Document:

CAPITAL
SECURITIES GUARANTEE AGREEMENT  

BAC
Capital Trust X 61⁄4% Capital Securities

Dated
as of March 28, 2006

ARTICLE 1

DEFINITIONS AND INTERPRETATION

SECTION 1.1...... Definitions and
Interpretation.............................................................................. 1

ARTICLE 2

TRUST INDENTURE ACT

SECTION 2.1...... Trust Indenture Act; Application......................................................................... 5

SECTION 2.2...... Lists of Holders of Securities.............................................................................. 5

SECTION 2.3...... Reports by the Capital Securities Guarantee
Trustee............................................ 5

SECTION 2.4...... Periodic Reports to Capital Securities
Guarantee Trustee.................................... 5

SECTION 2.5...... Evidence of Compliance with Conditions Precedent............................................ 5

SECTION 2.6...... Events of Default; Waiver................................................................................... 6

SECTION 2.7...... Event of Default; Notice..................................................................................... 6

SECTION 2.8...... Conflicting
Interests............................................................................................ 6

ARTICLE 3

POWERS, DUTIES AND RIGHTS OF CAPITAL SECURITIES GUARANTEE TRUSTEE

SECTION 3.1...... Powers and Duties of the Capital Securities
Guarantee Trustee............................ 6

SECTION 3.2...... Certain Rights of Capital Securities
Guarantee Trustee......................................... 8

SECTION 3.3...... Not Responsible
for Recitals or Issuance of Capital Securities Guarantee........... 10

ARTICLE 4

CAPITAL SECURITIES GUARANTEE TRUSTEE

SECTION 4.1...... Capital Securities Guarantee Trustee;
Eligibility.................................................. 10

SECTION 4.2...... Appointment,
Removal and Resignation of Capital Securities Guarantee Trustee 11

ARTICLE 5

GUARANTEE

SECTION 5.1...... Guarantee........................................................................................................ 12

SECTION 5.2...... Waiver of Notice and Demand......................................................................... 12

SECTION 5.3...... Obligations Not Affected.................................................................................. 12

SECTION 5.4...... Rights of Holders.............................................................................................. 13

SECTION 5.5...... Guarantee of Payment...................................................................................... 13

SECTION 5.6...... Subrogation...................................................................................................... 13

SECTION 5.7...... Independent
Obligations................................................................................... 14

ARTICLE 6

LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1...... Limitation of Transactions................................................................................. 14

SECTION 6.2...... Ranking............................................................................................................ 14

ARTICLE 7

TERMINATION

SECTION 7.1...... Termination...................................................................................................... 15

ARTICLE 8

INDEMNIFICATION

SECTION 8.1...... Exculpation...................................................................................................... 15

SECTION 8.2...... Indemnification................................................................................................. 15

ARTICLE 9

MISCELLANEOUS

SECTION 9.1...... Successors and Assigns.................................................................................... 16

SECTION 9.2...... Amendments.................................................................................................... 16

SECTION 9.3...... Notices............................................................................................................ 16

SECTION 9.4...... Benefit............................................................................................................. 17

SECTION 9.5...... Governing Law................................................................................................. 17

 

 

CROSS-REFERENCE
TABLE*

Section of

            Trust Indenture Act                                                                 Section
of

            of 1939,
as amended                                                               Declaration

310(a)...............................................................................       4.1(a)

310(c)...............................................................................       Inapplicable

311(c)...............................................................................       Inapplicable

312(a)...............................................................................       2.2(a)

312(b)...............................................................................       2.2(b)

313...................................................................................       2.3

314(a)...............................................................................       2.4

314(b)...............................................................................       Inapplicable

314(c)...............................................................................       2.5

314(d)...............................................................................       Inapplicable

314(f)................................................................................       Inapplicable

315(a)...............................................................................       3.1(d)

315(c)...............................................................................       3.1(c)

315(d)...............................................................................       3.1(d)

_______________

*This Cross-Reference Table does not constitute part of the
Capital Securities Guarantee and shall not affect the interpretation of any of
its terms or provisions.

 

 

CAPITAL
SECURITIES GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (the
"Capital Securities Guarantee"), dated as of March 28, 2006, is executed and
delivered by BANK OF AMERICA CORPORATION, a Delaware corporation (the "Guarantor"),
and THE BANK OF NEW YORK, a New York banking corporation, as trustee
(the "Capital Securities Guarantee Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Capital Securities (as defined
herein) of BAC Capital Trust X, a Delaware statutory trust (the "Issuer").

WHEREAS, pursuant to an Amended
and Restated Declaration of Trust (the "Declaration"), dated as of March 21,
2006, among the trustees of the Issuer named therein, the Guarantor, as
sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing on the date hereof 36,000,000
Capital Securities representing undivided preferred beneficial interests in the
assets of the Issuer, designated the BAC Capital Trust X 61⁄4% Capital Securities
(the "Capital Securities"), initially in the aggregate liquidation amount of $900,000,000;
and

WHEREAS, pursuant to the terms
of an Underwriting Agreement dated as of March 21, 2006, by and among the
Guarantor, as sponsor, the Issuer and the Underwriters named therein (the
"Underwriting Agreement"), the Issuer has agreed to issue up to an additional 5,400,000
Capital Securities with an aggregate liquidation amount of up to $135,000,000
upon exercise of an option granted in the Underwriting Agreement to the
Underwriters (the "Option"); and

WHEREAS, as incentive for the
Holders to purchase the Capital Securities, the Guarantor desires irrevocably
and unconditionally to agree, to the extent set forth in this Capital Securities
Guarantee, to pay to the Holders of the Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and conditions set forth herein; and

WHEREAS, the Guarantor also is
executing and delivering a guarantee agreement (the "Common Securities
Guarantee") for the benefit of the holders of the Common Securities (as defined
herein);

NOW, THEREFORE, in
consideration of the purchase by each Holder of Capital Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Capital Securities Guarantee for the benefit of the
Holders.

ARTICLE 1

DEFINITIONS AND INTERPRETATION

SECTION 1.1  
Definitions and Interpretation.  

In this Capital
Securities Guarantee, unless the context otherwise requires:

(a)        Capitalized
terms used in this Capital Securities Guarantee but not defined in the preamble
above have the respective meanings assigned to them in this Section 1.1;

                                                  
1

 

(b)        terms
defined in the Declaration as at the date of execution of this Capital
Securities Guarantee have the same meaning when used in this Capital Securities
Guarantee;

(c)        a
term defined anywhere in this Capital Securities Guarantee has the same meaning
throughout;

(d)        all
references to "the Capital Securities Guarantee" or "this Capital Securities
Guarantee" are to this Capital Securities Guarantee as modified, supplemented
or amended from time to time;

(e)        all
references in this Capital Securities Guarantee to Articles and Sections are to
Articles and Sections of this Capital Securities Guarantee, unless otherwise
specified;

(f)         a
term defined in the Trust Indenture Act has the same meaning when used in this
Capital Securities Guarantee, unless otherwise defined in this Capital
Securities Guarantee or unless the context otherwise requires; and

(g)        a
reference to the singular includes the plural and vice versa.

"Affiliate" has the same meaning as given to that
term in Rule 405 of the Securities Act of 1933, as amended, or any successor
rule thereunder.

"Authorized Officer" means the Chief Executive
Officer, President, Chief Financial Officer, any Vice President, Treasurer,
Assistant Treasurer, Associate General Counsel or other Person authorized to
bind a Person.

"Business Day" means any day other than a day on
which federal or state banking institutions in New York, New York or Charlotte,
North Carolina are authorized or obligated by law, executive order or
regulation to close.

"Capital Securities Guarantee Trustee" means The
Bank of New York, a New York banking corporation, until a Successor Capital
Securities Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Capital Securities Guarantee and
thereafter means each such Successor Capital Securities Guarantee Trustee.

"Capital Securities" means the total number of
BAC Capital Trust X 61⁄4% Capital Securities (liquidation amount $25 per Capital
Security) issued pursuant to the Declaration representing undivided preferred
beneficial interests in the assets of the Issuer, including any Capital
Securities issued upon exercise of the Option.

"Common Securities" means the securities
representing undivided common beneficial interests in the assets of the Issuer,
including any additional Common Securities issued in connection with the
exercise of the Option.

"Corporate Trust Office" means the office of the
Capital Securities Guarantee Trustee at which the corporate trust business of
the Capital Securities Guarantee Trustee shall, at

                                                                                      
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 any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, 8 West, New York, New York 10286.

"Covered Person" means any Holder or beneficial
owner of Capital Securities.

"Event of Default" means a default by the
Guarantor on any of its payments or other obligations under this Capital
Securities Guarantee.

"Guarantee Payments" means the following payments
or distributions, without duplication, with respect to the Capital Securities,
to the extent not paid or made by the Issuer:  (i) any accrued and unpaid
Distributions that are required to be paid on such Capital Securities to the
extent the Issuer shall have funds available therefor, (ii) the applicable
Redemption Price to the extent the Issuer has funds available therefor, with respect
to any Capital Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution, winding‐up or termination of the
Issuer (other than in connection with the distribution of Notes to the Holders
in exchange for Capital Securities as provided in the Declaration), the lesser
of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").  If an Event of
Default under, and as defined in, the Indenture has occurred and is continuing,
the rights of holders of the Common Securities to receive payments under the
Common Securities Guarantee are subordinated to the rights of Holders of
Capital Securities to receive Guarantee Payments under the Capital Securities
Guarantee.

"Holder" shall mean any holder, as registered on
the books and records of the Issuer, of any Capital Securities; provided,
however, that in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of
the Guarantor.

"Indemnified Person" means the Capital Securities
Guarantee Trustee, any Affiliate of the Capital Securities Guarantee Trustee,
or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Capital Securities
Guarantee Trustee.

"Indenture" means the Restated Indenture dated as
of November 1, 2001 between the Guarantor (the "Note Issuer") and The Bank of
New York, as trustee, together with any Board Resolution (as defined in the
Indenture) or any indenture supplemental thereto, pursuant to which certain
subordinated debt securities of the Note Issuer are to be issued to the
Property Trustee (as defined in the Declaration) of the Issuer.

"Majority in liquidation amount of the Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Capital Securities, voting separately as a class, of more than 50% of the
liquidation amount (including the stated amount that would be paid on
redemption, liquidation, dissolution or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Capital Securities.

                                                                                           
3

 

"Notes" means the series of junior subordinated
debt securities of the Guarantor designated the 61⁄4% Junior Subordinated Notes,
due 2055, held by the Property Trustee of the Issuer on behalf of the Trust.

"Officers' Certificate" means, with respect to
any Person, a certificate signed by an Authorized Officer of such Person.  Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Capital Securities Guarantee shall include:

(a)  a statement that each officer signing
the Officers' Certificate has read the covenant or condition and the definition
relating thereto;

(b)        a brief statement of the nature
and scope of the examination or investigation undertaken by each officer in
rendering the Officers' Certificate;

(c)        a statement that each such
officer has made such examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied with; and

(d)        a statement as to whether, in the
opinion of each such officer, such condition or covenant has been complied
with.

"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

"Responsible Officer" means, with respect to the
Capital Securities Guarantee Trustee, any officer within the Corporate Trust
Office of the Capital Securities Guarantee Trustee, including any vice
president, any assistant vice president, any assistant treasurer or other
officer of the Corporate Trust Office of the Capital Securities Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.

"Successor Capital Securities Guarantee Trustee"
means a successor Capital Securities Guarantee Trustee possessing the
qualifications to act as Capital Securities Guarantee Trustee under Section
4.1.

"Trust Indenture Act" means the Trust Indenture
Act of 1939, as amended.

"Trust Securities" means the Common Securities
and the Capital Securities.

                                                                                         
4

 

ARTICLE 2

TRUST INDENTURE ACT

SECTION 2.1  
Trust Indenture Act; Application.  

(a)        This
Capital Securities Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Capital Securities Guarantee
and shall, to the extent applicable, be governed by such provisions; and

(b)        If and to the
extent that any provision of this Capital Securities Guarantee limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.

SECTION 2.2  
Lists of Holders of Securities.  

            (a)        The
Guarantor shall provide the Capital Securities Guarantee Trustee with a list,
in such form as the Capital Securities Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Capital Securities
("List of Holders") as of such date, (i) within 10 days after each record date,
and (ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 10 days before
such List of Holders is given to the Capital Securities Guarantee Trustee; provided
that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Capital Securities Guarantee Trustee by the
Guarantor.  The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

(b)        The
Capital Securities Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.

SECTION 2.3  
Reports by the Capital Securities Guarantee Trustee.  

Within 60 days after March 31 of each year, the Capital
Securities Guarantee Trustee shall provide to the Holders of the Capital
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act.  The Capital Securities Guarantee Trustee also shall comply with
the requirements of Section 313(d) of the Trust Indenture Act.

SECTION 2.4  
Periodic Reports to Capital Securities Guarantee Trustee.  

The Guarantor shall provide to the Capital Securities
Guarantee Trustee such documents, reports and information, if any, as required
by Section 314 and the compliance certificate required by Section 314 of the
Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.

SECTION 2.5  
Evidence of Compliance with Conditions Precedent.  

The Guarantor shall provide to the Capital Securities
Guarantee Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Capital

                                                                                         
5

 Securities Guarantee that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act.  Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.

SECTION 2.6  
Events of Default; Waiver.  

The Holders of a Majority in liquidation amount of the
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default and its consequences.  Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

SECTION 2.7  
Event of Default; Notice.  

(a)        The Capital
Securities Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders
of the Capital Securities, notices of all Events of Default actually known to a
Responsible Officer of the Capital Securities Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided that
the Capital Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Capital Securities
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders.

(b)        The Capital
Securities Guarantee Trustee shall not be deemed to have knowledge of any Event
of Default unless a Responsible Officer of the Capital Securities Guarantee
Trustee shall have received written notice thereof, or unless a Responsible
Officer of the Capital Securities Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual knowledge thereof.

SECTION 2.8  
Conflicting Interests.  

The Declaration shall be deemed to be specifically
described in this Capital Securities Guarantee for the purposes of clause (i)
of the first proviso contained in Section 310(b) of the Trust Indenture Act.

ARTICLE 3

POWERS, DUTIES AND RIGHTS OF

CAPITAL SECURITIES GUARANTEE TRUSTEE

SECTION 3.1  
Powers and Duties of the Capital Securities Guarantee Trustee.  

(a)        This Capital
Securities Guarantee shall be held by the Capital Securities Guarantee Trustee
for the benefit of the Holders, and the Capital Securities Guarantee Trustee
shall not transfer this Capital Securities Guarantee to any Person except a Holder
of Capital Securities exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Capital Securities Guarantee Trustee on acceptance by such
Successor Capital Securities Guarantee Trustee of its appointment to act as
Successor Capital Securities Guarantee Trustee.  The right,

                                                                                         
6

 title and interest
of the Capital Securities Guarantee Trustee shall automatically vest in any
Successor Capital Securities Guarantee Trustee, and such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor Capital
Securities Guarantee Trustee.

(b)        If an Event of
Default actually known to a Responsible Officer of the Capital Securities
Guarantee Trustee has occurred and is continuing, the Capital Securities
Guarantee Trustee shall enforce this Capital Securities Guarantee for the
benefit of the Holders.

(c)        The Capital
Securities Guarantee Trustee, before the occurrence of any Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Capital Securities Guarantee, and no implied covenants shall be read into this
Capital Securities Guarantee against the Capital Securities Guarantee Trustee. 
In case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Capital Securities Guarantee Trustee, the Capital Securities Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Capital
Securities Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

(d)        No provision of
this Capital Securities Guarantee shall be construed to relieve the Capital
Securities Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

(i)         prior
to the occurrence of any Event of Default and after the curing or waiving of
all such Events of Default that may have occurred:

(A)       the
duties and obligations of the Capital Securities Guarantee Trustee shall be
determined solely by the express provisions of this Capital Securities
Guarantee, and the Capital Securities Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Capital Securities Guarantee, and no implied covenants or
obligations shall be read into this Capital Securities Guarantee against the
Capital Securities Guarantee Trustee; and

(B)       in the
absence of bad faith on the part of the Capital Securities Guarantee Trustee,
the Capital Securities Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Capital Securities Guarantee
Trustee and conforming to the requirements of this Capital Securities
Guarantee; but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Capital
Securities Guarantee Trustee, the Capital Securities Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Capital Securities Guarantee;

                                                                       
7

 

(ii)        the
Capital Securities Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Capital Securities
Guarantee Trustee, unless it shall be proved that the Capital Securities
Guarantee Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made;

(iii)       the
Capital Securities Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Capital Securities Guarantee
Trustee, or exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Capital Securities Guarantee; and

(iv)       no
provision of this Capital Securities Guarantee shall require the Capital
Securities Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Capital Securities Guarantee
Trustee shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Capital Securities Guarantee or indemnity, reasonably satisfactory to the
Capital Securities Guarantee Trustee, against such risk or liability is not
reasonably assured to it.

SECTION 3.2  
Certain Rights of Capital Securities Guarantee Trustee.  

(a)        Subject to the
provisions of Section 3.1:

(i)         The
Capital Securities Guarantee Trustee may rely conclusively, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.

(ii)        Any
direction or act of the Guarantor contemplated by this Capital Securities
Guarantee shall be sufficiently evidenced by an Officers' Certificate.

(iii)       Whenever,
in the administration of this Capital Securities Guarantee, the Capital
Securities Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Capital Securities Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor.

(iv)       The
Capital Securities Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or re-registration thereof).

                                                                             
8

 

(v)        The
Capital Securities Guarantee Trustee may consult with counsel of its selection,
and the advice or opinion of such counsel with respect to legal matters shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with
such advice or opinion.  Such counsel may be counsel to the Guarantor or any of
its Affiliates and may include any of its employees.  The Capital Securities
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Capital Securities Guarantee from any
court of competent jurisdiction.

(vi)       The
Capital Securities Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Capital Securities Guarantee
at the request or direction of any Holder, unless such Holder shall have
provided to the Capital Securities Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Capital Securities Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Securities Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Capital Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Capital
Securities Guarantee.

(vii)      The
Capital Securities Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Capital Securities Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.

(viii)      The
Capital Securities Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the Capital Securities Guarantee
Trustee shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder.

(ix)       Any
action taken by the Capital Securities Guarantee Trustee or its agents
hereunder shall bind the Holders of the Capital Securities, and the signature
of the Capital Securities Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action.  No third party shall be
required to inquire as to the authority of the Capital Securities Guarantee
Trustee to so act or as to its compliance with any of the terms and provisions
of this Capital Securities Guarantee, both of which shall be conclusively
evidenced by the Capital Securities Guarantee Trustee's or its agent's taking
such action.

(x)        Whenever
in the administration of this Capital Securities Guarantee the Capital
Securities Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Capital

                                                                                  
9

 Securities Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Securities, (ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions.

(xi)       The
Capital Securities Guarantee Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Capital Securities Guarantee.

(b)        No provision of
this Capital Securities Guarantee shall be deemed to impose any duty or
obligation on the Capital Securities Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the Capital
Securities Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation.  No permissive power or authority available
to the Capital Securities Guarantee Trustee shall be construed to be a duty.

SECTION 3.3  
Not Responsible for Recitals or Issuance of Capital Securities
Guarantee.  

The recitals contained in this Capital Securities
Guarantee shall be taken as the statements of the Guarantor, and the Capital
Securities Guarantee Trustee does not assume any responsibility for their
correctness.  The Capital Securities Guarantee Trustee makes no representation
as to the validity or sufficiency of this Capital Securities Guarantee.

ARTICLE 4

CAPITAL SECURITIES GUARANTEE TRUSTEE

SECTION 4.1  
Capital Securities Guarantee Trustee; Eligibility.  

(a)        There shall at all
times be a Capital Securities Guarantee Trustee which shall:

(i)         not
be an Affiliate of the Guarantor; and

(ii)        be a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Exchange Commission to
act as a trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority.  If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.

                                                                               
10

 

(b)        If at any time the
Capital Securities Guarantee Trustee shall cease to be eligible to so act under
Section 4.1(a), the Capital Securities Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).

       (c)        If the Capital Securities Guarantee
Trustee has or shall acquire  any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the Capital Securities Guarantee
Trustee and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.

SECTION 4.2  
Appointment, Removal and Resignation of Capital Securities Guarantee
Trustee.  

(a)        Subject to Section
4.2(b), the Capital Securities Guarantee Trustee may be appointed or removed
without cause at any time by the Guarantor except during an Event
of Default.

(b)        The Capital
Securities Guarantee Trustee shall not be removed in accordance with Section
4.2(a) until a Successor Capital Securities Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Capital Securities Guarantee Trustee and delivered to the
Guarantor.

(c)        The Capital
Securities Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Capital
Securities Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Capital Securities Guarantee Trustee
has been appointed and has accepted such appointment by instrument in writing
executed by such Successor Capital Securities Guarantee Trustee and delivered
to the Guarantor and the resigning Capital Securities Guarantee Trustee.

(d)        If no Successor
Capital Securities Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 4.2 within 60 days after delivery of an
instrument of removal or resignation, the Capital Securities Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Capital Securities Guarantee Trustee.  Such court
may thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Capital Securities Guarantee Trustee.

(e)        No Capital
Securities Guarantee Trustee shall be liable for the acts or omissions to act
of any Successor Capital Securities Guarantee Trustee.

(f)         Upon termination
of this Capital Securities Guarantee or removal or resignation of the Capital
Securities Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall
pay to the Capital Securities Guarantee Trustee all amounts accrued to the date
of such termination, removal or resignation.

                                                                                         
11

 

ARTICLE 5

GUARANTEE

SECTION 5.1  
Guarantee.  

The Guarantor irrevocably
and unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set‐off or counterclaim that the
Issuer may have or assert.  The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.

SECTION 5.2  
Waiver of Notice and Demand.  

The Guarantor hereby waives notice of acceptance of this
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.

SECTION 5.3  
Obligations Not Affected.  

The obligations, covenants, agreements and duties of the
Guarantor under this Capital Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:

(a)        the release or
waiver, by operation of law or otherwise, of the performance or observance by
the Issuer of any express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or observed by the Issuer;

(b)        the extension of
time for the payment by the Issuer of all or any portion of the Distributions,
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities (other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the Notes);

(c)        any failure,
omission, delay or lack of diligence on the part of the Holders to enforce,
assert or exercise any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Capital Securities, or any action on the
part of the Issuer granting indulgence or extension of any kind;

(d)        the voluntary or
involuntary liquidation, dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the Issuer;

(e)        any invalidity of,
or defect or deficiency in, the Capital Securities;

                                                                                
12

 

(f)         any failure or
omission to receive any regulatory approval or consent required in connection
with the Common Securities or Capital Securities, including the failure to
receive any approval of the Board of Governors of the Federal Reserve System
required in connection with the Capital Securities;

(g)        the settlement or
compromise of any obligation guaranteed hereby or hereby incurred; or

(h)        any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the intent of this Section 5.3
that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.

There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.

SECTION 5.4  
Rights of Holders.  

(a)        The
Holders of a Majority in liquidation amount of the Securities have the right to
direct the time, method and place of conducting of any proceeding for any
remedy available to the Capital Securities Guarantee Trustee in respect of this
Capital Securities Guarantee or exercising any trust or power conferred upon
the Capital Securities Guarantee Trustee under this Capital Securities
Guarantee.

(b)        If the Capital
Securities Guarantee Trustee fails to enforce such Capital Securities
Guarantee, any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce the Capital Securities Guarantee
Trustee's rights under this Capital Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Capital Securities
Guarantee Trustee or any other person or entity.  The Guarantor waives any
right or remedy to require that any action be brought first against the Issuer
or any other person or entity before proceeding directly against the Guarantor.

SECTION 5.5  
Guarantee of Payment.  

This Capital Securities Guarantee creates a guarantee of
payment and not of collection.

SECTION 5.6  
Subrogation.  

The Guarantor shall be subrogated to all (if any) rights
of the Holders against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Capital Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Capital Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Capital Securities Guarantee.  If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the
Holders.

                                                                                      
13

 

SECTION 5.7  
Independent Obligations.  

The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with respect to the
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.

ARTICLE 6

LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1  
Limitation of Transactions.  

So long as any Capital Securities remain outstanding, if
there shall have occurred and be continuing an Event of Default under this
Capital Securities Guarantee, an Event of Default or a Nonpayment under the
Declaration or during an Extended Interest Payment Period (as defined in the
Indenture), then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of its common stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor's capital stock
or the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, or (iii)
the purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to an acquisition or the conversion or exchange provisions of such
capital stock of the Guarantor or the security being converted or exchanged) or
make any guarantee payments with respect to the foregoing or (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by the Guarantor which rank pari passu with or junior to the Notes.

SECTION 6.2  
Ranking.  

This Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities, including contingent liabilities,
of the Guarantor, (ii) pari passu with the most senior preferred or preference
stock now or hereafter issued by the Guarantor and with any guarantee now or
hereafter entered into by the Guarantor in respect of any preferred securities
(including trust preferred securities) or preference stock of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock.

                                                                                         
14

 

ARTICLE 7

TERMINATION

SECTION 7.1  
Termination.  

This Capital Securities
Guarantee shall terminate upon (i) full payment of the Redemption Price of all
Capital Securities, (ii) upon the distribution of the Notes to the Holders of
all of the Capital Securities, or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation or dissolution of
the Issuer.  Notwithstanding the foregoing, this Capital Securities Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any Holder must restore payment of any sums paid under the Capital
Securities or under this Capital Securities Guarantee.

ARTICLE 8

INDEMNIFICATION

SECTION 8.1  
Exculpation.  

            (a)        No
Indemnified Person shall be liable, responsible or accountable in damages or
otherwise to the Guarantor or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Capital Securities
Guarantee and in a manner that such Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Indemnified Person by
this Capital Securities Guarantee or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.

            (b)        An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Guarantor and upon such information, opinions, reports or
statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Capital Securities might properly be paid.

SECTION 8.2  
Indemnification.  

The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against, any and all
loss, liability, damage, claim or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.  The
obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Capital Securities Guarantee.

                                                                                       
15

 

ARTICLE 9

MISCELLANEOUS

SECTION 9.1  
Successors and Assigns.  

All guarantees and
agreements contained in this Capital Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Capital Securities then
outstanding.

SECTION 9.2  
Amendments.  

Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Capital Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all the outstanding Capital Securities.  The provisions
of Section 12.2 of the Declaration with respect to meetings of holders of the
Securities apply to the giving of such approval.

SECTION 9.3  
Notices.  

All notices provided for in this Capital Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:

            (a)        If
given to the Capital Securities Guarantee Trustee, at the Capital Securities
Guarantee Trustee's mailing address set forth below (or such other address as
the Capital Securities Guarantee Trustee may give notice of to the Holders):

The Bank of
New York

                                    101 Barclay
Street, 8 West

                                    New York,
New York 10286

                                    Attention: 
Corporate Trust Trustee Administration

                                    Facsimile: 
(904) 645-1921

(b)        If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Capital Securities):

Bank of
America Corporation

                                    Bank of
America Corporate Center

                                    100 North
Tryon Street

                                    NC1-007-07-06

                                    Charlotte,
North Carolina 28255

                                    Attention: 
Corporate Treasury-Securities Administration

                                     Facsimile:  (704) 386-0270

                                                                                  
16

 

(c)        If
given to any Holder of Capital Securities, at the address set forth on the
books and records of the Issuer.

All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

SECTION 9.4  
Benefit.  

This Capital Securities Guarantee is solely for the
benefit of the Holders of the Capital Securities and, subject to Section
3.1(a), is not separately transferable from the Capital Securities.

