AMONG

1
Exhibit 10.10

EXECUTION COPY

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CREDIT AGREEMENT

DATED AS OF FEBRUARY 27, 1997

AMONG

SELFIX, INC.,
TAMOR CORPORATION, AND
SHUTTERS, INC.,

AS BORROWERS,

THE OTHER CREDIT PARTIES SIGNATORY HERETO,

AS CREDIT PARTIES,

THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,

AS LENDERS,

AND

GENERAL ELECTRIC CAPITAL CORPORATION,

AS AGENT AND LENDER

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2
TABLE OF CONTENTS

1. AMOUNT AND TERMS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Credit Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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1.3 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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1.4 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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1.5 Interest and Applicable Margins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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1.6 Eligible Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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1.7 Eligible Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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1.8 Cash Management Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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1.9 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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1.10 Receipt of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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1.11 Application and Allocation of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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1.12 Loan Account and Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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1.13 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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1.14 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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1.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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1.16 Capital Adequacy; Increased Costs; Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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1.17 Single Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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2. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.1 Conditions to the Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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2.2 Further Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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3.2 Executive Offices; FEIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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3.3 Corporate Power, Authorization, Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . 28
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3.4 Financial Statements and Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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3.5 Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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3.6 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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3.7 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock . . . . . . . . . . . . . . . . . . . . . . 30
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3.9 Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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3.10 Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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3.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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3.13 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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3.14 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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3.15 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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3.16 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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3.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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3.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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3.19 Deposit and Disbursement Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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3.20 Government Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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3.21 Customer and Trade Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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3.22 Agreements and Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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3.23 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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3.24 Acquisition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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3.25 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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4. FINANCIAL STATEMENTS AND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.1 Reports and Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4.2 Communication with Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.1 Maintenance of Existence and Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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5.2 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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5.3 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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5.4 Insurance; Damage to or Destruction of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 37
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5.5 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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5.6 Supplemental Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.7 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.8 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.9 Landlords' Agreements, Mortgagee Agreements and Bailee Letters . . . . . . . . . . . . . . . . . . . 40
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5.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.11 Acquisition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1 Mergers, Subsidiaries, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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6.2 Investments; Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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6.3 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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6.4 Employee Loans and Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6.5 Capital Structure and Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6.6 Guaranteed Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.8 Sale of Stock and Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.10 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.11 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.12 Sale-Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.13 Cancellation of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.14 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.15 Change of Corporate Name or Location; Change of Fiscal Year . . . . . . . . . . . . . . . . . . . . 44
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6.16 No Impairment of Intercompany Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.17 No Speculative Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.18 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.19 Changes Relating to Subordinated Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.20 Acquisition Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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7. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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7.2 Survival of Obligations Upon Termination of Financing Arrangements . . . . . . . . . . . . . . . . . 46
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8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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8.3 Waivers by Credit Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.1 Assignment and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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9.2 Appointment of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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9.3 Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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9.4 GE Capital and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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9.5 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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9.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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9.7 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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9.8 Setoff and Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert . . . . . . . . . . . . . . 54
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10. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
11.1 Complete Agreement; Modification of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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11.2 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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11.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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11.4 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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11.5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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11.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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11.7 Conflict of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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11.8 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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11.9 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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11.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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11.11 Section Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.13 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.14 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.15 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.16 Advice of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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11.17 No Strict Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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12. CROSS-GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.1 Cross-Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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12.2 Waivers by Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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12.3 Benefit of Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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12.4 Subordination of Subrogation, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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12.5 Election of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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12.6 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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12.7 Contribution with Respect to Guaranty Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 66
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12.8 Liability Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
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6
INDEX OF APPENDICES

Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b) - Form of Term Note
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Pro Forma
Schedule 3.4(C) - Projections
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.18 - Insurance
Schedule 3.19 - Deposit and Disbursement Accounts
Schedule 3.20 - Government Contracts
Schedule 3.22 - Material Agreements
Schedule 5.1 - Trade Names
Schedule 5.4 - Insurance
Schedule 6.2 - Investments
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.7 - Existing Liens

Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
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Annex C (Section 1.8) - Cash Management System
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Annex D (Section 2.1(a)) - Schedule of Additional Closing Documents
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Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
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Annex F (Section 4.1(b)) - Collateral Reports
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Annex G (Section 6.10) - Financial Covenants
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Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
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Annex I (Section 11.10) - Notice Addresses
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7
CREDIT AGREEMENT, dated as of February 27,1997, among SELFIX,
INC., a Delaware corporation ("Selfix"), TAMOR CORPORATION., a Massachusetts
corporation ("Tamor") and SHUTTERS, INC., an Illinois corporation ("Shutters")
(Selfix, Tamor and Shutters are sometimes collectively referred to herein as
the "Borrowers" and individually as a "Borrower"); the other Credit Parties
signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
(in its individual capacity, "GE Capital"), for itself, as Lender, and as Agent
for Lenders, and the other Lenders signatory hereto from time to time.

RECITALS

WHEREAS, Borrowers desire that Lenders extend revolving and
term credit facilities to Borrowers of up to Sixty Million Dollars
($60,000,000) in the aggregate, for the purpose of funding a portion of the
Acquisition and refinancing certain indebtedness of Borrowers and to provide
(a) working capital financing for Borrowers, and (b) funds for other general
corporate purposes of Borrowers; and for these purposes, Lenders are willing to
make certain loans and other extensions of credit to Borrowers of up to such
amount upon the terms and conditions set forth herein; and

WHEREAS, Borrowers desire to secure all of their obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon all of their existing and after-
acquired personal and real property; and

WHEREAS, capitalized terms used in this Agreement shall have
the meanings ascribed to them in Annex A. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, "Appendices") hereto, or
expressly identified to this Agreement, are incorporated herein by reference,
and taken together, shall constitute but a single agreement. These Recitals
shall be construed as part of the Agreement.

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

1. AMOUNT AND TERMS OF CREDIT

1.1 Credit Facilities.

(a) Revolving Credit Facility. (i) Subject to the terms
and conditions hereof, each Revolving Lender agrees to make available from time
to time until the Commitment Termination Date its Pro Rata Share of advances
(each, a "Revolving Credit Advance"). The Pro Rata Share of the Revolving Loan
of any Revolving Lender shall not at any time exceed its separate Revolving
Loan Commitment. The obligations of each Revolving Lender hereunder shall be
several and not joint. The aggregate amount of Revolving Credit Advances
outstanding shall not exceed at any time the lesser of (A) the Maximum Amount
and (B) the Aggregate Borrowing Base, in each case less the sum of the Letter
of Credit Obligations and the Swing Line Loan outstanding at such time
("Borrowing Availability"), except as set forth in Section 1.1(a)(iii).
Moreover, the sum of the Revolving Loan and Swing Line Loan outstanding to any
Borrower shall not exceed at any time that Borrower's

8
separate Borrowing Base, except as set forth in Section 1.1(a)(iii). Until the
Commitment Termination Date, Borrowers may from time to time borrow, repay and
reborrow under this Section 1.1(a). Each Revolving Credit Advance shall be
made on notice by Borrower Representative on behalf of the applicable Borrower
to the representative of Agent identified on Schedule 1.1 at the address
specified thereon. Xxxx notices must be given no later than (1) 10:30 a.m.
(Chicago time) on the Business Day of the proposed Revolving Credit Advance,
in the case of an Index Rate Loan, or (2) 11:00 a.m. (Chicago time) on the date
which is three (3) Business Days prior to the proposed Revolving Credit
Advance, in the case of a LIBOR Loan. Each such notice (a "Notice of Revolving
Credit Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit and such other information as may be
required by Agent. If any Borrower desires to have the Revolving Credit
Advances bear interest by reference to a LIBOR Rate, Borrower Representative
must comply with Section 1.5(e).

