Document:

<PAGE>

                                                                    Exhibit 10.1

                                  $127,500,000

                                CREDIT AGREEMENT

                                      among

                             PACIFIC CIRCUITS, INC.,
                                  as Borrower,

                             CIRCUIT HOLDINGS, LLC,

                                       and

                    THE DOMESTIC SUBSIDIARIES OF THE BORROWER
                        FROM TIME TO TIME PARTIES HERETO,
                                 as Guarantors,

                           THE LENDERS PARTIES HERETO

                                       and

                           FIRST UNION NATIONAL BANK,
                             as Administrative Agent

                           DRESDNER BANK AG, NEW YORK
                           AND GRAND CAYMAN BRANCHES,
                              as Syndication Agent

                                       and

                             SUNTRUST BANK, ATLANTA,
                             as Documentation Agent

                                       and

                       FIRST UNION CAPITAL MARKETS CORP.,
                                as Lead Arranger

                            Dated as of July 13, 1999
--------------------------------------------------------------------------------

<PAGE>

<TABLE>
<CAPTION>
                               TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
ARTICLE I DEFINITIONS .........................................................1
         Section 1.1 DEFINED TERMS ............................................1
         Section 1.2 OTHER DEFINITIONAL PROVISIONS ...........................26
         Section 1.3 ACCOUNTING TERMS ........................................27
ARTICLE II THE LOANS; AMOUNT AND TERMS .......................................27
         Section 2.1 REVOLVING LOANS .........................................27
         Section 2.2 TRANCHE A TERM LOAN FACILITY ............................29
         Section 2.3 TRANCHE B TERM LOAN FACILITY ............................31
         Section 2.4 LETTER OF CREDIT SUBFACILITY ............................33
         Section 2.5 SWINGLINE LOAN SUBFACILITY ..............................37
         Section 2.6 FEES ....................................................39
         Section 2.7 COMMITMENT REDUCTIONS ...................................39
         Section 2.8 PREPAYMENTS .............................................40
         Section 2.9 MINIMUM PRINCIPAL AMOUNT OF TRANCHES ....................42
         Section 2.10 DEFAULT RATE AND PAYMENT DATES .........................43
         Section 2.11 CONVERSION OPTIONS .....................................43
         Section 2.12 COMPUTATION OF INTEREST AND FEES .......................43
         Section 2.13 PRO RATA TREATMENT AND PAYMENTS ........................44
         Section 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT .......46
         Section 2.15 INABILITY TO DETERMINE INTEREST RATE ...................47
         Section 2.16 ILLEGALITY .............................................47
         Section 2.17 REQUIREMENTS OF LAW ....................................48
         Section 2.18 INDEMNITY ..............................................49
         Section 2.19 TAXES ..................................................49
         Section 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES......51
         Section 2.21 REPLACEMENT OF LENDERS . ...............................53
ARTICLE III REPRESENTATIONS AND WARRANTIES ...................................53
         Section 3.1 FINANCIAL CONDITION .....................................53
         Section 3.2 NO CHANGE . .............................................54
         Section 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW ................54
         Section 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS .54
         Section 3.5 NO LEGAL BAR; NO DEFAULT . ..............................55
         Section 3.6 NO MATERIAL LITIGATION . ................................55
         Section 3.7 INVESTMENT COMPANY ACT . ................................55
         Section 3.8 MARGIN REGULATIONS . ....................................55
         Section 3.9 ERISA ...................................................55
         Section 3.10 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE
         3.10, which in the aggregate, could not be reasonably expected to
         have a Material Adverse Effect ......................................56
         Section 3.11 PURPOSE OF LOANS .......................................57
         Section 3.12 SUBSIDIARIES ...........................................57
         Section 3.13 OWNERSHIP ..............................................57
         Section 3.14 INDEBTEDNESS ...........................................58
         Section 3.15 TAXES ..................................................58
         Section 3.16 INTELLECTUAL PROPERTY ..................................58

                                       i
<PAGE>

         Section 3.17 SOLVENCY ...............................................58
         Section 3.18 INVESTMENTS ............................................58
         Section 3.19 LOCATION OF COLLATERAL .................................59
         Section 3.20 NO BURDENSOME RESTRICTIONS .............................59
         Section 3.21 BROKERS' FEES ..........................................59
         Section 3.22 LABOR MATTERS ..........................................59
         Section 3.23 SECURITY DOCUMENTS .....................................59
         Section 3.24 ACCURACY AND COMPLETENESS OF INFORMATION ...............60
         Section 3.25 YEAR 2000 ISSUE ........................................60
ARTICLE IV CONDITIONS PRECEDENT ..............................................60
         Section 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS,
         TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS .......................60
         Section 4.2 CONDITIONS TO INITIAL REVOLVING LOANS, TRANCHE A TERM
         LOANS AND TRANCHE B TERM LOANS ......................................62
         Section 4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT ..................66
ARTICLE V AFFIRMATIVE COVENANTS ..............................................67
         Section 5.1 FINANCIAL STATEMENTS ....................................67
         Section 5.2 CERTIFICATES; OTHER INFORMATION .........................69
         Section 5.3 PAYMENT OF OBLIGATIONS ..................................70
         Section 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE ........70
         Section 5.5 MAINTENANCE OF PROPERTY; INSURANCE ......................70
         Section 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS ..71
         Section 5.7 NOTICES .................................................71
         Section 5.8 ENVIRONMENTAL LAWS ......................................72
         Section 5.9 FINANCIAL COVENANTS .....................................72
         Section 5.10 ADDITIONAL SUBSIDIARY GUARANTORS .......................75
         Section 5.11 COMPLIANCE WITH LAW ....................................75
         Section 5.12 PLEDGED ASSETS .........................................75
         Section 5.13 YEAR 2000 COMPLIANCE ...................................76
         Section 5.14 INTEREST RATE PROTECTION ...............................76
         Section 5.15 SENIOR DEBT RATING .....................................76
         Section 5.16 FURTHER ASSURANCES .....................................76
ARTICLE VI NEGATIVE COVENANTS ................................................77
         Section 6.1 INDEBTEDNESS ............................................77
         Section 6.2 LIENS ...................................................78
         Section 6.3 GUARANTY OBLIGATIONS ....................................78
         Section 6.4 NATURE OF BUSINESS ......................................78
         Section 6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. .78
         Section 6.6 ADVANCES, INVESTMENTS AND LOANS .........................80
         Section 6.7 TRANSACTIONS WITH AFFILIATES ............................80
         Section 6.8 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS .................80
         Section 6.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL
         CONTRACTS ...........................................................80
         Section 6.10 LIMITATION ON RESTRICTED ACTIONS .......................81
         Section 6.11 RESTRICTED PAYMENTS . ..................................81
         Section 6.12 PREPAYMENTS OF INDEBTEDNESS, ETC. ......................81
         Section 6.13 SALE LEASEBACKS ........................................82
         Section 6.14 NO FURTHER NEGATIVE PLEDGES ............................82

                                       ii
<PAGE>

         Section 6.15 PARENT HOLDING COMPANY..................................82
         Section 6.16 OTHER PAYMENTS .........................................82
         Section 6.17 OPERATING LEASES .......................................83
ARTICLE VII EVENTS OF DEFAULT ................................................83
         Section 7.1 EVENTS OF DEFAULT .......................................83
         Section 7.2 ACCELERATION; REMEDIES ..................................85
ARTICLE VIII THE AGENT .......................................................86
         Section 8.1 APPOINTMENT .............................................86
         Section 8.2 DELEGATION OF DUTIES ....................................86
         Section 8.3 EXCULPATORY PROVISIONS ..................................86
         Section 8.4 RELIANCE BY ADMINISTRATIVE AGENT ........................87
         Section 8.5 NOTICE OF DEFAULT .......................................87
         Section 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS ..88
         Section 8.7 INDEMNIFICATION .........................................88
         Section 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY .........89
         Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT ..........................89
ARTICLE IX MISCELLANEOUS .....................................................89
         Section 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL ...........89
         Section 9.2 NOTICES .................................................91
         Section 9.3 NO WAIVER; CUMULATIVE REMEDIES ..........................92
         Section 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES ..............93
         Section 9.5 PAYMENT OF EXPENSES AND TAXES ...........................93
         Section 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
         LENDERS .............................................................93
         Section 9.7 ADJUSTMENTS; SET-OFF ....................................96
         Section 9.8 TABLE OF CONTENTS AND SECTION HEADINGS ..................97
         Section 9.9 COUNTERPARTS ............................................97
         Section 9.10 EFFECTIVENESS ..........................................98
         Section 9.11 SEVERABILITY ...........................................98
         Section 9.12 INTEGRATION ............................................98
         Section 9.13 GOVERNING LAW ..........................................98
         Section 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS .........98
         Section 9.15 CONFIDENTIALITY ........................................99
         Section 9.16 ACKNOWLEDGMENTS ........................................99
         Section 9.17 WAIVER AGREEMENT ......................................100
         Section 9.18 WAIVERS OF JURY TRIAL .................................100
ARTICLE X GUARANTY ..........................................................100
         Section 10.1 THE GUARANTY ..........................................100
         Section 10.2 BANKRUPTCY ............................................101
         Section 10.3 NATURE OF LIABILITY ...................................101
         Section 10.4 INDEPENDENT OBLIGATION ................................101
         Section 10.5 AUTHORIZATION .........................................101
         Section 10.6 RELIANCE ..............................................102
         Section 10.7 WAIVER ................................................102
         Section 10.8 LIMITATION ON ENFORCEMENT .............................103
         Section 10.9 CONFIRMATION OF PAYMENT ...............................103
</TABLE>

                                       iii
<PAGE>

<TABLE>
<CAPTION>

SCHEDULES
---------
<S>                           <C>
Schedule 1.1(a)               Account Designation Letter
Schedule 1.1(b)               Permitted Liens
Schedule 1.1(c)               Investments
Schedule 1.1(d)               Adjustments to EBITDA
Schedule 2.1(a)               Schedule of Lenders and Commitments
Schedule 2.1(b)(i)            Form of Notice of Borrowing
Schedule 2.1(e)               Form of Revolving Note
Schedule 2.2(d)               Form of Tranche A Term Note
Schedule 2.3(d)               Form of Tranche B Term Note
Schedule 2.5(d)               Form of Swingline Note
Schedule 2.11                 Form of Notice of Conversion/Extension
Schedule 2.19                 Section 2.19 Certificate
Schedule 3.6                  Litigation
Schedule 3.9                  ERISA
Schedule 3.10                 Environmental Matters
Schedule 3.12                 Subsidiaries
Schedule 3.16                 Intellectual Property
Schedule 3.19(a)              Location of Real Property
Schedule 3.19(b)              Location of Collateral
Schedule 3.19(c)              Chief Executive Offices
Schedule 3.22                 Labor Matters
Schedule 4.1(b)               Form of Secretary's Certificate
Schedule 4.2(g)               Form of Solvency Certificate
Schedule 5.2(f)               Form of Borrowing Base Certificate
Schedule 5.5(b)               Insurance
Schedule 5.10                 Form of Joinder Agreement
Schedule 6.1(b)               Indebtedness
Schedule 6.7                  Transactions with Affiliates
Schedule 6.9(e)               Fiscal Month Ends
Schedule 6.17                 Operating Leases
Schedule 9.2                  Schedule of Lenders' Lending Offices
Schedule 9.6(c)               Form of Commitment Transfer Supplement
Schedule 9.17                 Waiver Agreement
</TABLE>

                                       iv
<PAGE>

         CREDIT AGREEMENT, dated as of July 13, 1999, among PACIFIC CIRCUITS,
INC., a Washington corporation (the "BORROWER"), CIRCUIT HOLDINGS, LLC, a
Delaware limited liability company (the "PARENT"), those Domestic Subsidiaries
of the Borrower identified as a "Guarantor" on the signature pages hereto and
such other Domestic Subsidiaries of the Borrower as may from time to time become
a party hereto (collectively, with the Parent, the "GUARANTORS"), the several
banks and other financial institutions as may from time to time become parties
to this Agreement (collectively, the "LENDERS"; and individually, a "LENDER"),
and FIRST UNION NATIONAL BANK, a national banking association, as administrative
agent for the Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").

                                            WITNESSETH:

         WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$127,500,000, as more particularly described herein;

         WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;

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

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.1 DEFINED TERMS.

         As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:

         "ACCOUNT DESIGNATION LETTER" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as
SCHEDULE 1.1(a).

         "ACQUIRED COMPANY" shall mean Power Circuits, Inc., a California
corporation.

         "ACQUISITION" shall mean the acquisition of the Acquired Company.

<PAGE>

         "ACQUISITION DOCUMENTS" shall mean the Agreement and Plan of Merger
dated June 11, 1999 among the Acquired Company, its stockholders, Brockway Moran
& Partners, Inc., Thayer Equity Investors IV, LLC, Power Holdings, LLC and Power
Acquisition Sub., Inc.

         "ADDITIONAL CREDIT PARTY" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.

         "ADMINISTRATIVE AGENT" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.

         "AFFILIATE" shall mean as to any Person, any other Person (excluding
any Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" a Person if such
Person possesses, directly or indirectly, power either (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

         "AGREEMENT" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.

         "ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"PRIME RATE" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "FEDERAL
FUNDS EFFECTIVE RATE" shall mean, for any day, 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 on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.

                                       2
<PAGE>

         "ALTERNATE BASE RATE LOANS" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.

         "APPLICABLE PERCENTAGE" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans and Tranche A Term Loans
which are Alternate Base Rate Loans shall be the percentage set forth under the
column "Alternate Base Rate Margin for Revolving Loans and Tranche A Term
Loans", (ii) Revolving Loans and Tranche A Term Loans which are LIBOR Rate Loans
shall be the percentage set forth under the column "LIBOR Rate Margin for
Revolving Loans, Tranche A Term Loans and Letter of Credit Fee", (iii) Tranche B
Term Loans which are Alternate Base Rate Loans shall be the percentage set forth
under the column "Alternate Base Rate Margin for Tranche B Term Loans", (iv)
Tranche B Term Loans which are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Tranche B Term Loans", (v) the
Letter of Credit Fee shall be the percentage set forth under the column "LIBOR
Rate Margin for Revolving Loans, Tranche A Term Loans and Letter of Credit Fee",
and (vi) the Commitment Fee shall be the percentage set forth under the column
"Commitment Fee":

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                         Alternate     LIBOR Rate
                                         Base Rate     Margin for
                                         Margin for    Revolving                                   LIBOR
                                         Revolving     Loans,            Alternate                  Rate
                                         Loans and     Tranche A         Base Rate               Margin for
                                         Tranche A     Term Loans        Margin for              Tranche B
                  Leverage                  Term       and Letter of     Tranche B                  Term           Commitment
  Level             Ratio                  Loans       Credit Fee        Term Loans                 Loans              Fee
---------------------------------------------------------------------------------------------------------------------------------
<S>        <C>                           <C>           <C>               <C>                   <C>               <C>
    I      GREATER THAN OR EQUAL TO         1.75%         3.25%              2.25%                   3.75%              .50%
                  5.00 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
    II     LESS THAN 5.00 to 1.0 but        1.50%         3.00%              2.25%                   3.75%              .50%
           GREATER THAN OR EQUAL TO
                  4.50 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
   III     LESS THAN 4.50 to 1.0 but         1.25%        2.75%              2.25%                   3.50%              .50%
           GREATER THAN OR EQUAL TO
                  4.00 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
    IV     LESS THAN 4.00 to 1.0 but         1.00%        2.50%              2.25%                   3.50%              .50%
           GREATER THAN OR EQUAL TO
                  3.50 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
    V      LESS THAN 3.50 to 1.0              .75%        2.25%              2.25%                   3.50%              .50%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       3
<PAGE>

         The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on which
the Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an "INTEREST DETERMINATION DATE"). Such Applicable Percentage shall
be effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Percentages shall be based on Level I
until the first Interest Determination Date occurring after September 30, 1999.
After the Closing Date, if the Borrower shall fail to provide the quarterly
financial information and certifications in accordance with the provisions of
Sections 5.1(b) and 5.2(b), the Applicable Percentage from such Interest
Determination Date shall, on the date five (5) Business Days after the date by
which the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on Level I
until such time as such information and certifications are provided, whereupon
the Level shall be determined by the then current Leverage Ratio.

         "ASSET DISPOSITION" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) Specified Sales, (ii) the sale, lease or transfer of
assets permitted by Section 6.5(a)(iii) or (iv) hereof, or (iii) any Equity
Issuance.

         "BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.

         "BORROWER" shall have the meaning set forth in the first paragraph of
this Agreement.

         "BORROWING BASE" shall mean the sum of (i) 85% of Eligible Receivables
PLUS (ii) 50% of Eligible Inventory.

         "BORROWING BASE CERTIFICATE" shall mean a borrowing base certificate
substantially in the form of SCHEDULE 5.2(f).

         "BORROWING DATE" shall mean, in respect of any Loan, the date such Loan
is made.

         "BUSINESS" shall have the meaning set forth in Section 3.10.

         "BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; PROVIDED, HOWEVER, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.

                                       4
<PAGE>

         "CAPITAL LEASE" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

         CAPITAL LEASE OBLIGATIONS" shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.

         "CAPITAL STOCK" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

         "CASH EQUIVALENTS" shall mean (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 twelve months from the date of acquisition ("GOVERNMENT OBLIGATIONS"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"APPROVED BANK"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within one year of the date of acquisition, (iv)
repurchase agreements with a bank or trust company (including a Lender) or a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, and (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.

         "CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) the failure of the Sponsors or one or more of their Affiliates to
maintain beneficial ownership, directly or indirectly, of Voting Stock of the
Borrower representing at least 51% of the combined voting power of all Voting
Stock of the Borrower, (b) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership, directly or indirectly, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of
control over, Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 33% or more of

                                       5
<PAGE>

the combined voting power of all Voting Stock of the Borrower, (c) the failure
of the Borrower to own, directly or indirectly, 100% of the combined voting
power of all Voting Stock of Power Circuits, Inc. or (d) Continuing Directors
shall cease for any reason to constitute a majority of the members of the board
of directors of the Parent then in office. As used herein, "beneficial
ownership" shall have the meaning provided in Rule l3d-3 of the Securities and
Exchange Commission promulgated under the Securities Exchange Act of 1934.

         "CLOSING DATE" shall mean the date of this Agreement.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

         "COLLATERAL" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.

         "COMMITMENT" shall mean the Revolving Commitment, the LOC Commitment,
the Swingline Commitment, the Tranche A Term Loan Commitment and the Tranche B
Term Loan Commitment, individually or collectively, as appropriate.

         "COMMITMENT FEE" shall have the meaning set forth in Section 2.6(a).

         "COMMITMENT PERCENTAGE" shall mean the Revolving Commitment Percentage,
the LOC Commitment Percentage, the Tranche A Term Loan Commitment Percentage
and/or the Tranche B Term Loan Commitment Percentage, as appropriate.

         "COMMITMENT PERIOD" shall mean the period from and including the
Funding Date to but not including the Revolving Commitment Termination Date.

         "COMMITMENT TRANSFER SUPPLEMENT" shall mean a Commitment Transfer
Supplement, substantially in the form of SCHEDULE 9.6(c).

         "COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.

         "CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all capital
expenditures of the Borrower and its Subsidiaries on a consolidated basis for
such period, as determined in accordance with GAAP. The term "Consolidated
Capital Expenditures" shall not include capital expenditures in respect of the
reinvestment of proceeds derived from (i) Recovery Events or (ii) a sale of
assets pursuant to Section 6.5(a)(ii) received by the Borrower and its
Subsidiaries to the extent that such reinvestment is permitted under the Credit
Documents.

         "CONSOLIDATED EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state,

                                       6
<PAGE>

local and foreign income, value added and similar taxes, (C) losses (or MINUS
gains) on the sale or disposition of assets outside the ordinary course of
business, (D) depreciation, amortization expense and other non-cash charges,
all as determined in accordance with GAAP, (E) amounts paid in respect of
management fees to the extent permitted hereunder and (F) other non-recurring
add-backs as set forth on SCHEDULE 1.1(d) PROVIDED THAT, notwithstanding the
foregoing, in the event such period includes the fourth fiscal quarter of
1998 and/or the first fiscal quarter of 1999, Consolidated EBITDA for such
fiscal quarters shall be the amounts set forth on SCHEDULE 1.1(d).

         "CONSOLIDATED INTEREST EXPENSE" means, for any period, all cash
interest expense of the Borrower and its Subsidiaries (including, without
limitation, the interest component under Capital Leases and the interest
component of deferred compensation under the Retention Bonus Plan), as
determined in accordance with GAAP.

         "CONSOLIDATED NET INCOME" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP.

         "CONSOLIDATED WORKING CAPITAL" shall mean, at any time, the excess of
(i) current assets (excluding cash) of the Borrower and its Subsidiaries on a
consolidated basis at such time less (ii) current liabilities (including the
Credit Party Obligations, but excluding the sum of (a) the current portion of
long term Indebtedness, PLUS (b) accrued and unpaid interest on Indebtedness,
PLUS (c) non-cash accruals under the Retention Bonus Plan) of the Borrower and
its Subsidiaries on a consolidated basis at such time, all as determined in
accordance with GAAP.

         "CONTINUING DIRECTORS" means either during any period of up to 24
consecutive months commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Parent (together with
any new director whose election by the Parent's board of directors or whose
nomination for election by the Parent's shareholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved).

         "CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "CREDIT DOCUMENTS" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, LOC Documents and the Security
Documents.

         "CREDIT PARTY" shall mean any of the Borrower or the Guarantors.

         "CREDIT PARTY OBLIGATIONS" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this Agreement,
the Notes or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a filing of a petition of

                                       7
<PAGE>

bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and obligations, whenever arising, owing from the
Borrower or any of its Subsidiaries to any Lender, or any Affiliate of a Lender,
arising under any Hedging Agreement.

         "DEBT ISSUANCE" shall mean the issuance of any Indebtedness for
borrowed money by the any Credit Party or any of its Subsidiaries (excluding,
for purposes hereof, any Equity Issuance or any Indebtedness of the Borrower and
its Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).

         "DEFAULT" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.

         "DEFAULTING LENDER" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.

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

         "DOMESTIC LENDING OFFICE" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on SCHEDULE
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

         "DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.

         "ELIGIBLE INVENTORY" means, as of the date of determination, the gross
dollar value (valued at the lower of cost (on a FIFO basis) or fair market
value) of all finished goods and raw materials inventory of the Borrower and its
Subsidiaries LESS appropriate reserves determined in accordance with GAAP
applied on a consistent basis, BUT EXCLUDING in any event (i) inventory subject
to a Lien other than a Permitted Lien, (ii) inventory upon which the
Administrative Agent does not have a perfected security interest, (iii)
inventory which fails to meet standards for sale or use imposed by Governmental
Authorities having regulatory authority over such inventory or its use or sale,
(iv) inventory which is not useable or saleable at prices approximating their
cost (after taking into account, without duplication, the amount of any reserves
for obsolescence, unsaleability or decline in value), (v) inventory which is
leased or on consignment and (vi) packaging materials, supplies and work in
process.

                                       8
<PAGE>

         "ELIGIBLE RECEIVABLES" means, as of any date of determination and
without duplication, the aggregate book value of all accounts receivable,
receivables, and obligations for payment created or arising from the sale of
inventory or the rendering of services in the ordinary course of business
(collectively, the "RECEIVABLES"), owned by or owing to the Borrower and its
Subsidiaries, net of allowances and reserves for doubtful or uncollectible
accounts and sales adjustments consistent with the Borrower's internal policies
and in any event in accordance with GAAP, net of accrued incentive amounts
(until such time as the Administrative Agent has determined to its satisfaction
that such incentive could not be used as an offset to the applicable
Receivable), but excluding in any event (i) Receivables subject to any Lien,
other than any Permitted Lien, (ii) Receivables upon which the Administrative
Agent does not have a perfected security interest, (iii) Receivables which are
more than 90 days from the date of invoice (net of reserves for bad debts in
connection with any such Receivables but before giving effect to any applicable
credit), (iv) any Receivable not otherwise excluded by clause (iii) above but
owing from an account debtor which is the account debtor on existing Receivables
more than 50% of which are then excluded by such clause (iii), unless the
exclusion by such clause (iii) is a result of a legitimate dispute by the
account debtor and the applicable Receivables are no more than 90 days from the
date of invoice, (v) Receivables evidenced by notes, chattel paper or other
instruments, unless (a) such notes, chattel paper or instruments have been
delivered to and are in the possession of the Administrative Agent or (b) the
aggregate amount of the Receivables evidenced thereby is not greater than
$50,000, (vi) Receivables owing by an account debtor which is subject to any
bankruptcy or insolvency proceeding of any kind, (vii) Receivables owing by an
account debtor located outside of the United States (unless (a) payment for the
goods shipped is either (A) covered by credit insurance in form and substance
acceptable to the Administrative Agent or (B) secured by an irrevocable letter
of credit in a form and from an institution reasonably acceptable to the
Administrative Agent or (b) such receivables are owing by an account debtor
which is majority owned by a parent domiciled in the United States and with
respect to which such parent has an "investment grade" senior debt credit rating
by each of S&P and Moody's provided that such receivables shall not be Eligible
Receivables to the extent they exceed an aggregate amount of $1,500,000 at any
time), (viii) Receivables which are contingent or subject to offset, deduction,
counterclaim, credit, dispute or other defense to payment, in each case to the
extent of such offset, deduction, counterclaim, dispute or other defense, (ix)
Receivables for which any direct or indirect Subsidiary of the Borrower or any
Affiliate of the Borrower is the account debtor, (x) Receivables representing a
sale to the government of the United States of America or any subdivision
thereof unless the Borrower or its Subsidiaries, as applicable have complied (to
the satisfaction of the Administrative Agent), with respect to the granting of a
security interest in such Receivable, with the Federal Assignment of Claims Act
or other similar applicable law and (xi) Receivables (if any) created in
connection with any sale where payment is due on delivery of inventory sold.

         "ENVIRONMENTAL LAWS" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.

                                       9
<PAGE>

         "EQUITY ISSUANCE" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term "Equity Issuance" shall
not include any Asset Disposition or any Debt Issuance.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.

         "EURODOLLAR RESERVE PERCENTAGE" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

         "EVENT OF DEFAULT" shall mean any of the events specified in
Section 7.1; PROVIDED, HOWEVER, that any requirement for the giving of notice
or the lapse of time, or both, or any other condition, has been satisfied.

         "EXCESS CASH FLOW" means, with respect to any fiscal year period of the
Borrower and its Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period PLUS (b) decreases (or minus increases) in
Consolidated Working Capital for such period MINUS (c) Consolidated Capital
Expenditures for such period MINUS (d) optional prepayments made pursuant to
Section 2.8 MINUS (e) Scheduled Funded Debt Payments made during such period
MINUS (f) Consolidated Interest Expense MINUS (g) amounts paid in respect of
federal, state, local and foreign income, value added and similar taxes with
respect to such period.

         "EXTENSION OF CREDIT" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.

         "FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".

         "FEE LETTER" shall mean the letter agreement dated June 17, 1999
addressed to the Borrower from the Administrative Agent, as amended, modified or
otherwise supplemented.

         "FIRST UNION" shall mean First Union National Bank, a national banking
association.

         "FIXED CHARGE COVERAGE RATIO" means, as of the end of each fiscal
quarter of the Borrower, for the Borrower and its Subsidiaries on a consolidated
basis for the four consecutive quarters ending on such date, the ratio of (i)
Consolidated EBITDA for the applicable period MINUS Consolidated Capital
Expenditures for the applicable period to (ii) the sum of Consolidated Interest
Expense for the applicable period PLUS Scheduled Funded Debt Payments

                                       10
<PAGE>

for the applicable period PLUS cash taxes paid during the applicable period. For
purposes hereof, the Consolidated Interest Expense and the Scheduled Funded Debt
Payment components of the Fixed Charge Coverage Ratio for the first three
complete fiscal quarters to occur after the Closing Date shall be determined by
annualizing the Consolidated Interest Expense and the Scheduled Funded Debt
Payment components such that for the first complete fiscal quarter to occur
after the Closing Date such components would be multiplied by four (4), the
first two complete fiscal quarters would be multiplied by two (2) and the first
three fiscal quarters would be multiplied by one AND ONE-THIRD (1 %).

         "FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.

         "FUNDED DEBT" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis, without duplication, (a) all Indebtedness
of such Person other than Indebtedness of the types referred to in clause (e),
(f), (i) and (l) of the definition of "Indebtedness" set forth in this Section
1. 1, (b) all Funded Debt of others of the type referred to in clause (a) above
secured by (or for which the holder of such Funded Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Funded Debt of the type referred to
in clause (a) above of another Person, (d) Funded Debt of the type referred to
in clause (a) above of any partnership or unincorporated joint venture in which
such Person is legally obligated or has a reasonable expectation of being liable
with respect thereto, and (e) the full amount of all obligations under the
Subordinated Notes and the Retention Bonus Plan measured as of the maturity
dates of such obligations and not on a present value basis.

         "FUNDING DATE" shall mean the date upon which the conditions in Section
4.2 shall have been satisfied and the initial Extensions of Credit shall have
been made by the Lenders.

         "GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, SUBJECT, HOWEVER, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.

         "GOVERNMENT ACTS" shall have the meaning set forth in Section 2.20.

         "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

         "GUARANTY OBLIGATIONS' means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other

                                       11

<PAGE>

balance sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar agreements
or arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or Services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.

         "GUARANTOR" shall mean the Parent and any of the Domestic Subsidiaries
identified as a "Guarantor" on the signature pages hereto and the Additional
Credit Parties which execute a Joinder Agreement, together with their successors
and permitted assigns.

         "GUARANTY" shall mean the guaranty of the Guarantors set forth in
Article X.

         "HEDGING AGREEMENTS" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.

         "INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) all obligations of such Person under take-or-pay or similar arrangements
or under commodities agreements, (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging Agreements,
(j) the maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (k)
all preferred Capital Stock issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise) subject
to mandatory sinking fund payments, redemption or other acceleration, (l) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product, (m) the Indebtedness of any partnership or

                                       12

<PAGE>

unincorporated joint venture in which such Person is a general partner or a
joint venturer, and (n) with respect to the Borrower, obligations owing under
the Retention Bonus Plan.

         "INSOLVENCY" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.

         "INSOLVENT" shall mean being in a condition of Insolvency.

         "INTEREST COVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Borrower and its Subsidiaries, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense
for such period. Notwithstanding the foregoing, for purposes of calculating the
Interest Coverage Ratio of the Borrower and its Subsidiaries for the first three
complete fiscal quarters to occur after the Closing Date, Consolidated Interest
Expense shall be determined by annualizing the components thereof such that for
the first complete fiscal quarter to occur after the Closing Date such
components would be multiplied by four (4), the first two complete fiscal
quarters would be multiplied by two (2) and the first three complete fiscal
quarters would be multiplied by one and one-third (1 1/3).

         "INTEREST DETERMINATION DATE" shall have the meaning assigned thereto
in the definition of "Applicable Percentage".

         "INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last day of each March, June, September and December
and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Rate Loan having an Interest Period longer than three
months, each day which is three months after the first day of such Interest
Period and the last day of such Interest Period.

         "INTEREST PERIOD" shall mean, with respect to any LIBOR Rate Loan,

                  (i) initially, the period commencing on the Borrowing Date or
         conversion date, as the case may be, with respect to such LIBOR Rate
         Loan and ending one, two, three or six months thereafter, as selected
         by the Borrower in the notice of borrowing or notice of conversion
         given with respect thereto; and

                  (ii) thereafter, each period commencing on the last day of
         the immediately preceding Interest Period applicable to such LIBOR Rate
         Loan and ending one, two, three or six months thereafter, as selected
         by the Borrower by irrevocable notice to the Administrative Agent not
         less than three Business Days prior to the last day of the then current
         Interest Period with respect thereto;

                  PROVIDED that the foregoing provisions are subject to the
         following:

                                       13

<PAGE>

                           (A) if any Interest Period pertaining to a LIBOR Rate
                  Loan would otherwise end on a day that is not a Business Day,
                  such Interest Period shall be extended to the next succeeding
                  Business Day unless the result of such extension would be
                  to carry such interest period into another calendar month in
                  which event such Interest Period shall end on the immediately
                  preceding Business Day;

                           (B) any Interest Period pertaining to a LIBOR Rate
                  Loan that begins on the last Business Day of a calendar month
                  (or on a day for which there is no numerically corresponding
                  day in the calendar month at the end of such Interest Period)
                  shall end on the last Business Day of the relevant calendar
                  month;

                           (C) if the Borrower shall fail to give notice as
                  provided above, the Borrower shall be deemed to have selected
                  an Alternate Base Rate Loan to replace the affected LIBOR Rate
                  Loan;

                           (D) any Interest Period in respect of any Loan that
                  would otherwise extend beyond the applicable Maturity Date
                  and, further with regard to the Tranche A Term Loans and the
                  Tranche B Term Loans, no Interest Period shall extend beyond
                  any principal amortization payment date unless the portion of
                  such Tranche A Term Loan or Tranche B Term Loan consisting of
                  Alternate Base Rate Loans together with the portion of such
                  Tranche A Term Loan and Tranche B Term Loan consisting of
                  LIBOR Rate Loans with Interest Periods expiring prior to or
                  concurrently with the date such principal amortization payment
                  date is due, is at least equal to the amount of such principal
                  amortization payment due on such date; and

                           (E) no more than six (6) LIBOR Rate Loans may be in
                  effect at any time. For purposes hereof, LIBOR Rate Loans with
                  different Interest Periods shall be considered as separate
                  LIBOR Rate Loans, even if they shall begin on the same date
                  and have the same duration, although borrowings, extensions
                  and conversions may, in accordance with the provisions hereof,
                  be combined at the end of existing Interest Periods to
                  constitute a new LIBOR Rate Loan with a single Interest
                  Period.

         "ISSUING LENDER" shall mean First Union.

         "ISSUING LENDER Fees" shall have the meaning set forth in Section
2.6(c).

         "JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of SCHEDULE 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.

         "LENDER" shall have the meaning set forth in the first paragraph of
this Agreement.

                                       14

<PAGE>

         "LETTERS OF CREDIT" shall mean any letter of credit issued by the
Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be
amended, modified, extended, renewed or replaced from time to time.

         "LETTER OF CREDIT FEE" shall have the meaning set forth in Section
2.6(b).

         "LEVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter, the ratio of (a) Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis on the last day of such period to (b)
Consolidated EBITDA for such twelve month period.

         "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.

         "LIBOR LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

         "LIBOR RATE" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:

                  LIBOR Rate =                          LIBOR
                                        ------------------------------------
                                        1.00 - Eurodollar Reserve Percentage

         "LIBOR RATE LOAN" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.

                                       15
<PAGE>

         "LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).

         "LOAN" shall mean a Revolving Loan, a Swingline Loan, the Tranche A
Term Loan and/or the Tranche B Term Loan as appropriate.

         "LOC COMMITMENT" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in SCHEDULE 2.1 (a), as such amount
may be reduced from time to time in accordance with the provisions hereof.

         "LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on SCHEDULE 2.1 (a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).

         "LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and participate in Letters
of Credit as referenced in Section 2.4 and, individually, the amount of each
Lender's LOC Commitment as specified in SCHEDULE 2.1 (a).

         "LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.

         "LOC OBLIGATIONS" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit PLUS (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.

         "MANDATORY BORROWING" shall have the meaning set forth in Section
2.5(b)(ii) or Section 2.3(b)(ii), as the context may require.

         "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower
or any Guarantor to perform its obligations, when such obligations are required
to be performed, under this Agreement, any of the Notes or any other Credit
Document to which it is a party or (c) the validity or enforceability of this
Agreement, any

                                       16
<PAGE>

of the Notes or any of the other Credit Documents or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder.

         "MATERIAL CONTRACT" shall mean any contract or other arrangement,
whether written or oral, to which the Borrower or any of its Subsidiaries is a
party as to which the breach, nonperformance, cancellation or failure to renew
by any party thereto could reasonably be expected to have a Material Adverse
Effect.

         "MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, friable
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

         "MATURITY DATE" shall mean (i) with respect to the Tranche A Term Loan,
the last scheduled quarterly payment date for the Tranche A Term Loan set forth
in Section 2.2(b), (ii) with respect to the Tranche B Term Loan, the last
scheduled quarterly payment date for the Tranche B Term Loan set forth in
Section 2.3(b) and (iii) with respect to the Revolving Loans, the Revolving
Commitment Termination Date.

         "MOODY'S" shall mean Moody's Investors Service, Inc.

         "MORTGAGE INSTRUMENTS" shall have the meaning set forth in Section
4.2(c)(i).

         "MORTGAGE POLICIES" shall have the meaning set forth in Section
4.2(c)(iii).

         "MORTGAGED PROPERTIES" shall have the meaning set forth in Section
4.2(c)(i).

         "MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

         "NET CASH PROCEEDS" shall mean the aggregate cash proceeds received by
any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs (including, without
limitation, reasonable and customary legal, accounting, brokerage commissions,
finder's fees and investment banking fees, and sales commissions and other
similar fees and commissions), (b) taxes paid or payable as a result thereof and
(c) the amount of any Indebtedness secured by a Lien in such asset that is
required to be repaid upon such disposition; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by the Borrower or any
Subsidiary in any Asset Disposition, Equity Issuance or Debt Issuance.

         "NOTE" or "NOTES" shall mean the Revolving Notes, the Swingline Note,
the Tranche A Term Notes and/or the Tranche B Term Notes, collectively,
separately or individually, as appropriate.

                                       17
<PAGE>

         "NOTICE OF BORROWING" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.3(b)(i), as appropriate.

         "NOTICE OF CONVERSION" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.11.

         "OBLIGATIONS" shall mean, collectively, Loans and LOC Obligations.

         "PARENT" shall mean Circuit Holdings, L.L.C.

         "PARTICIPANT" shall have the meaning set forth in Section 9.6(b).

         "PARTICIPATION Interest" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.4.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

         "PERMITTED INVESTMENTS" shall mean:

                  (i) cash and Cash Equivalents;

                  (ii) receivables owing to the Borrower or any of its
          Subsidiaries or any receivables and advances to suppliers, in each
          case if created, acquired or made in the ordinary course of business
          and payable or dischargeable in accordance with Customary trade terms;

                  (iii) investments in and loans to any Credit Parties;

                  (iv) loans and advances to officers, directors, employees and
          Affiliates in an aggregate amount not to exceed $1,000,000 at any
          time outstanding;

                  (v) investments (including debt obligations) received in
          connection with the bankruptcy or reorganization of suppliers and
          customers and in settlement of delinquent obligations of, and other
          disputes with, customers and suppliers arising in the ordinary course
          of business;

                  (vi) investments, acquisitions or transactions permitted under
          Section 6.5(b);

                  (vii) additional loan advances and/or investments of a nature
          not contemplated by the foregoing clauses hereof, PROVIDED that such
          loans, advances and/or investments made pursuant to this clause (vii)
          shall not exceed an aggregate amount of $100,000;

                  (viii) investments existing on the date hereof and set forth
          on SCHEDULE 1.1(c);

                                       18
<PAGE>

                  (ix) investments by the Borrower in Hedge Agreements permitted
          under Section 6.1(e); and

                  (x) investments consisting of intercompany debt permitted
          under Section 6.1(d).

         As used herein, "INVESTMENT" means all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.

         "PERMITTED LIENS" shall mean:

                  (i) Liens created by or otherwise existing, under or in
          connection with this Agreement or the other Credit Documents in favor
          of the Lenders;

                  (ii) Liens in favor of a Lender hereunder in connection with
          Hedging Agreements, but only (A) to the extent such Liens secure
          obligations under Hedging Agreements with any Lender, or any Affiliate
          of a Lender, (B) to the extent such Liens are on the same collateral
          as to which the Administrative Agent on behalf of the Lenders also has
          a Lien and (C) if such provider and the Lenders shall share PARI PASSU
          in the collateral subject to such Liens;

                  (iii) purchase money Liens securing purchase money
          indebtedness (and refinancings thereof) to the extent permitted under
          Section 6.1(c);

                  (iv) Liens for taxes, assessments, charges or other
          governmental levies not yet due or as to which the period of grace
          (not to exceed 60 days), if any, related thereto has not expired or
          which are being contested in good faith by appropriate proceedings,
          PROVIDED that adequate reserves with respect thereto are maintained on
          the books of the Borrower or its Subsidiaries, as the case may be, in
          conformity with GAAP (or, in the case of Subsidiaries with significant
          operations outside of the United States of America, generally accepted
          accounting principles in effect from time to time in their respective
          jurisdictions of incorporation);

                  (v) carriers', warehousemen's, mechanics', materialmen's,
          repairmen's or other like Liens arising in the ordinary course of
          business which are not overdue for a period of more than 60 days or
          which are being contested in good faith by appropriate proceedings;

                  (vi) pledges or deposits in connection with workers'
          compensation, unemployment insurance and other social security
          legislation and deposits securing liability to insurance carriers
          under insurance or self-insurance arrangements;

                                       19
<PAGE>

                  (vii) deposits to secure the performance of bids, trade
          contracts, (other than for borrowed money), leases, statutory
          obligations, surety and appeal bonds, performance bonds and other
          obligations of a like nature incurred in the ordinary course of
          business;

                  (viii) any extension, renewal or replacement (or successive
          extensions, renewals or replacements), in whole or in part, of any
          Lien referred to in the foregoing clauses; PROVIDED that such
          extension, renewal or replacement Lien shall be limited to all or a
          part of the property which secured the Lien so extended, renewed or
          replaced (plus improvements on such property);

                  (ix) Liens existing on the Closing Date and set forth on
          SCHEDULE 1.1(b); provided that (a) no such Lien shall at any time be
          extended to cover property or assets other than the property or assets
          subject thereto on the Closing Date and (b) the principal amount of
          the Indebtedness secured by such Liens shall not be extended, renewed,
          refunded or refinanced;

                  (x) Liens arising in connection with Capitalized Leases to the
          extent permitted under SECTION 6.1(c);

                  (xi) Liens on property of a Person existing at the time such
          Person is acquired, merged into or consolidated with the Borrower or
          any Subsidiary of the Borrower so long as such Liens were not created
          in contemplation of such acquisition, merger or consolidation;

                  (xii) Liens set forth in Exhibit B to the real property title
          reports set forth on SCHEDULE 1.1(b);

                  (xiii) any attachment or judgment Lien the existence of which,
          individually or in the aggregate, does not result in an Event of
          Default under Section 7.1(f); and

                  (xiv) other Liens securing debt outstanding in an aggregate
          principal amount not to exceed $250,000.

                  "Person" shall mean an individual, partnership, corporation,
          limited liability company, business trust, joint stock company, trust,
          unincorporated association, joint venture, Governmental Authority or
          other entity of whatever nature.

         "PLAN" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.

         "PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of the
Closing Date to be executed in favor of the Administrative Agent by the Borrower
and each of the other Credit Parties, as amended, modified, restated or
supplemented from time to time.

                                       20
<PAGE>

         "PRIME RATE" shall have the meaning set forth in the definition of
Alternate Base Rate.

         "PROPERTIES" shall have the meaning set forth in Section 3.10(a).

         "PURCHASING LENDERS" shall have the meaning set forth in Section
9.6(c).

         "RECOVERY EVENT" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.

         "REGISTER" shall have the meaning set forth in Section 9.6(d).

         "REORGANIZATION" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.

         "REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.

         "REQUIRED LENDERS" means, at any time, (i) Lenders which are then in
compliance with their obligations hereunder (as determined by the Administrative
Agent) and holding in the aggregate at least 51% of the Revolving Commitments
(and Participation Interests therein) and the outstanding Tranche A Term Loans
(and Participation Interests therein) or if the Commitments have been
terminated, the outstanding Revolving Loans and Tranche A Term Loans and
Participation Interests (including the Participation Interests of the Issuing
Lender in any Letters of Credit and of the Swingline Lender in any Swingline
Loans) and (ii) Lenders which are then in compliance with their obligations
hereunder (as determined by the Administrative Agent) and holding in the
aggregate at least 51% of the Tranche B Term Loans (and Participation
Interests therein) or if the Commitments have been terminated, the outstanding
Tranche B Term Loans and Participation Interests.

         "REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

         "RESPONSIBLE OFFICER" shall mean, as to (a) the Borrower, the President
and the Chief Executive Officer or the Chief Financial Officer or (b) any other
Credit Party, any duly authorized officer thereof.

                                       21
<PAGE>

         "RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
or (d) any payment or prepayment of principal of, premium, if any, or interest
on, redemption, purchase, retirement, defeasance, sinking fund or similar
payment with respect to, any Subordinated Notes.

         "RETENTION BONUS PLAN" shall mean that certain plan of the Borrower
dated as of December 15, 1998 for the purpose of providing certain designated
employees of the Borrower with an ongoing incentive to remain in the employ of
the Borrower as implemented pursuant to that certain Recapitalization and Stock
Purchase Agreement dated as of December 15, 1998 among the Parent, the Borrower
and certain other parties thereto.

         "REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount as
specified in SCHEDULE 2.1(a), as such amount may be reduced from time to time
in accordance with the provisions hereof.

         "REVOLVING COMMITMENT PERCENTAGE" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE 2.1(a),
as such percentage may be modified in connection with any assignment made
in accordance with the provisions of Section 9.6(c).

         "REVOLVING COMMITMENT TERMINATION DATE" shall mean June 30, 2004.

         "REVOLVING COMMITTED AMOUNT" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as such
amount may be reduced from time to time in accordance with the provisions
hereof, and, individually, the amount of each Lender's Revolving Commitment as
specified on SCHEDULE 2.1(a).

         "REVOLVING LOANS" shall have the meaning set forth in Section 2.1.

         "REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes
of the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

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

         "SCHEDULED FUNDED DEBT PAYMENTS" shall mean, as of any date of
determination for the Borrower and its Subsidiaries, the sum of all scheduled
payments of principal on Funded Debt

                                       22
<PAGE>

for the applied period ending on the date of determination (including the
principal component of payments due on Capital Leases during the applicable
period ending on the date of determination).

         "SECURITY AGREEMENT" shall mean the Security Agreement dated as of the
Closing Date given by the Borrower and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.

         "SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and
delivered in connection with the attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements.

         "SENIOR FUNDED DEBT" shall mean any Indebtedness not specifically
subordinated in right of payment to the Credit Party Obligations.

         "SENIOR LEVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter, the ratio of (a) Senior Funded Debt of the
Borrower and its Subsidiaries on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA for such twelve month period.

         "SINGLE EMPLOYER PLAN" shall mean any Plan which is not a Multiemployer
Plan.

         "SPECIFIED SALES" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business, (b)
the sale, transfer or other disposition of Permitted Investments described in
clause (i) of the definition thereof and (c) the sale of certain real property
located at 2620 Croddy Way, Santa Ana, California provided that (i) such sale is
consummated within 180 days of the Funding Date, (ii) the consideration for such
sale shall be cash only and (iii) only $500,000 of such net proceeds shall be
excluded from the prepayment obligations set forth in Section 2.8(b)(ii).

         "SPONSORS" shall mean a collective reference to each of Brockway Moran
& Partners Fund L.P. and Thayer Equity Investors IV, L.P.

         "SUBORDINATED DEBT" shall mean (a) the Subordinated Notes and (b) any
other Indebtedness incurred by any Credit Party which by its terms is
specifically subordinated in right of payment to the prior payment of the Credit
Party Obligations.

         "SUBORDINATED NOTES" shall mean collectively, (a) that certain
subordinated note dated December 15, 1998 in the amount of $51,043.65 from the
Borrower to The Colleen Beckdolt Trust No. 2, (b) that certain Subordinated Note
dated December 15, 1998 in the amount of $51,043.65 from the Borrower to The Ian
Lewis Coley Trust No. 2, (c) that certain subordinated note dated December 15,
1998 in the amount of $3,547,912.70 from the Borrower to Lewis 0. Coley, III,
(d) that certain subordinated note dated December 15, 1998 in the amount of
$350,000.00 from the Borrower to Simon Dadoun and (e) the TCW/Crescent Mezzanine
Notes.

                                       23
<PAGE>

         "SUBSIDIARY" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.

         "SWINGLINE COMMITMENT" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.5(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.

         "SWINGLINE COMMITTED AMOUNT" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.5(a).

         "SWINGLINE LENDER" shall mean First Union, in its capacity as such.

         "SWINGLINE LOAN" or "SWINGLINE LOANS" shall have the meaning set forth
in Section 2.5(a).

         "SWINGLINE NOTE" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.5(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.

         "TAXES" shall have the meaning set forth in Section 2.19.

         "TCW/CRESCENT MEZZANINE NOTES" shall mean those certain senior
subordinated notes dated as of the Closing Date in the aggregate amount of
$12,500,000, from the Borrower to TCW/Crescent Mezzanine Partners II, L.P. and
its Affiliates.

         "TRANCHE A TERM LOAN" shall have the meaning set forth in Section
2.2(a).

         "TRANCHE A TERM LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche A Term
Loan in a principal amount equal to such Lender's Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan Committed Amount (and for purposes of
making determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Tranche A Term Loan).

                                       24
<PAGE>

         "TRANCHE A TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender,
the percentage identified as its Tranche A Term Loan Commitment Percentage on
SCHEDULE 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6.

         "TRANCHE A TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth
in Section 2.2(a).

         TRANCHE A TERM NOTE" or "TRANCHE A TERM NOTES" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche A Term Loan provided pursuant to Section 2.2(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.

         "TRANCHE B TERM LOAN" shall have the meaning set forth in Section 2.3
(a).

         "TRANCHE B TERM LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche B Term
Loan in a principal amount equal to such Lender's Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan Committed Amount (and for purposes of
making determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Tranche B Term Loan).

         "TRANCHE B TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender,
the percentage identified as its Tranche B Term Loan Commitment Percentage on
SCHEDULE 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6.

         "TRANCHE B TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth
in Section 2.3(a).

         "TRANCHE B TERM NOTE" or "TRANCHE B TERM NOTES" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche B Term Loan provided pursuant to Section 2.3(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.

         "TRANCHE" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".

         "TRANSFER EFFECTIVE DATE" shall have the meaning set forth in each
Commitment Transfer Supplement.

         "2.19 CERTIFICATE" shall have the meaning set forth in Section 2.19.

                                       25
<PAGE>

         "TYPE" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan or Swingline Loan, as the case may be.

         "VOTING STOCK" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.

         "YEAR 2000 COMPLIANT" shall have the meaning set forth in Section 3.25.

         SECTION 1.2       OTHER DEFINITIONAL PROVISIONS.

                  (a)      Unless otherwise specified therein, all terms defined
         in this Agreement shall have the defined meanings when used in the
         Notes or other Credit Documents or any certificate or other document
         made or delivered pursuant hereto.

                  (b)      The words "hereof", "herein" and "hereunder" and
         words of similar import when used in this Agreement shall refer to this
         Agreement as a whole and not to any particular provision of this
         Agreement, and Section, subsection, Schedule and Exhibit references are
         to this Agreement unless otherwise specified.

                  (c)      The meanings given to terms defined herein shall be
         equally applicable to both the singular and plural forms of such terms.

         SECTION 1.3       ACCOUNTING TERMS.

         Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
PROVIDED that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.

         The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a

                                       26
<PAGE>

reasonable estimate of the effect on the financial statements on account of such
changes in application.

                                   ARTICLE II

                           THE LOANS; AMOUNT AND TERMS

         SECTION 2.1       REVOLVING LOANS.

