."

                  "Second Term C Lenders" has the meaning assigned to that term
                  in Section 2.1(e)(ii)."

                                       6
<PAGE>
                  "Subordinated Notes" means, collectively, those certain
                  unsecured subordinated notes to be issued by the Borrower in a
                  maximum principal amount which shall not exceed $70,000,000 at
                  any one time outstanding, as the same may be amended,
                  restated, supplemented or otherwise modified from time to time
                  as permitted hereunder; provided, that warrants, if any,
                  issued by the Borrower, directly or indirectly, to the holders
                  of such unsecured subordinated notes shall not constitute
                  "Subordinated Notes" for purposes of this definition and shall
                  not be considered in the calculation of the dollar limitation
                  described herein."

                  "Subordinated Notes Issue Date" means the date of issuance of
                  the Subordinated Notes by the Borrower."

                  "Term C Commitment" means, with respect to any Term C Lender,
                  the principal amount set forth opposite such Lender's name on
                  Schedule 1.1(a) hereto or in any Assignment and Assumption
                  Agreement under the caption "Amount of Term C Commitment", as
                  such commitment may be adjusted from time to time pursuant to
                  this Agreement, and "Term C Commitments" means such
                  commitments collectively, which commitments equal $25,000,000
                  in the aggregate as of the date hereof."

                  "Term C Commitment Increase Amount" has the meaning assigned
                  to that term in Section 2.1(e)."

                  "Term C Lender" means any Lender (which for all purposes shall
                  include the Second Term C Lenders) which has a Term C
                  Commitment or is owed a Term C Loan (or a portion thereof)."

                  "Term C Lenders" means, collectively, all of the Term C
                  Lenders (which for all purposes shall include the Second Term
                  C Lenders)."

                  "Term C Loan" and "Term C Loans" have the meanings assigned to
                  those terms in Section 2.1(e)."

                  "Term C Loan Maturity Date" means December 28, 2002; provided,
                  however, that in the event the Borrower has completed an
                  unsecured subordinated debt or equity financing of not less
                  than $35,000,000 on or prior to December 28, 2002 in
                  accordance with the terms of this Agreement, the Term C Loan
                  Maturity Date shall be amended, on the date of completion of
                  such financing, to be December 28, 2004 without any further
                  action on the part of the Term C Lenders or any other Lender
                  party to this Agreement."

                  "Term C Note" and "Term C Notes" have the meanings assigned to
                  those terms in Section 2.2(a)."

                  "Term C Percentage" means, at any time, a fraction (expressed
                  as a percentage) the numerator of which is equal to the
                  aggregate principal amount of all Term C Loans outstanding at
                  such time and the denominator of which is equal to the

                                       7
<PAGE>
                  aggregate principal amount of all Term Loans outstanding at
                  such time."

                  "Term C Pro Rata Share" means, when used with reference to any
                  Term C Lender and any described aggregate or total amount, an
                  amount equal to the result obtained by multiplying such
                  described aggregate or total amount by a fraction the
                  numerator of which shall be such Term C Lender's then
                  outstanding Term C Loan and the denominator of which shall be
                  all then outstanding Term C Loans."

                  (f)      Section 2.1 of the Credit Agreement shall be amended
         by inserting the following new subsection (e) immediately after
         subsection (d) thereof:

                           "(e) Term C Loans. (i) Each Term C Lender, severally
                  and for itself alone, hereby agrees, on the terms and subject
                  to the conditions hereinafter set forth and in reliance upon
                  the representations and warranties set forth herein and in the
                  other Loan Documents, to make a loan (each such loan, a "Term
                  C Loan" and collectively, the "Term C Loans") to the Borrower
                  on the Fourth Amendment Effective Date in an aggregate
                  principal amount equal to the Term C Commitment of such Term C
                  Lender (the Term C Lenders making loans on the Fourth
                  Amendment Effective Date shall be collectively referred to
                  herein as the "Initial Term C Lenders"). The Term C Loans (1)
                  shall be incurred by the Borrower pursuant to a single
                  drawing, which shall be on the Fourth Amendment Effective Date
                  (and the Borrower is hereby deemed to have requested the Term
                  C Loans be advanced on the Fourth Amendment Effective Date and
                  the Term C Lenders hereby waive the delivery of a written
                  Notice of Borrowing from the Borrower in connection with the
                  initial funding of Term C Loans on the Fourth Amendment
                  Effective Date), (2) shall be denominated in Dollars, (3)
                  shall be made as Base Rate Loans and, except as hereinafter
                  provided, may, at the option of the Borrower, be maintained as
                  and/or converted into Base Rate Loans or Eurocurrency Loans,
                  provided, that all Term C Loans made by the Term C Lenders
                  pursuant to the same Borrowing shall, unless otherwise
                  specifically provided herein, consist entirely of Term C Loans
                  of the same Type and (4) shall not exceed for any Lender at
                  the time of incurrence thereof, such Term C Lender's Term C
                  Commitment. Each Term C Lender's Term C Commitment shall
                  expire immediately and without further action on the Fourth
                  Amendment Effective Date if the Term C Loans are not made on
                  such date. No amount of a Term C Loan which is repaid or
                  prepaid by the Borrower may be reborrowed hereunder.
                  Notwithstanding anything to the contrary herein, the Borrower
                  may elect only Base Rate Loans or Eurocurrency Loans with a
                  one month Interest Period until the earlier of (x) ninety (90)
                  days after the Fourth Amendment Effective Date or (y) the date
                  upon which the Administrative Agent determines (and notifies
                  the Borrower) that the primary syndication (and the resultant
                  addition of Persons as Lenders pursuant to Section 12.8) has
                  been completed.

                           (ii) On or prior to March 28, 2002 and so long as no
                  Event of Default or Unmatured Event of Default has occurred
                  and is continuing, the Borrower may, upon 10 Business Days'
                  prior written notice to the Administrative Agent, request on
                  one occasion that the Term C Commitment be increased by any or
                  all of the

                                       8
<PAGE>
                  Lenders party to this Agreement as of the date of such
                  request; provided that (i) no Lender shall be under any
                  obligation to increase its Term C Commitment or to participate
                  in the Term C Facility, and (ii) the aggregate amount of any
                  increase in the Term C Commitment (the "Term C Commitment
                  Increase Amount") shall not exceed $25,000,000 (the "Second
                  Drawing Amount"). Such notice shall (A) specify the requested
                  Term C Commitment Increase Amount; and (B) specify the
                  effective date of such Term C Commitment increase, which date
                  shall not be less than 10 Business Days following the date of
                  such written notice. Any increase in the Term C Commitment
                  hereunder is subject to the conditions precedent that the
                  Borrower and the Lenders participating in the Term C
                  Commitment Increase Amount (collectively, the "Second Term C
                  Lenders") shall have executed and delivered any documentation
                  reasonably required by the Administrative Agent to evidence
                  such increase of the Term C Commitment hereunder. The
                  documentation of the Term C Commitment Increase Amount shall
                  reflect such terms and conditions as agreed to by the Borrower
                  and the Second Term C Lenders, including, without limitation,
                  the pro rata sharing with the Second Term C Lenders of the
                  first priority security interest of the Initial Term C Lenders
                  in the AFC Collateral, the Assignment and Pledge Collateral,
                  the Mortgaged Nevada/California Real Estate and the Mortgaged
                  California Real Estate. On the date that the event described
                  in this Section 2.1(e) become effective, Schedule 1.1(a) shall
                  be deemed modified to reflect the revised Term C Commitment.
                  Notwithstanding any other provision of this Agreement, until
                  such time as the increase in the Term C Commitment described
                  herein shall have been requested by the Borrower or otherwise
                  terminated in accordance with the terms of this subclause
                  (ii), the Borrower shall be prohibited from requesting any
                  increase in the Revolving Commitment or the Term A Commitment
                  pursuant to Section 2.8 of the Credit Agreement.

                           (iii) To the extent the Term C Commitment Increase
                  Amount is provided to the Borrower pursuant to subclause (ii)
                  above, the Term C Loans made pursuant to the aggregate Term C
                  Commitment Increase Amount (i) shall be incurred by the
                  Borrower pursuant to a single drawing subject to the
                  conditions set forth in this Section 2.1(e), (ii) shall be
                  denominated in Dollars, (iii) shall be made as Base Rate Loans
                  and, except as hereinafter provided, may, at the option of the
                  Borrower, be maintained as and/or converted into Base Rate
                  Loans or Eurocurrency Loans, provided, that all Term C Loans
                  made by the Term C Lenders pursuant to the same Borrowing
                  shall, unless otherwise specifically provided herein, consist
                  entirely of Term C Loans of the same Type and (iv) shall not
                  exceed for any Second Term C Lender at the time of incurrence
                  thereof such Second Term C Lender's portion of the Term C
                  Commitment Increase Amount. To the extent made available
                  pursuant to subclause (ii) above, each Second Term C Lender's
                  portion of the Term C Commitment Increase Amount shall expire
                  immediately and without further action on March 28, 2002 if
                  the Term C Loans with respect to the Term C Commitment
                  Increase Amount are not made on or before such date.
                  Notwithstanding anything in this Agreement to the contrary, in
                  no event shall the Second Term C Lenders make a loan to the
                  Borrower under the Term C Commitment Increase Amount until
                  such time as (i) the Borrower has

                                        9
<PAGE>
                  completed an unsecured subordinated debt or equity financing
                  of not less than the principal amount of $35,000,000 on or
                  prior to the date of funding of the Second Drawing Amount, on
                  terms and conditions satisfactory to the Administrative Agent,
                  (ii) no Unmatured Event of Default or Event of Default has
                  occurred and is continuing, (iii) the Borrower's final report
                  on Form 10-K for Fiscal Year ending November 30, 2001 (the
                  "2001 Form 10-K") has been filed with the SEC, and (iv) Ernst
                  & Young LLP, the Borrower's independent public accountants,
                  have not qualified their audit report in any material respect
                  as to the reliability of the financial statements set forth in
                  the 2001 Form 10-K."