(ii) Each Borrower shall execute and deliver to
each Revolving Lender a note to evidence the Revolving Loan Commitment of that
Revolving Lender. Each note shall be in the principal amount of the Revolving
Loan Commitment of the applicable Revolving Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(a)(ii) (each a "Revolving Note" and,
collectively, the "Revolving Notes"). Each Revolving Note shall represent the
obligation of each Borrower to pay the amount of each Revolving Lender's
Revolving Loan Commitment or, if less, the applicable Revolving Lender's Pro
Rata Share of the aggregate unpaid principal amount of all Revolving Credit
Advances to such Borrower together with interest thereon as prescribed in
Section 1.5. The entire unpaid balance of the aggregate Revolving Loan and all
other non-contingent Obligations shall be immediately due and payable in full
in immediately available funds on the Commitment Termination Date.

(iii) At the request of Borrower Representative, in
its discretion Agent may (but shall have absolutely no obligation to), make
Revolving Credit Advances to Borrowers on behalf of Revolving Lenders in
amounts which cause the outstanding balance of the aggregate Revolving Loan to
exceed the Aggregate Borrowing Base (less the Swing Line Loan) or which cause
the outstanding balance of the Revolving Loan owing by any Borrower to exceed
that Borrower's separate Borrowing Base (less the Swing Line Loan advanced to
that Borrower) (any such excess Revolving Credit Advances are herein referred
to collectively as "Overadvances"), and no such event or occurrence shall cause
or constitute a waiver by Agent or Lenders of any Default or Event of Default
that may result therefrom or of Agent's, Swing Line Lender's or Revolving
Lenders' right to refuse to make any further Overadvances, Swing Line Advances
or Revolving Credit Advances, or incur any Letter of Credit Obligations, as the
case may be, at any time that an Overadvance exists or would result therefrom.
In addition, Overadvances may be made even if the conditions to lending set
forth in Section 2 have not been met. All Overadvances shall constitute Index
Rate Loans, shall bear interest at the Default Rate and shall be payable on
demand. Except as otherwise provided in Section 1.11(b), the authority of
Agent to make Overadvances is limited to an aggregate amount not to exceed
$500,000 at any time, shall not cause the aggregate Revolving Loan to exceed
the Maximum Amount, and may be revoked prospectively by a written notice to
Agent signed by Revolving Lenders holding fifty percent (50%) or more of the
Revolving Loan Commitments.

2
9
(b) (1) Term Loan A. (i) Subject to the terms and
conditions hereof, each Lender having a Term Loan A Commitment agrees to make a
term loan on the Closing Date to (A) Selfix (the "Selfix Term Loan A") in the
original principal amount of its Selfix Term Loan A Commitment; (B) Tamor (the
"Tamor Term Loan A") in the original principal amount of its Tamor Term Loan A
Commitment, and (C) Shutters (the "Shutters Term Loan A" and, collectively
with the Selfix Term Loan A and the Tamor Term Loan A, the "Term Loan A") in
the original principal amount of its Shutters Term Loan A Commitment. The
obligations of each Term A Lender hereunder shall be several and not joint.
Each such Term Loan A shall be evidenced by promissory notes substantially in
the form of Exhibit 1.1(b) (each a "Term Note A" and collectively the "Term A
Notes"), and each Borrower shall execute and deliver its respective Term Note A
to the applicable Term A Lender. Each Term Note A shall represent the
obligation of the applicable Borrower to pay the amount of its Term Loan A to
the applicable Lender, together with interest thereon as prescribed in Section
1.5.

(ii) (A) Selfix shall pay the principal amount of the Selfix
Term Loan A in twenty-two (22) consecutive quarterly installments on the first
day of January, April, July and October of each year, commencing April 1, 1997,
as follows:

Payment Installment
Date Amount (each)
--------- -------------

1-4 April 1, July 1, and October 1, 1997
January 1, 1998 $ 87,500

5-8 April 1, July 1, and October 1, 1998
January 1, 1999 $ 131,250

9-12 April 1, July 1, and October 1, 1999
January 1, 2000 $ 153,125

13-16 April 1, July 1, and October 1, 2000
January 1, 2001 $ 153,125

17-20 April 1, July 1, and October 1, 2001
January 1, 2002 $ 218,750

21-22 April 1 and July 1, 2002 $ 262,500

(B) Tamor shall pay the principal amount of the Tamor
Term Loan A in twenty-two (22) consecutive quarterly installments on the first
day of January, April, July and October of each year, commencing April 1, 1997,
as follows:

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10

Payment Installment
Date Amount (each)
--------- -------------

1-4 April 1, July 1, and October 1, 1997
January 1, 1998 $ 375,000

5-8 April 1, July 1, and October 1, 1998
January 1, 1999 $ 562,500

9-12 April 1, July 1, and October 1, 1999
January 1, 2000 $ 656,250

13-16 April 1, July 1, and October 1, 2000
January 1, 2001 $ 656,250

17-20 April 1, July 1, and October 1, 2001
January 1, 2002 $ 937,500

21-22 April 1 and July 1, 2002 $ 1,125,000

(C) Shutters shall pay the principal amount of the
Shutters Term Loan A in twenty-two (22) consecutive quarterly installments on
the first day of January, April and October of each year, commencing April 1,
1997, as follows:

Payment Installment
Date Amount (each)
--------- -------------

1-4 April 1, July 1, and October 1, 1997
January 1, 1998 $ 37,500

5-8 April 1, July 1, and October 1, 1998
January 1, 1999 $ 56,250

9-12 April 1, July 1, and October 1, 1999
January 1, 2000 $ 65,625

13-16 April 1, July 1, and October 1, 2000
January 1, 2001 $ 65,625

17-20 April 1, July 1, and October 1, 2001
January 1, 2002 $ 93,750

21-22 April 1 and July 1, 2002 $112,500

4
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(iii) Notwithstanding the foregoing clauses (A)-(C), the
aggregate outstanding principal balance of the Selfix Term Loan A, the Tamor
Term Loan A and the Shutters Term Loan A shall each be due and payable in full
in immediately available funds on the Commitment Termination Date, if not
sooner paid in full.