                  (a)      REVOLVING COMMITMENT. During the Commitment Period,
         subject to the terms and conditions hereof, each Lender severally
         agrees to make revolving credit loans ("REVOLVING LOANS") to the
         Borrower from time to time for the purposes hereinafter set forth;
         PROVIDED, HOWEVER, that (i) with regard to each Lender individually,
         the sum of such Lender's share of outstanding Revolving Loans PLUS such
         Lender's Revolving Commitment Percentage of Swingline Loans PLUS such
         Lender's LOC Commitment Percentage of LOC Obligations shall not exceed
         such Lender's Revolving Commitment Percentage of the aggregate
         Revolving Committed Amount, and (ii) with regard to the Lenders
         collectively, the sum of the aggregate amount of outstanding Revolving
         Loans PLUS Swingline Loans PLUS LOC Obligations shall not exceed the
         lesser of (A) the Revolving Committed Amount and (B) the Borrowing
         Base. For purposes hereof, the aggregate amount available hereunder
         shall be FIFTEEN MILLION DOLLARS ($15,000,000) (as such aggregate
         maximum amount may be reduced from time to time as provided in Section
         2.6, the "REVOLVING COMMITTED AMOUNT"). Revolving Loans may consist of
         Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
         thereof, as the Borrower may request, and may be repaid and reborrowed
         in accordance with the provisions hereof. Notwithstanding any provision
         herein to the contrary, provided that each of the Lenders shall be able
         to provide LIBOR Rate Loans having an Interest Period of fourteen (14)
         days, (x) the initial LIBOR borrowings under Section 2.1 shall be made
         as LIBOR Rate Loans having an Interest Period of fourteen (14) days and
         (y) subsequent to such initial LIBOR Rate Loan borrowings but prior to
         the earlier to occur of (I) the closing of the initial syndication of
         the Commitment and (II) the sixtieth (60th) day following the Funding
         Date, all LIBOR Rate Loans under Section 2.1 shall be continued, at the
         Borrower's election, as LIBOR Rate Loans having an Interest Period of
         fourteen (14) days. All LIBOR Rate Loans having an Interest Period of
         fourteen (14) days shall bear interest at the same rate as LIBOR Rate
         Loans having an Interest Period of one month. LIBOR Rate Loans shall be
         made by each Lender at its LIBOR Lending Office and Alternate Base Rate
         Loans at its Domestic Lending Office.

                  (b)      REVOLVING LOAN BORROWINGS.

                           (i)      NOTICE OF BORROWING. The Borrower shall
                  request a Revolving Loan borrowing by written notice (or
                  telephone notice promptly confirmed in writing which
                  confirmation may be by fax) to the Administrative Agent not
                  later than 1:00 P.M. (Charlotte, North Carolina time) on the
                  Business Day prior to the

                                       27
<PAGE>

                  date of requested borrowing in the case of Alternate Base Rate
                  Loans, and on the third Business Day prior to the date of the
                  requested borrowing in the case of LIBOR Rate Loans. Each such
                  request for borrowing shall be irrevocable and shall specify
                  (A) that a Revolving Loan is requested, (B) the date of the
                  requested borrowing (which shall be a Business Day), (C) the
                  aggregate principal amount to be borrowed, (D) whether the
                  borrowing shall be comprised of Alternate Base Rate Loans,
                  LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
                  Loans are requested, the Interest Period(s) therefor. A form
                  of Notice of Borrowing (a "NOTICE OF BORROWING") is attached
                  as SCHEDULE 2.1(b)(i). If the Borrower shall fail to specify
                  in any such Notice of Borrowing (I) an applicable Interest
                  Period in the case of a LIBOR Rate Loan, then such notice
                  shall be deemed to be a request for an Interest Period of one
                  month, or (II) the type of Revolving Loan requested, then such
                  notice shall be deemed to be a request for an Alternate Base
                  Rate Loan hereunder. The Administrative Agent shall give
                  notice to each Lender promptly upon receipt of each Notice of
                  Borrowing, the contents thereof and each such Lender's share
                  thereof.

                           (ii)     MINIMUM AMOUNTS. Each Revolving Loan
                  borrowing shall be in a minimum aggregate amount of (A) with
                  respect to LIBOR Rate Loans, $1,000,000 and integral multiples
                  of $500,000 in excess thereof (or the remaining amount of the
                  Revolving Committed Amount, if less) and (B) with respect to
                  Alternate Base Rate Loans, $500,000 and integral multiples of
                  $100,000 in excess thereof (or the remaining amount of the
                  Revolving Committed Amount, if less).

                           (iii)    ADVANCES. Each Lender will make its
                  Revolving Commitment Percentage of each Revolving Loan
                  borrowing available to the Administrative Agent for the
                  account of the Borrower at the office of the Administrative
                  Agent specified in SCHEDULE 9.2, or at such other office as
                  the Administrative Agent may designate in writing, by 3:00
                  P.M. (Charlotte, North Carolina time) on the date specified in
                  the applicable Notice of Borrowing in Dollars and in funds
                  immediately available to the Administrative Agent. Such
                  borrowing will then be made available to the Borrower by the
                  Administrative Agent by crediting the account of the Borrower
                  on the books of such office with the aggregate of the amounts
                  made available to the Administrative Agent by the Lenders and
                  in like funds as received by the Administrative Agent.

                  (c)      REPAYMENT. The principal amount of all Revolving
         Loans shall be due and payable in full on the Revolving Commitment
         Termination Date.

                  (d)      INTEREST. Subject to the provisions of Section 2.10,
         Revolving Loans shall bear interest as follows:

                           (i)      ALTERNATE BASE RATE LOANS. During such
                  periods as Revolving Loans shall be comprised of Alternate
                  Base Rate Loans, each such Alternate Base

                                       28
<PAGE>

                  Rate Loan shall bear interest at a per annum rate equal to the
                  sum of the Alternate Base Rate PLUS the Applicable Percentage;
                  and

                           (ii)     LIBOR RATE LOANS. During such periods as
                  Revolving Loans shall be comprised of LIBOR Rate Loans, each
                  such LIBOR Rate Loan shall bear interest at a per annum rate
                  equal to the sum of the LIBOR Rate PLUS the Applicable
                  Percentage.

         Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.

                  (e)      REVOLVING NOTES. Each Lender's Revolving Commitment
         Percentage of the Revolving Loans shall be evidenced by a duly executed
         promissory note of the Borrower to such Lender in substantially the
         form of SCHEDULE 2.1(e).

         SECTION 2.2       TRANCHE A TERM LOAN FACILITY.

                  (a)      TRANCHE A TERM LOAN. Subject to the terms and
         conditions hereof and in reliance upon the representations and
         warranties set forth herein, each Lender severally agrees to make
         available to the Borrower on the Funding Date such Lender's Tranche A
         Term Loan Commitment Percentage of a term loan in Dollars (the "TRANCHE
         A TERM LOAN") in the aggregate principal amount of THIRTY-SEVEN MILLION
         FIVE HUNDRED THOUSAND DOLLARS ($37,500,000) (the "TRANCHE A TERM LOAN
         COMMITTED AMOUNT") for the purposes hereinafter set forth. The Tranche
         A Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate
         Loans, or a combination thereof, as the Borrower may request.
         Notwithstanding any provision herein to the contrary, provided that
         each of the Lenders shall be able to provide LIBOR Rate Loans having an
         Interest Period of fourteen (14) days, (x) the initial LIBOR borrowings
         under Section 2.2 shall be made as LIBOR Rate Loans having an Interest
         Period of fourteen (14) days and (y) subsequent to such initial LIBOR
         Rate Loan borrowings but prior to the earlier to occur of (I) the
         closing of the initial syndication of the Commitment and (II) the
         sixtieth (60th) day following the Funding Date all LIBOR Rate Loans
         under Section 2.2 shall be continued, at the Borrower's election, as
         LIBOR Rate Loans having an Interest Period of fourteen (14) days. All
         LIBOR Rate Loans having an Interest Period of fourteen (14) days shall
         bear interest at the same rate as LIBOR Rate Loans having an Interest
         Period of one month. The Borrower shall request the initial Tranche A
         Term Loan borrowing by written notice (or telephone notice promptly
         confirmed in writing which confirmation may be by fax) to the
         Administrative Agent not later than 1:00 P.M. (Charlotte, North
         Carolina time) on the Business Day prior to the date of requested
         borrowing. LIBOR Rate Loans shall be made by each Lender at its LIBOR
         Lending Office and Alternate Base Rate Loans at its Domestic Lending
         Office. Amounts repaid on the Tranche A Term Loan may not be
         reborrowed.

                  (b)      REPAYMENT OF TRANCHE A TERM LOAN. The principal
         amount of the Tranche A Term Loan shall be repaid in twenty (20)
         consecutive fiscal quarterly installments as follows, unless
         accelerated sooner pursuant to Section 7.2:

                                       29
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------
           PRINCIPAL                    TRANCHE A TERM
         AMORTIZATION                   LOAN PRINCIPAL
         PAYMENT DATES                   AMORTIZATION
                                           PAYMENT
---------------------------------------------------------------
<S>                                    <C>
      September 30, 1999                       $468,750
---------------------------------------------------------------
       December 31, 1999                       $468,750
---------------------------------------------------------------
        March 31, 2000                         $468,750
---------------------------------------------------------------
         June 30, 2000                         $468,750
---------------------------------------------------------------
      September 30, 2000                       $937,500
---------------------------------------------------------------
       December 31, 2000                       $937,500
---------------------------------------------------------------
        March 31, 2001                         $937,500
---------------------------------------------------------------
         June 30, 2001                         $937,500
---------------------------------------------------------------
      September 30, 2001                     $1,875,000
---------------------------------------------------------------
       December 31, 2001                     $1,875,000
---------------------------------------------------------------
        March 31, 2002                       $1,875,000
---------------------------------------------------------------
         June 30, 2002                       $1,875,000
---------------------------------------------------------------
      September 30, 2002                     $2,812,500
---------------------------------------------------------------
       December 31, 2002                     $2,812,500
---------------------------------------------------------------
         March 31, 2003                      $2,812,500
---------------------------------------------------------------
         June 30, 2003                       $2,812,500
---------------------------------------------------------------
      September 30, 2003                     $3,281,250
---------------------------------------------------------------
       December 31, 2003                     $3,281,250
---------------------------------------------------------------
         March 31, 2004                      $3,281,250
---------------------------------------------------------------
         June 30, 2004                       $3,281,250
---------------------------------------------------------------
</TABLE>

                  (c)      INTEREST ON THE TRANCHE A TERM LOAN. Subject to the
         provisions of Section 2.10, the Tranche A Term Loan shall bear
         interest as follows:

                           (i)      ALTERNATE BASE RATE LOANS. During such
                  periods as the Tranche A Term Loan shall be comprised of
                  Alternate Base Rate Loans, each such Alternate Base Rate Loan
                  shall bear interest at a per annum rate equal to the sum of
                  the Alternate Base Rate PLUS the Applicable Percentage; and

                                       30

<PAGE>

                  (ii) LIBOR RATE LOANS. During such periods as the Tranche A
          Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
          Loan shall bear interest at a per annum rate equal to the sum of
          the LIBOR Rate PLUS the Applicable Percentage.

                  Interest on the Tranche A Term Loan shall be payable in
          arrears on each Interest Payment Date.

         (d) TRANCHE A TERM NOTES. Each Lender's Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan outstanding as of the Closing Date shall
be evidenced by a duly executed promissory note of the Borrower to such Lender
in substantially the form of SCHEDULE 2.2(d).

SECTION 2.3 TRANCHE B TERM LOAN FACILITY.

         (a) TRANCHE B TERM LOAN. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower on the Funding Date
such Lender's Tranche B Term Loan Commitment Percentage of a term loan in
Dollars (the "TRANCHE B TERM LOAN") in the aggregate principal amount of
SEVENTY-FIVE MILLION DOLLARS ($75,000,000) (the "TRANCHE B TERM LOAN COMMITTED
AMOUNT") for the purposes hereinafter set forth. The Tranche B Term Loan may
consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request. Notwithstanding any provision herein to
the contrary, provided that each of the Lenders shall be able to provide LIBOR
Rate Loans having an Interest Period of fourteen (14) days, (x) the initial
LIBOR borrowings under Section 2.3 shall be made as LIBOR Rate Loans having an
Interest Period of fourteen (14) days and (y) subsequent to such initial LIBOR
Rate Loan borrowings but prior to the earlier to occur of (I) the closing of the
initial syndication of the Commitment and (II) the sixtieth (60th) day following
the Funding Date. All LIBOR Rate Loans under Section 2.3 shall be continued, at
the Borrower's election, as LIBOR Rate Loans having an Interest Period of
fourteen (14) days. All LIBOR Rate Loans having an Interest Period of fourteen
(14) days shall bear interest at the same rate as LIBOR Rate Loans having an
Interest Period of one month. The Borrower shall request the initial Tranche B
Term Loan borrowing by written notice (or telephone notice promptly confirmed in
writing which confirmation may be by fax) to the Administrative Agent not later
than 1:00 P.M. (Charlotte, North Carolina time) on the Business Day prior to
the date of requested borrowing. LIBOR Rate Loans shall be made by each Lender
at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic
Lending Office. Amounts repaid on the Tranche B Term Loan may not be reborrowed.

         (b) REPAYMENT OF TRANCHE B TERM LOAN. The principal amount of the
Tranche B Term Loan shall be repaid in twenty-four (24) consecutive fiscal
quarterly installments as follows, unless accelerated sooner pursuant to Section
7.2:

                                       31
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------
           PRINCIPAL                    TRANCHE B TERM
         AMORTIZATION                   LOAN PRINCIPAL
         PAYMENT DATES                   AMORTIZATION
                                           PAYMENT
---------------------------------------------------------------
<S>                                     <C>
      September 30, 1999                       $187,500
---------------------------------------------------------------
       December 31, 1999                       $187,500
---------------------------------------------------------------
        March 31, 2000                         $187,500
---------------------------------------------------------------
         June 30, 2000                         $187,500
---------------------------------------------------------------
      September 30, 2000                       $187,500
---------------------------------------------------------------
       December 31, 2000                       $187,500
---------------------------------------------------------------
        March 31, 2001                         $187,500
---------------------------------------------------------------
         June 30, 2001                         $187,500
---------------------------------------------------------------
      September 30, 2001                       $187,500
---------------------------------------------------------------
       December 31, 2001                       $187,500
---------------------------------------------------------------
        March 31, 2002                         $187,500
---------------------------------------------------------------
         June 30, 2002                         $187,500
---------------------------------------------------------------
      September 30, 2002                       $187,500
---------------------------------------------------------------
       December 31, 2002                       $187,500
---------------------------------------------------------------
        March 31, 2003                         $187,500
---------------------------------------------------------------
         June 30, 2003                         $187,500
---------------------------------------------------------------
      September 30, 2003                       $187,500
---------------------------------------------------------------
       December 31, 2003                       $187,500
---------------------------------------------------------------
        March 31, 2004                         $187,500
---------------------------------------------------------------
         June 30, 2004                         $187,500
---------------------------------------------------------------
      September 30, 2004                    $17,812,500
---------------------------------------------------------------
       December 31, 2004                    $17,812,500
---------------------------------------------------------------
        March 31, 2005                      $17,812,500
---------------------------------------------------------------
         June 30, 2005                      $17,812,500
---------------------------------------------------------------
</TABLE>

                                       32
<PAGE>

         (c) INTEREST ON THE TRANCHE B TERM LOAN. Subject to the provisions of
Section 2.10, the Tranche B Term Loan shall bear interest as follows:

                  (i) ALTERNATE BASE RATE LOANS. During such periods as the
          Tranche B Term Loan shall be comprised of Alternate Base Rate Loans,
          each such Alternate Base Rate Loan shall bear interest at a per annum
          rate equal to the sum of the Alternate Base Rate PLUS the Applicable
          Percentage; and

                  (ii) LIBOR RATE LOANS. During such periods as the Tranche B
          Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
          Loan shall bear interest at a per annum rate equal to the sum of the
          LIBOR Rate PLUS the Applicable Percentage.

                  Interest on the Tranche B Term Loan shall be payable in
          arrears on each Interest Payment Date.

         (d) TRANCHE B TERM NOTES. Each Lender's Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan outstanding as of the Closing Date shall
be evidenced by a duly executed promissory note of the Borrower to such Lender
in substantially the form of SCHEDULE 2.3(d).

SECTION 2.4 LETTER OF CREDIT SUBFACILITY.

         (a) ISSUANCE. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the Lenders shall participate in, Letters of Credit for the account
of the Borrower from time to time upon request in a form acceptable to the
Issuing Lender; PROVIDED, HOWEVER, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed TWO MILLION FIVE HUNDRED THOUSAND
DOLLARS ($2,500,000) (the "LOC COMMITTED AMOUNT"), (ii) the sum of the aggregate
amount of Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall not at
any time exceed the lesser of (A) Revolving Committed Amount and (B) the
Borrowing Base, (iii) all Letters of Credit shall be denominated in U.S. Dollars
and (iv) Letters of Credit shall be issued for the purpose of supporting
tax-advantaged variable rate demand note financing and for other lawful
corporate purposes and may be issued as standby letters of credit, including in
connection with workers' compensation and other insurance programs, and trade
letters of credit. Except as otherwise expressly agreed upon by all the Lenders,
no Letter of Credit shall have an original expiry date more than twelve (12)
months from the date of issuance; PROVIDED, HOWEVER, so long as no Default or
Event of Default has occurred and is continuing and subject to the other terms
and conditions to the issuance of Letters of Credit hereunder, the expiry dates
of Letters of Credit may be extended annually or periodically from time to time
on the request of the Borrower or by operation of the terms of the applicable
Letter of Credit to a date not more than twelve (12) months from the date of
extension; PROVIDED, FURTHER, that no Letter of Credit, as originally issued or
as

                                       33
<PAGE>

extended, shall have an expiry date extending beyond the Revolving Commitment
Termination Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry date of each Letter of Credit shall be a
Business Day. Any Letters of Credit issued hereunder shall be in a minimum
original face amount of $100,000. First Union shall be the Issuing Lender on all
Letters of Credit issued after the Closing Date.

         (b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least five (5) Business Days
prior to the requested date of issuance. The Issuing Lender will promptly upon
request provide to the Administrative Agent for dissemination to the Lenders a
detailed report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have occurred since
the date of any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the Letters
of Credit. The Issuing Lender will provide to the Administrative Agent promptly
upon request a summary report of the nature and extent of LOC Obligations then
outstanding.

         (c) PARTICIPATIONS. Each Lender upon issuance of a Letter of Credit
shall be deemed to have purchased without recourse a risk participation from the
Issuing Lender in such Letter of Credit and the obligations arising thereunder
and any collateral relating thereto, in each case in an amount equal to its LOC
Commitment Percentage of the obligations under such Letter of Credit and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its LOC Commitment Percentage of the obligations arising under such
Letter of Credit. Without limiting the scope and nature of each Lender's
participation in any Letter of Credit, to the extent that the Issuing Lender has
not been reimbursed as required hereunder or under any LOC Document, each such
Lender shall pay to the Issuing Lender its LOC Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.

         (d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on the day
of drawing under any Letter of Credit (either with the proceeds of a Revolving
Loan or a Swingline Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to reimburse
the Issuing Lender as provided herein, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the

                                       34
<PAGE>

Alternate Base Rate plus two percent (2%). Unless the Borrower shall immediately
notify the Issuing Lender and the Administrative Agent of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Swingline Loan, or if and to the extent Swingline Loans shall be
unavailable, a Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the other Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Lender's LOC Commitment
Percentage of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the Business Day next succeeding the day such notice is received. If such
Lender does not pay such amount to the Issuing Lender in full upon such request,
such Lender shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from the date
of such drawing until such Lender pays such amount to the Issuing Lender in full
at a rate per annum equal to, if paid within two (2) Business Days of the date
of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to
the Alternate Base Rate. Each Lender's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same, shall
be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be made without
any offset, abatement, withholding or reduction whatsoever.

         (e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested (i) a Swingline Loan
borrowing to reimburse a drawing under a Letter of Credit, the Swingline Lender
shall make the Swingline Loan advance pursuant to the terms of the request or
deemed request in accordance with the provisions for Swingline Loan advances
hereunder or (ii) a Revolving Loan to reimburse a drawing under a Letter of
Credit, the Administrative Agent shall give notice to the Lenders that a
Revolving Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan borrowing
comprised entirely of Alternate Base Rate Loans (each such borrowing, a
"MANDATORY BORROWING") shall be immediately made (without giving effect to any
termination of the Commitments pursuant to Section 7.2) PRO RATA based on each
Lender's respective Revolving Commitment Percentage (determined before giving
effect

                                       35
<PAGE>

to any termination of the Commitments pursuant to Section 7.2) and in the case
of both clauses (i) and (ii) the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each Lender
hereby irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the same such date
NOTWITHSTANDING (i) the amount of Mandatory Borrowing may not comply with the
minimum amount for borrowings of Revolving Loans otherwise required hereunder,
(ii) whether any conditions specified in Section 4.3 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time otherwise
required in Section 2.1(b), (v) the date of such Mandatory Borrowing, or (vi)
any reduction in the Revolving Committed Amount after any such Letter of Credit
may have been drawn upon; PROVIDE, HOWEVER, that in the event any such
Mandatory Borrowing should be less than the minimum amount for borrowings of
Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower shall
pay to the Administrative Agent for its own account an administrative fee of
$500. In the event that any Mandatory Borrowing cannot for any reason be made on
the date otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code), then each such
Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations; PROVIDED, FURTHER,
that in the event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then the amount
of such Lender's unfunded Participation Interest therein shall bear interest
payable by such Lender to the Issuing Lender upon demand, at the rate equal to,
if paid within two (2) Business Days of such date, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Alternate Base Rate.

         (f) MODIFICATION, EXTENSION. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.

         (g) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.

         SECTION 2.5 SWINGLINE LOAN SUBFACILITY.

         (a) SWINGLINE COMMITMENT. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to the Borrower (each a "SWINGLINE
LOAN" and, collectively, the "SWINGLINE LOANS") for the purposes hereinafter set
forth; PROVIDED,

                                       36
<PAGE>

HOWEVER, (i) the aggregate amount of Swingline Loans outstanding at any time
shall not exceed TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000) (the
"SWINGLINE COMMITTED AMOUNT"), and (ii) the sum of the aggregate amount of
outstanding Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall not
exceed the Revolving Committed Amount. Swingline Loans hereunder may be repaid
and reborrowed in accordance with the provisions hereof.

         (b) SWINGLINE LOAN BORROWINGS.

                  (i) NOTICE OF BORROWING AND DISBURSEMENT. The Swingline Lender
          will make Swingline Loans available to the Borrower on any Business
          Day upon request made by the Borrower not later than 2:00 P.M.
          (Charlotte, North Carolina time) on such Business Day. A notice of
          request for Swingline Loan borrowing shall be made in the form of
          SCHEDULE 2.1(b)(i) with appropriate modifications. Swingline Loan
          borrowings hereunder shall be made in minimum amounts of $100,000 and
          in integral amounts of $100,000 in excess thereof.

                  (ii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan
          borrowing shall be due and payable on the Revolving Commitment
          Termination Date. The Swingline Lender may, at any time, in its sole
          discretion, by written notice to the Borrower and the Administrative
          Agent, demand repayment of its Swingline Loans by way of a Revolving
          Loan borrowing, in which case the Borrower shall be deemed to have
          requested a Revolving Loan borrowing comprised entirely of Alternate
          Base Rate Loans in the amount of such Swingline Loans; PROVIDED,
          HOWEVER, that, in the following circumstances, any such demand shall
          also be deemed to have been given one Business Day prior to each of
          (i) the Revolving Commitment Termination Date, (ii) the occurrence of
          any Event of Default described in Section 7.1(e), (iii) upon
          acceleration of the Credit Party Obligations hereunder, whether on
          account of an Event of Default described in Section 7.1(e) or any
          other Event of Default, and (iv) the exercise of remedies in
          accordance with the provisions of Section 7.2 hereof (each such
          Revolving Loan borrowing made on account of any such deemed request
          therefor as provided herein being hereinafter referred to as
          "MANDATORY BORROWING"). Each Lender hereby irrevocably agrees to make
          such Revolving Loans promptly upon any such request or deemed request
          on account of each Mandatory Borrowing in the amount and in the manner
          specified in the preceding sentence and on the same such date
          NOTWITHSTANDING (I) the amount of Mandatory Borrowing may not comply
          with the minimum amount for borrowings of Revolving Loans otherwise
          required hereunder, (II) whether any conditions specified in Section
          4.3 are then satisfied, (III) whether a Default or an Event of Default
          then exists, (IV) failure of any such request or deemed request for
          Revolving Loans to be made by the time otherwise required in Section
          2.1(b)(i), (V) the date of such Mandatory Borrowing, or (VI) any
          reduction in the Revolving Committed Amount or termination of the
          Revolving Commitments immediately prior to such Mandatory Borrowing or
          Contemporaneously therewith. In the event that any Mandatory

                                       37
<PAGE>

          Borrowing cannot for any reason be made on the date otherwise required
          above (including, without limitation, as a result of the commencement
          of a proceeding under the Bankruptcy Code), then each Lender hereby
          agrees that it shall forthwith purchase (as of the date the Mandatory
          Borrowing would otherwise have occurred, but adjusted for any payments
          received from the Borrower on or after such date and prior to such
          purchase) from the Swingline Lender such participations in the
          outstanding Swingline Loans as shall be necessary to cause each such
          Lender to share in such Swingline Loans ratably based upon its
          respective Revolving Commitment Percentage (determined before giving
          effect to any termination of the Commitments pursuant to Section
          7.2), PROVIDED that (A) all interest payable on the Swingline Loans
          shall be for the account of the Swingline Lender until the date as of
          which the respective participation is purchased, and (B) at the time
          any purchase of participations pursuant to this sentence is actually
          made, the purchasing Lender shall be required to pay to the Swingline
          Lender interest on the principal amount of such participation
          purchased for each day from and including the day upon which the
          Mandatory Borrowing would otherwise have occurred to but excluding
          the date of payment for such participation, at the rate equal to, if
          paid within two (2) Business Days of the date of the Mandatory
          Borrowing, the Federal Funds Effective Rate, and thereafter at a
          rate equal to the Alternate Base Rate.

         (c) INTEREST ON SWINGLINE LOANS. Subject to the provisions of Section
2.10, Swingline Loans shall bear interest at a per annum rate equal to the
Alternate Base Rate PLUS the applicable Percentage for Revolving Loans that are
Alternate Base Rate Loans. Interest on Swingline Loans shall be payable in
arrears on each Interest Payment Date.

         (d) SWINGLINE NOTE. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in the original
amount of the Swingline Committed Amount and substantially in the form of
Schedule 2.5(d).

SECTION 2.6 FEES.

         (a) COMMITMENT FEE. In consideration of the Revolving Commitment, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Lenders a commitment fee (the "COMMITMENT FEE") in an amount equal to the
Applicable Percentage per annum on the average daily unused amount of the
aggregate Revolving Committed Amount. For purposes hereof, Letters Of Credit
shall be considered usage but Swingline Loans shall not be considered usage
under the aggregate Revolving Commitment Amount. The Commitment Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.

         (b) LETTER OF CREDIT FEES. In consideration of the LOC Commitments, the
Borrower agrees to pay to the Issuing Lender a fee (the "LETTER OF CREDIT FEE")
equal to the Applicable Percentage per annum on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance to
the date of expiration.

                                       38
<PAGE>

In addition to such Letter of Credit Fee, the Issuing Lender may charge, and
retain for its own account without sharing by the other Lenders, an additional
facing fee of one-fourth of one percent (1/4%) per annum on the average daily
maximum amount available to be drawn under each such Letter of Credit issued by
it. The Issuing Lender shall promptly pay over to the Administrative Agent for
the ratable benefit of the Lenders (including the Issuing Lender) the Letter of
Credit Fee. The Letter of Credit Fee shall be payable quarterly in arrears on
the 15th day following the last day of each calendar quarter for the prior
calendar quarter.

         (c) ISSUING LENDER FEES. In addition to the Letter of Credit Fees
payable pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing
Lender for its own account without sharing by the other Lenders the reasonable
and customary charges from time to time of the Issuing Lender with respect to
the amendment, transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the "ISSUING LENDER
FEES").

         (d) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the Fee
Letter.

SECTION 2.7 COMMITMENT REDUCTIONS.

         (a) VOLUNTARY REDUCTIONS. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Revolving Committed
Amount at any time or from time to time upon not less than five Business Days'
prior notice to the Administrative Agent (which shall notify the Lenders thereof
as soon as practicable) of each such termination or reduction, which notice
shall specify the effective date thereof and the amount of any such reduction
which shall be in a minimum amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof and shall be irrevocable and effective upon receipt
by the Administrative Agent, PROVIDED that no such reduction or termination
shall be permitted if after giving effect thereto, and to any prepayments of the
Revolving Loans made on the effective date thereof, the sum of the then
outstanding aggregate principal amount of the Revolving Loans PLUS Swingline
Loans PLUS LOC Obligations would exceed the Revolving Committed Amount.

         (b) MANDATORY REDUCTIONS. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 2.8(b)(ii), (iii) and
(iv), the Revolving Committed Amount shall be automatically permanently reduced
by the amount of such required prepayment and/or reduction.

         (c) REVOLVING COMMITMENT TERMINATION DATE. The Revolving Commitment and
the LOC Commitment and the Swingline Commitment shall automatically terminate on
the Revolving Commitment Termination Date.

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<PAGE>

SECTION 2.8 PREPAYMENTS.

         (a) OPTIONAL PREPAYMENTS. The Borrower shall have the right to prepay
Loans in whole or in part from time to time; PROVIDED, HOWEVER, that each
partial prepayment of Revolving Loans, the Tranche A Term Loan and the Tranche B
Term Loan shall be in a minimum principal amount of $1,000,000 and integral
multiples of $1,000,000 in excess thereof, and each prepayment of Swingline
Loans shall be in a minimum principal amount of $100,000 and integral multiples
of $100,000 in excess thereof. The Borrower shall give three Business Days'
irrevocable notice in the case of LIBOR Rate Loans and one Business Day's
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable). Amounts prepaid under this Section 2.8(a) shall be applied first
ratably to the Tranche A Term Loan to the remaining scheduled principal
installments thereof until paid in full and the Tranche B Term Loan to the
remaining scheduled principal installments thereof until paid in full (provided,
however, promptly upon notification thereof, one or more holders of the Tranche
B Term Loan may decline to accept such payment to the extent there are
sufficient amounts under the Tranche A Term Loan outstanding to be paid with
such prepayment, in which case, such declined payments shall be allocated pro
rata among the Tranche A Term Loan and the Tranche B Term Loan held by Lenders
accepting such payments) and then to the Revolving Loans, in each case first to
Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of
Interest Period maturities. All prepayments, under this Section 2.8(a) shall be
subject to Section 2.18, but otherwise without premium or penalty; provided,
however, that optional prepayments made with respect to Tranche B Term Loans
within (i) six months of the Funding Date shall be subject to a prepayment
penalty of 1.5% and (ii) after six months but prior to the expiration of twelve
months from the Funding Date shall be subject to a 1.0% prepayment penalty.
Interest on the principal amount prepaid shall be payable on the next occurring
Interest Payment Date that would have occurred had such loan not been prepaid
or, at the request of the Administrative Agent, interest on the principal amount
prepaid shall be payable on any date that a prepayment is made hereunder through
the date of prepayment. Amounts prepaid on the Revolving Loans may be reborrowed
in accordance with the terms hereof. Amounts prepaid on the Tranche A Term Loan
and the Tranche B Term Loan may not be reborrowed.

         (b) MANDATORY PREPAYMENTS.

                  (i) REVOLVING COMMITTED AMOUNT. If at any time after the
          Closing Date, the sum of the aggregate principal amount of outstanding
          Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall exceed
          the lesser of (A) the Revolving Committed Amount and (B) the Borrowing
          Base, the Borrower immediately shall prepay the Revolving Loans and
          (after all Revolving Loans have been repaid) cash collateralize the
          LOC Obligations, in an amount sufficient to eliminate such excess.

                                       40
<PAGE>

                           (ii)     ASSET DISPOSITIONS. Promptly following any
                  Asset Disposition in excess of $250,000 in any fiscal year,
                  the Borrower shall prepay the Loans in an aggregate amount
                  equal to the Net Cash Proceeds derived from such Asset
                  Disposition (such prepayment to be applied as set forth in
                  clause (vi) below); provided, however, that such Net Cash
                  Proceeds shall not be required to be so applied to the extent
                  the Borrower delivers to the Administrative Agent a
                  certificate stating that it intends to use such Net Cash
                  Proceeds to acquire fixed or capital assets in replacement of
                  the disposed assets within 180 days of the receipt of such Net
                  Cash Proceeds, it being expressly agreed that any Net Cash
                  Proceeds not so reinvested shall be applied to repay the Loans
                  immediately thereafter.

                           (iii)    ISSUANCES. Immediately upon receipt by any
                  Credit Party of proceeds from (A) any Debt Issuance, the
                  Borrower shall prepay the Loans in an aggregate amount equal
                  to one hundred percent (100%) of the Net Cash Proceeds of such
                  Debt Issuance to the Lenders (such prepayment to be applied as
                  set forth in clause (vi) below) or (B) any Equity Issuance
                  (other than an Equity Issuance to the Sponsors in an aggregate
                  amount not to exceed $3,000,000 during the term of this
                  Agreement provided that such equity contribution shall not
                  enable the Borrower to cure a Default or an Event of Default
                  that would have otherwise existed but for such equity
                  contribution), the Borrower shall prepay the Loans in an
                  aggregate amount equal to one hundred percent (100%) of the
                  Net Cash Proceeds of such Equity Issuance to the Lenders;
                  provided, however, if the Leverage Ratio of the Borrower and
                  its Subsidiaries on a pro forma basis after giving effect to
                  such Equity Issuance would be less than 3.50 to 1.0, the
                  Borrower shall prepay the Loans in an amount equal to
                  seventy-five percent (75%) of such cash proceeds to the
                  Lenders (such prepayments set forth above to be applied as set
                  forth in clause (vi) below).

                           (iv)     RECOVERY EVENT. To the extent of cash
                  proceeds received in connection with a Recovery Event which
                  are in excess of $250,000 in the aggregate and which are not
                  applied in accordance with Section 6.5(a)(ii), immediately
                  following the 180th day occurring after the receipt by a
                  Credit Party of such cash proceeds, the Borrower shall prepay
                  the Loans in an aggregate amount equal to one-hundred percent
                  (100%) of such cash proceeds to the Lenders (such prepayment
                  to be applied as set forth in clause (vi) below).

                           (v)      EXCESS CASH FLOW. Within 120 days after the
                  end of each fiscal year (commencing with the fiscal year
                  ending December 31, 1999), the Borrower shall prepay the Loans
                  in an amount equal to (x) (1) if the Leverage Ratio of the
                  Borrower and its Subsidiaries as of the end of the immediately
                  preceding fiscal quarter was greater than or equal to 3.50 to
                  1.0, 75% of the Excess Cash Flow earned during such prior
                  fiscal year and (2) if the Leverage Ratio of the Borrower and
                  its Subsidiaries as of the end of the immediately preceding
                  fiscal quarter was less than 3.50 to 1.0, 50% of the Excess
                  Cash Flow earned during such prior fiscal year less (y) the
                  amount of any voluntary prepayments of the Tranche A Term
                  Loan,

                                       41
<PAGE>

                  the Tranche B Term Loan and (to the extent accompanied by a
                  reduction in the Revolving Committed Amount) the Revolving
                  Loans during such prior fiscal year.

                           (vi)     APPLICATION OF MANDATORY PREPAYMENTS. All
                  amounts required to be paid pursuant to this Section 2.8(b)
                  shall be applied as follows: (A) with respect to all amounts
                  prepaid pursuant to Section 2.8(b)(i), to Revolving Loans and
                  (after all Revolving Loans have been repaid) to a cash
                  collateral account in respect of LOC Obligations, (B) with
                  respect to all amounts prepaid pursuant to Section 2.8(b)(ii),
                  pro rata across the Revolving Loans (with a corresponding
                  reduction in the Revolving Commitments), the Tranche A Term
                  Loan and the Tranche B Term Loan outstanding as of such date
                  and (C) with respect to all amounts prepaid pursuant to
                  Sections 2.8(b)(iii) through (v), (1) FIRST PRO RATA to the
                  Tranche A Term Loan and the Tranche B Term Loan (ratably to
                  the remaining principal installments thereof); PROVIDED,
                  HOWEVER, promptly upon notification thereof, one or more
                  holders of the Tranche B Term Loan may decline to accept a
                  mandatory prepayment under Section 2.8(b)(ii) through (iv) to
                  the extent there are sufficient amounts under the Tranche A
                  Term Loan outstanding to be paid with such prepayment, in
                  which case, such declined payments shall be allocated pro rata
                  among the Tranche A Term Loan and the Tranche B Term Loan held
                  by Lenders accepting such prepayments, and (2) SECOND to the
                  Revolving Loans and (after all Revolving Loans have been
                  repaid) to a cash collateral account in respect of LOC
                  Obligations. Within the parameters of the applications set
                  forth above, prepayments shall be applied first to Alternate
                  Base Rate Loans and then to LIBOR Rate Loans in direct order
                  of Interest Period maturities. All prepayments under this
                  Section 2.8(b) shall be subject to Section 2.18 and be
                  accompanied by interest on the principal amount prepaid
                  through the date of prepayment.

         SECTION 2.9 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.

         All borrowings, payments and prepayments in respect of Revolving Loans,
the Tranche A Term Loan and the Tranche B Term Loan shall be in such amounts and
be made pursuant to such elections so that after giving effect thereto the
aggregate principal amount of the Revolving Loans, the Tranche A Term Loan and
the Tranche B Term Loan comprising any Tranche shall not be less than (i) with
respect to LIBOR Rate Loans, $1,000,000 or a whole multiple of $500,000 in
excess thereof and (ii) with respect to Base Rate Loans, $500,000 in the
aggregate or a whole multiple of $100,000 in excess thereof

         SECTION 2.10 DEFAULT RATE AND PAYMENT DATES.

         Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Alternate Base Rate PLUS
2%).

                                       42
<PAGE>

         SECTION 2.11      CONVERSION OPTIONS.

                  (a)      The Borrower may, in the case of Revolving Loans, the
         Tranche A Term Loan and the Tranche B Term Loan, elect from time to
         time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by
         giving the Administrative Agent at least three Business Days' prior
         irrevocable written notice of such election. A form of Notice of
         Conversion/ Extension is attached as SCHEDULE 2.11. If the date upon
         which an Alternate Base Rate Loan is to be converted to a LIBOR Rate
         Loan is not a Business Day, then such conversion shall be made on the
         next succeeding Business Day and during the period from such last day
         of an Interest Period to such succeeding Business Day such Loan shall
         bear interest as if it were an Alternate Base Rate Loan. All or any
         part of outstanding Alternate Base Rate Loans may be converted as
         provided herein, PROVIDED that (i) no Loan may be converted into a
         LIBOR Rate Loan when any Default or Event of Default has occurred and
         is continuing and (ii) partial conversions shall be in an aggregate
         principal amount of $400,000 or a whole multiple of $100,000 in excess
         thereof.

                  (b)      Any LIBOR Rate Loans may be continued as such upon
         the expiration of an Interest Period with respect thereto by compliance
         by the Borrower with the notice provisions contained in
         Section 2.11(a); PROVIDED, that no LIBOR Rate Loan may be continued as
         such when any Default or Event of Default has occurred and is
         continuing, in which case such Loan shall be automatically converted to
         an Alternate Base Rate Loan at the end of the applicable Interest
         Period with respect thereto. If the Borrower shall fail to give timely
         notice of an election to continue a LIBOR Rate Loan, or the
         continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR
         Rate Loans shall be automatically converted to Alternate Base Rate
         Loans at the end of the applicable Interest Period with respect
         thereto.

         SECTION 2.12      COMPUTATION OF INTEREST AND FEES.

                  (a)      Interest payable hereunder with respect to Alternate
         Base Rate Loans shall be calculated on the basis of a year of 365 days
         (or 366 days, as applicable) for the actual days elapsed. All other
         fees, interest and all other amounts payable hereunder shall be
         calculated on the basis of a 360 day year for the actual days elapsed.
         The Administrative Agent shall as soon as practicable notify the
         Borrower and the Lenders of each determination of a LIBOR Rate on the
         Business Day of the determination thereof. Any change in the interest
         rate on a Loan resulting from a change in the Alternate Base Rate shall
         become effective as of the opening of business on the day on which such
         change in the Alternate Base Rate shall become effective. The
         Administrative Agent shall as soon as practicable notify the Borrower
         and the Lenders of the effective date and the amount of each such
         change.

                  (b)      Each determination of an interest rate by the
         Administrative Agent pursuant to any provision of this Agreement shall
         be conclusive and binding on the Borrower and the Lenders in the
         absence of manifest error. The Administrative Agent

                                       43
<PAGE>

         shall, at the request of the Borrower, deliver to the Borrower a
         statement showing the computations used by the Administrative Agent in
         determining any interest rate.

         SECTION 2.13 PRO RATA TREATMENT AND PAYMENTS.

         (a)      Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made PRO RATA according to the respective
Commitment Percentages of the Lenders. Each payment under this Agreement or any
Note shall be applied, first, to any fees then due and owing by the Borrower
pursuant to Section 2.6, second, to interest then due and owing in respect of
the Notes of the Borrower and, third, to principal then due and owing hereunder
and under the Notes of the Borrower. Each payment on account of any fees
pursuant to Section 2.6 shall be made PRO RATA in accordance with the respective
amounts due and owing (except as to the portion of the Letter of Credit retained
by the Issuing Lender and the Issuing Lender Fees). Each payment (other than
prepayments) by the Borrower on account of principal of and interest on the
Revolving Loans, the Tranche A Term Loan and on the Tranche B Term Loan shall be
made PRO RATA according to the respective amounts due and owing in accordance
with Section 2.8 hereof. Prepayments made pursuant to Section 2.16 shall be
applied in accordance with such section. Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.8(b). All
payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in Section 2.19(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent's office specified on SCHEDULE 9.2 in Dollars and in immediately available
funds not later than 2:00 P.M. (Charlotte, North Carolina time) on the date when
due. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a LIBOR Rate Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.

         (b)      ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent or any Lender on account of
the Credit Party Obligations or any other amounts outstanding under any of the
Credit Documents or in respect of the Collateral shall be paid over or delivered
as follows:

                  FIRST, to the payment of all reasonable out-of-pocket costs
         and expenses (including without limitation reasonable attorneys' fees)
         of the Administrative Agent in connection with enforcing the rights of
         the Lenders under the Credit Documents and any

                                       44
<PAGE>

         protective advances made by the Administrative Agent with respect to
         the Collateral under or pursuant to the terms of the Collateral
         Documents;

                  SECOND, to payment of any fees owed to the Administrative
         Agent;

                  THIRD, to the payment of all reasonable out-of-pocket costs
         and expenses (including without limitation, reasonable attorneys' fees)
         of each of the Lenders in connection with enforcing its rights under
         the Credit Documents or otherwise with respect to the Credit Party
         Obligations owing to such Lender;

                  FOURTH, to the payment of all of the Credit Party Obligations
         consisting of accrued fees and interest;

                  FIFTH, to the payment of the outstanding principal amount of
         the Credit Party Obligations (including the payment or cash
         collateralization of the outstanding LOC Obligations);

                  SIXTH, to all other Credit Party Obligations and other
         obligations which shall have become due and payable under the Credit
         Documents or otherwise and not repaid pursuant to clauses "FIRST"
         through "FIFTH" above; and

                  SEVENTH, to the payment of the surplus, if any, to whoever may
         be lawfully entitled to receive such surplus.

         In carrying out the foregoing, (i) amounts received shall be applied in
         the numerical order provided until exhausted prior to application to
         the next succeeding category; (ii) each of the Lenders shall receive an
         amount equal to its pro rata share (based on the proportion that the
         then outstanding Loans and LOC Obligations held by such Lender bears to
         the aggregate then outstanding Loans and LOC Obligations) of amounts
         available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
         and "SIXTH" above; and (iii) to the extent that any amounts available
         for distribution pursuant to clause "FIFTH" above are attributable to
         the issued but undrawn amount of outstanding Letters of Credit, such
         amounts shall be held by the Administrative Agent in a cash collateral
         account and applied (A) first, to reimburse the Issuing Lender from
         time to time for any drawings under such Letters of Credit and (B)
         then, following the expiration of all Letters of Credit, to all other
         obligations of the types described in clauses "FIFTH" and "SIXTH" above
         in the manner provided in this Section 2.13(b).

         SECTION 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.

                  (a)      Unless the Administrative Agent shall have been
         notified in writing by a Lender prior to the date a Loan is to be made
         by such Lender (which notice shall be effective upon receipt) that such
         Lender does not intend to make the proceeds of such Loan available to
         the Administrative Agent, the Administrative Agent may assume that such
         Lender has made such proceeds available to the Administrative Agent on
         such date,

                                       45
<PAGE>

         and the Administrative Agent may in reliance upon such assumption (but
         shall not be required to) make available to the Borrower a
         corresponding amount. If such corresponding amount is not in fact made
         available to the Administrative Agent, the Administrative Agent shall
         be able to recover such corresponding amount from such Lender. If such
         Lender does not pay such corresponding amount forthwith upon the
         Administrative Agent's demand therefor, the Administrative Agent will
         promptly notify the Borrower, and the Borrower shall immediately pay
         such corresponding amount to the Administrative Agent. The
         Administrative Agent shall also be entitled to recover from the Lender
         or the Borrower, as the case may be, interest on such corresponding
         amount in respect of each day from the date such corresponding amount
         was made available by the Administrative Agent to the Borrower to the
         date such corresponding amount is recovered by the Administrative Agent
         at a per annum rate equal to (i) from the Borrower at the applicable
         rate for the applicable borrowing pursuant to the Notice of Borrowing
         and (ii) from a Lender at the Federal Funds Effective Rate.

                  (b)      Unless the Administrative Agent shall have been
         notified in writing by the Borrower, prior to the date on which any
         payment is due from it hereunder (which notice shall be effective upon
         receipt) that the Borrower does not intend to make such payment, the
         Administrative Agent may assume that such Borrower has made such
         payment when due, and the Administrative Agent may in reliance upon
         such assumption (but shall not be required to) make available to each
         Lender on such payment date an amount equal to the portion of such
         assumed payment to which such Lender is entitled hereunder, and if the
         Borrower has not in fact made such payment to the Administrative Agent,
         such Lender shall, on demand, repay to the Administrative Agent the
         amount made available to such Lender. If such amount is repaid to the
         Administrative Agent on a date after the date such amount was made
         available to such Lender, such Lender shall pay to the Administrative
         Agent on demand interest on such amount in respect of each day from the
         date such amount was made available by the Administrative Agent to such
         Lender to the date such amount is recovered by the Administrative Agent
         at a per annum rate equal to the Federal Funds Effective Rate.

                  (c)      A certificate of the Administrative Agent submitted
         to the Borrower or any Lender with respect to any amount owing under
         this Section 2.14 shall be conclusive in the absence of manifest error.

         SECTION 2.15  INABILITY TO DETERMINE INTEREST RATE.

         Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of

                                       46
<PAGE>

such determination, confirmed in writing, to the Borrower, and the Lenders at
least two Business Days prior to the first day of such Interest Period. Unless
the Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain or be converted
into Alternate Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the interest Periods so affected.

         SECTION 2.16  ILLEGALITY.

         Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any relevant Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR, Lending Office to make or
maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain in the
interbank eurodollar market through its LIBOR Lending Office the funds with
which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent and the Borrower thereof, (b) the commitment of such Lender
hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall
forthwith be suspended until the Administrative Agent shall give notice that the
condition or situation which gave rise to the suspension shall no longer exist,
and (c) such Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall
be converted on the last day of the Interest Period for such Loans or within
such earlier period as required by law as Alternate Base Rate Loans. The
Borrower hereby agrees promptly to pay any Lender, upon its demand, any
additional amounts necessary to compensate such Lender for actual and direct
costs (but not including anticipated profits) reasonably incurred by such Lender
in making any repayment in accordance with this Section including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its LIBOR Lending
Office) to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section; PROVIDED, HOWEVER, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its sole discretion to be material.

         SECTION 2.17  REQUIREMENTS OF LAW.

                  (a)      If the adoption of or any change in any Requirement
         of Law or in the interpretation or application thereof or compliance by
         any Lender with any request or directive (whether or not having the
         force of law) from any central bank or other Governmental Authority
         made subsequent to the date hereof:

                           (i)      shall subject such Lender to any tax of any
                  kind whatsoever with respect to any Letter of Credit or any
                  application relating thereto, any LIBOR

                                       47
<PAGE>

                  Rate Loan made by it, or change the basis of taxation of
                  payments to such Lender in respect thereof (except for changes
                  in the rate of tax on the overall net income of such Lender);

                           (ii)     shall impose, modify or hold applicable any
                  reserve, special deposit, compulsory loan or similar
                  requirement against assets held by, deposits or other
                  liabilities in or for the account of, advances, loans or other
                  extensions of credit by, or any other acquisition of funds
                  by, any office of such Lender which is not otherwise included
                  in the determination of the LIBOR Rate hereunder; or

                           (iii)    shall impose on such Lender any other
                  condition;

         and the result of any of the foregoing is to increase the cost to such
         Lender of making or maintaining LIBOR Rate Loans or the Letters of
         Credit or to reduce any amount receivable hereunder or under any Note,
         then, in any such case, the Borrower shall promptly pay such Lender,
         upon its demand, any additional amounts necessary to compensate such
         Lender for such additional cost or reduced amount receivable which
         such Lender reasonably deems to be material as determined by such
         Lender with respect to its LIBOR Rate Loans or Letters of Credit.
         A certificate as to any additional amounts payable pursuant to this
         Section submitted by such Lender, through the Administrative Agent,
         to the Borrower shall be conclusive in the absence of manifest error.
         Each Lender agrees to use reasonable efforts (including reasonable
         efforts to change its Domestic Lending Office or LIBOR Lending Office,
         as the case may be) to avoid or to minimize any amounts which might
         otherwise be payable pursuant to this paragraph of this Section;
         PROVIDED, HOWEVER, that such efforts shall not cause the imposition on
         such Lender of any additional costs or legal or regulatory burdens
         deemed by such Lender to be material.

                  (b)      If any Lender shall have reasonably determined that
         the adoption of or any change in any relevant Requirement of Law
         regarding capital adequacy or in the interpretation or application
         thereof or compliance by such Lender or any corporation controlling
         such Lender with any request or directive regarding capital adequacy
         (whether or not having the force of law) from any central bank or
         Governmental Authority made subsequent to the date hereof does or shall
         have the effect of reducing the rate of return on such Lender's or such
         corporation's capital as a result of its commitment to lend hereunder
         to a level below that which such Lender or such corporation could have
         achieved but for such adoption, change or compliance (taking into
         consideration such Lender's or such corporation's policies with respect
         to capital adequacy) by an amount reasonably deemed by such Lender to
         be material, then from time to time, within fifteen (15) days after
         demand by such Lender, the Borrower shall pay to such Lender such
         additional amount as shall be certified by such Lender as being
         required to compensate it for such reduction to the extent that such
         Lender reasonably determines that such additional amount is allocable
         to the existence of such Lender's commitment to lend hereunder. Such a
         certificate as to any additional amounts payable under this Section
         submitted by a Lender (which certificate shall include a description of
         the basis for the

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<PAGE>

         computation), through the Administrative Agent, to the Borrower shall
         be conclusive absent manifest error.

                  (c)      The agreements in this Section 2.17 shall survive the
         termination of this Agreement and payment of the Notes and all other
         amounts payable hereunder.

         Section 2.18 INDEMNITY.

         The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.

         Section 2.19 TAXES.

                  (a)      All payments made by the Borrower hereunder or under
         any Note will be, except as provided in Section 2.19(b), 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 Governmental
         Authority or by any political subdivision or taxing authority thereof
         or therein with respect to such payments (but excluding any tax imposed
         on or measured by the net income or profits (and franchise taxes
         imposed in lieu thereof) of a Lender pursuant to the laws of the
         jurisdiction in which it is organized or the jurisdiction in which the
         principal office or applicable lending office of such Lender is located
         or any subdivision thereof or therein) and all interest, penalties or
         similar liabilities with respect thereto (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 as may be necessary so that every payment of
         all amounts due under this Agreement or under any Note, 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. The Borrower
         will furnish to the Administrative Agent as soon as practicable after
         the date the payment of any Taxes is due pursuant to applicable law
         certified copies (to the extent reasonably available and required by
         law) of

                                       49
<PAGE>

         tax receipts evidencing such payment by the Borrower. The Borrower
         agrees to indemnify and hold harmless each Lender, and reimburse such
         Lender upon its written request, for the amount of any Taxes so levied
         or imposed and paid by such Lender to the extent not paid by the
         Borrower.