                  (g)      Subsection (a) of Section 2.2 of the Credit Agreement
         shall be amended by (i) deleting the word "and" immediately before the
         phrase "(4) if Swing Line Loans," and inserting "," in lieu thereof,
         and (ii) inserting immediately prior to the period at the end of such
         sentence, the phrase "and (5) if Term C Loans, by a promissory note
         (each, a "Term C Note" and, collectively, the "Term C Notes") duly
         executed and delivered by the Borrower substantially in the form of
         Exhibit 2.2(a)(5) hereto, with blanks appropriately completed in
         conformity herewith."

                  (h)      Section 2.6 of the Credit Agreement shall be amended
         by inserting immediately after the fourth sentence thereof, the
         following sentence:

                  "Each conversion or continuation of Term C Loans shall be
                  allocated among the Term C Loans of the Term C Lenders in
                  accordance with their respective Term C Pro Rata Shares."

                  (i)      Section 2.7 of the Credit Agreement shall be amended
         by deleting the first sentence thereof in its entirety and inserting
         the following in lieu thereof:

                  "No later than 1:00 p.m. (local time at the place of funding)
                  on the date specified in each Notice of Borrowing, each Lender
                  will make available its Term A Pro Rata Share of Term A Loans,
                  Term B Pro Rata Share of Term B Loans, Term C Pro Rata Share
                  of Term C Loans and Revolver Pro Rata Share of Revolving
                  Loans, as the case may be, of the Borrowing requested to be
                  made on such date in Dollars or Euro, as the case may be, and
                  in immediately available funds, at the Payment Office (for the
                  account of such non-U.S. office of the Administrative Agent as
                  the Administrative Agent may direct in the case of
                  Eurocurrency Loans) and the Administrative Agent will make
                  available to the Borrower at its Payment Office the aggregate
                  of the amounts so made available by the Lenders not later than
                  2:00 p.m. (local time in the place of payment)."

                  (j)      Section 2.7 of the Credit Agreement shall be amended
         by deleting the third to last sentence thereof in its entirety and
         inserting the following in lieu thereof:

                  "Further, such Lender shall be deemed to have assigned any and
                  all payments made of principal and interest on its Loans,
                  amounts due with respect to its Letters of Credit (or its
                  participations therein) and any other amounts due to it
                  hereunder first to the Administrative Agent to fund any
                  outstanding Loans made

                                       10
<PAGE>
                  available on behalf of such Lender by the Administrative Agent
                  pursuant to this Section 2.7 until such Loans have been funded
                  (as a result of such assignment or otherwise) and then to fund
                  Loans of all Lenders other than such Lender until each Lender
                  has outstanding Loans equal to its Term A Pro Rata Share of
                  all Term A Loans, its Term B Pro Rata Share of all Term B
                  Loans, its Term C Pro Rata Share of all Term C Loans, and its
                  Revolver Pro Rata Share of all Revolving Loans (as a result of
                  such assignment or otherwise)."

                  (k)      Section 2.9 of the Credit Agreement shall be amended
         by deleting the first sentence thereof in its entirety and inserting
         the following in lieu thereof:

                  "All Borrowings of Term A Loans, Term B Loans, Term C Loans
                  and Revolving Loans under this Agreement shall be loaned by
                  the Lenders pro rata on the basis of their Term A Commitments,
                  Term B Commitments, Term C Commitments and Revolving
                  Commitments, as the case may be."

                  (l)      Subsection (vi) of Section 3.4 of the Credit
         Agreement shall be deleted in its entirety and the following is
         substituted in lieu thereof:

                           "(vi) no Interest Period shall extend beyond the Term
                  A Loan Maturity Date for any Term A Loan, the Term B Loan
                  Maturity Date for any Term B Loan, the Term C Loan Maturity
                  Date for any Term C Loan, or the Revolver Termination Date for
                  any Revolving Loan; and"

                  (m)      Subsection (vii) of Section 3.4 of the Credit
         Agreement shall be deleted in its entirety and the following is
         substituted in lieu thereof:

                           "(vii) no Interest Period in respect to any Borrowing
                  of Term A Loans, Term B Loans or Term C Loans, as the case may
                  be, shall be selected which extends beyond any date upon which
                  a mandatory repayment of such Term Loans will be required to
                  be made under Section 4.4(b), (c) or (l), as the case may be,
                  if the aggregate principal amount of Term A Loans, Term B
                  Loans or Term C Loans, as the case may be, which have Interest
                  Periods which will expire after such date will be in excess of
                  the aggregate principal amount of Term A Loans, Term B Loans
                  or Term C Loans, as the case may be, then outstanding less the
                  aggregate amount of such required prepayment."

                  (n)      Subsection (b) of Section 4.2 of the Credit Agreement
         shall be deleted in its entirety and the following is substituted in
         lieu thereof:

                           "(b) Reduction of Term A Commitments, Term B
                  Commitments and Term C Commitments. The Term A Commitments and
                  Term B Commitments shall terminate on the Initial Borrowing
                  Date, after giving effect to the Borrowing of the Term A Loans
                  and Term B Loans on such date. The Term C Commitments shall
                  terminate on the Fourth Amendment Effective Date after giving
                  effect to the Borrowing of the Term C Loans on such date;
                  provided, however, that in the event of an increase in the
                  Term C Commitments pursuant to Section 2.1(e), the

                                       11
<PAGE>
                  Term C Commitment Increase Amount shall terminate on the
                  earlier of (i) the date of the initial funding of Term C Loans
                  made under the Term C Commitment Increase Amount or (ii) March
                  28, 2002, in either case, after giving effect to the Borrowing
                  of Term C Loans on such date."

                  (o)      Subsection (c) of Section 4.2 of the Credit Agreement
         shall be deleted in its entirety and the following is substituted in
         lieu thereof:

                           "(c) Proportionate Reductions. Each reduction or
                  adjustment to the Term Commitments or the Revolving
                  Commitments pursuant to this Section 4.2 shall apply
                  proportionately to the Term A Commitment, the Term B
                  Commitment, the Term C Commitment or the Revolving Commitment,
                  as the case may be, of each Lender."

                  (p)      Subsection (d) of Section 4.2 of the Credit Agreement
         shall be deleted in its entirety and the following is substituted in
         lieu thereof:

                           "(d) Reduction of Commitments. The Commitments (other
                  than the Term C Commitment) will terminate in their entirety
                  on January 31, 2001 unless the Initial Borrowing Date has
                  occurred on or before such date. The Term C Commitment will
                  terminate in its entirety on the Fourth Amendment Effective
                  Date after giving effect to the initial Borrowing of the Term
                  C Loans on such date; provided, however, that in the event of
                  an increase in the Term C Commitments pursuant to Section
                  2.1(e), the Term C Commitment Increase Amount shall terminate
                  on the earlier of (i) the date of the initial funding of Term
                  C Loans made under the Term C Commitment Increase Amount or
                  (ii) March 28, 2002, in either case, after giving effect to
                  the Borrowing of Term C Loans on such date."

                  (q)      Subclause (v) of Section 4.3(a) of the Credit
         Agreement shall be deleted in its entirety and the following is
         substituted in lieu thereof:

                  "(v) each voluntary prepayment of Term Loans shall be applied
                  first to the Scheduled Term C Repayments due within the 12
                  month period following the date of such prepayment in direct
                  order of maturity and, thereafter, shall be applied (in each
                  case, after giving effect to the prepayments made to the
                  Scheduled Term C Repayments due within such twelve month
                  period as specified above) to reduce the remaining Scheduled
                  Term C Repayments on a pro rata basis (based upon the then
                  remaining principal amount of such Scheduled Term C
                  Repayments) and, second to the Scheduled Term A Repayments and
                  Scheduled Term B Repayments due within the 12 month period
                  following the date of such prepayment in direct order of
                  maturity and, thereafter, subject to Section 4.5(c) shall be
                  applied in proportional amounts equal to the Term A Percentage
                  and the Term B Percentage (in each case, after giving effect
                  to the prepayments made to the Scheduled Term A Repayments and
                  the Scheduled Term B Repayments due within such twelve month
                  period as specified above), as the case may be, of such
                  remaining prepayment, if any, and within each Term Loan, shall
                  be applied to

                                       12
<PAGE>
                  reduce the remaining Scheduled Term A Repayments and Scheduled
                  Term B Repayments on a pro rata basis (based upon the then
                  remaining principal amount of such Scheduled Term A Repayments
                  and Scheduled Term B Repayments, respectively)."

                  (r)      The last sentence of Section 4.4(d) of the Credit
         Agreement shall be deleted in its entirety and the following is
         substituted in lieu thereof:

                  "Notwithstanding the foregoing or the terms of Section 4.5(a),
                  if, as of the date of any prepayment from Net Sale Proceeds
                  required pursuant to this Section 4.4(d), (A) the Borrower has
                  repaid in full all principal and interest on the Term B Loans
                  and on the Term C Loans and no amounts remain outstanding to
                  any Term B Lender with respect to the Term B Loans or to any
                  Term C Lender with respect to the Term C Loans and (B) the
                  Leverage Ratio of the Borrower, calculated for the Test Period
                  ending on the last day of the most recently ended Fiscal
                  Quarter, is less than 2.50 to 1.00, the Borrower may elect, in
                  its sole discretion, to apply 100% of such Net Sale Proceeds
                  (x) to purchase assets used or to be used in the businesses
                  referred to in Section 8.9, (y) to repay, pro rata, Term A
                  Loans or (z) to repay, pro rata, Revolving Loans (without a
                  permanent reduction of the Revolving Commitments)."