(iv) Each payment of principal with respect to the Selfix
Term Loan A, the Tamor Term Loan A and the Shutters Term Loan A shall be paid
to Agent for the ratable benefit of each Term A Lender, ratably in proportion
to each such Term A Lender's respective Selfix Term Loan A Commitment, Tamor
Term Loan A Commitment and Shutters Term Loan A Commitment, as applicable.

(b) (2) Term Loan B. (i) Subject to the terms
and conditions hereof, each Term B Lender agrees to make a term loan on the
Closing Date to (A) Selfix (the "Selfix Term Loan B") in the original principal
amount of its Selfix Term Loan B Commitment; (B) Tamor (the "Tamor Term Loan
B") in the original principal amount of its Tamor Term Loan B Commitment, and
(C) Shutters (the "Shutters Term Loan B" and, collectively with the Selfix Term
Loan B and the Tamor Term Loan B, the "Term Loan B") in the original principal
amount of its Shutters Term Loan B Commitment. The obligations of each Term B
Lender hereunder shall be several and not joint. Each such Term B Loan shall
be evidenced by promissory notes substantially in the form of Exhibit 1.1(b)
(each a "Term Note B" and collectively the "Term B Notes"), and each Borrower
shall execute and deliver its respective Term Note B to the applicable Term B
Lender. Each Term Note B shall represent the obligation of the applicable
Borrower to pay the amount of its Term Loan B to the applicable Lender,
together with interest thereon as prescribed in Section 1.5.

(ii) (A) Selfix shall pay the principal amount of the Selfix
Term Loan B in thirty (30) consecutive quarterly installments on the first day
of January, April, July and October of each year, commencing April 1, 1997, as
follows:

Payment Installment
Date Amount (each)
--------- -------------

1-22 April 1, July 1, and October 1, 1997
January 1, April 1, July 1, and October 1, 1998
January 1, April 1, July 1, and October 1, 1999
January 1, April 1, July 1, and October 1, 2000
January 1, April 1, July 1, and October 1, 2001,
and January 1, April 1, and July 1, 2002 $ 8,750

23-26 October 1, 2002,
January 1, April 1, and July 1, 2003 $413,437

27-30 October 1, 2003,
January 1, April 1, and July 1, 2004 $413,438

5
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(B) Tamor shall pay the principal amount of the Tamor
Term Loan B in thirty (30) consecutive quarterly installments on the first day
of January, April, July and October of each year, commencing April 1, 1997, as
follows:

Payment Installment
Date Amount (each)
---------- ----------

23-26 October 1, 2002,
January 1, April 1, and July 1, 2003 $1,771,875

27-30 October 1, 2003,
January 1, April 1, and July 1, 2004 $1,771,875

(C) Shutters shall pay the principal amount of the
Shutters Term Loan B in thirty (30) consecutive quarterly installments on the
first day of January, April and October of each year, commencing April 1, 1997,
as follows:

Payment Installment
Date Amount (each)
---------- ----------

23-26 October 1, 2002,
January 1, April 1, and July 1, 2003 $177,187

27-30 October 1, 2003,
January 1, April 1, and July 1, 2004 $177,188

6
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(iii) Notwithstanding the foregoing clauses (A)-(C), the
aggregate outstanding principal balance of the Selfix Term Loan B, the Tamor
Term Loan B and the Shutters Term Loan B shall each be due and payable in full
in immediately available funds on the Commitment Termination Date, if not
sooner paid in full.

(iv) Each payment of principal with respect to the Selfix
Term Loan B, the Tamor Term Loan B and the Shutters Term Loan B shall be paid
to Agent for the ratable benefit of each Term B Lender, ratably in proportion
to each such Term B Lender's respective Selfix Term Loan B Commitment, Tamor
Term Loan B Commitment and Shutters Term Loan B Commitment, as applicable.

(c) Swing Line Facility. (i) Agent shall notify the
Swing Line Lender upon Agent's receipt of any Notice of Revolving Credit
Advance. Subject to the terms and conditions hereof, the Swing Line Lender
may, in its discretion, make available from time to time until the Commitment
Termination Date advances (each, a "Swing Line Advance") in accordance with any
such notice. The aggregate amount of Swing Line Advances outstanding shall not
exceed the lesser of (A) the Swing Line Commitment and (B) the Aggregate
Borrowing Base less the outstanding balance of the Revolving Loan at such time
("Swing Line Availability"). Moreover, the Swing Line Loan outstanding to any
Borrower shall not exceed at any time that Borrower's separate Borrowing Base
less the Revolving Loan outstanding to such Borrower. Until the Commitment
Termination Date, Borrowers may from time to time borrow, repay and reborrow
under this Section 1.1(c). Each Swing Line Advance shall be made pursuant to a
Notice of Revolving Credit Advance delivered to Agent by Borrower
Representative on behalf of the applicable Borrower in accordance with Section
1.1(a). Those notices must be given no later than 11:00 a.m. (Chicago time) on
the Business Day of the proposed Swing Line Advance. Notwithstanding any other
provision of this Agreement or the other Loan Documents, the Swing Line Loan
shall constitute an Index Rate Loan. Borrowers shall repay the aggregate
outstanding principal amount of the Swing Line Loan upon demand therefor by
Agent.

(ii) Each Borrower shall execute and deliver to the Swing
Line Lender a promissory note to evidence the Swing Line Commitment. Each note
shall be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(c)(ii) (each a "Swing Line Note" and, collectively, the "Swing Line
Notes"). Each Swing Line Note shall represent the obligation of each Borrower
to pay the amount of the Swing Line Commitment or, if less, the aggregate
unpaid principal amount of all Swing Line Advances made to such Borrower
together with interest thereon as prescribed in Section 1.5. The entire unpaid
balance of the Swing Line Loan and all other non-contingent Obligations shall
be immediately due and payable in full in immediately available funds on the
Commitment Termination Date if not sooner paid in full.

(iii) Refunding of Swing Line Loans. The Swing Line
Lender, at any time and from time to time in its sole and absolute discretion,
may on behalf of any Borrower (and each Borrower hereby irrevocably authorizes
the Swing Line Lender to so act on its behalf) request each Revolving Lender
(including the Swing Line Lender) to make a Revolving Credit Advance to such
Borrower

7
14
(which shall be an Index Rate Loan) in an amount equal to such Revolving
Lender's Pro Rata Share of the principal amount of such Borrower's Swing Line
Loan (the "Refunded Swing Line Loan") outstanding on the date such notice is
given. Unless any of the events described in Sections 8.1(g), 8.1(h) or 8.1(i)
shall have occurred (in which event the procedures of Section 1.1(c)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied, each
Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a
Revolving Credit Advance on behalf of the Swing Line Lender, prior to 2:00 p.m.
(Chicago time), in immediately available funds on the Business Day next
succeeding the date such notice is given. The proceeds of such Revolving
Credit Advances shall be immediately paid to the Swing Line Lender and applied
to repay the Refunded Swing Line Loan of the applicable Borrower.