                  (b)      Each Lender that is not a United States person (as
         such term is defined in Section 7701(a)(30) of the Code) agrees to
         deliver to the Borrower and the Administrative Agent on or prior to the
         Closing Date, or in the case of a Lender that is an assignee or
         transferee of an interest under this Agreement pursuant to Section
         9.6(d) (unless the respective Lender was already a Lender hereunder
         immediately prior to such assignment or transfer), on the date of such
         assignment or transfer to such Lender, (i) if the Lender is a "bank"
         within the meaning of Section 81(c)(3)(A) of the Code, two accurate
         and complete original signed copies of Internal Revenue Service Form
         4224 or 1001 (or successor forms) certifying such Lender's entitlement
         to a complete exemption from United States withholding tax with respect
         to payments to be made under this Agreement and under any Note, or
         (ii) if the Lender is not a "bank" within the meaning of Section 881
         (c)(3)(A) of the Code, either Internal Revenue Service Form 1001 or
         4224 as set forth in clause (i) above, or (x) a certificate
         substantially in the form of SCHEDULE 2.19 (any such certificate, a
         "2.19 CERTIFICATE") and (y) two accurate and complete original signed
         copies of Internal Revenue Service Form W-8 (or successor form)
         certifying such Lender's entitlement to an exemption from United States
         withholding tax with respect to payments of interest to be made under
         this Agreement and under any Note. In addition, each Lender agrees that
         it will deliver upon the Borrower's request updated versions of the
         foregoing, as applicable, whenever the previous certification has
         become obsolete or inaccurate in any material respect, together with
         such other forms as may be required in order to confirm or establish
         the entitlement of such Lender to a continued exemption from or
         reduction in United States withholding tax with respect to payments
         under this Agreement and any Note. Notwithstanding anything to the
         contrary contained in Section 2.19(a), but subject to the immediately
         succeeding sentence, (x) each Borrower shall be entitled, to the extent
         it is required to do so by law, to deduct or withhold Taxes imposed by
         the United States (or any political subdivision or taxing authority
         thereof or therein) from interest, fees or other amounts payable
         hereunder for the account of any Lender which is not a United States
         person (as such term is defined in Section 7701(a)(30) of the Code)
         for U.S. Federal income tax purposes to the extent that such Lender has
         not provided to the Borrower U.S. Internal Revenue Service Forms that
         establish a complete exemption from such deduction or withholding and
         (y) the Borrower shall not be obligated pursuant to Section 2.19(a)
         hereof to gross-up payments to be made to a Lender in respect of Taxes
         imposed by the United States if (I) such Lender has not provided to the
         Borrower the Internal Revenue Service Forms required to be provided to
         the Borrower pursuant to this Section 2.19(b) or (II) in the case of a
         payment, other than interest, to a Lender described in clause (ii)
         above, to the extent that such Forms do not establish a complete
         exemption from withholding of such Taxes. Notwithstanding anything to
         the contrary contained in the preceding sentence or elsewhere in this
         Section 2.19, the Borrower agrees to pay additional amounts and to
         indemnify each Lender in the manner set forth in Section 2.19(a)
         (without regard to the identity of the jurisdiction

                                       50
<PAGE>

requiring the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of Taxes.

         (c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as the
case may be) to avoid or to minimize any amounts which might otherwise be
payable pursuant to this Section; PROVIDED, HOWEVER, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.

         (d) If the Borrower pays any additional amount pursuant to this Section
2.19 with respect to a Lender, such Lender shall use reasonable efforts to
obtain a refund of tax or credit against its tax liabilities on account of such
payment; PROVIDED that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit position
or (ii) it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. In the event that
such Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the net
tax benefit obtained by such Lender as a result of such payment by the Borrower.
In the event that no refund or credit is obtained with respect to the Borrower's
payments to such Lender pursuant to this Section 2.19, then such Lender shall
upon request provide a certification that such Lender has not received a refund
or credit for such payments. Nothing contained in this Section 2.19 shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its determination
referred to in the proviso to the first sentence of this Section 2.19 to the
Borrower or any other party.

         (e) The agreements in this Section 2.19 shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.

SECTION 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.

         (a) In addition to its other obligations under Section 2.4, the
Borrower hereby agrees to protect, indemnify, pay and save each Issuing Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) that
the Issuing Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions,
herein called "GOVERNMENT ACTS").

         (b) As between the Borrower and the Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary

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<PAGE>

thereof. The Issuing Lender shall not be responsible: (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
a Letter of Credit to comply fully with conditions required in order to draw
upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in interpretation
of technical terms; (vi) for any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under a Letter of Credit or
of the proceeds thereof; and (vii) for any consequences arising from causes
beyond the control of the Issuing Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the vesting
of the Issuing Lender's rights or powers hereunder.

         (c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to the Borrower. It is the intention of the
parties that this Agreement shall be construed and applied to protect and
indemnify the Issuing Lender against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or omissions,
whether rightful or wrongful, of any Government Authority. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.

         (d) Nothing in this Section 2.20 is intended to limit the reimbursement
obligation of the Borrower contained in Section 2.4(d) hereof. The obligations
of the Borrower under this Section 2.20 shall survive the termination of this
Agreement. No act or omissions of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Agreement.

         (e) Notwithstanding anything to the contrary contained in this Section
2.20, the Borrower shall have no obligation to indemnify any Issuing Lender in
respect of any liability incurred by such Issuing Lender arising out of the
gross negligence or willful misconduct of the Issuing Lender (including action
not taken by an Issuing Lender), as determined by a court of competent
jurisdiction.

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<PAGE>

         SECTION 2.21 REPLACEMENT OF LENDERS.

         If any Lender delivers a notice pursuant to Section 2.16, 2.17 or 2.19
(hereinafter any such Lender shall be referred to as a "Replaced Lender"), then
in such case, the Borrower may, upon at least five (5) Business Days' notice to
the Administrative Agent and such Replaced Lender, designate a replacement
lender (a "Replacement Lender") acceptable to the Administrative Agent in its
reasonable discretion, to which such Replaced Lender shall, subject to its
receipt (unless a later date for the remittance thereof shall be agreed upon by
the Borrower and the Replaced Lender) of all amounts owed to such Replaced
Lender hereunder, assign all (but not less than all) of its rights and
obligations hereunder. Upon any assignment by any Lender pursuant to this
Section 2.21 becoming effective, the Replacement Lender shall thereupon be
deemed to be a "Lender" for all purposes of this Agreement and such Replaced
Lender shall thereupon cease to be a "Lender" for all purposes of this Agreement
and shall have no further rights or obligations hereunder (other than pursuant
to Sections 2.15, 2.16, 2.17 or 9.5 while such Replaced Lender was a Lender).

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represents
and warrants to the Administrative Agent and to each Lender that:

         SECTION 3.1 FINANCIAL CONDITION.

         The balance sheets and the related statements of income and of cash
flows of Power Circuits, Inc. for fiscal year 1997 and fiscal year 1998 audited
by Ernst & Young, LLP are complete and correct and present fairly the financial
condition of the Power Circuits, Inc. and its Subsidiaries as of such dates and
the balance sheets and the related statements of income and of cash flows of
Pacific Circuits, Inc. for fiscal year 1997 and fiscal year 1998 audited by
Arthur Andersen, L.L.P. are complete and correct and present fairly the
financial condition of Pacific Circuits, Inc. and its Subsidiaries as of such
dates. Additionally, monthly working capital detail for the trailing twelve
months, the company-prepared pro forma balance sheets of the Borrower and the
six-year projections have been prepared in good faith based upon reasonable
assumptions and represent the Borrower's best estimate of future results. All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed therein).

         SECTION 3.2 NO CHANGE.

         Since December 31, 1998 (and after delivery of annual audited financial
statements in accordance Section 5.1(a), from the date of the most recently
delivered annual audited financial

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<PAGE>

statements) there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect.

         SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.

         Each of the Borrower and the other Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the requisite power and authority and
the legal right to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to so qualify or be in good standing could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

         SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

         Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained) or with the validity or enforceability of any Credit Document against
the Borrower or the other Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document to which it is a party has been duly executed
and delivered on behalf of the Borrower or the other Credit Parties, as the
case may be. Each Credit Document to which it is a party constitutes a legal,
valid and binding obligation of the Borrower or the other Credit Parties, as the
case may be, enforceable against the Borrower or such other Credit Party, as the
case may be, in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

         SECTION 3.5 NO LEGAL BAR; NO DEFAULT.

         The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any

                                       54
<PAGE>

Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any other Credit Party is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.

         SECTION 3.6 NO MATERIAL LITIGATION.

         Except as set forth in SCHEDULE 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against any Credit Party
or any of its Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.

         SECTION 3.7 INVESTMENT COMPANY ACT.

         Neither the Borrower nor any Credit Party is an "investment company",
or a company "controlled" by any entity which is required to register as an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.

         SECTION 3.8 MARGIN REGULATIONS.

         No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.

         SECTION 3.9 ERISA.

         Except as set forth in SCHEDULE 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to

                                       55
<PAGE>

such accrued benefits by an amount which, as determined in accordance with GAAP,
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Commonly Controlled Entity is currently subject to any
liability for a complete or partial withdrawal from a Multiemployer Plan which
could reasonably be expected to have a Material Adverse Effect.

         SECTION 3.10 ENVIRONMENTAL MATTERS. Except as set forth in
SCHEDULE 3.10, which in the aggregate, could not be reasonably expected to
have a Material Adverse Effect:

                  (a) To the best knowledge of the Borrower and the other Credit
          Parties, the facilities and properties owned, leased or operated by
          the Borrower and the other Credit Parties or any of their Subsidiaries
          (the "PROPERTIES") do not contain any Materials of Environmental
          Concern in amounts or concentrations which (i) constitute a violation
          of, or (ii) could reasonably be expected to give rise to liability
          under, any Environmental Law.

                  (b) To the best knowledge of the Borrower and the other Credit
          Parties, the Properties and all operations of the Borrower and the
          other Credit Parties and/or their Subsidiaries at the Properties are
          in compliance, and have in the last three years been in compliance, in
          all material respects with all applicable Environmental Laws, and
          there is no contamination at, under or about the Properties or
          violation of any Environmental Law with respect to the Properties or
          the business operated by the Borrower and the other Credit Parties or
          any of their Subsidiaries (the "BUSINESS").

                  (c) Neither the Borrower nor any of the other Credit Parties
          has received any written or actual notice of violation, alleged
          violation, non-compliance, liability or potential liability regarding
          environmental matters or compliance with Environmental Laws with
          regard to any of the Properties or the Business, nor does the Borrower
          or any of the other Credit Parties nor any of their Subsidiaries have
          knowledge or reason to believe that any such notice will be received
          or is being threatened.

                  (d) To the best knowledge of the Borrower and the other Credit
          Parties, Materials of Environmental Concern have not been transported
          or disposed of from the Properties in violation of, or in a manner or
          to a location which could reasonably be expected to give rise to
          liability under any Environmental Law, nor have any Materials of
          Environmental Concern been generated, treated, stored or disposed of
          at, on or under any of the Properties in violation of, or in a manner
          that could reasonably be expected to give rise to liability under, any
          applicable Environmental Law.

                  (e) No judicial proceeding or governmental or administrative
          action is pending or, to the knowledge of the Borrower and the other
          Credit Parties, threatened, under any Environmental Law to which the
          Borrower or any other Credit Party or any Subsidiary is or will be
          named as a party with respect to the Properties or the Business, nor
          are there any consent decrees or other decrees, consent orders,
          administrative orders

                                       56
<PAGE>

         or other orders, or other administrative or judicial requirements
         outstanding under any Environmental Law with respect to the Properties
         or the Business.

                  (f) To the best knowledge of the Borrower and the other Credit
          Parties, there has been no release or threat of release of Materials
          of Environmental Concern at or from the Properties, or arising from or
          related to the operations of the Borrower or any other Credit Party or
          any Subsidiary in connection with the Properties or otherwise in
          connection with the Business, in violation of or in amounts or in a
          manner that could reasonably be expected to give rise to liability
          under Environmental Laws.

         SECTION 3.11 PURPOSE OF LOANS.

         The proceeds of the Loans hereunder shall be used solely by the
Borrower to (i) finance the Acquisition and to pay certain fees and expenses
related thereto, (ii) refinance certain existing indebtedness of the Credit
Parties and (iii) provide for working capital, capital expenditures and other
general corporate purposes. The Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in connection
with surety and reclamation bonds, reinsurance, domestic or international trade
transactions and obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in the ordinary course
of business.

         SECTION 3.12 SUBSIDIARIES.

         Set forth on SCHEDULE 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties. Information on the attached Schedule
includes state of incorporation; the number of shares of each class of Capital
Stock or other equity interests outstanding; the number and percentage of
outstanding shares of each class of stock; and the number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and similar rights. The outstanding Capital Stock and other equity
interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).

         SECTION 3.13 OWNERSHIP.

         Each Credit Party and its Subsidiaries is the owner of, and has good
and marketable title to, all of its respective assets, except as may be
permitted pursuant Section 6.13 hereof, and none of such assets is subject to
any Lien other than Permitted Liens.

         SECTION 3.14 INDEBTEDNESS.

         Except as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.

                                       57
<PAGE>

         SECTION 3.15 TAXES.

         Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid (a) all amounts of taxes shown thereon to be due (including interest
and penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is aware
as of the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.

         SECTION 3.16 INTELLECTUAL PROPERTY.

         Each of the Borrower and its Subsidiaries owns, or has the legal right
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes necessary for each of them to conduct its business as currently
conducted. Set forth on SCHEDULE 3.16 is a list of all Intellectual Property
owned by each of the Borrower and its Subsidiaries or that the Borrower or any
of its Subsidiaries has the right to use. Except as provided on SCHEDULE 3.16,
no claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower or any
of its Subsidiaries know of any such claim, and, to the knowledge of the
Borrower or any of its Subsidiaries, the use of such Intellectual Property by
the Borrower or any of its Subsidiaries does not infringe on the rights of any
Person, except for such claims and infringements that in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. SCHEDULE 3.16 may
be updated from time to time by the Borrower to include new Intellectual
Property by giving written notice thereof to the Administrative Agent.

         SECTION 3.17 SOLVENCY.

         The fair saleable value of each Credit Party's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Credit Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the transactions contemplated by this Credit Agreement, debts
beyond its ability to pay such debts as they become due.

         SECTION 3.18 INVESTMENTS.

         All Investments of each of the Borrower and its Subsidiaries are
Permitted Investments.

         SECTION 3.19 LOCATION OF COLLATERAL.

         Set forth on SCHEDULE 3.19(a) is a list of the Properties of the
Borrower and its Subsidiaries with street address, county and state where
located. Set forth on SCHEDULE 3.19(b) is

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a list of all locations where any tangible personal property of the Borrower and
its Subsidiaries is located, including county and state where located. Set forth
on SCHEDULE 3.19(c) is the chief executive office and principal place of
business of each of the Borrower and its Subsidiaries. SCHEDULE 3.19(a), 3.19(b)
and 3.19(c) may be updated from time to time by the Borrower to include new
properties or locations by giving written notice thereof to the Administrative
Agent.

         SECTION 3.20 NO BURDENSOME RESTRICTIONS.

         None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

         SECTION 3.21 BROKERS' FEES.

         None of the Borrower or any of its Subsidiaries has any obligation to
any Person in respect of any finder's, broker's, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents other than the closing and other fees payable pursuant to this
Credit Agreement.

         SECTION 3.22 LABOR MATTERS.

         There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Closing Date, other than as set forth in SCHEDULE 3.22 hereto, and none of the
Borrower or any of its Subsidiaries (i) has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years, other
than as set forth in SCHEDULE 3.22 hereto or (ii) has knowledge of any potential
or pending strike, walkout or work stoppage.

          SECTION 3.23 SECURITY DOCUMENTS.

         The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements or the recordation of the applicable Mortgage Instruments in favor of
First Union, as Collateral Agent for the Lenders) perfected security interests
and Liens, prior to all other Liens other than Permitted Liens.

          SECTION 3.24 ACCURACY AND COMPLETENESS OF INFORMATION.

         All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any Credit Party or any of its Subsidiaries to the
Administrative Agent or any Lender for purposes of or in connection with this
Agreement or any other Credit Document (including, without limitation,
information disclosed in all financial statements and all footnotes attached
thereto, the confidential information memorandum provided to the Lenders and the
bank group presentation made by the Borrower to prospective lenders on July 8,
1999), or any transaction

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contemplated hereby or thereby, is or will be true and accurate in all material
respects and not incomplete by omitting to state any material fact necessary to
make such information not misleading. There is no fact now known to the
Borrower, any other Credit Party or any of their Subsidiaries which has, or
could reasonably be expected to have, a Material Adverse Effect which fact has
not been set forth herein, in the financial statements of the Borrower and its
Subsidiaries furnished to the Administrative Agent and/or the Lenders, or in any
certificate, opinion or other written statement made or furnished by any Credit
Party to the Administrative Agent and/or the Lenders.

         SECTION 3.25 YEAR 2000 ISSUE.

         Any reprogramming and related testing required to permit the proper
functioning of the Credit Parties' computer systems in and following the year
2000 will be completed in all material respects prior to September 29, 1999
(that is, the Credit Parties will be "Year 2000 Compliant"), and the cost to
the Credit Parties of such reprogramming and testing will not result in a
Default or Event of Default or a Material Adverse Effect. Except for such
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Credit Parties and their
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, adequate for the conduct of its
business.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS,
TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS.

         This Agreement shall become effective upon the satisfaction or waiver
of the following conditions precedent:

                  (a) EXECUTION OF AGREEMENT. The Administrative Agent shall
          have received (i) counterparts of this Agreement, executed by a duly
          authorized officer of each party hereto, (ii) for the account of each
          Lender, Revolving Notes, the Tranche A Term Notes and the Tranche B
          Term Notes and for the account of the Swingline Lender, a Swingline
          Note and (iii) counterparts of the Security Agreement and the Pledge
          Agreement, in each case conforming to the requirements of this
          Agreement and executed by duly authorized officers of the Credit
          Parties.

                  (b) AUTHORITY DOCUMENTS. The Administrative Agent shall have
          received the following:

                      (i) ARTICLES OF INCORPORATION. Copies of the articles of
                  incorporation or other charter documents, as applicable, of
                  each Credit Party certified to be true

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                    and complete as of a recent date by the appropriate
                    governmental authority of the state of its incorporation.

                           (ii) RESOLUTIONS. Copies of resolutions of the board
                   of directors of each Credit Party approving and adopting the
                   Credit Documents, the transactions contemplated therein and
                   authorizing execution and delivery thereof, certified by an
                   officer of such Credit Party as of the Closing Date to be
                   true and correct and in force and effect as of such date.

                           (iii) BYLAWS. A copy of the bylaws of each Credit
                   Party certified by an officer of such Credit Party as of the
                   Closing Date to be true and correct and in force and effect
                   as of such date.

                           (iv) GOOD STANDING. Copies of (i) certificates of
                   good standing, existence or its equivalent with respect to
                   the each Credit Party certified as of a recent date by the
                   appropriate governmental authorities of the state of
                   incorporation and each other state in which the failure to so
                   qualify and be in good standing could reasonably be expected
                   to have a Material Adverse Effect on the business or
                   operations of the Borrower and its Subsidiaries in such state
                   and (ii) a certificate indicating payment of all corporate
                   franchise taxes certified as of a recent date by the
                   appropriate governmental taxing authorities.

                           (v) INCUMBENCY. An incumbency certificate of each
                   Credit Party certified by a secretary or assistant secretary
                   to be true and correct as of the Closing Date.

                  (c) CLOSING DATE STRUCTURE. The Administrative Agent shall be
          satisfied with management structure, legal structure, voting control,
          liquidity, total leverage and total capitalization of the Borrower as
          of the Closing Date.

                  (d) YEAR 2000 PLAN. The Administrative Agent shall have
          received the Borrower's plan for becoming Year 2000 Compliant, which
          plan shall be in form and substance satisfactory to the Administrative
          Agent.

                  (e) ENVIRONMENTAL REPORTS. The Administrative Agent shall have
          received satisfactory environmental reviews of all real property owned
          by the Borrower and its Subsidiaries.

          SECTION 4.2 CONDITIONS TO INITIAL REVOLVING LOANS, TRANCHE A TERM
LOANS AND TRANCHE B TERM LOANS.

         The obligations of each Lender to make the initial Revolving Loans, the
Tranche A Term Loan and the Tranche B Term Loan on the Funding Date is subject
to the satisfaction or waiver of the following conditions precedent:

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                  (a) LEGAL OPINIONS OF COUNSEL. The Administrative Agent shall
          have received an opinion of Shearman & Sterling, counsel for the
          Credit Parties, dated the Closing Date and addressed to the
          Administrative Agent and the Lenders, in form and substance reasonably
          acceptable to the Administrative Agent.

                  (b) PERSONAL PROPERTY COLLATERAL. The Administrative Agent
          shall have received, in form and substance reasonably satisfactory to
          the Administrative Agent:

                          (i) searches of Uniform Commercial Code filings in the
                  jurisdiction of the chief executive office of each Credit
                  Party and each jurisdiction where any Collateral is located or
                  where a filing would need to be made in order to perfect the
                  Administrative Agent's security interest in the Collateral,
                  copies of the financing statements on file in such
                  jurisdictions and evidence that no Liens exist other than
                  Permitted Liens;

                          (ii) duly executed UCC financing statements for each
                  appropriate jurisdiction as is necessary, in the
                  Administrative Agent's sole discretion, to perfect the
                  Administrative Agent's security interest in the Collateral;

                          (iii) duly executed consents as are necessary, in the
                  Administrative Agent's sole discretion, to perfect the
                  Lenders' security interest in the Collateral; and

                          (iv) in the case of any personal property Collateral
                  located at premises leased by a Credit Party, such estoppel
                  letters, consents and waivers from the landlords on such real
                  property as may be required by the Administrative Agent.

                  (e) REAL PROPERTY COLLATERAL. The Administrative Agent shall
          have received, in form and substance reasonably satisfactory to the
          Administrative Agent:

                          (i) fully executed and notarized mortgages, deeds of
                  trust or deeds to secure debt (each, as the same may be
                  amended, modified, restated or supplemented from time to time,
                  a "MORTGAGE INSTRUMENT" and collectively the "MORTGAGE
                  INSTRUMENTS") encumbering the fee interest in the properties
                  listed in SCHEDULE 3.19(a) (excluding for purposes hereof, the
                  property located at 2620 Croddy Way, Santa Ana, California for
                  a period of 180 days following the Funding Date) as properties
                  owned by the Credit Parties (each a "MORTGAGED PROPERTY" and
                  collectively the "MORTGAGED PROPERTIES");

                          (ii) a title report obtained by the Credit Parties in
                  respect of each of the Mortgaged Properties;

                          (iii) with respect to each Mortgaged Property, current
                  form ALTA mortgagee title insurance policies issued by Lawyers
                  Title Insurance Corporation (the "MORTGAGE POLICIES"), in
                  amounts not less than the respective amounts

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                  designated in SCHEDULE 3.19(a) with respect to any particular
                  Mortgaged Property, assuring the Administrative Agent that
                  each of the Mortgage Instruments creates a valid and
                  enforceable first priority mortgage lien on the applicable
                  Mortgaged Property, free and clear of all defects and
                  encumbrances except Permitted Liens, shall provide for
                  affirmative insurance and such reinsurance as the
                  Administrative Agent may reasonably request, all of the
                  foregoing in form and substance reasonably satisfactory to the
                  Administrative Agent;

                          (iv) evidence as to (A) whether any Mortgaged Property
                  is in an area designated by the Federal Emergency Management
                  Agency as having special flood or mud slide hazards (a "FLOOD
                  HAZARD PROPERTY") and (B) if any Mortgaged Property is a Flood
                  Hazard Property, (1) whether the community in which such
                  Mortgaged Property is located is participating in the National
                  Flood Insurance Program, (2) the applicable Credit Party's
                  written acknowledgment of receipt of written notification from
                  the Administrative Agent (a) as to the fact that such
                  Mortgaged Property is a Flood Hazard Property and (b) as to
                  whether the community in which each such Flood Hazard Property
                  is located is participating in the National Flood Insurance
                  Program and (3) copies of insurance policies or certificates
                  of insurance of the Borrower and its Subsidiaries evidencing
                  flood insurance reasonably satisfactory to the Administrative
                  Agent and naming the Administrative Agent as sole loss payee
                  on behalf of the Lenders; and

                          (v) maps or plats of an as-built survey of the sites
                  of the Mortgaged Properties certified to the Administrative
                  Agent and Lawyers Title Insurance Corporation in a manner
                  reasonably satisfactory to them, dated a date satisfactory to
                  each of the Administrative Agent and Lawyers Title Insurance
                  Corporation by an independent professional licensed land
                  surveyor reasonably satisfactory to each of the Administrative
                  Agent and Lawyers Title Insurance Corporation, which maps or
                  plats and the surveys on which they are based shall be
                  sufficient to delete any standard printed survey exception
                  contained in the applicable title policy and be made in
                  accordance with the Minimum Standard Detail Requirements for
                  Land Title Surveys jointly established and adopted by the
                  American Land Title Association and the American Congress on
                  Surveying and Mapping in 1992, and, without limiting the
                  generality of the foregoing, there shall be surveyed and shown
                  on such maps, plats or surveys the following: (A) the
                  locations on such sites of all the buildings, structures and
                  other improvements and the established building setback lines;
                  (B) the lines of streets abutting the sites and width thereof,
                  (C) all access and other easements appurtenant to the sites
                  necessary to use the sites; (D) all roadways, paths,
                  driveways, easements, encroachments and overhanging
                  projections and similar encumbrances affecting the site,
                  whether recorded, apparent from a physical inspection of the
                  sites or otherwise known to the surveyor; (E) any
                  encroachments on any adjoining property by the building
                  structures and improvements on the sites; and (F) if the site
                  is described as being on a filed map, a legend relating the
                  survey to said map.

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<PAGE>

                  (d) LIABILITY AND CASUALTY INSURANCE. The Administrative Agent
          shall have received copies of insurance policies or certificates of
          insurance evidencing liability and casualty insurance meeting the
          requirements set forth herein or in the Security Documents. The
          Administrative Agent shall be named as loss payee and additional
          insured on all such insurance policies for the benefit of the Lenders.

                  (e) FEES. The Administrative Agent shall have received all
          fees, if any, owing pursuant to the Fee Letter and Section 2.6.

                  (f) LITIGATION. There shall not exist any pending litigation
          or, to the best of any Credit Party's knowledge, investigation
          affecting or relating to the Borrower or any of its Subsidiaries, this
          Agreement and the other Credit Documents that in the reasonable
          judgment of the Administrative Agent could materially adversely affect
          the Borrower or any of its Subsidiaries, this Agreement and the other
          Credit Documents, that has not been settled, dismissed, vacated,
          discharged or terminated prior to the Closing Date.

                  (g) SOLVENCY EVIDENCE. (A) The Administrative Agent shall have
          received an officer's certificate for each Credit Party prepared by
          the chief financial officer of each such Credit Party as to the
          financial condition, solvency and related matters of each such Credit
          Party, in each case after giving effect to the Acquisition and the
          initial borrowings under the Credit Documents, in substantially the
          form of SCHEDULE 4.2(g) hereto and (B) the Administrative Agent shall
          have received a solvency opinion from a firm satisfactory to the
          Administrative Agent as to the solvency and related matters of (i) the
          Acquired Company on the Closing Date and (ii) the Borrower after
          giving effect to the Acquisition and the initial borrowings under the
          Credit Documents.

                  (h) ACCOUNT DESIGNATION LETTER. The Administrative Agent shall
          have received the executed Account Designation Letter in the form of
          SCHEDULE 1.1 (a) hereto.

                  (i) CORPORATE STRUCTURE. The corporate capital and ownership
          structure of the Borrower and its Subsidiaries (after giving effect to
          the purchase of the Acquired Company) shall be as described in
          SCHEDULE 3.12. The Administrative Agent shall be satisfied with
          management structure, legal structure, voting control, liquidity,
          total leverage and total capitalization of the Borrower as of the
          Closing Date.

                  (j) ACQUISITION DOCUMENTS. There shall not have been any
          material modification, amendment, supplement or waiver to the
          Acquisition Documents without the prior written consent of the
          Administrative Agent, including, but not limited to, any modification,
          amendment, supplement or waiver relating to the amount or type of
          consideration to be paid in connection with the Acquisition and the
          contents of all disclosure schedules and exhibits, and the Acquisition
          shall have been consummated in accordance with the terms of the
          Acquisition Documents (without waiver of any conditions precedent to
          the obligations of the buyer thereunder) with total consideration
          relating to the Acquisition including all fees and expenses incurred
          in connection therewith not to exceed $101,000,000 with fees and
          expenses incurred in connection therewith not to exceed

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         $5,500,000. The Administrative Agent shall have received final copies
         of the Acquisition Documents, together with all exhibits and schedules
         thereto, certified by an officer of the Borrower.

                  (k) SUBORDINATED DEBT AND EQUITY. The Borrower shall have
          received proceeds from the issuance of a combination of debt and
          equity in an amount not less than $50,000,000 on terms and conditions
          reasonably acceptable to the Administrative Agent in the aggregate,
          provided that the equity component of such combination shall be in an
          amount not less than $37,500,000 on terms and conditions acceptable to
          the Administrative Agent.

                  (l) GOVERNMENT CONSENT. The Administrative Agent shall have
          received evidence that all governmental, shareholder and material
          third party consents and approvals necessary in connection with the
          financings and other transactions contemplated hereby have been
          obtained and all applicable waiting periods have expired without any
          action being taken by any authority that could restrain, prevent or
          impose any material adverse conditions on such transactions or that
          could seek or threaten any of the foregoing.

                  (m) COMPLIANCE WITH LAWS. The financing and other transactions
          contemplated hereby shall be in compliance with all applicable laws
          and regulations (including all applicable securities and banking laws,
          rules and regulations).

                  (n) BANKRUPTCY. There shall be no bankruptcy or insolvency
          proceedings with respect to the Borrower or any of its Subsidiaries.

                  (o) MATERIAL ADVERSE EFFECT. Except as disclosed on Schedule
          3.2, no material adverse change shall have occurred since December 31,
          1998 in the business, properties, operations or conditions (financial
          or otherwise) of the Borrower and its Subsidiaries taken as a whole.

                  (p) FUNDED DEBT. After giving effect to the Acquisition and
          the closing of this Agreement, there shall be no more than
          $153,000,000 in Funded Debt of the Borrower and its Subsidiaries on a
          consolidated basis.

                  (q) MINIMUM EBITDA. The Administrative Agent shall have
          received satisfactory evidence that Consolidated EBITDA for the
          immediately preceding twelve month period was not less than
          $30,000,000. It being agreed that if the Funding Date shall occur
          after the 15th day of any month, then Consolidated EBITDA shall be
          calculated as of the end of the most recently ended month.

                  (r) FINANCIAL STATEMENTS. The Administrative Agent shall have
          received copies of the financial statements referred to in Section 3.1
          hereof, each in form and substance satisfactory to it.

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<PAGE>

                  (s) BORROWING BASE CERTIFICATE. The Administrative Agent shall
          have received a Borrowing Base Certificate dated as of the Closing
          Date in form and substance satisfactory to the Administrative Agent.

                  (t) TERMINATION OF EXISTING INDEBTEDNESS. All existing
          Indebtedness for borrowed money of the Borrower and its Subsidiaries
          (other than the Indebtedness listed ON SCHEDULE 6.1(b)) shall have
          been repaid in full and terminated.

                  (u) ADDITIONAL MATTERS. All other legal matters in connection
          with the transactions contemplated by this Agreement shall be
          reasonably satisfactory in form and substance to the Administrative
          Agent and its counsel.

          SECTION 4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT.

          The obligation of each Lender to make any Extension of Credit
hereunder is subject to the satisfaction or waiver of the following
conditions precedent on the date of making such Extension of Credit:

                  (a) REPRESENTATIONS AND WARRANTIES. The representations and
          warranties made by the Credit Parties herein, in the Security
          Documents or which are contained in any certificate furnished at any
          time under or in connection herewith shall be true and correct in all
          material respects on and as of the date of such Extension of Credit as
          if made on and as of such date other than any such representations and
          warranties that, by its terms, refer to a specific date other than the
          date of such Extension of Credit, which shall be true and correct to
          all material respects on and as of such specific date.

                  (b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
          Default shall have occurred and be continuing on such date or after
          giving effect to the Extension of Credit to be made on such date
          unless such Default or Event of Default shall have been waived in
          accordance with this Agreement.

                  (c) COMPLIANCE WITH COMMITMENTS. Immediately after giving
          effect to the making of any such Extension of Credit (and the
          application of the proceeds thereof), (i) the sum of the aggregate
          principal amount of outstanding Revolving Loans PLUS Swingline Loans
          PLUS LOC Obligations shall not exceed the Revolving Committed Amount,
          (ii) the LOC Obligations shall not exceed the LOC Committed Amount and
          (iii) the Swingline Loans shall not exceed the Swingline Commitment.

                  (d) ADDITIONAL CONDITIONS TO REVOLVING LOANS. If such Loan is
          made pursuant to Section 2.1, all conditions set forth in such
          Section shall have been satisfied.

                  (e) ADDITIONAL CONDITIONS TO TRANCHE A TERM LOAN. If such
          Loan is made pursuant to Section 2.2, all conditions set forth in such
          Section shall have been satisfied.

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<PAGE>

                  (f) ADDITIONAL CONDITIONS TO TRANCHE B TERM LOAN. If such Loan
          is made pursuant to Section 2.3, all conditions set forth in such
          Section shall have been satisfied.

                  (g) ADDITIONAL CONDITIONS TO LETTERS OF CREDIT. If such
          Extension of Credit is made pursuant to Section 2.4, all conditions
          set fort in such Section shall have been satisfied.

                  (h) ADDITIONAL CONDITIONS TO SWINGLINE LOANS. If such
          Extension of Credit is made pursuant to Section 2.5, all conditions
          set forth in such Section shall have been satisfied.

         Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (g) of this
Section have been satisfied.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

         The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Borrower shall, and shall cause each of its Subsidiaries (other than
in the case of Sections 5.1, 5.2 or 5.7 hereof), to:

         SECTION 5.1 FINANCIAL STATEMENTS.

         Furnish to the Administrative Agent and each of the Lenders:

                  (a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
          any event within ninety (90) days after the end of each fiscal year of
          the Borrower, a copy of the consolidated and consolidating balance
          sheet of the Borrower and its consolidated Subsidiaries as at the end
          of such fiscal year and the related consolidated and consolidating
          statements of income and of cash flows of the Borrower and its
          consolidated Subsidiaries for such year, such consolidated statements
          shall be audited by a firm of independent certified public accountants
          of nationally recognized standing reasonably acceptable to the
          Required Lenders, and shall set forth in each case in comparative form
          the figures for the previous year, reported on without a "going
          concern" or like qualification or exception, or qualification
          indicating that the scope of the audit was inadequate to permit such
          independent certified public accountants to certify such financial
          statements without such qualification;

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                  (b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
          in any event within forty-five (45) days after the end of each of the
          first three fiscal quarters of the Borrower, a company-prepared
          consolidated and consolidating balance sheet of the Borrower and its
          consolidated Subsidiaries as at the end of such period and related
          company-prepared statements of income and cash flows for the Borrower
          and its consolidated Subsidiaries for such quarterly period and for
          the portion of the fiscal year ending with such period, in each case
          setting forth in comparative form consolidated and consolidating
          figures for the corresponding period or periods of the preceding
          fiscal year (subject to normal recurring year-end audit adjustments);

                  (c) MONTHLY FINANCIAL STATEMENTS. As soon as available and in
          any event within thirty (30) days after the end of each month of the
          Borrower (other than at the end of a fiscal quarter, in which case 45
          days after the end thereof), a company-prepared consolidated and
          consolidating balance sheet of the Borrower and its consolidated
          Subsidiaries as at the end of such period and related company-prepared
          statements of income and cash flows for the Borrower and its
          consolidated Subsidiaries for such monthly period and for the portion
          of the fiscal year ending with such period, in each case setting forth
          in comparative form consolidated and consolidating figures for the
          corresponding period or periods of the preceding fiscal year (subject
          to normal recurring year-end audit adjustments); and

                  (d) ANNUAL BUDGET PLAN. As soon as available, but in any event
          within forty five (45) days after the end of each fiscal year, a copy
          of the detailed annual budget or plan of the Borrower for the next
          fiscal year on quarterly basis, in form and detail reasonably
          acceptable to the Administrative Agent and the Required Lenders,
          together with a summary of the material assumptions made in the
          preparation of such annual budget or plan;

all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.

         SECTION 5.2 CERTIFICATES; OTHER INFORMATION.

         Furnish to the Administrative Agent and each of the Lenders:

                  (a) concurrently with the delivery of the financial
          statements referred to in Section 5.1(a) above, a certificate of
          the independent certified public accountants reporting on such
          financial statements stating that in making the examination
          necessary therefor no knowledge was obtained of any Default or
          Event of Default, except as specified in such certificate;

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                  (b) concurrently with the delivery of the financial statements
          referred to in Sections 5.1(a) and 5.1(b) above, a certificate of
          a Responsible Officer stating that, to the best of such Responsible
          Officer's knowledge, each of the Credit Parties during such period
          observed or performed in all material respects all of its covenants
          and other agreements, and satisfied in all material respects every
          condition, contained in this Agreement to be observed, performed or
          satisfied by it, and that such Responsible Officer has obtained no
          knowledge of any Default or Event of Default except as specified in
          such certificate and such certificate shall include the calculations
          in reasonable detail required to indicate compliance with Section 5.9
          as of the last day of such period;

                  (c) within thirty (30) days after the same are sent, copies of
          all material financial reports (other than those otherwise provided
          pursuant to Section 5.1 and those which are of a promotional nature)
          and other financial information which the Borrower sends to its
          shareholders, and within thirty days after the same are filed, copies
          of all financial statements and non-confidential reports which the
          Borrower may make to, or file with the Securities and Exchange
          Commission or any successor or analogous Governmental Authority;

                  (d) within ninety (90) days after the end of each fiscal year
          of the Borrower, a certificate containing information regarding the
          amount of all Asset Dispositions, Debt Issuances, and Equity Issuances
          that were made during the prior fiscal year and amounts received in
          connection with any Recovery Event during the prior fiscal year;

                  (e) promptly upon receipt thereof, a copy of any other report
          or "management letter" submitted by independent accountants to the
          Borrower or any of its Subsidiaries in connection with any annual,
          interim or special audit of the books of such Person;

                  (f) within 15 days after the end of each calendar month, a
          Borrowing Base Certificate (including an accounts receivable detail
          and an inventory detail) as of the end of the immediately preceding
          month, substantially in the form of SCHEDULE 5.2(f) and certified by
          the chief financial officer of the Borrower to be true and correct as
          of such date; and

                  (g) promptly, such additional financial and other information
          as the Administrative Agent, on behalf of any Lender, may from time to
          time reasonably request.

         SECTION 5.3 PAYMENT OF OBLIGATIONS.

         Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being

                                       69
<PAGE>

contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.

         SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.

         Continue to engage in business of the same general type as now
conducted by it on the Closing Date and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

         SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.

                  (a) Keep all property useful and necessary in its business in
          good working order and condition (ordinary wear and tear and
          obsolescence excepted) except where failure to do so would not have a
          Material Adverse Effect;

                  (b) Maintain with financially sound and reputable insurance
          companies insurance on all its material property (including without
          limitation its material tangible Collateral) in at least such amounts
          and against at least such risks as are usually insured against in the
          same general area by companies engaged in the same or a similar
          business; and furnish to the Administrative Agent, upon written
          request, full information as to the insurance carried; PROVIDED,
          HOWEVER, that the Borrower and its Subsidiaries may maintain self
          insurance plans to the extent companies of similar size and in similar
          businesses do so. The Administrative Agent shall be named as loss
          payee or mortgagee, as its interest may appear, and/or additional
          insured with respect to any such insurance providing coverage in
          respect of any Collateral, and each provider of any such insurance
          shall agree, by endorsement upon the policy or policies issued by it
          or by independent instruments furnished to the Administrative Agent,
          that it will give the Administrative Agent thirty (30) days prior
          written notice before any such policy or policies shall be altered or
          canceled, and that no act or default of the Borrower or any of its
          Subsidiaries or any other Person shall affect the rights of the
          Administrative Agent or the Lenders under such policy or policies. The
          present insurance coverage of the Borrower and its Subsidiaries is
          outlined as to carrier, policy number, expiration date, type and
          amount on SCHEDULE 5.5(b); and

                  (c) In case of any material loss, damage to or destruction of
          the Collateral of any Credit Party or any part thereof, such Credit
          Party shall promptly give written notice thereof to the Administrative
          Agent generally describing the nature and extent of such damage or
          destruction.

                                       70
<PAGE>

         SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.

         Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
by the Administrative Agent or any Lender, the Administrative Agent or any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records (other than materials protected by the
attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.

         SECTION 5.7 NOTICES.

         Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:

                  (a) promptly, but in any event within two (2) Business Days
          after the Borrower knows or has reason to know thereof, the occurrence
          of any Default or Event of Default;

                  (b) promptly, any default or event of default under any
          Contractual Obligation of the Borrower or any of its Subsidiaries
          which could reasonably be expected to have a Material Adverse Effect;

                  (c) promptly, any litigation, or any investigation or
          proceeding known to the Borrower, affecting the Borrower or any of its
          Subsidiaries which, if adversely determined, could reasonably be
          expected to have a Material Adverse Effect;

                  (d) as soon as possible and in any event within thirty (30)
          days after the Borrower knows or has reason to know thereof: (i) the
          occurrence or expected occurrence of any Reportable Event with respect
          to any Plan, a failure to make any required contribution to a Plan,
          the creation of any Lien in favor of the PBGC (other than a Permitted
          Lien) or a Plan or any withdrawal from, or the termination,
          Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
          institution of proceedings or the taking of any other action by the
          PBGC or the Borrower or any Commonly Controlled Entity or any
          Multiemployer Plan with respect to the withdrawal from, or the
          terminating, Reorganization or Insolvency of, any Plan; and

                  (e) promptly, any other development or event which could
          reasonably be expected to have a Material Adverse Effect.

                                       71
<PAGE>

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.

         SECTION 5.8 ENVIRONMENTAL LAWS.

                  (a) Comply in all material respects with, and use its best
          efforts to ensure compliance in all material respects by all tenants
          and subtenants, if any, with, all applicable Environmental Laws and
          obtain and comply in all material respects with and maintain, and use
          its best efforts to ensure that all tenants and subtenants obtain and
          comply in all material respects with and maintain, any and all
          licenses, approvals, notifications, registrations or permits required
          by applicable Environmental Laws except to the extent that failure to
          do so could not reasonably be expected to have a Material Adverse
          Effect;

                  (b) Conduct and complete all investigations, studies, sampling
          and testing, and all remedial, removal and other actions required
          under Environmental Laws and promptly comply in all material respects
          with all lawful orders and directives of all Governmental Authorities
          regarding Environmental Laws except to the extent that the same are
          being contested in good faith by appropriate proceedings and the
          pendency of such proceedings could not reasonably be expected to
          have a Material Adverse Effect; and

                  (c) Defend, indemnify and hold harmless the Administrative
          Agent and the Lenders, and their respective employees, agents,
          officers and directors, from and against any and all claims, demands,
          penalties, fines, liabilities, settlements, damages, costs and
          expenses of whatever kind or nature known or unknown, contingent or
          otherwise, arising out of, or in any way relating to the violation
          of, noncompliance with or liability under, any Environmental Law
          applicable to the operations of the Borrower any of its Subsidiaries
          or the Properties, or any legally binding orders, requirements or
          demands of Governmental Authorities related thereto, including,
          without limitation, reasonable attorney's and consultant's fees,
          investigation and laboratory fees, response costs, court costs and
          litigation expenses, except to the extent that any of the foregoing
          arise out of the gross negligence or willful misconduct of the party
          seeking indemnification therefor. The agreements in this paragraph
          shall survive repayment of the Notes and all other amounts payable
          hereunder.

         SECTION 5.9 FINANCIAL COVENANTS.

                  Commencing on the day immediately following the Closing Date,
          the Borrower shall, and shall cause each of its Subsidiaries to,
          comply with the following financial covenants:

                                       72
<PAGE>

                  (a) LEVERAGE RATIO. The Leverage Ratio, as of the last day of
          each fiscal quarter of the Borrower and its Subsidiaries occurring
          during the periods indicated below, shall be less than or equal to the
          following:

<TABLE>
<CAPTION>
                           Period                                           Ratio
                           ------                                           -----
         <S>                                                              <C>
         Closing Date through and including
            the second fiscal quarter of fiscal year 2000                 5.25 to 1.0
         Third fiscal quarter of fiscal year 2000
            through and including the fourth fiscal quarter
            of fiscal year 2000                                           5.00 to 1.0
         First fiscal quarter of fiscal year 2001                         4.75 to 1.0
         Second fiscal quarter of fiscal year 2001                        4.50 to 1.0
         Third fiscal quarter of fiscal year 2001                         4.25 to 1.0
         Fourth fiscal quarter of fiscal year 2001
            through and including the third fiscal
            quarter of fiscal year 2002                                   4.00 to 1.0
         Fourth fiscal quarter of fiscal year 2002
            and thereafter                                                3.75 to 1.0
</TABLE>

                  (b) SENIOR LEVERAGE RATIO. The Senior Leverage Ratio,
         as of  the last day of each fiscal quarter of the Borrower and
         its Subsidiaries occurring during the periods indicated below,
         shall be less than or equal to the following:

<TABLE>
<CAPTION>
                            Period                                          Ratio
                            ------                                          -----
          <S>                                                             <C>
          Closing Date through and including
             the second fiscal quarter of fiscal year 2000                4.25 to 1.0
          Third fiscal quarter of fiscal year 2000 through
             and including the fourth fiscal quarter of
             fiscal year 2000                                             4.00 to 1.0
          First fiscal quarter of fiscal year 2001                        3.75 to 1.0
          Second fiscal quarter of fiscal year 2001                       3.50 to 1.0
          Third fiscal quarter of fiscal year 2001                        3.25 to 1.0
          Fourth fiscal quarter of fiscal year 2001
             through and including the third fiscal
             quarter of fiscal year 2002                                  3.00 to 1.0
          Fourth fiscal quarter of fiscal year 2002
             and thereafter                                               2.75 to 1.0
</TABLE>

                  (c) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage
          Ratio, as of the last day of each fiscal quarter of the Borrower and
          its Subsidiaries occurring during the periods indicated below, shall
          be greater than or equal to the following:

                                       73
<PAGE>

<TABLE>
<CAPTION>
                                   Period                                            Ratio
                                   ------                                            -----
                  <S>                                                              <C>
                  Closing Date through and including
                     the second fiscal quarter of fiscal year 2000                 1.05 to 1.0
                  Third fiscal quarter of fiscal year 2000 through
                     and including the first fiscal quarter of
                     fiscal year 2001                                              1.10 to 1.0
                  Second fiscal quarter of fiscal
                     year 2001 and thereafter                                      1.15 to 1.0
</TABLE>

                  (d) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as
          of the last day of each fiscal quarter of the Borrower and its
          Subsidiaries occurring during the periods indicated below, shall be
          greater than or equal to the following:

<TABLE>
<CAPTION>
                                   Period                                       Ratio
                                   ------                                       -----
                  <S>                                                         <C>
                  Closing Date through and including
                     the second fiscal quarter of fiscal year 2000            2.00 to 1.0
                  Third fiscal quarter of fiscal year 2000
                     through and including the fourth fiscal
                     quarter of fiscal year 2000                              2.15 to 1.0
                  First fiscal quarter of fiscal year 2001                    2.25 to 1.0
                  Second fiscal quarter of fiscal year 2001                   2.35 to 1.0
                  Third fiscal quarter of fiscal year 2001 through
                     and including the fourth fiscal quarter of fiscal
                     year 2001                                                2.50 to 1.0
                  First fiscal quarter of fiscal year 2002
                     and thereafter                                           3.00 to 1.0
</TABLE>

                  (e) CONSOLIDATED EBITDA. Consolidated EBITDA with respect to
          the Borrower and its Subsidiaries, as of the last day of each fiscal
          quarter of the Borrower occurring during the period indicated below,
          shall be greater than or equal to the following:

<TABLE>
<CAPTION>
                                    Period                                             Amount
                                    ------                                             ------
                  <S>                                                                <C>
                  Closing Date through and including
                     the first fiscal quarter of fiscal year 2000                    $26,000,000
                  Second fiscal quarter of fiscal year 2000                          $27,500,000
                  Third fiscal quarter of fiscal year 2000                           $28,500,000
                  Fourth fiscal quarter of fiscal year 2000                          $29,500,000
                  First fiscal quarter of fiscal year 2001                           $30,000,000
                  Second fiscal quarter of fiscal year 2001                          $31,000,000
                  Third fiscal quarter of fiscal year 2001                           $32,000,000
                  Fourth fiscal quarter of fiscal year 2001                          $33,000,000
                  First fiscal quarter of fiscal year 2002
                     through and including the second fiscal quarter
                     of fiscal year 2002                                             $35,000,000

                                       74
<PAGE>

                  Third fiscal quarter of fiscal year 2002
                    through and including the fourth fiscal quarter
                    of fiscal year 2002                                            $37,000,000
                  First fiscal quarter of fiscal year 2003
                    through and including the second fiscal quarter
                    of fiscal year 2003                                            $39,000,000
                  Third fiscal quarter of fiscal year 2003 and thereafter          $41,000,000
</TABLE>

                  (f) CONSOLIDATED CAPITAL EXPENDITURES. Consolidated Capital
          Expenditures (which shall not include the conversion of operating
          leases to Capital Leases or other Indebtedness as permitted by Section
          6.17) as of the end of any fiscal year of the Borrower shall be less
          than or equal to the amount set forth below during the periods set
          forth below:

<TABLE>
<CAPTION>
                               Period                                            Amount
                               ------                                            ------
                           <S>                                                 <C>
                           Fiscal Year 1999                                    $8,800,000
                           Fiscal Year 2000                                    $8,500,000
                           Fiscal Year 2001                                    $7,500,000
                           Fiscal Year 2002                                    $7,500,000
                           Fiscal Year 2003                                    $7,500,000
                           Fiscal Year 2004                                    $7,500,000
                           Fiscal Year 2005                                    $7,500,000
</TABLE>

         SECTION 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.

         The Credit Parties will cause each of their Domestic Subsidiaries,
whether newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement. The guaranty
obligations of any such Additional Credit Party shall be secured by, among other
things, the Collateral of the Additional Credit Party.

         SECTION 5.11 COMPLIANCE WITH LAW.

         Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.

         SECTION 5.12 PLEDGED ASSETS.

         Each Credit Party will, and will cause each of its Subsidiaries to, be
subject at all times to a first priority, perfected Lien with respect to all of
such Subsidiary's Collateral (subject in each case to Permitted Liens) in favor
of the Administrative Agent pursuant to the terms and conditions of the Security
Documents or such other security documents as the Administrative Agent shall
reasonably request. Each Credit Party shall, and shall cause each of its
Subsidiaries

                                       75
<PAGE>

to, adhere to the covenants regarding the location of personal property as
set forth in the Security Documents.

         SECTION 5.13 YEAR 2000 COMPLIANCE.