SECTION 9.5  
Governing Law.  

THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

[Signature
page follows.]

17

THIS CAPITAL SECURITIES GUARANTEE is executed as of the
day and year first above written.

BANK OF AMERICA CORPORATION, as
Guarantor

By: /s/ KAREN A. GOSNELL

Name:    Karen A. Gosnell

Title:     Senior Vice President

THE BANK OF NEW YORK, as Capital
Securities Guarantee Trustee

By:  /s/ VAN K. BROWN

Name: Van K. Brown

Title:  Vice President

 

                                                                                          
18Exhibit 10.16

Execution Copy

        This CREDIT AGREEMENT is entered into as of December 21,
2005, by and among (i) MINRAD, INC., a Delaware corporation (herein, together
with its successors and assigns, the "Borrower"), (ii) MINRAD
INTERNATIONAL, INC., a Delaware corporation (herein, together with its
successors and assigns, "Holdings"), and (iii) KEYBANK NATIONAL
ASSOCIATION (herein, together with its successors and assigns, the "Lender").

RECITALS:

        (1) The Borrower has requested that the Lender extend credit
to the Borrower to refinance certain of the Borrower's existing indebtedness and
to provide working capital and funds for other lawful purposes.

        (2) Subject to and upon the terms and conditions set forth
herein, the Lender is willing to extend credit and make available to the
Borrower the credit facility provided for herein for the foregoing purposes.

AGREEMENT:

        In consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS AND TERMS

        Section 1.01 Certain Defined Terms.
As used herein, the following terms shall have the meanings herein specified
unless the context otherwise requires:

        "Account" means any "account" as such term is now or
hereafter defined in the UCC.

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

        "Acquisition" means any transaction or series of
related transactions for the purpose of or resulting, directly or indirectly, in
(i) the acquisition of all or substantially all of the assets of any Person, or
any business or division of any Person, (ii) the acquisition or ownership of in
excess of 50% of the Equity Interest of any Person, or (iii) the acquisition of
another Person by a merger, consolidation, amalgamation or any other combination
with such Person. 

        "Additional Security Document" has the meaning
provided in Section 6.10(a).

        "Affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with such Person. A Person shall be deemed to control
a second Person if such first Person possesses, directly or indirectly, the
power (i) to vote 10% or more of the securities having ordinary voting power for
the election of directors or managers of such second Person or (ii) to direct or
cause the direction of the management and policies of such second Person,
whether through the ownership of voting securities, by contract or otherwise.
For the avoidance of doubt, any director or officer (or person functioning in a
substantially similar role) of Holdings and/or its Subsidiaries shall be deemed
an Affiliate of Holdings and its Subsidiaries. Notwithstanding the foregoing,
the Lender shall not be considered an Affiliate of Holdings or any of its
Subsidiaries.

        "Agreement" means this Credit Agreement, as the same
may from time to time be amended, restated, supplemented or otherwise modified.

        "Anti-Terrorism Law" means the USA Patriot Act or any
other law pertaining to the prevention of future acts of terrorism, in each case
as such law may be amended from time to time.

        "Approved Bank" has the meaning provided in subpart
(ii) of the definition of "Cash Equivalents."

        "Asset Sale" means the sale, lease, transfer or other
disposition (including by means of Sale and Lease-Back Transactions, and by
means of mergers, consolidations, amalgamations and liquidations of a
corporation, partnership or limited liability company of the interests therein
of Holdings or any Subsidiary) by Holdings or any Subsidiary to any Person of
any of Holdings' or such Subsidiary's respective assets, provided that
the term Asset Sale specifically excludes any sales, transfers or other
dispositions of inventory, or obsolete, worn-out or excess furniture, fixtures,
equipment or other property, real or personal, tangible or intangible, in each
case in the ordinary course of business.

        "Authorized Officer" means, with respect to any Credit
Party or any Subsidiary of a Credit Party, any of the following officers of such
Credit Party or Subsidiary: the Chairman, the President, the Chief Executive
Officer, the Chief Financial Officer, the Treasurer, the Assistant Treasurer or
the Controller, or, such other Person as is authorized in writing to act on
behalf of such Credit Party or such Subsidiary and is acceptable to the Lender.
Unless otherwise qualified, all references herein to an Authorized Officer shall
refer to an Authorized Officer of the Borrower.

        "Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto, as hereafter amended.

        "Base Rate" means, for any day, a fluctuating interest
rate per annum as shall be in effect from time to time which rate per annum
shall at all times be equal to the greater of (i) the rate of interest
established by KeyBank National Association, from time to time, as its "prime
rate," whether or not publicly announced, which interest rate may or may not be
the lowest rate charged by it for commercial loans or other extensions of
credit; or (ii) 1/2 of 1% in excess of the Federal Funds Effective Rate in
effect from time to time, determined one Business Day in arrears.

        "Borrower" has the meaning specified in the first
paragraph of this Agreement.

        "Borrower Guaranteed Obligations" has the meaning
provided in Section 2.10(a).

        "Borrowing" means the incurrence of a Revolving Loan
by the Borrower from the Lender.

        "Borrowing Base" means, at any time, the sum of:

(i) 60% of Eligible Accounts Receivable at such time,
		plus

		
		(ii) 35% of Eligible Finished Goods at such time, 
		plus

		
		(iii) 35% of Eligible Raw Materials at such time, 
		plus

		
		(iv) the lesser of (A) 35% of Eligible
		Work-In-Process and (B) $500,000, plus

		2

		
		
(v) the lesser of (A) 50% of Eligible Real Property
		and Equipment based on the most current appraisals in form and substance
		satisfactory to the Lender at such time and (B) $1,000,000, minus

		
		(vi) Reserves imposed by the Lender at such time.

	

The Lender may, in its Permitted Discretion, reduce the
advance rate set forth above or reduce one or more of the other elements used in
computing the Borrowing Base. Any such change shall become effective immediately
upon written notice from the Lender to the Borrower for purposes of calculating
the Borrowing Base. 

        "Borrowing Base Certificate" means a certificate,
signed by an Authorized Officer of the Borrower, substantially in the form of 
Exhibit D or another form which is acceptable to the Lender in its sole
discretion.

        "Business Day" means any day other than Saturday,
Sunday or any other day on which commercial banks in Cleveland, Ohio are
authorized or required by law to close.

        "Capital Distribution" means a payment made, liability
incurred or other consideration given for the purchase, acquisition, repurchase,
redemption or retirement of any Equity Interest of Holdings or any of its
Subsidiaries or as a dividend, return of capital or other distribution in
respect of any of Holdings' or such Subsidiary's Equity Interest.

        "Capital Lease" as applied to any Person means any
lease of any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, should be accounted for as a capital lease on the
balance sheet of that Person.

        "Capitalized Lease Obligations" means all obligations
under Capital Leases of Holdings or any of its Subsidiaries, without
duplication, in each case taken at the amount thereof accounted for as
liabilities identified as "capital lease obligations" (or any similar words) on
a consolidated balance sheet of Holdings and its Subsidiaries prepared in
accordance with GAAP.

        "Cash Dividend" means a Capital Distribution of
Holdings payable in cash to the shareholders of Holdings with respect to any
class or series of Equity Interest of Holdings.

        "Cash Equivalents" means any of the following:

        (i) securities issued or directly and fully
		guaranteed or insured by the United States of America or any agency or
		instrumentality thereof (provided that the full faith and credit
		of the United States of America is pledged in support thereof) having
		maturities of not more than one year from the date of acquisition;

		        (ii) U.S. dollar denominated time deposits,
		certificates of deposit and bankers' acceptances of (x) the Lender, (y)
		any domestic commercial bank of recognized standing having capital and
		surplus in excess of $500,000,000 or (z) any bank (or the parent company
		of such bank) whose short-term commercial paper rating from S&P is at
		least A-1, A-2 or the equivalent thereof or from Moody's is at least
		P-1, P-2 or the equivalent thereof (any such bank, an "Approved Bank"),
		in each case with maturities of not more than 180 days from the date of
		acquisition;

		3

		
		
        (iii) commercial paper issued by the Lender or any
		Approved Bank or by the parent company of the Lender or any Approved
		Bank and commercial paper issued by, or guaranteed by, any industrial or
		financial company with a short-term commercial paper rating of at least
		A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
		thereof by Moody's, or guaranteed by any industrial company with a
		long-term unsecured debt rating of at least A or A2, or the equivalent
		of each thereof, from S&P or Moody's, as the case may be, and in each
		case maturing within 180 days after the date of acquisition;

		        (iv) fully collateralized repurchase agreements
		entered into with the Lender or any Approved Bank having a term of not
		more than 30 days and covering securities described in clause (i) above;

		        (v) investments in money market funds substantially
		all the assets of which are comprised of securities of the types
		described in clauses (i) through (iv) above;

		        (vi) investments in money market funds access to
		which is provided as part of "sweep" accounts maintained with the Lender
		or an Approved Bank;

		        (vii) investments in industrial development revenue
		bonds that (A) "re-set" interest rates not less frequently than
		quarterly, (B) are entitled to the benefit of a remarketing arrangement
		with an established broker dealer, and (C) are supported by a direct pay
		letter of credit covering principal and accrued interest that is issued
		by an Approved Bank; and

		        (viii) investments in pooled funds or investment
		accounts consisting of investments of the nature described in the
		foregoing clause (vii).

	

        "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as the same may be amended
from time to time, 42 U.S.C. § 9601 et seq.

        "CFC" has the meaning provided in Section 6.09.

        "Change of Control" means (i) the acquisition of, or,
if earlier, the shareholder or director approval of the acquisition of,
ownership or voting control, directly or indirectly, beneficially or of record,
on or after the Closing Date, by any Person or group (within the meaning of Rule
13d-3 of the SEC under the 1934 Act, as then in effect), of Equity Interests
representing more than 20% of the aggregate ordinary Voting Power represented by
the issued and outstanding Equity Interests of Holdings; (ii) the occupation of
a majority of the seats (other than vacant seats) on the board of directors of
Holdings by Persons who were neither (A) nominated by the board of directors of
Holdings nor (B) appointed by directors so nominated; (iii) the failure of
Holdings to own, directly or indirectly, 100% of the outstanding shares of the
Borrower; (iv) the failure of the Borrower to own, directly or indirectly, 100%
of the outstanding shares of any of its Subsidiaries; or (v) the occurrence of a
change in control, or other similar provision, under or with respect to any
Material Indebtedness Agreement.

        "Charges" has the meaning provided in Section 10.21.

        "Claims" has the meaning set forth in the definition
of "Environmental Claims."

        "Closing Date" means December 21, 2005.

        "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code 

4

as in effect
at the Closing Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.

        "Collateral" means the "Collateral" as defined in the
Security Agreement and includes, for greater certainty, Mortgaged Real Property,
together with any other collateral (whether real property or personal property)
covered by any Security Document.

        "Collateral Access Agreement" means a landlord's
waiver, mortgagee's waiver or other agreement, each in form and substance
satisfactory to the Lender, between the Lender and any third party (including
any bailee, assignee, customs broker, or other similar Person) in possession of
any Collateral or any landlord of any Credit Party for any real property where
any Collateral is located and providing, among other things, for waiver of Lien,
certain notices and opportunity to cure and access to Collateral, as the same
may from time to time be amended, restated or otherwise modified.

        "Collateral Assignment" has the meaning specified in
the Security Agreement.

        "Commercial Letter of Credit" means any letter of
credit or similar instrument issued for the purpose of providing the primary
payment mechanism in connection with the purchase of materials, goods or
services in the ordinary course of business.

        "Commitment Fee" has the meaning provided in Section
2.06(a).

        "Commodities Hedge Agreement" means a commodities
contract purchased by Holdings or any of its Subsidiaries in the ordinary course
of business, and not for speculative purposes, with respect to raw materials
necessary to the manufacturing or production of goods in connection with the
business of Holdings and its Subsidiaries.

        "Compliance Certificate" has the meaning provided in
Section 6.01(c).

        "Confidential Information" has the meaning provided in
Section 10.13(b).

        "Consideration" means, in connection with an
Acquisition, the aggregate consideration paid, including borrowed funds, cash,
the issuance of securities or notes, the assumption or incurring of liabilities
(direct or contingent), the payment of consulting fees (excluding any fees
payable to any investment banker in connection with such Acquisition) or fees
for a covenant not to compete and any other consideration paid for the purchase.

        "Consolidated Depreciation and Amortization Expense"
means, for any period, all depreciation and amortization expenses of Holdings
and its Subsidiaries, all as determined for Holdings and its Subsidiaries on a
consolidated basis in accordance with GAAP.

        "Consolidated EBITDA" means, for any period,
Consolidated Net Income for such period, plus (i) the sum of the amounts
for such period included in determining such Consolidated Net Income of
(A) Consolidated Interest Expense, (B) Consolidated Income Tax Expense, (C)
Consolidated Depreciation and Amortization Expense, and (D) extraordinary and
other non-recurring non-cash losses and charges, less (ii) gains on sales
of assets and other extraordinary gains and other non-recurring non-cash gains,
all as determined for Holdings and its Subsidiaries on a consolidated basis in
accordance with GAAP; provided, however, that Consolidated EBITDA for any
Testing Period shall (y) include the EBITDA for any Person or business unit that
has been acquired by Holdings or any of its Subsidiaries for any portion of such
Testing Period prior to the date of acquisition, so long as such EBITDA has been
verified by appropriate audited financial statements or other financial
statements acceptable to the Lender 

5

and (z) exclude the EBITDA for any Person or
business unit that has been disposed of by Holdings or any of its Subsidiaries,
for the portion of such Testing Period prior to the date of disposition.

        "Consolidated Income Tax Expense" means, for any
period, all provisions for taxes based on the net income of Holdings or any of
its Subsidiaries (including, without limitation, any additions to such taxes,
and any penalties and interest with respect thereto), all as determined for
Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

        "Consolidated Interest Expense" means, for any period,
total interest expense (including, without limitation, that which is capitalized
and that which is attributable to Capital Leases or Synthetic Leases) of
Holdings and its Subsidiaries on a consolidated basis with respect to all
outstanding Indebtedness of Holdings and its Subsidiaries.

        "Consolidated Net Income" means for any period, the
net income (or loss) of Holdings and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with GAAP.

        "Consolidated Net Worth" means at any time, all
amounts that, in conformity with GAAP, would be included under the caption
"total stockholders' equity" (or any like caption) on a consolidated balance
sheet of Holdings at such time.

        "Control Agreements" has the meaning set forth in the
Security Agreement.

        "Credit Event" means the making of any Borrowing or
any LC Issuance.

        "Credit Party" means Holdings, the Borrower or any
other Guarantor.

        "Creditor" means the Lender and the Designated Hedge
Creditors, and the respective successors and assigns of each of the foregoing

        "Default" means any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.

        "Default Rate" means a rate equal to 3% above the Base
Rate.

        "Designated Hedge Agreement" means any Hedge Agreement
to which Holdings or any of its Subsidiaries is a party and as to which the
Lender or any of its Affiliates is a counterparty.

        "Designated Hedge Creditor" means the Lender or
Affiliate of the Lender that participates as a counterparty to any Credit Party
pursuant to any Designated Hedge Agreement.

        "Document" means any "document" as such term is now or
hereafter defined in the UCC.

        "Dollars," "U.S. Dollars" and the sign "$"
each means lawful money of the United States.

        "Domestic Subsidiary" means any Subsidiary organized
under the laws of the United States of America, any State thereof, or the
District of Columbia.

        "EBITDA" means, with respect to any Person for any
period, the net income for such Person for such period plus the sum of
the amounts for such period included in determining such net income in respect
of (i) interest expense, (ii) income tax expense, and (iii) depreciation and
amortization expense, in each case as determined in accordance with GAAP.

6

        "Eligible Accounts Receivable" means, at any time, the
Accounts of the Borrower that the Lender determines in its Permitted Discretion
are eligible as the basis for extensions of Revolving Loans hereunder. Without
limiting the Lender's Permitted Discretion provided herein, Eligible Accounts
Receivable shall not include any Account:

        (a) that is not subject to a first priority perfected
security interest in favor of the Lender;

        (b) that is subject to any Lien other than (i) a Lien in
favor of the Lender and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Lender;

        (c) with respect to which the scheduled due date is more than
120 days after the original invoice date, is unpaid more than 120 days, or 125
days in the case of Accounts from Account Debtors located in Brazil, after the
date of the original invoice therefor or more than 120 days after the original
due date, or which has been written of the books of the Borrower or otherwise
designated as uncollectible;

        (d) that is owing by an Account Debtor for which more than
25% of the Accounts owing from such Account Debtor and its Affiliates are
ineligible hereunder;

        (e) that is owing by an Account Debtor to the extent the
aggregate amount of Accounts owing from such Account Debtor and its Affiliates
to the Borrower or any of its Subsidiaries exceeds 25% of the aggregate Eligible
Accounts Receivable (for the avoidance of doubt, the Accounts of such Account
Debtor up to 25% shall be Eligible Accounts Receivable);

        (f) with respect to which any covenant, representation, or
warranty contained in this Agreement or in the Security Agreement has been
breached or is not true;

        (g) which (i) does not arise from the sale of goods or
performance of services in the ordinary course of business, (ii) is not
evidenced by an invoice or other documentation reasonably satisfactory to the
Lender which has been sent to the Account Debtor, (iii) represents a progress
billing, (iv) is contingent upon the Borrower's or any of its Subsidiary's
completion of any further performance, (v) represents a sale on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval, consignment,
cash-on-delivery or any other repurchase or return basis or (vi) relates to
payments of interest;

        (h) for which the goods giving rise to such Account have not
been shipped to the Account Debtor but only to the extent that title has not
passed to the Account Debtor or for which the services giving rise to such
Account have not been performed by the Borrower or any of its Subsidiaries;

        (i) with respect to which any check or other instrument of
payment has been returned uncollected for any reason;

        (j) except with respect to Accounts owing by any Account
Debtor arising after such Account Debtor becomes the subject of a bankruptcy
case or similar insolvency proceeding, any Account that is owed by an Account
Debtor that has (i) applied for, suffered, or consented to the appointment of
any receiver, custodian, trustee, or liquidator of its assets, (ii) had
possession of all or a material part of its property taken by any receiver,
custodian, trustee or liquidator, (iii) filed, or had filed against it, any
request or petition for liquidation, reorganization, arrangement, adjustment of
debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case
under any state or federal bankruptcy laws, (iv) admitted in writing its
inability, or is generally unable to, pay its debts as they become due, (v)
become insolvent, or (vi) ceased operation of its business;

7

        (k) that is owed by any Account Debtor that has sold all or
substantially all of its assets, unless upon such sale, the Person that acquires
such assets expressly assumes in writing the due and punctual payment of the
Account;

        (l) that is owed in any currency other than U.S. Dollars or
Euros;

        (m) that is owed by (i) the government (or any department,
agency, public corporation, or instrumentality thereof) of any country other
than the United States unless such Account is backed by a letter of credit
acceptable to the Lender that has been assigned to the Lender or under which the
Lender is the beneficiary, or (ii) the government of the United States, or any
department, agency, public corporation, or instrumentality thereof, unless the
Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq.
and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien
of the Lender in such Account have been complied with to the Lender's
satisfaction;

        (n) that is owed by (i) any Affiliate, employee, officer,
director or agent of Holdings or any of its Subsidiaries, (ii) any stockholder
of the Borrower or its Subsidiaries or (iii) any stockholder owning 5% or more
of the stock of Holdings;

        (o) that, for any Account Debtor, exceeds a credit limit
determined by the Lender, to the extent of such excess;

        (p) that is owed by an Account Debtor or any Affiliate of
such Account Debtor to which Holdings or any of its Subsidiaries is indebted,
but only to the extent of such indebtedness or is subject to any security,
deposit, progress payment, retainage or other similar advance made by or for the
benefit of an Account Debtor, in each case to the extent thereof;

        (q) that is subject to any counterclaim, deduction, defense,
setoff or dispute;

        (r) that is evidenced by any promissory note, chattel paper,
or instrument;

        (s) that is owed by an Account Debtor located in any
jurisdiction which requires filing of a "Notice of Business Activities Report"
or other similar report in order to permit the Borrower or any of its
Subsidiaries to seek judicial enforcement in such jurisdiction of payment of
such Account, unless the Borrower or any such Subsidiary has filed such report
or qualified to do business in such jurisdiction;

        (t) with respect to which Holdings or any of its Subsidiaries
has made any agreement with the Account Debtor for any reduction thereof, other
than discounts and adjustments given in the ordinary course of business or any
Account which is partially paid and the Borrower created a new receivable for
the unpaid portion of such Account; 

        (u) that does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal, state or
local, including without limitation the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z;

        (v) that is for goods that have been sold under a purchase
order or pursuant to the terms of a contract or other agreement or understanding
(written or oral) that indicates or purports that any Person other than the
Borrower has or has had an ownership interest in such goods, or which indicates
any party other than the Borrower as payee or remittance party;

        (w) that was created on cash on delivery terms; or

8

        (x) that the Lender determines may not be paid by reason of
the Account Debtor's inability to pay or which the Lender otherwise determines
in its Permitted Discretion is unacceptable.

        If an Account which was previously an Eligible Accounts
Receivable ceases to be an Eligible Accounts Receivable hereunder, the Borrower
shall notify the Lender thereof (i) within three Business Days of the date the
Borrower has obtained knowledge thereof if any such Account is in excess of
$25,000 in the aggregate and (ii) on and at the time of submission to the Lender
of the next Borrowing Base Certificate in all other cases. In determining the
amount of an Eligible Accounts Receivable, the face amount of an Account shall
be reduced by, without duplication, to the extent not reflected in such face
amount, (i) the amount of all accrued and actual discounts, claims, credits or
credits pending, promotional program allowances, price adjustments, finance
charges or other allowances (including any amount that the Borrower may be
obligated to rebate to an Account Debtor pursuant to the terms of any agreement
or understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by Borrower to reduce
the amount of such Account.

        "Eligible Finished Goods" means, at any time, Eligible
Inventory constituting finished goods to be sold by the Borrower in the ordinary
course of business of the Borrower, excluding Eligible Raw Materials.

        "Eligible Inventory" means, at any time, the Inventory
of the Borrower which the Lender determines in its Permitted Discretion is
eligible as the basis for the extension of Revolving Loans, and the issuance of
Letters of Credit hereunder. Without limiting the Lender's discretion provided
herein, Eligible Inventory shall not include any Inventory:

        (a) that is not subject to a first priority perfected Lien in
favor of the Lender;

        (b) that is subject to any Lien other than (i) a Lien in
favor of the Lender and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Lender;

        (c) that is, in the Lender's reasonable opinion, slow moving,
obsolete, unmerchantable, defective, unfit for sale, not salable at prices
approximating at least the cost of such Inventory in the ordinary course of
business or unacceptable due to age, type, category and/or quantity;

        (d) with respect to which any covenant, representation, or
warranty contained in this Agreement or the Security Agreement has been breached
or is not true and which does not conform to all standards imposed by any
Governmental Authority;

        (e) in which any Person other than the Borrower shall (i)
have any direct or indirect ownership, interest or title to such Inventory or
(ii) be indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein;

        (f) which constitutes spare or replacement parts,
subassemblies, packaging and shipping material, manufacturing supplies, samples,
prototypes, displays or display items, bill-and-hold goods, goods that are
returned or marked for return, repossessed goods, defective or damaged goods,
goods held on consignment, or goods which are not of a type held for sale in the
ordinary course of business;

        (g) which is not located in the U.S. or is in transit with a
common carrier from vendors or suppliers;

        (h) that is located in any locations leased by the Borrower
unless the lessor has delivered to the Lender a Collateral Access Agreement;

9

        (i) that is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document, unless such warehouseman or bailee has delivered to the Lender a
Collateral Access Agreement and such other documentation as the Lender may
require;

        (j) that is being processed offsite at a third party location
or outside processor, or is in transit to or from said third party location or
outside processor;

        (k) that is a discontinued product or component thereof which
is the subject of a consignment by the Borrower as consignor;

        (l) that is perishable;

        (m) that contains or bears any intellectual property rights
licensed by the Borrower unless the Lender is satisfied that it may sell or
otherwise dispose of such Inventory without (i) infringing on the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to the sale of such Inventory under the current licensing agreement;

        (n) that is not reflected in a current perpetual inventory
report of the Borrower; or

        (o) that the Lender otherwise reasonably determines is
unacceptable for any reason whatsoever.

        In the event that Inventory which was previously Eligible
Inventory ceases to be Eligible Inventory hereunder, the Borrower shall notify
the Lender thereof (i) within three Business Days of the date the Borrower has
obtained knowledge thereof if any such Inventory is in excess of $25,000 in the
aggregate and (ii) on and at the time of submission to the Lender of the next
Borrowing Base Certificate in all other cases.

        "Eligible Raw Materials" means, at any time, Eligible
Inventory constituting raw materials used or consumed by the Borrower in the
ordinary course of business in the manufacture or production of other inventory,
excluding Eligible Finished Goods.

        "Eligible Real Property and Equipment" means the
Mortgaged Real Property located in Bethlehem, Pennsylvania and all of Borrower's
equipment located thereon.

        "Eligible Work-In-Process" means, at any time,
Eligible Inventory constituting work-in-process, excluding Eligible Finished
Goods and Eligible Raw Materials.

        "Environmental Claims" means any and all global,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "Claims"), including, without limitation, (i) any and all
Claims by any Governmental Authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.

10

        "Environmental Law" means any applicable Federal,
state, foreign or local statute, law, rule, regulation, ordinance, code, binding
and enforceable guideline, binding and enforceable written policy and rule of
common law now or hereafter in effect and in each case as amended, and any
binding and enforceable judicial or global interpretation thereof, including any
judicial or global order, consent, decree or judgment issued to or rendered
against Holdings or any of its Subsidiaries relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
§ 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq., the
Hazardous Material Transportation Act, 49 U.S.C. § 5101 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the
extent it regulates occupational exposure to Hazardous Materials); and any state
and local or foreign counterparts or equivalents, in each case as amended from
time to time.

        "Equity Interest" means, with respect to any Person,
any and all shares, interests, participations or other equivalents, including
membership interests (however designated, whether voting or non-voting) of
equity of such Person, including, if such Person is a partnership, partnership
interests (whether general or limited) or any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership, but in no event will Equity
Interest include any debt securities convertible or exchangeable into equity
unless and until actually converted or exchanged.

        "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the Closing Date and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.

        "ERISA Affiliate" means each Person (as defined in
Section 3(9) of ERISA), which together with Holdings or a Subsidiary of
Holdings, would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) or 4001(b)(i)
of ERISA or (ii) as a result of Holdings or a Subsidiary of Holdings being or
having been a general partner of such Person.

        "Event of Default" has the meaning provided in Section
8.01.

        "Federal Funds Effective Rate" means, for any period,
a fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Lender from three
Federal Funds brokers of recognized standing selected by the Lender.

        "Fee Letter" means the Fee Letter dated as of November
9, 2005 between the Borrower and the Lender.

        "Fees" means all amounts payable pursuant to, or
referred to in, Section 2.06.

        "Financial Projections" has the meaning provided in
Section 5.07(b).

        "Foreign Subsidiary" means any Subsidiary that is not
a Domestic Subsidiary.

11

        "GAAP" means generally accepted accounting principles
in the United States of America as in effect from time to time.

        "Governmental Authority" means any nation or
government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, global tribunal, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or global powers or functions of or pertaining to government.

