Document:

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                                                                    EXHIBIT 10.1

                                CREDIT AGREEMENT

                         Dated as of September 9, 2002

                                     among

                           U.S. PLASTIC LUMBER CORP.,

                         VARIOUS FINANCIAL INSTITUTIONS

                                      and

                             BANK OF AMERICA, N.A.,

                            AS ADMINISTRATIVE AGENT

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                                CREDIT AGREEMENT

         This Credit Agreement dated as of September 9, 2002 (this "Agreement")
is among U.S. PLASTIC LUMBER CORP., a Nevada corporation (the "Company"), the
financial institutions from time to time parties hereto (together with their
respective successors and assigns, each individually a "Bank" and collectively
the "Banks") and BANK OF AMERICA, N.A., as administrative agent for the Banks.
Capitalized terms used in this Agreement shall have the respective meanings
ascribed thereto in Annex A.

                                  WITNESSETH:

         WHEREAS, the Company, various financial institutions and Bank of
America, N.A., as administrative agent, are parties to a Credit Agreement dated
as of June 30, 2000 (as amended, the "Existing Credit Agreement"); and

         WHEREAS, the Company, the Banks and the Administrative Agent desire to
refinance the Existing Credit Agreement on the terms and conditions set forth
herein;

         NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable
consideration, the receipt of which is hereby acknowledged, the Banks, the
Administrative Agent and the Company hereby agree, as follows.

                                   SECTION 1

                          LOANS AND LETTERS OF CREDIT

         1.1      Facility. Subject to the terms and conditions of this
Agreement, the Banks agree to make available to the Company a revolving credit
facility (the "Facility") in an amount not exceeding $10,000,000 (such amount,
as reduced from time to time pursuant to Section 3.2, the "Maximum Commitment
Amount"). The Company may access the Facility by obtaining Loans and Letters of
Credit from time to time during the period from the date hereof to the
Termination Date.

         1.2      Loans.

         1.2.1    Availability.

         (a)      Subject to the satisfaction of the applicable conditions
precedent set forth in Section 8 and subject to clause (b) below, each Bank
severally, but not jointly, agrees, upon the request of the Company from time
to time on any Business Day during the period from the Closing Date to the
Termination Date, to make Loans to the Company in amounts not to exceed such
Bank's Pro Rata Share of the Availability, except for Non-Ratable Loans and
Administrative Agent Advances. The Banks, however, in their unanimous
discretion, may elect to make Loans or issue or arrange to have issued Letters
of Credit to or for the account of the Company in excess of the Borrowing Base
on one or more occasions, but if they do so, neither the Administrative Agent
nor the Banks shall be deemed thereby to have changed the limits of the
Borrowing Base or to be obligated to exceed such limits on any other occasion.
If

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Availability would be less than zero after giving effect to any Borrowing, the
Banks may refuse to make or may otherwise restrict the making of Loans as the
Banks determine until such excess has been eliminated, subject to the
Administrative Agent's authority, in its sole discretion, to make
Administrative Agent Advances pursuant to Section 1.2.9.

         (b)      Notwithstanding the foregoing clause (a), unless the Required
Banks otherwise consent, prior to March 1, 2003 the Aggregate Outstandings
shall not exceed, at any time during any period set forth below, the amount set
forth below for such period:

<TABLE>
<CAPTION>
              Month           Maximum Aggregate Outstandings
              -----           ------------------------------

         <S>                  <C>
         September 2002                 $3,000,000
          October 2002                  $4,200,000
          November 2002                 $5,400,000
          December 2002                 $6,500,000
          January 2003                  $7,000,000
          February 2003                 $7,500,000
</TABLE>

         1.2.2    Notes. Upon the request of any Bank made through the
Administrative Agent, the Company shall execute and deliver to such Bank a note
to evidence the Loans of such Bank. Such note shall be substantially in the
form of Exhibit A (each a "Note" and collectively the "Notes"). Each Note shall
represent the obligation of the Company to pay the amount of such Bank's Pro
Rata Share of the aggregate unpaid principal amount of all Loans together with
interest thereon as prescribed in Section 2.1. The entire unpaid balance of the
Loans and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Termination Date.

         1.2.3    Reliance upon Authority. Prior to the Closing Date, the
Company shall deliver to the Administrative Agent a notice setting forth the
account of the Company (the "Designated Account") to which the Administrative
Agent is authorized to transfer the proceeds of the Loans; provided that,
unless the Administrative Agent otherwise consents, the Designated Account
shall be in the name of the Administrative Agent, which shall act as funds
administrator for the Company. The Designated Account must be reasonably
satisfactory to the Administrative Agent. The Administrative Agent is entitled
to rely conclusively on any Person's written request for Loans on behalf of the
Company, so long as the proceeds thereof are to be transferred to the
Designated Account. The Administrative Agent has no duty to verify the identity
of any individual representing himself or herself as a person authorized by the
Company to make such requests on its behalf.

         1.2.4    Procedure for Borrowing. Each Borrowing shall be made upon
the irrevocable written notice of the Company delivered to the Administrative
Agent in the form of Exhibit B (each a "Notice of Borrowing"), which must be
received by the Administrative Agent prior to 10:00 a.m. (Chicago time) on the
requested Funding Date, specifying:

                  (i)      the amount of the Borrowing, which shall be an
integral multiple of $100,000;

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                  (ii)     the requested Funding Date, which shall be a
Business Day; and

                  (iii)    the Borrowing Base determined as of the Funding
Date.

         1.2.5    No Liability. The Administrative Agent shall not incur any
liability to the Company as a result of acting upon any notice referred to in
Sections 1.2.3 and 1.2.4 which the Administrative Agent believes in good faith
to have been given by a Person duly authorized by the Company to request Loans
on its behalf. The crediting of any Loan to the Designated Account conclusively
establishes the obligation of the Company to repay such Loan as provided
herein.

         1.2.6    Administrative Agent's Election. Promptly after receipt of a
Notice of Borrowing, the Administrative Agent shall elect to have the terms of
Section 1.2.7 or the terms of Section 1.2.8 apply to such requested Borrowing.
If Bank of America declines in its sole discretion to make a Non-Ratable Loan
pursuant to Section 1.2.8, the terms of Section 1.2.7 shall apply to the
requested Borrowing.

         1.2.7    Making of Loans. If the Administrative Agent elects to have
the terms of this Section 1.2.7 apply to a requested Borrowing, then promptly
after receipt of a Notice of Borrowing, the Administrative Agent shall notify
the Banks by facsimile, telephone or e-mail of the requested Borrowing. Each
Bank shall transfer its Pro Rata Share of the requested Borrowing to the
Administrative Agent in immediately available funds, to the account from time
to time designated by the Administrative Agent, not later than 1:00 p.m.
(Chicago time) on the applicable Funding Date. After the Administrative Agent's
receipt of all proceeds of such Loans, the Administrative Agent shall make the
proceeds of such Loans available to the Company on the applicable Funding Date
by transferring same day funds to the Designated Account; provided that the
amount of Loans so made on any date shall not cause Availability on such date
to be less than zero.

         1.2.8    Making of Non-Ratable Loans. If the Administrative Agent
elects, with the consent of Bank of America, to have the terms of this Section
1.2.8 apply to a requested Borrowing, Bank of America shall make a Loan in the
amount of such Borrowing available to the Company on the applicable Funding
Date by transferring same day funds to the Designated Account. Each Loan made
solely by Bank of America pursuant to this Section is called a "Non-Ratable
Loan" and all such Loans are collectively called "Non-Ratable Loans." Each
Non-Ratable Loan shall be subject to all the terms and conditions applicable to
other Loans except that all payments thereon shall be payable to Bank of
America solely for its own account. The aggregate amount of Non-Ratable Loans
outstanding at any time shall not exceed $1,000,000. The Administrative Agent
shall not request Bank of America to make any Non-Ratable Loan if (i) the
Administrative Agent has received written notice from any Bank that one or more
of the applicable conditions precedent set forth in Section 8 will not be
satisfied on the requested Funding Date for such Loan or (ii) the requested
Loan would cause Availability on such Funding Date to be less than zero.

         1.2.9    Administrative Agent Advances. Subject to the limitations set
forth below, the Administrative Agent is authorized by the Company and the
Banks, from time to time in the

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Administrative Agent's sole discretion, (i) during the existence of an Event of
Default or Unmatured Event of Default or (ii) at any time that any of the other
conditions precedent set forth in Section 8 have not been satisfied, to make
Loans to the Company on behalf of the Banks in an aggregate amount outstanding
at any time not to exceed $300,000 but not in excess of the Maximum Commitment
Amount which the Administrative Agent, in its reasonable business judgment,
deems necessary or desirable (A) to preserve or protect the Collateral or any
portion thereof, (B) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations or (C) to pay any other amount
chargeable to the Company pursuant to the terms of this Agreement, including
costs, fees and expenses described in Section 13.6 (any such advances,
"Administrative Agent Advances"); provided that the Required Banks may at any
time revoke the Administrative Agent's authorization to make Administrative
Agent Advances. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent's receipt thereof.

         1.3      Letters of Credit.

         1.3.1    Agreement to Issue Letters of Credit. Subject to the terms
and conditions of this Agreement, the Issuer agrees to issue standby letters of
credit (each a "Letter of Credit") for the account of the Company from time to
time during the term of this Agreement.

         1.3.2    Amounts; Outside Expiration Date. The Issuer shall not have
any obligation to issue any Letter of Credit if: (a) the maximum face amount of
the requested Letter of Credit is greater than the Unused Letter of Credit
Subfacility; (b) the maximum undrawn amount of the requested Letter of Credit
and all commissions, fees, and charges due from the Company in connection with
the opening thereof would cause Availability to be less than zero; or (c) such
Letter of Credit has an expiration date that is less than 90 days prior to the
Stated Termination Date (or such later date as the Issuer may agree in its sole
discretion). With respect to any Letter of Credit that contains any "evergreen"
or automatic extension provision, each Bank shall be deemed to have consented
to any extension pursuant to such provision unless such Bank shall have
provided written notice to the Issuer, at least 30 days prior to the date on
which the Issuer is entitled to decline to so extend such Letter of Credit,
that it declines to consent to such extension. If all of the requirements of
this Section 1.3.2 are met and no Event of Default or Unmatured Event of
Default has occurred and is continuing, no Bank shall decline to consent to any
such extension.

         1.3.3    Other Conditions. In addition to the applicable conditions
precedent contained in Section 8, the obligation of the Issuer to issue any
Letter of Credit is subject to the following conditions precedent having been
satisfied in a manner reasonably satisfactory to the Administrative Agent:

         (a)      The Company shall have delivered to the Issuer, at such times
and in such manner as the Issuer may prescribe, an application in form and
substance satisfactory to the Issuer and reasonably satisfactory to the
Administrative Agent for the issuance of the proposed Letter of Credit and such
other documents as may be required pursuant to the terms thereof, and the form,
terms and purpose of the proposed Letter of Credit shall be reasonably
satisfactory to the Administrative Agent and the Issuer; and

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         (b)      As of the date of issuance, no order of any court, arbitrator
or Governmental Authority shall purport by its terms to enjoin or restrain
money center banks generally from issuing letters of credit of the type and in
the amount of the proposed Letter of Credit, and no law, rule or regulation
applicable to money center banks generally and no request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over money center banks generally shall prohibit the issuance of
letters of credit generally or the issuance of such Letter of Credit.

         1.3.4    Issuance of Letters of Credit.

         (a)      The Company shall notify the Administrative Agent and the
Issuer of a requested Letter of Credit at least three Business Days prior to
the proposed issuance date. Such notice shall be irrevocable and shall specify
the original face amount of the Letter of Credit requested, the Business Day of
issuance of such requested Letter of Credit, whether such Letter of Credit may
be drawn in a single or in partial draws, the Business Day on which the
requested Letter of Credit is to expire, the purpose for which such Letter of
Credit is to be issued and the beneficiary of the requested Letter of Credit.
The Company shall attach to such notice the proposed form of the Letter of
Credit.

         (b)      As of the Business Day immediately preceding the requested
issuance date of each Letter of Credit, the Administrative Agent shall
determine the amount of the Unused Letter of Credit Subfacility and
Availability. If the Administrative Agent determines a Letter of Credit in the
requested amount may be issued hereunder and the Issuer has not received notice
that the conditions to the issuance of such Letter of Credit have not been
satisfied, the Issuer shall issue the requested Letter of Credit on the
requested issuance date.

         (c)      The Issuer shall not be obligated to extend or amend any
Letter of Credit unless the requirements of this Section 1.3.4 are met as
though a new Letter of Credit were being requested and issued.

         1.3.5    Payments Pursuant to Letters of Credit. The Company agrees to
immediately reimburse the Issuer for any draw under any Letter of Credit, and
to pay the Issuer the amount of all other charges and fees payable to the
Issuer in connection with any Letter of Credit immediately when due,
irrespective of any claim, setoff, defense or other right which the Company may
have at any time against the Issuer, the beneficiary of such Letter of Credit
or any other Person. Each drawing under any Letter of Credit shall constitute a
request by the Company to the Administrative Agent for a Borrowing in the
amount of such drawing. The Funding Date with respect to such Borrowing shall
be the date of such drawing.

         1.3.6    Indemnification; Risks; Exoneration.

         (a)      Indemnification. In addition to amounts payable as elsewhere
provided in this Section 1.3, the Company agrees to protect, indemnify, pay and
save the Banks and the Administrative Agent harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and charges) which any Bank or the
Administrative Agent may incur or be subject to as a consequence, direct

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or indirect, of the issuance of any Letter of Credit, provided that the Company
shall have no obligation to so indemnify any Person with respect to liabilities
that are determined by a court of competent jurisdiction in a final
nonappealable decision to have arisen from the gross negligence or willful
misconduct of such Person. The obligations of the Company under this Section
shall survive payment of all other Obligations.

         (b)      Assumption of Risk by the Company. The Company assumes all
risks of the acts and omissions of, or misuse of any Letter of Credit by, the
beneficiary of such Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuer, the Banks and the Administrative Agent shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any Person in connection with the
application for and issuance of and presentation of drafts with respect to any
Letter of Credit, even if it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) any failure of the beneficiary of any Letter
of Credit to comply duly with conditions required in order to draw upon such
Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) the misapplication by the beneficiary of any Letter
of Credit of the proceeds of any drawing under such Letter of Credit; (viii)
any consequences arising from causes beyond the control of the Issuer, any Bank
or the Administrative Agent, including any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental Authority;
or (ix) the Issuer's honor of a draw under a Letter of Credit for which the
draw certificate or any other document fails to strictly comply with the terms
of such Letter of Credit. None of the foregoing shall affect, impair or prevent
the vesting of any rights or powers of the Issuer, any Bank or the
Administrative Agent under this Section 1.3.6.

         (c)      Exoneration. Without limiting the foregoing, no action or
omission whatsoever by the Issuer, any Bank or the Administrative Agent in
connection with any Letter of Credit shall result in any liability of the
Issuer, such Bank or the Administrative Agent to the Company (except to the
extent such liability results from the gross negligence or willful misconduct
of the Issuer, such Bank or the Administrative Agent, as the case may be) or
relieve the Company of any of its obligations hereunder to any such Person.

         1.4      Bank Products. The Company may request and each Bank may, in
its sole and absolute discretion, arrange for the Company to obtain Bank
Products from such Bank, although the Company is not required to do so. The
Company acknowledges and agrees that the obtaining of Bank Products from any
Bank (a) is in the sole and absolute discretion of such Bank and (b) is subject
to all rules and regulations of such Bank.

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                                   SECTION 2

                               INTEREST AND FEES

         2.1      Interest.

         2.1.1    Interest Rates. The Loans shall bear interest on the unpaid
principal amount thereof (including, to the extent permitted by law, on
interest thereon not paid when due) from the date made until paid in full in
cash at a fluctuating per annum rate equal to the Base Rate plus (a) 2.0%
during the period from the Closing Date through March 10, 2003 and (b) 3.0%
thereafter. Each change in the Base Rate shall be reflected in the interest
rate applicable to Loans as of the effective date of such change. All interest
shall be computed on the basis of a year of 360 days and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). The Company shall pay to the Administrative Agent, for the
ratable benefit of the Banks, interest accrued on all Loans in arrears on the
first day of each month and on the Termination Date.

         2.1.2    Default Rate. Upon request of the Required Banks at any time
an Event of Default exists, all of the Obligations shall bear interest at the
Default Rate.

         2.2      Maximum Interest Rate. In no event shall any interest rate
provided for hereunder exceed the maximum rate legally chargeable by any Bank
under applicable law for such Bank with respect to loans of the type provided
for hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent
such limitation, would have exceeded the Maximum Rate, then the interest rate
for that month shall be the Maximum Rate, and if, in future months, that
interest rate would otherwise be less than the Maximum Rate, then that interest
rate shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. In the event that, upon payment
in full of the Obligations, the total amount of interest paid or accrued under
the terms of this Agreement is less than the total amount of interest which
would, but for this Section 2.2, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then the
Company shall, to the extent permitted by applicable law, be liable to pay the
Administrative Agent, for the account of the Banks, an amount equal to the
excess of (a) the lesser of (i) the amount of interest which would have been
charged if the Maximum Rate had, at all times, been in effect or (ii) the
amount of interest which would have accrued had the interest rate otherwise set
forth in this Agreement, at all times, been in effect over (b) the amount of
interest actually paid or accrued under this Agreement. If a court of competent
jurisdiction determines that the Administrative Agent and/or any Bank has
received interest and other charges hereunder in excess of the Maximum Rate,
such excess shall be deemed received on account of, and shall automatically be
applied to reduce, the Obligations other than interest, in the inverse order of
maturity, and if there are no Obligations outstanding, the Administrative Agent
and/or such Bank shall refund to the Company such excess.

         2.3      Non-Use Fee. On the first day of each month and on the
Termination Date, the Company agrees to pay to the Administrative Agent, for
the account of the Banks, in accordance with their respective Pro Rata Shares,
a non-use fee (the "Non-Use Fee") equal to 0.5% per annum times the amount by
which the Maximum Commitment Amount exceeded the Aggregate Outstandings on each
day during the immediately preceding month (or shorter period if calculated for
the first month hereafter or on the Termination Date). The Non-Use Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
All principal

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payments received by the Administrative Agent shall be deemed to be credited
against the Loans immediately upon receipt for purposes of calculating the
Non-Use Fee pursuant to this Section 2.3.

         2.4      Letter of Credit Fee. The Company agrees to pay (a) to the
Administrative Agent, for the account of the Banks, in accordance with their
respective Pro Rata Shares, a fee (the "Letter of Credit Fee") equal to 3.0%
per annum during the period from the Closing Date through March 10, 2003, and
4.0% per annum thereafter, of the undrawn face amount of each Letter of Credit
(provided that upon the request of the Required Banks at any time any Event of
Default exists, the Letter of Credit Fee shall be equal to the sum of the
applicable rate set forth above plus 2.0% per annum), (b) to the Administrative
Agent for the benefit of the Issuer, a fronting fee of 0.25% per annum of the
undrawn face amount of each Letter of Credit and (c) to the Issuer, all fees,
costs and expenses incurred by the Issuer in connection with the application
for, processing of, issuance of, or amendment to any Letter of Credit. The
Letter of Credit Fee and the fronting fee referred to above shall be payable
monthly in arrears on the first day of each month, on the Termination Date and,
if applicable, thereafter on demand. The Letter of Credit Fee and such fronting
fee shall be computed on the basis of a 360-day year for the actual number of
days elapsed.

         2.5      Continuation Fees. The Company agrees to pay to the
Administrative Agent, for the account of the Banks, in accordance with their
respective Pro Rata Shares, (a) an initial continuation fee in an aggregate
amount of $150,000 on March 10, 2003 and (b) a supplemental continuation fee in
an aggregate amount of $125,000 on September 9, 2003; provided that if the
Commitments have been terminated and all Obligations (other than contingent
indemnity and expense obligations) have been paid in full on or before the date
a fee described in clause (a) or (b) above is to be paid, then the Company
shall not be required to pay such fee.

         2.6      Administrative Agent's Fees. The Company agrees to pay to the
Administrative Agent such fees as are mutually agreed to from time to time by
the Company and the Administrative Agent.

                                   SECTION 3

                            PAYMENTS AND PREPAYMENTS

         3.1      Payments and Prepayments of Loans. The Company shall repay
the outstanding principal balance of the Loans, plus all accrued but unpaid
interest thereon, on the Termination Date. Prior to the Termination Date, the
Company may prepay Loans at any time and reborrow subject to the terms of this
Agreement. In addition, if on any date the Aggregate Outstandings exceed the
remainder of (a) the lesser of the Borrowing Base and the Maximum Commitment
Amount minus (b) the unpaid principal amount of the Deferred Payment Notes, the
Company shall immediately repay Loans in an amount equal to such excess.

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         3.2      Reduction of Commitment; Termination of Facility.

         3.2.1    Reduction of Maximum Commitment Amount with Net Cash Proceeds
of the Issuance of Debt, Equity or Equity Equivalents. Concurrently with the
receipt by the Company or any Subsidiary of any Net Cash Proceeds from the
issuance of any Debt (other than Debt permitted by Section 7.13(a), (b), (c),
(d), (e), (g), (h) or (j)) or equity securities (excluding any issuance of
equity by a Subsidiary to the Company or another Subsidiary), the Maximum
Commitment Amount shall be reduced by an amount (rounded down, if necessary, to
an integral multiple of $100,000) equal to the remainder of 50% of all Net Cash
Proceeds from such issuances received since the Closing Date minus all such Net
Cash Proceeds previously applied to reduce the Maximum Commitment Amount
pursuant to this Section 3.2.1.

         3.2.2    Reduction of Maximum Commitment Amount with Net Cash Proceeds
of Asset Sales. Concurrently with the receipt by the Company or any Subsidiary
of any Net Cash Proceeds from any Asset Sale, the Maximum Commitment Amount
shall be reduced by an amount (rounded down, if necessary to an integral
multiple of $100,000) equal to the remainder of 75% of all Net Cash Proceeds
from Asset Sales received since the Closing Date minus all such Net Cash
Proceeds previously applied to reduce the Maximum Commitment Amount pursuant to
this Section 3.2.2.

         3.2.3    Voluntary Reduction of the Maximum Commitment Amount. The
Company may from time to time on at least five Business Days' prior written
notice received by the Administrative Agent (which shall promptly advise each
Bank thereof) permanently reduce the Maximum Commitment Amount to an amount not
less than the Aggregate Outstandings. Any such reduction shall be in an
integral multiple of $500,000. The Company may at any time on like notice
terminate the Commitments upon payment in full of all Loans and all other
Obligations and cash collateralization in full, pursuant to documentation in
form and substance satisfactory to the Issuer, of all obligations arising with
respect to the Letters of Credit.

         3.2.4    All Reductions. All reductions of the Maximum Commitment
Amount shall reduce the Commitments pro rata among the Banks according to their
respective Pro Rata Shares.

         3.3      Payments by the Company.

         3.3.1    General. All payments to be made by the Company hereunder or
under any other Loan Document shall be made without set-off, recoupment or
counterclaim. Except as otherwise expressly provided herein, all payments by
the Company shall be made to the Administrative Agent at the account designated
by the Administrative Agent, in Dollars and in immediately available funds, no
later than 12:00 noon (Chicago time) on the date specified herein. Any payment
received by the Administrative Agent after such time shall be deemed to have
been received on the following Business Day and any applicable interest shall
continue to accrue. Notwithstanding anything to the contrary herein, solely for
purposes of calculating interest, all cash, checks, instruments and other items
of payment shall be deemed to have been applied to the Obligations one Business
Day after receipt by the Administrative Agent of immediately available funds
with respect thereto.

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         3.3.2    Payments Due on a Day other than a Business Day. Whenever any
payment is due on a day other than a Business Day, such payment shall be due on
the following Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.

         3.4      Payments as Loans. At the election of the Administrative
Agent, all payments of principal, interest, reimbursement obligations in
connection with Letters of Credit, fees, premiums, reimbursable expenses and
other sums payable hereunder may be paid from the proceeds of Loans made
hereunder. The Company hereby irrevocably authorizes the Administrative Agent
to make Administrative Agent Advances for the purpose of paying all amounts
from time to time due hereunder.

         3.5      Apportionment, Application and Reversal of Payments. Except
as otherwise provided herein, principal and interest payments shall be
apportioned ratably among the Banks (according to the unpaid principal balance
of the Loans to which such payments relate held by each Bank) and payments of
the fees shall be apportioned ratably among the Banks, except for fees payable
solely to the Administrative Agent or the Issuer. All payments by or on behalf
of the Company or any other Loan Party shall be remitted to the Administrative
Agent and all payments not relating to principal of or interest on specific
Loans, or constituting payment of specific fees, and all proceeds of Accounts
or other Collateral received by the Administrative Agent, shall be applied
subject to the provisions of this Agreement: first, to pay any fees,
indemnities or expense reimbursements of the Administrative Agent; second, to
pay any fees, indemnities or expense reimbursements then due to the Banks from
the Company; third, to pay interest then due in respect of all Loans, including
Non-Ratable Loans and Administrative Agent Advances; fourth, to pay or prepay
principal of the Non-Ratable Loans and Administrative Agent Advances; fifth, to
pay or prepay principal of the Loans (other than Non-Ratable Loans and
Administrative Agent Advances) and unpaid reimbursement obligations in respect
of Letters of Credit; sixth, to pay an amount to Administrative Agent equal to
all outstanding Letter of Credit Obligations to be held as cash collateral for
such Obligations; and seventh, to the payment of any other Obligation due to
the Administrative Agent or any Bank by the Company, including any amount
relating to Bank Products then due to the Banks from the Company. At any time
an Event of Default or Unmatured Event of Default exists, the Administrative
Agent and the Banks shall have the continuing and exclusive right to apply and
reverse and reapply any and all such proceeds and payments to any portion of
the Obligations.