         The Credit Parties will promptly notify the Administrative Agent in
the event any Credit Party discovers or determines that any computer
application (including those of its suppliers, vendors and customers) that is
material to its or any of its Subsidiaries' business and operations will not
be Year 2000 Compliant, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect.

         SECTION 5.14 INTEREST RATE PROTECTION.

         The Borrower shall, within 90 days of the Funding Date, enter into
interest rate protection agreements protecting against fluctuations in
interest rates as to which the material terms are satisfactory to the
Administrative Agent, which agreements shall provide for coverage in an
amount not less than $50,000,000 and for a duration of not less than three
years.

         SECTION 5.15 SENIOR DEBT RATING.

         The Borrower shall have obtained, within 30 days of the Funding
Date, a senior debt rating of at least "B" from S&P and "B2" from Moody's.

         SECTION 5.16 FURTHER ASSURANCES.

         As soon as practicable, but in any event within (a) 45 days of the
Closing Date, the Borrower shall have delivered surveys for each of the
Mortgaged Properties satisfactory to the Administrative Agent in its sole
discretion, (b) 15 days of the Closing Date, the Administrative Agent shall
have received information in connection with field audits of the assets of
the Credit Parties the results of which shall be satisfactory to the
Administrative Agent in its sole discretion, (c) 45 days of the Closing Date,
the Administrative Agent shall have received a landlord waiver with respect
to the leased property of the Borrower located at 1162 Westar Lane,
Burlington, Washington on terms satisfactory to the Administrative Agent in
its sole discretion, (d) within 5 days of the Closing Date, the Borrower
shall have delivered evidence satisfactory to the Administrative Agent in its
sole discretion that the Indebtedness of the Borrower owing to Great Northern
Insured Annuity Corporation in the initial principal amount of $1,295,000 has
been paid in full and all liens existing in connection therewith have been
terminated and (e) within 15 days of the Closing Date, the Borrower shall
have delivered evidence satisfactory to the Administrative Agent in its sole
discretion that is has obtained flood insurance with respect to the real
property located on Croddy Way in Santa Ana, California naming the
Administrative Agent as sole loss payee on behalf of the Lenders.

                                       76
<PAGE>

                                   ARTICLE VI

                               NEGATIVE COVENANTS

         The Credit Parties hereby covenant and agree that on the Closing
Date, and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all
other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full that:

         SECTION 6.1 INDEBTEDNESS.

         The Borrower will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:

                  (a)      Indebtedness arising or existing under this Agreement
         and the other Credit Documents;

                  (b)      Indebtedness of the Borrower and its Subsidiaries
         existing as of the Closing Date as referenced in the financial
         statements referenced in Section 3.1 (and set out more specifically in
         SCHEDULE 6.1(b)) hereto and renewals, refinancings or extensions
         thereof in a principal amount not in excess of that outstanding as of
         the date of such renewal, refinancing or extension;

                  (c)      Indebtedness of the Borrower and its Subsidiaries
         incurred after the Closing Date consisting of Capital Leases or
         Indebtedness incurred to provide all or a portion of the purchase price
         or cost of construction of an asset provided that (i) such Indebtedness
         when incurred shall not exceed the purchase price or cost of
         construction of such asset; (ii) no such Indebtedness shall be
         refinanced for a principal amount in excess of the principal balance
         outstanding thereon at the time of such refinancing; and (iii) the
         total amount of all such Indebtedness shall not exceed $500,000 at any
         time outstanding; provided, however that notwithstanding the foregoing,
         the operating leases set forth on SCHEDULE 6.17 hereto may be converted
         into Capital Leases or purchased at such time as the Borrower may
         elect.

                  (d)      Unsecured intercompany Indebtedness among the
         Borrower and its Subsidiaries, PROVIDED that any such Indebtedness
         shall be fully subordinated to the Credit Party Obligations hereunder
         on terms reasonably satisfactory to the Administrative Agent;

                  (e)      Indebtedness and obligations owing under Hedging
         Agreements relating to the Loans hereunder and other Hedging Agreements
         entered into in order to manage existing or anticipated interest rate,
         exchange rate or commodity price risks and not for speculative
         purposes;

                                       77
<PAGE>

                  (f)      Indebtedness and obligations of Credit Parties owing
         under documentary letters of credit for the purchase of goods or other
         merchandise (but not under standby, direct pay or other letters of
         credit except for the Letters of Credit hereunder) generally in an
         aggregate amount not to exceed $250,000 in the aggregate;

                  (g)      Indebtedness in respect of Guaranty Obligations
         (other than Guaranty Obligations permitted pursuant to Section 6.1(a))
         in an aggregate amount not to exceed $500,000 at any time outstanding;

                  (h)      Indebtedness and obligations owing under the
         Subordinated Notes; and

                  (i)      other Indebtedness of the Borrower and its
         Subsidiaries which does not exceed $500,000 in the aggregate at any
         time outstanding.

         SECTION 6.2 LIENS.

         The Borrower will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to
any of its property or assets of any kind (whether real or personal, tangible
or intangible), whether now owned or hereafter acquired, except for Permitted
Liens.

         SECTION 6.3 GUARANTY OBLIGATIONS.

         The Borrower will not, nor will it permit any Subsidiary to, enter
into or otherwise become or be liable in respect of any Guaranty Obligations
(excluding specifically therefrom endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) other than (i)
those in favor of the Lenders in connection herewith, (ii) those in favor of
the holders of the TCW/Crescent Mezzanine Notes, and (iii) Guaranty
Obligations by the Borrower or its Subsidiaries of Indebtedness permitted
under Section 6.1(b) and Section 6.1(g) (except, as regards Indebtedness
under Section 6.1(b) thereof, only if and to the extent such Indebtedness was
guaranteed on the Closing Date).

         SECTION 6.4 NATURE OF BUSINESS.

         The Borrower will not, nor will it permit any Subsidiary to, alter
the character of its business in any material respect from that conducted as
of the Closing Date.

         SECTION 6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.

         The Borrower will not, nor will it permit any Subsidiary to,

                  (a)      dissolve, liquidate or wind up its affairs, sell,
         transfer, lease or otherwise dispose of its property or assets or agree
         to do so at a future time except the following, without duplication,
         shall be expressly permitted:

                                       78
<PAGE>

                           (i)      Specified Sales;

                           (ii)     the sale, transfer, lease or other
                  disposition of property or assets (A) to an unrelated party
                  not in the ordinary course of business (other than Specified
                  Sales), where and to the extent that they are the result of a
                  Recovery Event or (B) the sale, lease, transfer or other
                  disposition of machinery, parts and equipment no longer used
                  or useful in the conduct of the business of the Borrower or
                  any of its Subsidiaries, as appropriate, in its reasonable
                  discretion, so long as the net proceeds therefrom are used to
                  repair or replace damaged property or to purchase or otherwise
                  acquire new assets or property, PROVIDED that such purchase or
                  acquisition is committed to within 180 days of receipt of the
                  net proceeds and such purchase or acquisition is consummated
                  within 270 days of receipt of such proceeds;

                           (iii)    the sale, lease or transfer of property or
                  assets (at fair value) between the Borrower and any Guarantor;

                           (iv)     the sale, lease or transfer of property or
                  assets not to exceed $500,000 in the aggregate in any fiscal
                  year;

                           (v)      the sale, lease or transfer of certain real
                  property owned by Power Circuits, Inc. as described on
                  SCHEDULE 3.19(a);

         PROVIDED, that in the case of a sale, lease or transfer pursuant to
         Section 6.5(a)(ii)(A) and Section 6.5(a)(iv), at least 75% of the
         consideration received therefor by the Borrower or any such Subsidiary
         is in the form of cash or Cash Equivalents and in the case of a sale
         pursuant to Section 6.5(a)(v), 100% of the consideration received
         therefor by the Borrower or any Subsidiary is in the form of cash or
         Cash Equivalents; PROVIDED, FURTHER, that with respect to sales of
         assets permitted hereunder only, the Administrative Agent shall be
         entitled, without the consent of the Required Lenders, to release its
         Liens relating to the particular assets sold; or

                  (b)      (i) purchase, lease or otherwise acquire (in a single
         transaction or a series of related transactions) the property or assets
         of any Person (other than purchases or other acquisitions of inventory,
         leases, materials, property and equipment in the ordinary course of
         business, except as otherwise limited or prohibited herein) provided
         that so long as no Default or Event of Default shall have occurred and
         be continuing or would result therefrom, the Borrower may (A) acquire
         all or a majority of the Capital Stock or other ownership interest in
         any Person (in a similar or related line of business and which has
         earnings before interest, taxes, depreciation and amortization for the
         prior four fiscal quarters in an amount greater than $0) or all or a
         substantial portion of the assets, property and/or operations of a
         Person (in a similar or related line of business and which had earnings
         before interest, taxes, depreciation and amortization for the prior
         four fiscal quarters in an amount greater than $0) in an aggregate
         amount not to exceed $1,000,000

                                       79
<PAGE>

         for any individual acquisition of $2,500,000 in the aggregate in any
         fiscal year; provided, however that after giving effect to any such
         acquisition otherwise permitted hereunder, there shall be not less than
         $3,000,000 of availability under Section 2.1 and (B) to the extent
         permitted under Section 5.9(f), purchase that certain real property
         located at 2630-2640 South Harbor Boulevard, Santa Ana, California in
         an aggregate amount not to exceed $3,500,000 or (ii) enter into any
         transaction of merger or consolidation, except for (A) investments or
         acquisitions permitted pursuant to Section 6.6, and (B) the merger or
         consolidation of a Credit Party with and into another Credit Party,
         PROVIDED that if the Borrower is a party thereto, the Borrower will be
         the surviving corporation.

         SECTION 6.6 ADVANCES, INVESTMENTS AND LOANS.

         The Borrower will not, nor will it permit any Subsidiary to, lend
money or extend credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, or make
any capital contribution to, any Person except for Permitted Investments.

         SECTION 6.7 TRANSACTIONS WITH AFFILIATES.

         Except for those transactions contemplated by the agreements set
forth on SCHEDULE 6.7 and except as permitted in subsection (iv) of the
definition of Permitted Investments, the Borrower will not, nor will it
permit any Subsidiary to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than on fair and reasonable
terms and conditions substantially as favorable as would be obtainable in a
comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.

         SECTION 6.8 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.

         The Borrower will not, nor will it permit any Subsidiary to, create,
form or acquire any Subsidiaries, except for Domestic Subsidiaries which are
joined as Additional Credit Parties in accordance with the terms hereof. The
Borrower will not sell, transfer, pledge or otherwise dispose of any Capital
Stock or other equity interests in any of its Subsidiaries, nor will it
permit any of its Subsidiaries to issue, sell, transfer, pledge or otherwise
dispose of any of their Capital Stock or other equity interests, except in a
transaction permitted by Section 6.5.

         SECTION 6.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.

         The Borrower will not, nor will it permit any of its Subsidiaries
to, change its fiscal year or to change any fiscal quarter end as set forth
on SCHEDULE 6.9(e). The Borrower will not, nor will it permit any Subsidiary
to, amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational document) or bylaws (or other similar
document) without the prior written consent of the Required Lenders. The
Borrower will not, nor will it permit any of its Subsidiaries to, without the
prior written consent of the Administrative Agent, amend, modify, cancel or
terminate or fail to renew or extend or permit

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the amendment, modification, cancellation or termination of any of the
Material Contracts, except in the event that such amendments, modifications,
cancellations or terminations could not reasonably be expected to have a
Material Adverse Effect.

         SECTION 6.10 LIMITATION ON RESTRICTED ACTIONS.

         The Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Person to (a) pay dividends or make any other distributions to any Credit
Party on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, (b) pay any Indebtedness or
other obligation owed to any Credit Party, (c) make loans or advances to any
Credit Party, (d) sell, lease or transfer any of its properties or assets to
any Credit Party, or (e) act as a Guarantor and pledge its assets pursuant to
the Credit Documents or any renewals, refinancings, exchanges, refundings or
extension thereof, except (in respect of any of the matters referred to in
clauses (a)-(d) above) for such encumbrances or restrictions existing under
or by reason of (i) this Agreement and the other Credit Documents, (ii)
applicable law; (iii) any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c), PROVIDED that any such restriction
contained therein relates only to the asset or assets constructed or acquired
in connection therewith or (iv) any Permitted Lien or any document or
instrument governing any Permitted Lien, PROVIDED that any such restriction
contained therein relates only to the asset or assets subject to such
Permitted Lien.

         SECTION 6.11 RESTRICTED PAYMENTS.

         The Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, declare, order, make or set apart any sum for or pay
any Restricted Payment, except (a) to make dividends payable solely in the
same class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party (directly or indirectly through
Subsidiaries), (c) as permitted by Section 6.16,(d) to make regularly
scheduled payments of interest on the TCW/Crescent Notes to the extent
permitted by and subject to the subordination provisions applicable thereto,
and (e) provided that no Default or Event of Default has occurred and is
continuing at such time or would be directly or indirectly caused as a result
thereof, the Borrower may (i) pay cash distributions in respect of interest
owing on the Subordinated Notes (other than the TCW/Crescent Notes) in an
aggregate amount not to exceed $400,000 annually and (ii) repurchase stock
and options of management in an aggregate amount not to exceed $2,000,000
during the term of this Agreement.

         SECTION 6.12 PREPAYMENTS OF INDEBTEDNESS, ETC.

         The Borrower will not, nor will it permit any Subsidiary to, after
the issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Indebtedness if such amendment or
modification would add or change any terms in a manner adverse to the issuer
of such Indebtedness, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled
or increase the interest rate applicable thereto or change any subordination
provision thereof.

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         SECTION 6.13 SALE LEASEBACKS.

         The Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an operating lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or hereafter acquired in excess of $1,000,000 in the aggregate on an
annual basis, (a) which the Borrower or any Subsidiary has sold or
transferred or is to sell or transfer to a Person which is not the Borrower
or any Subsidiary or (b) which the Borrower or any Subsidiary intends to use
for substantially the same purpose as any other property which has been sold
or is to be sold or transferred by the Borrower or any Subsidiary to another
Person which is not the Borrower or any Subsidiary in connection with such
lease.

         SECTION 6.14 NO FURTHER NEGATIVE PLEDGES.

         The Borrower will not, nor will it permit any Subsidiary to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of
any security for such obligation if security is given for some other
obligation, except (a) pursuant to this Agreement and the other Credit
Documents, (b) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c), PROVIDED that any such restriction
contained therein relates only to the asset or assets constructed or acquired
in connection therewith and (c) in connection with any Permitted Lien or any
document or instrument governing any Permitted Lien, PROVIDED that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.

         SECTION 6.15 PARENT HOLDING COMPANY.

         The Parent shall not engage in any operations, business or activity
other than holding not less than 51% of the capital stock of the Borrower.

         SECTION 6.16 OTHER PAYMENTS.

         The Borrower will not, nor will it permit any Subsidiary to, make
payments in respect of management fees or the Retention Bonus Plan; provided,
however, that so long as no Default or Event of Default shall have occurred
or be continuing or would result therefrom, the Borrower may (i) pay
management fees to the Sponsors or any of their Affiliates in an aggregate
annual amount not to exceed $600,000 and (ii) pay amounts owing in respect of
the Retention Bonus Plan in an aggregate annual amount not to exceed
$1,200,000; notwithstanding the foregoing, if the Borrower shall have been
prohibited from making payments owing in respect of the Retention Bonus Plan
as a result of the foregoing provisions, then, so long as no Default or Event
of Default shall have occurred or be continuing or would result therefrom,
the Borrower may pay any amounts past due at such time.

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         SECTION 6.17 OPERATING LEASES.

         The Borrower will not, nor will it permit any Subsidiary to incur or
permit to exist any obligations in respect of operating leases which require
rental payments in excess of $2,500,000 in the aggregate for all such Persons
during any fiscal year; provided, however that the amount set forth above
shall be permanently reduced on a dollar for dollar basis upon the conversion
of each operating lease set forth on SCHEDULE 6.17 to a Capital Lease or
other Indebtedness otherwise permitted under Section 6. 1.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

         SECTION 7.1 EVENTS OF DEFAULT.

         An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):

                  (a)      The Borrower shall fail to pay any principal on any
         Note when due in accordance with the terms thereof or hereof; or the
         Borrower shall fail to reimburse the Issuing Lender for any LOC
         Obligations when due in accordance with the terms hereof; or the
         Borrower shall fail to pay any interest on any Note or any fee or other
         amount payable hereunder when due in accordance with the terms thereof
         or hereof and such failure shall continue unremedied for three (3)
         Business Days (or any Guarantor shall fail to pay on the Guaranty in
         respect of any of the foregoing or in respect of any other Guaranty
         Obligations thereunder); or

                  (b)      Any representation or warranty made or deemed made
         herein, in the Security Documents or in any of the other Credit
         Documents or which is contained in any certificate, document or
         financial or other statement furnished at any time under or in
         connection with this Agreement shall prove to have been incorrect,
         false or misleading in any material respect on or as of the date made
         or deemed made; or

                  (c)      (i) Any Credit Party shall fail to perform, comply
         with or observe any term, covenant or agreement applicable to it
         contained in Section 5.7(a), Section 5.9 or Article VI hereof; or (ii)
         any Credit Party shall fail to comply with any other covenant,
         contained in this Credit Agreement or the other Credit Documents or any
         other agreement, document or instrument among any Credit Party, the
         Administrative Agent and the Lenders or executed by any Credit Party in
         favor of the Administrative Agent or the Lenders (other than as
         described in Sections 7.1(a) or 7.1(c)(i) above), and in the event
         such breach or failure to comply is capable of cure, is not cured
         within thirty (30) days of its occurrence; or

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<PAGE>

                  (d)      The Borrower or any of its Subsidiaries shall (i)
         default in any payment of principal of or interest on any Indebtedness
         (other than the Notes) in a principal amount outstanding of at least
         $500,000 in the aggregate for the Borrower and any of its Subsidiaries
         beyond the period of grace (not to exceed 30 days), if any, provided in
         the instrument or agreement under which such Indebtedness was created;
         or (ii) default in the observance or performance of any other agreement
         or condition relating to any Indebtedness in a principal amount
         outstanding of at least $500,000 in the aggregate for the Borrower and
         its Subsidiaries or contained in any instrument or agreement
         evidencing, securing or relating thereto, 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
         Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
         trustee or agent on behalf of such holder or holders or beneficiary or
         beneficiaries) to cause, with the giving of notice if required, such
         Indebtedness to become due prior to its stated maturity; or

                  (e)      (i) The Borrower or any of its Subsidiaries shall
         commence any case, proceeding or other action (A) under any existing or
         future law of any jurisdiction, domestic or foreign, relating to
         bankruptcy, insolvency, reorganization or relief of debtors, seeking to
         have an order for relief entered with respect to it, or seeking to
         adjudicate it a bankrupt or insolvent, or seeking reorganization,
         arrangement, adjustment, winding-up, liquidation, dissolution,
         composition or other relief with respect to it or its debts, or (B)
         seeking appointment of a receiver, trustee, custodian, conservator or
         other similar official for it or for all or any substantial part of its
         assets, or the Borrower or any Subsidiary shall make a general
         assignment for the benefit of its creditors; or (ii) there shall be
         commenced against the Borrower or any Subsidiary any case, proceeding
         or other action of a nature referred to in clause (i) above which (A)
         results in the entry of an order for relief or any such adjudication or
         appointment or (B) remains undismissed, undischarged or unbonded for a
         period of 60 days; or (iii) there shall be commenced against the
         Borrower or any Subsidiary any case, proceeding or other action seeking
         issuance of a warrant of attachment, execution, distraint or similar
         process against all or any substantial part of its assets which results
         in the entry of an order for any such relief which shall not have been
         vacated, discharged, or stayed or bonded pending appeal within 60 days
         from the entry thereof; or (iv) the Borrower or any Subsidiary shall
         take any action in furtherance of, or indicating its consent to,
         approval of, or acquiescence in, any of the acts set forth in clause
         (i), (ii), or (iii) above; or (v) the Borrower or any Subsidiary shall
         generally not, or shall be unable to, or shall admit in writing its
         inability to, pay its debts as they become due; or

                  (f)      One or more judgments or decrees shall be entered
         against the Borrower or any of its Subsidiaries involving in the
         aggregate a liability (to the extent not paid when due or covered by
         insurance) of $500,000 or more and all such judgments or decrees shall
         not have been paid and satisfied, vacated, discharged, stayed or bonded
         pending appeal within 10 days from the entry thereof; or

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<PAGE>

                  (g)      (i) Any Person shall engage in any "prohibited
         transaction" (as defined in Section 406 of ERISA or Section 4975 of the
         Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
         defined in Section 302 of ERISA), whether or not waived, shall exist
         with respect to any Plan or any Lien in favor of the PBGC or a Plan
         (other than a Permitted Lien) shall arise on the assets of the Borrower
         or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
         with respect to, or proceedings shall commence to have a trustee
         appointed, or a trustee shall be appointed, to administer or to
         terminate, any Single Employer Plan, which Reportable Event or
         commencement of proceedings or appointment of a Trustee is, in the
         reasonable opinion of the Required Lenders, likely to result in the
         termination of such Plan for purposes of Title IV of ERISA, (iv) any
         Single Employer Plan shall terminate for purposes of Title IV of ERISA,
         (v) the Borrower, any of its Subsidiaries or any Commonly Controlled
         Entity shall, or in the reasonable opinion of the Required Lenders is
         likely to, incur any liability in connection with a withdrawal from, or
         the Insolvency or Reorganization of, any Multiemployer Plan or (vi) any
         other similar event or condition shall occur or exist with respect to a
         Plan; and in each case in clauses (i) through (vi) above, such event or
         condition, together with all other such events or conditions, if any,
         could have a Material Adverse Effect; or

                  (h)      There shall occur a Change of Control; or

                  (i)      The Guaranty or any provision thereof shall cease to
         be in full force and effect or any Guarantor or any Person acting by or
         on behalf of any Guarantor shall deny or disaffirm any Guarantor's
         obligations under the Guaranty;

                  (j)      Any other Credit Document shall fail to be in full
         force and effect or to give the Administrative Agent and/or the Lenders
         the security interests, liens, rights, powers and privileges purported
         to be created thereby (except as such documents may be terminated or no
         longer in force and effect in accordance with the terms thereof, other
         than those indemnities and provisions which by their terms shall
         survive); or

                  (k)      Any default shall occur under any of the Subordinated
         Notes.

         SECTION 7.2 ACCELERATION; REMEDIES.

         Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
and (b) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the written consent of the Required
Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) the Administrative Agent may, or upon the
written request of the

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Required Lenders, the Administrative Agent shall, by notice of default to the
Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes to be due and payable
forthwith and direct the Borrower to pay to the Administrative Agent cash
collateral as security for the LOC Obligations for subsequent drawings under
then outstanding Letters of Credit an amount equal to the maximum amount of
which may be drawn under Letters of Credit then outstanding, whereupon the
same shall immediately become due and payable.

                                  ARTICLE VIII

                                    THE AGENT

         SECTION 8.1 APPOINTMENT.

         Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this
Agreement, and each such Lender irrevocably authorizes First Union National
Bank, as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.

         SECTION 8.2 DELEGATION OF DUTIES.

         The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care. Without limiting the foregoing, the Administrative Agent may appoint
one of its affiliates as its agent to perform the functions of the
Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.

         SECTION 8.3 EXCULPATORY PROVISIONS.

         Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to
any of

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<PAGE>

the Lenders for any recitals, statements, representations or warranties made
by the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Credit Documents or for any
failure of the Borrower to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance by the Borrower
of any of the agreements contained in, or conditions of, this Agreement, or
to inspect the properties, books or records of the Borrower.

         SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.

         The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document or conversation
believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless (a) a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent and (b) the Administrative Agent shall have received the
written agreement of such assignee to be bound hereby as fully and to the
same extent as if such assignee were an original Lender party hereto, in each
case in form satisfactory to the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under any of the Credit
Documents in accordance with a request of the Required Lenders or all of the
Lenders, as may be required under this Agreement, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.

         SECTION 8.5 NOTICE OF DEFAULT.

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; PROVIDED, HOWEVER, that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem

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<PAGE>

advisable in the best interests of the Lenders except to the extent that this
Credit Agreement expressly requires that such action be taken, or not taken,
only with the consent or upon the authorization of the Required Lenders, or all
of the Lenders, as the case may be.

         SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.

         Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representation or warranty to it
and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit analysis, appraisals and decisions in taking or not
taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except
for notices, reports and other documents expressly required to be furnished
to the Lenders by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness
of the Borrower which may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates.

         SECTION 8.7 INDEMNIFICATION.

         The Lenders agree to indemnify the Administrative Agent in its
capacity hereunder (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Notes) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of any Credit Document or any
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing;
PROVIDED, HOWEVER, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the Agent's gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. The

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agreements in this Section 8.7 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.

         SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.

         The Administrative Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Administrative Agent shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.

         SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.

         The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the
Notes, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by
the Borrower, whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term "Administrative
Agent" shall mean such successor agent effective upon such appointment and
approval, and the former Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the
part of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring Agent's resignation
as Administrative Agent, the provisions of this Section 8.9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

                                   ARTICLE IX

                                  MISCELLANEOUS

         SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.

         Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended,
supplemented, waived or modified except in accordance with the provisions of
this Section nor may be released except as specifically provided herein or in
the Security Documents or in accordance with the provisions of this Section
9.1. The Required Lenders may, or, with the written consent of the Required
Lenders, the Administrative Agent may, from time to time, (a) enter into with
the Borrower written amendments, supplements or modifications hereto and to
the other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights
of the Lenders or of the Borrower hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders may specify in such
instrument, any of the

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requirements of this Agreement or the other Credit Documents or any Default
or Event of Default and its consequences; PROVIDED, HOWEVER, that no such
waiver and no such amendment, waiver, supplement, modification or release
shall:

                           (i)      reduce the amount or extend the scheduled
                  date of maturity of any Loan or Note or any installment
                  thereon, or reduce the stated rate of any interest or fee
                  payable hereunder (other than interest at the increased
                  post-default rate) or extend the scheduled date of any payment
                  thereof or increase the amount or extend the expiration date
                  of any Lender's Commitment, in each case without the written
                  consent of each Lender directly affected thereby, or

                           (ii)     amend, modify or waive any provision of this
                  Section 9.1 or reduce the percentage specified in the
                  definition of Required Lenders, without the written consent of
                  all the Lenders, or

                           (iii)    amend, modify or waive any provision of
                  Article VIII without the written consent of the then
                  Administrative Agent, or

                           (iv)     release any of the Guarantors from their
                  obligations under the Guaranty, except in accordance with the
                  terms thereof, without the written consent of all of the
                  Lenders, or

                           (v)      release all or substantially all of the
                  Collateral, without the written consent of all of the Lenders,
                  or

                           (vi)     without the consent of Lenders holding in
                  the aggregate more than 50% of the outstanding Tranche A Term
                  Loans and 50% of the outstanding Tranche B Term Loans, extend
                  the time for or the amount or the manner of application of
                  proceeds of any mandatory prepayment required by Section
                  2.8(b)(ii), (iii), (iv) or (v) hereof, or

                           (vii)    without the consent of Lenders holding in
                  the aggregate more than 50% of the outstanding Tranche B Term
                  Loans, amend any provision that changes the allocation of any
                  payments between the term loan facilities, or

                           (viii)   amend, modify or waive any provision of the
                  Credit Documents requiring consent, approval or request of the
                  Required Lenders or all Lenders, without the written consent
                  of all of the Required Lenders or Lenders as appropriate and,
                  PROVIDED, FURTHER, that no amendment, waiver or consent
                  affecting the rights or duties of the Administrative Agent or
                  the Issuing Lender under any Credit Document shall in any
                  event be effective, unless in writing and signed by the
                  Administrative Agent and/or the Issuing Lender, as applicable,
                  in addition to the Lenders required hereinabove to take such
                  action.

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         Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

         Notwithstanding any of the foregoing to the contrary, the consent of
the Borrower shall not be required for any amendment, modification or waiver
of the provisions of Article VIII (other than the provisions of Section 8.9);
PROVIDED, HOWEVER, that the Administrative Agent will provide written notice
to the Borrower of any such amendment, modification or waiver. In addition,
the Borrower and the Lenders hereby authorize the Administrative Agent to
modify this Credit Agreement by unilaterally amending or supplementing
SCHEDULE 2.1(a) from time to time in the manner requested by the Borrower,
the Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; PROVIDED, HOWEVER, that the
Administrative Agent shall promptly deliver a copy of any such modification
to the Borrower and each Lender.

         Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.

         SECTION 9.2 NOTICES.

         Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when confirmation of transmittal via telecopy (or other facsimile
device) to the number set out herein has been received by the sender, (c) the
day following the day on which the same has been delivered prepaid to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case, addressed as follows in the case of the
Borrower, the other Credit Parties and the Administrative Agent, and as set
forth on SCHEDULE 9.2 in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto and any future
holders of the Notes:

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The Borrower
and the other              Pacific Circuits, Inc.
Credit Parties:            17550 N.E. 67th Court
                           Redmond, Washington 98052
                           Attention: Mr. Lindsay Burton
                           Telecopier: (425) 869-1465
                           Telephone: (425) 883-7575 ext. 272

                           With a copy to:

                           Shearman & Sterling
                           555 California Street
                           Suite 2000
                           San Francisco, CA
                           Attention: Christopher Dillon
                           Telecopier: (415) 616-1199
                           Telephone: (415) 616-1122

                           Shearman & Sterling
                           599 Lexington Avenue
                           New York, NY 10022
                           Attention: Doug Bartner
                           Telecopier: (212) 848-7179
                           Telephone: (212) 848-8190

The Administrative         First Union National Bank
Agent:                     One First Union Center, DC-04
                           Charlotte, North Carolina 28288-0680
                           Attention: Syndication Agency Services
                           Telecopier: (704) 383-0288
                           Telephone: (704) 383-3721

                           with a copy to:

                           First Union National Bank
                           One First Union Center, DC-05
                           Charlotte, North Carolina 28288-0737
                           Attention: Mr. Jorge Gonzalez
                           Telecopier: (704) 374-4793
                           Telephone: (704) 383-8461

         SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.

         No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof;

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nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

         SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

         All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, PROVIDED that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.

         SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.

         The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation, negotiation, printing and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Administrative Agent or (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the Notes and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of the Credit Documents and any such other documents and the use, or proposed
use, of proceeds of the Loans (all of the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, HOWEVER, that the Borrower shall not have
any obligation hereunder to the Administrative Agent or any Lender with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, as determined by a
court of competent jurisdiction. The agreements in this Section 9.5 shall
survive repayment of the Loans, Notes and all other amounts payable hereunder.

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         SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.

                  (a)      This Agreement shall be binding upon and inure to the
         benefit of the Borrower, the Lenders, the Administrative Agent, all
         future holders of the Notes and their respective successors and
         assigns, except that the Borrower may not assign or transfer any of its
         rights or obligations under this Agreement or the other Credit
         Documents without the prior written consent of each Lender.

                  (b)      Any Lender may, in the ordinary course of its
         commercial banking business and in accordance with applicable law, at
         any time sell to one or more banks or other entities ("PARTICIPANTS")
         participating interests in any Loan owing to such Lender, any Note held
         by such Lender, any Commitment of such Lender, or any other interest of
         such Lender hereunder. In the event of any such sale by a Lender of
         participating interests to a Participant, such Lender's obligations
         under this Agreement to the other parties to this Agreement shall
         remain unchanged, such Lender shall remain solely responsible for the
         performance thereof, such Lender shall remain the holder of any such
         Note for all purposes under this Agreement, and the Borrower and the
         Administrative Agent shall continue to deal solely and directly with
         such Lender in connection with such Lender's rights and obligations
         under this Agreement. No Lender shall transfer or grant any
         participation under which the Participant shall have rights to approve
         any amendment to or waiver of this Agreement or any other Credit
         Document except to the extent such amendment or waiver would (i) extend
         the scheduled maturity of any Loan or Note or any installment thereon
         in which such Participant is participating, or reduce the stated rate
         or extend the time of payment of interest or fees thereon (except in
         connection with a waiver of interest at the increased post-default
         rate) or reduce the principal amount thereof, or increase the amount of
         the Participant's participation over the amount thereof then in effect
         (it being understood that a waiver of any Default or Event of Default
         shall not constitute a change in the terms of such participation, and
         that an increase in any Commitment or Loan shall be permitted without
         consent of any participant if the Participant's participation is not
         increased as a result thereof), (ii) release any of the Guarantors from
         their obligations under the Guaranty, (iii) release all or
         substantially all of the collateral, or (iv) consent to the assignment
         or transfer by the Borrower of any of its rights and obligations under
         this Agreement. In the case of any such participation, the Participant
         shall not have any rights under this Agreement or any of the other
         Credit Documents (the Participant's rights against such Lender in
         respect of such participation to be those set forth in the agreement
         executed by such Lender in favor of the Participant relating thereto)
         and all amounts payable by the Borrower hereunder shall be determined
         as if such Lender had not sold such participation, PROVIDED that each
         Participant shall be entitled to the benefits of Sections 2.16, 2.17,
         2.18 and 9.5 with respect to its participation in the Commitments and
         the Loans outstanding from time to time; PROVIDED, that no Participant
         shall be entitled to receive any greater amount pursuant to such
         Sections than the transferor Lender would have been entitled to receive
         in respect of the amount of the participation transferred by such
         transferor Lender to such Participant had no such transfer occurred.

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<PAGE>

                  (c)      Any Lender may, in the ordinary course of its
         commercial banking business and in accordance with applicable law, at
         any time, sell or assign to any Lender or any affiliate thereof and
         with the consent of the Administrative Agent and, so long as no Event
         of Default has occurred and is continuing, the Borrower (in each case,
         which consent shall not be unreasonably withheld), to one or more
         additional banks or financial institutions ("PURCHASING LENDERS"), all
         or any part of its rights and obligations under this Agreement and the
         Notes in minimum amounts of $3,000,000 with respect to its Revolving
         Commitment, its Revolving Loans, its Tranche A Term Loans or its
         Tranche B Term Loans (or, if less, the entire amount of such Lender's
         obligations), pursuant to a Commitment Transfer Supplement, executed by
         such Purchasing Lender and such transferor Lender (and, in the case of
         a Purchasing Lender that is not then a Lender or an affiliate thereof,
         the Administrative Agent and, so long as no Event of Default has
         occurred and is continuing, the Borrower), and delivered to the
         Administrative Agent for its acceptance and recording in the Register;
         PROVIDED, HOWEVER, that any sale or assignment to an existing Lender
         shall not require the consent of the Administrative Agent or the
         Borrower nor shall any such sale or assignment be subject to the
         minimum assignment amounts specified herein. Upon such execution,
         delivery, acceptance and recording, from and after the Transfer
         Effective Date specified in such Commitment Transfer Supplement, (x)
         the Purchasing Lender thereunder shall be a party hereto and, to the
         extent provided in such Commitment Transfer Supplement, have the rights
         and obligations of a Lender hereunder with a Commitment as set forth
         therein, and (y) the transferor Lender thereunder shall, to the extent
         provided in such Commitment Transfer Supplement, be released from its
         obligations under this Agreement (and, in the case of a Commitment
         Transfer Supplement covering all or the remaining portion of a
         transferor Lender's rights and obligations under this Agreement, such
         transferor Lender shall cease to be a party hereto). Such Commitment
         Transfer Supplement shall be deemed to amend this Agreement to the
         extent, and only to the extent, necessary to reflect the addition of
         such Purchasing Lender and the resulting adjustment of Commitment
         Percentages arising from the purchase by such Purchasing Lender of all
         or a portion of the rights and obligations of such transferor Lender
         under this Agreement and the Notes. On or prior to the Transfer
         Effective Date specified in such Commitment Transfer Supplement, the
         Borrower, at its own expense, shall execute and deliver to the
         Administrative Agent in exchange for the Notes delivered to the
         Administrative Agent pursuant to such Commitment Transfer Supplement
         new Notes to the order of such Purchasing Lender in an amount equal to
         the Commitment assumed by it pursuant to such Commitment Transfer
         Supplement and, unless the transferor Lender has not retained a
         Commitment hereunder, new Notes to the order of the transferor Lender
         in an amount equal to the Commitment retained by it hereunder. Such new
         Notes shall be dated the Closing Date and shall otherwise be in the
         form of the Notes replaced thereby. The Notes surrendered by the
         transferor Lender shall be returned by the Administrative Agent to the
         Borrower marked "canceled".

                  (d)      The Administrative Agent shall maintain at its
         address referred to in Section 9.2 a copy of each Commitment Transfer
         Supplement delivered to it and a register (the "REGISTER") for the
         recordation of the names and addresses of the Lenders

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<PAGE>

          and the Commitment of, and principal amount of the Loans owing to,
          each Lender from time to time. The entries in the Register shall be
          conclusive, in the absence of manifest error, and the Borrower, the
          Administrative Agent and the Lenders may treat each Person whose name
          is recorded in the Register as the owner of the Loan recorded therein
          for all purposes of this Agreement. The Register shall be available
          for inspection by the Borrower or any Lender at any reasonable time
          and from time to time upon reasonable prior notice.

                  (e) Upon its receipt of a duly executed Commitment Transfer
          Supplement, together with payment to the Administrative Agent by the
          transferor Lender or the Purchasing Lender, as agreed between them, of
          a registration and processing fee of $3,500.00 for each Purchasing
          Lender listed in such Commitment Transfer Supplement and the Notes
          subject to such Commitment Transfer Supplement, the Administrative
          Agent shall (i) accept such Commitment Transfer Supplement, (ii)
          record the information contained therein in the Register and (iii)
          give prompt notice of such acceptance and recordation to the Lenders
          and the Borrower.

                  (f) The Borrower authorizes each Lender to disclose to any
          Participant or Purchasing Lender (each, a "TRANSFEREE") and any
          prospective Transferee any and all financial information in such
          Lender's possession concerning the Borrower and its Affiliates which
          has been delivered to such Lender by or on behalf of the Borrower
          pursuant to this Agreement or which has been delivered to such Lender
          by or on behalf of the Borrower in connection with such Lender's
          credit evaluation of the Borrower and its Affiliates prior to becoming
          a party to this Agreement, in each case subject to Section 9.15.

                  (g) At the time of each assignment pursuant to this Section
          9.6 to a Person which is not already a Lender hereunder and which is
          not a United States person (as such term is defined in Section 7701
          (a)(30) of the Code) for Federal income tax purposes, the respective
          assignee Lender shall provide to the Borrower and the Administrative
          Agent the appropriate Internal Revenue Service Forms (and, if
          applicable, a 2.18 Certificate) described in Section 2.19.

                  (h) Nothing herein shall prohibit any Lender from pledging or
          assigning any of its rights under this Agreement (including, without
          limitation, any right to payment of principal and interest under any
          Note) to any Federal Reserve Bank in accordance with applicable laws.

          SECTION 9.7 ADJUSTMENTS; SET-OFF.

                  (a) Each Lender agrees that if any Lender (a "BENEFITED
          LENDER") shall at any time receive any payment of all or part of its
          Loans, or interest thereon, or receive any collateral in respect
          thereof (whether voluntarily or involuntarily, by set-off, pursuant to
          events or proceedings of the nature referred to in Section 7.1(e),
          or otherwise) in a greater proportion than any such payment to or
          collateral received by any other Lender, if any, in

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<PAGE>

          respect of such other Lender's Loans, or interest thereon, such
          benefited Lender shall purchase for cash from the other Lenders a
          participating interest in such portion of each such other Lender's
          Loan, or shall provide such other Lenders with the benefits of any
          such collateral, or the proceeds thereof, as shall be necessary to
          cause such benefited Lender to share the excess payment or benefits of
          such collateral or proceeds ratably with each of the Lenders;
          PROVIDED, HOWEVER, that if all or any portion of such excess payment
          or benefits is thereafter recovered from such benefited Lender, such
          purchase shall be rescinded, and the purchase price and benefits
          returned, to the extent of such recovery, but without interest. The
          Borrower agrees that each Lender so purchasing a portion of another
          Lender's Loans may exercise all rights of payment (including, without
          limitation, rights of set-off) with respect to such portion as fully
          as if such Lender were the direct holder of such portion.

                  (b) In addition to any rights and remedies of the Lenders
          provided by law (including, without limitation, other rights of
          set-off), each Lender shall have the right, without prior notice to
          the Borrower, any such notice being expressly waived by the Borrower
          to the extent permitted by applicable law, upon the occurrence of any
          Event of Default, to setoff and appropriate and apply any and all
          deposits (general or special, time or demand, provisional or final),
          in any currency, and any other credits, indebtedness or claims, in any
          currency, in each case whether direct or indirect, absolute or
          contingent, matured or unmatured, at any time held or owing by such
          Lender or any branch or agency thereof to or for the credit or the
          account of the Borrower, or any part thereof in such amounts as such
          Lender may elect, against and on account of the obligations and
          liabilities of the Borrower to such Lender hereunder and claims of
          every nature and description of such Lender against the Borrower, in
          any currency, whether arising hereunder, under the Notes or under any
          documents contemplated by or referred to herein or therein, as such
          Lender may elect, whether or not such Lender has made any demand for
          payment and although such obligations, liabilities and claims may be
          contingent or unmatured. The aforesaid right of set-off may be
          exercised by such Lender against the Borrower or against any trustee
          in bankruptcy, debtor in possession, assignee for the benefit of
          creditors, receiver or execution, judgment or attachment creditor of
          the Borrower, or against anyone else claiming through or against the
          Borrower or any such trustee in bankruptcy, debtor in possession,
          assignee for the benefit of creditors, receiver, or execution,
          judgment or attachment creditor, to the extent permitted by law,
          notwithstanding the fact that such right of set-off shall not have
          been exercised by such Lender prior to the occurrence of any Event of
          Default. Each Lender agrees promptly to notify the Borrower and the
          Administrative Agent after any such set-off and application made by
          such Lender; PROVIDED, HOWEVER, that the failure to give such notice
          shall not affect the validity of such set-off and application.

          SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.

          The table of contents and the Section and subsection headings
herein are intended for convenience only and shall be ignored in construing
this Agreement.

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         SECTION 9.9 COUNTERPARTS.

         This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.

         SECTION 9.10 EFFECTIVENESS.

         This Credit Agreement shall become effective on the date on which
all of the parties have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent
pursuant to SECTION 9.2 or, in the case of the Lenders, shall have given to
the Administrative Agent written, telecopied or telex notice (actually
received) at such office that the same has been signed and mailed to it.

         SECTION 9.11 SEVERABILITY.

         Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

         SECTION 9.12 INTEGRATION.

         This Agreement and the Notes represent the agreement of the
Borrower, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrower or
any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the Notes.

         SECTION 9.13 GOVERNING LAW.

         This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of North
Carolina.

         SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

         All judicial proceedings brought against the Borrower and/or any
other Credit Party with respect to this Agreement, any Note or any of the
other Credit Documents may be brought in any state or federal court of
competent jurisdiction in the State of North Carolina, and, by execution and
delivery of this Agreement, each of the Borrower and the other Credit Parties
accepts, for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any final judgment

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rendered thereby in connection with this Agreement from which no appeal has
been taken or is available. Each of the Borrower and the other Credit Parties
irrevocably agrees that all service of process in any such proceedings in any
such court may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid,
to it at its address set forth in Section 9.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto,
such service being hereby acknowledged by the each of the Borrower and the
other Credit Parties to be effective and binding service in every respect.
Each of the Borrower, the other Credit Parties, the Administrative Agent and
the Lenders irrevocably waives any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have to the bringing of any such
action or proceeding in any such jurisdiction. Nothing herein shall affect
the right to serve process in any other manner permitted by law or shall
limit the right of any Lender to bring proceedings against the Borrower or
the other Credit Parties in the court of any other jurisdiction.

         SECTION 9.15 CONFIDENTIALITY.

         The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the
Borrower (other than to its employees, affiliates, auditors or counsel or to
another Lender) any information with respect to the Borrower and its
Subsidiaries which is furnished pursuant to this Agreement, any other Credit
Document or any documents contemplated by or referred to herein or therein
and which is designated by the Borrower to the Lenders in writing as
confidential or as to which it is otherwise reasonably clear such information
is not public, except that any Lender may disclose any such information (a)
as has become generally available to the public other than by a breach of
this Section 9.16, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender or
to the Federal Reserve Board or the Federal Deposit Insurance Corporation or
the OCC or the NAIC or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Lender, (d) to any prospective Participant or assignee in
connection with any contemplated transfer pursuant to Section 9.6, PROVIDED
that such prospective transferee shall have been made aware of this Section
9.16 and shall have agreed to be bound by its provisions as if it were a
party to this Agreement or (e) with the consent of the Borrower (which
consent shall not be unreasonably withheld) to GOLD SHEETS and other similar
bank trade publications; such information to consist of deal terms and other
information regarding the credit facilities evidenced by this Credit
Agreement customarily found in such publications.

         SECTION 9.16 ACKNOWLEDGMENTS.

                  The Borrower and the other Credit Parties each hereby
acknowledges that:

                  (a) it has been advised by counsel in the negotiation,
          execution and delivery of each Credit Document;

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                  (b) neither the Administrative Agent nor any Lender has any
          fiduciary relationship with or duty to the Borrower or any other
          Credit Party arising out of or in connection with this Agreement and
          the relationship between Administrative Agent and Lenders, on one
          hand, and the Borrower and the other Credit Parties, on the other
          hand, in connection herewith is solely that of debtor and creditor;
          and

                  (c) no joint venture exists among the Lenders or among the
          Borrower or the other Credit Parties and the Lenders.

         SECTION 9.17 WAIVER AGREEMENT.

         Each of the Lenders has reviewed that certain waiver agreement
attached as SCHEDULE 9.17 hereto and by its signature below agrees to be
bound to the terms contained therein and authorizes the Administrative Agent
to execute such waiver agreement on its behalf.

         SECTION 9.18 WAIVERS OF JURY TRIAL.

         THE BORROWER, THE OTHER CREDIT PARTIES, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                                    ARTICLE X

                                    GUARANTY

         SECTION 10.1 THE GUARANTY.

         In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be
received by the Guarantors from the Extensions of Credit hereunder, each of
the Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: the Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise,
of any and all Credit Party Obligations to the Administrative Agent and the
Lenders. If any or all of the Credit Party Obligations of the Borrower to the
Administrative Agent and the Lenders becomes due and payable hereunder, each
Guarantor unconditionally promises to pay such indebtedness to the
Administrative Agent and the Lenders, on order, or demand, together with any
and all reasonable expenses which may be incurred by the Administrative Agent
or the Lenders in collecting any of the Credit Party Obligations.

         Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a
Guarantor shall be adjudicated to be invalid

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<PAGE>

or unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers)
then the obligations of each such Guarantor hereunder shall be limited to the
maximum amount that is permissible under applicable law (whether federal or
state and including, without limitation, the Bankruptcy Code).

         SECTION 10.2 BANKRUPTCY.

         Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1 (e), and
unconditionally promises to pay such Credit Party Obligations to the
Administrative Agent for the account of the Lenders, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to
the extent that the Borrower or a Guarantor shall make a payment or a transfer
of an interest in any property to the Administrative Agent or any Lender, which
payment or transfer or any part thereof is subsequently invalidated, declared to
be fraudulent or preferential, or otherwise is avoided, and/or required to be
repaid to the Borrower or a Guarantor, the estate of the Borrower or a
Guarantor, a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had
not been made.

         SECTION 10.3 NATURE OF LIABILITY.

         The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.

         SECTION 10.4 INDEPENDENT OBLIGATION.

         The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.

                                      101
<PAGE>

         SECTION 10.5 AUTHORIZATION.

         Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this Agreement,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any guarantor or any other party for the payment of this
Guaranty or the indebtedness and exchange, enforce waive and release any such
security, (c) apply such security and direct the order or manner of sale thereof
as the Administrative Agent and the Lenders in their discretion may determine
and (d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors.

         SECTION 10.6 RELIANCE.

         It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, 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 10.7 WAIVER.

                  (a)      Each of the Guarantors waives any right (except as
         shall be required by applicable statute and cannot be waived) to
         require the Administrative Agent or any Lender to (i) proceed against
         the Borrower, any other guarantor or any other party, (ii) proceed
         against or exhaust any security held from the Borrower, any other
         guarantor or any other party, or (iii) pursue any other remedy in the
         Administrative Agent's or any Lender's power whatsoever. Each of the
         Guarantors waives any defense based on or arising out of any defense of
         the Borrower, any other guarantor or any other party other than payment
         in full of the indebtedness, including without limitation any defense
         based on or arising out of the disability of the Borrower, any other
         guarantor or any other party, or the unenforceability of the
         indebtedness or any part thereof from any cause, or the cessation from
         any cause of the liability of the Borrower other than payment in full
         of the indebtedness. Without limiting the generality of the provisions
         of this Article X, each of the Guarantors hereby specifically waives
         the benefits of N.C. Gen. Stat. Section 26-7 through 26-9, inclusive.
         The Administrative Agent or any of the Lenders may, at their election,
         foreclose on any security held by the Administrative Agent or a Lender
         by one or more judicial or nonjudicial sales, whether or not every
         aspect of any such sale is commercially reasonable (to the extent such
         sale is permitted by applicable law), or exercise any other right or
         remedy the Administrative Agent and any Lender may have against the
         Borrower or any other party, or any security, without affecting or
         impairing in any way the liability of any Guarantor hereunder except to
         the extent the indebtedness has been paid. Each of the Guarantors
         waives any defense arising out of any such election by the
         Administrative

                                      102
<PAGE>

         Agent and each of the Lenders, even though such election operates to
         impair or extinguish any right of reimbursement or subrogation or other
         right or remedy of the Guarantors against the Borrower or any other
         party or any security.

                  (b)      Each of the Guarantors waives all presentments,
         demands for performance, protests and notices, including without
         limitation notices of nonperformance, notice of protest, notices of
         dishonor, notices of acceptance of this Guaranty, and notices of the
         existence, creation or incurring of new or additional indebtedness.
         Each Guarantor assumes all responsibility for being and keeping itself
         informed of the Borrower's financial condition and assets, and of all
         other circumstances bearing upon the risk of nonpayment of the
         indebtedness and the nature, scope and extent of the risks which such
         Guarantor assumes and incurs hereunder, and agrees that neither the
         Administrative Agent nor any Lender shall have any duty to advise such
         Guarantor of information known to it regarding such circumstances or
         risks.

                  (c)      Each of the Guarantors hereby agrees it will not
         exercise any rights of subrogation which it may at any time otherwise
         have as a result of this Guaranty (whether contractual, under Section
         509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the
         Lenders against the Borrower or any other guarantor of the indebtedness
         of the Borrower owing to the Lenders (collectively, the "OTHER
         PARTIES") and all contractual, statutory or common law rights of
         reimbursement, contribution or indemnity from any Other Party which it
         may at any time otherwise have as a result of this Guaranty until such
         time as the Loans hereunder shall have been paid and the Commitments
         have been terminated. Each of the Guarantors hereby further agrees not
         to exercise any right to enforce any other remedy which the
         Administrative Agent and the Lenders now have or may hereafter have
         against any Other Party, any endorser or any other guarantor of all or
         any part of the indebtedness of the Borrower and any benefit of, and
         any right to participate in, any security or collateral given to or for
         the benefit of the Lenders to secure payment of the indebtedness of the
         Borrower until such time as the Loans hereunder shall have been paid
         and the Commitments have been terminated.

         SECTION 10.8 LIMITATION ON ENFORCEMENT.

         The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.

         SECTION 10.9 CONFIRMATION OF PAYMENT.

         The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the

                                      103
<PAGE>

Commitments relating thereto, confirm to the Borrower, the Guarantors or any
other Person that the such indebtedness and obligations have been paid and the
Commitments relating thereto terminated, subject to the provisions of Section
10.2.

         SECTION 10.10 CALIFORNIA WAIVERS.