        "Guarantor" means Holdings and any other person that
executes and delivers a Guaranty to the Lender. 

        "Guaranty" means any of the following: (i) the
guaranty by the Borrower in Section 2.10, (ii) the guaranty by Holdings in
Article IX and (iii) a guaranty, in form and substance satisfactory to the
Lender, executed by one of more Persons in favor of the Lender under which such
Persons guarantee payment and performance of the Obligations.

        "Guaranty Obligations" means as to any Person (without
duplication) any obligation of such Person guaranteeing any Indebtedness ("primary
Indebtedness") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (i) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds for the purchase or payment of any
such primary Indebtedness or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(iv) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, provided, however, that the
definition of Guaranty Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The amount of any
Guaranty Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary Indebtedness in respect of which such
Guaranty Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).

        "Hazardous Materials" means (i) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; and (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "restricted hazardous materials," "extremely
hazardous wastes," "restrictive hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar meaning and
regulatory effect, under any applicable Environmental Law.

        "Hedge Agreement" means (i) any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar interest rate management agreement or arrangement, (ii) any
currency swap or option agreement, foreign exchange contract, forward currency
purchase agreement or similar currency management agreement or arrangement or
(iii) any Commodities Hedge Agreement.

        "Holdings" has the meaning provided in the first
paragraph of this Agreement.

12

        "Indebtedness" of any Person means without duplication
(i) all indebtedness of such Person for borrowed money; (ii) all bonds, notes,
debentures and similar debt securities of such Person; (iii) the deferred
purchase price of capital assets or services that in accordance with GAAP would
be shown on the liability side of the balance sheet of such Person; (iv) the
face amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder; (v) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances; (vi)
all indebtedness of a second Person secured by any Lien on any property owned by
such first Person, whether or not such indebtedness has been assumed; (vii) all
Capitalized Lease Obligations of such Person; (viii) the present value,
determined on the basis of the implicit interest rate, of all basic rental
obligations under all Synthetic Leases of such Person; (ix) all obligations of
such Person with respect to asset securitization financing; (x) all obligations
of such Person to pay a specified purchase price for goods or services whether
or not delivered or accepted, i.e., take-or-pay and similar obligations;
(xi) all net obligations of such Person under Hedge Agreements; (xii) the
full outstanding balance of trade receivables, notes or other instruments sold
with full recourse (and the portion thereof subject to potential recourse, if
sold with limited recourse), other than in any such case any thereof sold solely
for purposes of collection of delinquent accounts; and (xiii) all Guaranty
Obligations of such Person; provided, however, that (y) neither
trade payables, deferred revenue, taxes nor other similar accrued expenses, in
each case arising in the ordinary course of business, shall constitute
Indebtedness; and (z) the Indebtedness of any Person shall in any event include
(without duplication) the Indebtedness of any other entity (including any
general partnership in which such Person is a general partner) to the extent
such Person is liable thereon as a result of such Person's ownership interest in
or other relationship with such entity, except to the extent the terms of such
Indebtedness provide expressly that such Person is not liable thereon.

        "Indemnitees" has the meaning provided in Section
10.02.

        "Insolvency Event" means, with respect to any Person,
(i) the commencement of a voluntary case by such Person under the Bankruptcy
Code or the seeking of relief by such Person under any bankruptcy or insolvency
or analogous law in any jurisdiction outside of the United States; (ii) the
commencement of an involuntary case against such Person under the Bankruptcy
Code and the petition is not controverted within 10 days, or is not dismissed
within 60 days, after commencement of the case; (iii) a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of such Person; (iv) such Person commences (including by way
of applying for or consenting to the appointment of, or the taking of possession
by, a rehabilitator, receiver, custodian, trustee, conservator or liquidator
(collectively, a "conservator") of such Person or all or any substantial
portion of its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency,
liquidation, rehabilitation, conservatorship or similar law of any jurisdiction
whether now or hereafter in effect relating to such Person; (v) any such
proceeding of the type set forth in clause (iv) above is commenced against such
Person to the extent such proceeding is consented to by such Person or remains
undismissed for a period of 60 days; (vi) such Person is adjudicated insolvent
or bankrupt; (vii) any order of relief or other order approving any such case or
proceeding is entered; (viii) such Person suffers any appointment of any
conservator or the like for it or any substantial part of its property that
continues undischarged or unstayed for a period of 60 days; (ix) such Person
makes a general assignment for the benefit of creditors or generally does not
pay its debts as such debts become due; or (x) any corporate (or similar
organizational) action is taken by such Person for the purpose of effecting any
of the foregoing. 

        "Inventory" means any "inventory" as such term is now
or hereafter defined in the UCC.

        "Investment" means (i) any direct or indirect purchase
or other acquisition by a Person of any Equity Interest of any other Person;
(ii) any loan, advance (other than deposits with financial institutions
available for withdrawal on demand) or extension of credit to, guarantee or
assumption of debt or 

13

purchase or other acquisition of any other Indebtedness
of, any Person by any other Person; or (iii) the purchase, acquisition or
investment of or in any stocks, bonds, mutual funds, notes, debentures or other
securities, or any deposit account, certificate of deposit or other investment
of any kind.

        "LC Documents" means, with respect to any Letter of
Credit, any documents executed in connection with such Letter of Credit,
including the Letter of Credit itself.

        "LC Fee" means any of the fees payable pursuant to
Section 2.06(b) or Section 2.06(c) in respect of Letters of Credit.

        "LC Issuance" means the issuance of any Letter of
Credit by the Lender for the account of the Borrower in accordance with the
terms of this Agreement, and shall include any amendment thereto that increases
the Stated Amount thereof or extends the expiry date of such Letter of Credit.

        "LC Outstandings" means, at any time, the sum, without
duplication, of (i) the aggregate Stated Amount of all outstanding Letters of
Credit and (ii) the aggregate amount of all Unpaid Drawings with respect to
Letters of Credit.

        "LC Request" has the meaning provided in Section
2.02(b).

        "Leaseholds" of any Person means all the right, title
and interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.

        "Lender" has the meaning provided in the first
paragraph of this Agreement.

        "Letter of Credit" means any Standby Letter of Credit
or Commercial Letter of Credit, in each case issued by the Lender under this
Agreement pursuant to Section 2.02 for the account of the Borrower.

        "Letter of Credit Sublimit" means an amount equal to
$250,000. The Letter of Credit Sublimit is part of, and not in addition to, the
Revolving Commitment Amount.

        "Lien" means any mortgage, pledge, security interest,
hypothecation, encumbrance, lien or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement or any lease in the nature thereof).

        "Liquidity" means, at any time, the sum of (i) the
unrestricted cash of the Credit Parties at such time maintained in deposit
accounts that are subject to Control Agreements and (ii) the excess of (A) the
lesser of (1) the Revolving Commitment Amount and (2) the Borrowing Base at such
time over (B) the Revolving Facility Exposure at such time.

        "Loan Documents" means this Agreement, any Notes, the
Guaranty, the Security Documents, the Fee Letter, each Letter of Credit, each
other LC Document and each Designated Hedge Agreement.

        "Margin Stock" has the meaning provided in Regulation
U.

        "Material Adverse Effect" means any or all of the
following: (i) any material adverse effect on the business, operations,
property, assets, liabilities, financial or other condition or prospects of
Holdings or Holdings and its Subsidiaries, taken as a whole; (ii) any material
adverse effect on the ability of the Borrower or any other Credit Party to
perform its obligations under any of the Loan Documents to which it is a party;
(iii) any material adverse effect on the ability of Holdings and its
Subsidiaries, taken as a whole, to pay their liabilities and obligations as they
mature or become due; or (iv) any material adverse 

14

effect on the validity,
effectiveness or enforceability, as against any Credit Party, of any of the Loan
Documents to which it is a party.

        "Material Indebtedness" means, as to Holdings or any
of its Subsidiaries, any particular Indebtedness of Holdings or such Subsidiary
(including any Guaranty Obligations) in excess of the aggregate principal amount
of $50,000.

        "Material Indebtedness Agreement" means any agreement
governing or evidencing any Material Indebtedness.

        "Maximum Rate" has the meaning provided in Section
10.21.

        "Minimum Borrowing Amount" means $100,000 with minimum
increments thereafter of $100,000.

        "Moody's" means Moody's Investors Service, Inc. and
its successors.

        "Mortgage" means a mortgage, deed of trust or other
instrument, substantially in the form of Exhibit G and otherwise in form
and substance reasonably satisfactory to the Lender, executed by a Credit Party
with respect to a Mortgaged Real Property, as the same may from time to time be
amended, restated or otherwise modified.

        "Mortgaged Real Property" means each of the parcels of
real property set forth on Schedule 3 , or interests therein, owned or
leased by a Credit Party, together with each other parcel of Real Property that
shall become subject to a Mortgage after the Closing Date, in each case together
with all of such Credit Party's right, title and interest in the improvements
and buildings thereon and all appurtenances, easements or other rights belonging
thereto.

        "Multi-Employer Plan" means a multi-employer plan, as
defined in Section 4001(a)(3) of ERISA to which Holdings or any Subsidiary of
Holdings or any ERISA Affiliate is making or accruing an obligation to make
contributions or has within any of the preceding five plan years made or accrued
an obligation to make contributions.

        "Multiple Employer Plan" means an employee benefit
plan, other than a Multi-Employer Plan, to which Holdings or any Subsidiary of
Holdings or any ERISA Affiliate, and one or more employers other than Holdings
or a Subsidiary of Holdings or an ERISA Affiliate, is making or accruing an
obligation to make contributions or, in the event that any such plan has been
terminated, to which Holdings or a Subsidiary of Holdings or an ERISA Affiliate
made or accrued an obligation to make contributions during any of the five plan
years preceding the date of termination of such plan.

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

        "Note" means a Revolving Facility Note.

        "Notice of Borrowing" has the meaning provided in
Section 2.03(b).

        "Notice Office" means the office of the Lender at 127
Public Square, Cleveland, Ohio 44114, Attention: Paulette Murray (facsimile:
(216) 689-5962), or such other office as the Lender may designate in writing to
the Borrower from time to time.

15

        "Obligations" means, collectively, (i) all
Indebtedness incurred by the Borrower to the Lender pursuant to this Agreement
and includes the principal of, and interest on, any Note; (ii) each extension,
renewal or refinancing thereof in whole or in part; (iii) the commitment and
other fees, and any prepayment fees payable hereunder; (iv) all obligations and
liabilities of Holdings or any of its Subsidiaries now existing or hereafter
incurred under, arising out of, or in connection with any Designated Hedge
Agreement; (v) every other amount, indemnity, reimbursement obligation or other
liability, now or hereafter owing to the Lender or any Affiliate of the Lender
by any Credit Party, and includes, without limitation, every amount, indemnity,
reimbursement obligation or other liability, whether owing by only such Credit
Party or by such Credit Party with one or more others in a several, joint or
joint and several capacity, whether owing absolutely or contingently, whether
created by note, overdraft, guaranty of payment or other contract or by
quasi-contract, tort, statute or other operation of law, whether incurred
directly to the Lender (or any Affiliate thereof) or acquired by the Lender (or
any Affiliate thereof) by purchase, pledge or otherwise and whether participated
to or from the Lender (or any Affiliate thereof) in whole or in part (including,
but not limited to, interest and fees that accrue after the commencement by or
against any Credit Party of any insolvency proceeding, regardless of whether
allowed or allowable in such proceeding or subject to an automatic stay under
Section 362(a) of the Bankruptcy Code); and (vi) all Related Expenses.

        "Operating Lease" as applied to any Person means any
lease of any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is not accounted for as a Capital Lease on the
balance sheet of that Person.

        "Organizational Documents" means, with respect to any
Person (other than an individual), such Person's Articles (Certificate) of
Incorporation, or equivalent formation documents, and Regulations (Bylaws), or
equivalent governing documents, and, in the case of any partnership, includes
any partnership agreement, and in the case of a limited liability company,
includes any operating agreement, and, in each case, any amendments to any of
the foregoing.

        "Payment Office" means the office of the Lender at 127
Public Square, Cleveland, Ohio 44114, Attention: Paulette Murray (facsimile:
(216) 689-5962), or such other office(s), as the Lender may designate to the
Borrower in writing from time to time.

        "PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.

        "Perfection Certificate" has the meaning provided in
the Security Agreement.

        "Permitted Creditor Investment" means any securities
(whether debt or equity) received by Holdings or any of its Subsidiaries in
connection with the bankruptcy or reorganization of any customer or supplier of
Holdings or any such Subsidiary and in settlement of delinquent obligations of,
and other disputes with, customers and suppliers arising in the ordinary course
of business.

        "Permitted Discretion" means the Lender acting in a
commercially reasonably manner consistent with its customary business practice.

        "Permitted Lien" means any Lien permitted by Section
7.03.

        "Person" means any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.

16

        "Plan" means any Multi-Employer Plan or
Single-Employer Plan.

        "primary Indebtedness" has the meaning provided in the
definition of "Guaranty Obligations."

        "primary obligor" has the meaning provided in the
definition of "Guaranty Obligations."

        "Prohibited Transaction" means a transaction with
respect to a Plan that is prohibited under Section 4975 of the Code or Section
406 of ERISA and not exempt under Section 4975 of the Code or Section 408 of
ERISA.

        "RCRA" means the Resource Conservation and Recovery
Act, as the same may be amended from time to time, 42 U.S.C. § 6901 et seq.

        "Real Property" of any Person shall mean all of the
right, title and interest of such Person in and to land, improvements and
fixtures, including Leaseholds.

        "Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

        "Regulation Z" means Regulation Z of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

        "Related Expenses" means any and all reasonable costs,
liabilities and expenses (including, without limitation, losses, damages,
penalties, claims, actions, attorneys' fees, legal expenses, judgments, suits,
and disbursements) (i) incurred by, imposed upon, or asserted against, the
Lender or any Affiliate of the Lender in any attempt by the Lender or any
Affiliate of Lender to (A) obtain, preserve, perfect or enforce any security
interest evidenced by this Agreement or any Loan Document; (B) obtain payment,
performance or observance of any and all of the Obligations and/or any of the
Loan Documents (or any provision thereof); or (C) maintain, insure, audit,
collect, preserve, repossess or dispose of any of the collateral securing the
Obligations or any thereof, including, without limitation, costs and expenses
for appraisals, assessments, and audits of the Borrower or any such collateral;
or (ii) incidental or related to (i) above, including, without limitation,
interest thereupon from the date incurred, imposed, or asserted until paid at
the Default Rate.

        "Related Parties" means, with respect to any Person,
such Person's Affiliates and the directors, officers, employees, agents and
advisors of such Person and of such Person's Affiliates.

        "Reportable Event" means an event described in Section
4043 of ERISA or the regulations thereunder with respect to a Plan, other than
those events as to which the notice requirement is waived under subsection .22,
..23, .25, .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of
PBGC Regulation Section 4043.

        "Reserves" means any and all reserves which the Lender
deems necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves for accrued and unpaid interest on the Obligations, banking
services reserves, reserves for rent at locations leased by any Credit Party and
for consignee's, warehousemen's and bailee's charges, reserves for dilution of
Accounts, reserves for rate management transactions, reserves for contingent
liabilities of any Credit Party, reserves for uninsured losses of any Credit
Party and reserves for taxes, fees, assessments, and other governmental charges)
with respect to the Collateral or any Credit Party.

17

        "Restricted Payment" means (i) any Capital
Distribution; or (ii) any amount paid by Holdings or any of its Subsidiaries in
repayment, redemption, retirement, repurchase, direct or indirect, of any
Subordinated Indebtedness.

        "Revolving Commitment" means the obligation hereunder
of the Lender, during the Revolving Facility Availability Period, to make
Revolving Loans up to an aggregate principal amount outstanding at any time
equal to the Revolving Commitment Amount.

        "Revolving Commitment Amount" means an amount equal to
$3,500,000.

        "Revolving Facility Availability Period" means the
period from the Closing Date until the Revolving Facility Termination Date.

        "Revolving Facility Exposure" means, at any time, the
sum of (i) the aggregate principal amount of Revolving Loans outstanding at such
time and (ii) the LC Outstandings at such time.

        "Revolving Facility Note" means a promissory note
substantially in the form of Exhibit A.

        "Revolving Facility Termination Date" means the
earlier of (i) the Revolving Maturity Date, and (ii) the date that the Revolving
Commitment has been terminated pursuant to Section 8.02.

        "Revolving Loan" means any loan made by the Lender
pursuant to Section 2.01.

        "Revolving Maturity Date" means December 19, 2006.

        "Sale and Lease-Back Transaction" means any
arrangement with any Person providing for the leasing by Holdings or any
Subsidiary of Holdings of any property (except for temporary leases for a term,
including any renewal thereof, of not more than one year and except for leases
between Holdings and a Subsidiary or between Subsidiaries), which property has
been or is to be sold or transferred by Holdings or such Subsidiary to such
Person.

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

        "SEC" means the United States Securities and Exchange
Commission.

        "Security Agreement" has the meaning provided in
Section 4.01(iii).

        "Security Documents" means the Security Agreement,
each Mortgage, each Collateral Access Agreement, each Additional Security
Document, any UCC financing statement, any Control Agreement, any Collateral
Assignment, any Perfection Certificate and any document pursuant to which any
Lien is granted or perfected by any Credit Party to the Lender as security for
any of the Obligations.

        "Single-Employer Plan" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, to which Holdings, any Subsidiary of
Holdings or any ERISA Affiliate is making or accruing an obligation to make
contributions or, in the event that any such plan has been terminated, to which
Holdings, any Subsidiary of Holdings or any ERISA Affiliate made or accrued an
obligation to make contributions during any of the five plan years preceding the
date of termination of such plan.

        "Standard Permitted Lien" means any of the following:
(i) Liens for taxes not yet delinquent or Liens for taxes, assessments or
governmental charges being contested in good faith and by appropriate

18

proceedings for which adequate reserves in accordance with GAAP have been
established; (ii) Liens in respect of property or assets imposed by law that
were incurred in the ordinary course of business, such as carriers', suppliers',
warehousemen's, materialmen's and mechanics' Liens and other similar Liens
arising in the ordinary course of business, that do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Borrower or any
of its Subsidiaries and do not secure any Indebtedness; (iii) Liens created by
this Agreement or the other Loan Documents; (iv) Liens arising from judgments,
decrees or attachments in circumstances not constituting an Event of Default
under Section 8.01(g); (v) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with workers
compensation, unemployment insurance and other types of social security, and
mechanic's Liens, carrier's Liens, and other Liens to secure the performance of
tenders, statutory obligations, contract bids, government contracts, surety,
appeal, customs, performance and return-of-money bonds and other similar
obligations, incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money), whether pursuant to
statutory requirements, common law or consensual arrangements; (vi) easements,
rights-of-way, zoning or other restrictions, charges, encumbrances, defects in
title, prior rights of other persons, and obligations contained in similar
instruments or the Title Policy, in each case that do not secure Indebtedness
and do not involve, and are not likely to involve at any future time, either
individually or in the aggregate, (A) a substantial and prolonged interruption
or disruption of the business activities of the Borrower and its Subsidiaries
considered as an entirety, or (B) a Material Adverse Effect; (vii) Liens arising
from the rights of lessors under leases (including financing statements
regarding property subject to lease) not in violation of the requirements of
this Agreement, provided that such Liens are only in respect of the
property subject to, and secure only, the respective lease (and any other lease
with the same or an affiliated lessor); and (viii) rights of consignors of
goods, whether or not perfected by the filing of a financing statement under the
UCC.

        "Standby Letter of Credit" means any standby letter of
credit issued for the purpose of supporting workers compensation, liability
insurance, releases of contract retention obligations, contract performance
guarantee requirements and other bonding obligations or for other lawful
purposes.

        "Stated Amount" of each Letter of Credit shall mean
the maximum amount available to be drawn thereunder (regardless of whether any
conditions or other requirements for drawing could then be met).

        "Subordinated Indebtedness" means any Indebtedness
that has been subordinated to the prior payment in full of all of the
Obligations pursuant to a written agreement or written terms acceptable to the
Lender.

        "Subordinated Obligations" has the meaning provided in
Section 9.02(a).

        "Subsidiary" of any Person means (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary Voting Power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have Voting Power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries, and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries, owns more than 50% of the Equity
Interests of such Person at the time or in which such Person, one or more other
Subsidiaries of such Person or such Person and one or more Subsidiaries of such
Person, directly or indirectly, has the power to direct the policies, management
and affairs thereof. Unless otherwise expressly provided, all references herein
to "Subsidiary" shall mean a Subsidiary of Holdings.

19

        "Synthetic Lease" means any lease (i) that is
accounted for by the lessee as an Operating Lease, and (ii) under which the
lessee is intended to be the "owner" of the leased property for federal income
tax purposes.

        "Taxes" has the meaning provided in Section 3.02(a).

        "Testing Period" means a single period consisting of
the four consecutive fiscal quarters of Holdings then last ended (whether or not
such quarters are all within the same fiscal year), except that if a
particular provision of this Agreement indicates that a Testing Period shall be
of a different specified duration, such Testing Period shall consist of the
particular fiscal quarter or quarters then last ended that are so indicated in
such provision.

        "Title Company" has the meaning specified in Section
6.10(c)(i).

        "Title Policy" has the meaning specified in Section
6.10(c)(i).

        "UCC" means the Uniform Commercial Code as in effect
from time to time. Unless otherwise specified, the UCC shall refer to the UCC as
in effect in the State of New York.

        "Unfunded Benefit Liabilities" of any Plan means the
amount, if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.

        "United States" and "U.S." each means
United States of America.

        "Unpaid Drawing" means, with respect to any Letter of
Credit, the aggregate amount of the draws made on such Letter of Credit that
have not been reimbursed by the Borrower or converted to a Revolving Loan
pursuant to Section 2.02(d), and, in each case, all interest that accrues
thereon pursuant to this Agreement.

        "Unused Revolving Commitment" means, at any time, the
excess of (i) the Revolving Commitment Amount at such time over (ii) the
Revolving Facility Exposure at such time.

        "USA Patriot Act" means the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT Act) Act of 2001.

        "Voting Power" means, with respect to any Person, the
exclusive ability to control, through the ownership of shares of capital stock,
partnership interests, membership interests or otherwise, the election of
members of the board of directors or other similar governing body of such
Person, and the holding of a designated percentage of Voting Power of a Person
means the ownership of shares of capital stock, partnership interests,
membership interests or other interests of such Person sufficient to control
exclusively the election of that percentage of the members of the board of
directors or similar governing body of such Person.

        Section 1.02 Computation of Time
Periods. In this Agreement 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 means "to but excluding" and the
word "through" means "through and including."

        Section 1.03 Accounting Terms.
Except as otherwise specifically provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time.

20

        Section 1.04 Terms Generally.
The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall." Unless the context requires otherwise,
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, restated, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person's successors and assigns, (c) the words
"herein," "hereof" and "hereunder," and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Sections, Schedules and Exhibits
shall be construed to refer to Sections of, and Schedules and Exhibits to, this
Agreement, (e) the words "asset" and "property" shall be construed to have the
same meaning and effect and to refer to any and all Real Property, tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights, and interests in any of the foregoing, and (f) any reference to
a statute, rule or regulation is to that statute, rule or regulation as now
enacted or as the same may from time to time be amended, re-enacted or expressly
replaced.

ARTICLE II.

THE TERMS OF THE CREDIT FACILITY

        Section 2.01 Revolving Facility.
During the Revolving Facility Availability Period the Lender agrees, on the
terms and conditions set forth in this Agreement, to make a Revolving Loan or
Revolving Loans to the Borrower from time to time which Revolving Loans (i) may
be repaid or prepaid and reborrowed in accordance with the provisions hereof;
and (ii) shall not be made if, after giving effect to any such Revolving Loan,
(A) the Revolving Facility Exposure would exceed the lesser of (x) the Revolving
Commitment Amount or (y) the Borrowing Base, or (B) the Borrower would be
required to prepay Revolving Loans or cash collateralize Letters of Credit
pursuant to Section 2.08(b). 

        Section 2.02 Letters of Credit.

        (a) LC Issuances. During the Revolving Facility
Availability Period, the Borrower may request that the Lender at any time and
from time to time issue, for the account of the Borrower, and subject to and
upon the terms and conditions herein set forth, the Lender agrees to issue from
time to time Letters of Credit denominated and payable in Dollars and in each
case in such form as may be approved by the Lender; provided, however,
that notwithstanding the foregoing, no LC Issuance shall be made if, after
giving effect thereto, (i) the LC Outstandings would exceed the Letter of Credit
Sublimit, (ii) the Revolving Facility Exposure would exceed the lesser of (x)
the Revolving Commitment Amount or (y) the Borrowing Base, or (iii) the Borrower
would be required to prepay Revolving Loans or cash collateralize Letters of
Credit pursuant to Section 2.08(b). Each Letter of Credit shall have an expiry
date (including any renewal periods) occurring not later than the earlier of (y)
one year from the date of issuance thereof, or (z) 30 Business Days prior to the
Revolving Facility Termination Date. 

        (b) LC Requests. Whenever the Borrower desires that a
Letter of Credit be issued for its account, the Borrower shall give the Lender
written or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Lender) which, if in the form of
written notice, shall be substantially in the form of Exhibit B-1 (each
such request, a "LC Request"), or transmit by electronic communication,
prior to 11:00 A.M. (local time at the Notice Office) at least three Business
Days (or such shorter period as may be acceptable to the Lender) prior to the
proposed date of issuance (which shall be a 

21

Business Day), which LC Request
shall include such supporting documents that the Lender customarily requires in
connection therewith. In the event of any inconsistency between any of the terms
or provisions of any LC Document and the terms and provisions of this Agreement
respecting Letters of Credit, the terms and provisions of this Agreement shall
control. 

        (c) Applicability of ISP98 and UCP. Unless otherwise
expressly agreed by the Lender, when a Letter of Credit is issued, (i) the rules
of the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce at the time
of issuance (including the International Chamber of Commerce's decision
published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each Commercial
Letter of Credit.

        (d) Reimbursement Obligations.

        (i) The Borrower hereby agrees to reimburse the
		Lender, by making payment directly to the Lender in immediately
		available funds at the Payment Office, for any Unpaid Drawing with
		respect to any Letter of Credit immediately after, and in any event on
		the date on which, the Lender notifies the Borrower of such payment or
		disbursement (which notice to the Borrower shall be delivered reasonably
		promptly after any such payment or disbursement), such payment to be
		made in Dollars, with interest on the amount so paid or disbursed by the
		Lender, to the extent not reimbursed prior to 1:00 P.M. (local time at
		the Payment Office) on the date of such payment or disbursement, from
		and including the date paid or disbursed to but not including the date
		the Lender is reimbursed therefor at a rate per annum that shall be the
		rate then applicable to Revolving Loans pursuant to Section 2.05(a) or,
		if not reimbursed on the date of such payment or disbursement, at the
		Default Rate, any such interest also to be payable on demand. If by
		11:00 A.M. on the Business Day immediately following notice to it of its
		obligation to make reimbursement in respect of an Unpaid Drawing, the
		Borrower has not made such reimbursement out of its available cash on
		hand or a contemporaneous Borrowing hereunder (if such Borrowing is
		otherwise available to the Borrower), (x) the Borrower will in each case
		be deemed to have given a Notice of Borrowing for Revolving Loans in an
		aggregate principal amount sufficient to reimburse such Unpaid Drawing,
		(y) the Lender shall, unless it is legally prohibited from doing so,
		make the Revolving Loans contemplated by such deemed Notice of Borrowing
		(which Revolving Loans shall be considered made under Section 2.01), and
		(z) the proceeds of such Revolving Loans shall be disbursed directly to
		the Lender to the extent necessary to effect such reimbursement and
		repayment of the Unpaid Drawing, with any excess proceeds to be made
		available to the Borrower.