         3.6      Indemnity for Returned Payments. If after receipt of any
payment or any proceeds of any Collateral which is applied to the payment of
all or any part of the Obligations, the Administrative Agent or any Bank is for
any reason compelled to surrender such payment or proceeds to any Person
because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff or a diversion of trust funds or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continued and this Agreement shall continue in full force as if such
payment or proceeds had not been received by the Administrative Agent or such
Bank and the Company shall be liable to pay to the Administrative Agent and the
Banks, and hereby indemnifies the Administrative Agent and the Banks for and
agrees to hold the Administrative Agent and the Banks harmless from, the amount
of such payment or proceeds surrendered. The

                                       10
<PAGE>
provisions of this Section 3.6 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Administrative Agent or
any Bank in reliance upon such payment or application of proceeds, and any such
contrary action so taken shall be without prejudice to the Administrative
Agent's and the Banks' rights under this Agreement and shall be deemed to have
been conditioned upon such payment or application of proceeds having become
final and irrevocable. The provisions of this Section 3.6 shall survive the
termination of this Agreement.

         3.7      Administrative Agent's and Banks' Books and Records. The
Administrative Agent shall record the principal amount of the Loans owing to
each Bank, the undrawn face amount of all outstanding Letters of Credit and the
aggregate amount of unpaid reimbursement obligations outstanding with respect
to the Letters of Credit from time to time on its books. In addition, each Bank
may note the date and amount of each payment or prepayment of principal of such
Bank's Loans in its books and records or by endorsement on any Note. Failure by
the Administrative Agent or any Bank to make any such notation shall not affect
the obligations of the Company with respect to the Loans or the Letters of
Credit. The Company agrees that the Administrative Agent's and each Bank's
books and records showing the Obligations and the transactions pursuant to this
Agreement and the other Loan Documents shall be admissible in any action or
proceeding arising therefrom, and shall constitute rebuttably presumptive proof
thereof, irrespective of whether any Obligation is also evidenced by a
promissory note or other instrument.

                                   SECTION 4

                     TAXES, YIELD PROTECTION AND ILLEGALITY

         4.1      Taxes.

         4.1.1    Payments of Taxes Generally. Any and all payments by the
Company to each Bank or the Administrative Agent under this Agreement and any
other Loan Document shall be made free and clear of, and without deduction or
withholding for, any Taxes. In addition, the Company shall pay all Other Taxes.

         4.1.2    Indemnification of Banks and Administrative Agent. The
Company agrees to indemnify and hold harmless each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section) paid
by any Bank or the Administrative Agent and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days after
the date such Bank or the Administrative Agent makes written demand therefor.

         4.1.3    Deduction or Withholding of Taxes. If the Company shall be
required by law to deduct or withhold any Taxes or Other Taxes from or in
respect of any sum payable hereunder to any Bank or the Administrative Agent,
then:

                                       11
<PAGE>
         (a)      the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Bank or the Administrative Agent, as the case may be, receives an amount equal
to the sum it would have received had no such deductions or withholdings been
made;

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

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

         (d)      the Company shall also pay to each Bank or the Administrative
Agent for the account of such Bank, at the time interest is paid, all
additional amounts which such Bank specifies are necessary to preserve the
after-tax yield such Bank would have received if such Taxes or Other Taxes had
not been imposed.

         4.1.4    Evidence of Payment of Taxes. At the Administrative Agent's
request, within 30 days after the date of any payment by the Company of Taxes
or Other Taxes, the Company shall furnish the Administrative Agent the original
or a certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to the Administrative Agent.

         4.1.5    Change of Lending Office. If the Company is required to pay
additional amounts to any Bank or the Administrative Agent pursuant to Section
4.1.3, then such Bank shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its lending office so as
to eliminate any such additional payment by the Company which may thereafter
accrue, if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.

         4.2      Reduction of Return. If any Bank shall determine in good
faith that (a) the introduction of any Capital Adequacy Regulation, (b) any
change in any Capital Adequacy Regulation, (c) any change in the interpretation
or administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or administration
thereof or (d) compliance by such Bank or any corporation or other entity
controlling such Bank with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by such Bank
or any corporation or other entity controlling such Bank and (taking into
consideration such Bank's or such corporation's or other entity's policies with
respect to capital adequacy and such Bank's desired return on capital)
determines in good faith that the amount of such capital is increased as a
consequence of its Commitments, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company through the
Administrative Agent, the Company shall pay to such Bank, from time to time as
specified by such Bank, additional amounts sufficient to compensate such Bank
for such increase.

         4.3      Certificates of Administrative Agent. If any Bank claims
reimbursement or compensation under this Section 4, such Bank shall deliver to
the Company (with a copy to the Administrative Agent) a certificate setting
forth in reasonable detail the basis for, and a

                                       12
<PAGE>
calculation of the amount payable to, such Bank, and such certificate shall be
conclusive and binding on the Company in the absence of manifest error.

         4.4      Survival. The agreements and obligations of the Company in
this Section 4 shall survive the payment of all other Obligations.

                                   SECTION 5

               BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES

         5.1      Financial Information. The Company shall, and shall cause
each Subsidiary to, promptly furnish to each Bank, all financial information as
the Administrative Agent shall reasonably request. Without limiting the
foregoing, the Company will furnish to the Administrative Agent, in sufficient
copies for distribution by the Administrative Agent to each Bank, in such
detail as the Administrative Agent or the Banks shall request, the following:

         5.1.1    Annual Reports. Promptly when available and in any event
within 90 days after the close of each Fiscal Year: (a) a copy of the annual
audit report of the Company and its Subsidiaries for such Fiscal Year,
including therein consolidated balance sheets of the Company and its
Subsidiaries as of the end of such Fiscal Year and consolidated statements of
earnings and cash flows of the Company and its Subsidiaries for such Fiscal
Year certified without qualification by BDO Seidman, LLP or other independent
auditors of recognized standing selected by the Company and reasonably
acceptable to the Required Banks, together with a written statement from such
accountants to the effect that in making the examination necessary for the
signing of such annual audit report by such accountants, they have not become
aware of any Event of Default or Unmatured Event of Default that has occurred
and is continuing or, if they have become aware of any such event, describing
it in reasonable detail; and (b) consolidating balance sheets of the Company
and its Subsidiaries as of the end of such Fiscal Year and consolidating
statements of earnings for the Company and its Subsidiaries for such Fiscal
Year, certified by a Responsible Officer.

         5.1.2    Quarterly Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated and consolidating balance sheets of
the Company and its Subsidiaries as of the end of such Fiscal Quarter, together
with consolidated and consolidating statements of earnings and consolidated
statements of cash flows for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such
Fiscal Quarter, certified by a Responsible Officer.

         5.1.3    Monthly Reports. Promptly when available and in any event
within 30 days after the end of each of the first two months of each Fiscal
Quarter and 45 days after the end of each Fiscal Quarter, (i) consolidated and
consolidating balance sheets of the Company and its Subsidiaries as of the end
of such month, together with consolidated and consolidating statements of
earnings for such month and for the period beginning with the first day of the
applicable Fiscal Year and ending on the last day of such month including
consolidations by product line and production facility, and consolidated cash
flow statements for such month

                                       13
<PAGE>
including any variance from the budget/forecast and the prior Fiscal Year,
certified by a Responsible Officer, (ii) a detailed report of Capital
Expenditures by the Company and its Subsidiaries as of the end of such month
including any variance from the budget/forecast, (iii) a progress report with
respect to the Company's capital raising and Debt refinancing efforts and (iv)
a duly completed compliance certificate in the form of Exhibit C, with
appropriate insertions, dated the date of such monthly financial statements and
signed by a Responsible Officer, containing a computation of each of the
financial ratios and restrictions set forth in Section 7, and to the effect
that such officer has not become aware of any Event of Default or Unmatured
Event of Default that has occurred and is continuing or, if there is any such
event, describing it and the steps, if any, being taken to cure it.

         5.1.4    Financial Projections. (a) As soon as practicable and in any
event within 60 days after the commencement of each Fiscal Year, financial
projections for the Company and its Subsidiaries for such Fiscal Year prepared
in a manner consistent with the projections delivered by the Company to the
Administrative Agent prior to the Closing Date; and (b) as soon as practicable
and in any event within 45 days after the end of each Fiscal Quarter, updates
of such financial projections.

         5.1.5    SEC Filings. Promptly upon the filing or sending thereof,
copies of all regular, periodic or special reports of the Company or any
Subsidiary filed with the SEC (excluding exhibits thereto provided that the
Company shall promptly deliver any such exhibit to the Administrative Agent or
any Bank upon request therefor); copies of all registration statements of the
Company or any Subsidiary filed with the SEC (other than on Form S-8); and
copies of all proxy statements or other communications made to shareholders
generally concerning material developments in the business of the Company or
any Subsidiary.

         5.1.6    Management Reports. Promptly upon the request of the
Administrative Agent or any Bank, copies of all detailed financial and
management reports submitted to the Company by independent auditors in
connection with each annual or interim audit made by such auditors of the books
of the Company.

         5.1.7    Change in Subsidiaries. Promptly upon any change in the list
of its Subsidiaries from that set forth on Schedule 6.4 (or in the most recent
notice pursuant to this Section), notification of such change.

         5.1.8    Borrowing Base Certificate. As soon as practicable and in any
event within five days after the end of each week, a Borrowing Base Certificate
signed by a Responsible Officer as of the last day of such week.

         5.1.9    Borrowing Base Reports. On a monthly basis by the 15th day of
each month (or more frequently if requested by the Administrative Agent), (a) a
detailed calculation of Eligible Accounts Receivable, Eligible Equipment and
Eligible Inventory and reconciliation to the corresponding Borrowing Base and
to the general ledger of the Company and (b) an aging of the Accounts of the
Company and each other Loan Party.

                                       14
<PAGE>
         5.1.10   Inventory Reports. On a monthly basis by the 15th day of each
month (or more frequently if requested by the Administrative Agent), inventory
reports by category and location.

         5.1.11   Information regarding Accounts. Upon request, copies of
invoices in connection with the Accounts of the Company or any Loan Party,
customer statements, credit memos, remittance advices and reports, deposit
slips, shipping and delivery documents in connection with such Accounts and for
inventory and equipment acquired by the Company or any Loan Party, purchase
orders and invoices.

         5.1.12   Other Information. Promptly such information as the
Administrative Agent and/or any Bank may from time to time reasonably request
regarding the financial and business affairs of the Company or any Subsidiary
(including the Collateral).

         5.2      Notices. Promptly, but in no event later than two Business
Days after becoming aware of any of the following, the Company will provide to
the Administrative Agent written notice describing the same and the steps being
taken by the Company or the Subsidiary affected thereby with respect thereto:

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

         (b)      any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Banks which has been
instituted or, to the knowledge of the Company, is threatened against the
Company or any Subsidiary or to which any of the properties of any thereof is
subject which, if adversely determined, might reasonably be expected to have a
Material Adverse Effect;

         (c)      the institution of any steps by any member of the Controlled
Group or any other Person to terminate any Pension Plan, or the failure of any
member of the Controlled Group to make a required contribution to any Pension
Plan (if such failure is sufficient to give rise to a lien under Section 302(f)
of ERISA) or to any Multiemployer Pension Plan, or the taking of any action
with respect to a Pension Plan which could result in the requirement that the
Company furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan or Multiemployer
Pension Plan which could result in the incurrence by any member of the
Controlled Group of any material liability, fine or penalty (including any
claim or demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), or any notice that any Multiemployer Pension Plan
is in reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of an excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent;

         (d)      any cancellation (without replacement) or material change in
any insurance maintained by the Company or any Subsidiary;

                                       15
<PAGE>
         (e)      any event (including any violation of any Environmental Law
or the assertion of any Environmental Claim) which might reasonably be expected
to have a Material Adverse Effect; and

         (f)      any setoff, claim (including any Environmental Claim),
withholding or other defense to which any of the collateral granted under any
Collateral Document, or the Administrative Agent's or the Banks' rights with
respect to any such collateral, are subject.

                                   SECTION 6

                     GENERAL WARRANTIES AND REPRESENTATIONS

         The Company warrants and represents to the Administrative Agent and
the Banks that:

         6.1      Authorization, Validity and Enforceability of this Agreement
and the Loan Documents. The execution and delivery by the Company of this
Agreement and each other Loan Document to which it is a party, the borrowings
hereunder, the execution and delivery by each Guarantor of each Loan Document
to which it is a party and the performance by each Loan Party of its
obligations under each Loan Document to which it is a party are within the
organizational powers of each Loan Party, have been duly authorized by all
necessary organizational action on the part of each Loan Party (including any
necessary shareholder, partner or member action), have received all necessary
governmental approval (if any shall be required), and do not and will not (a)
violate any provision of law or any order, decree or judgment of any court or
other Governmental Authority which is binding on any Loan Party, (b) contravene
or conflict with, or result in a breach of, any provision of the certificate of
incorporation, partnership agreement, by-laws or other organizational documents
of any Loan Party or of any agreement, indenture, instrument or other document
which is binding on any Loan Party or any other Subsidiary or (c) result in, or
require, the creation or imposition of any Lien on any property of any Loan
Party or any other Subsidiary (other than Liens arising under the Loan
Documents). Each of this Agreement and each other Loan Document to which the
Company is a party is the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency and similar laws affecting the enforceability of
creditors' rights generally and to general principles of equity; and each Loan
Document to which any Guarantor is a party is, or upon the execution and
delivery thereof by such Guarantor will be, the legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, subject to bankruptcy, insolvency and similar laws affecting
the enforceability of creditors' rights generally and to general principles of
equity.

         6.2      Validity and Priority of Security Interest. The provisions of
this Agreement and the Collateral Documents create legal and valid Liens on all
the Collateral in favor of the Administrative Agent, for the ratable benefit of
the Administrative Agent and the Banks, and such Liens constitute perfected and
continuing Liens on all the Collateral, having priority over all other Liens on
the Collateral, except for Permitted Liens, securing all the Obligations and
enforceable against each Loan Party and all third parties.

                                       16
<PAGE>
         6.3      Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada; each Subsidiary is duly organized, validly existing and in
good standing under the laws of the state of its organization; and the Company
and each Subsidiary is duly qualified to do business in each jurisdiction where
the nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not
have a Material Adverse Effect) and has full power and authority to own its
property and conduct its business as presently conducted by it.

         6.4      Subsidiaries. The Company has no Subsidiaries except those
listed in Schedule 6.4.

         6.5      Financial Statements. The audited consolidated financial
statements of the Company and its Subsidiaries as at December 31, 2001 and the
unaudited consolidated financial statements of the Company and its Subsidiaries
as at June 30, 2002, copies of each of which have been delivered to each Bank,
were prepared in accordance with GAAP (subject, in the case of such unaudited
statements, to the absence of footnotes and to normal year-end adjustments) and
present fairly the consolidated financial condition of the Company and its
Subsidiaries as at such dates and the results of their operations for the
periods then ended.

         6.6      No Material Adverse Change. Except as previously disclosed in
the Company's filings with the SEC, since December 31, 2001, there has been no
material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as
a whole.

         6.7      Solvency. On the Closing Date (or, in the case of any Person
which becomes a Guarantor after the Closing Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each Borrowing hereunder and the use of
the proceeds thereof (and after giving effect to any right of contribution and
subrogation), (a) each of the Company's and each Guarantor's assets will exceed
its liabilities and (b) each of the Company and each Guarantor will be solvent,
will be able to pay its debts as they mature, will own property with fair
saleable value greater than the amount required to pay its debts and will have
capital sufficient to carry on its business as then constituted.

         6.8      Debt. After giving effect to the making of the Loans to be
made on the Closing Date and the application of the proceeds thereof, the
Company and its Subsidiaries will have no Debt, except (a) the Obligations and
(b) Debt that is permitted by Section 7.13.

         6.9      Real Property; Leases. Schedule 6.9 sets forth, as of the
Closing Date, a correct and complete list of all real property owned by the
Company or any Subsidiary, all leases and subleases of real or personal
property held by the Company or any Subsidiary as lessee or sublessee (other
than any lease of personal property as to which the Company or any Subsidiary
is lessee or sublessee where the value of the personal property subject thereto
is less than $500,000), and all leases and subleases of real or personal
property held by the Company or any Subsidiary as lessor or sublessor. Each of
such leases and subleases is valid and enforceable in

                                       17
<PAGE>
accordance with its terms and is in full force and effect, and no default by
any party to any such lease or sublease exists. Each of the Company and each
Subsidiary has good and marketable title in fee simple to the real property
identified on Schedule 6.9 as owned by such Person, or a valid leasehold
interests in all real property designated therein as "leased" by such Person.

         6.10     Litigation and Contingent Liabilities. No litigation
(including derivative actions), arbitration proceeding, labor controversy or
governmental investigation or proceeding is pending or, to the Company's
knowledge, threatened against the Company or any Subsidiary which might
reasonably be expected to have a Material Adverse Effect, except as set forth
on Schedule 6.10. Other than any liability incident to such litigation or
proceedings, neither the Company nor any Subsidiary has any material contingent
liabilities not listed in such Schedule 6.10.

         6.11     Labor Disputes. Except as set forth on Schedule 6.11, as of
the Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of the Company or any Subsidiary, (b) to the best
of the Company's knowledge, no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees of
the Company or any Subsidiary or for any similar purpose and (c) there is no
pending or (to the best of the Company's knowledge) threatened strike, work
stoppage, material unfair labor practice claim, or other material labor dispute
against or affecting the Company or any Subsidiary.

         6.12     Environmental Matters.

         (a)      Except as set forth on Schedule 6.12, neither the Company nor
any Subsidiary, nor any operator of the Company's or any Subsidiary's
properties, is in violation of any judgment, decree, order, law, permit,
license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986 or any
other Environmental Law which (i) in any single case, requires expenditures in
any three-year period of $250,000 or more by the Company and its Subsidiaries
in penalties and/or for investigative, removal or remedial actions or (ii)
individually or in the aggregate otherwise might reasonably be expected to have
a Material Adverse Effect.

         (b)      Except as set forth on Schedule 6.12, neither the Company nor
any Subsidiary has received written notice from any third party, including any
Governmental Authority: (i) that any one of them has been identified by the
U.S. Environmental Protection Agency as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B; (ii) that any hazardous waste, as defined by 42 U.S.C.
ss.6903(5), any hazardous substance as defined by 42 U.S.C. ss.9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic
substance, oil or hazardous material or other chemical or substance regulated
by any Environmental Law, excluding household hazardous waste (all of the
foregoing, "Hazardous Substances"), which any one of them has generated,
transported or disposed of has been found at any site at which a Federal, state
or local agency or other third party has conducted a remedial investigation,
removal or other response action pursuant to any Environmental Law; (iii) that
the Company or any Subsidiary must conduct sampling, testing, a remedial
investigation, removal, or a response action pursuant to any Environmental Law;
or (iv) of any Environmental Claim.

                                       18
<PAGE>
         (c)      Except as set forth on Schedule 6.12, (i) no portion of the
real property or other assets of the Company or any Subsidiary has been used
for the handling, processing, storage or disposal of Hazardous Substances
except in accordance in all material respects with applicable Environmental
Laws and no underground tank or other underground storage receptacle for
Hazardous Substances is located on such properties which might reasonably be
expected to have a material adverse effect on the value of real property or
assets with an aggregate net book value (prior to any writedown resulting from
any of the foregoing) exceeding $250,000 or which otherwise might be reasonably
expected to have a Material Adverse Effect; (ii) in the course of any
activities conducted by the Company, any Subsidiary or the operators of any
real property of the Company or any Subsidiary, no Hazardous Substances have
been generated or are being used on such properties which might reasonably be
expected to have a material adverse effect on the value of properties with an
aggregate net book value (prior to any writedown resulting from any of the
foregoing) exceeding $250,000 or which otherwise might be reasonably expected
to have a Material Adverse Effect; (iii) there have been no Releases of
Hazardous Substances on, upon, into or from any real property or other assets
of the Company or any Subsidiary, which Releases singly or in the aggregate
might reasonably be expected to have a material adverse effect on the value of
real property or assets with an aggregate net book value (prior to any
writedown resulting from any of the foregoing) exceeding $250,000 or which
otherwise might be reasonably expected to have a Material Adverse Effect; (iv)
to the Company's actual knowledge, there have been no Releases on, upon, from
or into any real property in the vicinity of the real property or other assets
of the Company or any Subsidiary which, through soil or groundwater
contamination, may have come to be located on, and which might reasonably be
expected to have a material adverse effect on the value of, real property or
other assets of the Company or any Subsidiary with an aggregate net book value
(prior to any writedown resulting from any of the foregoing) exceeding $250,000
or which otherwise might be reasonably expected to have a Material Adverse
Effect; and (v) any Hazardous Substance generated by the Company and its
Subsidiaries have been transported offsite only by properly licensed carriers
and, to the best of the Company's knowledge, delivered only to treatment or
disposal facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and are, to the
best of the Company's knowledge, operating in compliance with such permits and
applicable Environmental Laws, except to the extent that failure to do so would
not, individually or in the aggregate, have a Material Adverse Effect.

         (d)      Except as set forth on Schedule 6.12, the Company and its
Subsidiaries have taken reasonable steps to investigate the condition and usage
of the real property of the Company and its Subsidiaries with regard to
environmental matters.

         6.13     No Violation of Law. Neither the Company nor any Subsidiary
is in violation of any law, statute, regulation, ordinance, judgment, order, or
decree applicable to it which violation could reasonably be expected to have a
Material Adverse Effect.

         6.14     No Default. Neither the Company nor any of its Subsidiaries
is in default with respect to any note, indenture, loan agreement, mortgage,
lease, deed or other agreement to

                                       19
<PAGE>
which the Company or such Subsidiary is a party or by which it is bound (other
than, prior to the execution and delivery of the GE Capital Facility
Confirmation, the GE Capital Facility), which default could reasonably be
expected to have a Material Adverse Effect.

         6.15     Pension Plans.

         (a)      During the twelve-consecutive-month period prior to the date
of the execution and delivery of this Agreement or the making of any Loan
hereunder, (i) no steps have been taken to terminate any Pension Plan and (ii)
no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could result in the incurrence by the Company of any material liability,
fine or penalty.

         (b)      All contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made by the Company or any
other member of the Controlled Group under the terms of the plan or of any
collective bargaining agreement or by applicable law; neither the Company nor
any member of the Controlled Group has withdrawn or partially withdrawn from
any Multiemployer Pension Plan, incurred any withdrawal liability with respect
to any such plan, received notice of any claim or demand for withdrawal
liability or partial withdrawal liability from any such plan, and no condition
has occurred which, if continued, might result in a withdrawal or partial
withdrawal from any such plan; and neither the Company nor any member of the
Controlled Group has received any notice that any Multiemployer Pension Plan is
in reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent.

         6.16     Taxes. Each of the Company and each Subsidiary has filed all
Federal tax returns and other material tax returns and reports required by law
to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.

         6.17     Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. The Company is not subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code or law,
or any other federal or state statute or regulation limiting its ability to
incur indebtedness.

         6.18     Margin Stock. The Company is not engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.

         6.19     Copyrights, Patents, Trademarks and Licenses, etc. Each of
the Company and each Subsidiary owns or is licensed or otherwise has the right
to use all of the patents,

                                       20
<PAGE>
trademarks, service marks, trade names, copyrights, contractual franchises,
licenses, rights of way, authorizations and other rights that are reasonably
necessary for the operation of its businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best of the
Company's knowledge, threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending
or, to the knowledge of the Company, proposed, which, in any such case, could
reasonably be expected to have a Material Adverse Effect.

         6.20     Full Disclosure. None of the representations or warranties
made by the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents, contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.

         6.21     Bank Accounts. Set forth on Schedule 6.21 is a complete and
accurate list of all bank accounts maintained by the Company or any Subsidiary
with any bank or other financial institution as of the Closing Date.

         6.22     Clean Earth Sale. (a) The Clean Earth Sale complies in all
material respects with all applicable legal requirements, and all necessary
shareholder approvals and material governmental, regulatory and other consents
and approvals required for the consummation of the Clean Earth Sale have been,
or prior to the consummation thereof will be, (i) duly waived or (ii) duly
obtained and in full force and effect.

         (b)      The consummation by the Company of the Clean Earth Sale will
not violate in any material respect any statute or regulation of the United
States or any other applicable jurisdiction, or any order, judgment or decree
of any court or other Governmental Authority, or result in a breach of, or
constitute a default under, any indenture or other agreement, or any order or
decree, affecting the Company or any of its Subsidiaries.