(iv) Participation in Swing Line Loans. If, prior to
refunding a Swing Line Loan with a Revolving Credit Advance pursuant to Section
1.1(c)(iii), one of the events described in Sections 8.1(g), 8.1(h) or 8.1(i)
shall have occurred, then, subject to the provisions of Section 1.1(c)(v)
below, each Revolving Lender will, on the date such Revolving Credit Advance
was to have been made for the benefit of the applicable Borrower, purchase from
the Swing Line Lender an undivided participation interest in the Swing Line
Loan to such Borrower in an amount equal to its Pro Rata Share of such Swing
Line Loan. Upon request, each Revolving Lender will promptly transfer to the
Swing Line Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swing Line Lender will deliver to
such Revolving Lender a Swing Line Loan Participation Certificate,
substantially the form of Exhibit 1.1(c)(iv), dated the date of receipt of such
funds and in such amount.

(v) Revolving Lenders' Obligations Unconditional. Each
Revolving Lender's obligation to make Revolving Credit Advances in accordance
with Section 1.1(c)(iii) and to purchase participating interests in accordance
with Section 1.1(c)(iv) shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Revolving Lender may have against
the Swing Line Lender, any Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of any Borrower to satisfy the conditions precedent
to borrowing set forth in this Agreement on the date upon which such
participating interest is to be purchased or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
If any Revolving Lender does not make available to Agent or the Swing Line
Lender, as applicable, the amount required pursuant to Section 1.1(c)(iii) or
1.1(c)(iv), as the case may be, the Swing Line Lender shall be entitled to
recover such amount on demand from such Revolving Lender, together with
interest thereon for each day from the date of non-payment until such amount is
paid in full at the Federal Funds Rate for the first two Business Days and at
the Index Rate thereafter.

(d) Reliance on Notices; Appointment of Borrower
Representative. Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of Revolving Credit Advance, Notice of
Conversion/Continuation or similar notice reasonably believed by Agent to be
genuine. Agent may assume that each Person executing and delivering such a
notice was duly

8
15
authorized, unless the responsible individual acting thereon for Agent has
actual knowledge to the contrary. Each Borrower hereby designates Selfix as
its representative and agent on its behalf for the purposes of issuing Notices
of Revolving Credit Advances, Notices of Swing Line Advances and Notices of
Conversion/Continuation, giving instructions with respect to the disbursement
of the proceeds of the Loans, selecting interest rate options, requesting
Letters of Credit, giving and receiving all other notices and consents
hereunder or under any of the other Loan Documents and taking all other actions
(including in respect of compliance with covenants) on behalf of any Borrower
or Borrowers under the Loan Documents. Borrower Representative hereby accepts
such appointment. Agent and each Lender may regard any notice or other
communication pursuant to any Loan Document from Borrower Representative as a
notice or communication from all Borrowers, and may give any notice or
communication required or permitted to be given to any Borrower or Borrowers
hereunder to Borrower Representative on behalf of such Borrower or Borrowers.
Each Borrower agrees that each notice, election, representation and warranty,
covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.

1.2 Letters of Credit. Subject to and in accordance with
the terms and conditions contained herein and in Annex B, Borrower
Representative, on behalf of the applicable Borrower, shall have the right to
request, and Revolving Lenders agree to incur, or purchase participations in,
Letter of Credit Obligations in respect of each Borrower.

1.3 Prepayments.

(a) Voluntary Prepayments. Borrowers may at any time on
at least fifteen (15) days' prior written notice upon a partial prepayment (or
at least thirty (30) days' prior written notice in the case of a prepayment in
full) by Borrower Representative to Agent (i) voluntarily prepay all or part of
the Term Loan A or Term Loan B and/or (ii) voluntarily prepay all or part of
the Revolving Loan and terminate or reduce the Revolving Loan Commitment;
provided that (A) any such prepayments or reductions shall be in a minimum
amount of $500,000 and integral multiples of $250,000 in excess of such amount
and (B) the Revolving Loan Commitment shall not be reduced to an amount less
than the L/C Sublimit plus five million dollars ($5,000,000). In addition,
Borrowers may at any time on at least thirty (30) days for prior written notice
by Borrower Representative to Agent terminate the Revolving Loan Commitment;
provided that upon such termination, all Loans and other Obligations shall be
immediately due and payable in full. Any such voluntary prepayment and any
such reduction or termination of the Revolving Loan Commitment must be
accompanied by the payment of the fee required by Section 1.9(c), if any, plus
the payment of any LIBOR funding breakage costs in accordance with Section
1.13(b). Upon any such prepayment and reduction or termination of the
Revolving Loan Commitment, each Borrower's right to request Revolving Credit
Advances, or request that Letter of Credit Obligations be incurred on its
behalf, or request Swing Line Advances shall simultaneously be permanently
reduced or terminated, as the case may be; provided that a permanent reduction
of the Revolving Loan Commitment shall not require a corresponding pro rata
reduction in the L/C Sublimit (as defined in Annex B). Each

9
16
notice of partial prepayment shall designate the Loans or other Obligations to
which such prepayment is to be applied, provided that any partial prepayments
of the Term Loan made by or on behalf of any Borrower shall be applied to
prepay the scheduled installments of such Borrower's Term Loan in inverse order
of maturity.

(b) Mandatory Prepayments. (i) If at any time the
outstanding balance of the aggregate Revolving Loan exceeds the lesser of (A)
the Maximum Amount and (B) the Aggregate Borrowing Base, less, in each case,
the aggregate outstanding Swing Line Loan at such time, Borrowers shall
immediately repay the aggregate outstanding Revolving Credit Advances to the
extent required to eliminate such excess. If any such excess remains after
repayment in full of the aggregate outstanding Revolving Credit Advances,
Borrowers shall provide cash collateral for the Letter of Credit Obligations in
the manner set forth in Annex B to the extent required to eliminate such
excess. Furthermore, if the outstanding balance of the Revolving Loan of any
Borrower exceeds that Borrower's separate Borrowing Base at any time less the
outstanding balance of the Swing Line Loan of such Borrower at such time, the
applicable Borrower shall immediately repay its Revolving Credit Advances in
the amount of such excess (and, if necessary, shall provide cash collateral for
its Letter of Credit Obligations as described above). Notwithstanding the
foregoing, any Overadvance made pursuant to Section 1.1(a)(iii) shall be
repaid on demand.