                  (s)      Subsection (f) of Section 4.4 of the Credit Agreement
         shall be deleted in its entirety and the following is substituted in
         lieu thereof:

                  "(f) Mandatory Payment With Proceeds of Capital Stock. On the
                  first Business Day after receipt thereof by the Borrower
                  and/or any of their Subsidiaries, an amount equal to 100% of
                  the Net Offering Proceeds of the sale or issuance of Capital
                  Stock of (or cash capital contributions to) the Borrower or
                  any of their Subsidiaries shall be applied as a mandatory
                  repayment of principal of the Term Loans pursuant to the terms
                  of Section 4.5(a) (in each case subject to modification of
                  such application as set forth in Section 4.5(c)); provided,
                  however, that notwithstanding the foregoing, Net Offering
                  Proceeds derived from the issuance of Capital Stock in
                  accordance with the Equity Capital shall first be applied in
                  accordance with Section 4.4(o). Notwithstanding the foregoing
                  or the terms of Section 4.5(a), if, as of the date of any
                  prepayment from Net Offering Proceeds required pursuant to
                  this Section 4.4(f), (A) the Borrower has repaid in full all
                  principal and interest on the Term B Loans and on the Term C
                  Loans and no amounts remain outstanding to any Term B Lender
                  with respect to the Term B Loans or to any Term C Lender with
                  respect to the Term C Loans and (B) the Leverage Ratio of the
                  Borrower, calculated for the Test Period ending on the last
                  day of the most recently ended Fiscal Quarter, is less than
                  2.50 to 1.00, the Borrower may elect, in its sole discretion,
                  to apply 100% of such Net Offering Proceeds (x) to purchase
                  assets used or to be used in the businesses referred to in
                  Section 8.9, (y) to repay, pro rata, Term A Loans or (z) to
                  repay, pro rata, Revolving Loans (without a permanent
                  reduction of the Revolving Commitments)."

                                       13
<PAGE>
                  (t)      The last sentence of Section 4.4(g) of the Credit
         Agreement shall be deleted in its entirety and the following is
         substituted in lieu thereof:

                  "Notwithstanding the foregoing or the terms of Section 4.5(a),
                  if, as of the date of any prepayment from net cash proceeds of
                  a Sale and Leaseback Transaction required pursuant to this
                  Section 4.4(g), (A) the Borrower has repaid in full all
                  principal and interest on the Term B Loans and on the Term C
                  Loans and no amounts remain outstanding to any Term B Lender
                  with respect to the Term B Loans or to any Term C Lender with
                  respect to the Term C Loans and (B) the Leverage Ratio of the
                  Borrower, calculated for the Test Period ending on the last
                  day of the most recently ended Fiscal Quarter, is less than
                  2.50 to 1.00, the Borrower may elect, in its sole discretion,
                  to apply 100% of such net cash proceeds (x) to purchase assets
                  used or to be used in the businesses referred to in Section
                  8.9, (y) to repay, pro rata, Term A Loans or (z) to repay, pro
                  rata, Revolving Loans (without a permanent reduction of the
                  Revolving Commitments)."

                  (u)      The last sentence of Section 4.4(h) of the Credit
         Agreement shall be deleted in its entirety and the following is
         substituted in lieu thereof:

                  "Notwithstanding the foregoing or the terms of Section 4.5(a),
                  if, as of the date of any prepayment from Net Offering
                  Proceeds required pursuant to this Section 4.4(h), (A) the
                  Borrower has repaid in full all principal and interest on the
                  Term B Loans and on the Term C Loans and no amounts remain
                  outstanding to any Term B Lender with respect to the Term B
                  Loans or to any Term C Lender with respect to the Term C Loans
                  and (B) the Leverage Ratio of the Borrower, calculated for the
                  Test Period ending on the last day of the most recently ended
                  Fiscal Quarter, is less than 2.50 to 1.00, the Borrower may
                  elect, in its sole discretion, to apply 100% of such Net
                  Offering Proceeds (x) to purchase assets used or to be used in
                  the businesses referred to in Section 8.9, (y) to repay, pro
                  rata, Term A Loans or (z) to repay, pro rata, Revolving Loans
                  (without a permanent reduction of the Revolving Commitments)."

                  (v)      Section 4.4(i) of the Credit Agreement shall be
         amended by deleting the amount of "10,000,000" in the proviso thereto
         and inserting in lieu thereof the amount of "15,000,000".

                  (w)      The last sentence of Section 4.4(j) of the Credit
         Agreement shall be deleted in its entirety and the following is
         substituted in lieu thereof:

                  "Notwithstanding the foregoing or the terms of Section 4.5(a),
                  if, as of the date of any prepayment from net proceeds of any
                  Recovery Event required pursuant to this Section 4.4(j), (A)
                  the Borrower has repaid in full all principal and interest on
                  the Term B Loans and on the Term C Loans and no amounts remain
                  outstanding to any Term B Lender with respect to the Term B
                  Loans or to any Term C Lender

                                       14
<PAGE>
                  with respect to the Term C Loans and (B) the Leverage Ratio of
                  the Borrower, calculated for the Test Period ending on the
                  last day of the most recently ended Fiscal Quarter, is less
                  than 2.50 to 1.00, the Borrower may elect, in its sole
                  discretion, to apply 100% of such net proceeds (x) to purchase
                  assets used or to be used in the businesses referred to in
                  Section 8.9, (y) to repay, pro rata, Term A Loans or (z) to
                  repay, pro rata, Revolving Loans (without a permanent
                  reduction of the Revolving Commitments)."

                  (x)      Section 4.4 of the Credit Agreement shall be amended
         by inserting the following new subsections (l), (m) and (n) immediately
         after subsection (k) thereof:

                           "(l) Scheduled Term C Repayments. The Borrower shall
                  cause to be paid Scheduled Term C Repayments on the Term C
                  Loans until the Term C Loans are paid in full in the amounts
                  and at the times specified in the definition of Scheduled Term
                  C Repayments to the extent that prepayments have not
                  previously been applied to such Scheduled Term C Repayments
                  (and such Scheduled Term C Repayments have not otherwise been
                  reduced) pursuant to the terms hereof. To the extent not
                  previously paid, all Term C Loans shall be due and payable on
                  the Term C Maturity Date.

                           (m) Mandatory Prepayment Upon Nevada/California
                  Collateral Valuation. To the extent that the Nevada/California
                  Collateral Valuation reflects an aggregate fair market value
                  of less than $50,000,000, on the Business Day following the
                  Nevada/California Collateral Valuation Date, the Borrower
                  shall cause to be paid all outstanding Term C Loans and shall
                  cause the Term C Commitments (to the extent not otherwise
                  terminated) to be permanently reduced in whole as provided in
                  Section 4.5(a).

                           (n) Mandatory Prepayment Upon California Collateral
                  Valuation. To the extent that the California Collateral
                  Valuation reflects an aggregate fair market value of less than
                  $100,000,000, on the Business Day following the California
                  Collateral Valuation Date, the Borrower shall cause to be paid
                  all outstanding Term C Loans and shall cause the Term C
                  Commitments (to the extent not otherwise terminated) to be
                  permanently reduced in whole as provided in Section 4.5(a).

                           (o) Mandatory Prepayment Upon Issuance of
                  Subordinated Notes or Equity Capital. On the Business Day of
                  receipt thereof by the Borrower, an amount equal to 100% of
                  the sum of the Net Offering Proceeds of (x) the Subordinated
                  Notes and (y) the Equity Capital (provided, however, that in
                  no amount shall the Net Offering Proceeds applied under this
                  Section 4.4(o) exceed $70,000,000) shall be applied as a
                  mandatory prepayment to repay outstanding Revolving Loans pro
                  rata (without a permanent reduction of the Revolving
                  Commitments). Amounts, if any, remaining after the prepayment
                  described in the preceding sentence (including, without
                  limitation, Net Offering Proceeds in excess of the $70,000,000
                  limitation applicable to this Section 4.4(o) as described

                                       15
<PAGE>
                  above) shall be applied in accordance with the terms of this
                  Agreement, including, without limitation, the other mandatory
                  prepayment provisions of this Section 4.4, as applicable."

                  (y)      Section 4.5(a) of the Credit Agreement shall be
         deleted in its entirety and the following is substituted in lieu
         thereof:

                           "(a) Prepayments. Subject in all events to the final
                  proviso set forth in Section 4.4(d), (f), (g), (h) and (j) and
                  except as otherwise expressly provided in Section 4.4(d), (j),
                  (k), (m), (n) and (o), all prepayments of principal made by
                  the Borrower pursuant to Section 4.4 (other than with respect
                  to 4.4(b), (c) and (l)) shall be applied to repay, first, the
                  Term C Loans, and second, the Term A Loans and the Term B
                  Loans (with the Term A Percentage of such repayment to be
                  applied as a repayment of Term A Loans and the Term B
                  Percentage of such repayment to be applied as a repayment of
                  Term B Loans). Any prepayment of Loans pursuant to Section
                  4.4(d) and (j) shall be applied (i) first, to the payment of
                  the unpaid principal amount of the Term C Loans, second, to
                  the payment of the unpaid principal amount of the Term A Loans
                  and the Term B Loans (with the Term A Percentage of such
                  repayment to be applied as a repayment of Term A Loans and the
                  Term B Percentage of such repayment to be applied as a
                  repayment of Term B Loans), third, to the prepayment of the
                  then outstanding balance of Swing Line Loans, fourth, to the
                  payment, pro rata, of the then outstanding balance of the
                  Revolving Loans, and fifth, to the cash collateralization of
                  LC Obligations; (ii) within each of the foregoing Loans, first
                  to the payment of Base Rate Loans and second to the payment of
                  Eurocurrency Loans; and (iii) with respect to Eurocurrency
                  Loans, in such order as the Borrower shall request (and in the
                  absence of such request, as the Administrative Agent shall
                  determine). Each prepayment of Term Loans made pursuant to
                  Section 4.4(d), (e), (f), (g), (h) and (j) shall be allocated
                  first to the Term C Loans and applied on a pro rata basis
                  against all Scheduled Term C Repayments until all such amounts
                  are paid in full, second to the Term A Loans and the Term B
                  Loans based on the aggregate principal amount of the Scheduled
                  Term A Repayments and the Scheduled Term B Repayments due
                  within the twelve month period following the date of such
                  prepayment in direct order of maturity, and, thereafter, shall
                  be allocated third to the Term A Loans and the Term B Loans in
                  proportional amounts equal to the Term A Percentage and the
                  Term B Percentage (in each case, after giving effect to the
                  prepayments made to the Scheduled Term A Repayments and
                  Scheduled Term B Repayments due within such twelve month
                  period as specified above), as the case may be, of such
                  remaining prepayment, if any, and, within each Term A Loan or
                  Term B Loan, shall be applied to reduce the remaining
                  Scheduled Term A Repayments and Scheduled Term B Repayments on
                  a pro rata basis (based upon the then remaining principal
                  amount of such Scheduled Term A Repayments and Scheduled Term
                  B Repayments, respectively). Any prepayment of Term Loans
                  pursuant to Section 4.4(i) shall be applied, first, pro rata
                  to each of the Scheduled Term C Repayments until all such
                  amounts are paid in full and second, pro rata to each of the
                  Scheduled Term A Repayments and Term B Repayments. Any
                  prepayment of Loans pursuant to Section 4.4(k) shall be
                  applied first to a

                                       16
<PAGE>
                  repayment of Term B Loans, applied to the Scheduled Term B
                  Repayments on a pro rata basis, and second, to repay
                  outstanding Revolving Loans (without a permanent reduction of
                  the Revolving Commitment) (and within such Facility, first, to
                  the prepayment of the then outstanding balance of Swing Line
                  Loans, second, to the payment, pro rata, of the then
                  outstanding balance of the Revolving Loans, and third, to the
                  cash collateralization of LC Obligations), and third, to the
                  Term A Loans, applied to reduce the Scheduled Term A
                  Repayments on a pro rata basis. Any repayment of Loans
                  pursuant to Section 4.4(m) and (n) shall be applied to a
                  repayment of Term C Loans (allocated to the Scheduled Term C
                  Repayments on a pro rata basis) and, concurrently therewith,
                  the Term C Commitments, if any, in effect shall be permanently
                  reduced to zero. Any prepayment of Loans pursuant to Section
                  4.4(o) shall be applied to repay outstanding Revolving Loans
                  (without a permanent reduction of the Revolving Commitment)
                  (and within such Facility, first, to the prepayment of the
                  then outstanding balance of Swing Line Loans, second, to the
                  payment, pro rata, of the then outstanding balance of the
                  Revolving Loans, and third, to the cash collateralization of
                  LC Obligations). If any prepayment of Eurocurrency Loans made
                  pursuant to a single Borrowing shall reduce the outstanding
                  Loans made pursuant to such Borrowing to an amount less than
                  the Minimum Borrowing Amount, such Borrowing shall immediately
                  be converted into Base Rate Loans, in the case of Loans
                  denominated in Dollars, or into Loans with a 30 day Interest
                  Period, in the case of Loans denominated in Euro. All
                  prepayments shall include payment of accrued interest on the
                  principal amount so prepaid, shall be applied to the payment
                  of interest before application to principal and shall include
                  amounts payable, if any, under Section 3.5."

                  (z)      Subsection (a) of Section 6.8 the Credit Agreement
         shall be amended by inserting the following sentence immediately
         following the only sentence thereof as follows:

                  "All proceeds of the Term C Loans incurred in accordance with
                  Section 2.1 hereof shall be used by the Borrower (i) to pay
                  fees and expenses incurred in connection with the addition of
                  the Term C Facility (or the increase thereof, if applicable)
                  and the transactions contemplated in accordance therewith and
                  (ii) for ongoing working capital needs and general corporate
                  purposes (other than to voluntarily prepay any Term Loan)."

                  (aa)     Article VII of the Credit Agreement shall be amended
         to insert the following new section immediately following Section 7.18
         thereof:

                  "Section 7.19. Addition of Collateral Concurrent with Addition
                  of Term C Facility and Forbearance of Lenders.

                           (a) In order to cause the Initial Term C Lenders to
                  extend additional credit to the Borrower in the form of the
                  Term C Facility on the Fourth

                                       17
<PAGE>
                  Amendment Effective Date and in order to cause the Lenders to
                  forbear from certain actions as described in Amendment No. 4,
                  the Borrower hereby agrees:

                           (i) to deliver or cause to be delivered to the
                           Administrative Agent, all in accordance with the
                           terms of Section 7.12 of this Agreement, on the
                           Fourth Amendment Effective Date, a pledge by the
                           Borrower of the Common Stock of AFC and a pledge and
                           grant of a security interest by AFC of all of the AFC
                           Assets (collectively, the pledges and the security
                           interest described herein are referred to as the "AFC
                           Collateral"), each in favor of the Administrative
                           Agent (A) on behalf of the Initial Term C Lenders to
                           secure payment of their respective Term C Loans, a
                           continuing security interest of first priority in all
                           the right, title and interest of the Borrower and
                           AFC, as the case may be, in the AFC Collateral and
                           (B) on behalf of the Lenders to secure payment of
                           their respective Obligations, a continuing security
                           interest of second priority in all the right, title
                           and interest of the Borrower and AFC, as the case may
                           be, in the AFC Collateral; and

                           (ii) to deliver or cause to be delivered to the
                           Administrative Agent, all on terms and conditions
                           satisfactory to the Administrative Agent, on the
                           Fourth Amendment Effective Date, (A) a pledge by
                           Aerojet Investments Ltd. of the Elliott Note,
                           together with a pledge by Aerojet Investments Ltd. of
                           its rights to the Deed of Trust securing the Elliot
                           Note, all pursuant to the Elliott Note Assignment and
                           Pledge and (B) an assignment by Aerojet of the 1900
                           Lease pursuant to a collateral assignment of leases
                           and rents ((collectively, the pledges and the
                           assignment described herein are referred to as the
                           "Assignment and Pledge Collateral"), each of favor of
                           the Administrative Agent (A) on behalf of the Initial
                           Term C Lenders to secure payment of their respective
                           Term C Loans, a continuing security interest of first
                           priority in all the right, title and interest of
                           Aerojet Investments Ltd. and Aerojet, as the case may
                           be, in the Assignment and Pledge Collateral, (B) on
                           behalf of the Initial Term C Lenders to secure
                           payment of their respective Revolving Loans and Term
                           A Loans, a continuing security interest of second
                           priority in all the right, title and interest of
                           Aerojet Investments Ltd. and Aerojet, as the case may
                           be, in the Assignment and Pledge Collateral and (C)
                           on behalf of the Lenders to secure payment of their
                           respective Obligations, a continuing security
                           interest of third priority in all the right, title
                           and interest of Aerojet Investments Ltd. and Aerojet,
                           as the case may be, in the Assignment and Pledge
                           Collateral; and

                           (iii) to grant a mortgage (or cause its applicable
                           Subsidiary to grant a mortgage) to the Administrative
                           Agent, all in accordance with the terms of Section
                           7.12 of this Agreement, as soon as possible but in no
                           event later than 30 days after the Fourth Amendment
                           Effective Date, on the following real property: (A)
                           two parcels of approximately 800 acres and

                                       18
<PAGE>
                           approximately 400 acres of land located near the
                           Company's facilities in Rancho Cordova, California,
                           (B) approximately 400 acres of land located in or
                           near Chino Hills, California, (C) approximately 10
                           acres located in Hollywood, California and (D)
                           approximately 10,000 acres located near Hawthorne,
                           Nevada, owned by the Borrower or any of its
                           Subsidiaries holding title of such real property and
                           as further identified to the Administrative Agent
                           ((A) through (D) are referred to herein collectively
                           as the "Mortgaged Nevada/California Real Estate"), in
                           favor of the Administrative Agent (x) on behalf of
                           the Initial Term C Lenders to secure payment of their
                           respective Term C Loans, a continuing security
                           interest of first priority in all the right, title
                           and interest of the Borrower and such applicable
                           Subsidiaries, as the case may be, in the Mortgaged
                           Nevada/California Real Estate, (y) on behalf of the
                           Initial Term C Lenders to secure payment of their
                           respective Revolving Loans and Term A Loans, a
                           continuing security interest of second priority in
                           all the right, title and interest of the Borrower and
                           such applicable Subsidiaries, as the case may be, in
                           the Mortgaged Nevada/California Real Estate, and (z)
                           on behalf of the Lenders to secure payment of their
                           respective Obligations, a continuing security
                           interest of third priority in all the right, title
                           and interest of the Borrower and such applicable
                           Subsidiaries, as the case may be, in the Mortgaged
                           Nevada/California Real Estate; and

                           (iv) to grant a mortgage (or cause its applicable
                           Subsidiary to grant a mortgage) to the Administrative
                           Agent, all in accordance with the terms of Section
                           7.12 of this Agreement, as soon as possible but in no
                           event later than 120 days after the Fourth Amendment
                           Effective Date, on the real property of the Borrower
                           or any of its Subsidiaries holding such title located
                           in or near Sacramento, California and as further
                           identified to the Administrative Agent (the
                           "Mortgaged California Real Estate"), in favor of the
                           Administrative Agent (A) on behalf of the Initial
                           Term C Lenders to secure payment of their respective
                           Term C Loans, a continuing security interest of first
                           priority in all the right, title and interest of the
                           Borrower and such applicable Subsidiaries, as the
                           case may be, in the Mortgaged California Real Estate,
                           (B) on behalf of the Initial Term C Lenders to secure
                           payment of their respective Revolving Loans and Term
                           A Loans, a continuing security interest of second
                           priority in all the right, title and interest of the
                           Borrower and such applicable Subsidiaries, as the
                           case may be, in the Mortgaged California Real Estate,
                           and (C) on behalf of the Lenders to secure payment of
                           their respective Obligations, a continuing security
                           interest of third priority in all the right, title
                           and interest of the Borrower and Aerojet, as the case
                           may be, in the Mortgaged California Real Estate.