         (c)      The representations and warranties of the Company and Clean
Earth set forth in the CEI Sale Agreement are true and correct in all material
respects on the date of this Agreement, except to the extent that all breaches
of such representations and warranties have not, and would not be reasonably
likely to, result in claims against the Company exceeding, in the aggregate for
all such claims (whether previously paid or currently unpaid), the sum of (i)
the Escrow Funds (as defined in the CEI Sale Agreement) plus (ii) the principal
amount of the Seller Note (as defined in the CEI Sale Agreement); to the best
of the Company's knowledge, the representations and warranties of Clean Earth
Acquisition Corp. and CEI Holding Corporation in the CEI Sale Agreement are
true and correct in all material respects on the date of this Agreement; there
have been no amendments to or waivers under the CEI Sale Agreement (other than
amendments and waivers approved by the Required Banks); and the Clean Earth
Sale will be consummated in accordance with the terms of the CEI Sale
Agreement.

                                       21
<PAGE>
                                   SECTION 7

                       AFFIRMATIVE AND NEGATIVE COVENANTS

         The Company covenants to the Administrative Agent and each Bank that
so long as any Obligations remain outstanding or this Agreement is in effect,
the Company will:

         7.1      Compliance with Laws, Material Contracts; Payment of Taxes
and Liabilities. (a) Comply, and cause each Subsidiary to comply, in all
material respects with all applicable laws (including Environmental Laws),
rules, regulations, decrees, orders, judgments, licenses, material contracts
(other than, prior to the date on which the GE Capital Facility Confirmation
has been delivered to the Administrative Agent, the GE Capital Facility) and
permits; and (b) pay, and cause each Subsidiary to pay, prior to delinquency,
all Federal taxes and all other material taxes and other governmental charges
against it or any of its property, as well as claims of any kind which, if
unpaid, might become a Lien on any of its property; provided that the foregoing
shall not require the Company or any Subsidiary to pay any such tax or charge
so long as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.

         7.2      Legal Existence and Good Standing. Maintain and preserve, and
(subject to Section 7.9) cause each Subsidiary to maintain and preserve, (a)
its existence and good standing in the jurisdiction of its incorporation and
(b) its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification
necessary (except in those instances in which the failure to be qualified or in
good standing does not have a Material Adverse Effect).

         7.3      Books, Records and Inspections. Keep, and cause each
Subsidiary to keep, its books and records in accordance with sound business
practices sufficient to allow the preparation of financial statements in
accordance with GAAP; permit, and cause each Subsidiary to permit, any Bank or
the Administrative Agent or any representative thereof upon reasonable prior
notice to inspect the properties and operations of the Company and of such
Subsidiary; and permit, and cause each Subsidiary to permit, at any reasonable
time during normal business hours and with reasonable notice (or at any time
without notice if an Event of Default exists), any Bank or the Administrative
Agent or any representative thereof to visit any or all of its offices, to
discuss its financial matters with its officers and its independent auditors
(and the Company hereby authorizes such independent auditors to discuss such
financial matters with any Bank or the Administrative Agent or any
representative thereof whether or not any representative of the Company or any
Subsidiary is present), to examine (and, at the expense of the Company or the
applicable Subsidiary, photocopy extracts from) any of its books or other
corporate records and to conduct field examinations of the Accounts, inventory
and equipment of the Company and its Subsidiaries.

                                       22
<PAGE>
         7.4      Operating Leases. Not permit the aggregate amount of all
rental payments made (or scheduled to be made) under Operating Leases by the
Company and its Subsidiaries (on a consolidated basis) in any Fiscal Year to
exceed $1,200,000.

         7.5      Insurance.

         (a)      Maintenance of Insurance. Maintain, and cause each Subsidiary
to maintain, with financially sound and reputable insurers having a rating of
at least A- or better by Best Rating Guide (it being understood that, after the
occurrence and during the continuance of an Event of Default, the
Administrative Agent or the Required Banks may require the Best's rating of the
insurers to be A+ or better), insurance against loss or damage by fire with
extended coverage; theft, burglary, pilferage and loss in transit; public
liability and third party property damage; larceny, embezzlement or other
criminal liability; business interruption; public liability and third party
property damage; and such other hazards or of such other types as is customary
for Persons engaged in the same or similar business, as the Administrative
Agent, in its discretion, or acting at the direction of the Required Banks,
shall specify, in amounts, and under policies, reasonably acceptable to the
Administrative Agent and the Required Banks. Without limiting the foregoing, if
any improved real property covered by any Mortgage is determined to be located
within an area that has been identified by the Director of the Federal
Emergency Management Agency as a Special Flood Hazard Area ("SFHA"), the
Company or the applicable Subsidiary shall purchase and maintain flood
insurance on such improved real property and any equipment and inventory
located on such real property. The amount of said flood insurance will be
reasonably determined by the Administrative Agent and shall, at a minimum,
comply with applicable federal regulations as required by the Flood Disaster
Protection Act of 1973. The Company shall, and shall cause each Subsidiary to,
also maintain flood insurance for any other inventory and equipment which is,
at any time, located in a SFHA.

         (b)      Administrative as Loss Payee; Payment of Premiums, etc.
Cause, and cause each Subsidiary to cause, (i) the Administrative Agent, for
the ratable benefit of the Administrative Agent and the Banks, to be named as
secured party or mortgagee and sole loss payee or additional insured, in a
manner acceptable to the Administrative Agent on each policy of insurance
maintained by the Company or any Subsidiary, (ii) each such policy of insurance
to contain endorsements reasonably acceptable to the Administrative Agent and
(iii) all premiums for such insurance to be paid when due. The Company will, or
will cause each applicable Subsidiary to, deliver to the Administrative Agent
upon request certificates of insurance and/or, photocopies of all insurance
policies, in each case in sufficient quantity for distribution by the
Administrative Agent to each of the Banks. If the Company or any Subsidiary
fails to procure any applicable insurance or to pay the premiums therefor when
due, the Administrative Agent may, and at the direction of the Required Banks
shall, do so from the proceeds of Loans.

         7.6      Insurance and Condemnation Proceeds. Promptly notify the
Administrative Agent and the Banks of any loss, damage or destruction to the
Collateral of $100,000 or more, whether or not covered by insurance. The
Administrative Agent is hereby authorized to collect all insurance and
condemnation proceeds in respect of Collateral directly and to apply or remit
them as follows:

                                       23
<PAGE>
         (a)      With respect to insurance and condemnation proceeds relating
to Collateral other than Fixed Assets, after deducting from such proceeds the
reasonable expenses, if any, incurred by the Administrative Agent in the
collection or handling thereof, the Administrative Agent shall apply such
proceeds, ratably, to the reduction of the Obligations in the order provided
for in Section 3.5.

         (b)      With respect to insurance and condemnation proceeds relating
to Collateral consisting of Fixed Assets, the Administrative Agent shall permit
or require the Company or the applicable Subsidiary to use such proceeds, or
any part thereof, to replace, repair, restore or rebuild the relevant Fixed
Assets in a diligent and expeditious manner with materials and workmanship of
substantially the same (or better) quality as existed before the loss, damage
or destruction so long as (i) no Event of Default or Unmatured Event of Default
has occurred and is continuing, (ii) the aggregate proceeds do not exceed
$1,000,000 and (iii) the Company or the applicable Subsidiary first (A)
provides the Administrative Agent and the Required Banks with plans and
specifications for any such replacement, repair, restoration or rebuilding
which shall be reasonably satisfactory to the Administrative Agent and the
Required Banks and (B) demonstrates to the reasonable satisfaction of the
Administrative Agent and the Required Banks that the funds available to it will
be sufficient to complete such project in the manner provided therein. In all
other circumstances, the Administrative Agent shall apply such insurance and
condemnation proceeds to the reduction of the Obligations in the order provided
for in Section 3.5.

         7.7      Environmental Laws.

         7.7.1    Compliance with Environmental Laws. Conduct, and cause each
Subsidiary to conduct, its business in substantial compliance with all
Environmental Laws applicable to it, including those relating to the
generation, handling, use, storage and disposal of any contaminant; and take,
and cause each Subsidiary to take, prompt and appropriate action to respond to
any non-compliance with Environmental Law.

         7.7.2    Inspection and Testing of Properties. Permit the
Administrative Agent and its representatives at any reasonable time to enter
and visit any real property owned or leased by the Company or any Subsidiary
and any other place where any property of the Company or any Subsidiary is
located or any other property with respect to which the Company or any
Subsidiary may have any liability under any Environmental Law (subject, in the
case of non-owned real property, to the consent of the owner) for the purposes
of observing such real property, taking and removing soil or groundwater
samples, and conducting tests on any part of such real property. The
Administrative Agent is under no duty, however, to visit or observe any such
real property or to conduct tests, and any such acts by the Administrative
Agent will be solely for the purposes of protecting the Administrative Agent's
Liens and preserving the Administrative Agent and the Banks' rights under the
Loan Documents. No site visit, observation or testing by the Administrative
Agent or any Bank will result in a waiver of any default of the Company or
impose any liability on the Administrative Agent or the Banks. In no event will
any site visit, observation or testing by the Administrative Agent be a
representation that Hazardous Substances are or are not present in, on or under
any such real property, or that there has been or will be compliance with any
Environmental Law. Neither the Company nor any other party is

                                       24
<PAGE>
entitled to rely on any site visit, observation or testing by the
Administrative Agent. The Administrative Agent and the Banks owe no duty of
care to protect the Company or any Subsidiary or any other party against, or to
inform the Company or any Subsidiary or any other party of, any Hazardous
Substance or any other adverse condition affecting any such real property. The
Administrative Agent may in its discretion disclose to the Company or any
Subsidiary or to any other party if so required by law any report or finding
made as a result of, or in connection with, any site visit, observation or
testing by the Administrative Agent. The Company understands and agrees that
the Administrative Agent makes no warranty or representation to the Company or
any Subsidiary or any other party regarding the truth, accuracy or completeness
of any such report or findings that may be disclosed. The Company also
understands that, depending on the results of any site visit, observation or
testing by the Administrative Agent and disclosed to the Company or the
applicable Subsidiary, such Person may have a legal obligation to notify one or
more environmental agencies of the results and that such reporting requirements
are site-specific and are to be evaluated by the Company or the applicable
Subsidiary without advice or assistance from the Administrative Agent. In each
instance, the Administrative Agent will give the Company reasonable notice
before entering any real property or any other place the Administrative Agent
is permitted to enter under this Section 7.7.2. The Administrative Agent will
make reasonable efforts to avoid interfering with the use of any such real
property by the Company and its Subsidiaries or in exercising any rights
provided hereunder.

         7.8      Employee Benefit Plans. Maintain, and cause each Subsidiary
to maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.

         7.9      Mergers, Consolidations or Sales. Not, and not permit any
Subsidiary to, be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or any stock of any
class of, or any partnership or joint venture interest in, any other Person, or
sell, transfer, convey or lease all or any substantial part of its assets
(other than sales of inventory in the ordinary course of business), or sell or
assign with or without recourse any receivables, except for:

         (a)      any such merger or consolidation, sale, transfer, conveyance,
lease or assignment of or by any wholly-owned Subsidiary into the Company or
into, with or to any other wholly-owned Subsidiary;

         (b)      any such purchase or other acquisition by the Company or any
wholly-owned Subsidiary of the assets or stock of any wholly-owned Subsidiary;

         (c)      the Clean Earth Sale; and

         (d)      sales and dispositions of assets (including the stock of
Subsidiaries) so long as the net book value of all assets sold or otherwise
disposed of in any Fiscal Year does not exceed $500,000.

         7.10     Restricted Payments. Not, and not permit any Subsidiary to,
(a) declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any

                                       25
<PAGE>
such stock or any warrants, units, options or other rights in respect of such
stock, (c) make any other distribution to shareholders, (d) pay any principal
of or interest on, or purchase, redeem or defease, any Subordinated Debt (other
than the payment to Halifax of (i) a portion of the proceeds of the Clean Earth
Sale and (ii) non-cash interest, in each case pursuant to the agreement
described in Section 8.1.7(c)) or (e) set aside funds for any of the foregoing;
provided that (x) any Subsidiary may declare and pay dividends to the Company
or to any other wholly-owned Subsidiary; and (y) the Company may make regularly
scheduled payments of interest on any Subordinated Debt through the issuance of
additional Subordinated Debt.

         7.11     Transactions Affecting Collateral or Obligations. Not, and
not permit any Subsidiary to, enter into any transaction which could be
reasonably expected to have a Material Adverse Effect.

         7.12     Advances and Other Investments. Not, and not permit any
Subsidiary to, make, incur, assume or suffer to exist any Investment in any
other Person, except (without duplication) the following:

         (a)      equity Investments existing on the Closing Date in
wholly-owned Subsidiaries identified in Schedule 6.4;

         (b)      equity Investments in Subsidiaries acquired after the Closing
Date in transactions permitted as acquisitions of stock or assets pursuant to
Section 7.9;

         (c)      in the ordinary course of business, contributions by the
Company to the capital of any of its wholly-owned Subsidiaries, or by any such
Subsidiary to the capital of any of its wholly-owned Subsidiaries;

         (d)      in the ordinary course of business, Investments by the
Company in any wholly-owned Subsidiary or by any of the Subsidiaries in the
Company, by way of intercompany loans, advances or guaranties, all to the
extent permitted by Section 7.13;

         (e)      Suretyship Liabilities permitted by Section 7.13;

         (f)      loans to officers and employees not exceeding (a) $100,000 in
the aggregate to any single individual or (b) $250,000 in the aggregate for all
such individuals;

         (g)      Cash Equivalent Investments;

         (h)      the CEI Note; and

         (i)      bank deposits in the ordinary course of business; provided
that with respect to deposits (excluding amounts in payroll accounts for which
checks to employees have been issued) maintained with any bank other than the
Administrative Agent, such Bank and the Company shall have delivered a Blocked
Account Agreement to the Administrative Agent;

provided that no Investment otherwise permitted by clause (e) or (f) above
shall be permitted to be made if, immediately before or after giving effect
thereto, any Event of Default or Unmatured

                                       26
<PAGE>
Event of Default shall have occurred and be continuing. Without limiting the
foregoing, the Company will not, and will not permit any Subsidiary to, open or
maintain any bank or deposit account (other than those described on Schedule
6.21) without the prior written consent of the Administrative Agent.

         7.13     Debt. Not, and not permit any Subsidiary to, create, incur,
assume or suffer to exist any Debt, except:

         (a)      obligations in respect of the Loans and the Letters of
Credit;

         (b)      Debt under the GE Capital Facility not exceeding $12,000,000
in aggregate principal amount at any time outstanding;

         (c)      other Debt outstanding on the date hereof and listed in
Schedule 7.13;

         (d)      Debt arising under Capital Leases and Debt secured by Liens
permitted by clause (c) or (d) of Section 7.17; provided that the aggregate
amount of all such Debt at any time outstanding shall not exceed $4,000,000 so
long as the Company is operating the Chicago Facility as a Capital Lease and
shall not exceed $1,000,000 if the Company acquires the Chicago Facility;

         (e)      refinancings of Debt permitted by clause (b), (c) or (d)
above, so long as the terms applicable to such refinanced Debt are no less
favorable to the Company or the applicable Subsidiary than the terms in effect
immediately prior to such refinancing;

         (f)      Debt of Subsidiaries owed to the Company;

         (g)      Hedging Obligations of the Company or any Subsidiary incurred
in the ordinary course of business for bona fide hedging purposes and not for
speculation;

         (h)      unsecured Debt of the Company to Subsidiaries;

         (i)      Subordinated Debt;

         (j)      Debt arising in connection with insurance premium financing
arrangements in the ordinary course of business;

         (k)      Debt under the Deferred Payment Notes; and

         (l)      upon the exercise of the Chicago Purchase Options, Debt
secured by a mortgage on the Chicago Facility so long as (i) no Event of
Default under Section 9.1.1 exists at the time of or will result from the
incurrence of such Debt and (ii) all consideration for such exercise shall be
paid with the proceeds of such Debt.

         7.14     Prepayment. Not, and not permit any Subsidiary to,
voluntarily prepay any Debt, except the Obligations in accordance with the
terms of this Agreement.

                                       27
<PAGE>
         7.15     Transactions with Affiliates. Not, and not permit any
Subsidiary to, enter into, or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its Affiliates (other than the Company and
its Subsidiaries) which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates.

         7.16     Business Activities. Not, and not permit any Subsidiary to,
engage in any line of business other than the businesses engaged in by the
Company and its Subsidiaries as of the date hereof (after giving effect to the
Clean Earth Sale) and businesses reasonably related thereto.

         7.17     Liens. Not, and not permit any Subsidiary to, create or
permit to exist any Lien on any of its real or personal properties, assets or
rights of whatsoever nature (whether now owned or hereafter acquired), except
for the following ("Permitted Liens"):

         (a)      Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;

         (b)      Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds, bid
bonds, performance bonds and similar obligations) for sums not overdue or being
contested in good faith by appropriate proceedings and not involving any
deposits or advances or borrowed money or the deferred purchase price of
property or services, and, in each case, for which it maintains adequate
reserves;

         (c)      Liens identified on Schedule 7.17;

         (d)      subject to the limitation set forth in Section 7.13(d), (i)
Liens existing on property at the time of the acquisition thereof by the
Company or any Subsidiary (and not created in contemplation of such
acquisition) and (ii) Liens that constitute purchase money security interests
on any property securing debt incurred for the purpose of financing all or any
part of the cost of acquiring such property; provided that any such Lien
attaches to such property within 60 days of the acquisition thereof and such
Lien attaches solely to the property so acquired;

         (e)      attachments, appeal bonds, judgments and other similar Liens,
for sums not exceeding $500,000 arising in connection with court proceedings;
provided the execution or other enforcement of such Liens is effectively stayed
and the claims secured thereby are being actively contested in good faith and
by appropriate proceedings;

         (f)      easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any material
respect with the ordinary conduct of the business of the Company or any
Subsidiary;

         (g)      Liens in favor of the Administrative Agent for the benefit of
the Banks arising under the Loan Documents;

                                       28
<PAGE>
         (h)      after receipt by the Administrative Agent of the GE Capital
Facility Confirmation, Liens on the Chicago Purchase Options granted to secure
the GE Capital Facility;

         (i)      Liens securing insurance premium financing arrangements
permitted by Section 7.13(j), provided that such Liens are limited to the
applicable insurance contracts;

         (j)      Liens in favor of Halifax securing Debt that is subject to an
intercreditor agreement substantially in the form of Exhibit L; and

         (k)      a mortgage granted to a third-party lender on the Chicago
Facility so long as the Debt secured thereby is permitted by Section 7.13(k).

         7.18     New Subsidiaries. Without the prior written consent of the
Administrative Agent or the Required Banks, not, and not permit any Subsidiary
to, organize, create, acquire or permit to exist any Subsidiary other than
those listed on Schedule 6.4.

         7.19     Fiscal Year. Not change its Fiscal Year.

         7.20     Capital Expenditures. Not permit the aggregate amount of all
Capital Expenditures made by the Company and its Subsidiaries in any Fiscal
Year to exceed $2,000,000.

         7.21     Financial Covenants.

         7.21.1   Interest Coverage Ratio. Not permit the Interest Coverage
Ratio as of the last day of any Computation Period to exceed the applicable
ratio set forth below:

<TABLE>
<CAPTION>
         Computation Period Ending          Minimum Interest Coverage Ratio
         -------------------------          -------------------------------
         <S>                                <C>
                  3/31/03                             1.30 to 1.0
                  6/30/03                             2.10 to 1.0
                  9/30/03                             2.00 to 1.0
                 12/31/03                             1.60 to 1.0
                  3/31/04                             1.60 to 1.0
                  6/30/04                            1.70 to 1.0.
</TABLE>

         7.21.2   Minimum EBITDA. Not permit EBITDA for any Computation Period
to be less than the applicable amount set forth below:

<TABLE>
<CAPTION>
         Computation Period Ending          Minimum EBITDA
         -------------------------          --------------
         <S>                                <C>
                  3/31/03                      $561,000
                  6/30/03                     $1,844,000
                  9/30/03                     $2,641,000
                 12/31/03                     $2,872,000
                  3/31/04                     $2,928,000
                  6/30/04                     $3,015,000.
</TABLE>

                                       29
<PAGE>
         7.22     Use of Proceeds. Use the proceeds of the Loans solely to
finance the Company's working capital, for capital expenditures and for other
general corporate purposes; and not use or permit any proceeds of any Loan to
be used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying" any Margin Stock.

         7.23     Further Assurances. Take, and cause each Subsidiary to take,
such actions as are necessary, or as the Administrative Agent (or the Required
Banks acting through the Administrative Agent) may reasonably request, from
time to time (including the execution and delivery of guaranties, security
agreements, pledge agreements, financing statements, mortgages, deeds of trust
and other documents, the filing or recording of any of the foregoing, the
delivery of stock certificates and other collateral with respect to which
perfection is obtained by possession, and the delivery of opinions of counsel
with respect to any of such documents) to ensure that (a) the obligations of
the Company hereunder and under the other Loan Documents are secured by
substantially all of the assets of the Company and guaranteed by all
Subsidiaries by execution of a counterpart of the Guaranty and (b) the
obligations of each Guarantor under the Guaranty are secured by substantially
all of the assets of such Guarantor. Notwithstanding the foregoing, after
receipt by the Administrative Agent of the GE Capital Facility Confirmation, no
Loan Party shall be required to grant to, or maintain in favor of, the
Administrative Agent and the Banks a Lien on the Chicago Purchase Options.

         7.24     Inconsistent Agreements. Not, and not permit any Subsidiary
to, enter into any agreement containing any provision which (a) would be
violated or breached by any borrowing, or the obtaining of any Letter of
Credit, by the Company hereunder or by the performance by the Company or any
Subsidiary of any of its obligations hereunder or under any other Loan Document
or (b) would prohibit the Company or any Subsidiary from granting to the
Administrative Agent, for the benefit of the Banks, a Lien on any of its
assets.

         7.25     Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made
of such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any Subsidiary from entering into
options for the purchase of particular assets.

         7.26     Amendments to Certain Documents. Not make or agree to any
amendment to or modification of, or waive any of its rights under, any
agreement or instrument governing any Subordinated Debt which would (a) have
the effect of (i) increasing the principal amount payable thereon or
redemptions thereof, (ii) providing for earlier payment in respect of principal
or redemptions or otherwise, or (iii) requiring additional collateral or
guarantees to secure such Subordinated Debt or (b) otherwise adversely affect
the interest of the Banks.

         7.27     Halifax Agreement. Not later than September 11, 2002, deliver
to the Administrative Agent a copy of a fully-signed agreement pursuant to
which Halifax agrees that, upon receipt by Halifax of $2,500,000 from the
proceeds of the Clean Earth Sale, (i) all Subordinated Debt owing to Halifax
will bear interest at a rate equal to 10% per annum, which interest shall be
paid through the issuance of additional Subordinated Debt to Halifax until a
date that is not earlier than the Stated Termination Date, and (ii) Halifax
will waive the payment by the Company of all accrued interest and fees
(including dividends payable on the Company's Series D preferred stock) owing
on the Closing Date.

                                       30
<PAGE>
                                   SECTION 8

                             CONDITIONS OF LENDING

         8.1      Conditions Precedent to Initial Credit Extensions. The
obligation of the Banks to make the initial credit extension hereunder is
subject to the following conditions precedent having been satisfied in a manner
satisfactory to the Administrative Agent and each Bank:

         8.1.1    Execution of Loan Documents. This Agreement and the other
Loan Documents shall have been executed by each party thereto and the Company
and each other Loan Party shall have performed and complied with all covenants,
agreements and conditions contained herein and the other Loan Documents which
are required to be performed or complied with by the Company and the other Loan
Parties before or on such Closing Date.

         8.1.2    Accuracy of Representations and Warranties. All
representations and warranties made hereunder and in the other Loan Documents
shall be true and correct as if made on the Closing Date.

         8.1.3    Absence of Default. No Event of Default or Unmatured Event of
Default shall have occurred and be continuing after giving effect to the
effectiveness hereof and the extensions of credit hereunder on the Closing
Date.

         8.1.4    Opinions of Counsel. The Administrative Agent and the Banks
shall have received the opinion of Rosetto & Associates, LLC.

         8.1.5    Payment of Fees and Expenses. The Company shall have paid all
fees and expenses of (a) the Administrative Agent (including reasonable
attorneys' fees and charges) incurred in connection with any of the Loan
Documents and the transactions contemplated thereby and (b) all professional
consultants and advisors retained by the Administrative Agent and/or the Banks
in connection with this Agreement or the Existing Credit Agreement.

         8.1.6    Satisfaction with Proceedings. All proceedings taken in
connection with the execution of this Agreement, the Notes, all other Loan
Documents and all documents and papers relating thereto shall be satisfactory
in form, scope, and substance to the Administrative Agent and the Banks.