(ii) Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (including condemnation proceeds, but
excluding proceeds of asset dispositions permitted by Sections 6.8 (a) and
6.8(b)) or any sale of Stock of any Subsidiary of any Credit Party, Borrowers
shall prepay the Loans in an amount equal to all such proceeds, net of (A)
commissions and other reasonable and customary transaction costs, fees and
expenses properly attributable to such transaction and payable by Borrowers in
connection therewith (in each case, paid to non-Affiliates), (B) transfer
taxes, (C) amounts payable to holders of senior Liens (to the extent such Liens
constitute Permitted Encumbrances hereunder), if any, and (D) an appropriate
reserve for income taxes in accordance with GAAP in connection therewith. Any
such prepayment shall be applied in accordance with clause (c)(1) below.

(iii) Except for the proceeds of approximately $1,500,000
of Holdings Stock to be put into escrow pursuant to the Acquisition Agreement
as security for Holdings' and Selfix's obligation to reimburse the stockholders
of Tamor under Section 2.5(d) of the Acquisition Agreement, if Holdings or any
Borrower issues Stock, no later than the Business Day following the date of
receipt of the proceeds thereof, all Borrowers (in the case of an issuance by
Holdings) or the issuing Borrower shall prepay the Loans in an amount equal to
all or a portion of such proceeds, in accordance with clause (c)(2) below, net
of underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith.

(iv) Until the Termination Date, Borrowers shall prepay
the Obligations on the earlier of the date which is ten (10) days after (A) the
date on which Borrowers' annual audited Financial Statements for the
immediately preceding Fiscal Year are delivered pursuant to Annex E or (B) the
date on which such annual audited Financial Statements were required to be
delivered

10
17
pursuant to Annex E, in an amount equal to seventy-five percent (75%) of Excess
Cash Flow for the immediately preceding Fiscal Year. Any prepayments from
Excess Cash Flow paid pursuant to this clause (iv) shall be allocated to each
Borrower's Obligations based upon such Borrower's relative contribution to
Excess Cash Flow and shall be applied in accordance with clause (c)(1) below.
Each such prepayment shall be accompanied by a certificate signed by Borrower
Representative's chief financial officer certifying the manner in which Excess
Cash Flow, the resulting prepayment, and the method of allocation to each
Borrower's Obligations were calculated, which certificate shall be in form and
substance reasonably satisfactory to Agent.

(c)(1) Application of Certain Mandatory Prepayments. Any
prepayments made by any Borrower pursuant to clauses (b)(ii) or (iv) or Section
5.4(c) shall be applied as follows: first, to Fees and reimbursable expenses
of Agent and other Lenders then due and payable pursuant to any of the Loan
Documents; second, to interest then due and payable on such Borrower's Term
Loans, pro rata; third, ratably to prepay the scheduled installments of such
Borrower's Term Loans in inverse order of maturity, until such Loans shall have
been prepaid in full; fourth to interest then due and payable on the Term Loans
of each other Borrower, pro rata; fifth, to prepay the scheduled installments
of the Term Loans of such other Borrowers in inverse order of maturity, until
such Loans shall have been prepaid in full; sixth, to interest then due and
payable on Revolving Credit Advances (including Swing Line Advances) made to
such Borrower; seventh, to the principal balance of Revolving Credit Advances
(including Swing Line Advances) outstanding to such Borrower until the same
shall have been paid in full; eighth, to any Letter of Credit Obligations of
such Borrower to provide cash collateral therefor in the manner set forth in
Annex B, until all such Letter of Credit Obligations have been fully cash
collateralized in the manner set forth in Annex B; ninth, to interest then due
and payable on the Revolving Credit Advances (including Swing Line Advances)
outstanding to each other Borrower, pro rata; tenth, to the principal balance
of the Revolving Credit Advances (including Swing Line Advances) made to each
other Borrower, pro rata, until the same shall have been paid in full; and
last, to any Letter of Credit Obligations of each other Borrower, pro rata, to
provide cash collateral therefor in the manner set forth in Annex B, until all
such Letter of Credit Obligations have been fully cash collateralized. Neither
the Revolving Loan Commitment nor the Swing Line Commitment shall be
permanently reduced by the amount of any such prepayments.

(c)(2) Application of Mandatory Prepayments from Stock
Sales. All prepayments made by Holdings or any Borrower pursuant to clause
(b)(iii) above shall be applied as follows: first, 50% of the balance of such
prepayments shall be applied to accrued interest and to the principal of the
Subordinated Notes, and the remaining 50% of the balance of such prepayment
shall be applied, ratably, to accrued interest and to the principal balances of
Term Loan A and Term Loan B; and second, after payment in full of the
Subordinated Notes, 100% of such prepayment shall be applied, ratably, to
accrued interest and to the principal balances of Term Loan A and Term Loan B.
All such prepayments of the Term Loans shall be applied to scheduled
installments in inverse order of maturity.

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(d) Nothing in this Section 1.3 shall be construed to
constitute Agent's or any Lender's consent to any transaction referred to in
clauses (b)(ii) and (b)(iii) above which is not permitted by other provisions
of this Agreement or the other Loan Documents.

1.4 Use of Proceeds. Borrowers shall utilize the
proceeds of the Term Loans, the Revolving Loan and the Swing Line Advances
solely for the Acquisition and the Refinancing (and to pay any related
transaction expenses), and for the financing of Borrowers' ordinary working
capital and general corporate needs (but excluding in any event the making of
any Restricted Payment not specifically permitted by Section 6.14). Disclosure
Schedule (1.4) contains a description of Borrowers' sources and uses of funds
as of the Closing Date, including Loans and Letter of Credit Obligations to be
made or incurred on that date, and a funds flow memorandum detailing how funds
from each source are to be transferred to particular uses.

1.5 Interest and Applicable Margins. (a) Borrowers
shall pay interest to Agent, for the ratable benefit of Lenders in accordance
with the various Loans being made by each Lender, in arrears on each applicable
Interest Payment Date, at the following rates: (i) with respect to the
Revolving Credit Advances, the Index Rate plus the Applicable Revolver Index
Margin per annum or, at the election of Borrower Representative, the applicable
LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based on the
aggregate Revolving Credit Advances outstanding from time to time; (ii) with
respect to Term Loan A, the Index Rate plus the Applicable Term Loan A Index
Margin per annum or, at the election of Borrower Representative, the applicable
LIBOR Rate plus the Applicable Term Loan A LIBOR Margin per annum; (iii) with
respect to Term Loan B, the Index Rate plus the Applicable Term Loan B Index
Margin per annum or, at the election of Borrower Representative, the applicable
LIBOR Rate plus the Applicable Term Loan B LIBOR Margin per annum and (iv) with
respect to the Swing Line Loan, the Index Rate plus the Applicable Revolver
Index Margin per annum.