		        (ii) Obligations Absolute. The Borrower's
		obligation under this Section to reimburse the Lender with respect to
		Unpaid Drawings (including, in each case, interest thereon) shall be
		absolute and unconditional under any and all circumstances and
		irrespective of any setoff, counterclaim or defense to payment that the
		Borrower may have or have had against the Lender, including, without
		limitation, any defense based upon the failure of any drawing under a
		Letter of Credit to conform to the terms of the Letter of Credit or any
		non-application or misapplication by the beneficiary of the proceeds of
		such drawing; provided, however, that the Borrower shall
		not be obligated to reimburse the Lender for any wrongful payment made
		by the Lender under a Letter of Credit as a result of acts or omissions
		constituting willful misconduct or gross negligence on the part of the
		Lender.

		22

		
	

        Section 2.03 Notice of Borrowing.

        (a) Time of Notice. Each Borrowing of a Revolving Loan
shall be made upon notice in the form provided for below which shall be provided
by the Borrower to the Lender at its Notice Office prior to 11:00 A.M. (local
time at its Notice Office) on the proposed date of such Borrowing. 

        (b) Notice of Borrowing. Each request for a Borrowing
shall be made by an Authorized Officer of the Borrower by delivering written
notice of such request substantially in the form of Exhibit B-2 (each
such notice, a "Notice of Borrowing") or by telephone (to be confirmed
immediately in writing by delivery by an Authorized Officer of the Borrower of a
Notice of Borrowing), and in any event each such request shall be irrevocable
and shall specify (i) the aggregate principal amount of the Revolving Loan to be
made pursuant to such Borrowing and (ii) the date of the Borrowing (which shall
be a Business Day). Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Lender may act prior to receipt of written confirmation without liability upon
the basis of such telephonic notice believed by the Lender in good faith to be
from an Authorized Officer of the Borrower entitled to give telephonic notices
under this Agreement on behalf of the Borrower. In each such case, the Lender's
record of the terms of such telephonic notice shall be conclusive absent
manifest error.

        (c) Minimum Borrowing Amount. The aggregate principal
amount of each Borrowing by the Borrower shall not be less than the Minimum
Borrowing Amount. 

        (d) Maximum Borrowings. More than one Borrowing may be
incurred by the Borrower on any day.

        Section 2.04 Evidence of
Obligations.

        (a) Loan Accounts of the Lender. The Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the Obligations of the Borrower to the Lender resulting from (i) each Revolving
Loan made by the Lender, including the amounts of principal and interest payable
and paid to the Lender from time to time hereunder and (ii) the amount and other
details of with respect to each Letter of Credit issued hereunder.

        (b) Effect of Loan Accounts, etc. The entries made in
the accounts maintained pursuant to Section 2.04(a) shall be prima facie
evidence of the existence and amounts of the Obligations recorded therein; 
provided, that the failure of the Lender to maintain such accounts or any
error (other than manifest error) therein shall not in any manner affect the
obligation of any Credit Party to repay or prepay the Revolving Loans or the
other Obligations in accordance with the terms of this Agreement.

        (c) Note. To evidence the Borrower's obligation to
repay the Revolving Loans, the Borrower will execute and deliver to the Lender a
Revolving Facility Note in the principal amount of the Revolving Commitment
Amount.

        Section 2.05 Interest; Default
Rate.

        (a) Interest on Revolving Loans. The outstanding
principal amount of each Revolving Loan made by the Lender shall bear interest
at the Base Rate plus 2%.

        (b) Default Interest. Notwithstanding the above
provisions, if an Event of Default is in existence, (i) all outstanding amounts
of principal and, to the extent permitted by law, all overdue interest, in
respect of each Revolving Loan shall bear interest, payable on demand, at a rate
per annum equal to the 

23

Default Rate, and (ii) the LC Fees shall be increased by
an additional 1% per annum in excess of the LC Fees otherwise applicable
thereto. In addition, if any amount (other than amounts as to which the
foregoing subparts (i) and (ii) are applicable) payable by the Borrower under
the Loan Documents is not paid when due, such amount shall bear interest,
payable on demand, at a rate per annum equal to the Default Rate.

        (c) Accrual and Payment of Interest. Interest shall
accrue from and including the date of any Borrowing to but excluding the date of
any prepayment or repayment thereof and shall be payable by the Borrower: (i)
quarterly on the last Business Day of each March, June, September and December
and (ii) at maturity (whether by acceleration or otherwise) and after such
maturity or, in the case of any interest payable pursuant to Section 2.05(b), on
demand.

        (d) Computations of Interest. All computations of
interest on Revolving Loans and Unpaid Drawings hereunder shall be made on the
actual number of days elapsed in a year of 365 days (or 366 days in case of a
leap year). 

        Section 2.06 Fees.

        (a) Commitment Fee. The Borrower agrees to pay to the
Lender as consideration for the Revolving Commitment of the Lender, a commitment
fee (the "Commitment Fee") for the period from the Closing Date to, but
not including, the Revolving Facility Termination Date, computed for each day at
a rate per annum equal to (i) 0.50% times (ii) the Unused Revolving
Commitment in effect on such day. The accrued Commitment Fee shall be due and
payable in arrears on the last Business Day of each March, June, September and
December and on the Revolving Facility Termination Date.

        (b) LC Fees. The Borrower agrees to pay to the Lender
a fee in respect of each Letter of Credit issued hereunder in an amount equal to
(A) the Base Rate plus 2% times (B) the Stated Amount of such Letter of
Credit. The foregoing fees shall be payable on the date of issuance of such
Letter of Credit.

        (c) Fronting Fees. The Borrower agrees to pay the
Lender a fee in respect of each Letter of Credit issued by it, payable on the
date of issuance (or any increase in the amount, or renewal or extension)
thereof, computed at the rate of 1/4th of 1% per annum on the Stated
Amount thereof for the period from the date of issuance (or increase, renewal or
extension) to the expiration date thereof (including any extensions of such
expiration date which may be made at the election of the beneficiary thereof).

        (d) Additional Charges of the Lender. The Borrower
agrees to pay the Lender upon each LC Issuance, drawing under, or amendment,
extension, renewal or transfer of, a Letter of Credit issued by it such amount
as shall at the time of such LC Issuance, drawing under, amendment, extension,
renewal or transfer be the processing charge that the Lender is customarily
charging for issuances of, drawings under or amendments, extensions, renewals or
transfers of, letters of credit issued by it.

        (e) Lender Fees. The Borrower shall pay to the Lender,
on the Closing Date and thereafter, for its own account, the fees set forth in
the Fee Letter.

        (f) Computations of Fees. All computations of LC Fees,
the Commitment Fee and other Fees hereunder shall be made on the actual number
of days elapsed over a year of 360 days.

24

        Section 2.07 Termination and
Reduction of Revolving Commitment.

        (a) Mandatory Termination of Revolving Commitment. The
Revolving Commitment shall terminate on the Revolving Facility Termination Date.

        (b) Voluntary Termination of the Revolving Commitment.
Upon at least three Business Days' prior irrevocable written notice (or
telephonic notice confirmed in writing) to the Lender at its Notice Office, the
Borrower shall have the right to terminate in whole the Revolving Commitment, 
provided that (i) all outstanding Revolving Loans and Unpaid Drawings are
contemporaneously prepaid in accordance with Section 2.08 and (ii) either there
are no outstanding Letters of Credit or the Borrower shall contemporaneously
cause all outstanding Letters of Credit to be surrendered for cancellation.

        Section 2.08 Voluntary, Scheduled
and Mandatory Prepayments of Revolving Loans.

        (a) Voluntary Prepayments. The Borrower shall have the
right to prepay any of the Revolving Loans owing by it, in whole or in part,
without premium or penalty from time to time. The Borrower shall give the Lender
at the Notice Office written or telephonic notice (in the case of telephonic
notice, promptly confirmed in writing if so requested by the Lender) of its
intent to prepay the Revolving Loans, the amount of such prepayment and the
specific Borrowing(s) pursuant to which the prepayment is to be made, which
notice shall be received by the Lender by 11:00 A.M. (local time at the Notice
Office) on the date of such prepayment, provided that each partial
prepayment shall be in an aggregate principal amount of at least $100,000 and
thereafter in minimum increments of at least $100,000.

        (b) Mandatory Payments. The Revolving Loans shall be
subject to mandatory repayment or prepayment (in the case of any partial
prepayment conforming to the requirements as to the amounts of partial
prepayments set forth in Section 2.08(a) above), and the LC Outstandings shall
be subject to cash collateralization requirements, in accordance with the
following provisions:

        (i) Revolving Facility Termination Date. The
		entire principal amount of all outstanding Revolving Loans shall be
		repaid in full on the Revolving Facility Termination Date.

		        (ii) Loans Exceed the Revolving Commitment. If
		on any date (after giving effect to any other payments on such date) the
		Revolving Facility Exposure exceeds the lesser of (A) the Revolving
		Commitment Amount or (ii) the Borrowing Base, then the Borrower
		shall, on such day, prepay on such date the principal amount of
		Revolving Loans and, after Revolving Loans have been paid in full,
		Unpaid Drawings, in an aggregate amount at least equal to such excess.

		        (iii) LC Outstandings Exceed Letter of Credit
		Sublimit. If on any date the LC Outstandings exceed the Letter of
		Credit Sublimit, then the Borrower shall, on such day, pay to the
		Lender an amount in cash equal to such excess and the Lender shall hold
		such payment as security for the reimbursement obligations of the
		Borrower hereunder in respect of Letters of Credit pursuant to a cash
		collateral agreement to be entered into in form and substance reasonably
		satisfactory to the Lender and the Borrower (which shall permit certain
		investments in Cash Equivalents satisfactory to the Lender and the
		Borrower until the proceeds are applied to any Unpaid Drawings or to any
		other Obligations in accordance with any such cash collateral
		agreement).

	

        (c) Other Compensation. Any prepayment made pursuant
to this Section 2.08 shall be accompanied by any amounts payable in respect
thereof under Article III.

25

        Section 2.09 Method and Place of
Payment. 

        (a) Generally. All payments made by the Borrower
hereunder (including any payments made with respect to the Borrower Guaranteed
Obligations under Section 2.10) under any Note or any other Loan Document, shall
be made without setoff, counterclaim or other defense. 

        (b) Payment of Obligations. Except as specifically set
forth elsewhere in this Agreement, all payments under this Agreement with
respect to any of the Obligations shall be made to the Lender on the date when
due and shall be made at the Payment Office in immediately available funds and
shall be made in Dollars.

        (c) Timing of Payments. Any payments under this
Agreement that are made later than 11:00 A.M. (local time at the Payment Office)
shall be deemed to have been made on the next succeeding Business Day. Whenever
any payment to be made hereunder shall be stated to be due on a day that is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable during such extension at the applicable rate in effect immediately prior
to such extension.

        Section 2.10 Guaranty by the
Borrower.

        (a) Borrower Guaranteed Obligations. The Borrower
hereby unconditionally guarantees, for the benefit of the Lender, all of the
following (collectively, the "Borrower Guaranteed Obligations"): all
amounts, indemnities and reimbursement obligations, direct or indirect,
contingent or absolute, of every type or description, and at any time existing
owing by any Subsidiary of the Borrower under any Designated Hedge Agreement or
any other document or agreement executed and delivered in connection therewith
to any Designated Hedge Creditor whether now existing, or hereafter incurred or
arising, including any such interest or other amounts incurred or arising during
the pendency of any bankruptcy, insolvency, reorganization, receivership or
similar proceeding, regardless of whether allowed or allowable in such
proceeding or subject to an automatic stay under Section 362(a) of the
Bankruptcy Code. Upon failure by any Credit Party to pay punctually any of the
Borrower Guaranteed Obligations, the Borrower shall forthwith on demand by the
Lender pay the amount not so paid at the place and in the currency and otherwise
in the manner specified in this Agreement or any other applicable agreement or
instrument.

        (b) Additional Undertaking. As a separate, additional
and continuing obligation, the Borrower unconditionally and irrevocably
undertakes and agrees, for the benefit of the Lender that, should any Borrower
Guaranteed Obligations not be recoverable from the Borrower under
Section 2.10(a) for any reason whatsoever (including, without limitation, by
reason of any provision of any Loan Document or any other agreement or
instrument executed in connection therewith being or becoming void,
unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any notice or knowledge thereof by the Lender, any of its
respective Affiliates, or any other person, at any time, the Borrower as sole,
original and independent obligor, upon demand by the Lender, will make payment
to the Lender of all such obligations not so recoverable by way of full
indemnity, in such manner as is provided in the Loan Documents or any other
applicable agreement or instrument.

        (c) Guaranty Unconditional. The obligations of the
Borrower under this Section 2.10 shall be unconditional and absolute and,
without limiting the generality of the foregoing shall not be released,
discharged or otherwise affected by the occurrence, one or more times, of any of
the following:

        (i) any extension, renewal, settlement, compromise,
		waiver or release in respect to the Borrower Guaranteed Obligations
		under any agreement or instrument, by operation of law or otherwise;

		26

		
		
        (ii) any modification or amendment of or supplement
		to this Agreement, any Note, any other Loan Document, or any agreement
		or instrument evidencing or relating to any Borrower Guaranteed
		Obligation;

		        (iii) any release, non-perfection or invalidity of
		any direct or indirect security for the Borrower Guaranteed Obligations
		under any agreement or instrument evidencing or relating to any Borrower
		Guaranteed Obligations;

		        (iv) any change in the corporate existence, structure
		or ownership of any Credit Party or other Subsidiary or any insolvency,
		bankruptcy, reorganization or other similar proceeding affecting any
		Credit Party or other Subsidiary or its assets or any resulting release
		or discharge of any obligation of any Credit Party or other Subsidiary
		contained in any agreement or instrument evidencing or relating to any
		of the Borrower Guaranteed Obligations;

		        (v) the existence of any claim, set-off or other
		rights which the Borrower may have at any time against any other Credit
		Party, the Lender, any Affiliate of the Lender or any other Person,
		whether in connection herewith or any unrelated transactions;

		        (vi) any invalidity or unenforceability relating to
		or against any other Credit Party for any reason of any agreement or
		instrument evidencing or relating to any of the Borrower Guaranteed
		Obligations, or any provision of applicable law or regulation purporting
		to prohibit the payment by any Credit Party of any of the Borrower
		Guaranteed Obligations; or

		        (vii) any other act or omission of any kind by any
		other Credit Party, the Lender or any other Person or any other
		circumstance whatsoever which might, but for the provisions of this
		Section 2.10, constitute a legal or equitable discharge of the
		Borrower's obligations under this Section other than the irrevocable
		payment in full of all Borrower Guaranteed Obligations.

	

        (d) Borrower Obligations to Remain in Effect; Restoration.
The Borrower's obligations under this Section 2.10 shall remain in full force
and effect until the Revolving Commitment shall have terminated, and the
principal of and interest on any Notes and other Borrower Guaranteed
Obligations, and all other amounts payable by the Borrower, any other Credit
Party or other Subsidiary, under the Loan Documents or any other agreement or
instrument evidencing or relating to any of the Borrower Guaranteed Obligations,
shall have been paid in full. If at any time any payment of any of the Borrower
Guaranteed Obligations is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of such Credit Party, the
Borrower's obligations under this Section 2.10 with respect to such payment
shall be reinstated at such time as though such payment had been due but not
made at such time.

        (e) Waiver of Acceptance, etc. The Borrower
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any person against any other Credit Party or any other
Person, or against any collateral or guaranty of any other Person.

        (f) Subrogation. Until the indefeasible payment in
full of all of the Obligations and the termination of the Revolving Commitment
hereunder, the Borrower shall have no rights, by operation of law or otherwise,
upon making any payment under this Section to be subrogated to the rights of the
payee against any other Credit Party with respect to such payment or otherwise
to be reimbursed, indemnified or exonerated by any such Credit Party in respect
thereof.

27

        (g) Effect of Stay. In the event that acceleration of
the time for payment of any amount payable by any Credit Party under any of the
Borrower Guaranteed Obligations is stayed upon insolvency, bankruptcy or
reorganization of such Credit Party, all such amounts otherwise subject to
acceleration under the terms of any applicable agreement or instrument
evidencing or relating to any of the Borrower Guaranteed Obligations shall
nonetheless be payable by the Borrower under this Section 2.10 forthwith on
demand by the Lender.

ARTICLE III.

ADDITIONAL AMOUNTS, NET PAYMENTS AND INCREASED COSTS

        Section 3.01 Additional Amounts.

        (a) If the Lender shall have determined that after the
Closing Date, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by the Lender or its parent corporation with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank, or comparable agency, in each case made subsequent to
the Closing Date, has or would have the effect of reducing by an amount
reasonably deemed by the Lender to be material to the rate of return on the
Lender's or its parent corporation's capital or assets as a consequence of the
Lender's commitments or obligations hereunder to a level below that which the
Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration the Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by the Lender (with a copy to the
Lender), the Borrower shall pay to the Lender such additional amount or amounts
as will compensate the Lender or its parent corporation for such reduction. The
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 3.01(a), will give prompt written notice
thereof to the Borrower, which notice shall set forth, in reasonable detail, the
basis of the calculation of such additional amounts, which basis must be
reasonable, although the failure to give any such notice shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 3.01(a) upon the subsequent receipt of such notice.

        (b) Notwithstanding anything in this Agreement to the
contrary, (i) the Lender shall not be entitled to compensation or payment or
reimbursement of other amounts under Section 3.01(a) or Section 3.03 for any
amounts incurred or accruing more than 90 days prior to the giving of notice to
the Borrower of additional costs or other amounts of the nature described in
such Sections, and (ii) the Lender shall not demand compensation for any
reduction referred to in Section 3.01(a) or payment or reimbursement of other
amounts under Section 3.03 if it shall not at the time be the general policy or
practice of the Lender to demand such compensation, payment or reimbursement in
similar circumstances under comparable provisions of other credit agreements.

        Section 3.02 Net Payments. 

        (a) All payments made by the Borrower hereunder, under any
Note or any other Loan Document, including all payments made by the Borrower
pursuant to its guaranty obligations under Section 2.10, will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in this Section 3.02(a), any tax imposed on or
measured by the net income or net profits of the Lender and franchise taxes
imposed on it pursuant 

28

to the laws of the jurisdiction under which the Lender is
organized or the jurisdiction in which the principal office of the Lender is
located or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect to such non-excluded taxes, levies imposts,
duties, fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes and such additional amounts
(including additional amounts to compensate for withholding on amounts paid
pursuant to this Section 3.02(a)) as may be necessary so that every payment by
it of all amounts due hereunder, under any Note or under any other Loan
Document, after withholding or deduction for or on account of any Taxes will not
be less than the amount provided for herein or in such Note or in such other
Loan Document. The Borrower will indemnify and hold harmless the Lender and
reimburse the Lender upon its written request, for the amount of any Taxes
imposed on and paid by the Lender. If any amounts are payable in respect of
Taxes pursuant to this Section 3.02(a), the Borrower agrees to reimburse the
Lender, upon the written request of the Lender, for taxes imposed on or measured
by the net income, profits or franchise of the Lender pursuant to the laws of
the jurisdiction in which the Lender is organized or in which the principal
office of the Lender is located or under the laws of any political subdivision
or taxing authority therein, and for any withholding of taxes as the Lender
shall determine are payable by, or withheld from, the Lender in respect of such
reimbursement of taxes, which request shall be accompanied by a statement from
the Lender setting forth, in reasonable detail, the computations used in
determining such amounts. The Borrower will furnish to the Lender within 45 days
after the date the payment of any Taxes, or any withholding or deduction on
account thereof, is due pursuant to applicable law certified copies of tax
receipts, or other evidence satisfactory to the Lender, evidencing such payment
by the Borrower. 

        (b) If the Lender, in its sole opinion, determines that it
has finally and irrevocably received or been granted a refund in respect of any
Taxes as to which indemnification has been paid by the Borrower pursuant to
Section 3.02(a), it shall promptly remit such refund (including any interest
received in respect thereof), net of all out-of-pocket costs and expenses to the
Borrower; provided, however, that the Borrower agrees to promptly return
any such refund (plus interest) to the Lender in the event the Lender is
required to repay such refund to the relevant taxing authority. The Lender shall
provide the Borrower with a copy of any notice of assessment from the relevant
taxing authority (redacting any unrelated confidential information contained
therein) requiring repayment of such refund. Nothing contained herein shall
impose an obligation on the Lender to apply for any such refund.

        Section 3.03 Increased Costs for
LC Issuances. If after the Closing Date, the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the interpretation
or administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Lender with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency (in
each case made subsequent to the Closing Date) shall either (i) impose, modify
or make applicable any reserve, deposit, capital adequacy or similar requirement
against Letters of Credit issued by the Lender's participation therein, or (ii)
impose on the Lender any other conditions affecting this Agreement, any Letter
of Credit or the Lender's participation therein; and the result of any of the
foregoing is to increase the cost to the Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by the Lender hereunder (other than any increased cost or
reduction in the amount received or receivable resulting from the imposition of
or a change in the rate of taxes or similar charges), then, upon demand to the
Borrower by the Lender, the Borrower shall pay to the Lender such additional
amount or amounts as will compensate the Lender for such increased cost or
reduction. A certificate submitted to the Borrower by the Lender setting forth,
in reasonable detail, the basis for the determination of such additional amount
or amounts necessary to compensate the Lender as aforesaid shall be conclusive
and binding on the Borrower absent manifest error, although the failure to

29

deliver any such certificate shall not release or
diminish the Borrower's obligations to pay additional amounts pursuant to this
Section 3.03. 

ARTICLE IV.

CONDITIONS PRECEDENT

        Section 4.01 Conditions Precedent
at Closing Date. The obligation of the Lender to make Revolving Loans and to
issue Letters of Credit, is subject to the satisfaction of each of the following
conditions on or prior to the Closing Date:

        (i) Credit Agreement. This Agreement shall
		have been executed by Holdings, the Borrower and the Lender.

		        (ii) Notes. The Borrower shall have executed
		and delivered to the Lender a Note evidencing the Revolving Commitment
		Amount.

		        (iii) Security Agreement. Each Credit Party
		shall have duly executed and delivered a Pledge and Security Agreement
		(the "Security Agreement"), substantially in the form attached as
		Exhibit C, and shall have delivered to the Lender the shares
		pledged thereunder, together with any applicable share transfer power
		duly executed in blank, and any promissory notes or other instruments
		pledged thereunder, together with endorsements thereof in blank, in each
		case in form and substance satisfactory to the Lender. Each Credit Party
		shall have duly executed and delivered all of the following in
		connection therewith, each of which shall be in form and substance
		satisfactory to the Lender: (A) the Control Agreements required pursuant
		to the terms of the Security Agreement, duly executed by the appropriate
		depositary institution, securities intermediary or issuer as the case
		may be, (B) the Collateral Assignments required pursuant to the terms of
		the Security Agreement, and (C) a Perfection Certificate.

		        (iv) Closing Date Mortgages. Each Credit
		Party, as appropriate, shall have (A) executed and delivered to the
		Lender a Mortgage, in form and substance satisfactory to the Lender,
		with respect to each Mortgaged Real Property of such Credit Party owned
		as of the Closing Date, and (B) provided to the Lender all of the other
		items required to be provided with respect to each such Mortgaged Real
		Property pursuant to Section 6.10(c), each of which shall be in form and
		substance satisfactory to the Lender.

		        (v) Fees and Fee Letters. The Borrower shall
		have (A) executed and delivered to the Lender the Fee Letter and shall
		have paid to the Lender, for its own account, the fees required to be
		paid by it on the Closing Date and (B) paid or caused to be paid all
		fees and expenses of the Lender and of special counsel to the Lender
		that have been invoiced on or prior to the Closing Date in connection
		with the preparation, execution and delivery of this Agreement and the
		other Loan Documents and the consummation of the transactions
		contemplated hereby and thereby.

		        (vi) Corporate Resolutions and Approvals. The
		Lender shall have received certified copies of the resolutions of the
		Board of Directors of each Credit Party approving the Loan Documents to
		which such Credit Party, as the case may be, is or may become a party,
		and of all documents evidencing other necessary corporate action and
		governmental approvals, if any, with respect to the execution, delivery
		and performance by such Credit Party of the Loan Documents to which it
		is or may become a party.

		30

		
		
        (vii) Incumbency Certificates. The Lender
		shall have received a certificate of the Secretary or an Assistant
		Secretary of each Credit Party certifying the names and true signatures
		of the officers of such Credit Party, as the case may be, authorized to
		sign the Loan Documents to which such Credit Party is a party and any
		other documents to which such Credit Party is a party that may be
		executed and delivered in connection herewith.

		        (viii) Opinions of Counsel. The Lender shall
		have received such opinions of counsel from counsel to the Credit
		Parties as the Lender shall request, each of which shall be addressed to
		the Lender and dated the Closing Date and in form and substance
		satisfactory to the Lender.

		        (ix) Recordation of Security Documents, Delivery
		of Collateral, Taxes, etc. The Security Documents (or proper notices
		or UCC financing statements in respect thereof) shall have been duly
		recorded, published and filed in such manner and in such places as is
		required by law to establish, perfect, preserve and protect the rights,
		Liens and security interests of the parties thereto and their respective
		successors and assigns, all Collateral items required to be physically
		delivered to the Lender thereunder shall have been so delivered,
		accompanied by any appropriate instruments of transfer, and all taxes,
		fees and other charges then due and payable in connection with the
		execution, delivery, recording, publishing and filing of such
		instruments and the issuance of the Obligations and the delivery of any
		Notes shall have been paid in full.

		        (x) Evidence of Insurance. The Lender shall
		have received certificates of insurance naming the Lender as loss payee
		or additional insured and other evidence, satisfactory to it, of
		compliance with the insurance requirements of this Agreement and the
		Security Documents.

		        (xi) Search Reports. The Lender shall have
		received the results of UCC and other search reports from one or more
		commercial search firms acceptable to the Lender, listing all of the
		effective financing statements filed against any Credit Party, together
		with copies of such financing statements.

		        (xii) Corporate Charter and Good Standing
		Certificates. The Lender shall have received: (A) an original
		certified copy of the Certificate or Articles of Incorporation or
		equivalent formation document of each Credit Party and any and all
		amendments and restatements thereof, certified as of a recent date by
		the relevant Secretary of State; (B) an original good standing
		certificate from the Secretary of State of the state of incorporation,
		dated as of a recent date, listing all charter documents affecting such
		Credit Party and certifying as to the good standing of such Credit
		Party; and (C) original certificates of good standing from each other
		jurisdiction in which each Credit Party is authorized or qualified to do
		business.

		        (xiii) Closing Certificate. The Lender shall
		have received a certificate substantially in the form of Exhibit F,
		dated the Closing Date, of an Authorized Officer of the Borrower to the
		effect that, at and as of the Closing Date and both before and after
		giving effect to the initial Borrowings hereunder and the application of
		the proceeds thereof: (A) no Default or Event of Default has occurred or
		is continuing; and (B) all representations and warranties of the Credit
		Parties contained herein or in the other Loan Documents are true and
		correct in all material respects as of the Closing Date.