         8.1.7    Other Closing Conditions. The Administrative Agent shall have
received the following, each in form and substance acceptable to the
Administrative Agent:

         (a)      evidence that the Clean Earth Sale has been (or concurrently
with the effectiveness hereof will be) consummated;

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<PAGE>
         (b)      a funds flow memorandum executed by the Company specifying in
reasonable detail the use of proceeds of the Clean Earth Sale;

         (c)      an agreement executed by Halifax consenting to the Clean
Earth Sale, together with evidence, reasonably satisfactory to the
Administrative Agent, that no proceeds of the Clean Earth Sale will be
delivered to Halifax until Halifax has executed and delivered the agreement
described in Section 7.27;

         (d)      evidence that all existing Debt under the Stout Note has been
converted into equity of the Company;

         (e)      a guaranty, substantially in the form of Exhibit I (the
"Guaranty"), duly executed by each Subsidiary;

         (f)      a security agreement, substantially in the form of Exhibit J
(the "Security Agreement"), duly executed by each Loan Party, together with
evidence satisfactory to the Administrative Agent that all filings necessary to
perfect the Administrative Agent's Lien on any collateral granted under the
Security Agreement have been duly made;

         (g)      a pledge agreement, substantially in the form of Exhibit H
(the "Pledge Agreement"), duly executed by the Company and each other Loan
Party that has one or more Subsidiaries, together with all stock certificates,
stock powers and other items required to be delivered in connection with the
Pledge Agreement;

         (h)      certified copies of resolutions of the Board of Directors (or
similar governing body) of each Loan Party authorizing or ratifying the
execution, delivery and performance by such Loan Party of the Loan Documents to
which it is a party;

         (i)      a certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the names of the officer or officers of such Loan
Party authorized to sign the Loan Documents to which it is a party, together
with a sample of the true signature of each such officer (it being understood
that the Administrative Agent and each Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein);

         (j)      a good standing certificate dated as of a recent date issued
by the Secretary of State of the state of formation of each Loan Party;

         (k)      amendments to Mortgages as the Administrative Agent shall
deem reasonably necessary;

         (l)      a duly completed Borrowing Base Certificate dated as of the
Closing Date;

         (m)      an intercreditor agreement executed by Halifax substantially
in the form of Exhibit L; and

         (n)      such other documents as the Administrative Agent or any Bank
shall reasonably request.

                                       32
<PAGE>
         8.2      Conditions Precedent to Each Credit Extension. The obligation
of the Banks to make each Loan, including the initial Loans on the Closing
Date, and the obligation of the Issuer to issue any Letter of Credit shall be
subject to the further conditions precedent that (a) the Company shall have
delivered to the Agent a Borrowing Base Certificate as of the date of such
extension of credit and (b) on and as of the date of such extension of credit,
the following statements shall be true (and the acceptance by the Company of
any extension of credit shall be deemed to be a statement to the effect set
forth in clauses (i), (ii) and (iii) below with the same effect as the delivery
to the Administrative Agent and the Banks of a certificate signed by a
Responsible Officer, dated the date of such extension of credit, stating that):

                  (i)      the representations and warranties of each Loan
Party contained in this Agreement and the other Loan Documents are correct in
all material respects on and as of the date of such extension of credit as
though made on and as of such date, other than any such representation or
warranty which relates to a specified prior date (which shall have been true
and correct in all material respects as of such prior date) and except to the
extent the Administrative Agent and the Banks have been notified in writing by
the Company that any representation or warranty is not correct and the Required
Banks have explicitly waived in writing compliance with such representation or
warranty;

                  (ii)     no event has occurred and is continuing, or would
result from such extension of credit, which constitutes an Event of Default or
Unmatured Event of Default; and

                  (iii)    no event has occurred and is continuing, or would
result from such extension of credit, which has had or would reasonably be
expected to have a Material Adverse Effect.

                                   SECTION 9

                               DEFAULT; REMEDIES

         9.1      Events of Default. Each of the following events shall
constitute an "Event of Default" hereunder:

         9.1.1    Non-Payment. The Company shall default in the payment when
due of the principal of any Loan or any reimbursement obligation with respect
to any Letter of Credit; or the Company shall default in the payment when due
of any interest, fee or other amount payable by the Company hereunder or under
any other Loan Document and such default shall continue for five days.

         9.1.2    Warranties, etc. Any warranty made by the Company herein is
false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by the Company
or any Subsidiary to the Administrative Agent or any Bank in connection
herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are stated or certified.

                                       33
<PAGE>
         9.1.3    Non-Compliance with this Agreement. The Company shall fail to
comply with or to perform any covenant set forth in Section 5.2(a) or Section
7; or the Company shall fail to comply with or to perform any other provision
of this Agreement (and not constituting an Event of Default under any other
provision of this Section 9) and such failure shall continue for 30 days after
notice thereof to the Company from the Administrative Agent or any Bank.

         9.1.4    Material Obligations. The Company or any Subsidiary shall
default in the payment when due, or in the performance or observance of, any
material obligation of, or condition agreed to by, the Company or such
Subsidiary with respect to any material purchase or lease of goods or services
where such default, singly or in the aggregate with all other such defaults,
might reasonably be expected to have a Material Adverse Effect.

         9.1.5    Bankruptcy, etc. The Company or any Subsidiary becomes
insolvent or generally fails to pay, or admits in writing its general inability
or refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any
substantial part of the property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for the
Company or any Subsidiary or for any substantial part of the property thereof
and is not discharged within 60 days; or any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency
law, or any dissolution or liquidation proceeding (except the voluntary
dissolution, not under any bankruptcy or insolvency law, of a Subsidiary) is
commenced in respect of the Company or any Subsidiary, and if such case or
proceeding is not commenced by the Company or such Subsidiary, it is consented
to or acquiesced in by the Company or such Subsidiary, or remains for 60 days
undismissed; or the Company or any Subsidiary takes any corporate action to
authorize, or in furtherance of, any of the foregoing.

         9.1.6    Guaranty. The Guaranty shall cease to be in full force and
effect with respect to any Guarantor, any Guarantor shall fail (subject to any
applicable grace period) to comply with or to perform any applicable provision
of the Guaranty, or any Guarantor (or any Person by, through or on behalf of
such Guarantor) shall contest in any manner the validity, binding nature or
enforceability of the Guaranty with respect to such Guarantor.

         9.1.7    Collateral Documents. Any Collateral Document shall cease to
be in full force and effect with respect to any Loan Party, any Loan Party
shall fail (subject to any applicable grace period) to comply with or to
perform any applicable provision of any Collateral Document to which it is a
party, or the Company or any Loan Party (or any Person by, through or on behalf
of such Loan Party) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document; or any Lien with respect to any
material portion of the Collateral intended to be secured by any Loan Party
ceases to be, or is not, valid, perfected and prior to all other Liens (other
than Permitted Liens) or is terminated, revoked or declared void.

         9.1.8    Condemnation, etc. All or any material part of the property
of the Company or any Subsidiary shall be nationalized, expropriated,
condemned, seized or otherwise appropriated, or custody or control of such
property or of the Company or such Subsidiary shall be assumed by any
Governmental Authority or any court of competent jurisdiction at the instance
of any

                                       34
<PAGE>
Governmental Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect.

         9.1.9    Judgments. Final judgments which exceed an aggregate of
$500,000 shall be rendered against the Company or any Subsidiary and shall not
have been paid, discharged or vacated or had execution thereof stayed pending
appeal within 30 days after entry or filing of such judgments.

         9.1.10   Cross-Default. Any default shall occur under the terms
applicable to any Debt of the Company or any Subsidiary in an aggregate
principal amount (for all such Debt so affected) exceeding $500,000 and such
default shall (a) consist of the failure to pay such Debt when due (subject to
any applicable grace period), whether by acceleration or otherwise, or (b)
accelerate the maturity of such Debt or permit the holder or holders thereof,
or any trustee or agent for such holder or holders, to cause such Debt to
become due and payable prior to its expressed maturity, excluding for purposes
of this Section 9.1.10, until the GE Capital Facility Confirmation has been
delivered to the Administrative Agent, any default under the GE Capital
Facility so long as no lender under the GE Capital Facility has taken steps
(through judicial proceedings or otherwise) to foreclose or otherwise realize
upon any collateral securing the GE Capital Facility.

         9.1.11   Racketeering Action. Any action, suit or proceeding under any
federal or state racketeering statute (including the Racketeer Influenced and
Corrupt Organization Act of 1970) is filed against the Company or any
Subsidiary and (a) is not dismissed within 120 days and (b) could reasonably be
expected to result in the confiscation or forfeiture of any material portion of
the Collateral.

         9.1.12   ERISA. (a) The Company or any other Person takes steps to
terminate a Pension Plan if as a result of such termination the Company could
be required to make a contribution to such Pension Plan, or could incur a
liability or obligation to such Pension Plan, in excess of $500,000; (b) a
contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under section 302(f) of ERISA; or (c) any withdrawal or partial
withdrawal from a Multiemployer Pension Plan occurs and the withdrawal
liability (without unaccrued interest) to Multiemployer Pension Plans as a
result of such withdrawal (including any outstanding withdrawal liability that
the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $500,000.

         9.1.13   Change of Control. Any Change of Control occurs.

         9.1.14   Material Adverse Change. Any event occurs that results in or
is reasonably likely to result in (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole,
or the Collateral; (b) a material impairment of the ability of the Company or
any guarantor of any Obligations to perform under any Loan Document to which it
is a party; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Company or any guarantor of any
Obligations of any Loan Document to which it is a party.

                                       35
<PAGE>
         9.2      Remedies. If any Event of Default described in Section 9.1.5
occurs, the Commitments shall immediately terminate, all Obligations shall
become immediately due and payable and the Company shall immediately be
required to cash collateralize all outstanding Letter of Credit Obligations,
all without notice or demand of any kind. At any time any other Event of
Default exists, the Administrative Agent may, in its discretion, and shall, at
the direction of the Required Banks, do one or more of the following, in any
order, without notice to or demand on the Company: (a) terminate the
Commitments; (b) declare any or all Obligations to be immediately due and
payable; (c) require the Company to cash collateralize all outstanding Letter
of Credit Obligations; and (d) pursue its other rights and remedies under the
Loan Documents and applicable law.

                                  SECTION 10

                             AMENDMENTS AND WAIVERS

         10.1     No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement or the Notes shall in any event be
effective unless the same shall be in writing and signed and delivered by Banks
having aggregate Pro Rata Shares of not less than the aggregate Pro Rata Shares
expressly designated herein with respect thereto or, in the absence of such
designation as to any provision of this Agreement or the Notes, by the Required
Banks, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No amendment, modification, waiver or consent shall increase or extend
the Commitment of any Bank without the consent of such Bank. No amendment,
modification, waiver or consent shall (a) extend the date for payment of any
principal of or interest on any Loan or any fees payable hereunder, (b) reduce
the principal amount of any Loan, the rate of interest thereon or any fees
payable hereunder, (c) release the Guaranty (other than with respect to a
Guarantor which ceases to be a Subsidiary as a result of a transaction
permitted hereunder) or all or substantially all of the collateral granted
under the Collateral Documents or (d) reduce the aggregate Pro Rata Shares
required to effect an amendment, modification, waiver or consent without, in
each case, the consent of all Banks. No provision of Section 12 or any other
provision of this Agreement affecting the Administrative Agent in its capacity
as such shall be amended, modified or waived without the consent of the
Administrative Agent. No provision of this Agreement relating to the rights or
duties of the Issuer in its capacity as such shall be amended, modified or
waived without the consent of the Issuer; provided that the Administrative
Agent may, in its sole discretion and notwithstanding the limitations contained
above and any other terms of this Agreement, make Administrative Agent Advances
in accordance herewith; and provided, further, that Schedule 1.1 hereto may be
amended from time to time by the Administrative Agent alone to reflect
assignments in accordance herewith.

                                  SECTION 11

                          ASSIGNMENTS; PARTICIPATIONS

         11.1     Assignments. Any Bank may, with the prior written consent of
the Administrative Agent and, so long as no Event of Default or Unmatured Event
of Default has

                                       36
<PAGE>
occurred and is continuing, the Company (which consents shall not be
unreasonably delayed or withheld), at any time assign and delegate to one or
more commercial banks or other Persons (any Person to whom such an assignment
and delegation is to be made being herein called an "Assignee"), all or any
fraction of such Bank's Loans and Commitment (which assignment and delegation
shall be of a constant, and not a varying, percentage of all the assigning
Bank's Loans and Commitment) in a minimum aggregate amount equal to the lesser
of (a) the amount of the assigning Bank's remaining Commitment and (b)
$1,000,000; provided that (i) no assignment and delegation may be made to any
Person if, at the time of such assignment and delegation, the Company would be
obligated to pay any greater amount under Section 4 to the Assignee than the
Company is then obligated to pay to the assigning Bank under such Section (and
if any assignment is made in violation of the foregoing, the Company will not
be required to pay the incremental amounts) and (ii) the Company and the
Administrative Agent shall be entitled to continue to deal solely and directly
with such Bank in connection with the interests so assigned and delegated to an
Assignee until the date when all of the following conditions shall have been
met:

         (A)      five Business Days (or such lesser period of time as the
Administrative Agent and the assigning Bank shall agree) shall have passed
after written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such Assignee,
shall have been given to the Company and the Administrative Agent by such
assigning Bank and the Assignee;

         (B)      the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Administrative Agent an assignment agreement
substantially in the form of Exhibit D (an "Assignment and Assumption"),
together with any documents required to be delivered thereunder, which
Assignment and Assumption shall have been accepted by the Administrative Agent;
and

         (C)      the assigning Bank or the Assignee shall have paid the
Administrative Agent a processing fee of $3,500.

         From and after the date on which the conditions described above have
been met, (a) such Assignee shall be deemed automatically to have become a
party hereto and, to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee pursuant to such Assignment and
Assumption, shall have the rights and obligations of a Bank hereunder, and (b)
the assigning Bank, to the extent that rights and obligations hereunder have
been assigned and delegated by it pursuant to such Assignment and Assumption,
shall be released from its obligations hereunder. Within five Business Days
after the effectiveness of any assignment and delegation to a Person that is
not currently a Bank hereunder, the Company shall execute and deliver to the
Administrative Agent (for delivery to the Assignee) a new Note dated the
effective date of such assignment. Any attempted assignment and delegation not
made in accordance with this Section 11.1 shall be null and void.

         11.2     Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitment of such Bank, the direct
or participation interest of such Bank in any

                                       37
<PAGE>
Letter of Credit or any other interest of such Bank hereunder (any Person
purchasing any such participating interest being herein called a
"Participant"); provided that any Bank selling any such participating interest
shall give notice thereof to the Company. In the event of a sale by a Bank of a
participating interest to a Participant, (a) such Bank shall remain the holder
of its Note for all purposes of this Agreement, (b) the Company and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations hereunder and (c) all
amounts payable by the Company shall be determined as if such Bank had not sold
such participation and shall be paid directly to such Bank. No Participant
shall have any direct or indirect voting rights hereunder (except with respect
to any of the events described in clauses (a) through (d) of the last paragraph
of Section 11.1). Each Bank agrees to incorporate the requirements of the
preceding sentence into each participation agreement which such Bank enters
into with any Participant. The Company agrees that if amounts outstanding under
this Agreement and the Notes are due and payable (as a result of acceleration
or otherwise), each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement,
any Note and with respect to any Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement or such Note; provided that such right of setoff shall be
subject to the obligation of each Participant to share with the Banks, and the
Banks agree to share with each Participant, as provided in Section 12.13. The
Company also agrees that each Participant shall be entitled to the benefits of
Section 4 as if it were a Bank (provided that no Participant shall receive any
greater compensation pursuant to Section 4 than would have been paid to the
participating Bank if no participation had been sold).

         11.3     Assignment to Federal Reserve Bank. Notwithstanding the
foregoing provisions of this Section 11.3 or any other provision of this
Agreement, any Bank may at any time assign all or any portion of its Loans and
its Note to a Federal Reserve Bank (but no such assignment shall release any
Bank from any of its obligations hereunder).

                                  SECTION 12

                            THE ADMINISTRATIVE AGENT

         12.1     Appointment and Authorization.

         (a)      Each Bank hereby irrevocably (subject to Section 12.9)
appoints, designates and authorizes the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent.

                                       38
<PAGE>
         (b)      The Issuer shall act on behalf of the Banks with respect to
any Letters of Credit issued by it and the documents associated therewith. The
Issuer shall have all of the benefits and immunities provided to the
Administrative Agent in this Section 12 with respect to any acts taken or
omissions suffered by it in connection with each Letter of Credit issued or
proposed to be issued by it and the applications and agreements for letters of
credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent", as used in this Section 12, included the Issuer with
respect to such acts or omissions.

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

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

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

                                       39
<PAGE>
         12.5     Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Event of Default except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent
for the account of the Banks, unless the Administrative Agent shall have
received written notice from a Bank or the Company referring to this Agreement,
describing such Event of Default or Unmatured Event of Default and stating that
such notice is a "notice of default". The Administrative Agent will notify the
Banks of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Event of Default or Unmatured Event of Default
as may be requested by the Required Banks in accordance with Section 9;
provided that, unless and until the Administrative Agent has received any such
request, the Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Event of
Default or Unmatured Event of Default as it shall deem advisable or in the best
interest of the Banks.

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

         12.7     Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and
without limiting the obligation of the Company to do so), pro rata, from and
against any and all Indemnified Liabilities; provided that no Bank shall be
liable for any payment to any Agent-Related Person of any portion of the
Indemnified Liabilities resulting solely from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including reasonable fees and expenses of
attorneys for the Administrative Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) incurred by
the

                                       40
<PAGE>
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive repayment of the Loans,
cancellation of the Notes, any foreclosure under, or any modification, release
or discharge of, any or all of the Collateral Documents, any termination of
this Agreement and the resignation or replacement of the Administrative Agent.

         For the purposes of this Section 12.7, "Indemnified Liabilities" shall
mean: any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements
(including reasonable fees of attorneys for the Administrative Agent (including
the allocable costs of internal legal services and all disbursements of
internal counsel)) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Administrative Agent or the replacement of
any Bank) be imposed on, incurred by or asserted against any Agent-Related
Person in any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation
or proceeding (including (a) any case, action or proceeding before any court or
other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; undertaken under U.S. Federal, state or foreign law, including the
United States Bankruptcy Code, and including any appellate proceeding) related
to or arising out of this Agreement or the Commitments or the use of the
proceeds thereof, whether or not any Agent-Related Person, any Bank or any of
their respective officers, directors, employees, counsel, agents or
attorneys-in-fact is a party thereto.

         12.8     Administrative Agent in Individual Capacity. Bank of America
and its Affiliates (including BA Strategic Solutions) may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Company and its Subsidiaries
and Affiliates as though Bank of America were not the Administrative Agent
hereunder and without notice to or consent of the Banks. Bank of America or its
Affiliates may receive information regarding the Company, its Affiliates and
Account Debtors (including information that may be subject to confidentiality
obligations in favor of the Company or any such Affiliate) and acknowledge that
the Administrative Agent, Bank of America and BA Strategic Solutions shall be
under no obligation to provide such information to them.

         12.9     Successor Administrative Agent. The Administrative Agent may,
and at the request of the Required Banks shall, resign as Administrative Agent
upon 30 days' notice to the Banks. If the Administrative Agent resigns under
this Agreement, the Required Banks shall, with (so long as no Event of Default
or Unmatured Event of Default exists) the consent of the

                                       41
<PAGE>
Company (which shall not be unreasonably withheld or delayed), appoint from
among the Banks a successor agent for the Banks. If no successor agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Banks
and the Company, a successor agent from among the Banks. Upon the acceptance of
its appointment as successor agent hereunder, such successor agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term "Administrative Agent" shall mean such successor agent, and
the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 12 and Sections 13.7 and 13.10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement. If no successor agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the Banks
shall perform all of the duties of the Administrative Agent hereunder until
such time, if any, as the Required Banks appoint a successor agent as provided
for above. Notwithstanding the foregoing, however, Bank of America may not be
removed as the Administrative Agent at the request of the Required Banks unless
BA Strategic Solutions shall also simultaneously be replaced as a "Issuer"
hereunder pursuant to documentation in form and substance reasonably
satisfactory to Bank of America and BA Strategic Solutions.

         12.10    Withholding Tax.

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

                  (i)      if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, properly
completed Internal Revenue Service ("IRS") Forms W-8ECI and W-8BEN before the
payment of any interest in the first calendar year and before the payment of
any interest in each third succeeding calendar year during which interest may
be paid under this Agreement;

                  (ii)     if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Bank, two
properly completed and executed copies of IRS Form W-8ECI before the payment of
any interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid under
this Agreement, and IRS Form W-9; and

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

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

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

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

         (d)      If any Bank is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest
payment to such Bank an amount equivalent to the applicable withholding tax
after taking into account such reduction. If the forms or other documentation
required by Section 12.10(a) are not delivered to the Administrative Agent,
then the Administrative Agent may withhold from any payment to the Bank not
providing such forms or other documentation an amount equivalent to the
applicable withholding tax.

         (e)      If the IRS or any other Governmental Authority asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Bank (because the appropriate form was not
delivered or was not properly executed, or because such Bank failed to notify
the Administrative Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Administrative Agent under this
Section, together with all costs and expenses (including reasonable fees and
expenses of attorneys for the Administrative Agent (including the allocable
costs of internal legal services and all disbursements of internal counsel)).
The obligation of the Banks under this subsection shall survive the repayment
of the Loans, cancellation of the Notes, any termination of this Agreement and
the resignation or replacement of the Administrative Agent.

         12.11    Collateral Matters; Release of Clean Earth Entities.

         (a)      The Banks irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent under any Collateral Document (a) upon termination of the
Commitments and payment in full of all Loans and all other Obligations and the
expiration or termination of all Letters of Credit; (b) constituting property
sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; or (c) subject to Section 13.1, if approved,
authorized or ratified in writing by the Required Banks. Upon request by the
Administrative Agent at any time, the

                                       43
<PAGE>
Banks will confirm in writing the Administrative Agent's authority to release
particular types or items of collateral pursuant to this Section 12.11.

         (b)      The Banks irrevocably authorize the Administrative Agent to,
and the Administrative Agent shall, upon the consummation of the Clean Earth
Sale, release (a) Clean Earth and each of its Subsidiaries from the Guaranty
and (b) the Lien of the Administrative Agent on all Collateral granted to the
Administrative Agent by such Persons under the Collateral Documents.

         12.12    Relation Among Banks. The Banks are not partners or
co-venturers, and no Bank shall be liable for the acts or omissions of, or
(except as otherwise expressly set forth herein) authorized to act for, any
other Bank.

         12.13    Sharing of Payments. If at any time any Bank shall receive
(a) by payment, foreclosure, setoff or otherwise, any proceeds of Collateral or
any payment with respect to the Obligations, except for any such proceeds or
payments received by such Bank from the Administrative Agent pursuant to the
terms of this Agreement, or (b) payments from the Administrative Agent in
excess of such Bank's ratable portion (in accordance with the terms hereof) of
all such distributions by the Administrative Agent, such Bank shall promptly
(i) turn the same over to the Administrative Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Administrative
Agent, or in same day funds, as applicable, for the account of all of the Banks
and for application to the Obligations in accordance with the applicable
provisions of this Agreement, or (ii) purchase, without recourse or warranty,
an undivided interest and participation in the Obligations owed to the other
Banks so that such excess payment received shall be applied ratably among the
Banks in accordance with their Pro Rata Shares (or as otherwise provided
herein); provided that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, such purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to
such purchasing party, but without interest except to the extent that such
purchasing party is required to pay interest in connection with the recovery of
the excess payment.

         12.14    Payments by the Administrative Agent to Banks. All payments
to be made by the Administrative Agent to the Banks shall be made by bank wire
transfer or internal transfer of immediately available funds to each Bank
pursuant to wire transfer instructions delivered in writing to the
Administrative Agent on or prior to the Closing Date (or if such Bank is an
Assignee, on the applicable Assignment and Assumption), or pursuant to such
other wire transfer instructions as each party may designate for itself by
written notice to the Administrative Agent. Concurrently with each such
payment, the Administrative Agent shall identify whether such payment (or any
portion thereof) represents principal, interest, fees or other amounts.

         12.15    Settlement.

         12.15.1  Settlement Procedures. Each Bank's funded portion of the
Loans is intended by the Banks to be equal at all times to such Bank's Pro Rata
Share of the outstanding Loans. Notwithstanding the foregoing, the
Administrative Agent, BA Strategic Solutions and the other

                                       44
<PAGE>
Banks agree (which agreement shall not be for the benefit of or enforceable by
the Company) that in order to facilitate the administration of this Agreement
and the other Loan Documents, settlement among them as to the Loans, the
Non-Ratable Loans and the Administrative Agent Advances shall take place on a
periodic basis in accordance with the following provisions:

         (a)      The Administrative Agent shall request settlement
("Settlement") with the Banks on at least a weekly basis, or on a more frequent
basis at Administrative Agent's election, (i) on behalf of Bank of America,
with respect to each outstanding Non-Ratable Loan, (ii) for itself, with
respect to each Administrative Agent Advance and (iii) with respect to
collections received, in each case by notifying the Banks of such requested
Settlement by facsimile, telephone or other similar form of transmission, no
later than 12:00 noon (Chicago time) on the date of such requested Settlement
(the "Settlement Date"). Settlements may occur during the continuation of an
Event of Default or Unmatured Event of Default and whether or not the
applicable conditions precedent set forth in Section 8 have then been
satisfied.