The Applicable Revolver Index Margin, Applicable Term Loan A
Index Margin, Applicable Term Loan B Index Margin, Applicable Revolver LIBOR
Margin and Applicable Term Loan A LIBOR Margin and Applicable Term Loan B LIBOR
Margin will be 1.25%, 1.50%, 2.00%, 2.75%, 3.00% and 3.50% per annum,
respectively, as of the Closing Date. The Applicable Margins will be adjusted
(up or down) prospectively on a quarterly basis as determined by Borrowers'
consolidated financial performance, commencing with the first day of the first
calendar month that occurs more than five (5) days after delivery of Borrowers'
quarterly Financial Statements to Lenders for the Fiscal Quarter in December,
1997. Adjustments in Applicable Margins will be determined by reference to the
following grids:

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LEVEL OF
LEVERAGE RATIO IS: APPLICABLE MARGINS:
----------------- ------------------

( 2.5 Level I

(3.5, but ) 2.5 Level II
-
(5.0, but ) 3.5 Level III
-

(6.00, but ) 5.0 Level IV
-

) 6.00 Level V
-

APPLICABLE MARGINS
------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
------- -------- --------- -------- -------

Applicable Revolver .50% .75% 1.0% 1.25% 1.50%
Index Margin

Applicable Revolver LIBOR Margin 2.0% 2.25% 2.50% 2.75% 3.00%

Applicable Term Loan A Index .75% 1.0% 1.25% 1.50% 1.75%
Margin

Applicable Term Loan A LIBOR 2.25% 2.50% 2.75% 3.0% 3.25%
Margin

Applicable Term Loan B Index 1.25% 1.50% 1.75% 2.0% 2.25%
Margin

Applicable Term Loan B LIBOR 2.75% 3.0% 3.25% 3.5% 3.75%
Margin

All adjustments in the Applicable Margins after December 31,
1997 will be implemented quarterly on a prospective basis, for each calendar
month commencing at least five (5) days after the date of delivery to Lenders
of the quarterly unaudited or annual audited (as applicable) Financial
Statements of Borrowers evidencing the need for an adjustment. Concurrently
with the delivery of those Financial Statements, Borrower Representative shall
deliver to Agent and Lenders a certificate, signed by its chief financial
officer, setting forth in reasonable detail the basis for the continuance of,
or any change in, the Applicable Margins. Failure to timely deliver such
Financial Statements shall, in addition to any other remedy provided for in
this Agreement, result in an increase in the Applicable Margins to the highest
level set forth in the foregoing grid, until the first day of the first
calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required. If an Event of Default
shall have occurred or be continuing at the time any reduction in the
Applicable Margins is to be implemented, that reduction shall be deferred until
the

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first day of the first calendar month following the date on which such Default
or Event of Default is waived or cured.

(b) If any payment on any Loan becomes due and payable on
a day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.

(c) All computations of Fees calculated on a per annum
basis and interest shall be made by Agent on the basis of a three hundred and
sixty (360) day year, in each case for the actual number of days occurring in
the period for which such interest and Fees are payable. The Index Rate shall
be determined each day based upon the Index Rate as in effect each day. Each
determination by Agent of an interest rate hereunder shall be conclusive,
absent manifest error.

(d) So long as any Event of Default shall have occurred
and be continuing, and at the election of Agent (or upon the written request of
Requisite Lenders) confirmed by written notice from Agent to Borrower
Representative, the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%) per annum above
the rates of interest or the rate of such Fees otherwise applicable hereunder
("Default Rate"), and all outstanding Obligations shall bear interest at the
Default Rate applicable to such Obligations. Interest and Letter of Credit Fees
at the Default Rate shall accrue from the initial date of such Default or Event
of Default until that Default or Event of Default is cured or waived and shall
be payable upon demand.

(e) So long as no Default or Event of Default shall have
occurred and be continuing, and subject to the additional conditions precedent
set forth in Section 2.2, Borrower Representative shall have the option to (i)
request that any Revolving Credit Advances be made as a LIBOR Loan, (ii)
convert at any time all or any part of outstanding Loans (other than the Swing
Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan
to an Index Rate Loan, subject to payment of LIBOR breakage costs in accordance
with Section 1.13(b) if such conversion is made prior to the expiration of the
LIBOR Period applicable thereto, or (iv) continue all or any portion of any
Loan (other than the Swing Line Loan) as a LIBOR Loan upon the expiration of
the applicable LIBOR Period and the succeeding LIBOR Period of that continued
Loan shall commence on the last day of the LIBOR Period of the Loan to be
continued. Any Loan to be made or continued as, or converted into, a LIBOR
Loan must be in a minimum amount of $2,000,000 integral multiples of $500,000
in excess of such amount. Any such election must be made by 11:00 a.m.
(Chicago time) on the third (3rd) Business Day prior to (1) the date of any
proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of
each LIBOR Period with respect to any LIBOR Loans to be continued as such, or
(3) the date on which Borrower Representative wishes to convert any Index Rate
Loan to a LIBOR Loan for a LIBOR Period designated by Borrower Representative
in such election. If no election is received with respect to a LIBOR Loan by
11:00 a.m. (Chicago time) on the third (3rd) Business Day prior to the end of
the LIBOR Period with respect thereto (or if a Default or an Event of Default
shall have occurred and be continuing or if the additional conditions precedent
set forth in Section 2.2 shall not have been satisfied), that LIBOR Loan shall
be converted

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to an Index Rate Loan at the end of its LIBOR Period. Borrower
Representative must make such election by notice to Agent in writing, by
telecopy or overnight courier. In the case of any conversion or continuation,
such election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.5(e). No Loan may be made as
or converted into a LIBOR Loan until the earlier of forty-five (45) days after
the Closing Date or completion of syndication.

(f) Notwithstanding anything to the contrary set forth in
this Section 1.5, if a court of competent jurisdiction determines in a final
order that the rate of interest payable hereunder exceeds the highest rate of
interest permissible under law (the "Maximum Lawful Rate"), then so long as the
Maximum Lawful Rate would be so exceeded, the rate of interest payable
hereunder shall be equal to the Maximum Lawful Rate; provided, however, that if
at any time thereafter the rate of interest payable hereunder is less than the
Maximum Lawful Rate, Borrowers shall continue to pay interest hereunder at the
Maximum Lawful Rate until such time as the total interest received by Agent, on
behalf of Lenders, is equal to the total interest which would have been
received had the interest rate payable hereunder been (but for the operation of
this paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in Sections 1.5(a) through (e)
above, unless and until the rate of interest again exceeds the Maximum Lawful
Rate, and at that time this paragraph shall again apply. In no event shall the
total interest received by any Lender pursuant to the terms hereof exceed the
amount which such Lender could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate.
If the Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made.
If, notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in Section 1.11 and thereafter shall refund any excess to Borrowers or as a
court of competent jurisdiction may otherwise order.