		        (xiv) Proceedings and Documents. All corporate
		and other proceedings and all documents incidental to the transactions
		contemplated hereby shall be satisfactory in substance and form to the
		Lender and its special counsel and the Lender shall have received all
		such counterpart originals or certified or other copies of such
		documents as the Lender or its special counsel may reasonably request.

		31

		
		
        (xv) Material Litigation. The Lender shall be
		satisfied that there are no actions, suits, investigations or
		proceedings pending or threatened in any court or before any arbitrator
		or Governmental Authority (i) that have, or, if determined adversely,
		could reasonably be expected to have, a Material Adverse Effect or a
		material adverse effect on any of the transactions contemplated hereby,
		or (ii) which question the validity or enforceability of any of the Loan
		Documents or the ability of any Credit Party to perform their respective
		obligations under the Loan Documents.

		        (xvi) Financial Information.  The Lender shall
		have received (A) the audited consolidated financial statements for the
		fiscal year ended December 31, 2004, (B) the unaudited quarterly
		financial statements for the Borrower and its Subsidiaries through the
		fiscal quarter ended immediately prior to the Closing Date and (C)
		financial projections for the fiscal year ending December 31, 2006.

		        (xvii) Appraisals. The Lender shall have
		received (at the Borrower's expense) and be satisfied with assets
		appraisals (including, without limitation, appraisals of the Eligible
		Real Property and Equipment).

		        (xviii) Account and Inventory Reports. The
		Lender shall have received accounts receivable aging and inventory
		reports satisfactory to it.

		        (xix) Material Adverse Effect. Since December
		31, 2004 there shall not have occurred any event or condition that, in
		the opinion of the Lender, has had or could reasonably be expected to
		have a material adverse effect on the business, operations, property,
		condition (financial or otherwise) or prospects of Holdings, the
		Borrower or any Subsidiary of Holdings.

		        (xx) Existing Indebtedness. On the Closing
		Date, after giving effect to the transactions contemplated herein,
		Holdings and its Subsidiaries shall have outstanding no Indebtedness
		other than (A) the Revolving Loans and (B) Indebtedness permitted under
		Section 7.04. All other Indebtedness and agreements in respect thereof
		shall be terminated and all Liens securing such Indebtedness shall be
		released or arrangements, to the satisfaction of the Lender, shall have
		been made for such release.

		        (xxi) Minimum Liquidity. The Borrower shall
		have provided evidence satisfactory to the Lender that on the Closing
		Date and after giving effect to the indebtedness to be incurred in
		connection herewith that the Borrower is in compliance with Section
		7.07(a). 

		        (xxii) Borrowing Base Certificate. The Lender
		shall have received an executed Borrowing Base Certificate for the month
		ending November 30, 2005.

		        (xxiii) Miscellaneous. The Credit Parties
		shall have provided to the Lender such other items and shall have
		satisfied such other conditions as may be reasonably required by the
		Lender.

	

        Section 4.02 Conditions Precedent
to All Credit Events. The obligations of the Lender to make or participate
in each Credit Event is subject, at the time thereof, to the satisfaction of the
following conditions:

        (a) Notice. The Lender shall have received, as
applicable, (i) a Notice of Borrowing meeting the requirements of Section
2.03(b) with respect to any Borrowing or (ii) an LC Request meeting the
requirements of Section 2.02(b) with respect to any LC Issuance.

32

        (b) No Default; Representations and Warranties. At the
time of each Credit Event and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
of the Credit Parties contained herein or in the other Loan Documents shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, except to the extent that such representations and warranties
expressly relate to an earlier specified date, in which case such
representations and warranties shall have been true and correct in all material
respects as of the date when made.

        The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Borrower to the Lender that all
of the applicable conditions specified in Section 4.01 and Section 4.02 have
been satisfied as of the times referred to in such Sections.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

        In order to induce the Lender to enter into this Agreement
and to make the Revolving Loans and to issue the Letters of Credit provided for
herein, the Borrower and the Credit Parties each makes the following
representations and warranties to, and agreements with the Lender, all of which
shall survive the execution and delivery of this Agreement and each Credit
Event:

        Section 5.01 Corporate Status.
Holdings and each of its Subsidiaries (i) is a duly organized or formed and
validly existing corporation, partnership or limited liability company, as the
case may be, in good standing or in full force and effect under the laws of the
jurisdiction of its formation and has the corporate, partnership or limited
liability company power and authority, as applicable, to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage, and (ii) has duly qualified and is authorized to do business
in all jurisdictions where it is required to be so qualified or authorized
except where the failure to be so qualified would not have a Material Adverse
Effect. Schedule 5.01 lists, as of the Closing Date, each Subsidiary of
Holdings, the jurisdiction of organization of such Subsidiary and the direct and
indirect ownership interest of Holdings therein.

        Section 5.02 Corporate Power and
Authority. Each Credit Party has the corporate or other organizational power
and authority to execute, deliver and carry out the terms and provisions of the
Loan Documents to which it is party and has taken all necessary corporate or
other organizational action to authorize the execution, delivery and performance
of the Loan Documents to which it is party. Each Credit Party has duly executed
and delivered each Loan Document to which it is party and each Loan Document to
which it is party constitutes the legal, valid and binding agreement and
obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).

        Section 5.03 No Violation.
Neither the execution, delivery and performance by any Credit Party of the Loan
Documents to which it is party nor compliance with the terms and provisions
thereof (i) will contravene any provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any Governmental Authority applicable to
such Credit Party or its properties and assets, (ii) will conflict with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (other than the Liens created
pursuant to the Security Documents) upon any of the property or assets of such
Credit Party pursuant to the terms of any promissory note, bond, debenture,
indenture, mortgage, deed of trust, credit or loan agreement, or any other
agreement or other instrument, to which such Credit Party is a party

33

or by which it or any of its property or assets are
bound or to which it may be subject, or (iii) will violate any provision of the
Organizational Documents of such Credit Party.

        Section 5.04 Governmental
Approvals. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
Governmental Authority is required to authorize or is required as a condition to
(i) the execution, delivery and performance by any Credit Party of any Loan
Document to which it is a party or any of its obligations thereunder, or (ii)
the legality, validity, binding effect or enforceability of any Loan Document to
which any Credit Party is a party, except the filing and recording of
financing statements and other documents necessary in order to perfect the Liens
created by the Security Documents.

        Section 5.05 Litigation. There
are no actions, suits or proceedings pending or, to the knowledge of any Credit
Party, threatened with respect to such Credit Party or any of its Subsidiaries
(i) that have had, or could reasonably be expected to have, a Material Adverse
Effect, or (ii) that question the validity or enforceability of any of the Loan
Documents, or of any action to be taken by any of the Credit Parties pursuant to
any of the Loan Documents.

        Section 5.06 Use of Proceeds;
Margin Regulations.

        (a) The proceeds of all Revolving Loans and LC Issuances
shall be utilized to refinance existing senior debt facilities and provide
working capital and funds for general corporate purposes, in each case, not
inconsistent with the terms of this Agreement.

        (b) No part of the proceeds of any Credit Event will be used
directly or indirectly to purchase or carry Margin Stock, or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock, in violation
of any of the provisions of Regulations T, U or X of the Board of Governors of
the Federal Reserve System. No Credit Party is engaged in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. At
no time would more than 25% of the value of the assets of Holdings or of
Holdings and its consolidated Subsidiaries that are subject to any "arrangement"
(as such term is used in Section 221.2(g) of such Regulation U) hereunder be
represented by Margin Stock.

        Section 5.07 Financial Statements.

        (a) The
Borrower has furnished to the Lender complete and correct copies of (i) the
audited consolidated balance sheets of Holdings and its consolidated
Subsidiaries for the fiscal year ended December 31, 2004 and the related audited
consolidated statements of income, shareholders' equity, and cash flows of
Holdings and its consolidated Subsidiaries for the fiscal year of Holdings then
ended, accompanied by the report thereon of Freed Maxick Battaglia, CPAs, PC;
and (ii) the condensed consolidated balance sheets of Holdings and its
consolidated Subsidiaries for the fiscal quarters ended March 31, 2005, June 30,
2005 and September 30, 2005 and the related condensed consolidated statements of
income and of cash flows of Holdings and its consolidated Subsidiaries for each
of the fiscal periods then ended. All such financial statements have been
prepared in accordance with GAAP, consistently applied (except as stated
therein), and fairly present the financial position of Holdings and its
Subsidiaries as of the respective dates indicated and the consolidated results
of their operations and cash flows for the respective periods indicated, subject
in the case of any such financial statements that are unaudited, to normal audit
adjustments, none of which shall be material. Holdings and its Subsidiaries did
not have, as of the date of the latest financial statements referred to above,
and will not have as of the Closing Date after giving effect to the incurrence
of Revolving Loans or LC Issuances hereunder, any material or significant
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto in 

34

accordance with GAAP and that in any such
case is material in relation to the business, operations, properties, assets,
financial or other condition or prospects of Holdings and its Subsidiaries.

        (b) The financial projections of Holdings and its
Subsidiaries for the fiscal year 2006 prepared by Holdings and delivered to the
Lender (the "Financial Projections") were prepared on behalf of Holdings
in good faith after taking into account historical levels of business activity
of Holdings and its Subsidiaries, known trends, including general economic
trends, and all other information, assumptions and estimates considered by
management of Holdings and its Subsidiaries to be pertinent thereto; provided,
however, that no representation or warranty is made as to the impact of
future general economic conditions or as to whether Holdings' projected
consolidated results as set forth in the Financial Projections will actually be
realized, it being recognized by the Lender that such projections as to future
events are not to be viewed as facts and that actual results for the periods
covered by the Financial Projections may differ materially from the Financial
Projections. No facts are known to Holdings as of the Closing Date which, if
reflected in the Financial Projections, would result in a material adverse
change in the assets, liabilities, results of operations or cash flows reflected
therein. 

        Section 5.08 Solvency. The
Borrower has received consideration that is the reasonable equivalent value of
the obligations and liabilities that the Borrower has incurred to the Lender
under the Loan Documents. The Borrower now has capital sufficient to carry on
its business and transactions and all business and transactions in which it is
about to engage and is now solvent and able to pay its debts as they mature and
the Borrower, as of the Closing Date, owns property having a value, both at fair
valuation and at present fair salable value, greater than the amount required to
pay the Borrower's debts; and the Borrower is not entering into the Loan
Documents with the intent to hinder, delay or defraud its creditors. For
purposes of this Section, "debt" means any liability on a claim, and "claim"
means (y) right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; or (z) right to an equitable
remedy for breach of performance if such breach gives rise to a payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

        Section 5.09 No Material Adverse
Change. Since December 31, 2004, there has been no change in the condition,
business, affairs or prospects of Holdings and its Subsidiaries taken as a
whole, or their properties and assets considered as an entirety, except 
for changes none of which, individually or in the aggregate, has had or could
reasonably be expected to have, a Material Adverse Effect.

        Section 5.10 Tax Returns and
Payments. Holdings and each of its Subsidiaries has filed all federal income
tax returns and all other tax returns, domestic and foreign, required to be
filed by it and has paid all taxes and assessments payable by it that have
become due, other than those not yet delinquent and except for those contested
in good faith. Holdings and each of its Subsidiaries has established on its
books such charges, accruals and reserves in respect of taxes, assessments, fees
and other governmental charges for all fiscal periods as are required by GAAP.
Neither Holdings nor any of its Subsidiaries knows of any proposed assessment
for additional federal, foreign or state taxes for any period, or of any basis
therefor, which, individually or in the aggregate, taking into account such
charges, accruals and reserves in respect thereof as Holdings and its
Subsidiaries have made, could reasonably be expected to have a Material Adverse
Effect.

        Section 5.11 Title to Properties,
etc. Holdings and each of its Subsidiaries has good and marketable title, in
the case of Real Property, and good title (or valid Leaseholds, in the case of
any leased property), in the case of all other property, to all of its
properties and assets free and clear of Liens other than Permitted Liens. The
interests of Holdings and its Subsidiaries in the properties reflected in the
most recent balance sheet referred to in Section 5.07(a), taken as a whole, were
sufficient, in the judgment of 

35

Holdings, as of the
date of such balance sheet for purposes of the ownership and operation of the
businesses conducted by Holdings and its Subsidiaries.

        Section 5.12 Lawful Operations,
etc. Holdings and each of its Subsidiaries: (i) hold all necessary foreign,
federal, state, local and other governmental licenses, registrations,
certifications, permits and authorizations necessary to conduct its business;
and (ii) is in full compliance with all requirements imposed by law, regulation
or rule, whether foreign, federal, state or local, that are applicable to it,
its operations, or its properties and assets, including, without limitation,
applicable requirements of Environmental Laws, except for any failure to
obtain and maintain in effect, or noncompliance that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

        Section 5.13 Environmental Matters.

        (a) Holdings and each of its Subsidiaries is in compliance
with all applicable Environmental Laws, except to the extent that any such
failure to comply (together with any resulting penalties, fines or forfeitures)
would not reasonably be expected to have a Material Adverse Effect. All
licenses, permits, registrations or approvals required for the conduct of the
business of Holdings and its Subsidiaries under any Environmental Law have been
secured and Holdings and its Subsidiaries is in substantial compliance
therewith, except for such licenses, permits, registrations or approvals the
failure to secure or to comply therewith is not reasonably likely to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries has
received written notice, or otherwise knows, that it is in any respect in
noncompliance with, breach of or default under any applicable writ, order,
judgment, injunction, or decree to which Holdings or such Subsidiary is a party
or that would affect the ability of Holdings or such Subsidiary to operate any
Real Property and no event has occurred and is continuing that, with the passage
of time or the giving of notice or both, would constitute noncompliance, breach
of or default thereunder, except in each such case, such noncompliance, breaches
or defaults as would not reasonably be expected to, in the aggregate, have a
Material Adverse Effect. There are no Environmental Claims pending or, to the
best knowledge of any Credit Party, threatened wherein an unfavorable decision,
ruling or finding would reasonably be expected to have a Material Adverse
Effect. There are no facts, circumstances, conditions or occurrences on any Real
Property now or at any time owned, leased or operated by Holdings or any of its
Subsidiaries or on any property adjacent to any such Real Property, that are
known by Holdings or any of its Subsidiaries or as to which Holdings or any of
its Subsidiaries has received written notice, that could reasonably be expected:
(i) to form the basis of an Environmental Claim against Holdings or any of its
Subsidiaries or any Real Property of Holdings or any of its Subsidiaries; or
(ii) to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.

        (b) Hazardous Materials have not at any time been (i)
generated, used, treated or stored on, or transported to or from, any Real
Property of Holdings or any of its Subsidiaries or (ii) released on any such
Real Property, in each case where such occurrence or event is not in compliance
with Environmental Laws and is reasonably likely to have a Material Adverse
Effect.

        Section 5.14 Compliance with ERISA.
Compliance by each Credit Party with the provisions hereof and Credit Events
contemplated hereby will not involve any Prohibited Transaction. Holdings and
each of its Subsidiaries and each ERISA Affiliate (i) has fulfilled all
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan that is not a Multi-Employer Plan or a Multiple Employer
Plan, (ii) has satisfied all contribution obligations in respect of each
Multi-Employer Plan and each Multiple Employer Plan, (iii) is in compliance in
all material respects 

36

with all other applicable
provisions of ERISA and the Code with respect to each Plan, each Multi-Employer
Plan and each Multiple Employer Plan, and (iv) has not incurred any liability
under Title IV of ERISA to the PBGC with respect to any Plan, any Multi-Employer
Plan, any Multiple Employer Plan, or any trust established thereunder. No Plan
or trust created thereunder has been terminated, and there have been no
Reportable Events, with respect to any Plan or trust created thereunder or with
respect to any Multi-Employer Plan or Multiple Employer Plan, which termination
or Reportable Event will or could give rise to a material liability of Holdings
or any ERISA Affiliate in respect thereof. Neither Holdings nor any Subsidiary
of Holdings nor any ERISA Affiliate is at the date hereof, or has been at any
time within the five years preceding the date hereof, an employer required to
contribute to any Multi-Employer Plan or Multiple Employer Plan, or a
"contributing sponsor" (as such term is defined in Section 4001 of ERISA) in any
Multi-Employer Plan or Multiple Employer Plan. Neither Holdings nor any
Subsidiary of Holdings nor any ERISA Affiliate has any contingent liability with
respect to any post-retirement "welfare benefit plan" (as such term is defined
in ERISA) except as has been disclosed to the Lender in writing.

        Section 5.15 Intellectual
Property, etc. Holdings and each of its Subsidiaries has obtained or has the
right to use all material patents, trademarks, service marks, trade names,
copyrights, licenses and other rights with respect to the foregoing necessary
for the present and planned future conduct of its business, without any known
conflict with the rights of others.

        Section 5.16 Investment Company
Act, etc. Neither Holdings nor any of its Subsidiaries is subject to
regulation with respect to the creation or incurrence of Indebtedness under the
Investment Company Act of 1940, as amended, the Interstate Commerce Act, as
amended, the Federal Power Act, as amended, the Public Utility Holding Company
Act of 1935, as amended, or any applicable state public utility law.

        Section 5.17 Insurance. A
description of all insurance maintained by or on behalf of Holdings and its
Subsidiaries as of the Closing Date is set forth on Schedule 5.17. As of
the Closing Date, all premiums in respect of such insurance have been paid. Such
insurance is provided by insurers and in form and amount and insuring against
risks, which, in each case, are generally consistent with industry standards and
in compliance with the terms of Section 6.03.

        Section 5.18 Burdensome Contracts;
Labor Relations. Neither Holdings nor any of its Subsidiaries (a) is subject
to any burdensome contract, agreement, corporate restriction, judgment, decree
or order, (b) is a party to any labor dispute affecting any bargaining unit or
other group of employees generally, (c) is subject to any material strike,
slowdown, workout or other concerted interruptions of operations by employees of
Holdings or any Subsidiary, whether or not relating to any labor contracts, (d)
is subject to any significant pending or, to the knowledge of any Credit Party,
threatened, unfair labor practice complaint, before the National Labor Relations
Board, (e) is subject to any significant pending or, to the knowledge of any
Credit Party, threatened grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement, (f) is subject to any
significant pending or, to the knowledge of any Credit Party, threatened
significant strike, labor dispute, slowdown or stoppage, or (g) is, to the
knowledge of any Credit Party, involved or subject to any union representation
organizing or certification matter with respect to the employees of Holdings or
any of its Subsidiaries, except (with respect to any matter specified in
any of the above clauses) for such matters as, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

        Section 5.19 Security Interests.
Once executed and delivered, each of the Security Documents creates, as security
for the Secured Obligations (as defined in the Security Agreement), a valid and
enforceable, and upon making the filings and recordings referenced in the next
sentence, perfected security interest in and Lien on all of the Collateral
subject thereto from time to time, in favor of 

37

the
Lender, superior to and prior to the rights of all third persons and subject to
no other Liens, except that the Collateral under the Security Documents
may be subject to Permitted Liens. No filings or recordings are required in
order to perfect the security interests created under any Security Document
except for filings or recordings required in connection with any such Security
Document that shall have been made, or for which satisfactory arrangements have
been made, upon or prior to the execution and delivery thereof. All recording,
stamp, intangible or other similar taxes required to be paid by any Person under
applicable legal requirements or other laws applicable to the property
encumbered by the Security Documents in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement thereof have been
paid.

        Section 5.20 True and Complete
Disclosure. All information heretofore or contemporaneously furnished by or
on behalf of Holdings or any of its Subsidiaries in writing to the Lender for
purposes of or in connection with this Agreement or any transaction contemplated
herein, other than the Financial Projections (as to which representations are
made only as provided in Section 5.07(b)), is, and all other such information
hereafter furnished by or on behalf of such Person in writing to the Lender will
be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading at such time in
light of the circumstances under which such information was provided.

        Section 5.21 Defaults. No
Default or Event of Default exists as of the Closing Date hereunder, nor will
any Default or Event of Default begin to exist immediately after the execution
and delivery hereof.

        Section 5.22 Anti-Terrorism Law
Compliance. Neither Holdings nor any of its Subsidiaries is subject to or in
violation of any law, regulation, or list of any government agency (including,
without limitation, the U.S. Office of Foreign Asset Control list, Executive
Order No. 13224 or the USA Patriot Act) that prohibits or limits the conduct of
business with or the receiving of funds, goods or services to or for the benefit
of certain Persons specified therein or that prohibits or limits the Lender from
making any advance or extension of credit to the Borrower or from otherwise
conducting business with Holdings or any of its Subsidiaries.

ARTICLE VI.

AFFIRMATIVE COVENANTS

        The Borrower and the other Credit Parties each hereby
covenants and agrees that on the Closing Date and thereafter so long as this
Agreement is in effect and until such time as the Revolving Commitment have been
terminated, no Notes remain outstanding and the Revolving Loans, together with
interest, Fees and all other Obligations incurred hereunder and under the other
Loan Documents, have been paid in full:

        Section 6.01 Reporting
Requirements. The Borrower will furnish to the Lender:

        (a) Annual Financial Statements. As soon as available
and in any event within 90 days after the close of each fiscal year of Holdings,
the consolidated balance sheets of Holdings and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated statements of
income, of stockholders' equity and of cash flows for such fiscal year, in each
case setting forth comparative figures for the preceding fiscal year, all in
reasonable detail and accompanied by the opinion with respect to such
consolidated financial statements of independent public accountants of
recognized national standing selected by Holdings, which opinion shall be
unqualified and shall (i) state that such accountants audited 

38

such consolidated
financial statements in accordance with generally accepted auditing standards,
that such accountants believe that such audit provides a reasonable basis for
their opinion, and that in their opinion such consolidated financial statements
present fairly, in all material respects, the consolidated financial position of
Holdings and its consolidated Subsidiaries as at the end of such fiscal year and
the consolidated results of their operations and cash flows for such fiscal year
in conformity with generally accepted accounting principles, or (ii) contain
such statements as are customarily included in unqualified reports of
independent accountants in conformity with the recommendations and requirements
of the American Institute of Certified Public Accountants (or any successor
organization).

        (b) Quarterly Financial Statements. As soon as
available and in any event within 45 days after the close of each of the
quarterly accounting periods in each fiscal year of Holdings, the unaudited
consolidated balance sheets of Holdings and its consolidated Subsidiaries as at
the end of such quarterly period and the related unaudited consolidated
statements of income and of cash flows for such quarterly period and/or for the
fiscal year to date, and setting forth, in the case of such unaudited
consolidated statements of income and of cash flows, comparative figures for the
related periods in the prior fiscal year, and which shall be certified on behalf
of Holdings by the Chief Financial Officer of Holdings, subject to changes
resulting from normal year-end audit adjustments.

        (c) Monthly Reporting. Within 30 days of the end of
each calendar month (i) a certificate (a "Compliance Certificate"),
substantially in the form of Exhibit E, signed by the Chief Financial
Officer of Holdings to the effect that (x) no Default or Event of Default exists
or, if any Default or Event of Default does exist, specifying the nature and
extent thereof and the actions Holdings has taken or proposes to take with
respect thereto, (y) the representations and warranties of the Credit Parties
are true and correct in all material respects, except to the extent that any
relate to an earlier specified date, in which case, such representations shall
be true and correct in all material respects as of the date made, which
certificate shall set forth the calculations required to establish compliance
with the provision of Section 7.07 and (ii) a Borrowing Base Certificate which
certificate shall include all information necessary to calculate the Borrowing
Base for such period.

        (d) Officer's Compliance Certificates. At the time of
the delivery of the financial statements provided for in subparts (a) and (b)
above, a Compliance Certificate signed by the Chief Financial Officer of
Holdings to the effect that (i) no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and extent thereof
and the actions Holdings has taken or proposes to take with respect thereto, and
(ii) the representations and warranties of the Credit Parties are true and
correct in all material respects, except to the extent that any relate to an
earlier specified date, in which case, such representations shall be true and
correct in all material respects as of the date made, which certificate shall
set forth the calculations required to establish compliance with the provisions
of Section 7.07.

        (e) Notices. Promptly, and in any event within three
Business Days, after Holdings or any of its Subsidiaries obtains knowledge
thereof, notice of:

        (i) the occurrence of any event that constitutes a
		Default or Event of Default, which notice shall specify the nature
		thereof, the period of existence thereof and what action Holdings
		proposes to take with respect thereto;

		        (ii) the commencement of, or any other material
		development concerning, any litigation or governmental or regulatory
		proceeding pending against Holdings or any of its Subsidiaries or the
		occurrence of any other event, if the same would be reasonably likely to
		have a Material Adverse Effect;

		39

		
		
        (iii) any significant adverse change in Holdings' or
		any Subsidiary's relationship with, or any significant event or
		circumstance which is in Holdings' reasonable judgment likely to
		adversely affect Holdings' or any Subsidiary's relationship with, (A)
		any customer (or related group of customers) representing more than 10%
		of Holdings' consolidated revenues during its most recent fiscal year,
		or (B) any supplier which is material to the operations of Holdings and
		its Subsidiaries considered as an entirety;

		        (iv) any Lien (other than Liens permitted under
		Section 7.03) or claim made or asserted against the Collateral;

		        (v) any loss or damage or destruction to any
		Collateral in an amount exceeding $250,000 (irrespective of whether
		covered by insurance); or

		        (vi) any other development, financial or otherwise,
		which could reasonably be expected to have a Material Adverse Effect.

	

        (f) ERISA. Promptly, and in any event within 10 days
after Holdings or any Subsidiary of Holdings or any ERISA Affiliate knows of the
occurrence of any of the following, Holdings will deliver to the Lender a
certificate of an Authorized Officer of Holdings setting forth the full details
as to such occurrence and the action, if any, that Holdings or such Subsidiary
of Holdings or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given by Holdings or such Subsidiary
of Holdings or the ERISA Affiliate to or filed with the PBGC, a Plan participant
or the Plan administrator with respect thereto: (i) that a Reportable Event has
occurred with respect to any Plan; (ii) the institution of any steps by
Holdings, any Subsidiary of Holdings, any ERISA Affiliate, the PBGC or any other
Person to terminate any Plan or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the termination
of, or the appointment of a trustee to administer, a Plan; (iii) the institution
of any steps by Holdings, any Subsidiary of Holdings or any ERISA Affiliate to
withdraw from any Multi-Employer Plan or Multiple Employer Plan, if such
withdrawal could result in withdrawal liability (as described in Part 1 of
Subtitle E of Title IV of ERISA or in Section 4063 of ERISA) in excess of
$25,000; (iv) a Prohibited Transaction in connection with any Plan; (v) that a
Plan has Unfunded Benefit Liabilities exceeding $25,000; (vi) the cessation of
operations at a facility of Holdings, any Subsidiary of Holdings or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (vii) the
conditions for imposition of a lien under Section 302(f) of ERISA shall have
been met with respect to a Plan; (viii) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA; (ix) the insolvency of or commencement of reorganization proceedings with
respect to a Multi-Employer Plan; (x) any material increase in the contingent
liability of Holdings or any Subsidiary with respect to any post-retirement
welfare liability; or (xi) the taking of any action by, or the threatening of
the taking of any action by, the Internal Revenue Service, the Department of
Labor or the PBGC with respect to any of the foregoing.