         (b)      If, as of any Settlement Date, Non-Ratable Loans and/or
Administrative Agent Advances are outstanding, each Bank (other than (x) Bank
of America, in the case of Non-Ratable Loans, and (y) the Administrative Agent,
in the case of Administrative Agent Advances) shall transfer the amount of such
Bank's Pro Rata Share of the outstanding principal amount of the Non-Ratable
Loans and/or the Administrative Agent Advances to the Administrative Agent not
later than 2:00 p.m. (Chicago time), on such Settlement Date. Such amounts made
available to the Administrative Agent shall be applied against the amounts of
the applicable Non-Ratable Loans and/or Administrative Agent Advances and,
together with the portion of such Non-Ratable Loans and/or Administrative Agent
Advances representing Bank of America's Pro Rata Share thereof, shall
constitute Loans of the Banks. If any such amount is not transferred to the
Administrative Agent by any Bank on the Settlement Date applicable thereto, the
Administrative Agent shall be entitled to recover such amount on demand from
such Bank together with interest thereon at the Federal Funds Rate for the
first three days from and after the Settlement Date and thereafter at the
interest rate then applicable to the Loans (x) on behalf of Bank of America,
with respect to each Non-Ratable Loan, and (y) for itself, with respect to each
Administrative Agent Advance.

         (c)      Between Settlement Dates, the Administrative Agent may apply
any payments received by the Administrative Agent which, in accordance with the
terms of this Agreement, would be applied to the reduction of the Loans, to
Administrative Agent Advances and/or to Bank of America's Loans (including
Non-Ratable Loans). If, as of any Settlement Date, collections received since
the then immediately preceding Settlement Date have been applied to Bank of
America's Loans (other than to Non-Ratable Loans) as provided for in the
previous sentence, Bank of America shall pay to the Administrative Agent for
the accounts of the Banks, to be applied to the outstanding Loans of the Banks,
an amount such that each Bank shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of all outstanding Loans. During the
period between Settlement Dates, Bank of America with respect to Non-Ratable
Loans, the Administrative Agent with respect to Administrative Agent Advances
and each Bank with respect to the Loans other than Non-Ratable Loans and
Administrative Agent Advances, shall be entitled to interest at the applicable
rate or rates payable under this

                                       45
<PAGE>
Agreement on the actual daily amount of funds employed by BA Strategic
Solutions, the Administrative Agent or such Bank.

         12.15.2  Banks' Failure to Perform. All Loans (other than Non-Ratable
Loans and Administrative Agent Advances) shall be made by the Banks
simultaneously and in accordance with their Pro Rata Shares. The Company, the
Banks and the Administrative Agent agree that (a) no Bank shall be responsible
for any failure by any other Bank to perform its obligation to make any Loan
hereunder, nor shall any Commitment of any Bank be increased or decreased as a
result of any failure by any other Bank to perform its obligation to make any
Loan hereunder, (b) no failure by any Bank to perform its obligation to make
any Loan hereunder shall excuse any other Bank from its obligation to make any
Loan hereunder and (c) the obligations of each Bank hereunder shall be several,
not joint and several.

         12.15.3  Defaulting Banks. Unless the Administrative Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date
of such Borrowing, that such Bank will not make available as and when required
hereunder to the Administrative Agent such Bank's Pro Rata Share of a
Borrowing, the Administrative Agent may assume that each Bank has made such
amount available to the Administrative Agent in immediately available funds on
the Funding Date. Furthermore, the Administrative Agent may, in reliance upon
such assumption, make available to the Company on such date a corresponding
amount. If any Bank has not transferred its full Pro Rata Share to the
Administrative Agent in immediately available funds and the Administrative
Agent has transferred a corresponding amount to the Company, on the Business
Day following such Funding Date such Bank shall make such amount available to
the Administrative Agent, together with interest at the Federal Funds Rate for
that day. A notice by the Administrative Agent submitted to any Bank with
respect to amounts owing shall be conclusive, absent manifest error. If any
Bank's full Pro Rata Share is transferred to the Administrative Agent as
required, the amount transferred to the Administrative Agent shall constitute
such Bank's Loan for all purposes of this Agreement. If such amount is not
transferred to the Administrative Agent, on the Business Day following the
Funding Date the Administrative Agent will notify the Company of such failure
to fund and, upon demand by the Administrative Agent, the Company shall pay
such amount to the Administrative Agent for the Administrative Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising that particular Borrowing. The failure of any Bank
to make any Loan on any Funding Date (any such Bank, prior to the cure of such
failure, a "Defaulting Bank") shall not relieve any other Bank of its
obligation hereunder to make a Loan on that Funding Date. No Bank shall be
responsible for any other Bank's failure to advance such other Bank's Pro Rata
Share of any Borrowing.

         12.15.4  Retention of Defaulting Bank's Payments. The Administrative
Agent shall not be obligated to transfer to a Defaulting Bank any payment made
by the Company to the Administrative Agent for the Defaulting Bank's benefit;
nor shall a Defaulting Bank be entitled to the sharing of any payment
hereunder. Amounts payable to a Defaulting Bank shall instead be paid to or
retained by the Administrative Agent. In its discretion, the Administrative
Agent may loan the Company the amount of all such payments received or retained
by it for the account of

                                       46
<PAGE>
such Defaulting Bank. Any amounts so loaned to the Company shall bear interest
at the then applicable interest rate for Loans and for all other purposes of
this Agreement shall be treated as if they were Loans; provided that for
purposes of voting or consenting to matters with respect to the Loan Documents
and determining Pro Rata Shares, such Defaulting Bank shall be deemed not to be
a "Bank". Until a Defaulting Bank cures its failure to fund its Pro Rata Share
of any Borrowing (a) such Defaulting Bank shall not be entitled to any portion
of the Non-Use Fee and (b) the Non-Use Fee shall accrue in favor of the Banks
which have funded their respective Pro Rata Shares of such requested Borrowing
and shall be allocated among such performing Banks ratably based upon their
relative Commitments. This Section shall remain effective with respect to a
Defaulting Bank until such time as such Bank shall no longer be in default of
any of its obligations under this Agreement. The terms of this Section shall
not be construed to increase or otherwise affect the Commitment of any Bank, or
relieve or excuse the performance by the Company of its duties and obligations
hereunder.

         12.15.5  Removal of Defaulting Bank. At the Company's request, the
Administrative Agent or a bank or other financial institution designated by the
Company and reasonably acceptable to the Administrative Agent and the Company
shall have the right (but not the obligation) to purchase from any Defaulting
Bank, and each Defaulting Bank shall, upon such request, sell and assign to the
Administrative Agent or such bank or other financial institution, all of the
Defaulting Bank's outstanding Commitment hereunder. Such sale shall be
consummated promptly after Administrative Agent has arranged for a purchase by
the Administrative Agent or such bank or other financial institution pursuant
to an Assignment and Assumption, and at a price equal to the outstanding
principal balance of the Defaulting Bank's Loans, plus accrued interest and
fees, without premium or discount.

         12.16    Letters of Credit; Intra-Bank Issues.

         12.16.1  Notice of Letter of Credit Balance. On each Settlement Date,
the Administrative Agent shall notify each Bank of the issuance of all Letters
of Credit since the prior Settlement Date.

         12.16.2  Participations in Letters of Credit.

         (a)      Immediately upon issuance of any Letter of Credit in
accordance with Section 1.3.4, each Bank shall be deemed to have irrevocably
and unconditionally purchased and received, without recourse or warranty, an
undivided interest and participation equal to such Bank's Pro Rata Share of the
face amount of such Letter of Credit (including all obligations of the Company
with respect thereto, and any security therefor or guaranty pertaining
thereto).

         (b)      Whenever the Administrative Agent receives a payment from the
Company on account of reimbursement obligations in respect of a Letter of
Credit as to which the Administrative Agent has previously received for the
account of the Issuer payment from a Bank, the Administrative Agent shall
promptly pay to such Bank such Bank's Pro Rata Share of such payment from the
Company. Each such payment shall be made by the Administrative Agent on the
next Settlement Date.

                                       47
<PAGE>
         (c)      Upon the request of any Bank, the Administrative Agent shall
furnish to such Bank copies of any Letter of Credit, any reimbursement
agreement executed in connection therewith, any application for any Letter of
Credit and such other documentation as may reasonably be requested by such
Bank.

         (d)      The obligation of each Bank to make payments to the
Administrative Agent with respect to any Letter of Credit or with respect to
its participation therein or with respect to the Loans made as a result of a
drawing under a Letter of Credit, and the obligation of the Company to
reimburse the Issuer for the amount of each drawing under a Letter of Credit,
in each case shall be irrevocable and shall not be subject to any qualification
or exception whatsoever, including any of the following circumstances:

                  (i)      any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;

                  (ii)     the existence of any claim, setoff, defense or other
right which the Company may have at any time against a beneficiary named in a
Letter of Credit or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), any Bank, the Administrative Agent,
the issuer of such Letter of Credit or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction between the
Company or any other Person and the beneficiary named in any Letter of Credit);

                  (iii)    any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;

                  (iv)     the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;

                  (v)      the occurrence of any Event of Default or Unmatured
Event of Default; or

                  (vi)     the failure of the Company to satisfy the applicable
conditions precedent set forth in Section 8.

         12.16.3  Recovery or Avoidance of Payments; Refund of Payments in
Error. In the event any payment by or on behalf of the Company received by the
Administrative Agent with respect to any Letter of Credit and distributed by
the Administrative Agent to the Banks on account of their respective
participations therein is thereafter set aside, avoided or recovered from the
Administrative Agent in connection with any receivership, liquidation or
bankruptcy proceeding, the Banks shall, upon demand by the Administrative
Agent, pay to the Administrative Agent their respective Pro Rata Shares of such
amount set aside, avoided or recovered, together with interest at the rate
required to be paid by the Administrative Agent upon the amount required to be
repaid by it. Unless the Administrative Agent receives notice from the Company
prior to the date on which any payment is due to the Banks that the Company
will not make such payment in full as and when required, the Administrative
Agent may assume that the Company has made

                                       48
<PAGE>
such payment in full to the Administrative Agent on such date in immediately
available funds and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the extent
the Company has not made such payment in full to the Administrative Agent, each
Bank shall repay to the Administrative Agent on demand such amount distributed
to such Bank, together with interest thereon at the Federal Funds Rate for each
day from the date such amount is distributed to such Bank until the date
repaid.

         12.16.4  Indemnification by Banks. To the extent not reimbursed by the
Company and without limiting the obligations of the Company hereunder, the
Banks agree to indemnify the Issuer, ratably in accordance with their
respective Pro Rata Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
attorneys' fees and charges) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Issuer in any way
relating to or arising out of any Letter of Credit or the transactions
contemplated thereby or any action taken or omitted by the Issuer under any
Letter of Credit or any Loan Document in connection therewith; provided that no
Bank shall be liable for any of the foregoing to the extent it is determined by
a court of competent jurisdiction in a final, nonappealable order to have
arisen from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Bank agrees to reimburse
the Issuer promptly upon demand for its Pro Rata Share of any costs or expenses
payable by the Company to the Issuer, to the extent that the Issuer is not
promptly reimbursed for such costs and expenses by the Company. The agreement
contained in this Section shall survive payment in full of all other
Obligations.

         12.17    Concerning the Collateral and the Loan Documents. Each Bank
authorizes and directs the Administrative Agent to enter into the other Loan
Documents, for the ratable benefit and obligation of the Administrative Agent
and the Banks. Each Bank agrees that any action taken by the Administrative
Agent or the Required Banks, as applicable, in accordance with the terms of
this Agreement or the other Loan Documents, and the exercise by the
Administrative Agent the Required Banks, as applicable, of their respective
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Banks. The
Banks acknowledge that the Loans, the Administrative Agent Advances, the
Non-Ratable Loans, all Letter of Credit Obligations, obligations with respect
to Bank Products and all interest, fees and expenses hereunder constitute one
Debt, secured pari passu by all of the Collateral.

         12.18    Field Audit and Examination Reports; Disclaimer by Banks. By
signing this Agreement, each Bank:

         (a)      is deemed to have requested that the Administrative Agent
furnish such Bank, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively, "Reports")
prepared by or on behalf of the Administrative Agent;

         (b)      expressly agrees and acknowledges that no Agent-Related
Person (i) makes any representation or warranty as to the accuracy of any
Report or (ii) shall be liable for any information contained in any Report;

                                       49
<PAGE>
         (c)      expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that any Agent-Related Person or other
party performing any audit or examination will inspect only specific
information regarding the Company and will rely significantly upon the books
and records of the Company, as well as on representations of the personnel of
the Company;

         (d)      agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute any Report to any Person except to its
Participants, or use any Report in any other manner; and

         (e)      without limiting the generality of any other indemnification
provision contained in this Agreement, agrees (i) to hold the Administrative
Agent and any other Person preparing a Report harmless from any action such
Bank may take or conclusion such Bank may reach or draw from any Report in
connection with any loans or other credit accommodations that such Bank has
made or may make to the Company, or such Bank's participation in, or such
Bank's purchase of, a loan or loans of the Company and (ii) to pay and protect,
and indemnify, defend and hold the Administrative Agent and any other Person
preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses and other amounts (including attorney's fees and
charges) incurred by the Administrative Agent and such other Person preparing a
Report as the direct or indirect result of any third party who obtains all or
part of any Report through the such Bank.

                                  SECTION 13

                                 MISCELLANEOUS

         13.1     No Waivers; Cumulative Remedies. No failure by the
Administrative Agent or any Bank to exercise any right, remedy, or option under
this Agreement or any present or future supplement thereto, or in any other
agreement between or among the Company and the Administrative Agent and/or any
Bank, or delay by the Administrative Agent or any Bank in exercising the same,
will operate as a waiver thereof. No single or partial exercise by the
Administrative Agent or any Bank of any right, power or remedy shall preclude
other or further exercise thereof, or the exercise of any other right, power or
remedy. No waiver by the Administrative Agent or any Bank will be effective
unless it is in writing, and then only to the extent specifically stated. No
waiver by the Administrative Agent or the Banks on any occasion shall affect or
diminish the Administrative Agent's and each Bank's rights thereafter to
require strict performance by the Company of any provision of this Agreement.
The Administrative Agent and the Banks may proceed directly to collect the
Obligations without any prior recourse to the Collateral. The Administrative
Agent's and each Bank's rights under this Agreement will be cumulative and not
exclusive of any other right or remedy which the Administrative Agent or any
Bank may have.

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

                                       50
<PAGE>
         13.3     Governing Law; Choice of Forum; Service of Process.

         13.3.1   GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS; EXCEPT THAT
PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO
APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC)
OF THE STATE OF ILLINOIS; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE BANKS
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

         13.3.2   CHOICE OF FORUM. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF ILLINOIS OR OF THE UNITED STATES OF AMERICA LOCATED IN COOK
COUNTY, ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
COMPANY, THE ADMINISTRATIVE AGENT AND EACH BANK CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND EACH BANK IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1)
THE ADMINISTRATIVE AGENT AND THE BANKS SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST THE COMPANY OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION THE ADMINISTRATIVE AGENT OR THE BANKS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS
FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.

         13.3.3   SERVICE OF PROCESS. THE COMPANY HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO
THE COMPANY AT ITS ADDRESS SET FORTH ON SCHEDULE 13.7 AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED
IN THE U.S. MAILS, POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR THE BANKS TO SERVE LEGAL PROCESS BY ANY
OTHER MANNER PERMITTED BY LAW.

         13.3.4   WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS AND THE
ADMINISTRATIVE AGENT IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING

                                       51
<PAGE>
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE COMPANY, THE BANKS AND THE
ADMINISTRATIVE AGENT AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES HERETO FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

         13.4     Survival of Representations and Warranties. All of the
representations and warranties of the Company contained in this Agreement shall
survive the execution, delivery and acceptance thereof by the parties,
notwithstanding any investigation by the Administrative Agent or the Banks or
their respective agents.

         13.5     Other Security and Guaranties. The Administrative Agent may,
without notice or demand and without affecting the Company's obligations
hereunder, from time to time: (a) take from any Person and hold collateral
(other than the Collateral) for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of all
or any part of the Obligations and release or substitute any such endorser or
guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.

         13.6     Fees and Expenses. The Company agrees to pay to the
Administrative Agent, for its benefit, on demand, all reasonable costs and
expenses that Administrative Agent pays or incurs in connection with the
negotiation, preparation, syndication, consummation, administration,
enforcement and termination of this Agreement or any other Loan Document,
including: (a) reasonable attorneys' fees and expenses; (b) costs and expenses
(including reasonable attorneys' fees and expenses) for any amendment,
supplement, waiver, consent or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) costs and expenses of
lien and title searches and title insurance; (d) taxes, fees and other charges
for recording the Mortgages, filing financing statements and continuations, and
other actions to perfect, protect and continue the Administrative Agent's Liens
(including costs and expenses paid or incurred by the Administrative Agent in
connection with the consummation of this Agreement); (e) sums paid or incurred
to pay any amount or take any action required of the Company or any Subsidiary
under the Loan Documents that the Company or such Subsidiary fails to pay or
take; (f) costs of appraisals, inspections, and verifications of the
Collateral, including travel, lodging and meals, for inspections of the
Collateral and the operations of the

                                       52
<PAGE>
Company and its Subsidiaries by the Administrative Agent plus the
Administrative Agent's then customary charge for field examinations and audits
and the preparation of reports thereof; (g) costs and expenses of forwarding
loan proceeds, collecting checks and other items of payment and establishing
and maintaining Assignee Deposit Accounts (as defined in the Security
Agreement) and lock boxes; (h) all monitoring fees and expenses of consultants
designated by the Banks; provided that, so long as no Event of Default exists,
the Company shall only be required to pay the consultants a monthly fee of
$15,000 plus expenses for any calendar month; and (i) costs and expenses of
preserving and protecting the Collateral. The Company further agrees to pay all
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) paid or incurred by the Administrative Agent and each Bank to obtain
payment of the Obligations, enforce the Administrative Agent's Liens, sell or
otherwise realize upon the Collateral and otherwise enforce the provisions of
the Loan Documents, or to defend any claims made or threatened against the
Administrative Agent or any Bank arising out of the transactions contemplated
hereby (including any preparation for and consultation concerning any such
matters). The foregoing provisions of this Section 13.6 shall not be construed
to limit any other provision of any Loan Document regarding costs and expenses
to be paid by the Company. All of the foregoing costs and expenses may be paid
by the making of Administrative Agent Advances as described in Section 3.4.

         13.7     Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
party shall be in writing, or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a) upon
personal delivery thereof, including, delivery by overnight mail and courier
service, (b) four days after it shall have been mailed by United States mail,
first class, certified or registered, with postage prepaid or (c) in the case
of notice by such a telecommunications device, when properly transmitted, in
each case addressed to the party to be notified at its address shown on
Schedule 13.7 hereto, or to such other address as such party may designate for
itself by like notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person designated to receive copies shall not adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.

         13.8     Waiver of Notices. Unless otherwise expressly provided
herein, the Company waives presentment, and notice of demand or dishonor and
protest as to any instrument, notice of intent to accelerate the Obligations
and notice of acceleration of the Obligations, as well as any and all other
notices to which it might otherwise be entitled. No notice to or demand on the
Company which the Administrative Agent or any Bank may elect to give shall
entitle the Company to any or further notice or demand in the same, similar or
other circumstances.

         13.9     Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors and assigns of the parties hereto; provided that no interest herein
may be assigned by the Company without prior written consent of the
Administrative Agent and each Bank. The rights and benefits of the
Administrative Agent and the Banks hereunder shall, if such Persons so agree,
inure to any party acquiring any interest in the Obligations or any part
thereof.

                                       53
<PAGE>
         13.10    Indemnity of the Administrative Agent and the Banks by the
Company.

         13.10.1  General. The Company agrees to defend, indemnify and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, representatives, agents and attorneys-in-fact
(each, an "Indemnified Person"), harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including reasonable
attorneys' fees and charges) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the Loans and the
termination, resignation or replacement of the Administrative Agent or
replacement of any Bank) be imposed on, incurred by or asserted against any
such Person in any way relating to or arising out of this Agreement or any
document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any bankruptcy or insolvency
proceeding or appellate proceeding) related to or arising out of this
Agreement, any other Loan Document, or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all of the
foregoing, collectively, the "Indemnified Liabilities"); provided that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities determined by a court of competent
jurisdiction in a final, nonappealable order to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. The agreements in
this Section shall survive payment of all other Obligations.

         13.10.2  Environmental Indemnification. The Company agrees to
indemnify, defend and hold harmless each Indemnified Person from any loss or
liability (including reasonable attorneys' fees and charges) directly or
indirectly arising out of the use, generation, manufacture, production,
storage, release, threatened release, discharge, disposal or presence of a
Hazardous Substance relating to the operations, business or property of the
Company or any Subsidiary. The foregoing indemnity will apply whether the
Hazardous Substance is on, under or about any property of the Company or any
Subsidiary or operations or property leased to the Company or any Subsidiary.
The agreements in this Section shall survive repayment of all other
Obligations.

         13.11    Limitation of Liability. NO CLAIM MAY BE MADE BY THE COMPANY,
ANY BANK OR ANY OTHER PERSON AGAINST THE ADMINISTRATIVE AGENT, ANY BANK OR ANY
OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL,
REPRESENTATIVES, AGENTS OR ATTORNEYS-IN-FACT FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF
CONTRACT OR ON ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH, AND THE
COMPANY AND EACH BANK HEREBY WAIVE, RELEASE AND AGREE NOT TO SUE UPON ANY CLAIM
FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED
TO EXIST IN ITS FAVOR.

                                       54
<PAGE>
         13.12    Final Agreement. This Agreement and the other Loan Documents
are intended by the Company, the Administrative Agent and the Banks to be the
final, complete and exclusive expression of the agreement between them. This
Agreement supersedes any and all prior oral or written agreements relating to
the subject matter hereof except for the fee letter dated September 9, 2002
among the Company and the Administrative Agent. No modification, rescission,
waiver, release or amendment of any provision of this Agreement or any other
Loan Document shall be made, except by a written agreement signed by the
Company and a duly authorized officer of the Administrative Agent and each of
the requisite Banks.

         13.13    Counterparts. This Agreement may be executed in any number of
counterparts, and by parties hereto in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.

         13.14    Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not
be construed to modify, enlarge or restrict any provision hereof.

         13.15    Automatic Debits of Fees. With respect to any interest,
non-use fee, letter of credit fee or other fee due and payable to the
Administrative Agent, the Issuer, BA Strategic Solutions or Bank of America
under the Loan Documents, the Company hereby irrevocably authorizes Bank of
America to debit any deposit account of the Company with Bank of America in an
amount such that the aggregate amount debited from all such deposit accounts
does not exceed such fee or other cost or expense. If there are insufficient
funds in such deposit accounts to cover the amount of the interest or fees then
due, such debits will be reversed (in whole or in part, in Bank of America's
sole discretion) and such amount not debited shall be deemed to be unpaid. No
such debit under this Section shall be deemed a set-off.

         13.16    Right of Setoff. In addition to any right or remedy of the
Banks provided by law, if an Event of Default exists, each Bank is authorized
at any time and from time to time, without prior notice to the Company, any
such notice being waived by the Company to the fullest extent permitted by law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing by, such Bank or any Affiliate of such Bank to or for the credit or the
account of the Company against any and all Obligations owing to such Bank, now
or hereafter existing, irrespective of whether or not the Administrative Agent
or such Bank shall have made demand under this Agreement or any Loan Document
and although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the Company and the Administrative Agent after any such
set-off and application made by such Bank; provided that the failure to give
such notice shall not affect the validity of such set-off and application.

         13.17    Confidentiality.

         (a)      The Company hereby agrees that the Administrative Agent and
each Bank may issue and disseminate to the public general information
describing the credit accommodation

                                       55
<PAGE>
entered into pursuant to this Agreement, including the name and address of the
Company and a general description of the Company's business, and may use the
Company's name in advertising and other promotional material.

         (b)      Each Bank severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Company and
provided to the Administrative Agent or such Bank by or on behalf of the
Company under this Agreement or any other Loan Document, except to the extent
that such information (a) was or becomes generally available to the public
other than as a result of disclosure by the Administrative Agent or such Bank,
or (b) was or becomes available on a nonconfidential basis from a source other
than the Company (so long as such source is not bound by a confidentiality
agreement with the Company known to the Administrative Agent or such Bank);
provided that the Administrative Agent and any Bank may disclose such
information (i) at the request or pursuant to any requirement of any
Governmental Authority to which the Administrative Agent or such Bank is
subject or in connection with an examination of the Administrative Agent or
such Bank by any such Governmental Authority; (ii) pursuant to subpoena or
other court process; (iii) when required to do so in accordance with the
provisions of any applicable law or regulation; (iv) to the extent reasonably
required in connection with any litigation or proceeding (including any
bankruptcy proceeding); (v) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document;
(vi) to the Administrative Agent's or such Bank's independent auditors,
accountants, attorneys and other professional advisors; (vii) to any actual or
prospective Participant or Assignee, provided that such Person agrees to keep
such information confidential to the same extent required of the Administrative
Agent and the Banks hereunder; (viii) as expressly permitted under the terms of
any other document or agreement regarding confidentiality to which the Company
is a party with the Administrative Agent or such Bank; and (ix) to its
Affiliates.

         13.18    Conflicts with Other Loan Documents. Unless otherwise
expressly provided in this Agreement (or in another Loan Document by specific
reference to the applicable provision contained in this Agreement), if any
provision contained in this Agreement conflicts with any provision of any other
Loan Document, the provision contained in this Agreement shall govern and
control.

         13.19    Waiver of Outstanding Interest and Fees. Each Bank hereby
waives the payment by the Company of a portion of the interest and fees payable
under the Existing Credit Agreement immediately prior to the effectiveness of
this Agreement in an amount equal to such Bank's Pro Rata Share of $1,000,000.