                           (b) Within 60 days after the Fourth Amendment
                  Effective Date (the "Nevada/California Collateral Valuation
                  Date"), the Borrower will deliver to the Administrative Agent
                  and the Initial Term C Lenders, an appraisal (or appraisals)

                                       19
<PAGE>
                  setting forth the fair market value of the Mortgaged
                  Nevada/California Real Estate, the Elliot Note and the 1900
                  Lease, in each case as prepared by a nationally recognized
                  real estate appraisal firm acceptable to the Administrative
                  Agent and the Initial Term C Lenders. Such appraisal (or
                  appraisals) shall expressly provide that it (or they) may be
                  relied upon by the Administrative Agent and the Initial Term C
                  Lenders.

                           (c) Within 90 days after the Fourth Amendment
                  Effective Date (the "California Collateral Valuation Date"),
                  the Borrower will deliver to the Administrative Agent and the
                  Term C Lenders, an appraisal setting forth the fair market
                  value of the Mortgaged California Real Estate prepared by a
                  nationally recognized real estate appraisal firm acceptable to
                  the Administrative Agent and the Term C Lenders. Such
                  appraisal shall expressly provide that it may be relied upon
                  by the Administrative Agent and the Term C Lenders.

                           (d) Notwithstanding the foregoing, in the event the
                  Borrower has repaid in full all principal and interest on the
                  Term C Loans and no amounts remain outstanding to any Term C
                  Lender with respect to the Term C Loans and the Term C
                  Commitments have been permanently reduced in whole, the
                  Administrative Agent shall release, and is hereby authorized
                  to release without further action of the Term C Lenders, the
                  first priority security interest of the Initial Term C Lenders
                  in the AFC Collateral, the Assignment and Pledge Collateral,
                  the Mortgaged California Real Estate and the Mortgaged
                  Nevada/California Real Estate; provided, that in no event
                  shall the Administrative Agent release or in any way modify
                  the second priority security interest in the AFC Collateral,
                  or the second or third priority security interests in the
                  Assignment and Pledge Collateral, the Mortgaged California
                  Real Estate and the Mortgaged Nevada/California Real Estate
                  except in accordance with the terms of this Agreement."

                  (bb)     The last sentence of Section 8.1 of the Credit
         Agreement shall be deleted in its entirety and the following sentence
         shall be inserted in lieu thereof:

                  "Notwithstanding the foregoing clauses (a) through (g) of this
                  Section 8.1, the Borrower agrees that it will not, nor will it
                  permit any of its Subsidiaries to pledge, encumber or
                  otherwise suffer to exist thereon any Lien (other than
                  Customary Permitted Liens or the mortgages provided for in
                  Section 7.19(a)(iii) and (iv)), on any real property owned by
                  the Borrower or any of its Subsidiaries which is located in
                  the State of California or the State of Nevada."

                  (cc)     Section 8.2 of the Credit Agreement is hereby amended
         by (i) in subsection (q) thereof, deleting the "." and inserting in
         lieu thereof the following phrase "; and" and (ii) inserting the
         following new subsection (r) immediately after subsection (q) therein:

                                       20
<PAGE>
                  "(r) Indebtedness of the Borrower arising under the
                  Subordinated Notes; provided, that the principal amount of
                  such Indebtedness shall not exceed $70,000,000 in the
                  aggregate at any one time outstanding."

                  (dd)     Section 8.11 of the Credit Agreement is hereby
         amended (i) in subsection (iii) thereof, deleting the word "or", (ii)
         in subsection (iv) thereof, deleting the "." and inserting in lieu
         thereof the following phrase "; or" and (iii) inserting the following
         new subsection (v) immediately after subsection (iv) therein:

                           "(v) amend, modify or permit the amendment,
                  termination or modification of any term or provision of the
                  Elliot Note or the 1900 Lease without the prior written
                  consent of 66 2/3% of the Initial Term C Lenders."

                  (ee)     Article VIII of the Credit Agreement is hereby
         amended by inserting the following new Section 8.14 immediately after
         Section 8.13 therein:

                  "Section 8.14  Sale of Mortgaged Nevada/California Property or
                                 Mortgaged California Property.

                  Notwithstanding any other provision in this Agreement to the
                  contrary, including, without limitation, Section 8.3(l), the
                  Borrower will not, nor will it permit any of its Subsidiaries
                  to, sell all or any portion of the Mortgaged Nevada/California
                  Real Estate or the Mortgaged California Real Estate on or
                  after the Fourth Amendment Effective Date to the extent that
                  the sum of the estimated fair market value (as determined by
                  the Borrower in good faith and as agreed to by the
                  Administrative Agent) of the remaining Mortgaged
                  Nevada/California Real Estate and the Mortgaged California
                  Real Estate, together with the appraised fair market value of
                  the Elliot Note and the 1900 Lease, (assuming the consummation
                  of such sale) shall be less than an amount equal to (x) the
                  sum of the total Revolving Commitments, Term A Commitments and
                  Term C Commitments then outstanding, as adjusted to reflect
                  any mandatory repayments required from the net proceeds from
                  such sale of Mortgaged Nevada/California Real Estate or
                  Mortgaged California Real Estate, multiplied by (y) the number
                  2.0; provided, however, that this Section 8.14 shall not apply
                  to sales of Mortgaged Nevada/California Real Estate or
                  Mortgaged California Real Estate which in the aggregate do not
                  exceed $25,000,000 in any Fiscal Year, and provided, further,
                  however, that if as of any date of sale of all or any portion
                  of the Mortgaged Nevada/California Real Estate or the
                  Mortgaged California Real Estate, (A) the Borrower has repaid
                  in full all principal and interest on the Term C Loans and no
                  amounts remain outstanding to any Term C Lender with respect
                  to the Term C Loans and (B) the Leverage Ratio of the
                  Borrower, calculated for the Test Period ending on the last
                  day of the most recently ended Fiscal Quarter, is less than
                  2.50 to 1.00, this Section 8.14 shall not apply to the
                  Borrower or its Subsidiaries."

                  (ff)     Section 9.3 of the Credit Agreement shall be amended
         by deleting the ratio set forth opposite the Fiscal Quarter ending
         February 28, 2002, and inserting in lieu thereof the ratio of "3.50 to
         1.00".

                                       21
<PAGE>
                  (gg)     Section 9.4 of the Credit Agreement shall be amended
         by deleting the Fiscal Quarters ending February 28, 2002 and May 31,
         2002 and the ratios immediately set forth opposite such Fiscal
         Quarters, and inserting the following in lieu thereof:

<TABLE>
<CAPTION>
                                     Fiscal Quarter                  Ratio
                                     --------------                  -----
<S>                                                              <C>
                           February 28, 2002                     3.10 to 1.00
                           May 31, 2002                          3.10 to 1.00
                           August 31, 2002                       2.75 to 1.00
                           November 30, 2002 and thereafter      2.50 to 1.00"
</TABLE>

                  (hh)     Section 9.5 of the Credit Agreement shall be deleted
         in its entirety and the following shall be inserted in lieu thereof:

                  "Section 9.5 Fixed Charge Coverage Ratio.

                  The Borrower will not permit the Fixed Charge Coverage Ratio
                  for any Test Period ending on the last day of each Fiscal
                  Quarter set forth below to be less than the ratio set forth
                  opposite such date:

<TABLE>
<CAPTION>
                                     Fiscal Quarter                  Ratio
                                     --------------                  -----
<S>                                                              <C>
                           February 28, 2002                     1.00 to 1.00
                           May 31, 2002                          1.00 to 1.00
                           August 31, 2002 and thereafter        1.05 to 1.00"
</TABLE>

                  (ii)     Section 10.1(l) of the Credit Agreement shall be
         amended by (i) deleting the word "Parties" and inserting the word
         "Creditors" in lieu thereof and (ii) inserting the phrase "in the order
         of priority of interest set forth in such Security Document"
         immediately following the phrase "Collateral Agent, for the benefit of
         the Secured Creditors".

                  (jj)     Section 10.1 of the Credit Agreement shall be amended
         by (i) deleting the "." immediately following the phrase "self-help or
         otherwise" in subsection (o) thereof and inserting the phrase "; or" in
         lieu thereof, and (ii) inserting the following new subsections
         immediately following subsection (o) thereof:

                           "(p) Failure of Deliveries Benefiting Initial Term C
                  Lenders. The Borrower or any of its Subsidiaries shall default
                  (i) in the due performance or observance of any term,
                  covenant, condition or agreement on its part to be performed
                  or observed under Sections 7.19(a)(iii) or 7.19(b) or (ii) in
                  the payment of principal or interest on any of the Term C
                  Loans when due; or

                           (q) Failure of Deliveries Benefiting Term C Lenders.
                  The Borrower or any of its Subsidiaries shall default (i) in
                  the due performance or observance of any term, covenant,
                  condition or agreement on its part to be performed or observed
                  under Sections 7.19(a)(iv) or 7.19(c) or (ii) in the payment
                  of principal or interest on any of the Term C Loans when due."