        (g) Environmental Matters. Promptly upon, and in any
event within 10 Business Days after, an officer of Holdings or any of its
Subsidiaries obtaining knowledge thereof, notice of one or more of the following
environmental matters to the extent any of the following could reasonably be
expected to have a Material Adverse Effect: (i) any pending or threatened
Environmental Claim against Holdings or any of its Subsidiaries or any Real
Property owned or operated by Holdings or any of its Subsidiaries; (ii) any
condition or occurrence on or arising from any Real Property owned or operated
by Holdings or any of its Subsidiaries that (A) results in noncompliance by
Holdings or any of its Subsidiaries with any applicable Environmental Law or (B)
would reasonably be expected to form the basis of a Environmental Claim against
Holdings or any of its Subsidiaries or any such Real Property; (iii) any
condition or occurrence on any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries that could reasonably be expected to cause
such Real Property to be subject to any restrictions on the ownership,
occupancy, 

40

use or transferability by Holdings or any of its Subsidiaries of such
Real Property under any Environmental Law; and (iv) the taking of any removal or
remedial action in response to the actual or alleged presence of any Hazardous
Material on any Real Property owned, leased or operated by Holdings or any of
its Subsidiaries as required by any Environmental Law or any governmental or
other global agency. All such notices shall describe in reasonable detail the
nature of the Environmental Claim, Holdings' or such Subsidiary's response
thereto and the potential exposure in Dollars of Holdings and its Subsidiaries
with respect thereto.

        (h) SEC Reports and Registration Statements. Promptly
after transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any registration
statement on Form S-8 or its equivalent) and all annual, quarterly or current
reports that Holdings or any of its Subsidiaries files with the SEC on Form
10-K, 10-Q or 8-K (or any successor forms).

        (i) Annual, Quarterly and Other Reports. Promptly
after transmission thereof to its stockholders, copies of all annual, quarterly
and other reports and all proxy statements that Holdings furnishes to its
stockholders generally.

        (j) Auditors' Internal Control Comment Letters, etc.
Promptly upon receipt thereof, a copy of each letter or memorandum commenting on
internal accounting controls and/or accounting or financial reporting policies
followed by Holdings and/or any of its Subsidiaries which is submitted to
Holdings by its independent accountants in connection with any annual or interim
audit made by them of the books of Holdings or any of its Subsidiaries.

        (k) Press Releases. Promptly after the release thereof
to any news organization or news distribution organization, copies of any press
releases and other similar statements intended to be made available generally by
Holdings or any of its Subsidiaries to the public concerning material
developments relating to Holdings or any of its Subsidiaries.

        (l) Information Relating to Collateral. At the time of
the delivery of the annual financial statements provided for in subpart (a)
above, a certificate of an Authorized Officer of Holdings (i) setting forth any
changes to the information required pursuant to the Perfection Certificate or
confirming that there has been no change in such information since the date of
the most recently delivered or updated Perfection Certificate and (ii)
certifying that neither Holdings nor any of its Subsidiaries has taken any
actions (and is not aware of any actions so taken) to terminate any UCC
financing statements or other appropriate filings, recordings or registrations,
including all refilings, rerecordings and reregistrations, containing a
description of the Collateral, which have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect and
perfect the security interests and Liens under the Security Documents for a
period of not less than 18 months after the date of such certificate (except as
noted therein with respect to any continuation statements to be filed within
such period).

        (m) Other Notices. Promptly after the transmission or
receipt thereof, as applicable, copies of all notices received or sent by
Holdings or any Subsidiary to or from the holders of any Material Indebtedness
or any trustee with respect thereto.

        (n) Other Information. Within 10 days after a request
therefor, such other information or documents (financial or otherwise) relating
to Holdings or any of its Subsidiaries as the Lender may reasonably request from
time to time.

41

        Section 6.02 Books, Records and
Inspections. Holdings will, and will cause each of its Subsidiaries to, (i)
keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of Holdings or
such Subsidiary, as the case may be, in accordance with GAAP; and (ii) permit
officers and designated representatives of the Lender to visit and inspect any
of the properties or assets of Holdings and its Subsidiaries in whomsoever's
possession (but only to the extent Holdings or such Subsidiary has the right to
do so to the extent in the possession of another Person), to examine the books
of account of Holdings and any of its Subsidiaries, and make copies thereof and
take extracts therefrom, and to discuss the affairs, finances and accounts of
Holdings and of its Subsidiaries with, and be advised as to the same by, its and
their officers and independent accountants and independent actuaries, if any,
all at such reasonable times and intervals and to such reasonable extent as the
Lender may request.

        Section 6.03 Insurance. 

        (a) Holdings will, and will cause each of its Subsidiaries
to, (i) maintain insurance coverage by such insurers and in such forms and
amounts and against such risks as are generally consistent with the insurance
coverage maintained by Holdings and its Subsidiaries as of the Closing Date, and
(ii) forthwith upon the Lender's written request, furnish to the Lender such
information about such insurance as the Lender may from time to time reasonably
request, which information shall be prepared in form and detail satisfactory to
the Lender and certified by an Authorized Officer of Holdings.

        (b) Holdings will, and will cause each other Credit Party to,
at all times keep its and their respective property that is subject to the Lien
of any Security Document insured in favor of the Lender, and all policies or
certificates (or certified copies thereof) with respect to such insurance (and
any other insurance maintained by Holdings or any such Credit Party) (i) shall
be endorsed to the Lender's satisfaction for the benefit of the Lender
(including, without limitation, by naming the Lender as loss payee (with respect
to Collateral) or, to the extent permitted by applicable law, as an additional
insured), (ii) shall state that such insurance policies shall not be canceled
without 30 days' prior written notice thereof (or 10 days' prior written notice
in the case of cancellation for the non-payment of premiums) by the respective
insurer to the Lender, (iii) shall provide that the respective insurers
irrevocably waive any and all rights of subrogation with respect to the Lender,
and (iv) shall in the case of any such certificates or endorsements in favor of
the Lender, be delivered to or deposited with the Lender. 

        (c) If Holdings or any other Credit Party shall fail to
maintain any insurance in accordance with this Section, or if Holdings or any
such Credit Party shall fail to so endorse and deliver or deposit all
endorsements or certificates with respect thereto, the Lender shall have the
right (but shall be under no obligation) to procure such insurance and Holdings
agrees to reimburse the Lender on demand for all costs and expenses of procuring
such insurance.

        Section 6.04 Payment of Taxes and
Claims. Holdings will pay and discharge, and will cause each of its
Subsidiaries to pay and discharge, all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims that, if unpaid, might become a Lien or charge upon any
properties of Holdings or any of its Subsidiaries; provided, however,
that neither Holdings nor any of its Subsidiaries shall be required to pay any
such tax, assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP. Without limiting the generality of the
foregoing, Holdings will, and will cause each of its Subsidiaries to, pay in
full all of its wage obligations to its employees in accordance with the Fair
Labor Standards Act (29 U.S.C. Sections 206-207) and any comparable provisions
of applicable law, in each case to the extent applicable to Holdings or its
Subsidiaries.

42

        Section 6.05 Corporate Franchises.
Holdings will do, and will cause each of its Subsidiaries to do, or cause to be
done, all things necessary to preserve and keep in full force and effect its
corporate existence, rights and authority; provided, however, that
nothing in this Section shall be deemed to prohibit any transaction permitted by
Section 7.02.

        Section 6.06 Good Repair.
Holdings will, and will cause each of its Subsidiaries to, ensure that its
material properties and equipment used or useful in its business in whomsoever's
possession they may be, are kept in good repair, working order and condition,
normal wear and tear excepted, and that from time to time there are made in such
properties and equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the extent and
in the manner customary for companies in similar businesses.

        Section 6.07 Compliance with
Statutes, etc. Holdings will, and will cause each of its Subsidiaries to,
comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all Governmental Authorities in respect of
the conduct of its business and the ownership of its property, other than those
the noncompliance with which would not be reasonably expected to have a Material
Adverse Effect.

        Section 6.08 Compliance with
Environmental Laws. Without limitation of the covenants contained in Section
6.07:

        (a) Holdings will comply, and will cause each of its
Subsidiaries to comply, with all Environmental Laws applicable to the ownership,
lease or use of all Real Property now or hereafter owned, leased or operated by
Holdings or any of its Subsidiaries, and will promptly pay or cause to be paid
all costs and expenses incurred in connection with such compliance, except
to the extent that such compliance with Environmental Laws is being contested in
good faith and by appropriate proceedings and for which adequate reserves have
been established to the extent required by GAAP, and an adverse outcome in such
proceedings is not reasonably expected to have a Material Adverse Effect.

        (b) Holdings will keep or cause to be kept, and will cause
each of its Subsidiaries to keep or cause to be kept, all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws other
than Permitted Liens.

        (c) Neither Holdings nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of, Hazardous Materials on any Real
Property now or hereafter owned, leased or operated by Holdings or any of its
Subsidiaries or transport or permit the transportation of Hazardous Materials to
or from any such Real Property other than in compliance with applicable
Environmental Laws and in the ordinary course of business, except for such
noncompliance as would not be reasonably expected to have a Material Adverse
Effect.

        (d) If required to do so under any applicable order of any
Governmental Authority, Holdings will undertake, and cause each of its
Subsidiaries to undertake, any clean up, removal, remedial or other action
necessary to remove and clean up any Hazardous Materials from any Real Property
owned, leased or operated by Holdings or any of its Subsidiaries in accordance
with, in all material respects, the requirements of all applicable Environmental
Laws and in accordance with, in all material respects, such orders of all
Governmental Authorities, except to the extent that Holdings or such Subsidiary
is contesting such order in good faith and by appropriate proceedings and for
which adequate reserves have been established to the extent required by GAAP.

        Section 6.09 Certain Subsidiaries
to Execute a Guaranty. If at any time after the Closing Date, Holdings or
any Credit Party acquires, creates or has any Subsidiary (other than a
Subsidiary that is 

43

a "controlled foreign
corporation" as defined in section 957 of the Code (a "CFC")) that is not
already a party to a Guaranty, then Holdings will promptly, but in any event
within 30 days after such occurrence, cause such Subsidiary to deliver to the
Lender (i) a Guaranty, duly executed by such Subsidiary and (ii) resolutions of
the Board of Directors or equivalent governing body of such Subsidiary,
certified by the Secretary or an Assistant Secretary of such Subsidiary, as duly
adopted and in full force and effect, authorizing the execution and delivery of
such Guaranty and the other Loan Documents to which such Subsidiary is or will
be a party, together with such other corporate documentation and an opinion of
counsel as the Lender may reasonably request, in each case, in form and
substance satisfactory to the Lender.

        Section 6.10 Additional Security;
Real Estate Matters; Further Assurances. 

        (a) Additional Security. Subject to subpart (b) below,
if any Credit Party acquires, owns or holds an interest in any Real Property or
any personal property that is not at the time included in the Collateral,
Holdings will promptly notify the Lender in writing of such event, identifying
the property or interests in question and referring specifically to the rights
of the Lender under this Section, and Holdings will, or will cause such
Subsidiary to, within 10 Business Days following request by the Lender, grant to
the Lender a Lien on such Real Property or such personal property pursuant to
the terms of such security agreements, assignments, Mortgages or other documents
as the Lender deems appropriate (collectively, the "Additional Security
Document") or a joinder in any existing Security Document. Furthermore,
Holdings shall cause to be delivered to the Lender such opinions of local
counsel, corporate resolutions, a Perfection Certificate, consents of landlords,
Collateral Access Agreements and other related documents as may be reasonably
requested by the Lender in connection with the execution, delivery and recording
of any such Additional Security Document or joinder, all of which documents
shall be in form and substance reasonably satisfactory to the Lender.

        (b) Foreign Subsidiaries. Notwithstanding anything in
subpart (a) above or elsewhere in this Agreement to the contrary, no Credit
Party shall be required to pledge (or cause to be pledged) more than 65% of the
Equity Interests in any of its CFCs or to cause a CFC to become a party to the
Security Agreement or any other Security Document, if to do so would subject
Holdings or any of its Subsidiaries to liability for additional United States
income taxes by virtue of Section 956 of the Code in an amount the Lender
reasonably deems material.

        (c) Real Estate Matters. The Borrower shall have
delivered to the Lender (x) with respect to each parcel of Real Property
subjected to a Mortgage as of the Closing Date, and (y) within 30 days of the
request therefor by the Lender, with respect to each parcel of Real Property
acquired by the Borrower or any Guarantor after the Closing Date that becomes
subject to a Mortgage pursuant to Section 6.10(a) above, all of the following:

        (i) an American Land Title Association ( ALTA)
		mortgagee title insurance policy or policies, or unconditional
		commitments therefor (a "Title Policy") issued by a title
		insurance company reasonably satisfactory to the Lender (a "Title
		Company"), in an amount not less than the amount reasonably required
		therefor by the Lender (taking into account the estimated value of the
		property involved), insuring fee simple title to, or a valid leasehold
		interest in, such Real Property vested in the applicable Credit Party
		and assuring the Lender that the applicable Mortgage creates a valid and
		enforceable first priority mortgage lien on the respective Real Property
		encumbered thereby, subject only to Permitted Liens and a standard
		survey exception, which Title Policy (1) shall include an endorsement
		for mechanics' liens, for revolving, "variable rate" and future advances
		under this Agreement and for any other matters reasonably requested by
		the Lender and (2) shall provide for affirmative insurance and such
		reinsurance as the Lender 

		44

		
may reasonably request, all of the foregoing
		in form and substance reasonably satisfactory to the Lender;

		        (ii) a title report issued by the Title Company with
		respect thereto, dated not more than 30 days prior to the date of
		execution of the applicable Mortgage and satisfactory in form and
		substance to the Lender;

		        (iii) copies of all recorded documents listed as
		exceptions to title or otherwise referred to in the Title Policy or in
		such title report relating to such real Property;

		        (iv) evidence, which may be in the form of a letter
		or other certification from the Title Company or from an insurance
		broker, surveyor, engineer or other provider, as to whether (1) such
		Real Property is a Flood Hazard Property, and (2) the community in which
		such Flood Hazard Property is located is participating in the National
		Flood Insurance Program, and if such Closing Date Mortgaged Property is
		a Flood Hazard Property, evidence that the applicable Credit Party has
		obtained flood insurance in respect of such Flood Hazard Property to the
		extent required under the applicable regulations of the Board of
		Governors of the Federal Reserve System;

		        (v) a survey, in form and substance reasonably
		satisfactory to the Lender, of such Real Property, certified in a manner
		satisfactory to the Lender by a licensed professional surveyor
		reasonably satisfactory to the Lender;

		        (vi) a certificate of Holdings identifying any Phase
		I, Phase II or other environmental report received in draft or final
		form by any Credit Party during the five-year period prior to the date
		of execution of the Mortgage relating to such Real Property and/or the
		operations conducted therefrom, or stating that no such draft or final
		form reports have been requested or received by any Credit Party (or its
		counsel), together with true and correct copies of all such
		environmental reports so listed (in draft form, if not finalized); and
		all such environmental reports shall be satisfactory in form and
		substance to the Lender;

		        (vii) an opinion of local counsel admitted to
		practice in the jurisdiction in which such Real Property is located,
		satisfactory in form and substance to the Lender, as to the validity and
		effectiveness of such Mortgage as a lien on such Real Property
		encumbered thereby, and covering such other matters of law in connection
		with the execution, delivery, recording and enforcement of such Mortgage
		as the Lender may reasonably request; 

		        (viii) The Lender shall have received appraisals,
		satisfactory in form and substance to the Lender, dated not more than 60
		days prior to the date of execution of each Mortgage and addressed to
		the Lender or accompanied by a separate letter indicating that the
		Lender may rely thereon, from one or more nationally recognized
		appraisal firms, satisfactory to the Lender, covering (i) the Real
		Properties, and (ii) all other tangible property, plant and equipment
		owned by Holdings or any of its Subsidiaries, that is to be subjected to
		the Lien of the Security Agreement and is located at any plant or
		facility owned or leased by Holdings or any of its Subsidiaries in the
		United States of America, which appraisals shall set forth (A) the "fair
		market value" of such property (i.e., the amount at which such
		property would equitably exchange between a willing buyer and a willing
		seller, neither being under a compulsion and both having reasonable
		knowledge of all relevant facts on the premise that such property will
		continue in its present use as part of an ongoing business enterprise),
		(B) the "orderly disposal value" of such property (i.e., the
		amount which may be realized through a forced sale disposal of such
		property when a reasonable time to find a buyer is allowed), and (C) the
		"forced liquidation value" of such 

		45

		
property (i.e., the amount
		which may be realized through an immediate forced sale disposal of such
		property), in each case as determined in accordance with sound appraisal
		standards; and

		        (ix) Taxes. Holdings shall have paid or caused
		to be paid all costs and expenses payable in connection with all of the
		actions set forth in this Section 6.10(c), including but not limited to
		(A) all mortgage, intangibles or similar taxes or fees, however
		characterized, payable in respect of this Agreement, the execution and
		delivery of any Notes, any of the Mortgages or any of the other Loan
		Documents or the recording of any of the same or any other documents
		related thereto; and (B) all expenses and premiums of the Title Company
		in connection with the issuance of such policy or policies of title
		insurance and to all costs and expenses required for the recording of
		the Mortgages or any other Loan Documents or any other related documents
		in the appropriate public records.

	

        (d) Landlord/Mortgagee Waivers. Holdings will promptly
upon request of the Lender obtain, and will maintain in effect, Collateral
Access Agreements on any Real Property on which any items of Collateral are
located, in form and substance reasonably acceptable to the Lender.

        (e) Further Assurances. Holdings will, and will cause
each of its Subsidiaries to, at the expense of Holdings, make, execute, endorse,
acknowledge, file and/or deliver to the Lender from time to time such
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, and other assurances or instruments and take such further steps
relating to the Collateral covered by any of the Security Documents as the
Lender may reasonably require. If at any time the Lender determines, based on
applicable law, that all applicable taxes (including, without limitation,
mortgage recording taxes or similar charges) were not paid in connection with
the recordation of any mortgage or deed of trust, Holdings shall promptly pay
the same upon demand.

        Section 6.11 Most Favored Covenant
Status. If any Credit Party at any time after the Closing Date enters into
or modifies any Material Indebtedness Agreement such that such Material
Indebtedness Agreement includes affirmative or negative covenants (or any events
of default or other type of restriction that would have the practical effect of
any affirmative or negative business or financial covenant, including, without
limitation, any "put" or mandatory prepayment of such Indebtedness upon the
occurrence of a "change of control") that are applicable to any Credit Party,
other than those set forth herein or in any of the other Loan Documents, the
Borrower shall promptly so notify the Lender and, if the Lender shall so request
by written notice to the Borrower (after a determination has been made by the
Lender that such Material Indebtedness Agreement contains any such provisions
that either individually or in the aggregate are more favorable to the holders
of such Indebtedness than any of the provisions set forth herein), the Borrower
and the Lender shall promptly amend this Agreement to incorporate some or all of
such provisions, in the discretion of the Lender, into this Agreement and, to
the extent necessary and reasonably desirable to the Lender, into any of the
other Loan Documents, all at the election of the Lender.

        Section 6.12 Senior Debt. The
Obligations shall, and the Borrower shall take all necessary action to ensure
that the Obligations shall, at all times rank at least pari passu in
right of payment (to the fullest extent permitted by law) with all other senior
secured Indebtedness of the Borrower and each Guarantor.

        Section 6.13 Post-Closing
Covenants.

        (a) Intellectual Property Releases. On or before
February 15, 2005, the Borrower shall deliver to the Lender executed copies of
intellectual property releases in form and substance satisfactory 

46

to the Lender
from Fleet National Bank (now know as Bank of America) and Manufacturers and
Traders Trust Company.

        (b) ALTA Survey. On or before February 15, 2005, the
Borrower shall deliver to the Lender, an ALTA survey, in form and substance
reasonably satisfactory to the Lender, of the Mortgaged Real Property, certified
in a manner satisfactory to the Lender.

        (c) Zoning Letter. On or before February 15, 2005, the
Borrower shall deliver to the Lender a zoning letter in form and substance
satisfactory to the Lender from the city of Bethlehem, Pennsylvania.

ARTICLE VII.

NEGATIVE COVENANTS

        The Borrower and the other Credit Parties each hereby
covenants and agrees that on the Closing Date and thereafter for so long as this
Agreement is in effect and until such time as the Revolving Commitment have been
terminated, no Notes remain outstanding and the Revolving Loans, together with
interest, Fees and all other Obligations incurred hereunder and under the other
Loan Documents, have been paid in full:

        Section 7.01 Changes in Business.
Neither Holdings nor any of its Subsidiaries will engage in any business if, as
a result, the general nature of the business, taken on a consolidated basis,
which would then be engaged in by Holdings and its Subsidiaries, would be
substantially changed from the general nature of the business engaged in by
Holdings and its Subsidiaries on the Closing Date.

        Section 7.02 Consolidation,
Merger, Acquisitions, Asset Sales, etc. Holdings will not, and will not
permit any Subsidiary to, (i) wind up, liquidate or dissolve its affairs, (ii)
enter into any transaction of merger or consolidation, (iii) make or otherwise
effect any Acquisition, (iv) sell or otherwise dispose of any of its property or
assets outside the ordinary course of business, or otherwise make or otherwise
effect any Asset Sale, or (v) agree to do any of the foregoing at any future
time, except that, if no Default or Event of Default shall have occurred
and be continuing or would result therefrom, each of the following shall be
permitted:

        (a) the merger, consolidation or amalgamation of (i) any
Subsidiary of Holdings (other than the Borrower) with or into Holdings, 
provided Holdings is the surviving or continuing or resulting corporation;
(ii) any Subsidiary of Holdings (other than the Borrower) with or into any
Guarantor, provided that the surviving or continuing or resulting
corporation is a Guarantor; (iii) any Subsidiary of Holdings that is a Guarantor
with or into the Borrower, provided the Borrower is the surviving or
continuing or resulting corporation; or (iv) any Foreign Subsidiary of Holdings
with or into any other Foreign Subsidiary of Holdings; and

        (b) any Asset Sale by (i) Holdings to any Credit Party (other
than the Borrower), (ii) any Subsidiary of Holdings (other than the Borrower) to
any Credit Party; or (iii) any Foreign Subsidiary of Holdings to any other
Foreign Subsidiary of Holdings.

        Section 7.03 Liens. Holdings
will not, and will not permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon or with respect to any property or assets of
any kind of Holdings or any such Subsidiary whether now owned or hereafter
acquired, except that the foregoing shall not apply to:

        (a) any Standard Permitted Lien;

47

        (b) Liens in existence on the Closing Date that are listed in
Schedule 7.03;

        (c) Liens (i) that are placed upon fixed or capital assets,
acquired, constructed or improved by Holdings or any Subsidiary, provided
that (A) such Liens only secure Indebtedness permitted by Section 7.04(c), (B)
such Liens and the Indebtedness secured thereby are incurred prior to or within
120 days after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed 90% of the
cost of acquiring, constructing or improving such fixed or capital assets; and
(D) such Liens shall not apply to any other property or assets of Holdings or
any Subsidiary; or (ii) arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any such Liens, provided that
the principal amount of such Indebtedness is not increased and such Indebtedness
is not secured by any additional assets;

        (d) any Lien granted to the Lender securing any of the
Obligations or any other Indebtedness of the Credit Parties under the Loan
Documents or any Indebtedness under any Designated Hedge Agreement; or

        (e) Liens on the Borrower's machinery, equipment and/or
buildings located in Bethlehem, Pennsylvania to the extent that such Liens are
subordinated to the satisfaction of the Lender to the Liens of the Lender
granted pursuant to the Loan Documents and arise from financing that consists of
Subordinated Indebtedness in an aggregate principal amount not to exceed
$2,000,000, at any time.

        Section 7.04 Indebtedness.
Holdings will not, and will not permit any of its Subsidiaries to, contract,
create, incur, assume or suffer to exist any Indebtedness of Holdings or any of
its Subsidiaries, except:

        (a) Indebtedness incurred under this Agreement and the other
Loan Documents;

        (b) the Indebtedness set forth on Schedule 7.04, and
any refinancing, extension, renewal or refunding of any such Indebtedness not
involving an increase in the principal amount thereof;

        (c) (i) Indebtedness consisting of Capital Lease Obligations
of Holdings and its Subsidiaries, (ii) Indebtedness secured by a Lien referred
to in Section 7.03(c), and (iii) any refinancing, extension, renewal or
refunding of any such Indebtedness not involving an increase in the principal
amount thereof, provided the aggregate outstanding principal amount
(using Capitalized Lease Obligations in lieu of principal amount, in the case of
any Capital Lease) of Indebtedness permitted by this subpart (c) shall not
exceed $100,000 at any time;

        (d) any intercompany loans (i) made by Holdings or any
Subsidiary of Holdings to any Credit Party; or (ii) made by any Foreign
Subsidiary of Holdings to any other Foreign Subsidiary of Holdings;

        (e) Indebtedness of Holdings and its Subsidiaries under Hedge
Agreements, provided such Hedge Agreements have been entered into in the
ordinary course of business and not for speculative purposes; 

        (f) Indebtedness constituting Guaranty Obligations permitted
by Section 7.05; and

        (g) other Indebtedness of the Credit Parties to the extent
not permitted by any of the foregoing subparts, provided that (i) all
such Indebtedness constitutes Subordinated Indebtedness, (ii) no Default or
Event of Default shall then exist or immediately after incurring any of such
Indebtedness will exist, (iii) the documentation with respect to such
Indebtedness shall be in form and substance satisfactory 

48

to the Lender, and (iv)
Holdings and its Subsidiaries shall be in compliance with the financial
covenants set forth in Section 7.07 both immediately before and after giving 
pro forma effect to the incurrence of such Indebtedness.

        Section 7.05 Investments and
Guaranty Obligations. Holdings will not, and will not permit any of its
Subsidiaries to, directly or indirectly, (i) make or commit to make any
Investment or (ii) be or become obligated under any Guaranty Obligations, 
except:

        (a) Investments by Holdings or any of its Subsidiaries in
cash and Cash Equivalents;

        (b) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal course of
business;

        (c) Holdings and its Subsidiaries may acquire and hold
receivables and similar items owing to them in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;

        (d) any Permitted Creditor Investment;

        (e) loans and advances to employees for business-related
travel expenses, moving expenses, costs of replacement homes, business machines
or supplies, automobiles and other similar expenses, in each case incurred in
the ordinary course of business, provided the aggregate outstanding
amount of all such loans and advances shall not exceed $100,000 at any time;

        (f) to the extent not permitted by any of the other subparts
in this Section, Investments existing as of the Closing Date and described on 
Schedule 7.05 ;

        (g) any Guaranty Obligations of Holdings or any Subsidiary in
favor of the Lender under any Designated Hedge Agreements pursuant to the Loan
Documents;

        (h) Investments of Holdings and its Subsidiaries in Hedge
Agreements permitted to be entered into pursuant to this Agreement;

        (i) Investments (i) of Holdings or any of its Subsidiaries in
any Subsidiary existing as of the Closing Date, (ii) of Holdings in any Credit
Party made after the Closing Date, or (iii) of any Credit Party in any other
Credit Party made after the Closing Date;

        (j) intercompany loans permitted by Section 7.04(d); and

        (k) any Guaranty Obligation incurred by any Credit Party with
respect to Indebtedness of another Credit Party which Indebtedness is permitted
by Section 7.04.