         13.20    Quakertown Claim. Notwithstanding anything in this Agreement
to the contrary, if the Obligations are refinanced in full (except for the
$1,000,000 thereof referred to below) by a Person other than any Bank within 30
days following the Closing Date, the Banks will defer payment of $1,000,000 of
the Obligations, so long as (a) the Company issues each Bank a note
substantially in the form of Exhibit K in such Bank's Pro Rata Share of the
deferred amount, (b) the Company grants to the Administrative Agent and the
Banks a first priority security interest in the Quakertown Claim and all
proceeds thereof pursuant to documentation satisfactory to the Banks in their
sole and complete discretion and (c) the Company causes each other Person with
a Lien on the Quakertown Claim to release such Lien.

         13.21    GE Capital Facility Confirmation. The Banks hereby authorize
the Administrative Agent to, and the Administrative Agent agrees that it will,
release its lien on the Chicago Purchase Options upon receipt of the GE Capital
Facility Confirmation.

                                       56
<PAGE>
         IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.

                                    U.S. PLASTIC LUMBER CORP.

                                    By: /s/ Bruce Rosetto
                                        ---------------------------------------
                                    Title: Secretary
                                           ------------------------------------

                                       57
<PAGE>
                                    "ADMINISTRATIVE AGENT"

                                    BANK OF AMERICA, N.A.,
                                    as Administrative Agent

                                    By: /s/ Kristine Thennes
                                        ---------------------------------------
                                    Title: Vice President
                                           ------------------------------------

                                    "BANKS"
                                    BANC OF AMERICA STRATEGIC SOLUTIONS, INC.

                                    By: /s/ Ronald Prince
                                        ---------------------------------------
                                    Title: Senior Vice President
                                           ------------------------------------

                                    LASALLE BANK NATIONAL ASSOCIATION

                                    By: /s/ Margaret P. Heger
                                        ---------------------------------------
                                    Title: First Vice President
                                           ------------------------------------

                                    UNION PLANTERS BANK NATIONAL ASSOCIATION

                                    By: /s/ Susan Johnson
                                        ---------------------------------------
                                    Title: Vice President
                                           ------------------------------------

                                       58
<PAGE>
                                    ANNEX A
                                       TO
                                CREDIT AGREEMENT

                         DEFINITIONS AND INTERPRETATION

         1.       Definitions. Capitalized terms used in the Loan Documents
shall have the following respective meanings (unless otherwise defined
therein), and all section references in the following definitions shall refer
to sections of the Agreement:

         "ACH Transactions" means any cash management or related services
including the automatic clearing house transfer of funds by any Bank for the
account of the Company pursuant to agreement or overdrafts.

         "Accounts" means all of the now owned or hereafter acquired or arising
accounts, as defined in the UCC, of the Company, including any rights to
payment for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.

         "Account Debtor" means each Person obligated on any Account.

         "Administrative Agent" means Bank of America, solely in its capacity
as agent for the Banks, and any successor administrative agent.

         "Administrative Agent Advances" - see Section 1.2.9.

         "Administrative Agent's Office means the Administrative Agent's office
at the address set forth on Schedule 13.7, or at such other address as the
Administrative Agent may designate by written notice to the Company and the
Banks.

         "Affiliate" of any Person means (a) any other Person which, directly
or indirectly, controls or is controlled by or is under common control with
such Person and (b) any officer or director of such Person.

         "Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including BA Strategic Solutions), and the officers, directors,
employees, counsel, representatives, agents and attorneys-in-fact of the
Administrative Agent and such Affiliates.

         "Aggregate Outstandings" means, at any date of determination, and
without duplication: the sum of (a) the unpaid principal balance of all Loans,
(b) the aggregate undrawn face amount of all outstanding Letters of Credit
issued and (c) the aggregate amount of any unpaid reimbursement obligations in
respect of Letters of Credit.

         "Agreement" - see the introductory paragraph.

         "Asset Sale" means the sale, lease, assignment or other transfer for
value (other than the granting of a Lien or the licensing of intellectual
property) by the Company or any Subsidiary to any Person (other than the
Company or any Subsidiary) of any asset or right of the Company or

                                       59
<PAGE>
such Subsidiary (including any sale or other transfer of stock of any
Subsidiary, whether by merger, consolidation or otherwise), excluding sales of
inventory in the ordinary course of business and sales of equipment which is
replaced by no later than 90 days after such sale by equipment performing the
same or similar functions.

         "Assignee" - see Section 11.1.

         "Assignment and Assumption" - see Section 11.1.

         "Availability" means at any time the remainder of (a) the lesser of
(i) the Maximum Commitment Amount or (ii) the Borrowing Base minus (b) the sum
of the Aggregate Outstandings plus the unpaid principal amount of the Deferred
Payment Notes.

         "Bank" and "Banks" - see the introductory paragraph hereof and shall
include the Administrative Agent to the extent of any Administrative Agent
Advance outstanding and Bank of America to the extent of any Non-Ratable Loan
outstanding; provided that no such Administrative Agent Advance or Non-Ratable
Loan shall be taken into account in determining any Bank's Pro Rata Share.

         "Bank of America" means Bank of America, N.A., a national banking
association, or any successor thereto.

         "Bank Products" means services relating to ACH Transactions and/or
cash management services, including controlled disbursement services, in each
case extended to the Company by any Bank.

         "Base Rate" means at any time the greater of (a) the Federal Funds
Rate plus 0.5% and (b) the Prime Rate.

         "BA Strategic Solutions" means Banc of America Strategic Solutions,
Inc.

         "Blocked Account Agreement" means an agreement substantially in the
form of Exhibit E (or such other form as is acceptable to the Administrative
Agent).

         "Borrowing" means a borrowing hereunder consisting of Loans made on
the same day by the Banks to the Company or by Bank of America in the case of a
Borrowing funded by a Non-Ratable Loan or by the Administrative Agent in the
case of a Borrowing consisting of an Administrative Agent Advance.

          "Borrowing Base" means, at any time of determination, the sum of (a)
80% of Eligible Accounts Receivable, plus (b) the least of (i) 50% of Eligible
Inventory, (ii) 50% of the amount determined pursuant to clause (a) or (iii)
$5,000,000, plus (c) the Specified Percentage of the Initial Equipment Value of
all Eligible Equipment.

         "Borrowing Base Certificate" means a certificate by a Responsible
Officer, substantially in the form of Exhibit F (or another form acceptable to
the Administrative Agent), setting forth the calculation of the Borrowing Base,
including a calculation of each component thereof, all in

                                       60
<PAGE>
such detail as shall be reasonably satisfactory to the Administrative Agent.
All calculations of the Borrowing Base in connection with the preparation of
any Borrowing Base Certificate shall originally be made by the Company and
certified to the Administrative Agent; provided that the Administrative Agent
shall have the right to review and adjust, in the exercise of its reasonable
credit judgment, any such calculation (a) to reflect its reasonable estimate of
declines in value of any of the Collateral described therein and (b) to the
extent that such calculation is not in accordance with this Agreement.

         "Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized or required to close under the
laws of, or are in fact closed in, the state where the Administrative Agent's
Office is located.

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

         "Capital Expenditures" means all expenditures which, in accordance
with GAAP, would be required to be capitalized and shown on the consolidated
balance sheet of the Company, but excluding expenditures made in connection
with the replacement, substitution or restoration of assets to the extent
financed (a) from insurance proceeds (or other similar recoveries) paid on
account of the loss of or damage to the assets being replaced or restored or
(b) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.

         "Capital Lease" means, with respect to any Person, any lease of (or
other agreement conveying the right to use) any real or personal property by
such Person that, in conformity with GAAP, is accounted for as a capital lease
on the balance sheet of such Person.

         "Cash Equivalent Investment" means, at any time, (a) any evidence of
Debt, maturing not more than one year after such time, issued or guaranteed by
the United States Government or any agency thereof, (b) commercial paper,
maturing not more than one year from the date of issue, or corporate demand
notes, in each case (unless issued by a Bank or its holding company) rated at
least A-l by Standard & Poor's Ratings Group or P-l by Moody's Investors
Service, Inc., (c) any certificate of deposit (or time deposits represented by
such certificates of deposit) or bankers acceptance, maturing not more than one
year after such time, or overnight Federal Funds transactions that are issued
or sold by a commercial banking institution that is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000, (d) any repurchase agreement entered into with any
Bank (or other commercial banking institution of the stature referred to in
clause (c)) which (i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c) and (ii) has
a market value at the time such repurchase agreement is entered into of not
less than 100% of the repurchase obligation of such Bank (or other commercial
banking institution) thereunder and (e) investments in short-term asset
management accounts offered by any Bank for the purpose of investing in loans
to any corporation (other than the Company or an

                                       61
<PAGE>
Affiliate of the Company), state or municipality, in each case organized under
the laws of any state of the United States or of the District of Columbia.

         "CEI Note" means the Subordinated Note in an original principal amount
of $3,500,000 issued by CEI Holding Corporation to the Company in connection
with the Clean Earth Sale.

         "CEI Sale Agreement" means the Amended and Restated Purchase Agreement
dated as of June 14, 2002 among Clean Earth Acquisition Corp., CEI Holding
Corporation, Clean Earth and the Company.

         "CERCLA" - see Section 6.12(a).

         "Change of Control" means (a) any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated
under such Act) of 25% or more of the outstanding shares of common stock of the
Company; (b) during any 12-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose
nomination for election by the Company's shareholders was approved by a vote of
at least two-thirds of the directors who either were directors at beginning of
such period or whose election or nomination was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the
Company; or (c) a period of 60 consecutive days shall have elapsed during which
any of the individuals named in Schedule 1 shall have ceased to hold executive
offices with the Company at least equal in seniority to such individual's
present offices, as set out in such Schedule 1, excluding any such individual
who has been replaced by another individual or individuals reasonably
satisfactory to the Required Banks (it being understood that any such
replacement individual shall be deemed added to Schedule 1 on the date of
approval thereof by the Required Banks).

         "Chicago Facility" means the facility operated by the Company and
located at 2600 West Roosevelt Avenue, Chicago, Illinois.

         "Chicago Purchase Options" mean the options of The Eaglebrook Group,
Inc. to purchase certain rights and interests in land located in Chicago,
Illinois, including the Chicago Facility.

         "Clean Earth" means Clean Earth, Inc., a Delaware corporation.

         "Clean Earth Sale" means the sale by the Company of all of the capital
stock of Clean Earth to CEI Acquisition Corp. pursuant to, and in accordance
with the terms of, the CEI Sale Agreement.

         "Closing Date" means the date of this Agreement.

         "Code" means the Internal Revenue Code of 1986.

                                       62
<PAGE>
         "Collateral" means all real and personal property of the Company and
its Subsidiaries and all other assets of any Person from time to time subject
to the Liens of the Administrative Agent securing payment or performance of the
Obligations.

         "Collateral Documents" means the Pledge Agreement, the Security
Agreement, each Mortgage and any other agreement pursuant to which any Loan
Party grants collateral to the Administrative Agent for the benefit of the
Banks.

         "Commitment" means, at any time with respect to a Bank, the amount set
forth beside such Bank's name under the heading "Commitment" on Schedule 1.1 or
in the Assignment and Assumption pursuant to which such Bank became a Bank
hereunder in accordance with the provisions of Section 11.1, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
11.1.

         "Company" - see the introductory paragraph.

         "Computation Period" means (a) each period beginning on January 1,
2003 and ending on March 31, 2003, June 30, 2003 and September 30, 2003 and (b)
each period of four consecutive Fiscal Quarters ending on the last day of a
Fiscal Quarter, commencing with the period ending on the last day of the
December 2003 Fiscal Quarter.

         "Consolidated Net Income" means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any extraordinary gains during such
period.

         "Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.

         "Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all obligations of such Person as
lessee under Capital Leases which have been or should be recorded as
liabilities on a balance sheet of such Person, (c) all obligations of such
Person to pay the deferred purchase price of property or services (excluding
trade accounts payable in the ordinary course of business), (d) all
indebtedness secured by a Lien on the property of such Person, whether or not
such indebtedness shall have been assumed by such Person (it being understood
that if such Person has not assumed or otherwise become personally liable for
any such indebtedness, the amount of the Debt of such Person in connection
therewith shall be limited to the lesser of the face amount of such
indebtedness or the fair market value of all property of such Person securing
such indebtedness), (e) all obligations, contingent or otherwise, with respect
to the face amount of all letters of credit (whether or not drawn) and banker's
acceptances issued for the account of such Person (including the Letters of
Credit), (f) all Hedging Obligations of such Person, (g) all Suretyship
Liabilities of such Person and (h) all Debt of any partnership in which such
Person is a general partner. The amount of any Person's Debt in respect of any
obligation to pay the deferred purchase price of property or services where
such

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obligation is contingent upon sales, revenues, the achievement of a particular
business goal or any similar test shall be the maximum amount which (at any
date of determination) is reasonably expected to be paid in respect of such
obligation as estimated by the Company (subject to the approval of the Required
Banks, which shall not be unreasonably withheld).

         "Default Rate" means a fluctuating per annum interest rate at all
times equal to the sum of (a) the otherwise applicable interest rate plus (b)
2.0% per annum.

         "Defaulting Bank" - see Section 12.15.3.

         "Deferred Payment Note" means a promissory note of the Company payable
to a Bank, substantially in the form of Exhibit G, evidencing all accrued and
unpaid interest and fees owed to such Bank under the Existing Credit Agreement
as of the Closing Date (except to the extent waived by such Bank).

         "Designated Account" see Section 1.2.3.

         "Dollar" and "$" mean lawful currency of the United States.

         "EBITDA" means, for any period, Consolidated Net Income for such
period plus to the extent deducted in determining such Consolidated Net Income,
Interest Expense, income tax expense, depreciation and amortization for such
period.

         "Eligible Accounts Receivable" means at any time any amount then due
to the Company or any Subsidiary from any Person, arising from the sale of the
Company's and such Subsidiaries' products, which meets each of the following
requirements:

         (a)      it is a valid, legally enforceable obligation of the Account
Debtor thereunder, is not subject to any offset, counterclaim or other defense
on the part of such Account Debtor or to any claim on the part of such Account
Debtor denying liability thereunder in whole or in part and is not unearned
income related to advance billings;

         (b)      it is owned by the Company free of any title defects and
subject to a first perfected security interest in favor of the Administrative
Agent and is not subject to any other lien or security interest whatsoever;

         (c)      if it arises from the sale of goods, such goods have been
shipped or delivered to the applicable Account Debtor;

         (d)      it is evidenced by an invoice (dated not earlier than the
date of shipment or performance) rendered to such Account Debtor, and is not
evidenced by any instrument or chattel paper;

         (e)      it is not owing by any Account Debtor whose obligations the
Administrative Agent, in its reasonable discretion, shall have notified the
Company in writing are not deemed to constitute Eligible Accounts Receivable;

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<PAGE>
         (f)      it is not owing by an Account Debtor who shall have failed to
pay in full 25% or more of the amount payable under any invoices evidencing
obligations to the Company or its Subsidiaries within 90 days after the date of
such invoice;

         (g)      it is not outstanding more than 90 days after the date of
such original invoice therefor, unless it arises in connection with the
Company's winter buying program (and is readily identifiable as such), in which
case it is not outstanding more than 150 days after the date of such invoice;
provided that in no event shall the aggregate amount of all Eligible Accounts
Receivable arising in connection with the winter buying program exceed
$2,000,000;

         (h)      it is not owing by an Account Debtor which, to the knowledge
of the Company or the applicable Subsidiary, is subject to any bankruptcy,
insolvency or similar proceeding; and

         (i)      the applicable Account Debtor is not any of the following:

                  (i)      an employee, affiliate, parent or Subsidiary of the
Company, or an entity which has common officers or directors with the Company;

                  (ii)     the U.S. government or any agency or department of
the U.S. government unless the Administrative Agent agrees in writing to accept
the obligation, the Company complies with the procedures in the Federal
Assignment of Claims Act of 1940 (41 U.S.C.ss.15) with respect to the
obligation, and the underlying contract expressly provides that neither the
U.S. government nor any agency or department thereof shall have the right of
set-off against the Company; or

                  (iii)    any Person located in a foreign country unless (A)
the account is supported by an irrevocable letter of credit issued by a bank
acceptable to the Administrative Agent, and, if requested by the Administrative
Agent, the original of such letter of credit and/or any usance drafts draws
under such letter of credit and accepted by the issuing or confirming bank have
been delivered to the Administrative Agent, or (B) the account is covered by
foreign credit insurance acceptable to the Administrative Agent and the account
is otherwise an Eligible Account Receivable.

         An obligation which is at any time an Eligible Account Receivable, but
which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be an Eligible Account Receivable. All otherwise Eligible
Accounts Receivable of any Account Debtor (or group of affiliated Account
Debtors) shall be ineligible to the extent that the Administrative Agent has
determined, in its reasonable discretion, and notified the Company that
Accounts of such Account Debtor (or group) shall not constitute Eligible
Accounts Receivable.

         "Eligible Equipment" means equipment:

         (a)      in which the Administrative Agent has a valid, duly perfected
lien;

         (b)      to which the Company or one of its Subsidiaries holds
indefeasible title;

                                       65
<PAGE>
         (c)      which is not subject to any Liens other than those in favor
of the Administrative Agent;

         (d)      which is in marketable condition;

         (e)      which is located at real property which is owned or leased by
the C mpany or a Subsidiary, provided that if it is located at property leased
by the Company, the Company shall have delivered to the Administrative Agent a
landlord's consent, in form and substance reasonably satisfactory to the
Administrative Agent, from the owner of such property;

         (f)      if such equipment is or may constitute a fixture, an
appropriate fixture filing has been filed and is effective in the real estate
or other appropriate records of the county (or other applicable jurisdiction)
where such Equipment is located;

         (g)      it is not equipment which the Required Banks shall have
notified the Company in writing is not deemed to constitute Eligible Equipment;
and

         (h)      for which the Administrative Agent has received a
satisfactory appraisal at the Company's expense;

provided that in no case shall the aggregate amount included in Eligible
Equipment with respect to manuals, parts and accessories exceed 5% of the
aggregate amount of all Eligible Equipment. All otherwise Eligible Equipment
shall be ineligible to the extent that the Administrative Agent has determined,
in its reasonable discretion, and notified the Company that such equipment
shall not constitute Eligible Equipment.

         "Eligible Inventory" means all goods of the Company and its
Subsidiaries which are held for lease or sale or held as raw materials or
supplies, and which meet all of the following requirements:

         (a)      it is owned by the Company free of any title defects and (i)
is subject to a perfected Lien in favor of the Administrative Agent and (ii) is
not subject to any assignment, claim or Lien other than Liens consented to by
the Required Banks;

         (b)      if held for sale or lease or furnishing under contracts of
service, it is (except as the Required Banks may otherwise consent in writing)
new, unused and in first-class, marketable condition;

         (c)      except as the Required Banks may otherwise consent, it is in
the possession and control of the Company or the applicable Subsidiary;

         (d)      it is not inventory which is dedicated to, identifiable with,
or otherwise specifically to be used in the manufacture of goods which are to
be sold or leased to the United States of America or any department, agency or
instrumentality thereof, and in respect of which inventory the Company or the
applicable Subsidiary shall have received any progress or other advance payment
which is or may be credited against any Account Receivable generated upon the
sale or lease of any such goods;

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<PAGE>
         (e)      it is not inventory produced in violation of the Fair Labor
Standards Act and subject to the "hot goods" provisions contained in Title 29
U.S.C.ss.215 or any successor statute or section;

         (f)      it is not subject to any agreement which would restrict the
Administrative Agent's ability to sell or otherwise dispose of such inventory
such as inventory bearing a servicemark, trademark or name of any Person other
than the Company or the applicable Subsidiary, or with respect to which the use
by the Company or the applicable Subsidiary or the manufacture or sale thereof
by the Company or the applicable Subsidiary is subject to any licensing,
patent, royalty, trademark, tradename or copyright agreement with any other
Person;

         (g)      it is not (i) hardware, packaging or shipping materials, (ii)
goods used in connection with maintenance or repair of the Company's or the
applicable Subsidiary's business, properties or assets, or (iii) work in
process;

         (h)      it is not defective or obsolete or held for sale at a
"close-out" or otherwise offered generally at a discount as part of a
discontinued line;

         (i)      it is finished goods or raw materials; and

         (j)      it is not Inventory which the Required Banks shall have
notified the Company in writing is not deemed to constitute Eligible Inventory.

         Inventory of the Company or any Subsidiary which is at any time
Eligible Inventory but which subsequently fails to meet any of the foregoing
requirements shall forthwith cease to be Eligible Inventory. All otherwise
Eligible Inventory shall be ineligible to the extent that the Administrative
Agent has determined, in its reasonable discretion, and notified the Company
that such Inventory shall not constitute Eligible Inventory.

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

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

         "ERISA" means the Employee Retirement Income Security Act of 1974.

         "Event of Default" - see Section 9.1.

         "Existing Credit Agreement" - see the recitals.

         "Existing Equipment" means Eligible Equipment owned by the Company or
any Subsidiary on the Closing Date.

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<PAGE>
         "Facility" - see Section 1.1.

         "Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.

         "Fiscal Quarter" means a fiscal quarter of a Fiscal Year.

         "Fiscal Year" means the fiscal year of the Company and its
Subsidiaries, which period shall be the 12-month period ending on December 31
of each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 2002") refer to the Fiscal Year ending on
December 31 of such calendar year.

         "Fixed Assets" means equipment and real property.

         "Funding Date" means the date on which a Borrowing occurs.

         "GAAP" means generally accepted accounting principles and practices
set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession).

          "GE Capital Facility" means the master credit facility among the
Company, General Electric Capital Corporation and various other lenders.

         "GE Capital Facility Confirmation" means, collectively, (a) a
subordination agreement substantially in the form of Exhibit M executed by each
lender under the GE Capital Facility (or a release by the lenders under the GE
Capital Facility of their liens on the "Other Equipment" as defined in the form
of subordination agreement set forth as Exhibit M) and (b) an agreement
executed by the Company and all lenders under the GE Capital Facility pursuant
to which (i) such lenders agree that, upon the receipt by such lenders from the
Company of principal payments in the aggregate amount of $500,000 and a release
by the Agent of its security interest in the Chicago Purchase Options, all
amortization of principal under the GE Capital Facility (other than a payment
not exceeding $2,000,000 plus the amount of the "Forbearance Fee" (as defined
in the Forbearance Agreement dated as of February 28, 2002 for the GE Capital
Facility as in effect on the date hereof) solely with the net proceeds in
excess of $3,000,000 received by the Company or any Subsidiary from the sale or
financing of the Chicago Facility after exercise of the Chicago Purchase
Options) will be deferred until a date that is not earlier than the

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<PAGE>
Business Day following the Stated Termination Date and (ii) the covenants and
defaults under the GE Capital Facility are amended in a manner reasonably
satisfactory to the Required Banks.

         "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

         "Guarantor" means, on any day, each Subsidiary that has executed a
counterpart of the Guaranty on or prior to that day (or is required to execute
a counterpart of the Guaranty on that date).

         "Guaranty" - see Section 8.1.7(e).

         "Halifax" means Halifax Fund, L.P.

         "Hazardous Substances" - see Section 6.12(b).

         "Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate, currency and commodity swap
agreements, cap agreements and collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates or commodity prices.

         "Initial Equipment Value" means (a) with respect to Existing
Equipment, the forced liquidation value of such equipment as determined by an
appraisal firm acceptable to the Required Banks; and (b) with respect to
Purchased Equipment, the cost of such equipment as evidenced by an invoice or
other documentation acceptable to the Administrative Agent. The Initial
Equipment Value for Purchased Equipment may be increased to reflect purchases
by the Company or any Subsidiary of Eligible Equipment only at such times as
the Company delivers quarterly compliance certificates pursuant to Section
5.1.3.

         "Interest Coverage Ratio" means, for any Computation Period, the ratio
of (a) EBITDA for such period to (b) cash Interest Expense for such period.

         "Interest Expense" means, as to any Person for any Computation Period,
the consolidated interest expense of the Company and its Subsidiaries for such
Computation Period (including all imputed interest on capitalized leases).

         "Investment" means, relative to any Person, (a) any loan or advance
made by such Person to any other Person (excluding any commission, travel or
similar advances made to directors, officers and employees of the Company or
any of its Subsidiaries), (b) any Suretyship Liability of such Person or (c)
any ownership or similar interest held by such Person in any other Person.

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

                                       69
<PAGE>
         "Issuer" means BA Strategic Solutions or any successor thereto as the
issuer of Letters of Credit hereunder.

         "Letter of Credit" - see Section 1.3.1.

         "Letter of Credit Fee" - see Section 2.4.

         "Letter of Credit Obligations" means, as at any date of determination,
the amount of the Unused Letter of Credit Subfacility plus the aggregate of all
unreimbursed drawings under the Letters of Credit (including all Borrowings
made pursuant to Section 1.3.5).

         "Letter of Credit Subfacility" means $1,000,000.

         "Lien" means, with respect to any Person, any interest in any real or
personal property, asset or other right owned or being purchased or acquired by
such Person which secures payment or performance of any obligation and shall
include any mortgage, lien, encumbrance, charge or other security interest of
any kind, whether arising by contract, as a matter of law, by judicial process
or otherwise.