1.6 Eligible Accounts. Based on the most recent
Borrowing Base Certificate delivered by each Borrower to Agent and on other
information available to Agent, Agent shall in its reasonable credit judgment
determine which Accounts of each Borrower shall be "Eligible Accounts" for
purposes of this Agreement. In determining whether a particular Account of any
Borrower constitutes an Eligible Account, Agent shall not include any such
Account to which any of the exclusionary criteria set forth below applies.
Agent reserves the right, at any time and from time to time after the Closing
Date, upon prior written notice to Borrower Representative to adjust any such
criteria, to establish new criteria and to adjust advance rates with respect to
Eligible Accounts, in its reasonable credit judgment, subject to the approval
of Supermajority Revolving Lenders in the case of adjustments or new criteria
or changes in advance rates which have the effect of making more credit
available. Eligible Accounts shall not include any Account of any Borrower:

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22
(a) which does not arise from the sale of goods or the
performance of services by such Borrower in the ordinary course of its
business;

(b) upon which (i) such Borrower's right to receive
payment is not absolute or is contingent upon the fulfillment of any condition
whatsoever or (ii) such Borrower is not able to bring suit or otherwise enforce
its remedies against the Account Debtor through judicial process;

(c) to the extent any defense, counterclaim, setoff or
dispute is asserted as to such Account or if the Account represents a progress
billing consisting of an invoice for goods sold or used or services rendered
pursuant to a contract under which the Account Debtor's obligation to pay that
invoice is subject to such Borrower's completion of further performance under
such contract;

(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;

(e) with respect to which an invoice, acceptable to Agent
in form and substance, has not been sent to the applicable Account Debtor;

(f) that (i) is not owned by such Borrower or (ii) is
subject to any right, claim, security interest or other interest of any other
Person, other than Liens in favor of Agent, on behalf of itself and Lenders;

(g) that arises from a sale to any director, officer,
other employee or Affiliate of any Credit Party, or to any entity which has any
common officer or director with any Credit Party;

(h) that is the obligation of an Account Debtor that is
the United States government or a political subdivision thereof, or any state
or municipality or department, agency or instrumentality thereof unless Agent,
in its sole discretion, has agreed to the contrary in writing and such
Borrower, if necessary or desirable, has complied with the Federal Assignment
of Claims Act of 1940, and any amendments thereto, or any applicable state
statute or municipal ordinance of similar purpose and effect, with respect to
such obligation;

(i) that is the obligation of an Account Debtor located
in a foreign country other than Canada (excluding the provinces of Quebec,
Newfoundland, Nova Scotia and Xxxxxx Xxxxxx Island) unless payment thereof is
assured by a letter of credit, satisfactory to Agent as to form, amount and
issuer;

(j) to the extent such Borrower or any Subsidiary thereof
is liable for goods sold or services rendered by the applicable Account Debtor
to such Borrower or any Subsidiary thereof but only to the extent of the
potential offset;

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23
(k) that arises with respect to goods which are delivered
on a xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed
sale or other terms by reason of which the payment by the Account Debtor is or
may be conditional;

(l) that is in default; provided, that, without limiting
the generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:

(i) it is not paid within the earlier of: sixty (60) days
following its due date or ninety (90) days following its original
invoice date;

(ii) if any Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or

(iii) if any petition is filed by or against any Account
Debtor obligated upon such Account under any bankruptcy law or any
other federal, state or foreign (including any provincial)
receivership, insolvency relief or other law or laws for the relief of
debtors;

(m) which is the obligation of an Account Debtor if fifty
percent (50%) or more of the dollar amount of all Accounts owing by that
Account Debtor are ineligible under the other criteria set forth in this
Section 1.6;

(n) as to which Agent's interest, on behalf of itself and
Lenders, therein is not a first priority perfected security interest;

(o) as to which any of the representations or warranties
pertaining to Accounts set forth in this Agreement or the Security Agreement is
untrue;

(p) to the extent such Account is evidenced by a
judgment, Instrument or Chattel Paper;

(q) to the extent such Account exceeds any credit limit
established by Agent, in its reasonable discretion;

(r) which is payable in any currency other than Dollars;
or

(s) which is unacceptable to Agent in its reasonable
credit judgment.

1.7 Eligible Inventory. Based on the most recent
Borrowing Base Certificate delivered by each Borrower to Agent and on other
information available to Agent, Agent shall in its reasonable credit judgment
determine which Inventory of each Borrower shall be "Eligible Inventory" for
purposes of this Agreement. In determining whether any particular Inventory of
any Borrower constitutes Eligible Inventory, Agent shall not include any such
Inventory to which any of the

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exclusionary criteria set forth below applies. Agent reserves the right, at
any time and from time to time after the Closing Date, upon prior written
notice to Borrower Representative to adjust any such criteria, to establish new
criteria and to adjust advance rates with respect to Eligible Inventory, in its
reasonable credit judgment, subject to the approval of Supermajority Revolving
Lenders in the case of adjustments or new criteria or changes in advance rates
which have the effect of making more credit available. Eligible Inventory
shall not include any Inventory of any Borrower:

(a) that is not owned by such Borrower free and clear of
all Liens and rights of any other Person (including the rights of a purchaser
that has made progress payments and the rights of a surety that has issued a
bond to assure such Borrower's performance with respect to that Inventory),
except Permitted Encumbrances;

(b) that is (i) not located on premises owned, leased or
operated by such Borrower or (ii) is stored with a bailee, warehouseman or
similar Person, unless Agent has given its prior consent thereto and unless (x)
a satisfactory bailee letter or landlord waiver has been delivered to Agent, or
(y) Reserves satisfactory to Agent have been established with respect thereto,
or (iii) located at any site if the aggregate book value of Inventory at any
such location is less than $100,000;

(c) that is placed on consignment, is in transit or is
otherwise not located on premises owned or leased by such Borrower;

(d) that is covered by a negotiable document of title,
unless such document has been delivered to Agent;

(e) that in Agent's reasonable determination, is excess,
obsolete, unsalable, shopworn, seconds, damaged or unfit for sale;

(f) that consists of display items or packing or shipping
materials, manufacturing supplies, work-in-process Inventory or replacement
parts;

(g) that consists of goods which have been returned by
the buyer;

(h) that is not of a type held for sale in the ordinary
course of such Borrower's business;

(i) as to which Agent's Lien, on behalf of itself and
Lenders, therein is not a first priority perfected Lien;

(j) as to which any of the representations or warranties
pertaining to Inventory set forth in this Agreement or the Security Agreement
is untrue;

(k) consists of any costs associated with "freight-in"
charges;

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25
(l) consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available;

(m) is not covered by casualty insurance reasonably
acceptable to Agent; or

(n) is otherwise unacceptable to Agent in its reasonable
credit judgment.