         Without limiting the generality of the foregoing, each Guarantor waives
all rights and defenses that such Guarantor may have because the Credit Party
obligations are secured by real property. This means, among other things: (1)
the administrative agent or the lenders may collect from such Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Borrower or any other Credit Party; (2) if the administrative agent or the
lenders foreclose on any real property collateral pledged by the Borrower or any
other Credit Party: (A) the amount of the obligations may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price; (B) the administrative agent or
the lenders may collect from such Guarantor even if the administrative agent or
the Lenders, by foreclosing on the real property collateral, have destroyed
any right such Guarantor may have to collect from the Borrower or any other
Credit Party. This is an unconditional and irrevocable waiver of any rights and
defenses such Guarantor may have because the Credit Party obligations are
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure (the "CCP").

         In addition, each Guarantor waives all rights and defenses arising out
of an election of remedies by the Administrative Agent or the Lenders, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a guaranteed obligation, has destroyed such Guarantor's rights
by the operation of Section 580d of the CPC or otherwise.

                                      104
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Charlotte, North Carolina by its proper and duly
authorized officers as of the day and year first above written.

BORROWER:                  PACIFIC CIRCUITS, INC.,
                           a Washington corporation

                           By: /s/ Michael E. Moran
                              ----------------------------------
                              Title: Vice President

GUARANTORS:                CIRCUIT HOLDINGS, LLC,
                           a Delaware limited liability company

                           By: /s/ Jeffrey W. Goettman
                              ----------------------------------
                              Title: President

                           POWER CIRCUITS, INC.,
                            a California corporation

                           By: /s/ James Eisenberg
                              ----------------------------------
                              Title: President

AGENT AND LENDERS:         FIRST UNION NATIONAL BANK,
                            as Administrative Agent and as a Lender

                           By: /s/ Jorge A. Gonzales
                              ----------------------------------
                              Title: Senior Vice President

<PAGE>

                           DRESDNER BANK, AG, NEW YORK AND GRAND CAYMAN
                           BRANCHES,
                            as a Lender

                           By: /s/ Peter M. Kay
                              -------------------------------
                              Title: Vice President

                           By: /s/ Christopher G. Todaro
                              ----------------------------
                              Title: Assistant Treasurer

<PAGE>

                           SUNTRUST BANK, ATLANTA,
                            as a Lender

                           By: /s/ [ILLEGIBLE]
                              ----------------------------------
                              Title: Vice President

                           By: /s/ [ILLEGIBLE]
                              ----------------------------------
                              Title: Managing Director<PAGE>

                                                                  Exhibit 10.2

            -------------------------------------------------------

                             PACIFIC CIRCUITS, INC.

                                     and the

                       SUBSIDIARY GUARANTORS NAMED HEREIN

                          $12,500,000 Principal Amount

                                       of

             12% Senior Subordinated Notes of Pacific Circuits, Inc.

                                       and

                Warrants to Purchase 2,019 Shares of Common Stock

                            of Pacific Circuits, Inc.

                          SECURITIES PURCHASE AGREEMENT

            -------------------------------------------------------

                            Dated as of July 13, 1999

<PAGE>

<TABLE>
<CAPTION>

                               TABLE OF CONTENTS

<S>                                                                                                    <C>
SECTION 1.      PURCHASE AND SALE OF SECURITIES.........................................................1
        1.1     ISSUE OF SECURITIES ....................................................................1
        1.2     PURCHASE AND SALE OF SECURITIES ........................................................2
        1.3     REGISTRATION OF SECURITIES .............................................................3
        1.4     DELIVERY EXPENSES ......................................................................4
        1.5     ISSUE TAXES ............................................................................4
        1.6     DIRECT PAYMENT .........................................................................4
        1.7     LOST, ETC. SECURITIES ..................................................................5
        1.8     INDEMNIFICATION ........................................................................5
        1.9     FURTHER ACTIONS ........................................................................8
        1.10    OTHER COVENANTS ........................................................................8

SECTION 2.     CLOSING CONDITIONS ......................................................................8
        2.1    DELIVERY OF DOCUMENTS ...................................................................8
        2.2    LEGAL INVESTMENT, PURCHASE PERMITTED BY APPLICABLE LAWS ................................10
        2.3    PAYMENT OF FEES . ......................................................................11
        2.4    COMPLIANCE WITH AGREEMENTS .............................................................11
        2.5    COMPLETION OF OTHER TRANSACTIONS .......................................................11
        2.6    REPRESENTATIONS AND WARRANTIES .........................................................12
        2.7    NO EVENT OF DEFAULT ....................................................................12
        2.8    EQUITY CONTRIBUTION ....................................................................12
        2.9    PROCEEDINGS SATISFACTORY ...............................................................12
        2.10   CONSENTS AND PERMITS ...................................................................12
        2.11   NO MATERIAL ADVERSE EFFECT .............................................................13
        2.12   NO MATERIAL JUDGEMENT OR ORDER .........................................................13

SECTION 3.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY ..........................................13
        3.1    AUTHORIZATION, CAPITALIZATION ..........................................................13
        3.2    NO VIOLATION OR CONFLICT, NO DEFAULT ...................................................14
        3.3    USE OF PROCEEDS ........................................................................15
        3.4    NO MATERIAL ADVERSE CHANGE: FINANCIAL STATEMENTS .......................................15
        3.5    FULL DISCLOSURE ........................................................................16
        3.6    THIRD PARTY CONSENTS ...................................................................16
        3.7    NO VIOLATION OF REGULATIONS OF BOARD OF GOVERNORS OF FEDERAL RESERVE SYSTEM ............16
        3.8    PRIVATE OFFERING .......................................................................17
        3.9    GOVERNMENTAL REGULATIONS ...............................................................17
        3.10   BROKERS ................................................................................17
        3.11   SOLVENCY ...............................................................................18
        3.12   REPRESENTATIONS AND WARRANTIES .........................................................18
        3.13   LITIGATION .............................................................................18
        3.14   LABOR MATTERS ..........................................................................19
        3.15   TAXES ..................................................................................19
        3.16   ENVIRONMENTAL MATTERS ..................................................................19
        3.17   ERISA ..................................................................................20
        3.18   INTELLECTUAL PROPERTY ..................................................................20

<PAGE>

        3.19   COMPLIANCE WITH LAWS ...................................................................21
        3.20   CONSUMMATION OF ACQUISITIONS ...........................................................21
        3.21   INDEBTEDNESS ...........................................................................21
        3.22   INVESTMENTS ............................................................................22
        3.23   INSURANCE ..............................................................................22
        3.24   SURVIVAL OF REPRESENTATIONS AND WARRANTIES .............................................22
        3.25   CONSULTING AGREEMENTS ..................................................................22
        3.26   YEAR 2000 COMPLIANCE ...................................................................22

SECTION 4.     REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS OF
               EACH PURCHASER .........................................................................22
        4.1    PURCHASE FOR OWN ACCOUNT ...............................................................23
        4.2    ACCREDITED INVESTOR ....................................................................23
        4.3    AUTHORIZATION ..........................................................................23
        4.4    ACCESS TO INFORMATION ..................................................................24
        4.5    SECURITIES RESTRICTED ..................................................................24
        4.6    PLEDGE OF SECURITIES ...................................................................24
        4.7    ........................................................................................24

SECTION 5.     COVENANTS ..............................................................................25
        5.1    PAYMENT OF NOTES, SATISFACTION OF OBLIGATIONS ..........................................25
        5.2    FINANCIAL STATEMENTS AND REPORTS .......................................................25
        5.3    CERTIFICATES; OTHER INFORMATION ........................................................26
        5.4    LIMITATION ON RESTRICTED PAYMENTS ......................................................27
        5.5    LIMITATION ON ADDITIONAL INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK ...............30
        5.6    LIMITATION ON TRANSACTIONS WITH AFFILIATES .............................................32
        5.7    RESTRICTIONS ON LIENS ..................................................................32
        5.8    LIMITATION ON SALE OF ASSETS ...........................................................32
        5.9    LIMITATION ON CONSOLIDATED CAPITAL EXPENDITURES ........................................35
        5.10   LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES ...........35
        5.11   CHANGE OF CONTROL ......................................................................36
        5.12   FINANCIAL COVENANTS ....................................................................37
        5.13   FISCAL YEARS ...........................................................................39
        5.14   STAY, EXTENSION AND USURY LAWS .........................................................39
        5.15   CORPORATE EXISTENCE, MERGER; SUCCESSOR CORPORATION .....................................39
        5.16   SAME BUSINESS ..........................................................................40
        5.17   TAXES ..................................................................................41
        5.18   INVESTMENT COMPANY ACT .................................................................41
        5.19   OWNERSHIP OF SUBSIDIARIES ..............................................................41
        5.20   INSURANCE ..............................................................................41
        5.21   ERISA NOTICES ..........................................................................41
        5.22   INCONSISTENT AGREEMENTS ................................................................42
        5.23   COMPLIANCE WITH LAWS, MAINTENANCE OF LICENSES ..........................................42
        5.24   INSPECTION OF PROPERTIES AND RECORDS ...................................................42
        5.25   BOARD OF DIRECTOR OBSERVATION RIGHTS ...................................................43
        5.26   MAINTENANCE OF OFFICE OR AGENCY ........................................................43
        5.27   INFORMATION TO PROSPECTIVE PURCHASERS ..................................................43
        5.28   PRIVATE PLACEMENT NUMBER ...............................................................44

<PAGE>

        5.29   SENIOR INDEBTEDNESS AMENDMENTS .........................................................44
        5.30   NOTICES OF CERTAIN PROCEEDINGS .........................................................44
        5.31   CONSULTING AGREEMENTS ..................................................................44
        5.32   NO AMENDMENT OR WAIVER OF CERTAIN DOCUMENTS ............................................44

SECTION 6.     REDEMPTION .............................................................................45
        6.1    THE COMPANY'S RIGHT TO REDEEM ..........................................................45
        6.2    SELECTION OF NOTES TO BE REDEEMED ......................................................45
        6.3    NOTICE OF REDEMPTION ...................................................................45
        6.4    EFFECT OF NOTICE OF REDEMPTION .........................................................46
        6.5    PAYMENT OF REDEMPTION PRICE ............................................................46

SECTION 7.     DEFAULTS AND REMEDIES ..................................................................46
        7.1    EVENTS OF DEFAULT ......................................................................46
        7.2    ACCELERATION OF NOTES, REMEDIES ........................................................48
        7.3    PREMIUM ON ACCELERATION ................................................................49
        7.4    OTHER REMEDIES .........................................................................49
        7.5    WAIVER OF PAST DEFAULTS ................................................................49
        7.6    RIGHTS OF HOLDERS TO RECEIVE PAYMENT ...................................................50
        7.7    UNDERTAKING FOR COSTS ..................................................................50

SECTION 8.     SUBORDINATION ..........................................................................50
        8.1    NOTES SUBORDINATED TO SENIOR INDEBTEDNESS ..............................................50
        8.2    NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES ...........................................50
        8.3    NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR INDEBTEDNESS ON DISSOLUTION,
               LIQUIDATION OR REORGANIZATION ..........................................................53
        8.4    NOTEHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS................54
        8.5    OBLIGATIONS OF THE COMPANY UNCONDITIONAL ...............................................54
        8.6    SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE COMPANY OR HOLDERS
               OF SENIOR INDEBTEDNESS .................................................................55
        8.7    SECTION 8 NOT TO PREVENT EVENTS OF DEFAULT .............................................55
        8.8    MISCELLANEOUS PROVISIONS ...............................................................55

SECTION 9.     AMENDMENTS AND WAIVERS .................................................................56
        9.1    WITH CONSENT OF HOLDERS ................................................................56
        9.2    REVOCATION AND EFFECT OF CONSENTS ......................................................57
        9.3    NOTATION ON OR EXCHANGE OF NOTES .......................................................58
        9.4    PAYMENT OF EXPENSES ....................................................................58

SECTION 10.    DEFINITIONS ............................................................................58
        10.1   DEFINITIONS ............................................................................58
        10.2   RULES OF CONSTRUCTION ..................................................................78

SECTION 11.    SUBSIDIARY GUARANTY ....................................................................79
        11.1   GUARANTY ...............................................................................79
        11.2   EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTY ..........................................80
        11.3   FUTURE SUBSIDIARY GUARANTORS ...........................................................81
        11.4   CERTAIN BANKRUPTCY EVENTS ..............................................................81

<PAGE>

        11.5   SUBORDINATION OF SUBSIDIARY GUARANTEES .................................................81

SECTION 12.    MISCELLANEOUS ..........................................................................81
        12.1   NOTICES ................................................................................81
        12.2   SUCCESSORS AND ASSIGNS .................................................................82
        12.3   COUNTERPARTS ...........................................................................82
        12.4   HEADINGS ...............................................................................82
        12.5   GOVERNING LAW, SUBMISSION TO JURISDICTION ..............................................82
        12.6   ENTIRE AGREEMENT .......................................................................83
        12.7   SEVERABILITY ...........................................................................83
        12.8   FURTHER ASSURANCES .....................................................................83
        12.9   DISCLOSURE OF FINANCIAL INFORMATION ....................................................83
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                     ANNEXES

<S>                <C>
Annex A            Form of Note
Annex A-1          Form of Guaranty
Annex B            Warrant Agreement
Annex C            Form of Registration Rights Agreement
Annex D            Form of Opinion of Counsel to the Company and its Subsidiaries
Annex E            Form of Opinion of Counsel to Purchasers

                                    SCHEDULES

Schedule 1.1       Purchaser Information
Schedule 1.2       Wire Transfer Instructions
Schedule 2.11      Material Changes
Schedule 3.1       Capitalization
Schedule 3.8       Recent Securities Offerings
Schedule 3.13      Litigation
Schedule 3.14      Labor Matters
Schedule 3.16      Environmental Matters
Schedule 3.17      ERISA
Schedule 3.18      Intellectual Property
Schedule 3.21      Existing Indebtedness
Schedule 3.23      Insurance
Schedule 3.25      Consulting Agreements
Schedule 5.5(b)    Operating Leases
Schedule 5.6       Transactions With Affiliates
Schedule 5.13      Fiscal Month-End
Schedule 10.1 (a)  Existing Liens
Schedule 10.1 (b)  Non-Recurring Add-Backs
Schedule 10.1 (c)  Investments
</TABLE>
<PAGE>

                          SECURITIES PURCHASE AGREEMENT

         This SECURITIES PURCHASE AGREEMENT is dated as of July 13, 1999, (this
"AGREEMENT"), and entered into by and among Pacific Circuits, Inc., a
Washington corporation (the "COMPANY"), the Subsidiary Guarantor listed on the
signature pages hereto and the purchasers listed on the signature pages hereto
(each a "PURCHASER" and collectively, the "PURCHASERS").

         Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in SECTION 10.1 hereof.

         In consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and each Subsidiary
Guarantor agrees, jointly and severally, and each of the Purchasers agrees,
severally but not jointly, as follows:

SECTION 1.  PURCHASE AND SALE OF SECURITIES

1.1      ISSUE OF SECURITIES

         (a)      On or before the Closing,

                  (1)      The Company will have authorized the issue and sale
         to the Purchasers, in the respective amounts set forth opposite such
         Purchaser's name on SCHEDULE 1.1, of $12,500,000 aggregate principal
         amount of its 12% Senior Subordinated Notes (the "NOTES"), to be
         substantially in the form attached hereto as ANNEX A.

                  (2)      The Company will have authorized the issue and sale
         to the Purchasers, in the respective amounts set forth opposite such
         Purchaser's name on SCHEDULE 1.1, its detachable warrants (the
         "WARRANTS") to purchase an aggregate of 2,019 shares of its Common
         Stock pursuant to a Warrant Agreement in the form attached hereto as
         ANNEX B (the "WARRANT AGREEMENT").

         The Notes and the Warrants shall individually be referred to herein as
a "SECURITY" and collectively referred to herein as the "SECURITIES."

         (b)      The Notes shall include such notations, legends or
endorsements set forth thereon or required by law. The Notes will be issued to
the Purchasers in the initial principal amounts set forth on SCHEDULE 1.1. Each
Note shall be dated the date of its issuance. Subject to SECTION 1.7. The
aggregate principal amount of the Notes outstanding at any one time may not
exceed $12,500,000; except to the extent interest is added to the principal of
any Note in accordance with the provisions thereof. The terms and provisions
contained in the Notes shall constitute, and are hereby expressly made, a part
of this Agreement and, to the extent applicable, the Company, by its execution
and delivery of this Agreement, expressly agrees to such terms and provisions
and to be bound thereby.

                                   Page 1
<PAGE>

         (c)      Each Warrant shall be substantially in the form attached as
EXHIBIT A to the Warrant Agreement. Each Warrant shall be dated the date of its
issuance. The Warrants will be exercisable, in the manner provided in the
Warrant Agreement and the Warrants, for a number of shares of Common Stock as
provided in the Warrant Agreement (the "WARRANT SHARES"). Each Holder of Warrant
Shares will have certain registration rights and other rights and obligations
with respect to the Warrant Shares as set forth in the Registration Rights
Agreement in the form attached hereto as ANNEX C(the "REGISTRATION RIGHTS
AGREEMENT") and other rights and obligations with respect to the Warrants and
Warrant Shares, as provided in the Warrant Agreement. The terms and provisions
contained in the Warrants shall constitute, and are hereby expressly made, a
part of this Agreement and, to the extent applicable, the Company and the
Holders, by their execution and delivery of this Agreement, expressly agree to
such terms and provisions and to be bound thereby.

1.2      PURCHASE AND SALE OF SECURITIES

         (a)      PURCHASE AND SALE. The Company agrees to sell and, subject to
the terms and conditions set forth herein and in reliance on the representations
and warranties of the Company and the Subsidiary Guarantors contained or
incorporated herein, each of the Purchasers agrees, severally but not jointly,
to purchase the securities set forth opposite such Purchaser's name in SCHEDULE
1.1 at the purchase price indicated therein. The Company and the Purchasers
hereby agree that all Tax Returns filed by the Company and the Purchasers shall
be consistent in all material respects with such allocation (including for
purposes of section 1271 et al. of the Code).

         (b)      CLOSING. The purchase and sale of the Securities shall take
place at a closing (the "CLOSING") at the offices of Gibson, Dunn & Crutcher,
LLP, located at 333 South Grand Avenue, Los Angeles, California 90071, at 10:00
a.m., local time, on July 13, 1999, or such other Business Day as may be agreed
upon by the Purchasers and the Company (the "CLOSING DATE"). At the Closing, the
Company will deliver to each of the Purchasers the Securities to be purchased by
such Purchaser (in such permitted denomination or denomination or denominations
and registered in such Purchaser's name or the name of such nominee or nominees
as such Purchaser may request), dated the Closing Date, against payment of the
purchase price therefor by intra-bank or Federal funds bank wire transfer of
same day funds to such bank account which is identified on SCHEDULE 1.2 or such
other account as the Company shall designate at least two Business Days prior to
the Closing.

         (c)      FEES AND EXPENSES. Whether or not the Securities are sold, the
Company agrees to pay or reimburse all reasonable out-of-pocket expenses of each
Purchaser relating to this Agreement, including but not limited to:

                  (1)      each Purchaser's reasonable out-of-pocket expenses
         incurred in connection with the transactions contemplated by this
         Agreement, the Warrant Agreement, the Registration Rights Agreement and
         the other Documents including, without limitation, travel and lodging
         expenses and all reasonable costs incurred in connection with such
         Purchaser's review of the Company's and each of its Subsidiaries'
         business and operations;

                  (2)      the reasonable fees and expenses of the Purchasers'
         counsel, Gardere & Wynne, L.L.P., in connection herewith and with the
         other Documents;

                                   Page 2
<PAGE>

                  (3)      the cost of printing, reproducing and delivering to
         each Purchaser's home office or the office of such Purchaser's
         designee, this Agreement, the Warrant Agreement, the Registration
         Rights Agreement, the Securities and the other Documents;

                  (4)      any reasonable fees and expenses (including the
         reasonable fees and expenses of counsel) in connection with any
         registration or qualification of the Securities required in connection
         with the offer and sale of the Securities pursuant to this Agreement
         under the securities or "blue sky" laws of any jurisdiction requiring
         such registration or qualification or in connection with obtaining any
         exemptions from such requirements;

                  (5)      the reasonable out-of-pocket expenses (including the
         fees and expenses of one counsel for each Purchaser together with such
         Purchaser's Affiliates) relating to any amendment to, or modification
         of, or any waiver or consent or preservation of rights under, this
         Agreement or any of the other Documents; and

                  (6)      all other expenses, including without limitation
         counsel's fees, accountant's fees and any rating agency fees incurred
         by the Company in connection with the transactions contemplated by this
         Agreement and the other Documents.

         The Company shall deliver to each of the Purchasers or to such other
persons as such Purchaser shall direct, concurrently with the Closing, by
intra-bank or Federal funds bank wire transfer of same day funds, the fee set
forth opposite such Purchaser's name on SCHEDULE 1.1 and payment for any
reasonable and documented out-of-pocket expenses which must be paid by Company
pursuant to this SECTION 1.2(c) or for which such Purchaser is entitled to
reimbursement pursuant to this SECTION 1.2(c).

         (d)      OTHER PURCHASERS. Each Purchaser's obligations hereunder are
         subject to the execution and delivery of this Agreement by the other
         Purchasers listed on the signature pages hereof. The obligations of
         each Purchaser shall be several and not joint, and no Purchaser shall
         be liable or responsible for the acts of any other Purchaser under this
         Agreement.

1.3      REGISTRATION OF SECURITIES

         The Company shall cause to be kept at its principal office a register
for the registration and transfer of the Notes (the "NOTE REGISTER") and a
register for the registration and transfer of the Warrants (the "WARRANT
REGISTER") and the Warrant Shares (the "WARRANT SHARES REGISTER"). The names and
addresses of the Holders of Notes, the transfer of Notes, and the names and
addresses of the transferees of the Notes shall be registered in the Note
Register. The names and addresses of the Holders of Warrants, the transfer of
Warrants and the names and addresses of the transferees of Warrants shall be
registered in the Warrant Register. The names and addresses of the Holders of
Warrant Shares, the transfer of Warrant Shares and the names and addresses of
the transferees of Warrant Shares shall be registered in the Warrant Shares
Register.

         The Person in whose name any registered Security shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes of
this Agreement, and the Company shall

                                   Page 3
<PAGE>

not be affected or bound by any notice to the contrary, until due presentment of
such Security for registration of transfer so provided in this SECTION 1.3.
Payment of or on account of the principal, premium, if any, and interest on any
registered Securities shall be made to or upon the written order of such
registered holder.

         When Securities are presented to the Company with a request to register
the transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized denominations, the Company
shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met.

1.4      DELIVERY EXPENSES

         If a Holder surrenders any Note or Warrant to the Company for any
reason, the Company agrees to pay the cost of delivering to such Holder's home
office or to the office of such Holder's designee from the Company, the
surrendered Security and each Security issued in substitution, replacement or
exchange for, or upon conversion of, the surrendered Security.

1.5      ISSUE TAXES

         The Company agrees to pay all taxes (other than taxes in the nature of
income, franchise or gift taxes) and governmental fees in connection with the
issuance, sale, delivery or transfer by the Company to each Holder of the Notes
and the Warrants, as the case may be, and the execution and delivery of the
other Documents and any modification of any of such Securities and Documents and
will save such Holder harmless without limitation as to time against any and
all liabilities with respect to all such taxes and fees. The obligations of the
Company under this SECTION 1.5 shall survive the payment or prepayment of the
Notes, at maturity, upon redemption or otherwise, the exercise of the Warrants
and the termination of this Agreement and the other Documents.

1.6      DIRECT PAYMENT

         (a)      The Company will pay or cause to be paid all amounts payable
with respect to any Note (without any presentment of such Note and without any
notation of such payment being made thereon) by crediting (before 2:00 p.m. (New
York City time) on the due date thereof), by Federal funds bank wire transfer in
same day funds to each Holder's account in any bank in the United States as may
be designated and specified in writing by such Holder at least two Business Days
prior thereto. Each Purchaser's initial bank account for this purpose is set
forth on SCHEDULE 1.1.

         (b)      Notwithstanding anything to the contrary contained in the
Notes, if any principal amount payable with respect to a Note is payable, at
maturity, upon redemption or otherwise, on a Legal Holiday, then the Company
shall pay such amount on the next succeeding Business Day, and interest shall
accrue on such amount until the date on which such amount is paid and payment of
such accrued interest shall be made concurrently with the payment of such
amount, provided that the Company may elect to pay in full (but not in part) any
such amount on the last Business Day prior to the date such payment otherwise
would be due, and no such additional interest shall accrue on such amount.
Notwithstanding anything to the contrary contained in the Notes, if any interest
payable with

                                   Page 4
<PAGE>

respect to a Note is payable on a Legal Holiday, then the Company shall pay such
interest on the next succeeding Business Day, and such extension of time shall
be included in the computation of the interest payment, provided that the
Company may elect to pay in full (but not in part) any such interest on the last
Business Day prior to the date such payment otherwise would be due, and such
diminution in time shall be included in the computation of the interest payment.

1.7      LOST, ETC. SECURITIES

         If a mutilated Security is surrendered to the Company or if the Holder
of a Security claims and submits an affidavit or other evidence, satisfactory to
the Company, to the effect that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue a replacement Security if the
customary requirements relating to replacement securities are reasonably
satisfied. If required by the Company, such Holder must provide an indemnity
bond, or other form of indemnity, sufficient in the judgment of the Company to
protect the Company from any loss which it may suffer if a Security is replaced.
If any Purchaser or any other institutional Holder (or nominee thereof) is the
owner of any such lost, stolen or destroyed Security, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Security at the time of such loss, theft
or destruction shall be accepted as satisfactory evidence thereof, and no
further indemnity shall be required as a condition to the execution and delivery
of a new Security other than the unsecured written agreement of such owner
reasonably satisfactory to the Company to indemnify the Company, or at the
option of the Purchaser, an indemnity bond in the amount of the Security
remaining outstanding.

         Every replacement Security is an obligation of the Company.

1.8      INDEMNIFICATION

         In addition to all other sums due hereunder or provided for in this
Agreement or any of the other Documents and any and all obligations of the
Company to indemnify any Purchaser hereunder or under any of the other
Documents, the Company hereby agrees, without limitations as to time, to
indemnify each Purchaser, each Affiliate of a Purchaser and each director,
officer, employee, counsel, agent or representative of such Purchaser and its
Affiliates (collectively, the "INDEMNIFIED PARTIES") against, and hold it and
them harmless from, to the fullest extent lawful, all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees and disbursements) and expenses, including expenses
of investigation (collectively, "LOSSES"), incurred by it or them and arising
out of or in connection with this Agreement, the Acquisition Agreements, the
Senior Credit Agreement, the other Documents or the transactions contemplated
hereby or thereby (or any other document or instrument executed herewith or
pursuant hereto or thereto), whether or not the transactions contemplated by
this Agreement are consummated and whether or not any Indemnified Party is a
formal party to any proceeding; provided, however, that the Company shall not be
liable to any Indemnified Party for any Losses (a) to the extent that it shall
be finally determined by a court of competent jurisdiction (which determination
is not subject to appeal or review) that such Losses arose from the gross
negligence or willful misconduct of such Indemnified Party or (b) relating to
a loss in value of the Securities as a result of market conditions, including
changes in interest rates). The Company and each Subsidiary Guarantor agrees,
jointly and severally,

                                   Page 5

<PAGE>

to reimburse any Indemnified Party promptly for all such Losses as they are
incurred by such Indemnified Party. The obligations of the Company to each
Indemnified Party hereunder shall be separate obligations, and the Company's
liability to any such Indemnified Party hereunder shall not be extinguished
solely because any other Indemnified Party is not entitled to indemnity
hereunder. The obligations of the Company under this SECTION 1.8 shall survive
the payment or prepayment of the Notes, at maturity, upon acceleration,
redemption or otherwise, the exercise of the Warrants purchased by any
Purchaser, the redemption or repurchase of the Warrants purchased by any
Purchaser, the redemption or repurchase of any Warrant Shares, any transfer of
the Securities by any Purchaser and the termination of this Agreement, the
Securities, the Acquisition Agreements, the Senior Credit Agreement, the Warrant
Agreement, the Registration Rights Agreement and any of the other Documents.

         In addition, the Company shall, without limitation as to time,
indemnify, reimburse, defend, and hold harmless the Indemnified Parties for,
from, and against all Losses asserted against, resulting to, imposed on, or
incurred by any of the Indemnified Parties, directly or indirectly, in
connection with any of the following: (i) the events, circumstances and
conditions relating to environmental matters described in the Acquisition
Agreements; (ii) any pollution or threat to human health or the environment that
is related in any way to the management, use, control, ownership or operation of
the business or property in connection with the business of the Companies, by
the Companies' employees, or any Person for whom any Company is or may be
responsible by law or contract including, without limitation, all on-site and
off-site activities involving Materials of Environmental Concern, and that
occurred, existed, arises out of conditions or circumstances that occurred or
existed, or was caused, in whole or in part, on or before the Closing Date,
whether or not the pollution or threat to human health or the environment is
described in the Acquisition Agreements; (iii) any Environmental Claim against
any Person whose liability for such Environmental Claim any Company has assumed
or retained either contractually or by operation of law, including but not
limited to any pollution or threat to human health or the environment, or any
Federal, state, local or foreign approvals; or (iv) the breach of any
environmental representation or warranty set forth or incorporated by reference
herein.

         In case any action, claim or proceeding shall be brought against any
Indemnified Party with respect to which indemnity may be sought against the
Company hereunder, such Indemnified Party shall promptly notify the Company in
writing and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party and
payment of all fees and expenses incurred in connection with the defense
thereof. The failure to so notify the Company shall not affect any obligation it
may have to any Indemnified Party under this Agreement or otherwise except to
the extent that (as finally determined by a court of competent jurisdiction
(which determination is not subject to any further review or appeal)) such
failure materially and adversely prejudiced the Company. Each Indemnified Party
shall have the right to employ separate counsel in such action, claim or
proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of each Indemnified Party unless; (i) the
Company has agreed to pay such expenses; or (ii) the Company has failed promptly
to assume the defense and employ counsel reasonably satisfactory to such
Indemnified Party; or (iii) the named parties to any such action, claim or
proceeding (including any impleaded parties) include any Indemnified Party and
such Indemnifying Party or an Affiliate of such Indemnifying Party, and such
Indemnified Party shall

                                    Page 6
<PAGE>

have been advised by counsel that either (x) there may be one or more legal
defenses available to it which are different from or in addition to those
available to the Company or such Affiliate or (y) a conflict of interest may
exist if such counsel represents such Indemnified Party and the Company or its
Affiliate; PROVIDED that, if such Indemnified Party notifies the Company in
writing that it elects to employ separate counsel in the circumstances described
in clause (i), (ii) or (iii) above, the Company shall not have the right to
assume the defense thereof and such counsel shall be at the expense of the
Company; PROVIDED, HOWEVER, that the Company shall not, in connection with any
one such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be responsible hereunder for the fees and
expenses of more than one such firm of separate counsel (in addition to any
local counsel), which counsel shall be designated by such Indemnified Party. The
Company shall not be liable for any settlement of any such action effected
without its written consent (which shall not be unreasonably withheld). The
Company agrees that it will not and that it will not permit any Subsidiary
Guarantor to, without the Indemnified Party's prior written consent, consent to
entry of any judgment or settle or compromise any pending or threatened claim,
action or proceeding in respect of which indemnification or contribution may be
sought hereunder unless the foregoing contains an unconditional release, in form
and substance reasonably satisfactory to such Indemnified Party, of such
Indemnified Party from all liability and obligation arising therefrom.

         If the indemnification provided for in this SECTION 1.8 is unavailable
to, or insufficient to hold harmless, any Indemnified Party in respect of any
Losses referred to therein (for reasons other than such Indemnified Party's
gross negligence or willful misconduct as herein provided), then the Company
shall have an obligation to contribute to the amount paid or payable by such
Persons as a result of such Losses in such proportion as is appropriate to
reflect the relative fault of the Company, its subsidiaries and Affiliates, on
the one hand, and such Indemnified Party, on the other hand, in connection with
the actions which resulted in such Losses as well as any other relevant
equitable considerations. The amount paid or payable by any such Person as a
result of the Losses referred to above shall be deemed to include, subject to
the limitations set forth in this SECTION 1.8, any reasonable legal or other
fees or expenses reasonably incurred by such Person in connection with any
investigation, lawsuit or legal or administrative action or proceeding.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this SECTION 1.8 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the Securities Act) shall be entitled to contribution from any Person
who is not guilty of such fraudulent misrepresentation.

         The Indemnified Parties shall have and be entitled to all rights of
subrogation, in respect of any Losses or other amounts as to which the foregoing
indemnity provisions apply, with respect to the claims of the Company against
any of the other parties to the Acquisition Agreements.

         The obligations of the Company under this SECTION 1.8 are subject to
the subordination provisions of SECTION 8 hereof, but any failure to perform
such obligations as a result of such subordination provisions shall in any event
constitute an Event of Default hereunder.

                                    Page 7
<PAGE>

1.9      FURTHER ACTIONS

         The Company shall (i) take all actions necessary or appropriate to
cause its representations and warranties contained in SECTION 3 hereof to be
true and correct as of the Closing Date (unless stated to refer to another
date), both before and after giving effect to the transactions contemplated by
this Agreement, the Acquisition Agreements and the other Documents, as if made
on and as of such date, and (ii) take, or cause to be taken, all action, and do,
or cause to be done, all things necessary, proper or advisable under applicable
law and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, obtaining all
consents and approvals of all Persons and removing all injunctive or other
impediments or delays, legal or otherwise, which are necessary to the
consummation of the transactions contemplated by this Agreement, the Acquisition
Agreements and the other Documents.

1.10     OTHER COVENANTS

         The Company further covenants and agrees not to, and will use its best
efforts to ensure that no affiliate (as defined in Rule 501(b) of the
Securities Act) of the Company will sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) that would be integrated with the sale of the Securities in a
manner that would require the registration under the Securities Act of the sale
to the Purchasers of the Securities.

SECTION 2.  CLOSING CONDITIONS

         The obligations of each Purchaser to purchase and pay for the
Securities to be delivered to such Purchaser at the Closing shall be subject to
the satisfaction of each of the following conditions on or before the Closing
Date:

2.1      DELIVERY OF DOCUMENTS

         The Company shall have delivered to each Purchaser, in form and
substance reasonably satisfactory to such Purchaser, the following:

         (a)      The Notes being purchased by such Purchaser, duly executed by
the Company, in the aggregate principal amount set forth opposite such
Purchaser's name on SCHEDULE 1.1; and Warrants being purchased by such
Purchaser, duly executed by the Company, representing the number of Warrants set
forth opposite such Purchaser's name on SCHEDULE 1.1.

         (b)      (1) An opinion, dated the Closing Date and addressed to such
         Purchaser, from Shearman & Sterling, counsel for the Company, or such
         other counsel of the Company reasonably acceptable to the Purchasers,
         as to the matters set forth on ANNEX D.

                  (2)      All opinions of all counsel to the Company delivered
         pursuant to the PCI Acquisition Agreement, dated the Closing Date and
         addressed to the Purchasers or accompanied by a written authorization
         from the Person delivering such legal opinion stating that the
         Purchasers may rely on such opinion as though it were addressed to them
         and a copy

                                    Page 8
<PAGE>

         of all opinions of all counsel to the Company delivered pursuant to the
         Senior Credit Agreement.

                  (3)      An opinion, dated the Closing Date and addressed to
         such Purchaser, from Gardere & Wynne, L.L.P., counsel for the
         Purchasers, as to the matters set forth on ANNEX E.

         In rendering such opinions, each counsel may rely as to factual matters
upon certificates or other documents furnished by officers and directors of the
Company (copies of which shall be delivered to such Purchaser) and by government
officials, and upon such other documents as such counsel deem appropriate as a
basis for their opinion. Such counsel shall opine, as applicable, as to the
Federal laws of the United States, the laws of the States of New York and
Washington, the laws of the state or states of incorporation of the Company and
each Subsidiary Guarantor, if other than New York or Washington, and the laws of
the state or states governing the PCI Acquisition Agreement and the Senior
Credit Agreement, as the case may be, if other than New York or Washington.

         (c)      Resolutions of the Board of Directors of the Company,
certified by the Secretary or Assistant Secretary of the Company, to be duly
adopted and in full force and effect on such date, authorizing (i) the
execution, delivery and performance of this Agreement, the Notes, the
Registration Rights Agreement, the Warrant Agreement, the PCI Acquisition
Agreement, the Senior Credit Agreement, the other Documents to which the Company
is a party and the consummation of the transactions contemplated hereby and
thereby, (ii) the issuance of the Notes and the Warrants and (iii) specific
officers of the Company to execute and deliver this Agreement, the Notes, the
Registration Rights Agreement, the Warrant Agreement, the PCI Acquisition
Agreement, the Senior Credit Agreement and any other Documents to which the
Company is a party.

         (d)      Certificates of the Chief Executive Officer and Chief
Financial Officer of the Company, dated the Closing Date, certifying that (i)
all of the conditions set forth in SECTIONS 2.3. 2.4, 2.5. 2.6, 2.7, 2.8, 2.10,
2.11 AND 2.12 are satisfied on and as of such date and specifying as to each
such condition the satisfaction thereof, (ii) all of the representations and
warranties of the Company contained or incorporated by reference herein are true
and correct on and as of such date as though made on and as of such date (unless
stated to relate to another date), both immediately prior to and after the
consummation of the PCI Acquisition (and after giving effect to the transactions
contemplated by this Agreement and the other Documents) and no event has
occurred and is continuing, or would result from the issuance of the Securities
or the incurrence of indebtedness under the Senior Credit Agreement, which
constitutes or would constitute a Default or an Event of Default, (iii)
concurrently with the purchase of the Securities, the Company (a) has
outstanding not more than $112,500,000 of Senior Term Debt and (b) has
outstanding not more than $3,000,000 of Senior Revolver Debt and (iv) the
Company has performed its obligations which are required to be performed on or
before the closing under the Acquisition Agreements and the Senior Credit
Agreement in accordance therewith and with all applicable law.

         (e)      Audited Financial Statements, with respect to Company,
together with a certificate of the Chief Financial Officer of the Company to the
effect that they were prepared in accordance

                                    Page 9
<PAGE>

with GAAP and fairly present in all material respects the consolidated financial
position, shareholders' equity and income of such Persons.

         (f)      Governmental certificates, dated the most recent practicable
date prior to the Closing Date, showing that each of the Companies is organized
and in good standing in the jurisdiction of its incorporation and is qualified
as a foreign corporation and in good standing in all other jurisdictions in
which it has executive offices or transacts business, except where the failure
to be so qualified could not reasonably be expected to have a Material Adverse
Effect.

         (g)      Copies of each consent, license and approval required in
connection with the execution, delivery and performance by the Company of this
Agreement, the Securities, the Acquisition Agreements, the Senior Credit
Agreement, the Registration Rights Agreement, the Warrant Agreement and the
other Documents and the consummation of the transactions contemplated hereby and
thereby (including without limitation consents, if any, required pursuant to the
HSR Act).

         (h)      Copies of the Charter Documents of each of the Companies,
certified as of a recent date by the Secretaries of State of their respective
states of incorporation, and certified by the Secretary or Assistant Secretary
of each of the Companies, as true and correct as of the Closing Date.

         (i)      Certificates of the Secretary or an Assistant Secretary of
each of the Companies as to the incumbency and signatures of the officers or
representatives of such entity executing this Agreement, the Securities, the PCI
Acquisition Agreement, the Senior Credit Agreement, the Registration Rights
Agreement, the Warrant Agreement, the other Documents and any other certificate
or other document to be delivered pursuant hereto or thereto, together with
evidence of the incumbency of such Secretary or Assistant Secretary.

         (j)      True and correct copies of the Acquisition Agreements and all
amendments thereto relating to the Pacific Acquisition and the PCI Acquisition;

         (k)      The Pro Forma and the Projections, each in form and substance
acceptable to Purchasers; and

         (l)      Such additional information and materials as any Purchaser may
reasonably request and specifically identify prior to the Closing Date,
including, without limitation, copies of any debt agreements, security
agreements and other contracts to which any of the Companies is a party.

2.2      LEGAL INVESTMENT, PURCHASE PERMITTED BY APPLICABLE LAWS

         Each Purchaser's acquisition of the Securities (a) shall not be
prohibited by any applicable law or governmental regulation, release,
interpretation or opinion (including, without limitation, Regulations U and X of
the Board of Governors of the Federal Reserve System), (b) shall constitute a
legal investment as of the Closing Date under the laws and regulations and
orders of each jurisdiction to which such Purchaser may be subject (without
resort to any "basket" or "leeway" provision), and (c) shall not subject such
Purchaser to any material penalty.

                                    Page 10
<PAGE>

2.3      PAYMENT OF FEES.

         The Company shall have delivered to each of the Purchasers or to such
other Persons as such Purchaser shall direct on SCHEDULE 1.1, at the Closing, by
intra-bank or federal funds bank wire transfer of same day funds, payment for
such Purchaser's fee as set forth opposite such Purchaser's name on SCHEDULE
1.1.

2.4      COMPLIANCE WITH AGREEMENTS

         The Company shall have performed and complied in all material respects
with all agreements, covenants and conditions contained herein, in each of the
other Documents and in any other document contemplated hereby or thereby which
are required to be performed or complied with by the Company on or before the
Closing Date.

2.5      COMPLETION OF OTHER TRANSACTIONS

         Simultaneously with or prior to the sale to each Purchaser of the
Securities to be purchased by such Purchaser:

         (a) The Company shall have executed and delivered the Acquisition
Agreements and shall have consummated the transactions contemplated thereby to
be consummated on or prior to the Closing Date (including, without limitation,
the Pacific Acquisition and the PCI Acquisition), without amendment,
modification or waiver of any material condition.

         (b) The Company and each Person a party thereto shall have executed and
delivered the Registration Rights Agreement and the Warrant Agreement and shall
have consummated the transactions contemplated thereby to be consummated on or
prior to the Closing Date in accordance with all applicable laws (including
without limitation, the Securities Act, all applicable state securities laws and
all related rules and regulations under such statutes and other laws).

         (c) All of the other Purchasers listed in the signature pages hereof
shall have consummated their purchase of Securities pursuant to this Agreement.

         (d) The Company and the lenders party thereto shall have executed and
delivered the Senior Credit Agreement; none of the parties to the Senior Credit
Agreement shall be in breach of any of their respective material obligations
thereunder and all of the conditions precedent to the transactions contemplated
thereby shall have been duly satisfied without amendment, modification or waiver
of any material condition; and the Company shall have not more than (a)
$112,500,000 of Senior Term Debt and (b) $3,000,000 of Senior Revolver Debt.

         (e) The Company shall have issued 1,000 shares of Common Stock to the
Purchasers in the respective amounts set forth opposite each Purchaser's name
on SCHEDULE 1.1 hereto.

                                    Page 11

<PAGE>

2.6      REPRESENTATIONS AND WARRANTIES

         Unless stated to relate to another date, all of the representations and
warranties of each of the Companies contained or incorporated by reference
herein or in any of the other Documents shall be true and correct, in all
material respects, on and as of the Closing Date, both before and after giving
effect to the PCI Acquisition and the other transactions contemplated hereby and
by the other Documents.

2.7      NO EVENT OF DEFAULT

         No event shall have occurred and be continuing, or would result from
the consummation of the transactions contemplated to be consummated on or prior
to the Closing Date by this Agreement, the Acquisition Agreements, the Senior
Credit Agreement or any of the other Documents (including without limitation the
purchase of the Securities or the incurrence of indebtedness pursuant to the
Senior Credit Agreement), which constitutes or would constitute a Default or an
Event of Default.

2.8      EQUITY CONTRIBUTION

         On or prior to the Closing Date, separate from payment of the purchase
price of the Warrants hereunder, the Company shall have received equity
contributions of at least $41,250,000 in cash (or other consideration reasonably
acceptable to Purchasers) from the issuance of Common Stock of the Company in
connection with the Pacific Acquisition and $37,500,000 in cash (or other
consideration reasonably acceptable to Purchasers) from the issuance of Common
Stock of the Company in connection with the PCI Acquisition.

2.9      PROCEEDINGS SATISFACTORY

         All proceedings taken in connection with the sale of the Securities,
the transactions contemplated hereby (including, without limitation, the PCI
Acquisition), and all documents and papers relating thereto, shall be reasonably
satisfactory to such Purchaser. Such Purchaser and its counsel shall have
received copies of such documents and papers as they may reasonably request in
connection therewith, or as a basis for the Closing opinions, all in form and
substance satisfactory to such Purchaser.

2.10     CONSENTS AND PERMITS

         The Company shall have received all consents, permits, approvals and
authorizations and sent or made all notices, filings, registrations and
qualifications as may be required pursuant to any law, statute, regulation or
rule (Federal, state, local or foreign) or pursuant to any other agreement,
order or decree to which the Company or any of its Subsidiaries is a party or to
which any of them is subject, in connection with the transactions to be
consummated on or prior to the Closing Date as contemplated by this Agreement or
any of the other Documents.

                                    Page 12

<PAGE>

2.11     NO MATERIAL ADVERSE EFFECT

         Since the date of the most recent of the Audited Financial Statements
(A) none of the Companies shall have suffered any adverse change in their
properties, business, operations, assets or condition (financial or otherwise)
which could reasonably be expected to result in a Material Adverse Effect; and
(B) except as set forth in SCHEDULE 2.11 hereto, (i) there shall not have been
any material change in the capital stock or long-term debt, or material increase
in short-term debt, of any of the Companies and (ii) none of the Companies shall
have incurred any liability or obligation, direct or contingent, that is
material to such Company that is required to be disclosed on a balance sheet in
accordance with GAAP and is not disclosed on the latest balance sheet previously
provided to the Purchasers.

2.12     NO MATERIAL JUDGEMENT OR ORDER

         There shall not be on the Closing Date any judgment or order of a court
of competent jurisdiction or any ruling of any agency of the Federal, state or
local government that, in the reasonable judgment of any Purchaser or its
counsel, would prohibit the sale or issuance of the Securities hereunder or
subject the Company to any material penalty if the Securities were to be issued
and sold hereunder.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants on the date hereof and as of the
Closing, as follows:

3.1      AUTHORIZATION, CAPITALIZATION

         (a) The Company has taken all actions necessary to authorize it (i) to
execute, deliver and perform all of its obligations under this Agreement, the
Acquisition Agreements, the Warrant Agreement, the Registration Rights
Agreement, the Senior Credit Agreement and the other Documents to which it is a
party, (ii) to issue and perform all of its obligations under the Notes and
Warrants, and (iii) to consummate the transactions contemplated hereby and
thereby. Each of this Agreement, the Notes, the Acquisition Agreements, the
Warrant Agreement, the Registration Rights Agreement, the Senior Credit
Agreement and the other Documents to which the Company is a party is a legally
valid and binding obligation of the Company, enforceable against it in
accordance with their respective terms, except for (a) the effect thereon of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the rights of creditors generally and (b) limitations
imposed by equitable principles upon the specific enforceability of any of the
remedies, covenants or other provisions thereof and upon the availability of
injunctive relief or other equitable remedies.

         (b) The Subsidiaries listed on SCHEDULE 3.1 are the only Subsidiaries
of the Company (the "COMPANY'S SUBSIDIARIES"). The total authorized Equity
Interests of the Company consist of 10,000,000 shares of Common Stock, of which
41,250 shares of Common Stock were issued and outstanding on the date hereof
and 78,750 shares of Common Stock will be issued and outstanding upon
consummation of the transactions contemplated hereby, in each case free and
clear of any Lien,

                                    Page 13

<PAGE>

limitation on voting rights, encumbrance, equity or adverse interest of any
nature, other than Permitted Liens and the restrictions, if any, set forth in
the Shareholders Agreement. On the Closing Date and after giving effect to the
consummation of the transactions contemplated by the Documents, the Equity
Interests of the Company and its Subsidiaries are owned by the Persons listed on
SCHEDULE 3.1 in the amounts set forth thereon. The outstanding Equity Interests
or other securities evidencing equity ownership of the Company in each of its
Subsidiaries is owned, in each case, free and clear of any Lien (other than
Permitted Liens), limitation on voting rights, encumbrance, equity or adverse
interest of any nature. All of the outstanding Equity Interests of the Company
and each of its Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of, and are not
subject to, any preemptive or similar rights. Except for the shares of capital
stock of each of the Company's Subsidiaries or as set forth on SCHEDULE 3.1,
the Company does not own any capital stock or any other securities of any
corporation, nor does it have any Equity Interest in any firm, partnership,
association or other entity.

         (c) On the Closing Date, the Securities will be duly authorized and
validly issued, will be fully paid and nonassessable and will not have been
issued in violation of, and, except as set forth on SCHEDULE 3.1 will not be
subject to, any preemptive or similar rights. Except as set forth on SCHEDULE
3.1, there are no outstanding (i) securities convertible into or exchangeable
for any Equity Interests of any of the Companies, (ii) options, warrants or
other rights to purchase or subscribe to Equity Interests of any of the
Companies or securities convertible into or exchangeable for Equity Interests of
any of the Companies, (iii) contracts, commitments, agreements, understandings,
arrangements, calls or claims of any kind relating to the issuance of any Equity
Interests of any of the Companies, any such convertible or exchangeable
securities or any such options, warrants or rights or (iv) voting trusts,
agreements, contracts, commitments, understandings or arrangements with respect
to the voting of any of the Equity Interests of any of the Companies.

         (d) Except for the Registration Rights Agreement and as set forth on
SCHEDULE 3.1, none of the Companies has entered into an agreement to register
its securities under the Securities Act. Except for this Agreement and as set
forth on SCHEDULE 3.1 hereto, none of the Companies has entered into any
agreement to issue, purchase or sell any of its securities.

         (e) There are no securities of the Company registered under the
Exchange Act or listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a United States automated
inter-dealer quotation system.

3.2      NO VIOLATION OR CONFLICT, NO DEFAULT

         (a) Neither the execution, delivery or performance of this Agreement,
the Securities, the Acquisition Agreements, the Senior Credit Agreement, the
Registration Rights Agreement, the Warrant Agreement or any of the other
Documents by the Company nor the compliance with its obligations hereunder or
thereunder, nor the consummation of the transactions contemplated hereby and
thereby, nor the issuance, sale or delivery of the Securities will:

                  (1) violate any provision of the Charter Documents of any of
         the Companies;

                                    Page 14

<PAGE>

                  (2) violate any statute, law, rule or regulation or any
         judgment, decree, order, regulation or rule of any court or
         governmental authority or body to which any of the Companies or any of
         their respective properties may be subject except where such violation
         would not have a Material Adverse Effect;

                  (3) permit or cause the acceleration of the maturity of any
         debt or obligation of any of the Companies; or

                  (4) violate, or be in conflict with, or constitute a default
         under, or permit the termination of, or require the consent of any
         Person under, or result in the creation or imposition of any Lien
         (other than Permitted Liens) upon any property of any of the Companies
         under, any mortgage, indenture, loan agreement, note, debenture,
         agreement for borrowed money or any other agreement to which any of the
         Companies is a party or by which any of the Companies (or their
         respective properties) may be bound, other than such violations,
         conflicts, defaults, terminations and Liens, or such failures to obtain
         consents, which could not reasonably be expected to result in a
         Material Adverse Effect.

         (b) None of the Companies is in default (without giving effect to any
grace or cure period or notice requirement) under any agreement for borrowed
money or under any agreement pursuant to which any of its securities were sold.

3.3      USE OF PROCEEDS

         The net proceeds from the sale of the Securities hereunder will be used
solely to pay the purchase price for the PCI Acquisition, to pay the fees and
expenses associated with the PCI Acquisition and to refinance certain existing
Indebtedness of the Companies.