        Section 7.06 Restricted Payments.
Holdings will not, and will not permit any of its Subsidiaries to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except:

        (a) Holdings or any of its Subsidiaries may declare and pay
or make Capital Distributions that are payable solely in additional shares of
its common stock (or warrants, options or other rights to acquire additional
shares of its common stock); 

49

        (b) (i) any Subsidiary of Holdings may declare and pay or
make Capital Distributions to any Credit Party, and (ii) any Foreign Subsidiary
of Holdings may declare and pay or make Capital Distributions to any other
Foreign Subsidiary or to any Credit Party; and 

        (c) Holdings may declare and pay or make Cash Dividends to
the holders of its Preferred Shares (as defined in the Certificate of
Incorporation referred to below), provided that (i) no Default or Event
of Default shall have occurred and be continuing or would result therefrom, (ii)
Holdings will be in compliance with the financial covenants set forth in Section
7.07 after giving pro forma effect to each such Cash Dividend, and (iii)
all such Cash Dividends shall be made by Holdings in such amounts and upon the
terms and conditions set forth in its Certificate of Incorporation (as amended
by the Certificate of Designations, filed with the Secretary of State of the
State of Delaware on June 8, 2005), as in effect on the Closing Date.

        Section 7.07 Financial Covenants.

        (a) Minimum Liquidity. Holdings will at all times
maintain on a consolidated basis Liquidity in an amount equal to or greater than
$1,000,000.

        (b) Minimum Consolidated EBITDA. Holdings shall have,
at the end of each Testing Period ending on the dates set forth below,
Consolidated EBITDA for such Testing Period of not less than the following:

	
		Testing Period
	
		Consolidated EBITDA

	
		December 31, 2005
	
		($175,000)

	
		March 31, 2006
	
		$250,000

	
		June 30, 2006
	
		$500,000

	
		September 30, 2006 and thereafter
	
		$1,000,000

        (c) Consolidated Net Worth. Holdings will not permit
its Consolidated Net Worth at any time to be less than the sum of (i) $4,000,000
plus (ii) 50% of Consolidated Net Income of Holdings (to the extent a
positive number) for each fiscal quarter ending after the Closing Date plus
(iii) 75% of the net proceeds of any equity offering (or any debt offering to
the extent converted into equity).

        Section 7.08 Limitation on Certain
Restrictive Agreements. Holdings will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into, incur or permit to exist or
become effective, any "negative pledge" covenant or other agreement, restriction
or arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of Holdings or any Subsidiary to create, incur or suffer to exist any
Lien upon any of its property or assets as security for Indebtedness, or (b) the
ability of any such Subsidiary to make Capital Distributions or any other
interest or participation in its profits owned by Holdings or any Subsidiary of
Holdings, or pay any Indebtedness owed to Holdings or a Subsidiary of Holdings,
or to make loans or advances to Holdings or any of Holdings' other Subsidiaries,
or transfer any of its property or assets to Holdings or any of Holdings' other
Subsidiaries, except for such restrictions existing under or by reason of
(i) applicable law, (ii) this Agreement and the other Loan Documents, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest, (iv) customary provisions restricting assignment of any
licensing agreement entered into in the ordinary course of business, (v)
customary provisions restricting the transfer or further encumbering of assets
subject to Liens permitted under Section 7.03(c), (vi) customary restrictions
affecting only a Subsidiary of Holdings under any agreement or instrument
governing any of the 

50

Indebtedness of a Subsidiary
permitted pursuant to Section 7.04, (vii) restrictions affecting any Foreign
Subsidiary of Holdings under any agreement or instrument governing any
Indebtedness of such Foreign Subsidiary permitted pursuant to Section 7.04, and
customary restrictions contained in "comfort" letters and guarantees of any such
Indebtedness, (viii) any document relating to Indebtedness secured by a Lien
permitted by Section 7.03, insofar as the provisions thereof limit grants of
junior liens on the assets securing such Indebtedness, and (ix) any Operating
Lease or Capital Lease, insofar as the provisions thereof limit grants of a
security interest in, or other assignments of, the related leasehold interest to
any other Person.

        Section 7.09 Transactions with
Affiliates. Holdings will not, and will not permit any Subsidiary to, enter
into any transaction or series of transactions with any Affiliate (other than,
in the case of Holdings, any Subsidiary, and in the case of a Subsidiary,
Holdings or another Subsidiary) other than in the ordinary course of business of
and pursuant to the reasonable requirements of Holdings' or such Subsidiary's
business and upon fair and reasonable terms no less favorable to Holdings or
such Subsidiary than would be obtained in a comparable arm's-length transaction
with a Person other than an Affiliate, except (i) sales of goods to an
Affiliate for use or distribution outside the United States that in the good
faith judgment of Holdings comply with any applicable legal requirements of the
Code, or (ii) agreements and transactions with and payments to officers,
directors and shareholders that are either (A) entered into in the ordinary
course of business and not prohibited by any of the provisions of this
Agreement, or (B) entered into outside the ordinary course of business, approved
by the directors or shareholders of Holdings, and not prohibited by any of the
provisions of this Agreement or in violation of any law, rule or regulation.

        Section 7.10 Plan Terminations,
Minimum Funding, etc. Holdings will not, and will not permit any Subsidiary
of Holdings or ERISA Affiliate to, (i) terminate any Plan or Plans so as to
result in liability of Holdings or any ERISA Affiliate to the PBGC in excess of,
in the aggregate, the amount that is equal to 5% of Holdings' Consolidated Net
Worth as of the date of the then most recent financial statements furnished to
the Lender pursuant to the provisions of this Agreement, (ii) permit to exist
one or more events or conditions that present a material risk of the termination
by the PBGC of any Plan or Plans with respect to which Holdings or any
Subsidiary of Holdings or ERISA Affiliate would, in the event of such
termination, incur liability to the PBGC in excess of such amount in the
aggregate, (iii) fail to comply with the minimum funding standards of ERISA and
the Code with respect to any Plan, or (iv) incur an obligation to contribute to,
or become a contributing sponsor (as such term is defined in Section 4001 of
ERISA) in, any Multi-Employer Plan or Multiple Employer Plan.

        Section 7.11 Anti-Terrorism Laws.
Neither Holdings nor any of its Subsidiaries shall be subject to or in violation
of any law, regulation, or list of any government agency (including, without
limitation, the U.S. Office of Foreign Asset Control list, Executive Order No.
13224 or the USA Patriot Act) that prohibits or limits the conduct of business
with or the receiving of funds, goods or services to or for the benefit of
certain Persons specified therein or that prohibits or limits the Lender from
making any advance or extension of credit to the Borrower or from otherwise
conducting business with Holdings or any of its Subsidiaries.

ARTICLE VIII.

EVENTS OF DEFAULT

        Section 8.01 Events of Default.
Any of the following specified events shall constitute an Event of Default (each
an "Event of Default"):

51

        (a) Payments: the Borrower shall (i) default in the
payment when due (whether at maturity, on a date on which a required prepayment
is to be made, upon acceleration or otherwise) of any principal of the Revolving
Loans or any reimbursement obligation in respect of any Unpaid Drawing; or (ii)
default, and such default shall continue for three or more Business Days, in the
payment when due of any interest on the Revolving Loans, any Fees or any other
Obligations; or

        (b) Representations, etc.: any representation,
warranty or statement made by any Credit Party herein or in any other Loan
Document or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or

        (c) Certain Covenants: any Credit Party shall default
in the due performance or observance by it of any term, covenant or agreement
contained in Sections 2.10, 6.01, 6.02(ii), 6.03(b), 6.09, 6.10, 6.11, 6.12 or
6.13 or Article VII or Article IX ; or

        (d) Other Covenants: any Credit Party shall default in
the due performance or observance by it of any term, covenant or agreement
contained in this Agreement or any other Loan Document (other than those
referred to in Section 8.01(a) or (b) or (c) above) and such default is not
remedied within 30 days after the earlier of (i) an Authorized Officer of any
Credit Party obtaining knowledge of such default or (ii) the Borrower receiving
written notice of such default from the Lender; or

        (e) Cross Default Under Other Agreements: Holdings or
any of its Subsidiaries shall (i) default in any payment with respect to any
Material Indebtedness (other than the Obligations), and such default shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Material Indebtedness, or (ii) default in the
observance or performance of any agreement or condition relating to any such
Material Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto (and all grace periods applicable to such
observance, performance or condition shall have expired), or any other event
shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Material
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause any such Material Indebtedness to become due prior to its stated maturity;
or any such Material Indebtedness of Holdings or any of its Subsidiaries shall
be declared to be due and payable, or shall be required to be prepaid (other
than by a regularly scheduled required prepayment or redemption, prior to the
stated maturity thereof); or (iii) without limitation of the foregoing clauses,
default in any payment obligation under a Designated Hedge Agreement, and such
default shall continue after the applicable grace period, if any, specified in
such Designated Hedge Agreement or any other agreement or instrument relating
thereto; or

        (f) Invalidity of Loan Documents or Liens: any
provision of any Loan Document, at any time after its execution and delivery and
for any reason other than as expressly permitted hereunder or under such Loan
Document or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Credit Party or any other Person contests in any manner
the validity or enforceability of any provision of any Loan Document; or any
Credit Party denies that it has any or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind any Loan Document or
the Lender fails to have; or

        (g) Judgments: (i) one or more judgments, orders or
decrees shall be entered against Holdings and/or any of its Subsidiaries
involving a liability (other than a liability covered by insurance, as to which
the carrier has adequate claims paying ability and has not effectively reserved
its rights) of $50,000 or more in the aggregate for all such judgments, orders
and decrees for Holdings and its Subsidiaries, and any such judgments or orders
or decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 30 days (or such longer period, not in excess of 60 days, during

52

which enforcement thereof, and the filing of any judgment lien, is effectively
stayed or prohibited) from the entry thereof; or (ii) one or more judgments,
orders or decrees shall be entered against Holdings and/or any of its
Subsidiaries involving a required divestiture of any material properties, assets
or business reasonably estimated to have a fair value in excess of $50,000, and
any such judgments, orders or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal within 30 days (or such longer period, not in
excess of 60 days, during which enforcement thereof, and the filing of any
judgment lien, is effectively stayed or prohibited) from the entry thereof; or

        (h) Insolvency Event: any Insolvency Event shall occur
with respect to Holdings or any Subsidiary of Holdings; or

        (i) ERISA: (i) any of the events described in clauses
(i) through (xi) of Section 6.01(f) shall have occurred; and (ii) there shall
result from any such event or events the imposition of a Lien, the granting of a
security interest, or a liability or a material risk of incurring a liability;
or

        (j) Change of Control: if there occurs a Change of
Control; or

        (k) Material Adverse Effect: any event or development
has occurred that the Lender determines has or is reasonably likely to have a
Material Adverse Effect.

        Section 8.02 Remedies. Upon
the occurrence of any Event of Default, and at any time thereafter, if any Event
of Default shall then be continuing, the Lender shall, by written notice to the
Borrower, take any or all of the following actions, without prejudice to the
rights of the Lender to enforce its claims against the Borrower or any other
Credit Party in any manner permitted under applicable law:

        (a) declare the Revolving Commitment terminated;

        (b) declare the principal of and any accrued interest in
respect of all Revolving Loans, all Unpaid Drawings and all other Obligations
(other than any Obligations under any Designated Hedge Agreement) owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower;

        (c) terminate any Letter of Credit that may be terminated in
accordance with its terms; or

        (d) exercise any other right or remedy available under any of
the Loan Documents or applicable law;

provided that, if an Event of Default specified in
Section 8.01(h) shall occur, the result that would occur upon the giving of
written notice by the Lender as specified in clauses (a) and/or (b) above shall
occur automatically without the giving of any such notice.

ARTICLE IX.

GUARANTY

        Section 9.01 Guaranty by Holdings.

        (a) Holdings irrevocably and unconditionally guarantees to
the Lender and each Designated Hedge Creditor, as applicable, the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all of the Obligations. Such guaranty is an absolute,
unconditional, present 

53

and continuing guaranty of payment and not of collectibility and is in no way conditioned or contingent upon any attempt to
collect from the Borrower or any other Subsidiary or Affiliate of the Borrower,
or any other action, occurrence or circumstance whatsoever. If an Event of
Default shall occur and be continuing hereunder or any payment default shall
occur and be outstanding under any Designated Hedge Agreement, Holdings will,
immediately upon (and in any event no later than one Business Day following) its
receipt of written notice from the Lender demanding payment hereunder, pay to
the Lender, for the benefit of the Creditors, in immediately available funds, at
the Payment Office, such amount of the Obligations as the Lender shall specify
in such notice.

        (b) In addition to the foregoing, Holdings unconditionally
and irrevocably, guarantees to the Creditors the payment of any and all
Obligations, whether or not due or payable by the obligor thereon, upon the
occurrence of an Insolvency Event in respect of the Borrower or such other
Credit Party, and unconditionally and irrevocably, promises to pay the
Obligations to the Lender, for the benefit of the Creditors, on demand, in such
manner as is provided in the Loan Documents governing the Obligations.

        (c) As a separate, additional and continuing obligation,
Holdings unconditionally and irrevocably undertakes and agrees, for the benefit
of the Creditors, that, should any amounts constituting Obligations not be
recoverable from the Borrower or any other Credit Party for any reason
whatsoever (including, without limitation, by reason of any provision of any
Loan Document or any other agreement or instrument executed in connection
therewith being or becoming, at any time, voidable, void, unenforceable, or
otherwise invalid under any applicable law), then notwithstanding any notice or
knowledge thereof by the Lender, any other Creditor, any of their respective
Affiliates, or any other Person, Holdings as sole, original and independent
obligor, upon demand by the Lender, will make payment to the Lender, for the
account of the Creditors, of all such obligations not so recoverable by way of
full indemnity.

        (d) All payments by Holdings under this Article IX shall be
made to the Lender, for the benefit of the Creditors, in such manner as is
provided in the Loan Documents to which such payments relate.

        Section 9.02 Subordination.

        (a) Any Indebtedness or other obligations or liabilities of
the Borrower now or hereafter held by Holdings (collectively, "Subordinated
Obligations") are hereby subordinated to the Indebtedness of the Borrower to
any Creditor; and such Subordinated Obligations of the Borrower to Holdings, if
the Lender, after an Event of Default has occurred, so requests, shall be
collected, enforced and received by Holdings as trustee for the Lender and the
other Creditors and be paid over to the Lender, for the benefit of the
Creditors, on account of the Indebtedness of the Borrower owing under the Loan
Documents to the Lender and to the other Creditors, but without affecting or
impairing in any manner the liability of Holdings under the other provisions of
this Article IX. Prior to the transfer by Holdings of any note or negotiable
instrument evidencing any Subordinated Obligation of the Borrower to Holdings,
Holdings shall mark such note or negotiable instrument with a legend that the
same is subject to this subordination.

        (b) If and to the extent that Holdings makes any payment to
the Lender or any other Creditor or to any other Person pursuant to or in
respect of this Article IX, any reimbursement or similar claim that Holdings may
have against the Borrower by reason thereof shall be subject and subordinate to
the prior termination of the Revolving Commitment and indefeasible payment in
full of all Obligations.

        Section 9.03 Holdings' Obligations
Absolute. The obligations of Holdings under this Article IX shall be
absolute and unconditional, shall not be subject to any counterclaim, setoff,
deduction or defense based on any claim Holdings may have against the Borrower
or any other Person, including, 

54

without limitation,
the Lender, any other Creditor, any of their respective Affiliates, or any other
Guarantor, and shall remain in full force and effect without regard to, and
shall not be released, suspended, abated, deferred, reduced, limited,
discharged, terminated or otherwise impaired or adversely affected by any
circumstance or occurrence whatsoever, other than indefeasible payment in full
of, and complete performance of, all of the Obligations, including, without
limitation:

        (a) any increase in the amount of the Obligations outstanding
from time to time, including, without limitation, any increase in the aggregate
outstanding amount of the Revolving Loans and Letters of Credit above any
specific maximum amount referred to in this Agreement as in effect on the date
hereof, and any increase in any interest rate, Fee or other amount applicable to
any portion of the Obligations or otherwise payable under any Loan Document;

        (b) any direction as to the application of any payment by the
Borrower or by any other Person;

        (c) any incurrence of additional Obligations at any time or
under any circumstances, including, without limitation, (i) during the
continuance of a Default or Event of Default, (ii) at any time when all
conditions to such incurrence have not been satisfied, or (iii) in excess of any
borrowing base, sublimit or other limitations contained in this Agreement or any
of the other Loan Documents;

        (d) any renewal or extension of the time for payment or
maturity of any of the Obligations, or any amendment or modification of, or
addition or supplement to, or deletion from, this Agreement, any other Loan
Document, or any other instrument or agreement applicable to the Borrower or any
other Person, or any part thereof, or any assignment, transfer or other
disposition of any thereof;

        (e) any failure of this Agreement, any other Loan Document,
or any other instrument or agreement applicable to the Borrower or any other
Person, to constitute the legal, valid and binding agreement or obligation of
any party thereto, enforceable in accordance with its terms, or any irregularity
in the form of any Loan Document;

        (f) any waiver, consent, extension, indulgence or other
action or inaction (including, without limitation, any lack of diligence, any
failure to mitigate damages or marshal assets, or any election of remedies)
under or in respect of (i) this Agreement, any other Loan Document, or any such
other instrument or agreement, or (ii) any obligation or liability of the
Borrower or any other Person;

        (g) any payment made to the Lender or any other Creditor on
the Obligations that the Lender or any other Creditor repays, returns or
otherwise restores to the Borrower or any other applicable obligor pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding;

        (h) any sale, exchange, release, surrender or foreclosure of,
or any realization upon, or other dealing with, in any manner and in any order,
any property, rights or interests by whomsoever at any time granted, assigned,
pledged or mortgaged to secure, or howsoever securing, the Obligations, or any
other liabilities or obligations (including any of those hereunder), or any
portion of any thereof;

        (i) any release of any security or any guaranty by or at the
direction of the Lender or any other Creditor, or any release or discharge of,
or limitation of recourse against, any Person furnishing any security or
guaranty, including, without limitation, any release or discharge of Holdings
from this Article IX;

        (j) any Insolvency Event relating to the Borrower or to any
of its properties or assets;

55

        (k) any assignment, transfer or other disposition, in whole
or in part, by the Borrower or any other Person of its interest in any of the
property, rights or interests constituting security for all or any portion of
the Obligations or any other Indebtedness, liabilities or obligations;

        (l) any lack of notice to, or knowledge by, Holdings of any
of the matters referred to above; or

        (m) to the fullest extent permitted under applicable law now
or hereafter in effect, any other circumstance or occurrence, whether similar or
dissimilar to any of the foregoing, that could or might constitute a defense
available to, or a discharge of the obligations of, a guarantor or other surety.

        Section 9.04 Waivers. Holdings
unconditionally waives, to the maximum extent permitted under any applicable law
now or hereafter in effect, insofar as its obligations under this Article IX are
concerned, (a) notice of any of the matters referred to in Section 9.03, (b) all
notices required by statute, rule of law or otherwise to preserve any rights
against Holdings hereunder, including, without limitation, any demand,
presentment, proof or notice of dishonor or non-payment of any Obligation,
notice of acceptance of the Guaranty provided under this Article IX, notice of
the incurrence of any Obligation, notice of any failure on the part of the
Borrower, any of its Subsidiaries or Affiliates, or any other Person, to perform
or comply with any term or provision of this Agreement, any other Loan Document
or any other agreement or instrument to which the Borrower or any other Person
is a party, or notice of the commencement of any proceeding against any other
Person or any of its property or assets, (c) any right to the enforcement,
assertion or exercise against the Borrower or against any other Person or any
collateral of any right, power or remedy under or in respect of this Agreement,
the other Loan Documents or any other agreement or instrument, and (d) any
requirement that Holdings be joined as a party to any proceedings against the
Borrower or any other Person for the enforcement of any term or provision of
this Agreement, the other Loan Documents, or any other agreement or instrument.

        Section 9.05 Subrogation Rights.
Until such time as the Obligations have been paid in full in cash and otherwise
fully performed and the Revolving Commitment under this Agreement have been
terminated, Holdings hereby irrevocably waives all rights of subrogation that it
may at any time otherwise have as a result of this Article IX (whether
contractual, under Section 509 of the Bankruptcy Code, or otherwise) to the
claims of the Lender and/or the other Creditors against the Borrower, any other
Guarantor or any other guarantor of or surety for the Obligations and all
contractual, statutory or common law rights of reimbursement, contribution or
indemnity from the Borrower or any other Guarantor that it may at any time
otherwise have as a result of this Article IX.

        Section 9.06 Holdings Familiar
with Borrower's Affairs. Holdings confirms that it has made its own
independent investigation with respect to the creditworthiness of the Borrower
and its other Subsidiaries and Affiliates and is not executing this Agreement in
reliance on any representation or warranty by the Lender or any other Creditor
or any other Person acting on behalf of the Lender or any other Creditor as to
such creditworthiness. Holdings expressly assumes all responsibilities to remain
informed of the financial condition of the Borrower and its other Subsidiaries
and Affiliates and any circumstances affecting (a) the Borrower's or any other
Subsidiary's or Affiliate's ability to perform its obligations under this
Agreement and the other Loan Documents to which it is a party, or (b) any
collateral securing, or any other guaranty for, all or any part of the
Borrower's or such other Subsidiary's or Affiliate's payment and performance
obligations thereunder; and Holdings further agrees that the Lender and the
other Creditors shall have no duty to advise Holdings of information known to
them regarding such circumstances or the risks Holdings undertakes in this
Article IX.

        Section 9.07 Solvency.
Holdings represents and warrants to the Lender and each of the other Creditors
that as of the date Holdings has become a party to this Agreement, (i) Holdings
has 

56

received consideration that is the reasonable
equivalent value of the obligations and liabilities that Holdings has incurred
to the Lender and the other Creditors under this Article IX and the other Loan
Documents to which Holdings is a party; (ii) Holdings has capital sufficient to
carry on its business and transactions and all business and transactions in
which it is about to engage and is solvent and able to pay its debts as they
mature; (iii) Holdings owns property having a value, both at fair valuation and
at present fair salable value, greater than the amount required to pay its
debts; and (iv) Holdings is not entering into the Loan Documents to which it is
a party with the intent to hinder, delay or defraud its creditors.

        Section 9.08 Continuing Guaranty;
Remedies Cumulative, etc. The guaranty provided under this Article IX is a
continuing guaranty, all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon, and this Article IX shall remain in full force and effect until
terminated as provided in Section 9.14. No failure or delay on the part of the
Lender or any other Creditor in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies that the Lender or any other Creditor would
otherwise have. No notice to or demand on Holdings in any case shall entitle
Holdings to any other further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Lender or any other Creditor to any
other or further action in any circumstances without notice or demand. It is not
necessary for, and neither the Lender nor any other Creditor, undertakes any
obligation or duty to, inquire into the capacity or powers of the Borrower or
any of its Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.

        Section 9.09 Enforcement Expenses.
Holdings hereby agrees to pay, to the extent not paid pursuant to Section 10.01,
all out-of-pocket costs and expenses of the Lender and each other Creditor in
connection with the enforcement of this Article IX and any amendment, waiver or
consent relating hereto (including, without limitation, the fees and
disbursements of a single counsel employed by the Lender and the other Creditors
for each applicable jurisdiction, unless such counsel has a conflict of interest
prohibiting it from representing one or more of the Creditors, in which case the
fees and disbursements of separate counsel for such Creditors shall also be paid
by Holdings as aforesaid).

        Section 9.10 Right of Setoff.
In addition to any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, upon the occurrence and during the
continuance of an Event of Default after any applicable notice and grace period,
each Creditor is hereby authorized at any time or from time to time, without
notice to Holdings or to any other Person, any such notice being expressly
waived, to the fullest extent permitted under applicable law now or hereafter in
effect, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Creditor
to or for the credit or the account of Holdings, against and on account of the
obligations and liabilities of Holdings to such Creditor under this Article IX,
irrespective of whether or not the Lender or such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or claims,
or any of them, shall be contingent or unmatured. Each Creditor agrees to
promptly notify Holdings after any such set off and application, provided,
however, that the failure to give such notice shall not affect the validity
of such set off and application.

        Section 9.11 Reinstatement. If
a claim is ever made upon the Lender or any other Creditor for recission,
repayment, recovery or restoration of any amount or amounts received by the
Lender or any other Creditor in payment or on account of any of the Obligations
and any of the aforesaid payees repays all or part of said amount by reason of
(a) any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (b) any settlement or
compromise of 

57

any such claim effected by such payee
with any such claimant, then and in such event (i) any such judgment, decree,
order, settlement or compromise shall be binding upon Holdings, notwithstanding
any revocation hereof or other instrument evidencing any liability of the
Borrower, (ii) Holdings shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or otherwise recovered or restored to the
same extent as if such amount had never originally been received by any such
payee, and (iii) this Article IX shall continue to be effective or be
reinstated, as the case may be, all as if such repayment or other recovery had
not occurred.

        Section 9.12 Full Recourse
Obligations. It is the desire and intent of Holdings, the Lender and the
other Creditors that this Article IX shall be enforced as a full recourse
obligation of Holdings to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. 

        Section 9.13 Payments Free and
Clear of Setoffs, Counterclaims and Taxes, etc. 

        (a) All payments made by Holdings hereunder will be made
without setoff, counterclaim or other defense and, except as provided for in
this Section 9.13, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes. If any Taxes are so
levied or imposed, Holdings agrees to pay the full amount of such Taxes and such
additional amounts as may be necessary so that every payment by it of all
amounts due hereunder, after withholding or deduction for or on account of any
Taxes will not be less than the amount provided for herein. If any amounts are
payable in respect of Taxes pursuant to the preceding sentence, Holdings agrees
to reimburse each Creditor, upon the written request of such Creditor for taxes
imposed on or measured by the net income or profits of such Creditor pursuant to
the laws of the jurisdiction in which such Creditor is organized or in which the
principal office of such Creditor is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which the principal
office of such Creditor is located and for any withholding of income or similar
taxes imposed by the United States of America as such Creditor shall determine
are payable by, or withheld from, such Creditor in respect of such amounts so
paid to or on behalf of such Creditor pursuant to the preceding sentence, which
request shall be accompanied by a statement from such Creditor setting forth, in
reasonable detail, the computations used in determining such amounts. Holdings
will furnish to the Lender within 45 days after the date the payment of any
Taxes, or any withholding or deduction on account thereof, is due pursuant to
applicable law certified copies of tax receipts, or other evidence satisfactory
to the applicable Creditor, evidencing such payment by Holdings. Holdings will
indemnify and hold harmless the Lender and each Creditor, and reimburse the
Lender or such Creditor upon its written request, for the amount of any Taxes so
levied or imposed on and paid or withheld by such Creditor in respect of
payments by Holdings hereunder.

        (b) Notwithstanding anything to the contrary contained in
this Section 9.13, (i) Holdings shall be entitled, to the extent it is required
to do so by law, to deduct or withhold income or other similar taxes imposed by
the United States (or any political subdivision or taxing authority thereof or
therein) from any amounts payable hereunder for the account of any Creditor that
is not a United States Person (as such term is defined in Section 7701(a)(30) of
the Code) for United States federal income tax purposes and that has not
provided to the Borrower such forms that establish a complete exemption from
such deduction or withholding; and (ii) Holdings shall not be obligated pursuant
to this Section 9.13 to gross-up payments to be made to a Creditor in respect of
income or similar taxes imposed by the United States or any additional amounts
with respect thereto if such Creditor has not provided to the Borrower such
forms.