         "Loan Documents" means this Agreement, the Notes, the Guaranty, all
applications for Letters of Credit, the Collateral Documents and all other
documents evidencing or securing the Loans hereunder.

         "Loan Party" means the Company and each Guarantor.

         "Loan" means any loan or advance provided for in Section 1.

         "Margin Stock" means any "margin stock" as defined in Regulation U of
the Board of Governors of the Federal Reserve System.

         "Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as
a whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against the Company or any Guarantor of any
Loan Document.

         "Maximum Commitment Amount" - see Section 1.1.

         "Mortgage" means a mortgage, deed of trust, leasehold mortgage or
similar instrument granting the Administrative Agent a Lien on real property
owned or leased by the Company or any Subsidiary.

         "Multiemployer Pension Plan" means a multiemployer plan, as such term
is defined in Section 4001(a)(3) of ERISA, and to which the Company or any
member of the Controlled Group may have any liability.

         "Net Cash Proceeds" means:

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<PAGE>
         (a)      with respect to any Asset Sale, the aggregate cash proceeds
(including cash proceeds received by way of deferred payment of principal
pursuant to a note, installment receivable or otherwise, but only as and when
received) received by the Company or any Subsidiary pursuant to such Asset
Sale, net of (i) the direct costs relating to such Asset Sale (including sales
commissions and legal, accounting and investment banking fees), (ii) taxes paid
or reasonably estimated by the Company to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements) and (iii) amounts required to be applied to the repayment of any
Debt secured by a Lien on the asset subject to such Asset Sale (other than Debt
hereunder); and

         (b)      with respect to any issuance of equity securities or Debt,
the aggregate cash proceeds received by the Company or any Subsidiary pursuant
to such issuance, net of the direct costs relating to such issuance (including
sales and underwriter's discounts and commissions and legal, accounting and
investment banking fees).

         "Non-Ratable Loan" and "Non-Ratable Loans" - see Section 1.2.8.

         "Non-Use Fee" - see Section 2.3.

         "Note" and "Notes" - see Section 1.2.2.

         "Notice of Borrowing" - see Section 1.2.4.

         "Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties and debts owing by the Company to
the Administrative Agent and/or any Bank, arising under or pursuant to this
Agreement or any other Loan Document, whether or not evidenced by any note,
whether direct or indirect, absolute or contingent, due or to become due, and
including all principal, interest, charges, expenses, fees, attorneys' fees,
filing fees and any other sums chargeable to the Company hereunder or under any
other Loan Document. "Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter arising from or in connection
with the Letters of Credit and (b) all debts, liabilities and obligations now
or hereafter arising from or in connection with Bank Products.

         "Operating Lease" means any lease of (or other agreement conveying the
right to use) any real or personal property by the Company or any Subsidiary,
as lessee, other than any Capital Lease.

         "Other Taxes" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Document.

         "Participant" - see Section 11.2.

         "PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.

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<PAGE>
         "Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Pension Plan), and to which the Company or any member of the
Controlled Group may have any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.

         "Permitted Liens" - see Section 7.17.

         "Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority or other entity.

         "Pledge Agreement" - see Section 8.1.7(g).

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

         "Pro Rata Share" means, with respect to a Bank, a fraction (expressed
as a percentage), the numerator of which is the amount of such Bank's
Commitment and the denominator of which is the Maximum Commitment Amount, or if
no Commitments are outstanding, a fraction (expressed as a percentage), the
numerator of which is the principal amount of Obligations owed to such Bank and
the denominator of which is the aggregate principal amount of the Obligations
owed to all Banks (excluding, in each case, any Non-Ratable Loans, any
Administrative Agent Advances and any payments of Loans applied solely to the
Loans of Bank of America.)

         "Purchased Equipment" means Eligible Equipment purchased or otherwise
acquired by the Company or any Subsidiary after the Closing Date.

         "Quakertown Claim" means the claim by the Company (as successor to
Integrated Technical Services) for payment pursuant to the Quakertown Foundry
Site Agreement dated April 16, 1998 between Integrated Technical Services and
the Pennsylvania Department of Environmental Protection.

         "RCRA" - see Section 6.12(a).

         "Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
contaminant into the indoor or outdoor environment or into or out of any real
property owned or leased by the Company or any Subsidiary or other property,
including the movement of contaminants through or in the air, soil, surface
water, groundwater or other property.

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<PAGE>
         "Required Banks" means Banks having aggregate Pro Rata Shares of more
than 50% and (a) if there are two or three Banks, at least two Banks, (b) if
there are four Banks, at least three Banks or at least two Banks having
aggregate Pro Rata Shares of 60% or more and (c) if there are five or more
Banks, at least 50% of the Banks.

         "Responsible Officer" means the chief executive officer or the
president of the Company, or any other officer of the Company having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants and the preparation of a Borrowing Base
Certificate, the chief financial officer or the treasurer of the Company, or
any other officer of the Company having substantially the same authority and
responsibility.

         "SEC" means the Securities and Exchange Commission.

         "Security Agreement" - see Section 8.1.7(f).

         "Settlement" and "Settlement Date" - see Section 12.15.1(a).

         "Specified Percentage" means (a) with respect to Existing Equipment,
80% reduced by the product of 4.0% multiplied by the number of Fiscal Quarter
ends that have occurred since the Closing Date; and (b) with respect to any
Purchased Equipment, on the date such equipment is purchased, 80%, and at any
time thereafter 80% reduced by the product of 4.0% multiplied by the number of
Fiscal Quarter ends that have occurred since the date such equipment was
purchased. In no event shall the Specified Percentage for any Eligible
Equipment be less than zero.

         "Stated Termination Date" means the second anniversary of the Closing
Date.

         "Stout Note" means the promissory note dated January 27, 1999 issued
by the Company to Stout Partnership.

         "Subordinated Debt" means any Debt of the Company which has maturities
and other terms, and which is subordinated to the obligations of the Company
and its Subsidiaries hereunder and under the other Loan Documents in a manner,
approved in writing by the Required Banks.

         "Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock or other equity interests (in the
case of Persons other than corporations), is owned or controlled directly or
indirectly by such Person, one or more of the Subsidiaries of such Person or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Company.

         "Suretyship Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to or otherwise to
invest in a debtor, or otherwise to assure a creditor against loss) any
indebtedness, obligation or other liability of any other Person (other than by
endorsements of instruments in the

                                       73
<PAGE>
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.

         "Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Administrative Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
such Bank's or the Administrative Agent's net income or receipts jurisdiction
(whether federal, state or local and including any political subdivision
thereof) under the laws of which such Bank or the Administrative Agent, as the
case may be, is organized or maintains a lending office.

         "Termination Date" means the earlier to occur of (a) the Stated
Termination Date and (b) the date the Facility is terminated either by the
Company pursuant to Section 3.2 or by the Required Banks pursuant to Section
9.2.

         "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Illinois or of any other state the laws of which are required
as a result thereof to be applied in connection with the perfection of a
security interest in any Collateral.

         "Unmatured Event of Default" means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would (if not cured or
waived) constitute an Event of Default.

         "Unused Letter of Credit Subfacility" means an amount equal to the
Letter of Credit Subfacility minus the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit plus, without duplication, (b) the
aggregate unpaid reimbursement obligations with respect to all Letters of
Credit.

         2.       Accounting Terms. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given to such term in accordance with GAAP, and all financial
computations in the Agreement shall be made, unless otherwise specifically
provided therein, in accordance with GAAP as consistently applied and using the
same method for inventory valuation as used in the preparation of the audited
financial statements referred to in Section 6.5; provided that if any change in
GAAP after the Closing Date would affect (or would result in a change in the
method of calculation of) any of the covenants set forth in Section 7 (or any
definition related thereto) or the method of inventory or accounts valuation
used by the Company and its Subsidiaries, then the Company, the Administrative
Agent and the Banks will negotiate in good faith to amend such covenants and/or
definitions and/or the provisions of the Borrowing Base as would be affected by
such change in GAAP to the extent necessary to maintain the economic terms of
such covenants, definitions and provisions as in effect immediately prior to
such change; provided that until the amendment of such covenants, definitions
and provisions shall have been agreed upon by the Company and the Required
Banks, any determination of compliance with such covenants, and any valuation
of

                                       74
<PAGE>
accounts and inventory for purposes of the definitions of "Eligible Accounts
Receivable" or "Eligible Inventory," shall be made using GAAP as in effect
immediately prior to such change.

         3.       Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.

         (b)      Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

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

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

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

                  (iv)     The word "or" is not exclusive.

         (d)      Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.

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

                                       75
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<TABLE>
<CAPTION>
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<S>                                                                                                            <C>
SECTION 1             LOANS AND LETTERS OF CREDIT................................................................1
         1.1      Facility.......................................................................................1
         1.2      Loans..........................................................................................1
                  1.2.1    Availability..........................................................................1
                  1.2.2    Notes.................................................................................2
                  1.2.3    Reliance upon Authority...............................................................2
                  1.2.4    Procedure for Borrowing...............................................................2
                  1.2.5    No Liability..........................................................................3
                  1.2.6    Administrative Agent's Election.......................................................3
                  1.2.7    Making of Loans.......................................................................3
                  1.2.8    Making of Non-Ratable Loans...........................................................3
                  1.2.9    Administrative Agent Advances.........................................................3
         1.3      Letters of Credit..............................................................................4
                  1.3.1    Agreement to Issue Letters of Credit..................................................4
                  1.3.2    Amounts; Outside Expiration Date......................................................4
                  1.3.3    Other Conditions......................................................................4
                  1.3.4    Issuance of Letters of Credit.........................................................5
                  1.3.5    Payments Pursuant to Letters of Credit................................................5
                  1.3.6    Indemnification; Risks; Exoneration...................................................5
         1.4      Bank Products..................................................................................6
SECTION 2             INTEREST AND FEES..........................................................................7
         2.1      Interest.......................................................................................7
                  2.1.1    Interest Rates........................................................................7
                  2.1.2    Default Rate..........................................................................7
         2.2      Maximum Interest Rate..........................................................................7
         2.3      Non-Use Fee....................................................................................7
         2.4      Letter of Credit Fee...........................................................................8
         2.5      Continuation Fees..............................................................................8
         2.6      Administrative Agent's Fees....................................................................8
</TABLE>

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                                  (continued)

<TABLE>
<CAPTION>
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<S>                                                                                                            <C>
SECTION 3             PAYMENTS AND PREPAYMENTS...................................................................8
         3.1      Payments and Prepayments of Loans..............................................................8
         3.2      Reduction of Commitment; Termination of Facility...............................................9
                  3.2.1    Reduction of Maximum Commitment Amount with Net Cash Proceeds of the Issuance
                           of Debt, Equity or Equity Equivalents.................................................9
                  3.2.2    Reduction of Maximum Commitment Amount with Net Cash Proceeds of Asset Sales..........9
                  3.2.3    Voluntary Reduction of the Maximum Commitment Amount..................................9
                  3.2.4    All Reductions........................................................................9
         3.3      Payments by the Company........................................................................9
                  3.3.1    General...............................................................................9
                  3.3.2    Payments Due on a Day other than a Business Day......................................10
         3.4      Payments as Loans.............................................................................10
         3.5      Apportionment, Application and Reversal of Payments...........................................10
         3.6      Indemnity for Returned Payments...............................................................10
         3.7      Administrative Agent's and Banks' Books and Records...........................................11
SECTION 4             TAXES, YIELD PROTECTION AND ILLEGALITY....................................................11
         4.1      Taxes.........................................................................................11
                  4.1.1    Payments of Taxes Generally..........................................................11
                  4.1.2    Indemnification of Banks and Administrative Agent....................................11
                  4.1.3    Deduction or Withholding of Taxes....................................................11
                  4.1.4    Evidence of Payment of Taxes.........................................................12
                  4.1.5    Change of Lending Office.............................................................12
         4.2      Reduction of Return...........................................................................12
         4.3      Certificates of Administrative Agent..........................................................12
         4.4      Survival......................................................................................13
SECTION 5             BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES.........................................13
         5.1      Financial Information.........................................................................13
</TABLE>

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                                  (continued)

<TABLE>
<CAPTION>
                                                                                                              PAGE

<S>                                                                                                           <C>
                  5.1.1    Annual Reports.......................................................................13
                  5.1.2    Quarterly Reports....................................................................13
                  5.1.3    Monthly Reports......................................................................13
                  5.1.4    Financial Projections................................................................14
                  5.1.5    SEC Filings..........................................................................14
                  5.1.6    Management Reports...................................................................14
                  5.1.7    Change in Subsidiaries...............................................................14
                  5.1.8    Borrowing Base Certificate...........................................................14
                  5.1.9    Borrowing Base Reports...............................................................14
                  5.1.10   Inventory Reports....................................................................15
                  5.1.11   Information regarding Accounts.......................................................15
                  5.1.12   Other Information....................................................................15
         5.2      Notices.......................................................................................15
SECTION 6             GENERAL WARRANTIES AND REPRESENTATIONS....................................................16
         6.1      Authorization, Validity and Enforceability of this Agreement and the Loan Documents...........16
         6.2      Validity and Priority of Security Interest....................................................16
         6.3      Organization and Qualification................................................................17
         6.4      Subsidiaries..................................................................................17
         6.5      Financial Statements..........................................................................17
         6.6      No Material Adverse Change....................................................................17
         6.7      Solvency......................................................................................17
         6.8      Debt..........................................................................................17
         6.9      Real Property; Leases.........................................................................17
         6.10     Litigation and Contingent Liabilities.........................................................18
         6.11     Labor Disputes................................................................................18
         6.12     Environmental Matters.........................................................................18
         6.13     No Violation of Law...........................................................................19
         6.14     No Default....................................................................................19
         6.15     Pension Plans.................................................................................20
         6.16     Taxes.........................................................................................20
</TABLE>

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                                  (continued)

<TABLE>
<CAPTION>
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<S>                                                                                                            <C>
         6.17     Regulated Entities............................................................................20
         6.18     Margin Stock..................................................................................20
         6.19     Copyrights, Patents, Trademarks and Licenses, etc.............................................20
         6.20     Full Disclosure...............................................................................21
         6.21     Bank Accounts.................................................................................21
         6.22     Clean Earth Sale..............................................................................21
SECTION 7             AFFIRMATIVE AND NEGATIVE COVENANTS........................................................22
         7.1      Compliance with Laws, Material Contracts; Payment of Taxes and Liabilities....................22
         7.2      Legal Existence and Good Standing.............................................................22
         7.3      Books, Records and Inspections................................................................22
         7.4      Operating Leases..............................................................................23
         7.5      Insurance.....................................................................................23
         7.6      Insurance and Condemnation Proceeds...........................................................23
         7.7      Environmental Laws............................................................................24
                  7.7.1    Compliance with Environmental Laws...................................................24
                  7.7.2    Inspection and Testing of Properties.................................................24
         7.8      Employee Benefit Plans........................................................................25
         7.9      Mergers, Consolidations or Sales..............................................................25
         7.10     Restricted Payments...........................................................................25
         7.11     Transactions Affecting Collateral or Obligations..............................................26
         7.12     Advances and Other Investments................................................................26
         7.13     Debt..........................................................................................27
         7.14     Prepayment....................................................................................27
         7.15     Transactions with Affiliates..................................................................28
         7.16     Business Activities...........................................................................28
         7.17     Liens.........................................................................................28
         7.18     New Subsidiaries..............................................................................29
         7.19     Fiscal Year...................................................................................29
         7.20     Capital Expenditures..........................................................................29
</TABLE>

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                                  (continued)

<TABLE>
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<S>                                                                                                            <C>
         7.21     Financial Covenants...........................................................................29
                  7.21.1   Interest Coverage Ratio..............................................................29
                  7.21.2   Minimum EBITDA.......................................................................29
         7.22     Use of Proceeds...............................................................................30
         7.23     Further Assurances............................................................................30
         7.24     Inconsistent Agreements.......................................................................30
         7.25     Unconditional Purchase Obligations............................................................30
         7.26     Amendments to Certain Documents...............................................................30
         7.27     Halifax Agreement.............................................................................30
SECTION 8             CONDITIONS OF LENDING.....................................................................31
         8.1      Conditions Precedent to Initial Credit Extensions ............................................31
                  8.1.1    Execution of Loan Documents..........................................................31
                  8.1.2    Accuracy of Representations and Warranties...........................................31
                  8.1.3    Absence of Default...................................................................31
                  8.1.4    Opinions of Counsel..................................................................31
                  8.1.5    Payment of Fees and Expenses.........................................................31
                  8.1.6    Satisfaction with Proceedings........................................................31
                  8.1.7    Other Closing Conditions.............................................................31
         8.2      Conditions Precedent to Each Credit Extension.................................................33
SECTION 9             DEFAULT; REMEDIES.........................................................................33
         9.1      Events of Default.............................................................................33
                  9.1.1    Non-Payment..........................................................................33
                  9.1.2    Warranties, etc......................................................................33
                  9.1.3    Non-Compliance with this Agreement...................................................34
                  9.1.4    Material Obligations.................................................................34
                  9.1.5    Bankruptcy, etc......................................................................34
                  9.1.6    Guaranty.............................................................................34
                  9.1.7    Collateral Documents.................................................................34
                  9.1.8    Condemnation, etc....................................................................34
</TABLE>

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<TABLE>
<CAPTION>
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<S>                                                                                                            <C>
                  9.1.9    Judgments............................................................................35
                  9.1.10   Cross-Default........................................................................35
                  9.1.11   Racketeering Action..................................................................35
                  9.1.12   ERISA................................................................................35
                  9.1.13   Change of Control....................................................................35
                  9.1.14   Material Adverse Change..............................................................35
         9.2      Remedies......................................................................................36
SECTION 10            AMENDMENTS and WAIVERS....................................................................36
ASSIGNMENTS; PARTICIPATIONS.....................................................................................36
         11.1     Assignments...................................................................................36
         11.2     Participations................................................................................37
         11.3     Assignment to Federal Reserve Bank............................................................38
SECTION 12            THE ADMINISTRATIVE AGENT..................................................................38
         12.1     Appointment and Authorization.................................................................38
         12.2     Delegation of Duties..........................................................................39
         12.3     Liability of Administrative Agent.............................................................39
         12.4     Reliance by Administrative Agent..............................................................39
         12.5     Notice of Default.............................................................................40
         12.6     Credit Decision...............................................................................40
         12.7     Indemnification...............................................................................40
         12.8     Administrative Agent in Individual Capacity...................................................41
         12.9     Successor Administrative Agent................................................................41
         12.10    Withholding Tax...............................................................................42
         12.11    Collateral Matters; Release of Clean Earth Entities...........................................43
         12.12    Relation Among Banks..........................................................................44
         12.13    Sharing of Payments...........................................................................44
         12.14    Payments by the Administrative Agent to Banks.................................................44
         12.15    Settlement....................................................................................44
                  12.15.1 Settlement Procedures.................................................................44
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<TABLE>
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<S>                                                                                                            <C>
                  12.15.2 Banks' Failure to Perform.............................................................46
                  12.15.3 Defaulting Banks......................................................................46
                  12.15.4 Retention of Defaulting Bank's Payments...............................................46
                  12.15.5 Removal of Defaulting Bank............................................................47
         12.16    Letters of Credit; Intra-Bank Issues..........................................................47
                  12.16.1 Notice of Letter of Credit Balance....................................................47
                  12.16.2 Participations in Letters of Credit...................................................47
                  12.16.3 Recovery or Avoidance of Payments; Refund of Payments in Error........................48
                  12.16.4 Indemnification by Banks..............................................................49
         12.17    Concerning the Collateral and the Loan Documents..............................................49
         12.18    Field Audit and Examination Reports; Disclaimer by Banks......................................49
SECTION 13            MISCELLANEOUS.............................................................................50
         13.1     No Waivers; Cumulative Remedies...............................................................50
         13.2     Severability..................................................................................50
         13.3     Governing Law; Choice of Forum; Service of Process............................................51
                  13.3.1   GOVERNING LAW........................................................................51
                  13.3.2   CHOICE OF FORUM......................................................................51
                  13.3.3   SERVICE OF PROCESS...................................................................51
                  13.3.4   WAIVER OF JURY TRIAL.................................................................51
         13.4     Survival of Representations and Warranties....................................................52
         13.5     Other Security and Guaranties.................................................................52
         13.6     Fees and Expenses.............................................................................52
         13.7     Notices.......................................................................................53
         13.8     Waiver of Notices.............................................................................53
         13.9     Binding Effect................................................................................53
         13.10    Indemnity of the Administrative Agent and the Banks by the Company............................54
                  13.10.1 General...............................................................................54
                  13.10.2 Environmental Indemnification.........................................................54
         13.11    Limitation of Liability.......................................................................54
</TABLE>

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<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
         13.12    Final Agreement...............................................................................55
         13.13    Counterparts..................................................................................55
         13.14    Captions......................................................................................55
         13.15    Automatic Debits of Fees......................................................................55
         13.16    Right of Setoff...............................................................................55
         13.17    Confidentiality...............................................................................55
         13.18    Conflicts with Other Loan Documents...........................................................56
         13.19    Waiver of Outstanding Interest and Fees.......................................................56
         13.20    Quakertown Claim..............................................................................56
         13.21    GE Capital Facility Confirmation..............................................................56
</TABLE>

                                    -viii-<PAGE>
                                                                    EXHIBIT 10.2

                     AMENDED AND RESTATED SECURITY AGREEMENT

         THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "AGREEMENT") dated
as of September 9, 2002 is among U.S. PLASTIC LUMBER CORP. (the "COMPANY"), each
Subsidiary of the Company listed on the signature pages hereof, each other
person or entity which from time to time becomes a party hereto (collectively,
including the Company, the "DEBTORS" and individually each a "DEBTOR") and BANK
OF AMERICA, N.A. ("BANK OF AMERICA"), in its capacity as Administrative Agent
(as defined below) for the Banks (as defined below).

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, the Company, various financial institutions (the "BANKS") and
Bank of America, as Administrative Agent for the Banks (in such capacity, the
"ADMINISTRATIVE AGENT"), have entered into a Credit Agreement dated as of
September 9, 2002 (as amended, restated or otherwise modified from time to time,
the "CREDIT AGREEMENT");

         WHEREAS, each of the Debtors other than the Company has executed and
delivered a guaranty (the "GUARANTY") of the obligations of the Company in
respect of the Loan Documents; and

         WHEREAS, the obligations of the Company in respect of the Loan
Documents and the obligations of each other Debtor under the Guaranty are to be
secured pursuant to this Agreement;

         NOW, THEREFORE, for and in consideration of the premises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. DEFINITIONS. When used herein, (a) the terms ACCOUNT, ACCOUNT DEBTOR,
CERTIFICATED SECURITY, CHATTEL PAPER, COMMODITY ACCOUNT, COMMODITY CONTRACT,
DEPOSIT ACCOUNT, DOCUMENT, EQUIPMENT, FIXTURE, GOODS, INSTRUMENT, INVENTORY,
INVESTMENT PROPERTY, SECURITY, SECURITY ENTITLEMENT, SECURITIES ACCOUNT and
UNCERTIFICATED SECURITY shall have the respective meanings assigned to such
terms in the UCC (as defined below), (b) capitalized terms used but not defined
have the meanings assigned to such terms in the Credit Agreement and (c) the
following terms have the following meanings (such definitions to be applicable
to both the singular and plural forms of such terms):

                  ADMINISTRATIVE AGENT - see the recitals.

                  AGREEMENT - see the introductory paragraph.

                  BANK OF AMERICA - see the introductory paragraph.

                  BANKS - see the recitals.

                  BLOCKED ACCOUNT - see Section 4.

<PAGE>

                  COLLATERAL means, with respect to any Debtor, all property and
         rights of such Debtor in which a security interest is granted
         hereunder.

                  COMPANY - see the introductory paragraph.

                  COMPUTER HARDWARE AND SOFTWARE means, with respect to any
         Debtor, (i) all computer and other electronic data processing hardware,
         whether now or hereafter owned, licensed or leased by such Debtor,
         including, without limitation, all integrated computer systems, central
         processing units, memory units, display terminals, printers, features,
         computer elements, card readers, tape drives, hard and soft disk
         drives, cables, electrical supply hardware, generators, power
         equalizers and accessories and all peripheral devices and other related
         computer hardware; (ii) all software programs, whether now or hereafter
         owned, licensed or leased by such Debtor, designed for use on the
         computers and electronic data processing hardware described in CLAUSE
         (I) above, including, without limitation, all operating system
         software, utilities and application programs in whatsoever form (source
         code and object code in magnetic tape, disk or hard copy format or any
         other listings whatsoever); (iii) all firmware associated with the
         foregoing, whether now or hereafter owned, licensed or leased by such
         Debtor; and (iv) all documentation for the hardware, software and
         firmware described in CLAUSES (I), (II) and (III) above, whether now or
         hereafter owned, licensed or leased by such Debtor, including, without
         limitation, flow charts, logic diagrams, manuals, specifications,
         training materials, charts and pseudo codes.

                  CONCENTRATION ACCOUNT - see SECTION 4.

                  CREDIT AGREEMENT - see the recitals.

                  DEBTOR - see the introductory paragraph.