3.4      NO MATERIAL ADVERSE CHANGE; FINANCIAL STATEMENTS

         (a) The balance sheets and the related statements of income and of cash
flows of PCI for fiscal year 1997 and fiscal year 1998 audited by Ernst & Young,
LLP are complete and correct and present fairly the financial condition of PCI
and its Subsidiaries as of such dates and the balance sheets and the related
statements of income and of cash flows of the Company, for fiscal year 1997 and
fiscal year 1998 audited by Arthur Andersen, L.L.P. are complete and correct and
present fairly the financial condition of the Company and its Subsidiaries as of
such dates (collectively, the "AUDITED FINANCIAL STATEMENTS"). Additionally,
monthly working capital detail for the trailing twelve months, the
Company-prepared pro forma (the "PRO FORMA") balance sheets of the Company and
the six-year projections (the "PROJECTIONS") have been prepared in good faith
based upon reasonable assumptions and represent the Company's best estimate of
future results. All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as disclosed therein).

                                    Page 15
<PAGE>

         (b) Except as set forth in SCHEDULE 2.11, since December 31, 1998,
there has been no development or event which has had or could reasonably be
expected to have a Material Adverse Effect.

3.5      FULL DISCLOSURE

         All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Company or any of its Subsidiaries to the
Purchasers or any Holder for purposes of or in connection with this Agreement or
any other Document, or any transaction contemplated hereby or thereby, is or
will be true and accurate in all material respects and not incomplete by
omitting to state any material fact necessary to make such information not
misleading. There is no material fact known to the Company that has had or could
reasonably be expected to have a Material Adverse Effect and that has not been
disclosed herein or in such other documents, certificates and written statements
furnished to the Purchasers for use in connection with the transactions
contemplated hereby (including information disclosed in all financial statements
and all footnotes attached thereto).

3.6      THIRD PARTY CONSENTS

         Neither the nature of the Company nor of any of their businesses or
properties, nor any relationship between the Company and any other Person, nor
any circumstance in connection with the offer, issuance, sale or delivery of the
Securities at the Closing nor the performance by the Company of their other
obligations hereunder or under, or the consummation of the transactions
contemplated by, the Securities, the Acquisition Agreements, the Senior Credit
Agreement, the Registration Rights Agreement, the Warrant Agreement or any other
Document, as the case may be, is such as to require a consent, approval or
authorization of, or notice to, or filing, registration or qualification with,
any governmental authority or other Person on the part of the Company as a
condition to the execution and delivery of this Agreement, the Acquisition
Agreements, the Senior Credit Agreement, the Registration Rights Agreement, the
Warrant Agreement or any of the other Documents or the offer, issuance, sale or
delivery of the Securities at the Closing other than such consents, approvals,
authorizations, notices, filings, registrations or qualifications which shall
have been made or obtained on or prior to the Closing Date (and copies of which
will be delivered to the Purchasers) and such filings under Federal and state
securities laws which are permitted to be made after the Closing Date and which
the Company hereby agrees to file within the time period prescribed by
applicable law.

3.7      NO VIOLATION OF REGULATIONS OF BOARD OF GOVERNORS OF FEDERAL RESERVE
SYSTEM

         None of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the Securities)
will violate or result in a violation of Section 7 of the Exchange Act or any
regulation issued pursuant thereto, including, without limitation, Regulations U
and X of the Board of Governors of the Federal Reserve System.

                                   Page 16
<PAGE>

3.8      PRIVATE OFFERING

         Assuming the truth and correctness of the representations and
warranties set forth in SECTION 4 hereof, the sale of the Securities hereunder
is exempt from the registration and prospectus delivery requirements of the
Securities Act. In the case of each offer or sale of the Securities, no form of
general solicitation or general advertising was used by any of the Companies or
their respective representatives, including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper, magazine
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising.

         The Purchasers are the sole purchasers of the Securities. Except as set
forth on SCHEDULE 3.8, no securities have been issued and sold by the Company
within the six-month period immediately prior to the date hereof. None of the
securities issued within such six-month period could be integrated with the
issuance of the Securities as a single offering for purposes of the Securities
Act, and the Company agrees that neither it, nor anyone acting on its behalf,
will offer or sell the Securities, or any portion of them, if such offer or sale
might bring the issuance and sale of the Securities to any Purchaser hereunder
within the provisions of Section 5 of the Securities Act nor offer any similar
securities for issuance or sale to, or solicit any offer to acquire any of the
same from, or otherwise approach or negotiate with respect thereto, with anyone
if the sale of the Securities and any such securities could be integrated as a
single offering for the purposes of the Securities Act, including without
limitation Regulation D thereunder. It is not necessary, in connection with the
transactions contemplated hereby, to qualify an indenture under the Trust
Indenture Act of 1939, as amended.

3.9      GOVERNMENTAL REGULATIONS

         None of the Companies is subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935,
as amended, the Federal Power Act, the Interstate Commerce Act, the Commodity
Exchange Act or to any Federal or state statute or regulation limiting its
ability to incur indebtedness for borrowed money or consummate the transactions
contemplated hereby and by the other Documents.

3.10     BROKERS

         Except as disclosed to the Purchasers, none of the Companies has dealt
with any broker, finder, commission agent or other such intermediary in
connection with the sale of the Securities and the transactions contemplated by
this Agreement and the other Documents, and none of the Companies is under any
obligation to pay any broker's or finder's fee or commission or similar payment
in connection with such transactions.

         The Company agrees to indemnify and hold the Holders harmless from and
against any and all actions, suits, claims, costs, expenses, losses, liabilities
and/or obligations in connection with or relating to any broker's or finder's
fees or commission or similar payment in connection with such transactions,
except with respect to such fees or commissions incurred by any Purchaser for
its

                                   Page 17
<PAGE>

account, so long as the Company receives notice of any such action, suit, claim,
etc., reasonably promptly after the Holders become aware thereof; provided that
the failure to give such notice as provided in this sentence shall not relieve
the Company of its obligations under this sentence except to the extent, and
only to the extent, that the Company is materially prejudiced by such failure to
give notice (as determined by a court of competent jurisdiction in a final
nonappealable judgment).

3.11     SOLVENCY

         The fair saleable value of the Company's and each of its Subsidiaries'
assets, measured on a going concern basis, exceeds all probable liabilities,
including those to be incurred pursuant to this Agreement. Neither the Company
nor any of its Subsidiaries (a) has unreasonably small capital in relation to
the business in which it is or proposes to be engaged or (b) has incurred, or
believes that it will incur after giving effect to the transactions contemplated
by this Agreement, debts beyond its ability to pay such debts as they become
due.

3.12     REPRESENTATIONS AND WARRANTIES

         (a) To the best knowledge of the Company after due inquiry, all
representations and warranties (and the related schedules) of the Company
contained in the PCI Acquisition Agreement, the Registration Rights Agreement,
the Warrant Agreement, the Senior Credit Agreement and the other Documents, each
in the form as in effect on the date hereof without amendment or waiver, shall
be deemed to constitute representations and warranties of the Company under this
Agreement with the same force and effect as the representations and warranties
expressly set forth herein. Such representations and warranties are true and
correct on the date hereof, in all material respects, and will be true and
correct as of the Closing Date, in all material respects, as if made at and as
of such date, both before and after the consummation of the PCI Acquisition, and
are hereby incorporated by reference herein as if made hereby by the Company to
the Purchasers. Unless otherwise defined herein, for purposes of this SECTION
3.12, the definitions contained in the Senior Credit Agreement, the Registration
Rights Agreement, the Warrant Agreement, the Acquisition Agreements and any
other Documents (insofar as they relate to the representations and warranties
incorporated herein) are hereby incorporated by reference herein and made a part
hereof.

         (b) There exist no material defaults with respect to the Acquisition
Agreements nor any basis for the exercise by any party thereto of any rights of
cancellation or rescission or any material rights of offset.

3.13     LITIGATION

         Except as set forth in SCHEDULE 3.13, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Company, threatened by or against the Company or
any of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Documents or any Note or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.

                                   Page 18
<PAGE>

         (d) To the best knowledge of the Company and its Subsidiaries,
Materials of Environmental Concern have not been transported or disposed of from
the Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law.

         (e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened, under any Environmental Law to which the Company or any of its
Subsidiaries is or will be named as a party with respect to the Properties or
the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business.

         (f) To the best knowledge of the Company and its Subsidiaries, there
has been no release or threat of release of Materials of Environmental Concern
at or from the Properties, or arising from or related to the operations of the
Company and its Subsidiaries in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could reasonably be expected to give rise to liability under Environmental Laws.

3.17     ERISA

         Except as set forth in SCHEDULE 3.17, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.

3.18     INTELLECTUAL PROPERTY

         SCHEDULE 3.18 hereto contains a complete and accurate list of (i) all
of the Company's and its Subsidiaries' intellectual property which is the
subject of a registration or application or constitutes material unregistered
copyrights or trademarks and (ii) all license agreements to which the Company or
its Subsidiaries is a party or by which they are bound relating to intellectual
property, whether as

                                   Page 20
<PAGE>

the licensee or licensor thereunder. The Companies own or possess adequate
licenses or other rights to use all trademarks, service marks, trade names,
copyrights, and know-how necessary to conduct the business now conducted by the
Companies and, none of the Companies has received any notice of infringement of
or conflict with (or knows of such infringement of or conflict with) asserted
rights of others with respect to trademarks, service marks, trade names,
copyrights, or know-how which, individually or in the aggregate, could
reasonably be expected to result in any Material Adverse Effect. The Company
does not in the conduct of its business as now conducted, infringe or conflict
with any right of any third party, known to the Company, where such infringement
or conflict could reasonably be expected to result in any Material Adverse
Effect.

3.19     COMPLIANCE WITH LAWS

         The Company and each of its Subsidiaries has obtained and has
maintained in good standing any licenses, permits, consents and authorizations
required to be obtained by it under all laws or regulations relating to its
business (collectively, the "Laws"), except as to any of the foregoing the
absence of which (individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect, and any such licenses, permits,
consents and authorizations remain in full force and effect, except as to any of
the foregoing the absence of which (individually or in the aggregate) could not
reasonably be expected to have a Material Adverse Effect. The Company and each
of its Subsidiaries are in compliance with the Laws in all material respects,
and there is no pending or, to the Company's or any of its Subsidiaries'
knowledge, threatened, action or proceeding against the Company or any of its
Subsidiaries under any of the Laws, other than any such actions or proceedings
which, individually or in the aggregate, if adversely determined, could not
reasonably be expected to have a Material Adverse Effect.

3.20     CONSUMMATION OF ACQUISITIONS

         The Acquisitions have been duly consummated in accordance with the
terms of the Acquisition Agreements without amendment or waiver of any material
term or provision thereof. True and correct copies of the Acquisition Agreements
have been delivered to each Purchaser pursuant to SECTION 2.1(j). The Company is
not in default under either of the Acquisition Agreements or under any
instrument or document to be delivered in connection therewith. All of the
transactions engaged in by the Company and its Affiliates as part of the
Acquisitions were legal and valid and in compliance with all applicable law.

3.21     INDEBTEDNESS

         After giving effect to the Acquisitions and the transactions
contemplated thereby, other than the Seller Notes, the Retention Bonus Pool, the
Notes, the Indebtedness described on SCHEDULE 3.21 and the Senior Credit
Agreement and the notes issued pursuant thereto, none of the Companies (i) is a
party to any loan or similar agreement, (ii) has any notes, bonds, debentures or
other evidences of Indebtedness outstanding nor (iii) has guaranteed the
obligations or liabilities of any Person.

                                   Page 21
<PAGE>

3.22      INVESTMENTS

          None of the Companies has any Investments, other than Investments in
their respective Subsidiaries and Permitted Investments.

3.23      INSURANCE

          SCHEDULE 3.23 hereto lists all material insurance policies insuring,
and all material performance bonds issued in favor of, any of the Companies,
specifying (a) the name of the insurer or bonding company, (b) the risk insured
or bonded, (c) the limits of coverage, (d) the deductible, if any, (e) the
premium (including any proposed premium increases known to any of the
Companies), (f) any notice of cancellation or nonrenewal received by any of the
Companies and (g) the date through which coverage will continue by virtue of
premiums already paid.

3.24      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

          All of the Company's representations and warranties hereunder and
under the Registration Rights Agreement and the Warrant Agreement shall survive
the execution and delivery of the same, any investigation by any Purchaser and
the issuance of the Securities.

3.25      CONSULTING AGREEMENTS

          SCHEDULE 3.25 hereto lists and attaches all management, consulting or
similar agreements or arrangements between any of the Companies, on the one
hand, and the Sponsors and/or their Affiliates, on the other hand (collectively
"CONSULTING AGREEMENTS").

3.26      YEAR 2000 COMPLIANCE

          The Company has (i) initiated a review and assessment of all areas
within the Company's and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the Year 2000 Problem, (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Based on the foregoing,
the Company believes that all computer applications of the Company that are
material to its or any of its Subsidiaries' business and operations are or are
scheduled to be Year 2000 Compliant prior to January 1, 2000 and is not aware of
any Year 2000 Problem that could reasonably be expected to have a Material
Adverse Effect.

SECTION 4.    REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS OF EACH PURCHASER

          Each Purchaser (as to itself only) and each Account Manager (as to the
managed accounts of Purchasers) represents and warrants to the Company that:

                                    Page 22
<PAGE>

4.1       PURCHASE FOR OWN ACCOUNT

          Such Purchaser or such Account Manager is purchasing the Securities to
be purchased by it solely for its own account (or in the case of Account
Managers, on behalf of managed accounts) and not as nominee or agent for any
other person (other than for such managed accounts, if applicable) and not with
a view to, or for offer or sale in connection with, any distribution thereof
(within the meaning of the Securities Act) that would be in violation of the
securities laws of the United States of America or any state thereof, without
prejudice, however, to its right at all times to sell or otherwise dispose of
all or any part of said Securities pursuant to a registration statement under
the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act, and subject, nevertheless, to the
disposition of its property being at all times within its control.

4.2       ACCREDITED INVESTOR

          Such Purchaser or such Account Manager is knowledgeable, sophisticated
and experienced in business and financial matters; it has previously invested in
securities similar to the Securities and it acknowledges that the Securities
have not been registered under the Securities Act and understands that the
Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or such sale is permitted pursuant to an available
exemption from such registration requirement; it (or, in the case of an Account
Manager, the managed account on behalf of which the Account Manager is acting)
is able to bear the economic risk of its investment in the Securities and is
presently able to afford the complete loss of such investment; it (or, in the
case of an Account Manager, the managed account on behalf of which the Account
Manager is acting) is an "accredited investor" as defined in Regulation D
promulgated under the Securities Act and the Securities to be acquired by it
pursuant to this Agreement are being acquired for its own account; and it has
been afforded access to information about each of the Companies and their
financial condition and business sufficient to enable it to evaluate its
investment in the Securities.

4.3       AUTHORIZATION

          Each Purchaser has taken all actions necessary to authorize it (or, in
the case of an Account Manager, such Account Manager is duly authorized by the
managed account for which it is acting) (i) to execute, deliver and perform all
of its obligations under this Agreement, (ii) to perform all of its obligations
under the Securities and (iii) to consummate the transactions contemplated
hereby and thereby. This Agreement is a legally valid and binding obligation of
each Purchaser enforceable against it in accordance with its terms, except for
(a) the effect thereon of bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting the rights of creditors generally
and (b) limitations imposed by Federal or state law or equitable principles upon
the specific enforceability of any of the remedies, covenants or other
provisions thereof and upon the availability of injunctive relief or other
equitable remedies.

                                    Page 23
<PAGE>

4.4       ACCESS TO INFORMATION

          Each Purchaser has had an opportunity to discuss the Companies'
business, management and financial affairs with each Company's respective
management and has had the opportunity to review financial and other information
related to the Companies.

4.5       SECURITIES RESTRICTED

          Each Purchaser acknowledges that the Securities have not been and,
except as otherwise provided in the Registration Rights Agreement, will not be
registered under the Securities Act and are being issued in a transaction that
is exempt from the registration requirements of the Securities Act. Each
Purchaser understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or such sale is permitted
pursuant to an available exemption from such registration requirement.

          No transfer or sale (including, without limitation, by pledge or
hypothecation) of Securities by any Holder which is otherwise permitted
hereunder, other than a transfer or sale to the Company, shall be effective
unless such transfer or sale is made (A) pursuant to an effective registration
statement under the Securities Act and a valid qualification under applicable
state securities or "blue sky" laws or (B) without such registration or
qualification as a result of the availability of an exemption therefrom, and, if
reasonably requested by the Company, counsel for such Holder shall have
furnished the Company with an opinion, reasonably satisfactory in form and
substance to the Company, that no such registration is required because of the
availability of an exemption from the registration requirements of the
Securities Act; provided, however, that with respect to transfers by Holders to
their Affiliates, no such opinion shall be required. A transfer made by a Holder
which is a state-sponsored employee benefit plan to a successor trust or
fiduciary pursuant to a statutory reconstitution shall be expressly permitted
and no opinions of counsel shall be required in connection therewith.

4.6       PLEDGE OF SECURITIES

          Notwithstanding anything to the contrary in this Section 4.6, each
Holder shall be permitted to pledge the Securities held by it to a trustee for
the benefit of secured noteholders pursuant to documents relating to the
financing of such Holder. If reasonably requested by the Company, counsel for
any Holder pledging Securities pursuant to this SECTION 4.6 shall furnish the
Company with an opinion, reasonably satisfactory in form and substance to the
Company, that, in connection with any such pledge, no registration under the
Securities Act or valid qualification under applicable state securities or "blue
sky" law is required because of the availability of an exemption from the
registration requirements of the Securities Act.

4.7       PRIORITY OF NOTES

          Purchasers acknowledge that, as of the Closing Date, the Indebtedness
evidenced by the Seller Notes and the Retention Bonus Pool is not contractually
subordinated to the Indebtedness evidenced by this Agreement and the Notes.

                                    Page 24
<PAGE>

SECTION 5. COVENANTS

          The Company hereby covenants to the Holders of outstanding Securities
and agrees that it will comply, and will cause each of its Subsidiaries to
comply with such of the following as are applicable to it or them as follows:

5.1       PAYMENT OF NOTES, SATISFACTION OF OBLIGATIONS

          So long as any of the Notes remain unpaid and outstanding, the Company
shall pay the principal of, premium, if any, and interest on the Notes on the
dates and in the manner provided in the Notes. All payments by the Company
shall be made without deduction, defense, setoff or counterclaim in same day
funds and delivered to Holder by wire transfer to the Purchaser's account set
forth on SCHEDULE 1.1 hereto or to such other place as the Holder may direct
from time to time by written notice to the Company. To the extent lawful, the
Company shall pay interest (including interest accruing after the commencement
of any proceeding under any Bankruptcy Law) on all unpaid amounts outstanding
under the Notes (including overdue installments of principal or interest) at a
rate equal to 14% per annum, compounded quarterly. The obligations of the
Company under this Section 5.1 are subject to the subordination provisions of
Section 8 hereof, but any failure to perform such obligations as a result of
such subordination provisions shall in any event constitute an Event of Default
hereunder.

5.2       FINANCIAL STATEMENTS AND REPORTS

          (a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in any
event within ninety (90) days after the end of each fiscal year of the Company,
a copy of the consolidated and consolidating balance sheet of the Company and
its consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income and retained earnings and of
cash flows of the Company and its consolidated Subsidiaries for such year, such
consolidated statements shall be audited by a firm of independent certified
public accountants of nationally recognized standing reasonably acceptable to
the Required Holders, and shall set forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification indicating that the scope of the
audit was inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification;

          (b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within forty-five (45) days after the end of each of the first three
fiscal quarters of the Company, a company-prepared consolidated and
consolidating balance sheet of the Company and its consolidated Subsidiaries as
at the end of such period and related company-prepared statements of income and
of cash flows for the Company and its consolidated Subsidiaries for such
quarterly period and for the portion of the fiscal year ending with such period,
in each case setting forth in comparative form consolidated and consolidating
figures for the corresponding period or periods of the preceding fiscal year
(subject to normal recurring year-end audit adjustments);

                                    Page 25
<PAGE>

          (c) MONTHLY FINANCIAL STATEMENTS. As soon as available and in any
event within thirty (30) days after the end of each month of the Company (other
than at the end of a fiscal quarter, in which case 45 days after the end
thereof), a company-prepared consolidated and consolidating balance sheet of the
Company and its consolidated Subsidiaries as at the end of such period and
related company prepared statements of income and of cash flows for the Company
and its consolidated Subsidiaries for such monthly period and for the portion of
the fiscal year ending with such period, in each case setting forth in
comparative form consolidated and consolidating figures for the corresponding
period or periods of the preceding fiscal year (subject to normal recurring
year-end audit adjustments); and

          (d) ANNUAL BUDGET PLAN. As soon as available, but in any event within
forty-five (45) days after the end of each fiscal year, a copy of the detailed
annual budget or plan of the Company for the next fiscal year on quarterly
basis, in form and detail reasonably acceptable to the Required Holders,
together with a summary of the material assumptions made in the preparation of
such annual budget or plan;

all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 10.3.

5.3       CERTIFICATES; OTHER INFORMATION

          The Company shall deliver to the Holders:

          (a) concurrently with the delivery of the financial statements
referred to in SECTION 5.2(a) above, a certificate of the independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;

          (b) concurrently with the delivery of the financial statements
referred to in SECTIONS 5.2(a) and 5.2(b) above, a certificate of a Principal
Officer stating that, to the best of such Principal Officer's knowledge, the
Company and each of its Subsidiaries during such period observed or performed in
all material respects all of its covenants and other agreements, and satisfied
in all material respects every condition, contained in this Agreement to be
observed, performed or satisfied by it, and that such Principal Officer has
obtained no knowledge of any Default or Event of Default except as specified in
such certificate and such certificate shall include the calculations in
reasonable detail required to indicate compliance with Sections 5.9 and 5.12 as
of the last day of such period;

          (c) within thirty (30) days after the same are sent, copies of all
material financial reports (other than those otherwise provided pursuant to
Section 5.2 and those which are of a promotional nature) and other financial
information which the Company sends to its shareholders, and within thirty days
after the same are filed, copies of all financial statements and
non-confidential reports which the

                                    Page 26
<PAGE>

Company may make to, or file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority;

          (d) within ninety (90) days after the end of each fiscal year of the
Company, a certificate containing information regarding the amount of all Asset
Sales and all issuances of Indebtedness or Equity Securities that were made
during the prior fiscal year and amounts received in connection with any
Recovery Event during the prior fiscal year;

          (e) promptly upon receipt thereof, a copy of any other report or
"management letter" submitted by independent accountants to the Company or any
of its Subsidiaries in connection with any annual, interim or special audit of
the books of such Person;

          (f) promptly, such additional financial and other information as the
Required Holders, may from time to time reasonably request.

5.4       LIMITATION ON RESTRICTED PAYMENTS

          (a) Subject to SECTION 5.4(b), so long as any of the Notes remain
unpaid and outstanding, the Company shall not, and shall not cause or permit any
of its Subsidiaries to,

                    (i) declare or pay any dividends, either in cash or
          property, on, or make any distribution to the holders (as such) in
          respect of, any class of Equity Interest in the Company or any of its
          Subsidiaries (other than dividends or distributions payable in Equity
          Interests (other than Disqualified Stock) of the Company or its
          Subsidiaries or dividends or distributions payable to the Company);

                    (ii) purchase, redeem or otherwise acquire or retire for
          value any Equity Interests of the Company or any of its Subsidiaries
          or any other Affiliate of the Company;

                    (iii) purchase, redeem, defease or otherwise acquire or
          retire for value any Indebtedness (other than the Notes) that is PARI
          PASSU with or subordinated to the Notes;

                    (iv)  make any payments of principal of, interest on or
          premium or redemption fees (if any) with respect to the Seller Notes
          or the Retention Bonus Plan or on account of any indemnities, fees or
          expenses related thereto;

                    (v) make any payments with respect to any of the Consulting
          Agreements; or

                    (vi) make any Investment, other than Permitted Investments
          (all such payments and other actions set forth in clauses (i) through
          (vi) hereof being collectively referred to as "Restricted Payments").

          (b) The foregoing provision will not prohibit the following Restricted
Payments:

                                   Page 27
<PAGE>

                    (i) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payment, the defeasance, redemption, repurchase or
          prepayment of PARI PASSU or subordinated Indebtedness with the net
          proceeds from the issuance of Equity Interests (other than
          Disqualified Stock);

                    (ii) so long as (1) no default or event of default with
          respect to the Senior Indebtedness shall have occurred and be
          continuing or would occur as a consequence of such Restricted Payment,
          (2) no Default or Event of Default pursuant to clause (a) or (b) of
          SECTION 7.1 shall have occurred and be continuing, and (3) no
          Indefinite Blockage Period or Payment Blockage Period is then in
          effect (A) the regularly scheduled payments of accrued interest on the
          Seller Notes and (B) the amount owing in respect of the Retention
          Bonus Plan in an aggregate amount not to exceed $1,200,000 in any
          fiscal year of the Company; notwithstanding the foregoing, if the
          Company shall have been prohibited from making payments owing in
          respect of the Retention Bonus Plan as a result of the foregoing
          provisions, then, so long as none of the foregoing provisions shall
          have occurred or be continuing or would result therefrom, the Company
          may pay any amounts past due with respect to the Retention Bonus Plan
          at such time as none of the conditions set forth in the foregoing
          clauses (1), (2) or (3) exists;

                    (iii) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payment, dividends paid or distributions made in respect of
          Equity Interests with the net proceeds of the issuance of Equity
          Interests (other than Disqualified Stock);

                    (iv) dividends paid or distributed by any Wholly-Owned
          Subsidiary of the Company to its direct parent;

                    (v) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payment, subject to the Change in Control provisions of
          this Agreement, the purchase or redemption of Common Stock with the
          net proceeds from the issuance of Equity Interests (other than
          Disqualified Stock);

                    (vi) Intercompany Indebtedness to the extent permitted by
          clause (b)(iv) of SECTION 5.5;

                    (vii) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payment, the purchase or redemption by the Company of all
          or any portion of the Common Stock held by an executive officer of the
          Company; PROVIDED such purchase or redemption is approved by the Board
          of Directors of the Company in good faith and the aggregate amount of
          purchase consideration for any and all such purchases does not exceed
          $2,000,000 in the aggregate (including cash and the principal amount
          of any Indebtedness of the Company or any of its Subsidiaries incurred
          to purchase such Common Stock) whenever made at any time after the
          Closing Date;

                                   Page 28
<PAGE>

                    (viii) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payment, the acquisition of all or a majority of the
          Capital Stock or other ownership interest in any Person (in a similar
          or related line of business and which has earnings before interest,
          taxes, depreciation and amortization for the prior four fiscal
          quarters in an amount greater than $0) or all or a substantial portion
          of the assets, property and/or operations of a Person (in a similar or
          related line of business and which had earnings before interest,
          taxes, depreciation and amortization for the prior four fiscal
          quarters in an amount greater than $0); PROVIDED that (1) the
          aggregate consideration paid by the Company and its Subsidiaries does
          not exceed, in the aggregate, $1,000,000 for any single acquisition or
          $2,500,000 in the aggregate for all such acquisitions in any fiscal
          year; and (2) after giving effect to any such acquisition availability
          under the Senior Revolver Debt is not less than $3,000,000 (excluding
          any availability under any swingline or overadvance facility); and

                    (ix) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payment, an Approved Use of Proceeds; PROVIDED that, such
          Approved Use of Proceeds is completed on or before January 13, 2003,
          and, at the time and after giving effect to such Approved Use of
          Proceeds and any Indebtedness incurred or anticipated to be incurred
          in connection therewith, including any Acquired Indebtedness, the
          Company shall be able to incur at least $1.00 of additional
          Indebtedness pursuant to SECTION 5.5(a);

                    (x) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payment, the purchase, redemption, defeasance, acquisition
          or retirement for value of the Operating Leases set forth on SCHEDULE
          5.5(b); PROVIDED, that the total amount paid by Company and its
          Subsidiaries, on a consolidated basis, with respect to such purchase,
          redemption, defeasance, acquisition or retirement does not exceed the
          amounts set forth on SCHEDULE 5.5(b), and such purchase, redemption,
          defeasance, acquisition or retirement is consummated before the
          amounts payable with respect to such purchase, redemption, defeasance,
          acquisition or retirement are determined by reference to fair market
          value; and

                    (xi) so long as no Default or Event of Default shall have
          occurred and be continuing or would occur as a consequence of such
          Restricted Payments, the defeasance, redemption or repurchase of
          Indebtedness listed on SCHEDULE 3.21 or Indebtedness permitted by
          clause (b)(vi) of SECTION 5.5; PROVIDED that, in the event such
          defeasance, redemption or repurchase is made with the net proceeds of
          an incurrence of Permitted Refinancing Indebtedness, any Lien securing
          such Permitted Refinancing Indebtedness shall not extend to or cover
          any asset of the Company or any of its Subsidiaries other than the
          assets securing the Indebtedness so refinanced, renewed, replaced,
          defeased or refunded, and; provided further that in the event such
          defeasance, repurchase or redemption is made from the proceeds of an
          issuance of Equity Interests, such Equity Interests are not
          Disqualified Stock;

                    (xii) Investments in Hedging Obligations to the extent
          permitted by SECTION 5.5(b);

                                   Page 29
<PAGE>

                    (xiii) so long as no Event of Default has occurred and is
          continuing, payment of management fees pursuant to the Consulting
          Agreements in an aggregate amount not to exceed $600,000 in any fiscal
          year of the Company; and

                    (xiv) Investments in addition to the Investments permitted
          by clauses (i) through (xiii) of this SECTION 5.4(b), in an aggregate
          amount not to exceed $110,000.

5.5       LIMITATION ON ADDITIONAL INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED
          STOCK

          (a) So long as any of the Notes remain unpaid and outstanding, the
Company will not, and will not permit any of its Subsidiaries (including without
limitation, upon the creation or acquisition of such Subsidiary) to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to (collectively, "INCUR") any Indebtedness or
issue any Disqualified Stock provided that the Company and its Subsidiaries may,
in connection with an Approved Use of Proceeds, incur additional Senior
Indebtedness at any time on or before January 13, 2003, if:

                    (i) no Default or Event of Default shall have occurred and
          be continuing at the time or would occur as a consequence of the
          incurrence of such Indebtedness;

                    (ii)      (1) The Leverage Ratio of the Company, on a
                    Consolidated basis, for the period of twelve (12)
                    consecutive months ending on the last day of the month
                    immediately preceding the date such Indebtedness is to be
                    incurred and for which the Holders have received the
                    financial information required by clause (b) of SECTION 5.2
                    is not greater than 4.75 to 1.00.

                              (2) The Senior Leverage Ratio of the Company, on a
                    Consolidated basis, for the period of twelve (12)
                    consecutive months ending on the last day of the month
                    immediately preceding the date on which such Indebtedness is
                    to be incurred and for which the Holders have received the
                    financial information required by clause (b) of SECTION 5.2
                    is not greater than 4.00 to 1.00.

                    (iii) provided, that each of the immediately preceding
          clauses (1) and (2) shall be determined on a pro forma basis after
          giving effect to the proposed Approved Use of Proceeds, the earnings
          of the Company and the Acquisition Target (if applicable), the
          incurrence of any Acquired Indebtedness and the incurrence of such
          Senior Indebtedness, as if such Senior Indebtedness had been incurred
          at the beginning of such twelve month period, all calculated and
          determined to the mutual satisfaction and agreement of the Company and
          Required Holders.

          (b)       The foregoing limitations will not apply to:

                    (i) the incurrence by the Company of Indebtedness under the
          Senior Credit Agreement in an aggregate principal amount at any one
          time outstanding (including loans, the nominal amount of outstanding
          letters of credit and all unused commitments) not to exceed

                                   Page 30
<PAGE>

          (1) $15,000,000 of Senior Revolver Debt, (2) $112,500,000 of Senior
          Term Debt, and (3) $12,750,000 of Senior Revolver Debt or Senior Term
          Debt, or any combination thereof which does not exceed $12,750,000, in
          each case with respect to this clause (i) of SECTION 5.5(b), less the
          aggregate amount of any permanent reductions of commitments with
          respect to the Senior Revolver Debt or the Senior Term Debt or
          repayments of the Senior Term Debt under the Senior Credit Agreement
          (including those required pursuant to SECTION 5.8 hereof);

                    (ii) the incurrence by the Company of the Indebtedness
          represented by the Notes;

                    (iii) the incurrence by the Company of Permitted Refinancing
          Indebtedness in exchange for, or the net proceeds of which are used to
          extend, refinance, renew, replace, defease or refund other
          Indebtedness of the Company referred to in clause (b)(i), (b)(ii) or
          (b)(vi) of this SECTION 5.5;

                    (iv) intercompany Indebtedness among the Company and its
          Wholly-Owned Subsidiary Guarantors; provided, however, that the
          obligations of each obligor in respect of such Indebtedness shall be
          unsecured and subordinated to the obligations of the Company hereunder
          and under the Notes to no less an extent as such obligations under the
          Notes are subordinated to Senior Indebtedness and that the
          disposition, pledge or transfer of such Indebtedness to a Person other
          than a Wholly-Owned Subsidiary Guarantor and the occurrence of any
          event pursuant to which such Wholly-Owned Subsidiary Guarantor is no
          longer a Wholly-Owned Subsidiary Guarantor shall each constitute an
          incurrence of Indebtedness that is not permitted by this clause (iv);

                    (v) Hedging Obligations that are incurred in the ordinary
          course of business for the purpose of fixing or hedging interest rate
          risk with respect to any floating rate Indebtedness that is
          permitted by the terms of this Agreement to be outstanding;

                    (vi) The incurrence by the Company and its Subsidiaries of
          Indebtedness in addition to the Indebtedness permitted by clauses (i)
          through (v) of this SECTION 5.5(b), which is either (1) unsecured and
          incurred for borrowed money, (2) a Capitalized Lease Obligation or (3)
          Purchase Money Indebtedness; PROVIDED that the aggregate amount
          outstanding at any time with respect to the foregoing clauses (1),
          (2) and (3) which, together with the aggregate amount outstanding with
          respect to the Indebtedness listed on SCHEDULE 3.21 does not exceed
          $1,500,000, provided, however that notwithstanding the foregoing, the
          Operating Leases set forth on SCHEDULE 5.5(b) may be converted into
          Capital Leases or other Indebtedness otherwise permitted under this
          clause (vi) of this SECTION 5.5 or purchased at such time as the
          Company may elect;

                    (vii) The incurrence by the Company of the Indebtedness
          represented by the Seller Notes;

                    (viii) The incurrence by the Company of the Indebtedness
          represented by the Retention Bonus Plan; and

                                   Page 31
<PAGE>

         (ix) the incurrence by the Company of Indebtedness with respect to
documentary letters of credit for the purchase of goods and other merchandise
(but not under standby, direct pay or other letters of credit, except for the
letters of credit issued pursuant to the Senior Credit Agreement) generally in
an aggregate amount not to exceed $250,000 at any time.

5.6      LIMITATION ON TRANSACTIONS WITH AFFILIATES

         Except for those transactions contemplated by the agreements set forth
on SCHEDULE 5.6 and except as permitted in clause (b) of the definition of
Permitted Investments, the Company shall not and shall not permit any of its
Subsidiaries to sell, lease, transfer or otherwise dispose of any of its
properties or assets to or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, an Affiliate (an "AFFILIATE TRANSACTION"), unless such Affiliate
Transaction is upon fair and reasonable terms, set forth on SCHEDULE 5.6 or
otherwise fully disclosed in writing to the Holders and on terms and conditions
substantially as favorable to the Company or such Subsidiary as those that could
have been obtained in a comparable arm's-length transaction by the Company or
such Subsidiary with an unrelated Person.

5.7      RESTRICTIONS ON LIENS

         So long as any of the Notes remain unpaid and outstanding, the Company
shall not, and shall not permit any of its Subsidiaries to, create or suffer to
exist any Liens upon any assets of the Company or any such Subsidiaries or any
shares of capital stock of such Subsidiaries, in each case now owned or
hereafter acquired; provided, however, that this SECTION 5.7 shall not prohibit
the creation or continuing existence of any Permitted Lien.

5.8      LIMITATION ON SALE OF ASSETS

         So long as any of the Notes remain unpaid and outstanding, the Company
shall not, and shall not permit any of its Subsidiaries to, make any Asset Sale
unless: (i) no Default or Event of Default exists and is continuing or is
created by such disposition and (ii) in the case of any Asset Sale involving (A)
assets for Net Proceeds (whether in cash or property) in excess of $500,000 or
with a fair market value in excess of $500,000 or (B) assets for Net Proceeds
(whether in cash or property) or with a fair market value (when aggregated with
the Net Proceeds or fair market value of all other assets subject to any Asset
Sales during the same fiscal year) in excess of $750,000.

         (1) the Company or such Subsidiary receives consideration at the time
of such Asset Sale at least equal to the fair market value of such assets (as
determined in good faith by the Board of Directors of the Company or such
Subsidiary and evidenced by a resolution set forth in a certificate of a
Principal Officer, including as to the value of all noncash consideration or, in
the case of any sale of an asset with a fair market value less than $500,000, as
determined in good faith by a Principal Officer of the Company);

                                    Page 32

<PAGE>

         (2) at least 75% of the consideration therefor received by the Company
or such Subsidiary, as the case may be, shall be in the form of cash; provided,
however, that for the purposes of this clause (2), the following are deemed to
be cash: (x) any liabilities (as shown on the Company's or such Subsidiary's
most recent balance sheet or in the notes thereto) of the Company or such
Subsidiary that are assumed by the transferee in connection with the Asset Sale
(other than liabilities that are incurred in connection with or in anticipation
of such Asset Sale); and (y) securities received by the Company or such
Subsidiary from such transferee that are immediately converted into cash at the
face amount or fair market value thereof by the Company or such Subsidiary; and

         (3) upon the consummation of an Asset Sale, the Company or such
Subsidiary shall apply the Net Proceeds (it being understood that the entire Net
Proceeds and not just the portion in excess of the amounts set forth in
subclauses (A) and (B) of clause (ii) above shall be subject to this subsection
(3)) of such Asset Sale within 270 days of the consummation of an Asset Sale
(the "COMMITMENT DATE") either: (x) to prepay any outstanding Senior
Indebtedness in accordance with the applicable provisions thereof (with a
permanent reduction in amounts available to be borrowed thereunder) or, after
all Senior Indebtedness is paid in full, to prepay the Notes or (y) to reinvest
in Productive Assets. Any Net Proceeds from an Asset Sale which are not applied
or reinvested as provided in this clause (3) of SECTION 5.8 constitute excess
proceeds ("EXCESS NET PROCEEDS") and shall be held in Cash or Cash Equivalents.

         When the aggregate amount of Excess Net Proceeds exceeds $500,000, the
Company shall promptly make an offer (the "ASSET SALE OFFER") to all Holders of
the Notes to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Net Proceeds, at an offer price in cash in an amount
(the "ASSET SALE OFFER PRICE") equal to the percentages of principal set forth
below (if the Asset Sale Date occurs during the twelve-month period commencing
on July 13 of the year set forth below), plus accrued and unpaid interest
thereon to the Asset Sale Date:

<TABLE>
<CAPTION>

                                                    % of Principal Amount
                                                    ---------------------
<S>                                                 <C>
                  1999                                       105%
                  2000                                       104%
                  2001                                       103%
                  2002                                       102%
                  2003                                       101%
                  2004 and thereafter                        100%
</TABLE>

         If the aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Net Proceeds, the Company shall select the
Notes to be purchased on a pro rata basis. Upon completion of such Asset Sale
Offer, the amount of Excess Net Proceeds shall be reset at zero. The obligations
of the Company to repurchase the Notes shall be subject to the subordination
provisions of SECTION 8 hereof, but any failure to make such repurchase as a
result of such subordination shall in any event constitute an Event of Default
hereunder.

         Simultaneously with the making of such Asset Sale Offer, the Company
shall provide the Holders with a certificate of a Principal Officer setting
forth the Asset Sale Offer Price, the Asset Sale

                                    Page 33

<PAGE>

Date and the calculations used in determining the amount of Excess Net Proceeds
to be applied to the repurchase of the Notes.

         If the date on which the Asset Sale Offer closes (the "ASSET SALE
DATE") is on or after an interest payment record date and on or before the
related interest payment date, any accrued interest will be paid to the person
in whose name a Note is registered at the close of business on such record date,
and no additional interest will be payable to holders who tender Notes pursuant
to the Asset Sale Offer.

         Notice of any Asset Sale Offer shall be mailed by the Company to each
Holder at its last registered address. The Asset Sale Offer shall remain open
from the time of mailing until 20 business days thereafter, and no longer,
unless a longer period is required by law. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Asset Sale Offer. The notice, which shall govern the terms of
the Asset Sale Offer, shall state:

         (1) that the Asset Sale Offer is being made pursuant to this SECTION
5.8 and that Notes will be accepted for payment either (A) in whole or (B) in
part in integral multiples of $1,000;

         (2) the Asset Sale Offer Price and the Asset Sale Date;

         (3) that any Note not tendered will continue to accrue interest;

         (4) that any Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest from and after the Asset Sale Date (so long as
the Company does not default in its obligation to promptly pay the Asset Sale
Offer Price);

         (5) that Holders electing to have a Note purchased pursuant to the
Asset Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, at
the address specified in the notice prior to the close of business on the Asset
Sale Date;

         (6) that Holders will be entitled to withdraw their election on the
terms and subject to the conditions set forth in the notice;

         (7) that Holders whose Notes are purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.

         On the Asset Sale Date, the Company shall (i) accept for payment all
Notes or portions thereof validly tendered pursuant to the Asset Sale Offer and
(ii) promptly thereafter mail or deliver to Holders of Notes accepted for
purchase payment in the amount equal to the aggregate Asset Sale Offer Price for
such Notes, and the Company shall execute and mail or deliver to such Holders a
new Note equal in principal amount to any unpurchased portion of the Notes
surrendered. The Company will notify the Holders of the results of the Asset
Sale Offer on the Asset Sale Date.

                                    Page 34

<PAGE>

         The provisions of this SECTION 5.8 shall not apply to any Asset Sale by
Senior Bank (i) in judicial proceedings to foreclose upon any assets of the
Company and its Subsidiaries or (ii) pursuant to an exercise of any right under
applicable law or applicable Security Documents to take ownership of any such
assets in lieu of foreclosure.

5.9      LIMITATION ON CONSOLIDATED CAPITAL EXPENDITURES

         So long as any of the Notes remain unpaid and outstanding, Consolidated
Capital Expenditures of the Company and its Subsidiaries which shall not include
the conversion of Operating Leases to Capital Leases or other Indebtedness as
permitted by clause (b)(x) of SECTION 5.4, as of the end of any fiscal year of
the Company shall be less than or equal to the amount set forth below during the
periods set forth below:

<TABLE>
<CAPTION>
                   Period                                   Amount
                   ------                                   ------
<S>                                                        <C>
               Fiscal Year 1999                            $10,000,000
               Fiscal Year 2000                            $ 9,775,000
               Fiscal Year 2001 and                        $ 8,625,000
                each fiscal year thereafter
</TABLE>

5.10     LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
         SUBSIDIARIES

         So long as any of the Notes remain unpaid and outstanding, the Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of any Subsidiary of the
Company to (a) pay dividends or make any other distributions on its Capital
Stock or any other interest or participation in, or measured by, its profits
owned by, or pay any Indebtedness owed to, the Company, (b) make loans or
advances to the Company, (c) transfer any of its properties or assets to the
Company, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under or contemplated by this Agreement
and the Senior Credit Agreement; (ii) any restrictions, with respect to a
Subsidiary of the Company that is not a Subsidiary of the Company on the date
hereof, in existence at the time such Person becomes a Subsidiary of the Company
(so long as such restrictions are not created in anticipation of such Person
becoming a Subsidiary of the Company); (iii) with respect to clause (c) above
only, any restrictions existing under Capital Lease Obligations, Purchase Money
Indebtedness or Indebtedness secured by Permitted Liens (provided that, in each
case, such prohibition shall only relate to the assets which are subject to such
Capital Lease Obligations or which secure such Indebtedness and the proceeds
therefrom); or (iv) any restrictions existing under any agreement that
refinances or replaces the agreements containing the restrictions in the
foregoing clauses (i), (ii) and (iii); provided, that the terms and conditions
of any such restrictions are no more restrictive than those under or pursuant to
the agreement evidencing the Indebtedness refinanced.

                                    Page 35

<PAGE>

5.11     CHANGE OF CONTROL

         (a) CHANGE OF CONTROL. Upon the occurrence of a Change of Control, the
Company shall give each Holder prompt, and in any event within 10 Business Days
of the occurrence of the Change of Control (the "CHANGE OF CONTROL DATE"),
notice describing in reasonable detail the nature of the Change of Control,
offering to each Holder the right to require the Company to repurchase all or
any part of such Holder's Notes (the "CHANGE OF CONTROL OFFER") at a purchase
price equal to (i) if such Change of Control is the result of the sale,
conveyance, lease or sublease, transfer or other disposition, of all or
substantially all of the assets of the Company or sale, conveyance, lease or
sublease, transfer or other disposition (including any transaction of merger or
consolidation), of a majority of Equity Interest of the Company, 102% of the
principal amount of the Notes, together with unpaid interest thereon to the date
of repurchase if such Change of Control occurs prior to July 13, 2001 and 100%
of the principal amount of the Notes, together with unpaid interest thereon to
the debt of repurchase if such Change of Control occurs after July 13, 2001 and
(ii) otherwise, the percentages of principal set forth below (if the Change of
Control occurs during the twelve-month period commencing on July 13 of the year
set forth below), together with accrued and unpaid interest to the date of
repurchase (the "CHANGE OF CONTROL OFFER PRICE").

<TABLE>
<CAPTION>
                                                   % of Principal Amount
<S>                                                              <C>
             1999                                                105%
             2000                                                104%
             2001                                                103%
             2002                                                102%
             2003                                                101%
             2004 and thereafter                                 100%
</TABLE>

         The obligation of the Company to repurchase Notes pursuant to the
Change of Control Offer is subject to the subordination provisions of SECTION 8
hereof, but any failure to make such repurchase as a result of such
subordination provisions shall in any event constitute an Event of Default
hereunder.

         (b) PROCEDURE. The notice of a Change of Control Offer shall state a
date not less than 30 days nor more than 60 days after the date of mailing of
such notice by the Company for repurchase of the Notes pursuant to the Change of
Control Offer (the "CHANGE OF CONTROL PAYMENT DATE"). The notice, which shall
govern the terms of the Change of Control Offer, shall state:

                  (1) that the Change of Control Offer is being made pursuant to
         this SECTION 5.11;

                  (2) the Change of Control Offer Price and the Change of
         Control Payment Date;

                  (3) that, unless the Company defaults in the payment of the
         Change of Control Offer Price, all Notes accepted for payment shall
         cease to accrue interest on and after the Change of Control Payment
         Date;

                                    Page 36
<PAGE>

                  (4) that Holders electing to require the Company to repurchase
         any Notes will be required to surrender the Note, with the form
         entitled "Option of Holder to Elect Purchase" on the reverse side of
         the Note completed and otherwise in proper form for transfer, to the
         address specified in the notice prior to the close of business on the
         Business Day preceding the Change of Control Payment Date;

                  (5) that the Holders will be entitled to withdraw their
         election to require the Company to repurchase any Notes on the terms
         and conditions set forth in such notice; and

                  (6) that the Holders electing to require the Company to
         repurchase any Notes in part will be issued a new Note in a principal
         amount equal to the unpurchased portion of the Notes surrendered;
         provided, however, that any portion of a Note repurchased by the
         Company and any new Note issued to the Holder in respect of the
         unpurchased portion thereof shall be in the principal amount of $1,000
         or an integral multiple thereof.

                  (7) whether, in the event of an IPO as described in SECTION
         5(c) of the Notes, the Company has elected to exercise its option to
         redeem all or any part of the Notes pursuant to such Section; PROVIDED
         that if the Company notifies the Holders that it will not exercise its
         option to redeem the Notes pursuant to such SECTION 5(c) of the Notes,
         then the Company shall no longer have such option to redeem as provided
         in such Section and the Holders shall in any event have the right to
         elect to require the Company to purchase Notes as provided more fully
         in this SECTION 5.11. If the Company elects to exercise its option to
         redeem all or any part of the Notes pursuant to SECTION 5(c) of the
         Notes in connection with an IPO, the premium payable with respect to
         the Notes so redeemed shall be the amount specified in SECTION 5(c) of
         the Notes and not the premium provided for in this SECTION 5.11.

         (c) Acceptance of Notes. On a Change of Control Payment Date, the
Company shall (1) accept for payment all Notes or portions thereof validly
tendered pursuant to the Change of Control Offer and (ii) promptly thereafter
mail or deliver to each Holder of Notes accepted for repurchase payment in the
amount equal to the aggregate Change of Control Offer Price for such Notes, and
the Company shall execute and mail or deliver to such Holders a new Note equal
in principal amount to any unpurchased portion of the Notes surrendered. The
Company will notify the Holders of the results of the Change of Control Offer on
the Change of Control Payment Date.

5.12     FINANCIAL COVENANTS

         Commencing on the day immediately following the Closing Date, the
Company shall, and shall cause each of its Subsidiaries to, comply with the
following financial covenants:

         (a) LEVERAGE RATIO. The Leverage Ratio, as of the last day of each
fiscal quarter of the Company and its Subsidiaries occurring during the periods
indicated below, shall be less than or equal to the following:

                                   Page 37
<PAGE>

<TABLE>
<CAPTION>
                                   Period                                             Ratio
                                   ------                                             -----

<S>                                                                                   <C>
Closing Date through and including the second fiscal quarter
   of fiscal year 2000                                                                6.00 to 1.0
Third fiscal quarter of fiscal year 2000 through and including the
   fourth fiscal quarter of fiscal year 2000                                          5.75 to 1.0
First fiscal quarter of fiscal year 2001                                              5.50 to 1.0
Second fiscal quarter of fiscal year 2001                                             5.25 to 1.0
Third fiscal quarter of fiscal year 2001                                              5.00 to 1.0
Fourth fiscal quarter of fiscal year 2001 through and including the
   third fiscal quarter of fiscal year 2002                                           4.75 to 1.0
Fourth fiscal quarter of fiscal year 2002 and thereafter                              4.50 to 1.0
</TABLE>

         (b) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio, as of
the last day of each fiscal quarter of the Company and its Subsidiaries, shall
be greater than or equal to 1.00 to 1.0.

         (c) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Company and its Subsidiaries occurring
during the periods indicated below, shall be greater than or equal to the
following:

<TABLE>
<CAPTION>
                                    Period                                             Ratio
                                    ------                                             -----

<S>                                                                                    <C>
 Closing Date through and including the second fiscal quarter
    of fiscal year 2000                                                                1.70 to 1.0
 Third fiscal quarter of fiscal year 2000 through and including the
    fourth fiscal quarter of fiscal year 2000                                          1.80 to 1.0
 First fiscal quarter of fiscal year 2001                                              1.90 to 1.0
 Second fiscal quarter of fiscal year 2001                                             2.00 to 1.0
 Third fiscal quarter of fiscal year 2001 through and including the                    2.10 to 1.0
    fourth fiscal quarter of fiscal year 2001
 First fiscal quarter of fiscal year 2002 and thereafter                               2.50 to 1.0
</TABLE>

         (d) CONSOLIDATED EBITDA. Consolidated EBITDA with respect to the
Company and its Subsidiaries, as of the last day of each fiscal quarter of the
Company occurring during the period indicated below, shall be greater than or
equal to the following:

<TABLE>
<CAPTION>
                                    Period                                             Amount
                                    ------                                             ------

<S>                                                                                    <C>
  Closing Date through and including the first fiscal quarter
    of fiscal year 2000                                                                $22,100,000
  Second fiscal quarter of fiscal year 2000                                            $23,375,000
  Third fiscal quarter of fiscal year 2000                                             $24,225,000
  Fourth fiscal quarter of fiscal year 2000                                            $25,075,000
  First fiscal quarter of fiscal year 2001                                             $25,500,000

                                   Page 38
<PAGE>

Second fiscal quarter of fiscal year 2001                                             $26,350,000
Third fiscal quarter of fiscal year 2001                                              $27,200,000
Fourth fiscal quarter of fiscal year 2001                                             $28,050,000
First fiscal quarter of fiscal year 2002 through and including
   the second fiscal quarter of fiscal year 2002                                      $29,750,000
Third fiscal quarter of fiscal year 2002 through and including
   the fourth fiscal quarter of fiscal year 2002                                      S31,450,000
First fiscal quarter of fiscal year 2003 through and including
   the second fiscal quarter of fiscal year 2003                                      $33,150,000
Third fiscal quarter of fiscal year 2003 and thereafter                               $34,850,000
</TABLE>

5.13     FISCAL YEARS

         The Company shall not change its fiscal year from a fiscal year ending
on December 31 or change any fiscal quarter end as set forth in SCHEDULE 5.13.