                                       22
<PAGE>
                  (kk)     The first sentence of the second to last paragraph of
         Section 10.1 of the Credit Agreement shall be amended by inserting
         immediately following the phrase "all of the Liens and security
         interests created pursuant to the Security Documents" the following
         phrase "; provided, however, that notwithstanding the foregoing or
         anything else in this Agreement to the contrary, in the event of any
         Event of Default described in Section 10.1(p) with respect to the
         Borrower or any of its Subsidiaries, until such time as the Borrower
         has repaid in full all principal and interest on the Term C Loans and
         no amounts remain outstanding to any Initial Term C Lender with respect
         to the Term C Loans, the Administrative Agent, at the written direction
         of 66 2/3% of the Initial Term C Lenders (and without any action or
         consent of the Lenders other than the Initial Term C Lenders) shall
         take one or more of the actions described in (i) through (v) of this
         paragraph, and provided, further, however, that notwithstanding the
         foregoing or anything else in this Agreement to the contrary, in the
         event of any Event of Default described in Section 10.1(q) with respect
         to the Borrower or any of its Subsidiaries, until such time as the
         Borrower has repaid in full all principal and interest on the Term C
         Loans and no amounts remain outstanding to any Term C Lender with
         respect to the Term C Loans, the Administrative Agent, at the written
         direction of 66 2/3% of the Term C Lenders (and without any action or
         consent of the Lenders other than the Term C Lenders) shall take one or
         more of the actions described in (i) through (v) of this paragraph".

                  (ll) The second paragraph of Section 11.5 of the Credit
         Agreement shall be amended by (i) deleting the word "and" immediately
         before the phrase "Term B Lender" and inserting "," in lieu thereof,
         and (ii) inserting the phrase "and Term C Loan" immediately before the
         phrase "and the denominator of which".

                  (mm)     The first sentence of Section 11.6 of the Credit
         Agreement shall be amended by (i) deleting the word "and" immediately
         before the phrase "Term B Pro Rata Share" and inserting "," in lieu
         thereof, and (ii) inserting the phrase "and Term C Pro Rata Share"
         immediately before the phrase ", as applicable thereof),".

                  (nn)     Subclause (7) of the second to last sentence of
         Section 12.1(a) of the Credit Agreement shall be amended by inserting
         immediately before the phrase "without the consent of the Majority
         Lenders of the Revolving Facility", the phrase "without the consent of
         the Majority Lenders of the Term C Facility, amend the definition of
         Term C Pro Rata Share;".

                  (oo)     Subclause (8) of the second to last sentence of
         Section 12.1(a) of the Credit Agreement shall be amended by inserting
         immediately following the phrase "amend the definition of Scheduled
         Term B Repayments,", the phrase "and without the consent of the
         Majority Lenders of the Term C Facility, amend the definition of
         Scheduled Term C Repayments,".

                  (pp)     The second to last sentence of Section 12.1(a) of the
         Credit Agreement shall be amended by (i) deleting the word "or"
         immediately prior to subclause (9) and inserting "," in lieu thereof,
         and (ii) inserting the phrase ", (10) without the consent of the
         Majority Lenders of the Term C Facility, amend, modify or waive the
         conditions to funding of the Term C Commitment Increase Amount, (11)
         without the consent of each

                                       23
<PAGE>
         Term C Lender, release the Mortgaged Nevada/California Real Estate, the
         Mortgaged California Real Estate, the AFC Collateral or the Assignment
         and Pledge Collateral (except, in each case, as expressly provided in
         this Agreement), or (12) without the consent of 66 2/3% of the Initial
         Term C Lenders, amend, modify or waive the terms of the Mortgaged
         Nevada/California Real Estate, the Mortgaged California Real Estate,
         the AFC Collateral or the Assignment and Pledge Collateral (other than
         with respect to a release as provided in (11) above), including,
         without limitation, any repayments required by the terms of this
         Agreement as a result of or in connection with such collateral,
         including, without limitation, any mandatory prepayments as provided in
         Sections 4.4(m) and (n)", immediately after the phrase "amend, modify
         or waive any provision of Section 9.4".

                  (qq)     Section 12.1(a) of the Credit Agreement shall be
         amended by inserting the following sentence immediately following the
         last sentence thereof as follows:

                  "Notwithstanding the foregoing, prior to the date upon which
                  the Administrative Agent determines (and notifies the
                  Borrower) that the primary syndication (and the resultant
                  addition of Persons as Lenders pursuant to Section 12.8) of
                  the Term C Facility has been completed, the Borrower and the
                  Administrative Agent may, without the consent of any Lender,
                  agree to increase the interest rate pricing of the Term C
                  Facility."

                  (rr)     Subclause (i) of the last sentence of Section 12.8(b)
         of the Credit Agreement shall be amended by (i) by deleting the word
         "and" immediately before the phrase "Scheduled Term B Repayments" and
         inserting "," in lieu thereof, and (ii) inserting the phrase ", and
         Scheduled Term C Repayments (other than the Term C Loan Maturity Date)"
         immediately following the phrase "(other than the Term B Loan Maturity
         Date)".

                  (ss)     Subclause (i)(B) of the first sentence of Section
         12.8(c) of the Credit Agreement shall be amended by inserting the
         phrase "or of the Term C Facility" immediately following the phrase "of
         the Term B Facility".

                  (tt)     The last sentence of Section 12.8(c) of the Credit
         Agreement shall be amended by inserting the phrase "Term C Pro Rata
         Share," immediately following the phrase "Term B Pro Rata Share,".

                  (uu)     Section 12.15(b)(i) is shall be amended by inserting
         the following paragraph immediately following subclause (E) thereof:

                  "Notwithstanding anything in this clause (i) to the contrary,
                  in no event shall the Administrative Agent or the Collateral
                  Agent, as the case may be, release the Mortgaged
                  Nevada/California Real Estate, the Mortgaged California Real
                  Estate, the AFC Collateral or the Assignment and Pledge
                  Collateral (except, in each case, as expressly provided in
                  this Agreement), without the consent of each Term C Lender."

                                       24
<PAGE>
                  (vv)     Exhibit 12.8(c) to the Credit Agreement shall be
         deleted in its entirety and the Exhibit 12.8(c) attached to this
         Amendment No. 4 is substituted in lieu thereof

                  (ww)     Schedule 1.1(a) to the Credit Agreement shall be
         amended by inserting a fifth column immediately following the column
         titled "Multicurrency Commitment (as a subcomponent of the Revolving
         Commitment)" and inserting in such fifth column, the Term C Commitment
         amounts in effect as of the Effective Date across from the name of each
         Lender which is a Term C Lender as follows:

<TABLE>
<CAPTION>
                                  Lender                 Term C Commitment
                                  ------                 -----------------
<S>                                                      <C>
                           Bankers Trust Company          $21,344,416.53
                             ABN AMRO Bank N.V.            $3,655,583.47
</TABLE>

                  (xx)     The Credit Agreement shall be amended to insert the
         form of "Exhibit 2.2(a)(5) - Form of Term C Note" immediately following
         Exhibit 2.2(a)(4) attached thereto.

         2. Waivers and Acknowledgement. Subject to the conditions and
effectiveness of this Amendment No. 4 and otherwise notwithstanding the
provisions of any Loan Document:

         (a) the Lenders hereby waive, solely with respect to the Term C
Facility, compliance by the Borrower with Section 2.8 of the Credit Agreement
regarding the addition of the Term C Facility and any increase thereof in
accordance with the Credit Agreement, as amended by this Amendment No. 4, and
hereby acknowledge that the Term C Facility added to the Credit Agreement in
accordance with the terms and provisions of this Amendment No. 4 shall
constitute the Term C Facility described in said Section 2.8.(b);

         (b) notwithstanding any other provision of the Credit Agreement or the
other Loan Documents to the contrary, the Lenders hereby acknowledge and agree
that the Mortgaged Nevada/California Real Estate, the Mortgaged California Real
Estate, the AFC Collateral or the Assignment and Pledge Collateral shall
constitute collateral on a first priority security interest basis for the
Initial Term C Lenders with respect to all of the Obligations relating to the
Term C Loans due and owing to the Initial Term C Lenders, and with respect to
the Mortgaged Nevada/California Real Estate, the Mortgaged California Real
Estate and the Assignment and Pledge Collateral shall constitute collateral on a
second priority security interest basis for the Initial Term C Lenders with
respect to all of the Obligations relating to the Term A Loans and Revolving
Loans due and owing to the Initial Term C Lenders. In furtherance of the
foregoing, the Lenders, including the Term A Lenders and the Revolving Lenders,
hereby authorize and consent to the execution by the Administrative Agent or the
Collateral Agent, as the case may be (without any further action of such
Lenders) of such amendments and other modifications to the Security Documents
which the Administrative Agent or the Collateral Agent, as the case may be,
reasonably determines are necessary to reflect the above-described Liens in
favor of the Initial Term C Lenders with respect to the collateral described
above and the priority of payments in favor of the Initial Term C Lenders made
with the proceeds thereof and, in connection with such collateral, the voting
percentages of Initial Term C Lenders required to amend, modify or release such
collateral as further described in Section 12.1(a) of the Credit Agreement (as
amended by this Amendment No. 4) . In addition, the Administrative Agent or the
Collateral Agent, as the case may be, is authorized to execute any amendments or
other modifications to the Security

                                       25
<PAGE>
Documents as may be necessary to evidence to reflect the pro rata sharing with
the Second Term C Lenders of the first priority security interest of the Initial
Term C Lenders in the AFC Collateral, the Assignment and Pledge Collateral, the
Mortgaged Nevada/California Real Estate and the Mortgaged California Real
Estate;