        Section 9.14 Termination.
After the termination of the Revolving Commitment and all Designated Hedge
Agreements, when no LC Outstandings exist and when all Revolving Loans and other
Obligations (other than unasserted indemnity obligations) have been paid in
full, this guaranty provided 

58

under this Article IX
will terminate and the Lender, at the request and expense of the Borrower and/or
Holdings, will execute and deliver to Holdings an instrument or instruments
acknowledging such termination.

        Section 9.15 Enforcement Only by
Lender. The Creditors agree that the guaranty provided under this Article IX
may be enforced only by the action of the Lender and that no Creditor shall have
any right individually to seek to enforce or to enforce the guaranty provided
under this Article IX, it being understood and agreed that such rights and
remedies may be exercised by the Lender, for the benefit of the Creditors, upon
the terms of this Article IX.

        Section 9.16 Effect of Stay.
In the event that acceleration of the time for payment of any amount payable by
Holdings under any of the Obligations is stayed upon insolvency, bankruptcy or
reorganization of Holdings, all such amounts otherwise subject to acceleration
under the terms of any applicable agreement or instrument evidencing or relating
to any of the Obligations shall nonetheless be payable by Holdings under this
Article forthwith on demand by the Lender.

ARTICLE X.

MISCELLANEOUS

        Section 10.01 Payment of Expenses
etc. The Borrower agrees to pay (or reimburse the Lender) all of the
following: (i) whether or not the transactions contemplated hereby are
consummated, for all reasonable out-of-pocket costs and expenses of the Lender
in connection with the negotiation, preparation, administration and execution
and delivery of the Loan Documents and the documents and instruments referred to
therein; (ii) all reasonable out-of-pocket costs and expenses of the Lender in
connection with any amendment, waiver or consent relating to any of the Loan
Documents that are requested by any Credit Party; (iii) all reasonable
out-of-pocket costs and expenses of the Lender in connection with the
enforcement of any of the Loan Documents or the other documents and instruments
referred to therein, including, without limitation,  the reasonable fees and
disbursements of any individual counsel to the Lender (including, without
limitation, allocated costs of internal counsel); (iv) any and all present and
future stamp and other similar taxes with respect to the foregoing matters and
save the Lender harmless from and against any and all liabilities with respect
to or resulting from any delay or omission (other than to the extent
attributable to any such indemnified Person) to pay such taxes.

        Section 10.02 Indemnification.
The Borrower agrees to indemnify the Lender and its Related Parties
(collectively, the "Indemnitees") from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses reasonably
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of (i) any investigation, litigation or other proceeding
(whether or not the Lender is a party thereto) related to the entering into
and/or performance of any Loan Document or the use of the proceeds of any
Revolving Loans hereunder or the consummation of any transactions contemplated
in any Loan Document, other than any transactions solely involving the
assignment by the Lender of all or a portion of its Revolving Loans and
Revolving Commitment, or the granting of participations therein, as provided in
this Agreement, or arising solely out of any examination of the Lender by any
regulatory or other Governmental Authority having jurisdiction over it, or (ii)
the actual or alleged presence of Hazardous Materials in the air, surface water
or groundwater or on the surface or subsurface of any Real Property owned,
leased or at any time operated by Holdings or any of its Subsidiaries, the
release, generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by Holdings or any
of its Subsidiaries, if Holdings or any such Subsidiary could have or is alleged
to have any responsibility in respect thereof, the non-compliance of any such
Real Property with foreign, federal, state and local laws, regulations and
ordinances (including applicable permits thereunder) applicable thereto, or any
Environmental Claim 

59

asserted against Holdings or any
of its Subsidiaries, in respect of any such Real Property, including, in the
case of each of (i) and (ii) above, without limitation, the reasonable
documented fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified or of any other Indemnitee who is such Person or an Affiliate of
such Person). To the extent that the undertaking to indemnify, pay or hold
harmless any Person set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrower shall make the
maximum contribution to the payment and satisfaction of each of the indemnified
liabilities that is permissible under applicable law. 

        Section 10.03 Right of Setoff.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, the Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by the Lender (including, without limitation, by
branches, agencies and Affiliates of the Lender wherever located) to or for the
credit or the account of the Borrower against and on account of the Obligations
and liabilities of the Borrower to the Lender under this Agreement or under any
of the other Loan Documents, including, without limitation, all claims of any
nature or description arising out of or connected with this Agreement or any
other Loan Document, irrespective of whether or not the Lender shall have made
any demand hereunder and although said Obligations, liabilities or claims, or
any of them, shall be contingent or unmatured. The Lender agrees to promptly
notify the Borrower after any such set off and application, provided, 
however, that the failure to give such notice shall not affect the validity
of such set off and application.

        Section 10.04 Notices. 

        (a) Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subpart (c) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:

        (i) if to the Borrower, to it at 847 Main Street,
		Buffalo, New York 14203, Attention: William H. Burns, Jr. (Telecopier
		No. (716) 855-1078);

		        (ii) if to Holdings, to it c/o 847 Main Street,
		Buffalo, New York 14203, Attention: William H. Burns, Jr. (Telecopier
		No. (716) 855-1078); and

		        (iii) if to the Lender, to it at the Notice Office.

	

        (b) Receipt of Notices. Notices and communications
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent and receipt has been
confirmed by telephone. Notices delivered through electronic communications to
the extent provided in subpart (c) below shall be effective as provided in said
subpart (c).

        (c) Electronic Communications. Notices and other
communications to the Lender hereunder and required to be delivered pursuant to
Sections 6.01(a), (b), (c), (d), (h) or (i) may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet web sites)
pursuant to procedures approved by the Lender. The Lender and the Borrower may,
in their discretion, agree in a 

60

separate writing to accept notices and other
communications to them hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications. Unless the Lender otherwise
prescribes, (i) notices and other communications sent to an e-mail address shall
be deemed received upon the sender's receipt of an acknowledgement from the
intended recipient (such as by the "return receipt requested" function, as
available, return e-mail or other written acknowledgement), provided that
if such notice or other communication is not sent during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been sent at the opening of business on the next Business Day for the recipient,
and (ii) notices or communications posted to an Internet or intranet web site
shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the web site address
therefor.

        (d) Change of Address, Etc. Any party hereto may
change its address or telecopier number for notices and other communications
hereunder by notice to each of the other parties hereto in accordance with
Section 10.04(a).

        Section 10.05 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns; provided, however, that neither the Borrower nor Holdings may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Lender.

        Section 10.06 No Waiver; Remedies
Cumulative. No failure or delay on the part of the Lender in exercising any
right, power or privilege hereunder or under any other Loan Document and no
course of dealing between any Credit Party and the Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on any Credit Party in any case
shall entitle such Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Lender to any other or further action in any circumstances without notice or
demand. Without limiting the generality of the foregoing, the making of a
Revolving Loan or any LC Issuance shall not be construed as a waiver of any
Default or Event of Default, regardless of whether the Lender may have had
notice or knowledge of such Default or Event of Default at the time. The rights
and remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies that the Lender would otherwise have.

        Section 10.07 Governing Law;
Submission to Jurisdiction; Venue; Waiver of Jury Trial. 

        (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW). TO THE FULLEST EXTENT PERMITTED BY
LAW, THE BORROWER AND HOLDINGS EACH HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK GOVERNS THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. Any legal
action or proceeding with respect to this Agreement or any other Loan Document
may be brought in the Supreme Court of the State of New York sitting in New York
County or in the United States District Court of the Southern District of New
York, and, by execution and delivery of this Agreement, the Borrower and
Holdings each hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction 

61

of the aforesaid
courts. The Borrower and Holdings each hereby further irrevocably consents to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to any Credit Party at its address for notices pursuant
to Section 10.04, such service to become effective 30 days after such mailing or
at such earlier time as may be provided under applicable law. Nothing herein
shall affect the right of the Lender to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Credit Parties in any other jurisdiction.

        (b) The Borrower and Holdings each hereby irrevocably waives
any objection that it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Loan Document brought in the courts referred to in
Section 10.07(a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

        (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER
MODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

        Section 10.08 Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same agreement. A set of counterparts executed by all the
parties hereto shall be lodged with the Borrower and the Lender.

        Section 10.09 Integration.
This Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Lender constitute the entire contract among the
parties relating to the subject matter hereof and thereof and supersede any and
all previous agreements and understandings, oral or written, relating to the
subject matter hereof or thereof.

        Section 10.10 Headings Descriptive.
The headings of the several Sections and other portions of this Agreement are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.

        Section 10.11 Amendment or Waiver.
Neither this Agreement nor any other Loan Document, nor any terms hereof or
thereof, may be amended, changed, waived or otherwise modified unless
such amendment, change, waiver or other modification is in writing and signed by
the Credit Parties hereto and the Lender

        Section 10.12 Survival of
Indemnities. All indemnities set forth herein including, without limitation,
in Article III (subject to the limitations set forth Section 3.01(b)) or Section
10.02 shall survive the execution and delivery of this Agreement and the making
and repayment of the Obligations.

62

        Section 10.13 Confidentiality.

        (a) The Lender agrees to maintain the confidentiality of the
Confidential Information, except that Confidential Information may be
disclosed (1) to its and its Affiliates' directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Confidential Information and instructed to keep
such Confidential Information confidential), (2) to any direct or indirect
contractual counterparty in any Hedge Agreement (or to any such contractual
counterparty's professional advisor), so long as such contractual counterparty
(or such professional advisor) agrees to be bound by the provisions of this
Section, (3) to the extent requested by any regulatory authority, (4) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (5) to any other party to this Agreement, (6) to any other
creditor of any Credit Party that is a direct or intended beneficiary of any of
the Loan Documents, so long as such creditor agrees to be bound by the
provisions of this Section, (7) in connection with the exercise of any remedies
hereunder or under any of the other Loan Documents, or any suit, action or
proceeding relating to this Agreement or any of the other Loan Documents or the
enforcement of rights hereunder or thereunder, (8) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or participant in any of its rights or obligations under this
Agreement, (9) with the consent of Holdings, or (10) to the extent such
Confidential Information (i) becomes publicly available other than as a result
of a breach of this Section, or (ii) becomes available to the Lender on a
non-confidential basis from a source other than a Credit Party and not otherwise
in violation of this Section.

        (b) As used in this Section, "Confidential Information"
shall mean all information received from any Credit Party relating to such
Credit Party or its business, other than any such information that is available
to the Lender on a non-confidential basis prior to disclosure by any Credit
Party; provided, however, that, in the case of information received from
such Credit Party after the Closing Date, such information is clearly identified
at the time of delivery as confidential.

        (c) Any Person required to maintain the confidentiality of
Confidential Information as provided in this Section shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Confidential Information
as such Person would accord to its own confidential information. The Borrower
and Holdings each hereby agrees that the failure of the Lender to comply with
the provisions of this Section shall not relieve such Credit Party of any of its
obligations under this Agreement or any of the other Loan Documents.

        Section 10.14 Limitations on
Liability of Lender's LC Issuances. The Borrower assumes all risks of the
acts or omissions of any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letters of Credit. Neither the Lender nor any of its
officers or directors shall be liable or responsible for: (a) the use that may
be made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged;
(c) payment by the Lender against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against the
Lender, and the Lender shall be liable to the Borrower, to the extent of any
direct, but not consequential, damages suffered by the Borrower that the
Borrower proves were caused by (i) the Lender's willful misconduct or gross
negligence in determining whether documents presented under a Letter of Credit
comply with the terms of such Letter of Credit or (ii) the Lender's willful
failure to make lawful payment under any Letter of Credit after the presentation
to it of documentation strictly complying with the terms and conditions of such
Letter of Credit. In furtherance and not in limitation of

63

the foregoing, the Lender may accept documents that
appear on their face to be in order, without responsibility for further
investigation.

        Section 10.15 General Limitation
of Liability. No claim may be made by any Credit Party or any other Person
against the Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of the Lender for any damages other than actual compensatory
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or any of the other Loan Documents, or any act, omission or event
occurring in connection therewith; the Borrower and Holdings hereby, to the
fullest extent permitted under applicable law, waive, release and agree not to
sue or counterclaim upon any such claim for any special, consequential or
punitive damages, whether or not accrued and whether or not known or suspected
to exist in their favor.

        Section 10.16 No Duty. All
attorneys, accountants, appraisers, consultants and other professional persons
(including the firms or other entities on behalf of which any such Person may
act) retained by the Lender with respect to the transactions contemplated by the
Loan Documents shall have the right to act exclusively in the interest of the
Lender and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to Holdings, to any of
its Subsidiaries, or to any other Person, with respect to any matters within the
scope of such representation or related to their activities in connection with
such representation. The Borrower and Holdings each, on behalf of itself and its
Subsidiaries, not to assert any claim or counterclaim against any such persons
with regard to such matters, all such claims and counterclaims, now existing or
hereafter arising, whether known or unknown, foreseen or unforeseeable, being
hereby waived, released and forever discharged.

        Section 10.17 Lender Not Fiduciary
to Borrower, etc. The relationship among Holdings and its Subsidiaries, on
the one hand, and the Lender on the other hand, is solely that of debtor and
creditor, and the Lender has no fiduciary or other special relationship with
Holdings and its Subsidiaries, and no term or provision of any Loan Document, no
course of dealing, no written or oral communication, or other action, shall be
construed so as to deem such relationship to be other than that of debtor and
creditor.

        Section 10.18 Survival of
Representations and Warranties. All representations and warranties herein
shall survive the making of Revolving Loans and all LC Issuances hereunder, the
execution and delivery of this Agreement, any Notes and the other documents the
forms of which are attached as Exhibits , the issue and delivery of any Notes,
any disposition thereof by any holder thereof, and any investigation made by the
Lender any other holder of any of any Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Lender or any
holder of any Notes by or on behalf of Holdings or any of its Subsidiaries
pursuant hereto or otherwise specifically for use in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Credit Parties hereunder, made as of the respective dates specified
therein or, if no date is specified, as of the respective dates furnished to the
Lender.

        Section 10.19 Severability.
Any provision of this Agreement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

        Section 10.20 Independence of
Covenants. All covenants hereunder shall be given independent effect so that
if a particular action, event, condition or circumstance is not permitted by any

64

of such covenants, the fact that it would be permitted
by an exception to, or would otherwise be within the limitations or restrictions
of, another covenant, shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or event, condition or circumstance exists.

        Section 10.21 Interest Rate
Limitation. Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Revolving Loan, together with all fees,
charges and other amounts that are treated as interest on such Revolving Loan
under applicable law (collectively, the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted for,
charged, taken, received or reserved by the Lender in accordance with applicable
law, the rate of interest payable in respect of such Revolving Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Revolving Loan but were not payable as a result
of the operation of this Section shall be cumulated and the interest and Charges
payable to the Lender in respect of other Revolving Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Base Rate to the date of repayment, shall
have been received by the Lender.

        Section 10.22 USA Patriot Act.
The Lender is subject to the USA Patriot Act and hereby notifies Holdings and
the Borrower that pursuant to the requirements of the USA Patriot Act, it is
required to obtain, verify and record information that identifies Holdings and
the Borrower, which information includes the name and address of Holdings and
the Borrower and other information that will allow the Lender to identify
Holdings and the Borrower in accordance with the USA Patriot Act.

[Remainder of page intentionally left blank.]

65

        IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.

	 	MINRAD, INC.By: /s/
		William H. Burns, Jr.______________

		Name: William H. Burns, Jr.

		Title: President and CEO

	 	MINRAD INTERNATIONAL, INC.
		By: /s/ William H. Burns, Jr.______________

		Name: William H. Burns, Jr.

		Title: President and CEO

	 	KEYBANK NATIONAL ASSOCIATION
		By: /s/ Chris Swindell                                         

		Name: Chris Swindell

		Title: Senior Vice President

	 	 

66

	 

CREDIT AGREEMENT

dated as of

December 21, 2005

among

MINRAD, INC.,

as the Borrower,

MINRAD INTERNATIONAL, INC.,

as a Credit Party

and

KEYBANK NATIONAL ASSOCIATION,

as the Lender 

$3,500,000 Revolving Facility

	 

 

					
					TABLE OF CONTENTS

	 	Page
	

		ARTICLE I. DEFINITIONS AND TERMS 

			
		1

	
		 
	
		
Section 1.01

		
	
		Certain Defined Terms

	
		1

	
		 
	
		
Section 1.02

		
	
		Computation of Time Periods

	
		20

	
		 
	
		
Section 1.03

		
	
		Accounting Terms

	
		20

	
		 
	
		
Section 1.04

		
	
		Terms Generally

	
		21

	

		ARTICLE II. THE TERMS OF THE CREDIT
		FACILITY 

			
		
21

	
		 
	
		
Section 2.01

		
	
		Revolving Facility

	
		21

	
		 
	
		
Section 2.02

		
	
		Letters of Credit

	
		21

	
		 
	
		
Section 2.03

		
	
		Notice of Borrowing

	
		23

	
		 
	
		
Section 2.04

		
	
		Evidence of Obligations

	
		23

	
		 
	
		
Section 2.05

		
	
		Interest; Default Rate

	
		23

	
		 
	
		
Section 2.06

		
	
		Fees

	
		24

	
		 
	
		
Section 2.07

		
	
		Termination and Reduction of
							Revolving Commitment

	
		25

	
		 
	
		
Section 2.08

		
	
		Voluntary, Scheduled and Mandatory
							Prepayments of Revolving Loans

	
		25

	
		 
	
		
Section 2.09

		
	
		Method and Place of Payment

	
		26

	
		 
	
		
Section 2.10

		
	
		Guaranty by the Borrower

	
		26

	

		ARTICLE III. ADDITIONAL AMOUNTS, NET
		PAYMENTS AND INCREASED COSTS 

			
		
28

	
		 
	
		
Section 3.01

		
	
		Additional Amounts

	
		28

	
		 
	
		
Section 3.02

		
	
		Net Payments

	
		28

	
		 
	
		
Section 3.03

		
	
		Increased Costs for LC Issuances

	
		29

	

		ARTICLE IV. CONDITIONS PRECEDENT 

			
		
30

	
		 
	
		
Section 4.01

		
	
		Conditions Precedent at Closing Date
							
	
		30

	
		 
	
		
Section 4.02

		
	
		Conditions Precedent to All Credit
							Events

	
		32

	

		ARTICLE V. REPRESENTATIONS AND WARRANTIES
		

			
		
33

	
		 
	
		
Section 5.01

		
	
		Corporate Status

	
		33

	
		 
	
		
Section 5.02

		
	
		Corporate Power and Authority

	
		33

	
		 
	
		
Section 5.03

		
	
		No Violation

	
		33

	
		 
	
		
Section 5.04

		
	
		Governmental Approvals

	
		34

	
		 
	
		
Section 5.05

		
	
		Litigation

	
		34

	
		 
	
		
Section 5.06

		
	
		Use of Proceeds; Margin Regulations
							
	
		34

	
		 
	
		
Section 5.07

		
	
		Financial Statements

	
		34

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TABLE OF CONTENTS

(continued) 	 	 	 	Page
	
		 
	
		
Section 5.08

		
	
		Solvency

	
		35

	
		 
	
		
Section 5.09

		
	
		No Material Adverse Change

	
		35

	
		 
	
		
Section 5.10

		
	
		Tax Returns and Payments

	
		35

	
		 
	
		
Section 5.11

		
	
		Title to Properties, etc

	
		35

	
		 
	
		
Section 5.12

		
	
		Lawful Operations, etc

	
		36

	
		 
	
		
Section 5.13

		
	
		Environmental Matters

	
		36

	
		 
	
		
Section 5.14

		
	
		Compliance with ERISA

	
		36

	
		 
	
		
Section 5.15

		
	
		Intellectual Property, etc

	
		37

	
		 
	
		
Section 5.16

		
	
		Investment Company Act, etc

	
		37

	
		 
	
		
Section 5.17

		
	
		Insurance

	
		37

	
		 
	
		
Section 5.18

		
	
		Burdensome Contracts; Labor
							Relations

	
		37

	
		 
	
		
Section 5.19

		
	
		Security Interests

	
		37

	
		 
	
		
Section 5.20

		
	
		True and Complete Disclosure

	
		38

	
		 
	
		
Section 5.21

		
	
		Defaults

	
		38

	
		 
	
		
Section 5.22

		
	
		Anti-Terrorism Law Compliance

	
		38

	

		ARTICLE VI. AFFIRMATIVE COVENANTS 

			
		
38

	
		 
	
		
Section 6.01

		
	
		Reporting Requirements

	
		38

	
		 
	
		
Section 6.02

		
	
		Books, Records and Inspections

	
		42

	
		 
	
		
Section 6.03

		
	
		Insurance

	
		42

	
		 
	
		
Section 6.04

		
	
		Payment of Taxes and Claims

	
		42

	
		 
	
		
Section 6.05

		
	
		Corporate Franchises

	
		43

	
		 
	
		
Section 6.06

		
	
		Good Repair

	
		43

	
		 
	
		
Section 6.07

		
	
		Compliance with Statutes, etc

	
		43

	
		 
	
		
Section 6.08

		
	
		Compliance with Environmental Laws
							
	
		43

	
		 
	
		
Section 6.09

		
	
		Certain Subsidiaries to Execute a
							Guaranty

	
		43

	
		 
	
		
Section 6.10

		
	
		Additional Security; Real Estate
							Matters; Further Assurances

	
		44

	
		 
	
		
Section 6.11

		
	
		Most Favored Covenant Status

	
		46

	
		 
	
		
Section 6.12

		
	
		Senior Debt

	
		46

	
		 
	
		
Section 6.13

		
	
		Post-Closing Covenants

	
		46

	

		ARTICLE VII. NEGATIVE COVENANTS 

			
		
47

	
		 
	
		
Section 7.01

		
	
		Changes in Business

	
		47

	
		 
	
		
Section 7.02

		
	
		Consolidation, Merger, Acquisitions,
							Asset Sales, etc

	
		47

-ii-

TABLE OF CONTENTS

(continued)

	 	 	 	Page
	
		 
	
		
Section 7.03

		
	
		Liens

	
		47

	
		 
	
		
Section 7.04

		
	
		Indebtedness

	
		48

	
		 
	
		
Section 7.05

		
	
		Investments and Guaranty Obligations
							
	
		49

	
		 
	
		
Section 7.06

		
	
		Restricted Payments

	
		49

	
		 
	
		
Section 7.07

		
	
		Financial Covenants

	
		50

	
		 
	
		
Section 7.08

		
	
		Limitation on Certain Restrictive
							Agreements

	
		50

	
		 
	
		
Section 7.09

		
	
		Transactions with Affiliates

	
		51

	
		 
	
		
Section 7.10

		
	
		Plan Terminations, Minimum Funding,
							etc

	
		51

	
		 
	
		
Section 7.11

		
	
		Anti-Terrorism Laws

	
		51

	

		ARTICLE VIII. EVENTS OF DEFAULT 

			
		
51

	
		 
	
		
Section 8.01

		
	
		Events of Default

	
		51

	
		 
	
		
Section 8.02

		
	
		Remedies

	
		53

	

		ARTICLE IX. GUARANTY 

			
		
53

	
		 
	
		
Section 9.01

		
	
		Guaranty by Holdings

	
		53

	
		 
	
		
Section 9.02

		
	
		Subordination

	
		54

	
		 
	
		
Section 9.03

		
	
		Holdings' Obligations Absolute

	
		54

	
		 
	
		
Section 9.04

		
	
		Waivers

	
		56

	
		 
	
		
Section 9.05

		
	
		Subrogation Rights

	
		56

	
		 
	
		
Section 9.06

		
	
		Holdings Familiar with Borrower's
							Affairs

	
		56

	
		 
	
		
Section 9.07

		
	
		Solvency

	
		56

	
		 
	
		
Section 9.08

		
	
		Continuing Guaranty; Remedies
							Cumulative, etc

	
		57

	
		 
	
		
Section 9.09

		
	
		Enforcement Expenses

	
		57

	
		 
	
		
Section 9.10

		
	
		Right of Setoff

	
		57

	
		 
	
		
Section 9.11

		
	
		Reinstatement

	
		57

	
		 
	
		
Section 9.12

		
	
		Full Recourse Obligations

	
		58

	
		 
	
		
Section 9.13

		
	
		Payments Free and Clear of Setoffs,
							Counterclaims and Taxes, etc

	
		58

	
		 
	
		
Section 9.14

		
	
		Termination

	
		58

	
		 
	
		
Section 9.15

		
	
		Enforcement Only by Lender

	
		59

	
		 
	
		
Section 9.16

		
	
		Effect of Stay

	
		59

	

		ARTICLE X. MISCELLANEOUS 

			
		
59

	
		 
	
		
Section 10.01

		
	
		Payment of Expenses etc

	
		59

	
		 
	
		
Section 10.02

		
	
		Indemnification

	
		59

-iii-

TABLE OF CONTENTS

(continued)

	 	 	 	Page
	
		 
	
		
Section 10.03

		
	
		Right of Setoff

	
		60

	
		 
	
		
Section 10.04

		
	
		Notices

	
		60

	
		 
	
		
Section 10.05

		
	
		Successors and Assigns

	
		61

	
		 
	
		
Section 10.06

		
	
		No Waiver; Remedies Cumulative

	
		61

	
		 
	
		
Section 10.07

		
	
		Governing Law; Submission to
							Jurisdiction; Venue; Waiver of Jury Trial

	
		61

	
		 
	
		
Section 10.08

		
	
		Counterparts

	
		62

	
		 
	
		
Section 10.09

		
	
		Integration

	
		62

	
		 
	
		
Section 10.10

		
	
		Headings Descriptive

	
		62

	
		 
	
		
Section 10.11

		
	
		Amendment or Waiver

	
		62

	
		 
	
		
Section 10.12

		
	
		Survival of Indemnities

	
		62

	
		 
	
		
Section 10.13

		
	
		Confidentiality

	
		63

	
		 
	
		
Section 10.14

		
	
		Limitations on Liability of
							Lender's LC Issuances

	
		63

	
		 
	
		
Section 10.15

		
	
		General Limitation of Liability

	
		64

	
		 
	
		
Section 10.16

		
	
		No Duty

	
		64

	
		 
	
		
Section 10.17

		
	
		Lender Not Fiduciary to Borrower,
							etc

	
		64

	
		 
	
		
Section 10.18

		
	
		Survival of Representations and
							Warranties

	
		64

	
		 
	
		
Section 10.19

		
	
		Severability

	
		64

	
		 
	
		
Section 10.20

		
	
		Independence of Covenants

	
		64

	
		 
	
		
Section 10.21

		
	
		Interest Rate Limitation

	
		65

	
		 
	
		
Section 10.22

		
	
		USA Patriot Act

	
		65

-iv-

TABLE OF CONTENTS

 

Page

EXHIBITS

	
Exhibit A
	
Form of Revolving Facility Note
	
Exhibit B-1
	
Form of LC Request
	
Exhibit B-2
	
Form of Notice of Borrowing
	
Exhibit C
	
Form of Security Agreement
	
Exhibit D
	
Form of Borrowing Base Certificate
	
Exhibit E
	
Form of Compliance Certificate
	
Exhibit F
	
Form of Closing Certificate
	
Exhibit G
	
Form of Mortgage
	
		
	 

SCHEDULES

	
Schedule 3
	
Mortgaged Real Property
	
Schedule 5.01
	
Subsidiary Information
	
Schedule 5.17
	
Insurance
	
Schedule 7.03
	
Liens
	
Schedule 7.04
	
Indebtedness
	
Schedule 7.05
	
Investments

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