5.14     STAY, EXTENSION AND USURY LAWS

         The Company covenants and agrees (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, and will use its best
efforts to resist any attempts to claim or take the benefit of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of its obligations under this
Agreement or the Notes; and the Company (to the extent it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Holders, but will suffer and permit
the execution of every such power as though no such law has been enacted.

5.15     CORPORATE EXISTENCE, MERGER; SUCCESSOR CORPORATION

         (a) The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its and its Subsidiaries' corporate
existence in accordance with its organizational documents and the corporate
rights (charter and statutory), licenses and franchises of the Company and each
of its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or corporate existence, if the
Board of Directors of the Company shall determine in good faith that the
preservation thereof is no longer desirable in the conduct of the business of
the Company, and that the loss thereof is not adverse in any material respect to
any Holder.

         (b) The Company shall not, and shall not permit any Subsidiary
Guarantor to, in a single transaction or through a series of related
transactions, (i) consolidate with or merge with or into any other Person, or
transfer (by lease, assignment, sale or otherwise) all or substantially all of
its properties and assets as an entirety or substantially as an entirety to
another Person or group of affiliated Persons or (ii) adopt a Plan of
Liquidation, unless, in either case:

                                   Page 39
<PAGE>

                  (1) The Company or such Subsidiary Guarantor, as the case may
         be, shall be the continuing person, or the person (if other than the
         Company or such Subsidiary Guarantor, as the case may be) formed by
         such consolidation or into which the Company or such Subsidiary
         Guarantor, as the case may be, is merged or to which all or
         substantially all of the properties and assets of the Company or such
         Subsidiary Guarantor, as the case may be, as an entirety or
         substantially as an entirety are transferred (or, in the case of a Plan
         of Liquidation, any Person to which assets are transferred) (the
         Company, such Subsidiary Guarantor or such other person being
         hereinafter referred to as the "SURVIVING PERSON") shall be a
         corporation organized and validly existing under the laws of the United
         States, any State thereof or the District of Columbia, and shall
         expressly assume, by an amendment to this Agreement, all the
         Obligations of the Company under the Notes and this Agreement, the
         Warrants, the Registration Rights Agreement and all Obligations of such
         Subsidiary Guarantor under the Subsidiary Guaranty and this Agreement,
         as the case may be;

                  (2) immediately before and immediately after and giving effect
         to such transaction and the assumption of the Obligations as set forth
         in clause (1) above and the incurrence or anticipated incurrence of any
         Indebtedness to be incurred in connection therewith, no Default or
         Event of Default shall have occurred and be continuing; and

                  (3) the Company or such Subsidiary Guarantor, as the case may
         be, shall have delivered to each Holder a certificate for Principal
         Officer and an Opinion of Counsel, each stating that such
         consolidation, merger, transfer or adoption and such amendment to this
         Agreement comply with this SECTION 5.15, that the Surviving Person
         agrees to be bound hereby, and that all conditions precedent herein
         provided relating to such transaction have been satisfied.

         (c) Upon any consolidation or merger, or any transfer of assets
(including pursuant to a Plan of Liquidation) in accordance with this SECTION
5.15, the successor person formed by such consolidation or into which the
Company or any Subsidiary Guarantor is merged or to which such transfer is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company or such Subsidiary Guarantor, as the case may be, under
this Agreement with the same effect as if such successor person had been named
as the Company or such Subsidiary Guarantor herein; provided, however, that
neither the Company nor such Subsidiary Guarantor shall be released from the
Obligations and covenants under this Agreement or under the Notes or the
Warrants or the Subsidiary Guaranty, as the case may be.

5.16     SAME BUSINESS

         For so long as any Securities are outstanding, the Company and its
Subsidiaries will not engage in any business other than the business engaged in
by the Company immediately prior to the date hereof or reasonable extensions or
reasonably related to the general nature of the business.

                                   Page 40
<PAGE>

5.17     TAXES

         The Company shall, and shall cause its Subsidiaries to, pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all Taxes levied or imposed upon the Company or such Subsidiary,
as the case may be, or upon the income, profits or property of the Company or
such Subsidiary, as the case may be, and (ii) all lawful claims, whether for
labor, materials, supplies, services or anything else, which, if unpaid, would
or may by law become a Lien, upon the property of the Company or such
Subsidiary, as the case may be; provided, however, that neither the Company nor
any of its Subsidiaries shall be required to pay or discharge or cause to be
paid or discharged any such Tax, the applicability or validity of which is being
contested in good faith by appropriate proceedings which will prevent the
forfeiture or sale of any property of the Company or such Subsidiary, as the
case may be, and for which disputed amounts reserves have been established in
accordance with GAAP, in an amount which the Company or such Subsidiary, as the
case may be, believes in good faith is adequate.

5.18     INVESTMENT COMPANY ACT

         Neither of the Company nor any of its Subsidiaries shall become an
investment company subject to registration under the Investment Company Act of
1940, as amended.

5.19     OWNERSHIP OF SUBSIDIARIES

         (a) The Company shall at all times own 100% of the Equity Interests of
each of its Subsidiaries in existence at the Closing. The Company shall not
create or cause to exist any Subsidiary; provided, however, that the Company may
create or acquire Subsidiaries if (i) the Company shall at all times own 100% of
the Equity Interests of such Subsidiary and (ii) the Company shall cause such
Subsidiary to guaranty the Notes on a senior subordinated basis in accordance
with SECTION 11 hereof.

         (b) Except as permitted by SECTION 5.7, 5.8 or 5.15, the Company shall
maintain (along with one or more Subsidiaries in the case of an indirect
Subsidiary) good and valid title to the Equity Interests of each of its
Subsidiaries free and clear of any Lien other than Permitted Liens.

5.20     INSURANCE

         The Company and its Subsidiaries shall maintain liability, casualty and
other insurance with a reputable insurer or insurers in such amounts and against
such risks as is carried by responsible companies engaged in similar businesses
and owning similar assets, INCLUDING as set forth in SCHEDULE 3.23; PROVIDED,
HOWEVER, that the Company and its Subsidiaries may maintain self-insurance plans
to the extent companies of similar size and in similar businesses do so.

5.21     ERISA NOTICES

         As soon as possible and in any event within thirty (30) days after the
Company knows or has reason to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with

                                   Page 41
<PAGE>

respect to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC (other than a Permitted Lien) or a
Plan or any withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Company or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan. Such notice shall be
accompanied by a statement of a Principal Officer setting forth details of the
occurrence referred to therein and stating what action the Company proposes to
take with respect thereto.

5.22     INCONSISTENT AGREEMENTS

         The Company shall not, and shall not permit any of its Subsidiaries to,
(i) enter into any agreement or arrangement which is inconsistent with, or would
impair the ability of the Company or any of its Subsidiaries to fulfill the
obligations of the Company or any of its Subsidiaries under this Agreement, or
(ii) supplement, amend or otherwise modify the terms of their respective Charter
Documents if the effect thereof would be materially adverse to the Holders;
PROVIDED, however, that notwithstanding the foregoing, the Company and its
Subsidiaries may, subject to SECTION 5.5 and SECTION 5.29, enter into the Senior
Credit Agreement and any other agreement or other documents in connection
therewith or pursuant to the terms thereof.

5.23     COMPLIANCE WITH LAWS, MAINTENANCE OF LICENSES

         The Company shall, and shall cause each of its Subsidiaries to, comply
with all statutes, ordinances, governmental rules and regulations, judgments,
orders and decrees (including all Environmental Laws) to which any of them is
subject, and maintain, obtain and keep in effect all licenses, permits,
franchises and other governmental authorizations necessary to the ownership or
operation of their respective properties or the conduct of their respective
businesses, except to the extent that the failure to so comply or maintain,
obtain and keep in effect could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

5.24     INSPECTION OF PROPERTIES AND RECORDS

         The Company agrees to allow, and to cause each of its Subsidiaries to
allow, the TCW Representative and each Holder of at least $2,000,000 in
aggregate principal amount of the Notes or, in the event there is no Holder of
at least $2,000,000 in aggregate principal amount of the Notes, the TCW
Representative and the Holder who holds the greatest aggregate principal amount
of the Notes (and so long as a Default or an Event of Default has occurred and
is continuing, each Purchaser and its Affiliates and Holder and such Holder's
Affiliates) (or, in each case, such Persons as any of them may designate)
(individually and collectively, "INSPECTORS"), subject to appropriate agreements
as to confidentiality, (i) to visit and inspect any of the properties of the
Company or any of its Subsidiaries, (ii) to examine all their books of account,
records, reports and other papers and to make copies and extracts therefrom,
(iii) to discuss their respective affairs, finances and accounts with their
respective officers and employees, and (iv) to discuss the financial condition
of the Company and their Subsidiaries with their independent accountants upon
reasonable notice to the Company of its

                                   Page 42
<PAGE>

intention to do so and so long as the Company shall be given the reasonable
opportunity to participate in such discussions (and by this provision the
Company each authorize said accountants to have such discussions with the
Inspectors). All such visits, examinations and discussions set forth in the
preceding sentence shall be at such reasonable times and as often as may be
reasonably requested; provided that unless an Event of Default shall have
occurred and be continuing such visits shall be limited to 1 per quarter. If a
Default or an Event of Default shall have occurred and be continuing, the
Company shall pay or reimburse all Inspectors for expenses which such Inspectors
may reasonably incur in connection with any such visitations or inspections.

5.25     BOARD OF DIRECTOR OBSERVATION RIGHTS

         Purchasers, as a group and so long as any Purchaser or any TCW Group
Member is a Holder, shall have the right to have one representative (the "TCW
REPRESENTATIVE"), who shall be reasonably acceptable to the Company, present
(whether in person or by telephone) at all meetings of the Boards of Directors
of the Company. The Company shall send to such representative all of the
notices, information and other materials that are distributed to the directors
of the Company; provided, however, that upon the request of such representative,
the Company shall refrain from sending such notices, information and other
materials for so long as such representative shall request. The Purchasers shall
provide notice to the Company of the identity and address of, or any change with
respect to the identity or address of, such representative. The Company shall
reimburse each such representative for the reasonable out-of-pocket expenses of
such representative incurred in connection with the attendance at such meetings.

5.26     MAINTENANCE OF OFFICE OR AGENCY

         So long as any of the Notes remain unpaid and outstanding, the Company
shall maintain (i) an office or agency where the Notes may be presented for
registration and transfer and for exchange as provided in this Agreement; and
(ii) an office or agency where notices and demands to or upon the Company in
respect of the Notes may be served. The location of such office or agency
initially shall be Pacific Circuits, Inc., 17550 N.E. 67th Court, Redmond,
Washington 98052. The Company shall give to each Holder written notice of any
change of location thereof.

5.27     INFORMATION TO PROSPECTIVE PURCHASERS

         So long as any of the Notes remain unpaid and outstanding, the Company
shall, upon the request of any Purchaser or subsequent Holder, deliver to such
Purchaser or such Holder and any prospective purchaser designated by such
Purchaser or such Holder promptly following the request of such Purchaser or
such Holder or such prospective purchaser such information which such Purchaser
or such Holder or such prospective purchaser may reasonably request in order to
comply with the information requirements of Rule 144A(d)(4).

                                   Page 43
<PAGE>

5.28     PRIVATE PLACEMENT NUMBER

         The Company consents to the filing of copies of this Agreement with
Standard & Poor's Corporation to obtain a private placement number and with the
National Association of Insurance Commissioners.

5.29     SENIOR INDEBTEDNESS AMENDMENTS

         The Companies may at any time and from time to time without the consent
of or notice to the Holders, without incurring liability to the Holders and
without impairing or releasing the obligations of Holders pursuant to Section 8
of this Agreement, change the manner or place of payment or extend the time of
payment of or renew or alter any of the terms of the Senior Indebtedness, or
amend in any manner the Senior Credit Agreement or any other agreement, note,
guaranty or other instrument evidencing or securing or otherwise relating to the
Senior Indebtedness; PROVIDED that the Companies shall not increase the Senior
Indebtedness (except as permitted by Section 5.5).

5.30     NOTICES OF CERTAIN PROCEEDINGS

         If any of the Company or any of its Subsidiaries is made or threatened
to be made a party to any proceeding that, if determined adversely to the
Company or such Subsidiary would result, or be likely to result, in a Material
Adverse Effect, then the Company shall promptly deliver to the Holders a
description of such proceeding, indicating the court in which it was filed, if
any, the amount in controversy or other remedies sought and the other parties
thereto.

5.31     CONSULTING AGREEMENTS

         The Company will deliver to the Holders copies of all Consulting
Agreements promptly after the execution thereof. The Consulting Agreements shall
not be amended without the prior written consent of the Required Holders.

5.32     NO AMENDMENT OR WAIVER OF CERTAIN DOCUMENTS

         The Company will not take any action that will amend, modify, alter or
terminate the Acquisition Agreements (including the schedules relevant thereto)
in any way or waive any material rights with respect thereto, without the prior
written consent of the Required Holders. The Company will not take any actions
to amend, modify or alter the Seller Notes or the Retention Bonus Plan without
the prior written consent of the Required Holders. Company shall not request or
seek a waiver of any default or event of default with respect to the Senior
Indebtedness to permit Restricted Payments otherwise prohibited by clause
(b)(ii) of SECTION 5.4 without also obtaining a waiver of any such default or
event of default for the benefit of Holders, including termination of any
Indefinite Blockage Period or Payment Blockage Period then in effect.

                                   Page 44
<PAGE>

5.33     STOCK OPTIONS

         Without the prior written consent of the Required Holders, at no time
shall the options to acquire Common Stock pursuant to the Stock Option Plan in
the aggregate constitute more than twelve and one-half percent (12.5%) of the
Equity Interests, on a fully diluted basis, of the Company.

SECTION 6. REDEMPTION

6.1      THE COMPANY'S RIGHT TO REDEEM

         (a) OPTIONAL REDEMPTION. The Company may redeem the Notes, or a portion
thereof, in accordance with the terms and conditions provided in Section 5 of
the Notes.

         (b) MANDATORY REDEMPTION. The Company shall redeem the Notes on the
Maturity Date, as provided in Section 6(a) of the Notes.

         The obligations of the Company under this Section 6 are subject to the
subordination provisions of Section 8 hereof, but any failure to perform such
obligations as a result of such subordination provisions shall in any event
constitute an Event of Default hereunder.

6.2      SELECTION OF NOTES TO BE REDEEMED

         If fewer than all of the Notes are to be redeemed, the Company shall
redeem the Notes pro rata, in such manner as complies with applicable legal
requirements, if any. Notes in denominations of $1,000 may be redeemed only in
whole. The Company may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Notes that have denominations
larger than $1,000. Provisions of this Agreement that apply to Notes called for
redemption also apply to portions of Notes called for redemption.

6.3      NOTICE OF REDEMPTION

         At least 15 days or, if such redemption is being made in connection
with an IPO, at least 10 days, but, in each case, not more than 60 days before a
Redemption Date, the Company shall mail a notice of redemption ("NOTICE OF
REDEMPTION") by first-class mail to each Holder whose Notes are to be redeemed
at such Holder's registered address. Each notice for redemption shall identify
the Notes to be redeemed and shall state:

         (a)      the Redemption Date;

         (b)      the Redemption Price;

         (c)      the name and address of the Company;

         (d)      that Notes called for redemption must be surrendered to the
Company to collect the Redemption Price;

                                   Page 45
<PAGE>

         (e) that, unless the Company defaults in making the Redemption Price,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price upon surrender to the Company of the
Notes redeemed;

         (f) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date, and upon
surrender of such Note, a new Note or Notes in aggregate principal amount equal
to the unredeemed portion thereof will be issued;

         (g) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or, portion(s) thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate principal
amount of Note(s) to be outstanding after such partial redemption; and

         (h) the paragraph of the Notes pursuant to which the Notes are to be
redeemed.

6.4      EFFECT OF NOTICE OF REDEMPTION

         Once Notice of Redemption is mailed in accordance with SECTION 6.3
above, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Company, such Notes
called for redemption shall be paid at the Redemption Price.

6.5      PAYMENT OF REDEMPTION PRICE

         On presentation and surrender of any Notes with respect to which a
notice of redemption has been given, at a place of payment specified in such
notice, such Notes or specified portions thereof shall be paid and redeemed by
the Company at the applicable Redemption Price.

         If, on or prior to the Redemption Date, the Company deposits in a
segregated account or otherwise sets aside funds sufficient to pay the
Redemption Price of the Notes called for redemption, then, unless the Company
defaults in the payment of such Redemption Price, interest on the Notes to be
redeemed will cease to accrue on and after the applicable Redemption Date,
whether or not such Notes are presented for payment.

SECTION 7. DEFAULTS AND REMEDIES

7.1      EVENTS OF DEFAULT

         An "EVENT OF DEFAULT" occurs if:

         (a) the Company defaults in the payment of the principal of or premium,
if any, on any Note when the same becomes due and payable at maturity, upon
redemption or otherwise (whether or not prohibited by the subordination
provisions hereunder);

                                   Page 46
<PAGE>

         (b) the Company defaults in the payment of interest on any Note or any
other amount payable hereunder when the same becomes due and payable and the
Default continues for a period of five Business Days (whether or not prohibited
by the subordination provisions hereunder);

         (c) the Company or any Subsidiary Guarantor fails to comply with (i)
any of the agreements, covenants or provisions contained in SECTION 5 or (ii)
any of the other agreements, covenants, or provisions of this Agreement
(including the Subsidiary Guaranty) or the Notes and, in the case of this clause
(ii), the Required Holders notify the Company of the Default and the Company or
one of its Subsidiaries, as the case may be, does not cure the Default within 30
days after receipt of such notice;

         (d) if any of the representations or warranties of the Company made in
this Agreement, the Warrant Agreement and the Registration Rights Agreement are
untrue in any respect as of the Closing Date, the result of which could
reasonably be expected to have a Material Adverse Effect;

         (e) if the Company (i) defaults in the payment of principal or interest
payments and such default continues beyond the period of grace (not to exceed 30
days) under any loan agreement, note, mortgage, indenture or instrument (other
than the Senior Credit Agreement) under which there may be issued or by which
there may be secured or evidenced any Indebtedness (other than Senior
Indebtedness) of the Company or any of its Subsidiaries for borrowed money (or
the payment of which is guaranteed by the Company or any of its Subsidiaries),
whether such Indebtedness or guarantee now exists or shall be created hereafter,
and the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness for which there is a default in the
payment of interest, premium, if any, or principal aggregates $750,000 or more,
or (ii) an event of default occurs under any loan agreement, note, mortgage,
indenture or instrument including the Senior Credit Agreement which shall
represent a default in payment upon final maturity or otherwise result in the
acceleration of such Indebtedness prior to its expressed maturity and the
principal amount of such Indebtedness, together with the principal amount of any
other such Indebtedness with respect to which there has been a default in
payment upon final maturity or the maturity of which has been so accelerated and
has not been paid, aggregates $750,000 or more or is Senior Indebtedness;

         (f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any Subsidiary of the Company and such remains undischarged for a period (during
which execution shall not be effectively stayed) of 30 days; PROVIDED that the
aggregate of all such judgments exceeds $750,000;

         (g) the filing by the Company or any of its Subsidiaries (any such
person, a "DEBTOR") of a petition commencing a voluntary case under section 301
of Title 11 of the United States Code, or the commencement by a Debtor of a case
or proceeding under any other Bankruptcy Law seeking the adjustment,
restructuring, or discharge of the debts of such Debtor, or the liquidation of
such Debtor, including without limitation the making by a Debtor of an
assignment for the benefit of creditors; or the taking of any corporate action
by a Debtor in furtherance of or to facilitate, conditionally or otherwise, any
of the foregoing;

                                    Page 47

<PAGE>

         (h) the filing against a Debtor of a petition commencing an involuntary
case under section 303 of title 11 of the United States Code, with respect to
which case (a) such Debtor consents or fails to timely object to the entry of,
or fails to seek the stay and dismissal of, an order of relief, (b) an order for
relief is entered and is pending and unstayed on the 60th day after the filing
of the petition commencing such case, or if stayed, such stay is subsequently
lifted so that such order for relief is given full force and effect, or (c) no
order for relief is entered, but the court in which such petition was filed has
not entered an order dismissing such petition by the 60th day after the filing
thereof; or the commencement under any other Bankruptcy Law of a case or
proceeding against a Debtor seeking the adjustment, restructuring, or discharge
of the debts of such Debtor, or the liquidation of such Debtor, which case or
proceeding is pending without having been dismissed on the 60th day after the
commencement thereof;

         (i) the entry by a court of competent jurisdiction of a judgment,
decree or order appointing a receiver, liquidator, trustee, custodian or
assignee of a Debtor or of the property of a Debtor, or directing the winding
up or liquidation of the affairs or property of a Debtor, and (a) such Debtor
consents or fails to timely object to the entry of, or fails to seek the stay
and dismissal of, such judgment, decree, or order, or (b) such judgment,
decree or order is in full force and effect and is not stayed on the 60th day
after the entry thereof, or, if stayed, such stay is thereafter lifted so
that such judgment, decree or order is given full force and effect;

         (j) any Person, other than the Company and the Subsidiaries, shall,
directly or indirectly, (i) terminate any employee pension benefit plan
subject to Title IV of ERISA and as a result of such termination the Company
and its Subsidiaries, collectively, would incur any liability or (ii) make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any multiemployer plan if as a result of such withdrawal (within the
meaning of Section 4201 of ERISA) the Company and its Subsidiaries,
collectively, would incur any liability that, in the case of clauses (i) and
(ii), could reasonably be expected to have a Material Adverse Effect; or

         (k) any Subsidiary Guaranty shall for any reason cease to be, or be
asserted in writing by any responsible officer of any Subsidiary of the Company
or the Company not to be, in full force and effect or enforceable in accordance
with its terms unless any such Subsidiary Guaranty has been released pursuant to
the terms hereof.

         The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "CUSTODIAN" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

7.2      ACCELERATION OF NOTES, REMEDIES

         Subject to the following paragraph, if an Event of Default (other than
an Event of Default specified in clause (g), (h) or (i) of SECTION 7.1 occurs
and is continuing, the Required Holders by notice to the Company, may declare
the unpaid principal of and any accrued interest on all the Notes to be due and
payable (such notice being the "Acceleration Notice") and the same shall become
immediately due and payable. If an Event of Default specified in clause (g), (h)
or (i) of SECTION 7.1

                                    Page 48

<PAGE>

occurs, such an amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of any Holder.

         The Required Holders by notice to the Company may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration.

7.3      PREMIUM ON ACCELERATION

         In the event of an acceleration of the Notes upon an Event of
Default occurring by reason of any willful action (or deliberate inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding payment of the premium that the Company would have had to pay if the
Company had elected to redeem the Notes and such acceleration is not
rescinded or annulled, the Holders, subject to SECTION 8, shall be entitled
to receive, in addition to any other payments to which they may be entitled,
a premium equal to the percentages of principal set forth below if the
declaration date of the acceleration occurs during the twelve month period
commencing on July 13 of the year set forth below:

<TABLE>
<CAPTION>
                                                     % of Principal Amount
                                                     ---------------------
<S>                                                           <C>
               1999                                           105%
               2000                                           104%
               2001                                           103%
               2002                                           102%
               2003                                           101%
               2004 and thereafter                            100%
</TABLE>

7.4      OTHER REMEDIES

         If an Event of Default occurs and is continuing, Holders of the Notes
may pursue any available remedy to collect the payment of principal or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Agreement.

         A delay or omission by any Holder of any Notes in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.

7.5      WAIVER OF PAST DEFAULTS

         The Required Holders by notice to the Company may waive an existing
Default or Event of Default and its consequences except a continuing Default or
Event of Default in the payment of the principal of or interest on any Notes.

                                    Page 49

<PAGE>

7.6      RIGHTS OF HOLDERS TO RECEIVE PAYMENT

         Notwithstanding any other provision of this Agreement, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.

7.7      UNDERTAKING FOR COSTS

         In any suit for the enforcement of any right or remedy under this
Agreement, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.

SECTION 8. SUBORDINATION

8.1      NOTES SUBORDINATED TO SENIOR INDEBTEDNESS

         Notwithstanding anything in this Agreement or the Notes to the
contrary, the Company, for itself and its successors, and each Holder, by its
acceptance of the Notes, agrees that (a) the payment of the principal of and
interest or premium on the Notes and (b) any payment on account of the
acquisition or redemption of the Notes by the Company including, without
limitation, pursuant to SECTION 5.8 or 5.11, is subordinated, to the extent and
in the manner provided in this SECTION 8, to the prior payment in full of all
Senior Indebtedness of the Company and that these subordination provisions are
for the benefit of the holders of Senior Indebtedness. References in this
SECTION 8 to "SENIOR INDEBTEDNESS" are to Senior Indebtedness of the Company and
of the Subsidiary Guarantors.

         This SECTION 8 shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.

8.2      NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES

         (a) No payment shall be made by or on behalf of the Company on account
of the principal of, premium, if any, or interest on the Notes or to defease or
acquire any of the Notes (including repurchases of Notes pursuant to SECTION 5.8
or 5.11) for cash or property, or on account of the redemption provisions of the
Notes (other than principal, premium or interest paid with Junior Securities),
during the period (the "INDEFINITE BLOCKAGE PERIOD") beginning on the date that
the Company and the Holders of the Notes receive written notice (a "PAYMENT
NOTICE") from the holders of such Senior Indebtedness of any default in payment
(a "PAYMENT DEFAULT") of any principal of, premium, if any, or interest on any
Senior Indebtedness or any obligation owing under or in respect of Senior
Indebtedness or their representative, and ending on the earliest of (A) the date
that all Senior Indebtedness is paid in full, (B) the date on which the Senior
Indebtedness to which such

                                   Page 50

<PAGE>

Payment Default relates is paid in full or such default is cured, and (C) the
date on which such Payment Default is waived in writing in accordance with the
instruments governing such Senior Indebtedness by the holders of such Senior
Indebtedness (or any requisite percentage thereof).

         (b) If an event of default other than a Payment Default (an "OTHER
DEFAULT") with respect to any Senior Indebtedness, as such event of default is
defined in the instrument under which it is outstanding, has occurred, is
continuing and permits the holders (or any requisite percentage thereof) to
declare such Senior Indebtedness due and payable prior to the date on which it
would otherwise have become due and payable, then during the period (the
"PAYMENT BLOCKAGE PERIOD") commencing on the date that the Company and the
Holders receive written notice (a "DEFAULT NOTICE") of such Other Default and
ending on the earliest of: (A) 170 days after such date, (B) the date, if any,
on which the Senior Indebtedness to which such default relates is paid in full
or such Other Default is cured or waived in writing in accordance with the
instruments governing such Senior Indebtedness by the holders of such Senior
Indebtedness (or any requisite percentage thereof), and (C) the date on which
the Company and the Holders of the Notes receive from the holders of such Senior
Indebtedness (or their representative) that commenced the Payment Blockage
Period written notice that the Payment Blockage Period has been terminated, no
payment shall be made by or on behalf of the Company on account of the principal
of, premium, if any, or interest on, the Notes, or to defease or acquire any of
the Notes (including repurchases of Notes pursuant to SECTION 5.8 or 5.11) for
cash or property, or on account of the redemption provisions of the Notes or on
account of any fees and expenses relating to the Notes or this Agreement (other
than principal, premium or interest paid with Junior Securities).
Notwithstanding any other provision of this Agreement, only one Payment Blockage
Period may be commenced within any period of 365 consecutive days. No event of
default that existed or was continuing with respect to the Senior Indebtedness
for which a Default Notice commencing a Payment Blockage Period was given on the
date such Payment Blockage Period commenced shall be, or be made, the basis for
the commencement of any subsequent Payment Blockage Period unless such event of
default is cured or waived for a period of not less than 90 consecutive days.

         (c) For purposes of this Agreement, the term "STANDSTILL PERIOD" shall
mean a period which commences on the date that the Company and the Holders of
the Notes receive a Payment Notice or a Default Notice, as the case may be, and
ends on the earliest to occur of (i) the termination of the Indefinite Blockage
Period relating to such Payment Notice or the termination of the Payment
Blockage Period relating to such Default Notice, as the case may be, (ii)
acceleration of the Senior Indebtedness to which such Payment Notice or Default
Notice, as the case may be, relates, (iii) an Event of Default specified in
clause (g), (h) or (i) of SECTION 7.1, (iv) 170 days after the receipt by the
Company and the Holders of the Notes of such Payment Notice or Default Notice,
as the case may be, (v) the waiver or amendment by or on behalf of the lenders
under the Senior Credit Agreement (or any requisite percentage thereof) of the
restrictions, during such Standstill Period, on asset sales or dispositions by
the Company or any of its Subsidiaries so as to permit the Company or any of
its Subsidiaries to transfer or apply the net proceeds from such asset sales or
dispositions to or for the benefit of any holders of long-term Indebtedness of
the Company or its Subsidiaries other than to repay obligations under the Senior
Credit Agreement, (vi) the waiver or amendment, during such Standstill Period,
by or on behalf of the lenders under the Senior Credit Agreement (or any
requisite percentage thereof) of the prohibition on the creation or existence of
liens on property, revenue or

                                   Page 51
<PAGE>

assets of the Company or any of its Subsidiaries so as to permit the creation or
existence of liens (including judgment liens) securing payment of Indebtedness
of the Company or any of its Subsidiaries which ranks PARI PASSU with the Notes
or is subordinate or junior in right of payment to the Notes, or (vii) such time
as the holders of Senior Indebtedness (or any requisite percentage thereof)
consent in writing to the termination of the Standstill Period. During the
Standstill Period, such Holders shall be prohibited from accelerating the Notes
and shall be prohibited from enforcing any of their default remedies with
respect thereto (including any right to sue the Company or to file or
participate in the filing of any involuntary bankruptcy petition against the
Company) until the Standstill Period relating to such Payment Notice or Default
Notice, as the case may be, shall cease to be in effect; PROVIDED, HOWEVER, that
if a Holder had initiated an enforcement or collection action prior to the
commencement of such Standstill Period at a time when such Holder was entitled
to do so, then such Holder shall not be prevented during the Standstill Period
from taking any steps with respect to such pending collection or enforcement
action as are required by law or are reasonably required to avoid material
prejudice to the rights of such Holder so long as such steps are not
inconsistent with or in contravention of and which do not interfere with the
enforcement actions, if any, taken by the holders of the Senior Indebtedness or
their representative. Upon the termination of any Standstill Period, then the
Holders of the Notes may, at their sole election, exercise any and all remedies
(including acceleration of the maturity of the Notes) available to them under
this Agreement or applicable law; PROVIDED that the Indefinite Blockage Period
or the Payment Blockage Period, as the case may be (if not also terminated),
shall continue for its full period notwithstanding the termination of the
Standstill Period. Notwithstanding the foregoing, not more than one Standstill
Period may be commenced within a period of 365 consecutive days.

         (d) In furtherance of the provisions of SECTION 8.1, in the event
that, notwithstanding the foregoing provisions of this SECTION 8.2, any payment
or distribution of assets on account of principal of, premium, if any, or
interest on the Notes or to defease or acquire any of the Notes (including
repurchases of Notes pursuant to SECTION 5.8 or 5.11) for cash, property or
securities, or on account of the redemption provisions of the Notes (other than
principal, premium or interest paid with Junior Securities) shall be made by the
Company and received by any Holder, at a time when such payment or distribution
was prohibited by the provisions of this SECTION 8.2, then, unless such payment
or distribution is no longer prohibited by this SECTION 8.2, such payment or
distribution shall be received and held in trust by such Holder for the benefit
of the holders of Senior Indebtedness, and shall be paid or delivered by such
Holders to the holders of Senior Indebtedness remaining unpaid or unprovided for
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate amounts on
account of the Senior Indebtedness held or represented by each, to the extent
necessary to enable payment in full (except as such payment otherwise shall have
been provided for), of all Senior Indebtedness remaining unpaid, after giving
effect to all concurrent payments and distributions and all provisions therefor,
to or for the holders of such Senior Indebtedness, but only to the extent that
as to any holder of such Senior Indebtedness such holder (or a representative
thereof) notifies the Holders of the amounts then due and owing on such Senior
Indebtedness, if any, held by such holder and only the amounts specified in such
notices to the Holders shall be paid to the holders of such Senior Indebtedness.

                                    Page 52
<PAGE>

         The Company shall give prompt written notice to the Holders of any
default or event of default, and any cure or waiver thereof, or any acceleration
under any Senior Indebtedness or under any agreement pursuant to which Senior
Indebtedness may have been issued.

8.3      NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR INDEBTEDNESS ON
         DISSOLUTION, LIQUIDATION OR REORGANIZATION

         Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or
similar proceeding or upon assignment for the benefit of creditors:

         (a) the holders of all Senior Indebtedness shall first be entitled to
receive payments in full (or to have such payment duly provided for as
determined by the Governmental Authority, administering such proceeding) of the
principal of, premium if any, and interest on and other amounts payable in
respect thereof, before the Holders are entitled to receive any payment on
account of the principal of, premium if any, and interest on the Notes (other
than principal, interest or premium paid with Junior Securities);

         (b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than principal,
interest or premium paid with Junior Securities), to which the Holders would be
entitled except for the provisions of this Section 8, shall be paid by the
liquidating trustee or agent or other Person making such a payment or
distribution, directly to the holders of Senior Indebtedness or their
representative, ratably according to the respective amounts of Senior
Indebtedness held or represented by each, to the extent necessary to make
payment in full (or have such payment duly provided for) of all such Senior
Indebtedness remaining unpaid after giving effect to all concurrent payments and
distributions and all provisions therefor to or for the holders of such Senior
Indebtedness;

         (c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Holders on account of principal
of, premium, if any, or interest on the Notes (other than principal, interest or
premium paid with Junior Securities), as the case may be, before all Senior
Indebtedness is paid in full (or provision made therefor), such payment or
distribution shall be received and held in trust by such Holder for the benefit
of the holders of such Senior Indebtedness, or their respective representative,
ratably according to the respective amounts of Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full (except as
such payment otherwise shall have been provided for) of all such Senior
Indebtedness remaining unpaid after giving effect to all concurrent payments and
distributions and all provisions therefor to or for the holders of such Senior
Indebtedness, but only to the extent that as to any holder of such Senior
Indebtedness such holder (or a representative therefor) notifies the Holders of
the amounts then due and owing on such Senior Indebtedness, if any, held by such
holder and only the amounts specified in such notices to the Holders shall be
paid to the holders of such Senior Indebtedness; and

         (d) Upon the failure of any Holder to file appropriate claims or proofs
of claim in respect of any Note held by such Holder in any such proceeding as of
the 10th business day preceding the bar

                                    Page 53
<PAGE>

date thereof, each holder of Senior Indebtedness (or their representative) is
hereby irrevocably authorized and empowered (in its own name, by such
representative or otherwise), but shall have no obligation to file claims and
proofs of claim and take such other action as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of such Holder
with respect to the Notes held by such Holder. Notwithstanding the foregoing,
neither the holder of Senior Indebtedness nor their representative shall have
any right whatsoever to vote any claim that any Holder may have in such
proceeding to accept or reject any plan or partial or complete liquidation,
reorganization, arrangement, composition or extension.

         The Company shall give prompt written notice to the Holders of any
dissolution, winding up, liquidation or reorganization of the Company or
assignment for the benefit of creditors by the Company.

8.4      NOTEHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR
         INDEBTEDNESS

         Subject to the payment in full of all Senior Indebtedness (or provision
made for its payment) and the expiration or termination of all commitments to
lend under the Senior Credit Agreement, the Holders of Notes shall be subrogated
to the rights of the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Notes shall be paid in full, and for the purpose
of such subrogation no such payments or distributions to the holders of such
Senior Indebtedness by or on behalf of the Company, or by or on behalf of the
Holders by virtue of this SECTION 8, which otherwise would have been made to the
Holders shall, as between the Company and the Holders, be deemed to be payment
by the Company, to or on account of such Senior Indebtedness, it being
understood that the provisions of this Section 8 are and are intended solely for
the purpose of defining the relative rights of the Holders, on the one hand, and
the holders of such Senior Indebtedness, on the other hand.

         If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this SECTION 8 shall have been
applied, pursuant to the provisions of this SECTION 8, to the payment of amounts
payable under Senior Indebtedness, then the Holders shall be entitled to receive
from the holders of such Senior Indebtedness any payments or distributions
received by such holders of Senior Indebtedness in excess of the amount
sufficient to pay all amounts payable under or in respect of such Senior
Indebtedness in full.

8.5      OBLIGATIONS OF THE COMPANY UNCONDITIONAL

         Nothing contained in this SECTION 8 or elsewhere in this Agreement or
in the Notes is intended to or shall impair, as between the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of, premium, if any, and interest on the Notes
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or in the Notes prevent any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Agreement, subject to the rights and restrictions, if any, under this SECTION 8,
held by the holders of Senior Indebtedness in respect of cash, property or
securities of the Company (other than Junior

                                    Page 54
<PAGE>

Securities) received upon the exercise of any such remedy. Notwithstanding
anything to the contrary in this SECTION 8 or elsewhere in this Agreement or in
the Notes, upon any distribution of assets of the Company referred to in this
SECTION 8, the Holders shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other Person making any distribution to the
Holders for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
SECTION 8.

8.6      SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE COMPANY
         OR HOLDERS OF SENIOR INDEBTEDNESS

         No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this SECTION 8 shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Agreement,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company all without affecting the liabilities and obligations of the parties to
this Agreement or the Holders.

8.7      SECTION 8 NOT TO PREVENT EVENTS OF DEFAULT

         The failure to make a payment on account of principal of, premium, if
any, or interest on the Notes by reason of any provision of this SECTION 8 shall
not be construed as preventing the occurrence of a Default or an Event of
Default under this Agreement or in any way prevent the Holders from exercising
any right hereunder other than as provided in this Section 8.

8.8      MISCELLANEOUS PROVISIONS

         (a) The provisions of this SECTION 8 shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any of the
Senior Indebtedness is rescinded or must otherwise be returned by any holder of
Senior Indebtedness or any other recipient thereof, as the case may be, upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.

         (b) No failure on the part of any holder of Senior Indebtedness to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof of the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

                                    Page 55
<PAGE>

         (c) The provisions of this SECTION 8 constitute a continuing agreement
and shall (i) remain in full force and effect until the Senior Credit Agreement
shall have been terminated and the Senior Indebtedness shall have been paid in
full, (ii) be binding upon the Holders and their successors and assigns and
(iii) inure to the benefit of and be enforceable by the holders of the Senior
Indebtedness and their respective successors, transferees and assigns.

SECTION 9. AMENDMENTS AND WAIVERS

9.1      WITH CONSENT OF HOLDERS

         The Company, when authorized by a resolution of the Board of Directors
of the Company with written consent of the Required Holders, may amend this
Agreement or the Notes, provided that each Holder shall have received prior
notice of such proposed amendment. The Required Holders may waive compliance by
the Company with any provision of this Agreement or the Notes, provided that
each Holder shall have received prior notice of such proposed amendment. Without
the consent of each Holder affected, however, no amendment or waiver may (with
respect to any Notes held by a nonconsenting Holder of Notes):

         (a) reduce the principal amount of Notes whose Holders must consent to
an amendment or waiver of any provision of this Agreement or the Notes;

         (b) reduce the principal of or alter the provisions with respect to the
redemption of Notes, reduce the purchase price payable in connection with
repurchases of the Notes pursuant to SECTION 5.8 or 5.11 hereof or reduce the
premium payable pursuant to SECTION 7.3 hereof;

         (c) reduce the rate of or change the time for payment of interest on
any Note;

         (d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes or that resulted from a failure to
comply with SECTION 5.8 hereof (except a rescission of acceleration of the Notes
by the Required Holders and a waiver of the payment default that resulted from
such acceleration);

         (e) make the principal of, premium, if any, or the interest on, any
Note payable in any manner other than that stated in this Agreement and the
Notes;

         (f) make any change in the provisions of this Agreement relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, premium (if any) or interest on the Notes;

         (g) waive a redemption payment with respect to any Note;

         (h) make any change to the subordination provisions of this Agreement
that adversely affect any Holder;

         (i) make any change in the definitions of Required Holders or Maturity
Date: or

                                    Page 56
<PAGE>

         (j)    make any change in the foregoing amendment and waiver
provisions.

         It shall not be necessary for the consent of the Holders under this
SECTION 9 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.

         After an amendment or waiver under this SECTION 9 becomes effective,
the Company shall mail to the Holders affected thereby a notice briefly
describing the amendment or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment or waiver.

         In connection with any amendment under this SECTION 9, the Company may
offer, but shall not be obligated to offer, to any Holder who consents to such
amendment or waiver, consideration for such Holder's consent.

9.2      REVOCATION AND EFFECT OF CONSENTS

         Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder or subsequent Holder may revoke the consent as to his Note or
portion of his Note by notice to the Company received before the date on which
the Required Holders have consented (and not theretofore revoked such consent)
to the amendment or waiver.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver, which record date shall be at least 30 days prior to the first
solicitation of such consent. If a record date is fixed, then notwithstanding
the last sentence of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies), and only those
persons, shall be entitled to revoke any consent previously given, whether or
not such persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.

         After an amendment or waiver becomes effective, it shall bind every
Security holder, unless it makes a change described in any of clauses (a)
through (i) of SECTION 9.1, in which case, the amendment or waiver shall bind
only each Holder of a Note who has consented to it and every subsequent Holder
of a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note; provided that any such waiver shall not impair or affect the
right of any Holder to receive payment of principal of, premium (if any) and
interest on a Note, on or after the respective due dates expressed in such Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.

         In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or amendment, Notes owned
by the Company or any Affiliate of the Company shall be considered as though not
outstanding.

                                Page 57
<PAGE>

9.3      NOTATION ON OR EXCHANGE OF NOTES

         If an amendment or waiver changes the terms of a Note, the Company may
require the Holder of the Note to deliver it to the Company so that it may place
an appropriate notation on the Note about the changed terms and return it to
the Holder.

9.4      PAYMENT OF EXPENSES

         The Company agrees to pay or reimburse each Purchaser's out-of-pocket
expenses (including the reasonable fees and expenses of counsel) relating to any
amendment or modification of, or any waiver or consent under, this Agreement,
the Securities, the Registration Rights Agreement, the Warrant Agreement and any
other Documents.

SECTION 10. DEFINITIONS

10.1     DEFINITIONS

          As used in this Agreement, the following terms shall have the
following meanings:

         "ACCELERATION NOTICE" shall have the meaning set forth in SECTION 7.2.

         "ACCOUNT MANAGER" means each Purchaser, if any, duly authorized to act
as attorney in-fact on behalf of any Person in purchasing, in the name of and
using funds provided by such Person, Securities hereunder.

         "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person existing at the
time such Person becomes a Subsidiary of the Company or assumed in connection
with the acquisition by the Company or any of its Subsidiaries of assets from
such Person, which Indebtedness was not incurred in connection with or in
anticipation of such acquisition.

         "ACQUISITIONS" means, collectively, the Pacific Acquisition and the PCI
Acquisition

         "ACQUISITION AGREEMENT" means, collectively, the Pacific Acquisition
Agreement and the PCI Acquisition Agreement.

         "AFFILIATE" means, with respect to any referenced Person, a Person (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such referenced Person, (ii)
which directly or indirectly through one or more intermediaries beneficially
owns or holds 10% or more of the combined voting power of the total Voting
Securities of such referenced Person or (iii) of which 10% or more of the
combined voting power of the total Voting Securities directly or indirectly
through one or more intermediaries is beneficially owned or held by such
referenced Person or a Subsidiary of such referenced Person. When used herein
without reference to any Person, Affiliate means an Affiliate of the Company.
For purposes of this definition, "control" when used with respect to any person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies

                                Page 58
<PAGE>

of such person, whether through the ownership of Voting Securities, by agreement
or otherwise; and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing. Notwithstanding the foregoing, for
purposes of this Agreement, Trust Company of the West and its Affiliates and any
other Purchaser and its Affiliates shall not be considered Affiliates of the
Company or any of its Subsidiaries.

         "AFFILIATE TRANSACTION" shall have the meaning set forth in SECTION
5.6.

         "AGREEMENT" means this Securities Purchase Agreement dated as of July
13, 1999, by and among the Company, the Subsidiary Guarantors named therein and
the Purchasers.

         "APPROVED ACQUISITION" shall mean any acquisition of substantially all
of the assets or a majority or more of the Capital Stock of any Person which
meets each of the following conditions: (i) the Holders shall have received such
Qualified Financial Information regarding the Person, operating assets or line
of business to be acquired (herein the "ACQUISITION TARGET") as the Holders may
reasonably request; (ii) the Holders shall have received all documents,
instruments, certificates and agreements to be executed, or exchanged by,
between or among the Company or any of its Subsidiaries and the Person or
Persons selling the Acquisition Target evidencing, governing or relating to such
Acquisition (the "ACQUISITION DOCUMENTS"); and (iii) upon its consummation, if
the Acquisition Target is not merged into the Company or any Subsidiary
Guarantor, the Company shall cause such Person to Guaranty the Notes on a senior
subordinated basis in accordance with SECTION 11.3 hereof.

         "APPROVED USE OF PROCEEDS" means any use of the proceeds of additional
Senior Indebtedness incurred pursuant to SECTION 5.5(a) for (i) Approved
Acquisitions, or (ii) any other use approved by the Required Holders, in their
sole discretion.

         "ASSET SALE" means (i) the sale, lease, conveyance or other disposition
of assets (including by way of a sale-and-leaseback) of the Company or any of
its Subsidiaries, other than sales of inventory in the ordinary course of
business consistent with past practice, sales of Cash or Cash Equivalents, trade
receivables or sales of any asset by the Company to a Subsidiary of the Company
or by a Subsidiary of the Company to another Subsidiary of the Company or (ii)
the issuance or sale of Equity Interests of any of the Subsidiaries of the
Company to any Person other than the Company, in the case of either clause (i)
or (ii) above, whether in a single transaction or a series of related
transactions.

         "ASSET SALE OFFER" shall have the meaning set forth in SECTION 5.8.

         "ASSET SALE DATE" shall have the meaning set forth in SECTION 5.8.

         "ASSET SALE OFFER PRICE" shall have the meaning set forth in SECTION
5.8.

         "AUDITED FINANCIAL STATEMENTS" shall have the meaning set forth in
SECTION 3.4.

         "BANKRUPTCY LAW" shall have the meaning set forth in SECTION 7.1.

                                Page 59
<PAGE>

         "BROCKWAY MORAN" means Brockway Moran & Partners Fund, L.P., a Delaware
limited partnership.

         "BUSINESS" shall have the meaning set forth in SECTION 3.16(b).

         "BUSINESS DAY" means any day which is not a Legal Holiday.

         "CAPITAL LEASE" means any lease of any property (whether real, personal
or mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.

         "CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock, including without
limitation all common stock and preferred stock.

         "CAPITALIZED LEASE OBLIGATION" means, with respect to any Person for
any period, any obligation of such Person to pay rent or other amounts under a
Capital Lease; the amount of such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.

         "CASH" means U.S. Legal Tender or U.S. Government Obligations having a
maturity of one year or less from the date of issuance thereof.

         "CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
commercial paper maturing in 180 days or less from the date issued and, at the
time of acquisition, having a rating of at least A-1 from Standard & Poor's
Corporation or at least P-1 from Moody's Investors Service, Inc.; (iii)
certificates of deposit or bankers' acceptances maturing within one year from
the date of issuance thereof issued by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $100,000,000 or
the equivalent thereof or assets of at least $1 billion or the equivalent
thereof and, in each case, not subject to setoff rights in favor of such bank;
(iv) time deposits maturing no more than thirty (30) days from the date of
creation thereof with commercial banks having membership in the Federal Deposit
Insurance Corporation in amounts not exceeding the lesser of $100,000 or the
maximum amount of insurance applicable to the aggregate amount of the Company's
deposits at such institution; (v) repurchase obligations with a term of not more
than ninety (90) days for underlying securities of the types described in clause
(i) above entered into with any commercial bank meeting the qualifications
specified in clause (iii) above; (vi) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state of the
United States or the District of Columbia, or by any political subdivision or
taxing authority of any such state or the District of Columbia, the securities
of which state, the District of Columbia, political subdivision or taxing
authority (as the case may be) are rated at least AAA by Standard and Poor's
Corporation or AAA by Moody's Investors Services, Inc.; and (vii) shares of
money market mutual or similar funds having assets in excess of $ 100,000,000
and that invest exclusively in assets satisfying the requirements of clauses (i)
through (vi) above.

                                Page 60
<PAGE>

         "CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) the failure of the Sponsors or one or more of their Affiliates to
maintain beneficial ownership, directly or indirectly, of Voting Securities of
the Company representing at least 51% of the combined voting power of all
Voting Securities of the Company, (b) any Person or two or more Persons acting
in concert shall have acquired beneficial ownership, directly or indirectly, or
shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or their
acquisition of control over, Voting Securities of the Company (or other
securities convertible into such Voting Securities) representing 33% or more of
the combined voting power of all Voting Securities of the Company, (c) the
failure of the Company to own, directly or indirectly, 100% of the combined
voting power of all Voting Securities of PCI, and (d) Continuing Directors shall
cease for any reason to constitute a majority of the members of the board of
directors of the Parent then in office. As used herein, "beneficial ownership"
shall have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934.

         "CHANGE OF CONTROL DATE" shall have the meaning provided in
SECTION 5.11(a).

         "CHANGE OF CONTROL OFFER" shall have the meaning provided in
SECTION 5.11(a).

         "CHANGE OF CONTROL OFFER PRICE" shall have the meaning provided in
SECTION 5.11(a).

         "CHANGE OF CONTROL PAYMENT DATE" shall have the meaning provided in
SECTION 5.11(b).

         "CHARTER DOCUMENTS" means the Articles of Organization, Articles of
Incorporation or Certificate of Incorporation and Bylaws, as amended or restated
(or both) to date, of any of the Companies, or any of its Subsidiaries, as
applicable.

         "CLOSING" shall have the meaning set forth in SECTION 1.2(b).

         "CLOSING DATE" shall have the meaning set forth in SECTION 1.2(b).

         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute or law thereto and regulations promulgated
thereunder.

         "COMMITMENT DATE" shall have the meaning set forth in SECTION 5.8.

         "COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.

         "COMMON STOCK" means the Common Stock, no par value, of the Company.

         "COMPANIES" means, collectively, the Company and its Subsidiaries,
including PCI.

                                Page 61

<PAGE>

         "COMPANY" has the meaning set forth in the introductory paragraph of
this Agreement.

         "CONSOLIDATED" or "CONSOLIDATED," when used with reference to any
accounting term, means the amount described by such accounting term, determined
on a consolidated basis in accordance with GAAP, after elimination of
intercompany items.

         "CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all capital
expenditures of the Company and its Subsidiaries on a consolidated basis for
such period, as determined in accordance with GAAP. The term "Consolidated
Capital Expenditures" shall not include capital expenditures in respect of the
reinvestment of proceeds derived from (i) Recovery Events or (ii) that portion
of all such expenditures the Company is permitted to reinvest or use for
replacement or restoration of assets from Net Proceeds of Asset Sales.