         (c) the Lenders hereby waive any Event of Default arising under Section
10.1(c)(i) of the Credit Agreement resulting solely from the Borrower's failure
to comply with the ratio applicable to the Fiscal Quarter ended November 30,
2001 as set forth in, and required by, each of Section 9.3 and Section 9.4 of
the Credit Agreement;

         (d) the Lenders hereby waive, for the period commencing the Effective
Date and ending on the earlier of (i) the date on which the Borrower has
completed an unsecured subordinated debt or equity financing of not less than
$35,000,000 or (ii) March 28, 2002, any Event of Default or Unmatured Event of
Default arising solely out of the Borrower's breach of Section 2(b) of Amendment
No. 2 as a result of the Borrower's failure to permanently reduce the Revolving
Commitment and repay Revolving Loans, in part, as required by the terms of said
Section. Upon expiration of the waiver set forth in the preceding sentence
without compliance by the Borrower with the requirements specified in said
Section, such waiver shall be automatically revoked and the requirements of the
Credit Agreement waived thereby shall again be in full force with retroactive
effect to the dates specified in the Credit Agreement. In such case, following
such expiration and noncompliance as described in the preceding sentences, the
Administrative Agent and the Lenders shall have all rights and remedies under
the Credit Agreement and any other Loan Document or otherwise that the
Administrative Agent and the Lenders would have had if any such waiver had never
been granted; and

         (e) the Lenders hereby waive, for the period commencing the Effective
Date and ending on the date which is ten (10) Business Days following the
Effective Date, any Event of Default or Unmatured Event of Default arising
solely out of the Borrower's breach of Section 7.1(b) of the Credit Agreement as
a result of the Borrower's failure to deliver its audited annual financial
statements for the Fiscal Year ending November 30, 2001 within ninety (90) days
after the end of such Fiscal Year, as required by the terms of said Section.
Upon expiration of the waiver set forth in the preceding sentence without
compliance by the Borrower with the requirements specified in said Section, such
waiver shall be automatically revoked and the requirements of the Credit
Agreement waived thereby shall again be in full force with retroactive effect to
the date specified in the Credit Agreement. In such case, following such
expiration and noncompliance as described in the preceding sentence, the
Administrative Agent and the Lenders shall have all rights and remedies under
the Credit Agreement and any other Loan Document or otherwise that the
Administrative Agent and the Lenders would have had if any such waiver had never
been granted.

                                       26
<PAGE>
         3. Consent of Lenders to Equity. The Administrative Agent and the
Lenders hereby consent (i) to the issuance by the Borrower of Capital Stock in
connection with the Equity Capital and (ii) to the issuance of warrants of the
Borrower in connection with the Subordinated Notes. The Administrative Agent and
the Lenders further agree that such consents described in the preceding sentence
shall be in satisfaction of the consents required pursuant to Section 8.6(b) of
the Credit Agreement with respect to the actions described in clauses (i) and
(ii), provided that such issuance shall in all other respects be subject to said
Section 8.6(b).

         4. Subordination and Intercreditor Acknowledgements by Parties. (a)
Each of the Borrower and the Subsidiary Guarantor covenants and agrees, and the
Term A Lenders and the Revolving Lenders acknowledge and agree that the payment
of any and all of the Term A Loans and the Revolving Loans (i) from the proceeds
of the Mortgaged Nevada/California Real Estate, the Mortgaged California Real
Estate, the AFC Collateral or the Assignment and Pledge Collateral shall be
subordinate and subject in right and time of payment, to the extent and in the
manner set forth in this Amendment No. 4, to the prior indefeasible payment in
full in cash of all Term C Loans of the Initial Term C Lenders (collectively,
the "First Priority Loans") and (ii) from the proceeds of the Mortgaged
Nevada/California Real Estate, the Mortgaged California Real Estate and/or the
Assignment and Pledge Collateral shall be subordinate and subject in right and
time of payment, to the extent and in the manner set forth in this Amendment No.
4, to the prior indefeasible payment in full in cash of all Term A Loans and
Revolving Loans of the Initial Term C Lenders (the "Second Priority Loans").
Each Initial Term C Lender, whether now outstanding or hereafter created,
incurred, assumed or guaranteed, shall be deemed to have acquired Term C Loans
in reliance upon the provisions contained in this Amendment No. 4.

         (b)      With respect to the Mortgaged Nevada/California Real Estate,
the Mortgaged California Real Estate, the AFC Collateral and/or the Assignment
and Pledge Collateral, the First Priority Loans and, with respect to the
Mortgaged Nevada/California Real Estate, the Mortgaged California Real Estate
and/or the Assignment and Pledge Collateral, the Second Priority Loans shall, in
each case, continue to be treated as senior in priority to the Term A Loans and
Revolving Loans of the Lenders (other than the Initial Term C Lenders which
shall for any purposes constitute Second Priority Loans), and the provisions of
this Amendment No. 4 shall continue to govern the relative rights and priorities
of the Lenders even if all or part of the First Priority Loans or, with respect
to the Mortgaged Nevada/California Real Estate, the Mortgaged California Real
Estate and/or the Assignment and Pledge Collateral, the Second Priority Loans or
the security interests securing the First Priority Loans or, with respect to the
Mortgaged Nevada/California Real Estate, the Mortgaged California Real Estate
and/or the Assignment and Pledge Collateral, the Second Priority Loans are
subordinated (other than the Second Priority Loans being subordinated to the
First Priority Loans), set aside, avoided, invalidated or disallowed in
connection with any dissolution, insolvency or other bankruptcy or winding up
proceeding, or if for any reason the documentation regarding the creation of
such security interests is not executed or delivered by the Borrower or any of
its Subsidiaries, as applicable, or such documentation is not recorded, and this
Amendment No. 4 shall be reinstated if at any time any payment of any of the
First Priority Loans or, with respect to the Mortgaged Nevada/California Real
Estate, the Mortgaged California Real Estate and/or the Assignment and Pledge
Collateral, the Second Priority Loans is rescinded or must otherwise be returned
by any holder of the First Priority Loans or, with respect to the Mortgaged
Nevada/California Real

                                       27
<PAGE>
Estate, the Mortgaged California Real Estate and/or the Assignment and Pledge
Collateral, the Second Priority Loans or any representative of such holder.

         (c)      The Term A Lenders and the Revolving Lenders hereby waive any
rights any Lender may have under applicable law to assert the doctrine of
marshaling or to otherwise require the Administrative Agent, the Collateral
Agent or the Initial Term C Lenders to marshal any property of the Borrower or
any of the guarantors of the First Priority Loans or, with respect to the
Mortgaged Nevada/California Real Estate, the Mortgaged California Real Estate
and/or the Assignment and Pledge Collateral, the Second Priority Loans, for the
benefit of the Term A Lenders and the Revolving Lenders.

         (d)      THE LENDERS AGREE THAT NO LENDER WILL, NOR WILL ANY LENDER
ENCOURAGE ANY OTHER PERSON TO, AT ANY TIME, CONTEST THE VALIDITY, PERFECTION,
PRIORITY OR ENFORCEABILITY OF THE FIRST PRIORITY LOANS OR THE SECOND PRIORITY
LOANS, THE LOAN DOCUMENTS OR THE LIENS OR SECURITY INTERESTS (INCLUDING WITHOUT
LIMITATION THE PRIORITY OF SUCH LIENS AND SECURITY INTERESTS) OF THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, AS THE CASE MAY BE, IN FAVOR OF
THE INITIAL TERM C LENDERS IN THE COLLATERAL SECURING THE FIRST PRIORITY LOANS
OR THE SECOND PRIORITY LOANS, AS THE CASE MAY BE, OR THE ORDER OF PAYMENT OF
PROCEEDS, ALL AS DESCRIBED IN SECTION 1(BB) OF THIS AMENDMENT NO. 4 AND AS SET
FORTH IN THE LOAN DOCUMENTS.

         5. Representations and Warranties. As of the date hereof, the Borrower
hereby represents and warrants to the Administrative Agent and the Lenders as
follows:

                  (a)      After giving effect to this Amendment No. 4 (i) no
         Unmatured Event of Default or Event of Default shall have occurred or
         be continuing and (ii) the representations and warranties of the
         Borrower contained in the Loan Documents shall each be true and correct
         in all material respects at and as of the date hereof to the same
         extent as though made on and as of such date, except to the extent such
         representations and warranties expressly relate to an earlier date in
         which event such representation and warranties shall be true and
         correct as of such specified date.

                  (b)      The execution, delivery and performance, as the case
         may be, by the Borrower of this Amendment No. 4 and the other documents
         and transactions contemplated hereby are within the Borrower's
         corporate powers, have been duly authorized by all necessary corporate
         action (including, without limitation, all necessary shareholder
         approvals) of the Borrower, shall have received all necessary
         governmental approvals, and do not and will not contravene or conflict
         with any provision of law applicable to the Borrower, the certificate
         or articles of incorporation or bylaws of the Borrower, or any order,
         judgment or decree of any court or other agency of government or any
         contractual obligation binding upon the Borrower.

                  (c)      Each of this Amendment No. 4, the Credit Agreement
         and any other Loan Document is the legal, valid and binding obligation
         of the Borrower enforceable against

                                       28
<PAGE>
         the Borrower in accordance with its respective terms, except to the
         extent enforceability is limited by bankruptcy, insolvency or similar
         laws affecting the rights of creditors generally or by application of
         general principles of equity.