                  DEFAULT means the occurrence of any of the following events:
         (a) any Unmatured Event of Default under Section 8.1.5 of the Credit
         Agreement with respect to the Company, (b) any Event of Default or (c)
         any warranty of any Debtor herein is untrue or misleading in any
         material respect and, as a result thereof, the Administrative Agent's
         security interest in any material portion of the Collateral (of all
         Debtors taken as a whole) is not perfected or the Administrative
         Agent's rights and remedies with respect to any material portion of the
         Collateral of all Debtors taken as a whole are materially impaired or
         otherwise materially adversely affected.

                  GENERAL INTANGIBLES means, with respect to any Debtor, all of
         such Debtor's "general intangibles" as defined in the UCC and, in any
         event, includes (without limitation) all of such Debtor's trademarks,
         trade names, patents, copyrights, trade secrets, customer lists,
         inventions, designs, software programs, mask works, goodwill,
         registrations, licenses, franchises, tax refund claims, guarantee
         claims, security interests and rights to indemnification.

                  GUARANTY - see the recitals.

                                      -2-
<PAGE>

                  INTELLECTUAL PROPERTY means all past, present and future:
         trade secrets and other proprietary information; trademarks, service
         marks, business names, designs, logos, indicia, and/or other source
         and/or business identifiers and the goodwill of the business relating
         thereto and all registrations or applications for registrations which
         have heretofore been or may hereafter be issued thereon throughout the
         world; copyrights (including, without limitation, copyrights for
         computer programs) and copyright registrations or applications for
         registrations which have heretofore been or may hereafter be issued
         throughout the world and all tangible property embodying the
         copyrights; unpatented inventions (whether or not patentable); patent
         applications and patents; industrial designs, industrial design
         applications and registered industrial designs; license agreements
         related to any of the foregoing and income therefrom; mask works,
         books, records, writings, computer tapes or disks, flow diagrams,
         specification sheets, source codes, object codes and other physical
         manifestations, embodiments or incorporations of any of the foregoing;
         the right to sue for all past, present and future infringements of any
         of the foregoing; and all common law and other rights throughout the
         world in and to all of the foregoing.

                  LIABILITIES means (a) with respect to the Company, all
         obligations of the Company to the Administrative Agent or any Bank,
         howsoever created, arising or evidenced, whether direct or indirect,
         absolute or contingent, now or hereafter existing, or due or to become
         due, which arise under the Credit Agreement or any other Loan Document
         (including, without limitation, with respect to Letters of Credit and
         Bank Products), as the same may be amended, modified, extended or
         renewed from time to time, and (b) with respect to each Debtor other
         than the Company, all obligations of such Debtor under the Guaranty or
         any other Loan Document.

                  NON-TANGIBLE COLLATERAL means, with respect to any Debtor,
         collectively, such Debtor's Accounts and General Intangibles.

                  PERMITTED LIENS - see SECTION 3.

                  UCC means the Uniform Commercial Code as in effect from time
to time in the State of Illinois.

         2. GRANT OF SECURITY INTEREST. As security for the payment of all
Liabilities, each Debtor hereby assigns, pledges and conveys to the
Administrative Agent for the benefit of the Banks, and grants to the
Administrative Agent for the benefit of the Banks a continuing security interest
in, all of the following property of such Debtor, whether now or hereafter
existing or acquired:

         (i)      Accounts;

         (ii)     Chattel Paper;

         (iii)    Computer Hardware and Software and all rights with respect
                  thereto, including, without limitation, any and all licenses,
                  options, warranties, service contracts, program services, test
                  rights, maintenance rights, support rights, improvement

                                      -3-
<PAGE>

                  rights, renewal rights and indemnifications, and any
                  substitutions, replacements, additions or model conversions of
                  any of the foregoing;

         (iv)     Deposit Accounts;

         (v)      Documents;

         (vi)     General Intangibles;

         (vii)    Goods (including, without limitation, all of its Equipment,
                  Fixtures and Inventory), together with all accessions,
                  additions, attachments, improvements, substitutions and
                  replacements thereto and therefor;

         (viii)   Instruments (together with all guaranties thereof and security
                  therefor);

         (ix)     Intellectual Property;

         (x)      Investment Property (including Commodity Accounts, Commodity
                  Contracts, Securities (whether Certificated Securities or
                  Uncertificated Securities), Security Entitlements and
                  Securities Accounts);

         (xi)     money (of every jurisdiction whatsoever); and

         (xii)    to the extent not included in the foregoing, other personal
                  property of any kind or description;

         together with all books, records, writings, data bases, information and
         other property relating to, used or useful in connection with,
         evidencing, embodying, incorporating or referring to any of the
         foregoing, all claims and/or insurance proceeds arising out of the
         loss, nonconformity or any interference with the use of, or any defects
         or infringements of rights in, or damage to, any of the foregoing, and
         all proceeds, products, offspring, rents, issues, profits and returns
         of and from, and all distributions on and rights arising out of, any of
         the foregoing.

         3. WARRANTIES. Each Debtor warrants that: (i) no financing statement
(other than any which may have been filed on behalf of the Administrative Agent
or in connection with Permitted Liens (as defined below)) covering any of the
Collateral is on file in any public office; (ii) such Debtor is and will be the
lawful owner of all Collateral, free of all liens and claims whatsoever, other
than the security interest hereunder and liens and claims expressly permitted by
the Credit Agreement ("PERMITTED LIENS"), with full power and authority to
execute this Agreement and perform such Debtor's obligations hereunder, and to
subject the Collateral to the security interest hereunder; (iii) all information
with respect to Collateral and Account Debtors set forth in any schedule,
certificate or other writing at any time heretofore or hereafter furnished by
such Debtor to the Administrative Agent or any Bank and all other written
information heretofore or hereafter furnished by such Debtor to the
Administrative Agent or any Bank in connection with the Credit Agreement will be
true and correct in all material respects as of the date furnished; (iv) such

                                      -4-
<PAGE>

Debtor's true legal name as registered in the jurisdiction in which such Debtor
is organized or incorporated, jurisdiction of organization or incorporation,
federal employer identification number, organizational identification number, if
any, as designated by the state of its organization or incorporation, chief
executive office and principal place of business are as set forth on SCHEDULE I
hereto; (v) each other location where such Debtor maintains a place of business
or has any Goods is set forth on SCHEDULE II hereto; (vi) except as disclosed on
SCHEDULE III, such Debtor is not now known and during the five years preceding
the date hereof has not previously been known by any trade name; (vii) except as
disclosed on SCHEDULE III, during the five years preceding the date hereof such
Debtor has not been known by any legal name different from the one set forth on
the signature page of this Agreement nor has such Debtor been the subject of any
merger or other corporate reorganization; and (viii) SCHEDULE IV hereto contains
a complete listing of all of such Debtor's Intellectual Property which has been
registered under any registration statute.

         4. COLLECTIONS, ETC. Until such time during the existence of a Default
as the Administrative Agent shall notify such Debtor of the revocation of such
power and authority, each Debtor (a) may, in the ordinary course of its
business, at its own expense, sell, lease or furnish under contracts of service
any of the Inventory normally held by such Debtor for such purpose, use and
consume, in the ordinary course of its business, any raw materials, work in
process or materials normally held by such Debtor for such purpose, and use, in
the ordinary course of its business (but subject to the terms of the Credit
Agreement), the cash proceeds of Collateral and other money which constitutes
Collateral, (b) will, at its own expense, endeavor to collect, as and when due,
all amounts due under any of the Non-Tangible Collateral, including the taking
of such action with respect to such collection as the Administrative Agent may
reasonably request or, in the absence of such request, as such Debtor may deem
advisable, and (c) may grant, in the ordinary course of business, to any party
obligated on any of the Non-Tangible Collateral, any rebate, refund or allowance
to which such party may be lawfully entitled, and may accept, in connection
therewith, the return of Goods, the sale or lease of which shall have given rise
to such Non-Tangible Collateral. The Administrative Agent, however, may, at any
time that a Default exists, whether before or after any revocation of such power
and authority or the maturity of any of the Liabilities, notify any parties
obligated on any of the Non-Tangible Collateral to make payment to the
Administrative Agent of any amounts due or to become due thereunder and enforce
collection of any of the Non-Tangible Collateral by suit or otherwise and
surrender, release or exchange all or any part thereof, or compromise or extend
or renew for any period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby. Upon request of the Administrative
Agent during the existence of a Default, each Debtor will, at its own expense,
notify any parties obligated on any of the Non-Tangible Collateral to make
payment to the Administrative Agent of any amounts due or to become due
thereunder.

         Not later than 30 days after the Closing Date the Debtors shall
establish, and thereafter so long as this Agreement is in effect the Debtors
shall maintain, a lock-box service for collection of Accounts, all pursuant to
documentation reasonably acceptable to the Administrative Agent. The Debtors
shall instruct all Account Debtors to make all payments directly to the address
or addresses established for such service. If, notwithstanding such
instructions, any Debtor receives any payment on any Account, or if any Debtor
receives any other payment constituting proceeds of Collateral, it shall receive
such payment as the Administrative Agent's trustee and shall promptly deliver

                                      -5-
<PAGE>

such payment to the Administrative Agent in its original form, duly endorsed in
blank, or deposit such payment into the Concentration Account or a Blocked
Account (each as defined below). Each Debtor agrees that, at any time a Default
exists, the Administrative Agent shall have access to any post office box
established pursuant to this paragraph (and each Debtor agrees to execute and
deliver to the Administrative Agent such documents as the Administrative Agent
shall reasonably request to obtain such access).

         All cash, checks and other proceeds of Collateral, whether received in
a lockbox, received directly by any Debtor, received directly by the
Administrative Agent or otherwise, shall promptly be deposited into (a) an
account (the "CONCENTRATION ACCOUNT") established for the account of the Debtors
(in the name of the Administrative Agent or the Debtors, at the option of the
Administrative Agent) with the Administrative Agent or (b) one or more accounts
(each a "BLOCKED ACCOUNT") with other financial institutions which are in each
case subject to a Blocked Account Agreement. All amounts on deposit in any
Blocked Account shall (subject to customary restrictions imposed by the
financial institution which maintains such Blocked Account) be transferred at
the end of each Business Day into the Concentration Account to be applied as set
forth herein. No Debtor shall maintain any Deposit Account or deposit any item
or amount in any Deposit Account, except (i) Deposit Accounts maintained with
the Administrative Agent and (ii) Blocked Accounts.

         All funds in the Concentration Account and any Blocked Account shall be
subject to the Administrative Agent's sole control, and no Debtor shall have any
right to withdraw any such funds. Each Debtor authorizes the Administrative
Agent to, and the Administrative Agent will on each Business Day, subject to the
terms of the Credit Agreement, apply any amount in the Concentration Account
against the Liabilities, whether or not then due, in accordance with the Credit
Agreement. Notwithstanding any such application, no funds which are proceeds of
any check, draft or other instrument, or of any transfer of funds, shall
constitute final payment of any Liabilities unless and until such item of
payment or such transfer has actually been collected.

         5. CERTIFICATES, SCHEDULES AND REPORTS. Each Debtor will from time to
time deliver to the Administrative Agent such schedules, certificates and
reports respecting all or any of the Collateral at the time subject to the
security interest hereunder, and the items or amounts received by such Debtor in
full or partial payment of any of the Collateral, as the Administrative Agent
may reasonably request. Any such schedule, certificate or report shall be
executed by a duly authorized officer of such Debtor and shall be in such form
and detail as the Administrative Agent may specify. Each Debtor shall
immediately notify the Administrative Agent of the occurrence of any event
causing any loss or depreciation in the value of its Inventory or other Goods
which is material to the Company and its Subsidiaries taken as a whole, and such
notice shall specify the amount of such loss or depreciation.

         6. AGREEMENTS OF THE DEBTORS. Each Debtor (a) will, upon request of the
Administrative Agent, execute such financing statements and other documents (and
pay the cost of filing or recording the same in all public offices reasonably
deemed appropriate by the Administrative Agent) and do such other acts and
things (including, without limitation, delivery to the Administrative Agent of
any Instruments or Certificated Securities which constitute Collateral), all as
the Administrative Agent may from time to time reasonably request, to establish
and maintain a valid security interest in the Collateral (free of all other
liens, claims and rights of third parties whatsoever, other than Permitted
Liens) to secure the payment of the Liabilities (and each Debtor hereby
authorizes the Administrative Agent to file any financing statement without its

                                      -6-
<PAGE>

signature, to the extent permitted by applicable law, and/or to file a copy of
this Agreement as a financing statement in any jurisdiction); (b) will keep all
its Inventory at, and will not maintain any place of business at any location
other than, its address(es) shown on SCHEDULES I and II hereto or at such other
addresses of which such Debtor shall have given the Administrative Agent not
less than 10 days' prior written notice; (c) will not change its state of
organization or incorporation or its name, identity or corporate structure such
that any financing statement filed to perfect the Administrative Agent's
interests under this Agreement would become seriously misleading, unless such
Debtor shall have given the Administrative Agent not less than 30 days' prior
notice of such change (provided that this SECTION 6(C) shall not be deemed to
authorize any change or transaction prohibited under the Credit Agreement); (d)
will keep its records concerning the Non-Tangible Collateral in such a manner as
will enable the Administrative Agent or its designees to determine at any time
the status of the Non-Tangible Collateral; (e) will furnish the Administrative
Agent such information concerning such Debtor, the Collateral and the Account
Debtors as the Administrative Agent may from time to time reasonably request;
(f) will permit the Administrative Agent and its designees, from time to time,
on reasonable notice and at reasonable times and intervals during normal
business hours (or at any time without notice during the existence of a Default)
to inspect such Debtor's Inventory and other Goods, and to inspect, audit and
make copies of and extracts from all records and all other papers in the
possession of such Debtor pertaining to the Collateral and the Account Debtors,
and will, upon request of the Administrative Agent during the existence of a
Default, deliver to the Administrative Agent all of such records and papers; (g)
will, upon request of the Administrative Agent, stamp on its records concerning
the Collateral and add on all Chattel Paper constituting a portion of the
Collateral, a notation, in form satisfactory to the Administrative Agent, of the
security interest of the Administrative Agent hereunder; (h) except as permitted
by the Credit Agreement, will not sell, lease, assign or create or permit to
exist any lien on or security interest in any Collateral other than Permitted
Liens and liens and security interests in favor of the Administrative Agent; (i)
will at all times keep all its Inventory and other Goods insured under policies
maintained with reputable, financially sound insurance companies against loss,
damage, theft and other risks to such extent as is customarily maintained by
companies similarly situated, and cause all such policies to provide that loss
thereunder shall be payable to the Administrative Agent as its interest may
appear (it being understood that (A) so long as no Default shall be existing,
the Administrative Agent shall deliver any proceeds of such insurance which may
be received by it to such Debtor and (B) whenever a Default shall be existing,
the Administrative Agent may apply any proceeds of such insurance which may be
received by it toward payment of the Liabilities, whether or not due, in such
order of application as the Administrative Agent may determine) and such
policies or certificates thereof shall, if the Administrative Agent so requests,
be deposited with or furnished to the Administrative Agent; (j) will take such
actions as are reasonably necessary to keep its Inventory in good repair and
condition, ordinary wear and tear excepted; (k) will take such actions as are
reasonably necessary to keep its Equipment (other than obsolete Equipment) in
good repair and condition and in good working or running order, ordinary wear
and tear excepted; (l) will promptly pay when due all license fees, registration
fees, taxes, assessments and other charges which may be levied upon or assessed
against the ownership, operation, possession, maintenance or use of its
Equipment and other Goods (as applicable); PROVIDED that such Debtor shall not
be required to pay any such fee, tax, assessment or other charge if the validity

                                      -7-
<PAGE>

thereof is being contested by such Debtor in good faith by appropriate
proceedings, so long as forfeiture of any substantial part of its Equipment or
other Goods will not result from the failure of such Debtor to pay any such fee,
tax, assessment or other charge during the period of such contest; (m) will,
upon request of the Administrative Agent, (i) cause to be noted on the
applicable certificate, in the event any of its Equipment is covered by a
certificate of title, the security interest of the Administrative Agent in the
Equipment covered thereby and (ii) deliver all such certificates to the
Administrative Agent or its designees; (n) will take all steps reasonably
necessary to protect, preserve and maintain all of its rights in the Collateral;
(o) will keep all of the tangible Collateral, Deposit Accounts and Investment
Property in the continental United States; (p) will, promptly upon any officer
of such Debtor obtaining knowledge that such Debtor has acquired a commercial
tort claim (as defined in Section 9-102 of the UCC), notify the Administrative
Agent in a writing signed by such Debtor of the details of such commercial tort
claim and grant to the Administrative Agent in such writing a security interest
therein and in the proceeds thereof, with such writing to be in form and
substance reasonably satisfactory to the Administrative Agent; and (q) will
reimburse the Administrative Agent for all expenses, including reasonable
attorneys' fees and legal expenses, incurred by the Administrative Agent in
seeking to collect or enforce any rights in respect of such Debtor's Collateral.

         Any expenses incurred in protecting, preserving and maintaining any
Collateral shall be borne by the applicable Debtor. Whenever a Default shall be
existing, the Administrative Agent shall have the right to bring suit to enforce
any or all of the Intellectual Property or licenses thereunder, in which event
the applicable Debtor shall at the request of the Administrative Agent do any
and all lawful acts and execute any and all proper documents required by the
Administrative Agent in aid of such enforcement and such Debtor shall promptly,
upon demand, reimburse and indemnify the Administrative Agent for all reasonable
costs and expenses incurred by the Administrative Agent in the exercise of its
rights under this SECTION 6, except to the extent any of the foregoing result
from the gross negligence or willful misconduct of the Administrative Agent.
Notwithstanding the foregoing, the Administrative Agent shall have no
obligations or liabilities regarding the Collateral or any thereof by reason of,
or arising out of, this Agreement.

         7. DEFAULT. (a) Whenever a Default shall be existing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it under the UCC, under any other applicable law and in the
subsections set forth below in this SECTION 7.

         (b) Each Debtor agrees, in case of Default, (i) to assemble, at its
expense, all its Inventory and other Goods (other than Fixtures) at a convenient
place or places acceptable to the Administrative Agent, and (ii) at the
Administrative Agent's request, to execute all such documents and do all such
other things which may be necessary or desirable in order to enable the
Administrative Agent or its nominee to be registered as owner of the
Intellectual Property with any competent registration authority.

         (c) Notice of the intended disposition of any Collateral may be given
by first-class mail, hand-delivery (through a delivery service or otherwise),
facsimile or E-mail, and shall be deemed to have been "sent" upon deposit in the
United States mail with adequate postage properly affixed, upon delivery to an
express delivery service or upon the electronic submission through telephonic
services, as applicable. Each Debtor hereby agrees and acknowledges that (i)

                                      -8-
<PAGE>

with respect to Collateral that is: (A) perishable or threatens to decline
speedily in value or (B) is of a type customarily sold on a recognized market
(including Investment Property), no notice of disposition need be given; and
(ii) with respect to Collateral not described in CLAUSE (I) above, notification
sent after default and ten days before any proposed disposition provides notice
with a reasonable time before disposition.

         (d) Each Debtor hereby agrees and acknowledges that a commercially
reasonable disposition of Inventory, Equipment, Computer Hardware and Software
or Intellectual Property may be by lease or license of, in addition to the sale
of, such Collateral. Each Debtor further agrees and acknowledges that a
disposition (i) made in the usual manner on any recognized market, (ii) at the
price current in any recognized market at the time of disposition or (iii) in
conformity with reasonable commercial practices among dealers in the type of
property subject to the disposition shall, in each case, be deemed commercially
reasonable.

         (e) Any cash proceeds of any disposition by the Administrative Agent of
any of the Collateral shall be applied by the Administrative Agent to payment of
expenses in connection with the Collateral, including reasonable attorneys' fees
and legal expenses, and thereafter to the payment of any and all of the
Liabilities in such order of application as the Administrative Agent may from
time to time elect, and thereafter any surplus will be paid to the applicable
Debtor or as a court of competent jurisdiction shall direct. The Administrative
Agent need not apply or pay over for application noncash proceeds of collection
and enforcement unless (i) the failure to do so would be commercially
unreasonable and (ii) the applicable Debtor has provided the Administrative
Agent with a written demand to apply or pay over such noncash proceeds on such
basis.

         8. GENERAL. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action for that purpose as any applicable Debtor
requests in writing, but failure of the Administrative Agent to comply with any
such request shall not of itself be deemed a failure to exercise reasonable
care, and no failure of the Administrative Agent to preserve or protect any
rights with respect to such Collateral against prior parties, or to do any act
with respect to the preservation of such Collateral not so requested by any
Debtor, shall be deemed a failure to exercise reasonable care in the custody or
preservation of such Collateral.

         All notices and requests hereunder shall be in writing (including
facsimile transmission) and shall be sent (i) if to the Administrative Agent, to
its address shown on Schedule 14.3 to the Credit Agreement or such other address
as it may, by written notice to the Company, have designated as its address for
such purpose, and (ii) if to any Debtor, to its address shown on SCHEDULE I
hereto or to such other address as such Debtor may, by written notice to the
Administrative Agent, have designated as its address for such purpose. Notices
sent by facsimile transmission shall be deemed to have been given when sent;
notices sent by mail shall be deemed to have been given five Business Days after
the date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier shall be deemed to have been given
when received.

         Each of the Debtors agrees to pay all expenses (including reasonable
attorneys' fees and legal expenses) paid or incurred by the Administrative Agent
or any Bank in endeavoring to collect the Liabilities of such Debtor, or any

                                      -9-
<PAGE>

part thereof, and in enforcing this Agreement against such Debtor, and such
obligations will themselves be Liabilities.

         No delay on the part of the Administrative Agent in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Administrative Agent of any right or remedy shall preclude other
or further exercise thereof or the exercise of any other right or remedy.

         This Security Agreement shall remain in full force and effect until all
Liabilities have been paid in full and all Commitments have terminated. If at
any time all or any part of any payment theretofore applied by the
Administrative Agent or any Bank to any of the Liabilities is or must be
rescinded or returned by the Administrative Agent or such Bank for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of any Debtor), such Liabilities shall, for the purposes of this
Agreement, to the extent that such payment is or must be rescinded or returned,
be deemed to have continued in existence, notwithstanding such application by
the Administrative Agent or such Bank, and this Agreement shall continue to be
effective or be reinstated, as the case may be, as to such Liabilities, all as
though such application by the Administrative Agent or such Bank had not been
made.

         This Agreement shall be construed in accordance with and governed by
the laws of the State of Illinois applicable to contracts made and to be
performed entirely within the State of Illinois (except to the extent that,
pursuant to Illinois law, the perfection, the effect of perfection or
nonperfection or the priority of any security interest granted hereunder may be
determined in accordance with the laws of a different jurisdiction). Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable 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
Agreement.

         The rights and privileges of the Administrative Agent hereunder shall
inure to the benefit of its successors and assigns.

         This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement. At any time after the date of this
Agreement, one or more additional Persons may become parties hereto by executing
and delivering to the Administrative Agent a counterpart of this Agreement
(including supplements to the Schedules hereto). Immediately upon such execution
and delivery (and without any further action), each such additional Person will
become a party to, and will be bound by all the terms of, this Agreement.

         This Agreement amends and restates the Security Agreement dated as of
June 30, 2000 among the Administrative Agent, the other original signatories
hereto and various other parties. Nothing contained in this Agreement shall be
construed to release, cancel, terminate or otherwise adversely affect all or any
part of any lien, claim, right or security interest heretofore granted to or
retained by the Administrative Agent with respect to any Collateral heretofore
or hereafter acquired by a Debtor.

                                      -10-
<PAGE>

         ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH DEBTOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH DEBTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADDRESS OF ITS CHIEF EXECUTIVE OFFICE SET FORTH ON SCHEDULE I
HERETO (OR SUCH OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE
ADMINISTRATIVE AGENT AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH DEBTOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

         EACH OF EACH DEBTOR, THE ADMINISTRATIVE AGENT AND (BY ACCEPTING THE
BENEFITS HEREOF) EACH BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH
ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -11-
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.

                              U.S. PLASTIC LUMBER CORP.

                              By:   /s/ Bruce Rosetto
                                   ---------------------------------------------
                              Name:   Bruce Rosetto
                                     -------------------------------------------
                              Title:
                                      ------------------------------------------

                              BANK OF AMERICA, N.A., as Administrative Agent

                              By:   /s/ Kristine Hyde
                                   ---------------------------------------------
                              Name:   Kristine Hyde
                                     -------------------------------------------
                              Title:
                                      ------------------------------------------

                              U.S. PLASTIC LUMBER LTD.

                              By:   /s/ Bruce Rosetto
                                   ---------------------------------------------
                              Name:   Bruce Rosetto
                                     -------------------------------------------
                              Title:
                                      ------------------------------------------

                              U.S. PLASTIC LUMBER FINANCE CORP.

                              By:   /s/ Bruce Rosetto
                                   ---------------------------------------------
                              Name:   Bruce Rosetto
                                     -------------------------------------------
                              Title:
                                      ------------------------------------------

                                      -12-
<PAGE>

                              THE EAGLEBROOK GROUP, INC.

                              By:   /s/ Bruce Rosetto
                                   ---------------------------------------------
                              Name:   Bruce Rosetto
                                     -------------------------------------------
                              Title:
                                      ------------------------------------------

                              U.S. PLASTIC LUMBER IP CORP.

                              By:   /s/ Bruce Rosetto
                                   ---------------------------------------------
                              Name:   Bruce Rosetto
                                     -------------------------------------------
                              Title:
                                      ------------------------------------------

                                      -13-

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