         "CONSOLIDATED EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes, (C) losses (or MINUS gains) on the sale
or disposition of assets outside the ordinary course of business, (D)
depreciation, amortization expense and other non-cash charges, all as determined
in accordance with GAAP, (E) amounts paid in respect of management fees to the
extent permitted hereunder and (F) other non-recurring add-backs as set forth
on SCHEDULE 10.1(b); PROVIDED, that, not withstanding the foregoing, in the
event such period includes the fourth fiscal quarter of 1998 and/or the first
fiscal quarter of 1999, Consolidated EBITDA for such fiscal quarters shall be
the amounts set forth on Schedule 10.1(b).

         "CONSOLIDATED INTEREST EXPENSE" means, for any period, all cash
interest expense of the Company and its Subsidiaries (including, without
limitation, the interest component under Capital Leases and the interest
component of deferred compensation under the Retention Bonus Plan), as
determined in accordance with GAAP.

         "CONSOLIDATED NET INCOME" means, for any period, Net Income after taxes
for such period of the Company and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.

         "CONSULTING AGREEMENT" shall have the meaning set forth in SECTION
3.25.

         "CONTINUING DIRECTORS" means either during any period of up to 24
consecutive months commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Parent (together with
any new director whose election by the Parent's board of directors or whose
nomination for election by the Parent's shareholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved).

         "CUSTODIAN" shall have the meaning set forth in SECTION 7.1.

         "DEFAULT" means any event which is, or after notice or passage of time
would be, an Event of Default.

                                       Page 62
<PAGE>

         "DEFAULT NOTICE" shall have the meaning set forth in SECTION 8.2(b).

         "DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof, in whole or in part, on or prior to
the Maturity Date.

         "DOCUMENTS" means this Agreement, the Warrant Agreement, the
Securities, the Registration Rights Agreement, and the Acquisition Agreements
collectively, or each of such documents singularly, and any documents or
instruments contemplated by or executed in connection with any of them or any of
the transactions contemplated hereby or thereby.

         "ENVIRONMENTAL CLAIM" means any claim, demand, action, investigation or
notice of violation of which the Companies, including any of their employees,
are aware, or notice (written or oral) by any Person alleging potential
liability (including, without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or release into the environment, of any
Material of Environmental Concern at any location, whether or not owned or
operated by any of the Companies, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.

         "ENVIRONMENTAL LAWS" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human health
or the environment, as now or may at any time be in effect during the term of
this Agreement.

         "EQUITY INTEREST" means (i) with respect to a corporation, any and all
Capital Stock or warrants, options or other rights to acquire Capital Stock (but
excluding any debt security which is convertible into, or exchangeable or
exercisable for, Capital Stock) and (ii) with respect to a partnership, limited
liability company or similar Person, any and all units, interests, rights to
purchase, warrants, options or other equivalents of, or other ownership
interests in any such Person.

         "ERISA" means The Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute or law thereto and
regulations promulgated thereunder.

         "EVENT" shall have the meaning set forth in the definition of "Debt
Incurrence Ratio."

         "EVENT DATE" shall have the meaning set forth in the definition of
"Debt Incurrence Ratio."

         "EVENT OF DEFAULT" shall have the meaning set forth in SECTION 7.1.

         "EXCESS NET PROCEEDS" shall have the meaning set forth in SECTION 5.8.

                                       Page 63
<PAGE>

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
from time to time, and any successor statute or law thereto.

         "FIXED CHARGE COVERAGE RATIO" means, as of the end of each fiscal
quarter of the Company, for the Company and its Subsidiaries on a consolidated
basis for the four consecutive quarters ending on such date, the ratio of (i)
Consolidated EBITDA for the applicable period MINUS Consolidated Capital
Expenditures for the applicable period to (ii) the sum of Consolidated Interest
Expense for the applicable period PLUS Scheduled Funded Debt Payments for the
applicable period PLUS cash Taxes paid during the applicable period. For
purposes hereof, the Consolidated Interest Expense and Scheduled Funded Debt
Payments components of the Fixed Charge Coverage Ratio for the first three
complete fiscal quarters to occur after the Closing Date, shall be determined by
annualizing such Consolidated Interest Expense and Scheduled Funded Debt
Payments components such that for the first complete fiscal quarter to occur
after the Closing Date such components would be multiplied by four (4), the
first two complete fiscal quarters would be multiplied by two (2) and the first
three complete fiscal quarters would be multiplied by one and one-third (1 1/3).

         "FUNDED DEBT" shall mean, with respect to the Company and its
Subsidiaries, on a consolidated basis, without duplication, (a) all Indebtedness
of such Person other than Indebtedness of the types referred to in clause (e),
(f), (i) and (l) of the definition of "Indebtedness" set forth in this SECTION
10.1, (b) all Funded Debt of others of the type referred to in clause (a) above
secured by (or for which the holder of such Funded Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (c) all obligations
under any Guaranty of such Person with respect to Funded Debt of the type
referred to in clause (a) above of another Person, (d) Funded Debt of the type
referred to in clause (a) above of any partnership or unincorporated joint
venture in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto, and (e) the full amount of all
obligations under the Notes, the Seller Notes and the Retention Bonus Plan
measured as of the maturity dates of such obligations and not on a present value
basis.

         "GAAP" means those generally accepted accounting principles and
practices which are recognized as such on the Closing Date by the American
Institute of Certified Public Accountants acting through its Accounting
Principles Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof and which are consistently applied for
all periods after the date hereof so as to property reflect the financial
conditions, and the results of operations, shareholders' equity and cash flows,
of the Company and its consolidated subsidiaries.

         "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

         "GUARANTY" means, with respect to any Person, any contract, agreement
or understanding of such Person pursuant to which such Person guarantees, or in
effect guarantees, any Indebtedness of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, including without limitation:

                                       Page 64
<PAGE>

         (a)      agreements to purchase such Indebtedness or any property
constituting security therefor;

         (b)      agreements to advance or supply funds (i) for the purchase or
payment of such Indebtedness, or (ii) to maintain working capital, equity
capital or other balance sheet conditions;

         (c)      agreements to purchase property, securities or services
primarily for the purpose of assuring the holder of such Indebtedness of the
ability of the primary obligor to make payment of the Indebtedness;

         (d)      letters or agreements commonly known as "comfort" or
"keepwell" letters or agreements;

         (e)      all obligations of such Person or Persons, contingent or
otherwise, in respect of any documentary letters of credit; or

         (f)      any other agreements to assure the holder of the Indebtedness
of the primary obligor against loss in respect thereof;

except that "guaranty" shall not include (i) the endorsement by a Person in the
ordinary course of business of negotiable instruments or documents for deposit
or collection, or (ii) indemnities given by the Company or its Subsidiaries in
brokerage, management and other agreements in the ordinary course of business
substantially consistent with past practices.

         "HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.

         "HOLDER" or "HOLDERS" means each Purchaser (so long as it holds any
Securities) and any other holder of any of the Securities.

         "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated pursuant thereto.

         "INDEBTEDNESS" means, with respect to any Person, the aggregate amount
of, without duplication, the following: (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person
(other than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all obligations
of such Person issued or assumed as the deferred purchase price of Property or
services purchased by such Person (other than Trade Payables due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities

                                       Page 65
<PAGE>

agreements, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all obligations of such
Person with respect to Indebtedness of another Person, including Guaranties,
(h) all Capitalized Lease Obligations, (i) all Hedging Obligations of such
Person, (j) the maximum amount of all standby letters of credit issued or
bankers' acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and
which by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product, (m) the Indebtedness of any partnership
or unincorporated joint venture in which such Person is a general partner or
a joint venturer, and (n) with respect to the Company, all obligations with
respect to the Retention Bonus Plan.

         "INDEFINITE BLOCKAGE PERIOD" has the meaning set forth in SECTION
8.2(a).

         "INDEMNIFIED PARTIES" has the meaning set forth in SECTION 1.8.

         "INSOLVENCY" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.

         "INSPECTORS" shall have the meaning set forth in SECTION 5.25.

         "INTEREST COVERAGE RATIO" means, with respect to the Company and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Company and its Subsidiaries, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period. Notwithstanding the foregoing, for purposes of calculating the
Interest Coverage Ratio of the Company and its Subsidiaries for the first three
complete fiscal quarters to occur after the Closing Date, Consolidated Interest
Expense shall be determined by annualizing the components thereof such that for
the first complete fiscal quarter to occur after the Closing Date such
components would be multiplied by four (4), the first two complete fiscal
quarters would be multiplied by two (2) and the first three complete fiscal
quarters would be multiplied by one and one-third (1-1/3).

         "INVESTMENT" means, with respect to any Person, any direct, indirect or
beneficial investment by such Person, whether by means of share purchase, loan,
advance, extension of credit (other than accounts receivable and trade credits
arising in the ordinary course of business), capital contribution or otherwise,
in or to any other Person, the guaranty by such Person of any Indebtedness of
any other Person or the subordination of any claim against any other Person to
other Indebtedness of such other Person.

         "IPO" means a sale by the Company of Common Stock in an underwritten
(firm commitment) public offering registered under the Securities Act of 1933,
with gross proceeds to the Company of

                                       Page 66

<PAGE>

         not less than $30,000,000, resulting in the listing of the Company's
         Common Stock on a nationally recognized stock exchange, including
         without limitation, the NASDAQ National Market System.

                  "JUNIOR SECURITIES" means (a) any shares of Capital Stock of
         the Company, or its successor, as reorganized, or other Equity
         Interests of the Company or any other Person provided for by a plan of
         reorganization, (b) any warrants, options or other rights to acquire
         shares of Capital Stock of the Company, or its successor, as
         reorganized, or other Equity Interests of the Company or any other
         Person provided for by a plan of reorganization, and (c) any debt
         securities of the Company, or its successor, as reorganized, or any
         other Person provided for by a plan of reorganization, if (i) payment
         of such debt securities is subject to subordination provisions no less
         favorable to the holders of Senior Indebtedness than the provisions of
         SECTION 8 and (ii) scheduled payments of the principal amount of the
         Indebtedness evidenced by such debt securities are not required prior
         to the maturity date of the Senior Indebtedness.

                  "LAWS" means, as to any Person, any law, statute, ordinance,
         decree, requirement, order, judgment, rule, regulation (or official
         interpretation of any of the foregoing) of, and the terms of any
         license of permit issued by, any Governmental Authority which is
         applicable to such Person.

                  "LEGAL HOLIDAY" means a Saturday, Sunday or day on which banks
         and trust companies in the principal place of business of the Company
         or in the State of New York are not required to be open.

                  "LEVERAGE RATIO" means, with respect to the Company and its
         Subsidiaries on a consolidated basis for the twelve month period ending
         on the last day of any fiscal quarter, the ratio of (a) Funded Debt of
         the Company and its Subsidiaries on a consolidated basis on the last
         day of such period to (b) Consolidated EBITDA for such twelve month
         period.

                  "LIEN" means any mortgage, pledge, lien, encumbrance, charge
         or adverse claim affecting title or resulting in a charge against real
         or personal property, or security interest of any kind (including,
         without limitation, any conditional sale or other title retention
         agreement, any lease in the nature thereof, any option or other
         agreement to sell and any filing of any financing statement under
         the Uniform Commercial Code (or equivalent statutes) of any
         jurisdiction).

                  "LOSSES" shall have the meaning set forth in SECTION 1.8.

                  "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
         on (a) the business, operations, property, condition (financial or
         otherwise) of the Company and its Subsidiaries taken as a whole, (b)
         the ability of the Company or any Subsidiary Guarantor to perform its
         obligations, when such obligations are required to be performed, under
         this Agreement, any of the Notes or any other Document to which it is a
         party or (c) the validity or enforceability of this Agreement, any of
         the Notes or any of the other Documents or the rights or remedies
         of the Holders hereunder or thereunder.

                  "MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline
         or petroleum (including crude oil or any fraction thereof) or petroleum
         products or any hazardous or toxic substances, materials or

                                       Page 67
<PAGE>

         wastes, defined or regulated as such in or under any Environmental Law,
         including, without limitation, friable asbestos, polychlorinated
         biphenyls and urea-formaldehyde insulation.

                  "MATURITY DATE" means January 13, 2006; PROVIDED that, Company
         may, by written notice to the Holders delivered not later than December
         13, 2005, extend the maturity date to a date which is in no event later
         than July 13, 2009, and is at least six months prior to (1) the date on
         which any principal payments are first due on the Seller Notes and (ii)
         the date on which any disbursements (other than an Interim Bonus
         Payment Date, as defined in the Retention Bonus Plan) are required to
         be made with respect to the Retention Bonus Plan pursuant to the terms
         thereof.

                  "MULTIEMPLOYER PLAN" shall mean a Plan which is a
         multiemployer plan as defined in Section 4001(a)(3) of ERISA.

                  "NET INCOME" of any Person shall mean the net income (loss) of
         such Person, determined in accordance with GAAP, excluding, however,
         any gain or loss realized upon the sale or other disposition
         (including, without limitation, dispositions pursuant to sale and
         leaseback transactions) of any real property or equipment of such
         Person which is not sold or otherwise disposed of in the ordinary
         course of business and any gain or loss realized upon the sale or other
         disposition of any capital stock of such Person or a subsidiary of such
         Person and any other extraordinary gain or loss realized over the
         relevant period.

                  "NET PROCEEDS" means, with respect to any sale or other
         disposition of any assets (including in connection with any sale and
         leaseback transaction), (i) cash received by the Company or any of its
         Subsidiaries from such sale or other disposition and (ii) promissory
         notes received by the Company or any of its Subsidiaries from such sale
         or other disposition upon the liquidation or conversion of such notes
         into cash, in each case after (a) provision for all Taxes measured by
         or resulting from such sale or other disposition calculated as if the
         Company and its Subsidiaries were a separate consolidated group for tax
         purposes and assuming such sale or other disposition of such asset was
         the only transaction in which the Company and its Subsidiaries engaged
         during the relevant period without giving effect to any carryforwards,
         carrybacks or credits, (b) payment of all brokerage commissions and
         other fees and expenses related to such sale or other disposition, (c)
         amounts applied to repayment of Indebtedness (other than Senior
         Indebtedness) secured by a Lien on the asset sold or disposed and (d)
         amounts escrowed or booked as a reserve against liabilities associated
         with such sale or disposition.

                  "NOTE REGISTER" shall have the meaning set forth in SECTION
         1.3.

                  "NOTES" shall have the meaning set forth in SECTION 1.1.

                  "NOTICE OF REDEMPTION" shall have the meaning set forth in
         SECTION 6.3.

                  "OBLIGATIONS" means, with reference to any Indebtedness, any
         principal of, premium, interest, penalties, fees and other liabilities
         payable from time to time and obligations performable under the
         documentation governing such Indebtedness.

                                       Page 68
<PAGE>

                  "OFFICER" of a Person mean its Chairman of the Board, Chief
         Executive Officer, President, Treasurer, any Vice President, Secretary
         or any Assistant Secretary.

                  "OPERATING LEASE" means any lease other than a Capital Lease.

                  "OPINION OF COUNSEL" means a written opinion from legal
         counsel who is reasonably acceptable to each of the Purchasers. Unless
         otherwise required by any of the Purchasers, the legal counsel may be
         an employee of or counsel to the Company. For purposes of Section 4.4,
         "Opinion of Counsel" means a written opinion from legal counsel who is
         reasonably acceptable to the Company and who may be an employee of or
         counsel to any Purchaser or Holder.

                  "OTHER CAPITALIZED COSTS" means, for any fiscal period, the
         gross amount capitalized for long term assets (net of cash received in
         respect of long term assets), other than (a) Consolidated Capital
         Expenditures and (b) any fees and expenses capitalized with respect to
         the Related Transactions, all in accordance with GAAP.

          "OTHER DEFAULT" shall have the meaning set forth in SECTION 8.2(b).

                  "PACIFIC ACQUISITION" means the acquisition by Parent of
         ninety percent (90%) of the issued and outstanding Capital Stock of
         Company and the recapitalization related thereto pursuant to the
         Pacific Acquisition Agreement.

                  "PACIFIC ACQUISITION AGREEMENT" means (x) that certain
         Recapitalization and Stock Purchase Agreement dated as of December 16,
         1998, by and among Parent, Pacific Circuits and Lewis 0. Coley, III,
         The Colleen Beckdolt Trust No. 2, and The Ian Lewis Coley Trust No. 2.
         and all amendments, modifications, supplements and waivers thereto, and
         (y) all exhibits, schedules and any other documents, instruments and
         agreements delivered in connection with, or pursuant to, such agreement
         or the transactions contemplated thereby.

                  "PARENT" means Circuit Holdings LLC, a Delaware limited
         liability company.

                  "PAYMENT BLOCKAGE PERIOD" shall have the meaning set forth in
         SECTION 8.2(B).

                  "PAYMENT DEFAULT" shall have the meaning set forth in SECTION
         8.2(a).

                  "PAYMENT NOTICE" shall have the meaning set forth in SECTION
         8.2(b).

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation
         established pursuant to Subtitle A of Title IV of ERISA.

                  "PCI" means Power Circuits, Inc., a California corporation.

                  "PCI ACQUISITION" means the acquisition of PCI pursuant to the
         PCI Acquisition Agreement together with the contribution of Power
         Holdings to Parent, the contribution of Power Holdings to Company and
         the dissolution of Power Holdings.

                                       Page 69
<PAGE>

                  "PCI ACQUISITION AGREEMENT" means (x) that certain Agreement
         and Plan of Merger dated June 11, 1999 among PCI, its stockholders,
         Brockway Moran & Partners, Inc., Thayer Equity Investors IV, LLC, Power
         Holdings, LLC and Power Acquisition Sub., Inc., and all amendments,
         modifications, supplements and waivers thereto, and (y) all exhibits,
         schedules and any other documents, instruments and agreements delivered
         in connection with, or pursuant to, such agreement or the transactions
         contemplated thereby.

                  "PERMITTED INVESTMENT" means (a) Investments in cash and Cash
         Equivalents, (b) loans and advances to officers, directors, employees
         and Affiliates of the Company not to exceed $1,150,000 in the
         aggregate at any time outstanding, (c) Investments by the Company and
         its Subsidiaries in and to the Company and its Wholly-Owned
         Subsidiaries to the extent not otherwise prohibited pursuant to
         SECTIONS 5.4, 5.5 AND 5.14, (d) Investments existing on the Closing
         Date and set forth on Schedule 10.1 (c), and (e) additional loan
         advances and/or investments of a nature not contemplated by the
         foregoing clauses hereof, PROVIDED that such loans, advances and/or
         investments made pursuant to this clause (e) shall not exceed an
         aggregate amount of $115,000 at any time.

                  "PERMITTED LIENS" means with respect to any Person: (i) Liens
         incurred or deposits made by such Person under worker's compensation
         laws, unemployment insurance laws or similar legislation, or Liens
         incurred or good faith deposits made in connection with bids, tenders,
         contracts (other than for the payment of Indebtedness) or leases to
         which such Person is a party, or Liens incurred or deposits made to
         secure public or statutory obligations of such Person or deposits of
         cash or United States Government bonds made to secure the performance
         of statutory obligations, surety, stay, customs and appeal bonds to
         which such Person is a party, or deposits made as security for
         contested taxes or import duties or for the payment of rent, in each
         case in the ordinary course of business, (ii) Liens imposed by law,
         such as carriers, warehousemen's, materialmen's and mechanics' Liens or
         Liens arising out of judgments or awards against such Person with
         respect to which such Person shall then be prosecuting appeal or other
         proceedings for review and which do not constitute an Event of Default
         under SECTION 7.1 (f); provided that, in each case, such appeal or
         other proceeding is being made in good faith and with respect to which
         reserves or other appropriate provisions are being made in accordance
         with GAAP; (iii) Liens securing the payment of Taxes which are not yet
         subject to penalties for non-payment or which are being contested in
         good faith and by appropriate proceedings, with respect to which
         reserves or other appropriate provisions are being maintained in
         accordance with GAAP; (iv) Liens in favor of issuers of surety bonds or
         letters of credit issued pursuant to the request of and for the account
         of such Person in the ordinary course of its business; (v) minor survey
         exceptions, encumbrances, easements or reservations of, or rights of
         others for, rights of way, sewers, electric lines, telegraph and
         telephone lines and other similar purposes, or zoning or other
         restrictions as to the use of real properties or Liens incidental to
         the conduct of the business of such Person or to the ownership of its
         properties which were not incurred in connection with Indebtedness or
         other extensions of credit and which do not in the aggregate materially
         adversely affect the value of said properties or materially impair
         their use in the operation of the business of such Person; (vi) Liens
         existing on the date hereof and listed on Schedule 10.1 (a) hereto or,
         if not listed, will be terminated within 60 days after the Closing
         Date; (vii) Liens in favor of any holder of Senior Indebtedness
         incurred pursuant to the Senior Credit Agreement and refinancings
         thereof constituting Permitted Refinancing Indebtedness; and (viii)
         Liens securing Purchase Money Indebtedness incurred in accordance with
         Section 5.5(b)(vi).

                                       Page 70
<PAGE>

                  "PERMITTED REFINANCING INDEBTEDNESS" means, with respect to
         any Person, any Indebtedness of such Person issued in exchange for, or
         the net proceeds of which are used to extend, refinance, renew,
         replace, defease or refund other Indebtedness of such Person; provided
         that: (1) the principal amount of such Indebtedness does not exceed
         the principal amount of the Indebtedness so extended, refinanced,
         renewed, replaced, defeased or refunded or, in the case of Indebtedness
         being refinanced that was issued with an original issue discount, the
         accreted value thereof (as determined in accordance with GAAP) at the
         time of such refinancing, renewal, replacement, defeasance or refunding
         (plus the amount of reasonable expenses incurred in connection
         therewith); (2) such Indebtedness has a Weighted Average Life to
         Maturity equal to or greater than the Weighted Average Life to Maturity
         of the Indebtedness being extended, refinanced, renewed, replaced,
         defeased or refunded; (3) such Indebtedness is subordinated in right of
         payment to the Notes on terms at least as favorable to the holders of
         Notes as those, if any, contained in the documentation governing the
         Indebtedness being extended, refinanced, renewed, replaced, defeased or
         refunded; (4) with respect to any Indebtedness other than Indebtedness
         owing pursuant to or in connection with the Senior Credit Agreement,
         the annual interest rate with respect to such Indebtedness (x) if it is
         a fixed rate, is less than or equal to not more than two percent (2%)
         more than, and is payable no more frequently than, that of the
         Indebtedness being extended, refinanced, renewed, replaced, defeased or
         refunded and (y) if it is a variable rate, the index used for the
         calculation of the annual interest rate is substantially similar to and
         the margin applied to such index is less than or equal to not more than
         two percent (2%) more than, and such interest is payable no more
         frequently than, that of the Indebtedness being extended, refinanced,
         renewed, replaced, defeased or refunded, (5) with respect to any
         Indebtedness owing pursuant to or in connection with the Senior Credit
         Agreement, the annual interest rate with respect to such Indebtedness
         (x) if it is a fixed rate, is less than or equal to not more than four
         percent (4%) per annum more than, and such interest is payable no more
         frequently than, that of the Indebtedness being extended, refinanced,
         renewed, replaced, defeased or refunded and (y) if it is a variable
         rate, the index used for the calculation of the annual interest rate is
         substantially similar to and the margin applied to such index is IS
         less than or equal to not more than four percent (4%) per annum more
         than, and such interest is payable no more frequently than, that of the
         Indebtedness being extended, refinanced, renewed, replaced, defeased or
         refunded; (6) such Indebtedness is incurred by such Person who is an
         obligor on the Indebtedness being extended, refinanced, renewed,
         replaced, defeased or refunded; and (7) such Indebtedness satisfies the
         provisions of the subsection of Section 5.5(b) pursuant to which the
         Indebtedness being refinanced was incurred.

                  "PERSON" means an individual, partnership, corporation,
         limited liability company, trust or unincorporated organization or a
         government or agency or political subdivision thereof.

                  "PLAN" shall mean, at any particular time, any employee
         benefit plan which is covered by Title IV of ERISA and in respect of
         which the Company or a Commonly Controlled Entity is (or, if such plan
         were terminated at such time, would under Section 4069 of ERISA be
         deemed to be) an "employer" as defined in Section 3(5) of ERISA.

                  "PLAN OF LIQUIDATION" means, with respect to any Person, a
         plan that provides for, contemplates or the effectuation of which is
         preceded or accompanied by (whether or not substantially
         contemporaneously, in phases or otherwise) (i) the sale, lease,
         conveyance or other

                                       Page 71
<PAGE>

disposition of all or substantially all of the assets of such person otherwise
than as an entirety or substantially as an entirety and (ii) the distribution of
all or substantially all of the proceeds of such sale, lease, conveyance or
other disposition and all or substantially all of the remaining assets of such
person to holders of Capital Stock of such person.

         "POWER HOLDINGS" means Power Holdings, LLC, a Delaware limited
liability company.

         "PRINCIPAL" of any Note includes premium, if any.

         "PRINCIPAL OFFICER" shall mean, as to (a) the Company, the President
and the Chief Executive Officer or the Chief Financial Officer or (b) any
Subsidiary of the Company, any duly authorized officer thereof.

         "PRO FORMA" shall have the meaning set forth in SECTION 3.4(a).

         "PRODUCTIVE ASSETS" means assets used in the same type of business
engaged in by the Company immediately prior to the date hereof.

         "PROJECTIONS" shall have the meaning set forth in SECTION 3.4(a).

         "PROPERTIES" shall have the meaning set forth in SECTION 3.16(a).

         "PROPERTY" or "PROPERTY" means any assets or property of any kind or
nature whatsoever, real, personal or mixed (including fixtures), whether
tangible or intangible, provided that the terms "Property" or "property," when
used with respect to any Person, shall not include securities issued by such.

         "PURCHASE MONEY INDEBTEDNESS" means Indebtedness incurred solely for
the purchase or financing of fixed or capital assets in the ordinary course of
business (other than assets owned by the Company or any of its Subsidiaries on
the Closing Date) directly related to the business of the Company on the Closing
Date provided that (1)(A) such Indebtedness is secured by purchase money Liens
on such assets and (B) such Liens do not extend to or cover any other asset of
the Company or any of its Subsidiaries, (2) such Liens secure the obligation to
pay the purchase price of such asset and interest thereon only, (3) such
Indebtedness is incurred within nine months after the acquisition of such assets
(with recourse only against such assets) and (4) the fair market value of the
assets so secured is at least equal to the amount of Indebtedness secured
thereby.

         "PURCHASERS" means the purchasers on the signature pages hereto.

         "QUALIFIED FINANCIAL INFORMATION" means, with respect to any
Acquisition Target, (a) financial information prepared in a manner consistent
with the financial statements required by clauses (a), (b) and (c) of SECTION
5.2 for the most recently completed fiscal year of such Acquisition Target, or
(b) if requested by Required Holders, such other reports and reviews prepared by
a nationally recognized independent firm of certified public accountants
acceptable to Required Holders.

                                       Page 72

<PAGE>

         "RECOVERY EVENT" shall mean the receipt by the Company or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.

         "REDEMPTION DATE" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption pursuant to this Agreement and the
Notes.

         "REDEMPTION PRICE" means, when used with respect to any Note to be
redeemed, the price fixed for such redemption pursuant to this Agreement and the
Notes.

         "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, substantially in the form of ANNEX C attached hereto, among the
Company, and the Purchasers.

         "RELATED TRANSACTIONS" means the PCI Acquisition, the execution and
delivery of the Documents, the funding of the loans under the Senior Credit
Agreement on the Closing Date, the funding of the Notes on the Closing Date and
the payment of all fees, costs and expenses associated with all of the
foregoing.

         "REORGANIZATION" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.

         "REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.

         "REQUIRED HOLDERS" means, on any date of determination, Holders of at
least a majority in aggregate principal amount of the outstanding Notes on such
date of determination.

         "REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

         "RESTRICTED PAYMENTS" shall have the meaning set forth in SECTION 5.4.

         "RETENTION BONUS PLAN" shall mean that certain plan of the Company
dated as of December 15, 1998 for the purpose of providing certain designated
employees of the Company with an ongoing incentive to remain in the employ of
the Company as implemented pursuant to that certain Recapitalization and Stock
Purchase Agreement dated as of December 15, 1998 among the Parent, the Company
and certain other parties thereto.

         "RULE 144" means Rule 144 as promulgated by the SEC under the
Securities Act, as amended from time to time, and any successor rule or
regulation thereto.

                                       Page 73

<PAGE>

         "RULE 144A" means Rule 144A as promulgated by the SEC under the
Securities Act, as amended from time to time, and any successor rule or
regulation thereto.

         "SCHEDULED FUNDED DEBT PAYMENTS" shall mean, as of any date of
determination for the Company and its Subsidiaries, the sum of all scheduled
payments of principal on Funded Debt for the applied period ending on the date
of determination (including payments due on Capitalized Lease Obligations during
the applicable period ending on the date of determination).

         "SEC" means the Securities and Exchange Commission and any successor
thereto.

         "SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute or law thereto.

         "SECURITY", or "SECURITIES" shall have the meaning set forth in
SECTION 1.1.

         "SECURITY AGREEMENTS" means the Security Agreements as defined in the
Senior Credit Agreement.

         "SECURITY DOCUMENT" means all instruments, documents and agreements
executed by or on behalf of the Company or any of its Subsidiaries to guaranty
or provide collateral security with respect to the Obligations and other
transactions contemplated by the Senior Credit Agreement, including, without
limitation, each of the Security Documents (as defined in the Senior Credit
Agreement) and all instruments, documents and agreements executed pursuant to
the terms of the foregoing, including, without limitation, those executed
pursuant to the Security Agreements.

         "SELLER NOTES" shall mean collectively, (a) that certain subordinated
note dated December 15, 1998 in the amount of $51,043.65 from the Company to The
Colleen Beckdolt Trust No. 2, (b) that certain Subordinated Note dated December
15, 1998 in the amount of $51,043.65 from the Company to The Ian Lewis Coley
Trust No. 2, (c) that certain subordinated note dated December 15, 1998 in the
amount of $3,547,912.70 from the Company to Lewis 0. Coley, III, and (d) that
certain subordinated note dated December 15, 1998 in the amount of $350,000.00
from the Company.

         "SENIOR BANK" means (i) the lender (if the sole lender) or the agent
(if acting on behalf of lenders) under the Senior Credit Agreement and, with
respect to its successors, such persons who have been identified in a written
notice to the Purchasers as being successors, or (ii) if there is no agent,
those lenders having the ability to bind all lenders under the Senior Credit
Agreement.

         "SENIOR CREDIT AGREEMENT" means that certain Credit Agreement dated as
of date hereof by and among the Company, as borrower and certain of its
Subsidiaries as guarantors, the lenders party thereto and First Union National
Bank, as Administrative Agent, Dresdner Bank AG, New York and Grand Cayman
Branches, as Syndication Agent, SunTrust Bank, Atlanta, as Documentation Agent
and First Union Capital Markets Corp., as Lead Arranger, as amended, modified or
supplemented from time to time and pursuant to which Permitted Refinancing
Indebtedness is incurred with respect thereto.

                                       Page 74

<PAGE>

         "SENIOR FUNDED DEBT" shall mean any Indebtedness not specifically
subordinated in right of payment to the Senior Indebtedness.

         "SENIOR INDEBTEDNESS" means, with respect to the Company or any
Subsidiary Guarantor, the principal of, premium, if any, and interest
(including interest accruing after the filing of a petition for bankruptcy or
for reorganization relating to the Company regardless of whether a claim for
post-filing interest is allowed) on the loans made to the Company pursuant to
the Senior Credit Agreement and reimbursement obligations in respect of
letters of credit issued pursuant to the Senior Credit Agreement and (b) any
other obligations of the Company arising out of or in connection with the
Senior Credit Agreement or any of the Security Documents (including, without
limitation, fees, expenses and indemnities and any Hedging Obligations to the
extent incurred under hedging agreements required by the Senior Credit
Agreement as in effect on the date hereof, which Hedging Obligations shall be
valued, as of any date of determination, at the termination value payable by
the Company if such agreement were terminated on such date; provided,
however, Senior Indebtedness shall not include (i) in the case of the
obligation of the Company in respect of each Note, the obligation of the
Company in respect of other Notes, (ii) Indebtedness of the Company to a
Subsidiary or an Affiliate of the Company, (iii) Indebtedness to, or
guaranteed on behalf of, any individual shareholder, director, officer or
employee of the Company or any of the Company's or such Subsidiary
Guarantor's (as the case may be) Subsidiaries (including, without limitation,
amounts owed for compensation), (iv) Indebtedness represented by Capitalized
Lease Obligations or Purchase Money Indebtedness, (v) Trade Payables and
other Indebtedness and other amounts incurred in connection with obtaining
goods, materials or services, (vi) Indebtedness incurred in violation of the
provisions of SECTION 5.5 or 5.14 hereof and (vii) any Indebtedness of the
Company or any Subsidiary Guarantor, as the case may be, which by its terms
is unsecured.

         "SENIOR LEVERAGE RATIO" means, with respect to the Company and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter or month, as applicable, the ratio of (a) Senior
Funded Debt of the Company and its Subsidiaries on a consolidated basis on the
last day of such period to (b) Consolidated EBITDA for such twelve month period.

         "SENIOR REVOLVER DEBT" means the Indebtedness of the Company pursuant
to a senior revolving credit facility under the Senior Credit Agreement
including any swingline facility related thereto.

         "SENIOR TERM DEBT" means the Indebtedness of the Company pursuant to a
senior term facilities under the Senior Credit Agreement.

         "SHAREHOLDERS AGREEMENT" means that certain Amended and Restated
Shareholders Agreement dated as of July 13, 1999, among the Company, the Parent,
Lewis 0. Coley, III and those purchasers of Common Stock set forth on Schedule I
attached thereto, as amended, restated, modified or supplemented from time to
time.

         "SINGLE EMPLOYER PLAN" shall mean any Plan which is not a Multiemployer
Plan.

                                       Page 75

<PAGE>

         "SOLVENT" means, with respect to any Person on a particular date, that
on such date, (a) the fair saleable value of the assets of such Person exceeds
its probable liability on its debts as they become absolute and mature; (b) such
Person is able to pay its debts or liabilities as such debts and liabilities
mature; and (c) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's assets
would constitute an unreasonably small capital.

         "SPONSORS" means a collective reference to each of Brockway Moran and
Thayer.

         "STANDSTILL PERIOD" shall have the meaning set forth in SECTION 8.2(c).

         "SUBSIDIARY" means, with respect to any Person, (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is, at the date of determination, directly or indirectly,
owned by such Person, by one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person or (ii) a partnership in
which such Person or a Subsidiary of such Person is, at the date of
determination, a general or limited partner of such partnership, but, in the
case of a limited partner, only if such Person or its Subsidiary is entitled to
receive more than 50% of the assets of such partnership upon its dissolution, or
(iii) any limited liability company or any other Person (other than a
corporation or a partnership) in which such Person, a Subsidiary of such Person
or such Person and one or more Subsidiaries of such Person, directly or
indirectly, at the date of determination, has (a) at least a majority ownership
interest or (b) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.

         "SUBSIDIARY GUARANTOR" means PCI.

         "SUBSIDIARY GUARANTY" shall have the meaning set forth in SECTION 11.1
(a).

         "SUPPLEMENTAL DATA" shall have the meaning set forth in SECTION 3.4(d).

         "SURVIVING PERSON" shall have the meaning set forth in SECTION
5.15(b)(1).

         "TAXES" shall mean all Federal, state, local and foreign taxes, and
other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto.

         "TAX RETURNS" shall mean all Federal, state, local and foreign tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax Return relating to Taxes.

         "TCW GROUP MEMBER" means any Affiliate of Trust Company of the West or
any Holder for whom Trust Company of the West or any Affiliate of Trust Company
of the West acts as an Account Manager.

         "TCW REPRESENTATIVE" shall have the meaning set forth in SECTION 5.25.

                                       Page 76
<PAGE>

         "THAYER" means collectively, Thayer Equity Investors III, L.P. and
Thayer Equity Investors IV, L.P., each a Delaware limited partnership.

         "TRADE PAYABLES" means, with respect to any Person, accounts payable
and other similar accrued current liabilities in respect of obligations or
indebtedness to trade creditors created, assumed or guaranteed by such Person or
any of its Subsidiaries in the ordinary course of business in connection with
the obtaining of property or services.

         "U.S. GOVERNMENT OBLIGATIONS" means direct obligations of, or
obligations guaranteed as to timely payment by, the United States of America for
the payment (with respect to interest as well as principal) of which obligation
or guarantee the full faith and credit of the United States of America is
pledged.

         "U.S. LEGAL TENDER" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.

         "VOTING SECURITIES" means any class of Equity Interests of a Person
pursuant to which the holders thereof have, at the time of determination, the
general voting power under ordinary circumstances to vote for the election of
directors, managers, trustees or general partners of such Person (irrespective
of whether or not at the time any other class or classes will have or might have
voting power by reason of the happening of any contingency).

         "WARRANT AGREEMENT" means that certain Warrant Agreement dated of even
date herewith by and among the Company and the Purchasers, in the form attached
hereto as ANNEX B.

         "WARRANT REGISTER" shall have the meaning set forth in SECTION 1.3.

         "WARRANT SHARES" shall have the meaning set forth in SECTION 1.1.

         "WARRANT SHARES REGISTER" shall have the meaning set forth in SECTION
1.3.

         "WARRANTS" shall have the meaning set forth in SECTION 1.1.

         "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.

         "WHOLLY-OWNED" when used in reference to any subsidiary of any Person,
means that all outstanding Equity Interests (other than director's qualifying
shares) in such subsidiary are beneficially owned solely by such Person or one
or more other Wholly-Owned subsidiaries of such Person.

                                  Page 77
<PAGE>

         "YEAR 2000 COMPLIANT" means, as to any computer application used by the
Company or any Subsidiary of the Company, that such computer application will
not be negatively impacted by the Year 2000 Problem and that such computer
application is reasonably expected on a timely basis to be able to properly
recognize and perform date-sensitive functions for all dates before and after
January 1, 2000.

         "YEAR 2000 PROBLEM" means the risk that computer applications used by
the Company or any of its Subsidiaries, may be unable to properly recognize and
perform date-sensitive functions involving certain dates prior to and after
January 1, 2000.

10.2     RULES OF CONSTRUCTION

         Unless the context otherwise requires:

         (a) a term has the meaning assigned to it;

         (b) "or" is not exclusive;

         (c) words in the singular include the plural, and words in the plural
include the singular;

         (d) provisions apply to successive events and transactions;

         (e) the words "including," "includes" and "include" shall be deemed to
be followed by the words "without limitation";

         (f) "hereto", "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision; and

         (g) references to "SECTIONS", "subsections", "EXHIBITS" and "SCHEDULES"
shall be to SECTIONS, subsections, EXHIBITS and SCHEDULES, respectively, of or
to this Agreement unless otherwise specifically provided.

10.3     ACCOUNTING TERMS

         Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Company delivered to the Holders;
PROVIDED that, if the Company notifies the Holder that it wishes to amend any
covenant in SECTION 5.9 OR 5.12 to eliminate the effect of any change in GAAP on
the operation of such covenant (or if the Holders notify the Company that the
Required Holders wish to amend SECTION 5.9 OR 5.12 for such purpose), then the
Company's compliance with such covenant shall be determined on the basis of GAAP
in effect immediately before the relevant change in GAAP became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Company and the Required Holders.

                                  Page 78
<PAGE>

         The Company shall deliver to each Holder at the same time as the
delivery of any annual or quarterly financial statements given in accordance
with the provisions of SECTION 5.12, (i) a description in reasonable detail of
any material change in the application of accounting principles employed in the
preparation of such financial statements from those applied in the most recently
preceding quarterly or annual financial statements as to which no objection
shall have been made in accordance with the provisions above and (ii) a
reasonable estimate of the effect on the financial statements on account of such
changes in application.

SECTION 11. SUBSIDIARY GUARANTY

11.1     GUARANTY

         (a) In consideration of good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, each of the Subsidiary
Guarantors hereby irrevocably and unconditionally guarantees (each a "SUBSIDIARY
GUARANTY") to each Holder of a Note, irrespective of the validity and
enforceability of this Agreement, the Notes or the obligations of the Company
under this Agreement or the Notes, that: (w) the principal and premium (if any)
of and interest on the Notes will be paid in full when due, whether at the
maturity or interest payment date, by acceleration, call for redemption, upon a
Change of Control, Asset Sale Offer, or otherwise; (x) all other obligations of
the Company to the Holders under this Agreement or the Notes will be promptly
paid in full or performed, all in accordance with the terms of this Agreement
and the Notes; and (y) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, they will be paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at maturity, by acceleration, call for redemption, upon an Asset Sale Offer,
Change of Control or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Guarantor shall be obligated to pay the
same before failure so to pay becomes an Event of Default.

         (b) Each Subsidiary Guarantor hereby agrees that its obligations with
regard to this Subsidiary Guaranty shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Agreement, the
absence of any action to enforce the same, any delays in obtaining or realizing
upon or failures to obtain or realize upon collateral, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstances that might otherwise constitute a legal or equitable discharge
or defense of a guarantor. Each Subsidiary Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company or right to require the prior disposition of the assets of
the Company to meet its obligations, protest, notice and all demands whatsoever
and covenants that this Subsidiary Guaranty will not be discharged except by
complete performance of the obligations contained in the Notes and this
Agreement.

         (c) If any Holder is required by any court or otherwise to return to
either the Company or any Subsidiary Guarantor, or any custodian, trustee, or
similar official acting in relation to either the Company or such Subsidiary
Guarantor, any amount paid by either the Company or such Subsidiary Guarantor to
or such Holder, this Subsidiary Guaranty, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees
that it will not be entitled to any right of subrogation in relation to the
Holders in respect of any obligations

                                  Page 79
<PAGE>

guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Subsidiary Guarantor further agrees that, as between such Subsidiary
Guarantor, on the one hand, and the Holders, on the other hand, (i) the maturity
of the obligations guaranteed hereby may be accelerated as provided in SECTION
7.2 for the purposes of this Subsidiary Guaranty, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to the Company
of the obligations guaranteed hereby, and (ii) in the event of any declaration
of acceleration of those obligations as provided in SECTION 7.2, those
obligations (whether or not due and payable) will forthwith become due and
payable by each of the Subsidiary Guarantors for the purpose of this Subsidiary
Guaranty.

         (d) It is the intention of each Subsidiary Guarantor and the Company
that the obligations of each Subsidiary Guarantor hereunder shall be in, but not
in excess of, the maximum amount permitted by applicable law. Accordingly, if
the obligations in respect of the Subsidiary Guaranty would be annulled, avoided
or subordinated to the creditors of any Subsidiary Guarantor by a court of
competent jurisdiction in a proceeding actually pending before such court as a
result of a determination both that such Subsidiary Guaranty was made without
fair consideration and that, at, the time thereof, immediately after giving
effect thereto, or at the time that any demand is made thereupon such Subsidiary
Guarantor was insolvent or unable to pay its debts as they mature or left with
an unreasonably small capital, then the obligations of such Subsidiary Guarantor
under such Subsidiary Guaranty shall be reduced by such an amount, if any, that
would result in the avoidance of such annulment, avoidance or subordination;
provided, however, that any reduction pursuant to this paragraph shall be made
in the smallest amount as is necessary to reach such result. For purposes of
this paragraph, "fair consideration," "insolvency," "unable to pay its debts as
they mature," "unreasonably small capital" and the effective times of
reductions, if any, required by this paragraph shall be determined in accordance
with applicable law.

11.2     EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTY

         To evidence its Subsidiary Guaranty set forth in SECTION 11.1, each
Guarantor agrees that a notation of such Subsidiary Guaranty substantially in
the form annexed hereto as ANNEX A-1 shall be endorsed on each Note and that
this Agreement shall be executed on behalf of such Subsidiary Guarantor by two
Officers or by one Officer with an attestation by another Officer, by manual or
facsimile signature.

         Each Subsidiary Guarantor agrees that its Subsidiary Guaranty set forth
in SECTION 11.1 shall remain in full force and effect and apply to all the
Notes notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guaranty.

         If an Officer whose signature is on a Note no longer holds that office
at the time the Note on which a Subsidiary Guaranty is endorsed and issued, the
Subsidiary Guaranty shall be valid nevertheless.

         The delivery of any Note by the Company shall constitute due
delivery of the Subsidiary Guaranty set forth in this Agreement on behalf of
each Subsidiary Guarantor.

                                  Page 80
<PAGE>

11.3     FUTURE SUBSIDIARY GUARANTORS

         The Company shall cause each Person that is or becomes a Subsidiary of
the Company after the Closing Date to execute a Subsidiary Guaranty in the form
of ANNEX A-1 hereto and cause such Subsidiary to execute an amendment to this
Agreement for the purpose of adding such Subsidiary as a Subsidiary Guarantor
hereunder.

11.4     CERTAIN BANKRUPTCY EVENTS

         Each Subsidiary Guarantor hereby covenants and agrees that in the event
of the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Subsidiary Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request seeking to
stay or to prohibit (even temporarily) execution on the Subsidiary Guaranty and
hereby waives and agrees not to take the benefit of any such stay of execution,
whether under Section 362 or 105 of the United States Bankruptcy Code or
otherwise.

11.5     SUBORDINATION OF SUBSIDIARY GUARANTEES

         Each Subsidiary Guarantor, for itself and its successors, and each
Holder, by its acceptance of its respective Notes, agrees that the obligations
of the Subsidiary Guarantors to the Holders of Notes pursuant to the Subsidiary
Guaranty and this Agreement are expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of each
respective Subsidiary Guarantor, to the same extent as provided in SECTION 8
hereof with respect to the subordination of payments on the Notes to the prior
payment in full of all Senior Indebtedness of the Company. For purposes of this
SECTION 11, each Subsidiary Guarantor shall have the same rights and be subject
to the same duties and obligations as the Company pursuant to SECTION 8.

SECTION 12. MISCELLANEOUS

12.1     NOTICES

         All notices and other communications provided for or permitted
hereunder shall be made by hand-delivery, first-class mail, telex, telecopier,
or overnight air courier guaranteeing next day delivery:

         (a) if to any Purchaser at the address or telecopy number set forth on
the signature pages hereto, with a copy to Gardere & Wynne, L.L.P., 1601 Elm
Street, Suite 3000, Dallas, Texas 75201, Telecopy No. (214)999-4667, Attention:
Gary B. Clark, Esq.; and

         (b) if to the Company or any Subsidiary Guarantor, to (i) the
Company, Pacific Circuits, Inc., 17550 N.E. 67th Court, Redmond, Washington
98052, Telecopy No. (425) 882-1268 and (ii) Thayer Capital Partners IV, 1455
Pennsylvania Avenue, NW, Suite 350, Washington, D.C. 20004, Telecopy No.
(202) 371-0391, Attention: Jeffrey W. Goettman, and Brockway Moran &
Partners, Inc., 225 NE Mizner Blvd., Seventh Floor, Boca Raton, Florida,
Telecopy No. (561) 750-2001, Attention: Michael E. Moran, with a copy to
Shearman & Sterling, 555 California Street,

                                  Page 81
<PAGE>

Suite 2000, San Francisco, California 94104-1522, Telecopy No. (415) 616-1199,
Attention: Christopher Dillon;

         All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back if telexed; when receipt acknowledged, if telecopied; and
the next business day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery. The parties may change
the addresses to which notices are to be given by giving five days' prior
notice of such change in accordance herewith.

12.2     SUCCESSORS AND ASSIGNS

         This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties.

12.3     COUNTERPARTS

         This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.

12.4     HEADINGS

         The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

12.5     GOVERNING LAW, SUBMISSION TO JURISDICTION

         This agreement shall be governed by and construed in accordance with
the internal laws of the State of New York. The Company and each Subsidiary
Guarantor hereby irrevocably submit to the jurisdiction of any New York State
court sitting in the State of New York or any federal court sitting in the
Borough of Manhattan in the City of New York in respect of any suit, action or
proceeding arising out of or relating to this Agreement and the Notes, and
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, jurisdiction of the aforesaid courts. The Company and each
Subsidiary Guarantor irrevocably waive, to the fullest extent they may
effectively do so under applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. Nothing
herein shall affect the right of any Holder to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceeding
against the Company or any Subsidiary Guarantor in any other jurisdiction.

                                 Page 82
<PAGE>

12.6     ENTIRE AGREEMENT

         This Agreement, together with the Securities, the Registration Rights
Agreement and the Warrant Agreement (and any agreement between the Company and
any Holder relating to transfers), is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement, together with
the Securities, the Registration Rights Agreement and the Warrant Agreement,
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

12.7     SEVERABILITY

         In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that each Purchaser's rights and privileges shall be enforceable to the
fullest extent permitted by law.

12.8     FURTHER ASSURANCES

         The Company shall, and shall cause each of its Subsidiaries to, at its
cost and expense, upon request of any Purchaser or Holder, duly execute and
deliver, or cause to be duly executed and delivered, to such Purchaser or Holder
such further instruments and do or cause to be done such further acts as may be
necessary or proper in the reasonable opinion of such Purchaser or Holder to
carry out more effectually the provisions and purposes of this Agreement and the
other Documents.

12.9     DISCLOSURE OF FINANCIAL INFORMATION

         Each Holder is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business, operations or
financial condition of the Company and each of its Subsidiaries which may be
furnished to it hereunder or otherwise, to any other Holder, any court,
Governmental Authority having jurisdiction over such Holder, to any Person which
shall, or shall have any right or obligation to, succeed to all or any part of
such Holder's interest in any of the Securities and this Agreement or to any
actual or prospective purchaser or assignee thereof.

                                 Page 83
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties set forth below as of the date first written above.

PACIFIC CIRCUITS, INC.

By:  /s/ Jeffrey W. Goettman
   ------------------------------------
Name:  Jeffrey W. Goettman
Title  Vice President

SUBSIDIARY GUARANTOR:

POWER CIRCUITS, INC.

By:  /s/ Jeffrey W. Goettman
   ------------------------------------
Name:  Jeffrey W. Goettman
Title: Vice President

<PAGE>

PURCHASERS:

TCW/CRESCENT MEZZANINE PARTNERS II, L.P.
TCW/CRESCENT MEZZANINE TRUST II

By:    TCW/Crescent Mezzanine II, L.P.,
       as general partner or managing owner

By:    TCW/Crescent Mezzanine, L.L.C.,
       its general partner

       By:  /s/ Jean-Marc Chapus
          --------------------------
       Name:    Jean-Marc Chapus
       Title:   President

ADDRESS FOR NOTICES:

c/o TCW/Crescent Mezzanine, L.L.C.
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention:    Timothy P. Costello
Phone: 214/740-7348
Fax:   241/740-7382

<PAGE>

TCW LEVERAGED INCOME TRUST, L.P.

By:   TCW Advisors (Bermuda), Limited,
      as general partner

      By:  /s/ Jean-Marc Chapus
        -------------------------------
      Name:   Jean-Marc Chapus
      Title:  Managing Director

By:   TCW Investment Management Company,
      as Investment Advisor

      By: /s/ Timothy P. Costello
         ------------------------------
      Name:   Timothy P. Costello
      Title:  Managing Director

ADDRESS FOR NOTICES:

c/o TCW/Crescent Mezzanine, L.L.C.
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention:    Timothy P. Costello
Phone: 214/740-7348
Fax:   214/740-7382

<PAGE>

TCW LEVERAGED INCOME TRUST II, L.P.

By:   TCW (LINC II), L.P.,
      as general partner

By:   TCW Advisors (Bermuda), Ltd.,
      as general partner

      By:  /s/ Jean-Marc Chapus
         ------------------------------
      Name:   Jean-Marc Chapus
      Title:  Managing Director

By:   TCW Investment Management Company,
      as Investment Advisor

      By: /s/ Timothy P. Costello
         ------------------------------
      Name:   Timothy P. Costello
      Title:  Managing Director

ADDRESS FOR NOTICES:

c/o TCW/Crescent Mezzanine, L.L.C.
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention:    Timothy P. Costello
Phone: 214/740-7348
Fax:   214/740-7382

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