         6.       Conditions. This Amendment No. 4 shall become effective as of
the date first above written; provided, that the Administrative Agent shall have
received:

                  (a)      counterparts of this Amendment No. 4 duly executed by
                           the Borrower, the Subsidiary Guarantors, the
                           Administrative Agent and the percentage of Lenders
                           required by the Credit Agreement;

                  (b)      duly executed originals of the Term C Notes executed
                           by the Borrower;

                  (c)      duly executed originals of a certificate of the Chief
                           Executive Officer or Chief Financial Officer of the
                           Borrower and each other Credit Party, dated as of the
                           date hereof, stating that (A) since November 30, 2000
                           (i) no event or condition has occurred or is existing
                           which could reasonably be expected to have a Material
                           Adverse Effect; (ii) there has been no material
                           adverse change in the industry in which the Borrower
                           or such Credit Party operates; (iii) no litigation
                           has been commenced which, if successful, would have a
                           Material Adverse Effect or could challenge any of the
                           transactions contemplated by the Credit Agreement and
                           the other Loan Documents; (iv) there have been no
                           Restricted Payments made by the Borrower or any of
                           its Subsidiaries other than in accordance with the
                           Credit Agreement; and (v) there has been no material
                           increase in liabilities, liquidated or contingent,
                           and no material decrease in assets of any Borrower or
                           any of its Subsidiaries, and (B) all necessary
                           governmental (domestic and foreign) and third party
                           approvals in connection with the Credit Agreement and
                           the transactions contemplated by this Amendment No. 4
                           have been obtained and remain in effect;

                  (d)      copies of schedules to the Credit Agreement, updated
                           from the schedules delivered as of December 28, 2000,
                           in form and substance satisfactory to the
                           Administrative Agent and the Required Lenders;

                  (e)      pro forma (after giving effect to this Amendment No.
                           4, including the initial funding of the Term C
                           Facility) financial statements in form and substance
                           satisfactory to the Administrative Agent and the
                           Required Lenders;

                  (f)      duly executed original of a legal opinion of (i)
                           Vedder Price Kaufman & Kammholz, special counsel to
                           the Borrower, (ii) William R. Phillips, General
                           Counsel of the Borrower, and (iii) Hunter Richey Di
                           Benedetto & Eisenbeis, LLP, special California
                           counsel to the Borrower, each dated as of the
                           Effective Date and in form and substance satisfactory
                           to the Administrative Agent and the Required Lenders;

                                       29
<PAGE>
                  (g)      from the Borrower, without setoff, deduction or
                           counterclaim, a non-refundable commitment fee for the
                           account of each Initial Term C Lender that has
                           executed and delivered (including delivery of way of
                           facsimile) a copy of this Amendment No. 4 to the
                           attention of Kay McNab at Winston & Strawn, 35 West
                           Wacker Drive, Chicago, Illinois 60601, telecopy
                           number 312-558-5700, at or prior to 2:00 p.m. (New
                           York City time), on the Effective Date, in an amount
                           equal to 2.00% of such Lender's Term C Commitment as
                           of the Effective Date of this Amendment No. 4;

                  (h)      from the Borrower, without setoff, deduction or
                           counterclaim, a non-refundable amendment fee for the
                           account of each Lender that has executed and
                           delivered (including delivery of way of facsimile) a
                           copy of this Amendment No. 4 to the attention of Kay
                           McNab at Winston & Strawn, 35 West Wacker Drive,
                           Chicago, Illinois 60601, telecopy number
                           312-558-5700, at or prior to 2:00 p.m. (New York City
                           time), on the Effective Date, in an amount equal to
                           0.25% of the sum of such Lender's Revolving
                           Commitment and Term A Loans as of the Effective Date
                           of this Amendment No. 4; and

                  (i)      from the Borrower all fees and expenses of legal
                           counsel to the Administrative Agent to the extent
                           then invoiced.

         7. Affirmation of Subsidiary Guarantors. By its signature set forth
below, each Subsidiary Guarantor hereby confirms to the Administrative Agent and
the Lenders that, after giving effect to this Amendment No. 4 and the
transactions contemplated hereby, the Subsidiary Guaranty of such Subsidiary
Guarantor and each other Loan Document to which such Subsidiary Guarantor is a
party continues in full force and effect and is the legal, valid and binding
obligation of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.

         8. Successors and Assigns. This Amendment No. 4 shall be binding on and
shall inure to the benefit of the Borrower, the Administrative Agent, the
Lenders and their respective successors and assigns; provided that the Borrower
may not assign its rights, obligations, duties or other interests hereunder
without the prior written consent of the Administrative Agent and the Lenders.
The terms and provisions of this Amendment No. 4 are for the purpose of defining
the relative rights and obligations of the Borrower, the Administrative Agent
and the Lenders with respect to the transactions contemplated hereby and there
shall be no third party beneficiaries of any of the terms and provisions of this
Amendment No. 4.

         9. Entire Agreement. This Amendment No. 4, the Credit Agreement (as
amended hereby) and the other Loan Documents constitute the entire agreement of
the parties with respect to the subject matter hereof.

         10. Incorporation of Credit Agreement. The provisions contained in
Sections 12.4, 12.9 and 12.10 of the Credit Agreement are incorporated herein by
reference to the same extent as if

                                       30
<PAGE>
reproduced herein in their entirety with respect to this Amendment No. 4.

         11. Amendment; Waiver. The parties hereto agree and acknowledge that
nothing contained in this Amendment No. 4 in any manner or respect limits or
terminates any of the provisions of the Credit Agreement or any of the other
Loan Documents other than as amended as expressly set forth herein and further
agree and acknowledge that the Credit Agreement (as amended hereby) and each of
the other Loan Documents remain and continue in full force and effect and are
hereby ratified and confirmed. Except to the extent expressly set forth herein,
the execution, delivery and effectiveness of this Amendment No. 4 shall not
operate as a waiver of any rights, power or remedy of the Lenders or the
Administrative Agent under the Credit Agreement or any other Loan Document, nor
constitute a waiver of any provision of the Credit Agreement or any other Loan
Document. No delay on the part of any Lender or the Administrative Agent in
exercising any of their respective rights, remedies, powers and privileges under
the Credit Agreement or any of the Loan Documents or partial or single exercise
thereof, shall constitute a waiver thereof. On and after the Effective Date,
each reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import, and each reference to the Credit
Agreement in the Loan Documents and all other documents delivered in connection
with the Credit Agreement shall mean and be a reference to the Credit Agreement,
as amended hereby.

         12. Captions. Section captions used in this Amendment No. 4 are for
convenience only, and shall not affect the construction of this Amendment No. 4.

         13. Severability. Whenever possible each provision of this Amendment
No. 4 shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Amendment No. 4 shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Amendment No. 4.

         14. Counterparts. This Amendment No. 4 may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Amendment No. 4 by telecopy
shall be effective as delivery of a manually executed counterpart of this
Amendment No. 4.

                      [signature pages immediately follow]

                                       31
<PAGE>
         IN WITNESS WHEREOF, this Amendment No. 4 has been duly executed as of
the date first written above.

                                       GENCORP INC.

                                       By: /s/ Yasmin Seyal
                                           -------------------------------------
                                           Name:  Yasmin Seyal
                                           Title: Senior Vice President, Finance

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       AEROJET-GENERAL CORPORATION,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  Yasmin R. Seyal
                                           Title: Treasurer

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       AEROJET ORDNANCE TENNESSEE, INC., as
                                       Subsidiary Guarantor

                                       By: /s/ Brian E. Sweeney
                                           -------------------------------------
                                           Name:  Brian E. Sweeney
                                           Title: Vice President and Secretary

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       GENCORP PROPERTY INC.,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  Yasmin R. Seyal
                                           Title: Treasurer

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       PENN INTERNATIONAL INC.,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  Yasmin R. Seyal
                                           Title: Treasuer

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       GDX LLC, as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  Yasmin R. Seyal
                                           Title: Treasurer

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       GDX AUTOMOTIVE INC.,
                                       as Subsidiary Guarantor

                                       By: /s/ Yasmin R. Seyal
                                           -------------------------------------
                                           Name:  Yasmin R. Seyal
                                           Title: Treasurer

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       BANKERS TRUST COMPANY,
                                       as Lender and Administrative Agent

                                       By: /s/ Marguerite Sutton
                                           -------------------------------------
                                           Name:  Marguerite Sutton
                                           Title: Vice President

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       BANK ONE, NA,
                                       as Lender

                                       By: /s/ Karen C. Ryan
                                           -------------------------------------
                                           Name:  Karen C. Ryan
                                           Title: Director

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       ABN AMRO Bank N.V.,
                                       as Lender

                                       By: /s/ Terrence J. Ward
                                           -------------------------------------
                                           Name:  Terrence J. Ward
                                           Title: Group Vice President

                                       By: /s/ Mary L. Honda
                                           -------------------------------------
                                           Name:  Mary L. Honda
                                           Title: Group Vice President

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       THE BANK OF NEW YORK,
                                       as Lender

                                       By: /s/ Elizabeth T. Ying
                                           -------------------------------------
                                           Name:  Elizabeth T. Ying
                                           Title: Vice President

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       THE BANK OF NOVA SCOTIA,
                                       as Lender

                                       By: /s/ Mark Sparrow
                                           -------------------------------------
                                           Name:  Mark Sparrow
                                           Title: Director

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       NATIONAL CITY BANK,
                                       as Lender

                                       By: /s/ Brian J. Cullina
                                           -------------------------------------
                                           Name:  Brian J. Cullina
                                           Title: Senior Vice President

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       THE NORTHERN TRUST COMPANY,
                                       as Lender

                                       By: /s/ Melissa A. Whitson
                                           -------------------------------------
                                           Name:  Melissa A. Whitson
                                           Title: Vice President

                       Signature Page to Amendment No. 4
                                   and Waiver
<PAGE>
                                       WELLS FARGO BANK, N.A.,
                                       as Lender

                                       By: /s/ Scott D. Moldoff
                                           -------------------------------------
                                           Name:  Scott D. Moldoff
                                           Title: Vice President

                       Signature Page to Amendment No. 4
                                   and Waiver

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]