1.8 Cash Management Systems. On or prior to the Closing
Date, Borrowers will establish and will maintain until the Termination Date,
the cash management systems described on Annex C (the "Cash Management
Systems").

1.9 Fees. (a) Borrowers shall pay to GE Capital,
individually, the Fees specified in that certain fee letter dated as of
February 24, 1997 among Borrowers and GE Capital (the "GE Capital Fee Letter"),
at the times specified for payment therein.

(b) As additional compensation for the Revolving Lenders,
Borrowers agree to pay to Agent, for the ratable benefit of such Lenders, in
arrears, on the first Business Day of each month prior to the Commitment
Termination Date and on the Commitment Termination Date, a fee for Borrowers'
non-use of available funds in an amount equal to one- half percent (0.5%) per
annum (calculated on the basis of a 360 day year for actual days elapsed) of
the difference between (x) the Maximum Amount (as it may be reduced from time
to time) and (y) the average for the period of the daily closing balances of
the aggregate Revolving Loan and the Swing Line Loan outstanding during the
period for which such fee is due.

(c) If Borrowers prepay all or any portion of the Term
Loan A or Term Loan B or prepay the Revolving Loan and reduce or terminate the
Revolving Loan Commitment, whether voluntarily or involuntarily and whether
before or after acceleration of the Obligations, Borrowers shall pay to Agent,
for the benefit of Lenders as liquidated damages and compensation for the costs
of being prepared to make funds available hereunder an amount determined by
multiplying the Applicable Percentage (as defined below) by (i) the principal
amount of the Term Loans prepaid, and (ii) the amount of the reduction of the
Revolving Loan Commitment. As used herein, the term "Applicable Percentage"
shall mean (x) three percent (3.0%), in the case of a prepayment on or prior to
the first anniversary of the Closing Date, (y) two percent (2.0%), in the case
of a prepayment after the first anniversary of the Closing Date but on or prior
to the second anniversary, and (z) one percent (1.0%), in the case of a
prepayment after the second anniversary of the Closing Date but on or prior to
the third anniversary. Notwithstanding the foregoing, no prepayment fee shall
be payable by Borrowers upon a voluntary prepayment of Term Loan A or Term Loan
B from Borrowers' operating cash flow in the ordinary course or a mandatory
prepayment made pursuant to Sections 1.3(b) or 1.16(c); provided that Borrowers
do not permanently reduce the Revolving Loan Commitment upon any such
prepayment and, in the case of prepayments made pursuant to Section 1.3(b)(ii)
or (b)(iii), the transaction giving rise to the applicable prepayment is
expressly permitted under Section 6.

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1.10 Receipt of Payments. Borrowers shall make each
payment under this Agreement not later than 1:00 p.m. (Chicago time) on the day
when due in immediately available funds in Dollars to the Collection Account.
For purposes of computing interest and Fees and determining Borrowing
Availability or Net Borrowing Availability as of any date, all payments shall
be deemed received on the day of receipt of immediately available funds
therefor in the Collection Account prior to 1:00 p.m. Chicago time. Payments
received after 1:00 p.m. Chicago time on any Business Day shall be deemed to
have been received on the following Business Day.

1.11 Application and Allocation of Payments. (a) So long
as no Event of Default shall have occurred and be continuing, (i) payments
consisting of proceeds of Accounts received in the ordinary course of business
shall be applied to the Swing Line Loan and the Revolving Loan; (ii) payments
matching specific scheduled payments then due shall be applied to those
scheduled payments; (iii) voluntary prepayments shall be applied as determined
by Borrower Representative, subject to the provisions of Section 1.3(a); and
(iv) mandatory prepayments shall be applied as set forth in Section 1.3. As to
each other payment, and as to all payments made when an Event of Default shall
have occurred and be continuing or following the Commitment Termination Date,
each Borrower hereby irrevocably waives the right to direct the application of
any and all payments received from or on behalf of such Borrower, and each
Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations of
Borrowers as Agent may deem advisable notwithstanding any previous entry by
Agent in the Loan Account or any other books and records. In the absence of a
specific determination by Agent with respect thereto, payments shall be applied
to amounts then due and payable in the following order: (1) to Fees and Agent's
and the Lenders' expenses reimbursable hereunder; (2) to interest on the Swing
Line Loan; (3) to principal payments on the Swing Line Loan; (4) to interest on
the other Loans, ratably in proportion to the interest accrued as to each Loan;
(5) to principal payments on the other Loans and to provide cash collateral for
Letter of Credit Obligations in the manner described in Annex B, ratably to the
aggregate, combined principal balance of the other Loans and outstanding Letter
of Credit Obligations; and (6) to all other Obligations including expenses of
Lenders to the extent reimbursable under Section 11.3.

(b) Agent is authorized to, and at its sole election may,
charge to the Revolving Loan balance on behalf of each Borrower and cause to be
paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(a)) and interest and principal, other than
principal of the Revolving Loan, owing by Borrowers under this Agreement or any
of the other Loan Documents if and to the extent Borrowers fail to promptly pay
any such amounts as and when due, even if such charges would cause the balance
of the aggregate Revolving Loan and the Swing Line Loan to exceed Borrowing
Availability or would cause the balance of the Revolving Loan and the Swing
Line Loan of any Borrower to exceed such Borrower's separate Borrowing Base.
At Agent's option and to the extent permitted by law, any charges so made shall
constitute part of the Revolving Loan hereunder.

1.12 Loan Account and Accounting. Agent shall maintain a
loan account (the "Loan Account") on its books to record: (a) all Advances and
the Term Loan, (b) all payments made

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by Borrowers, and (c) all other debits and credits as provided in this
Agreement with respect to the Loans or any other Obligations. All entries in
the Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent's most recent printout or other written statement, shall be
presumptive evidence of the amounts due and owing to Agent and Lenders by each
Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect any Borrower's duty to pay the Obligations.
Agent shall render to Borrower Representative and each Lender a monthly
accounting of transactions with respect to the Loans setting forth the balance
of the Loan Account as to each Borrower. Unless Borrower Representative
notifies Agent in writing of any objection to any such accounting (specifically
describing the basis for such objection), within thirty (30) days after the
date thereof, each and every such accounting shall (absent manifest error) be
deemed final, binding and conclusive upon Borrowers in all respects as to all
matters reflected therein. Only those items expressly objected to in such
notice shall be deemed to be disputed by Borrowers.

1.13 Indemnity. (a) Each Credit Party that is a
signatory hereto shall jointly and severally indemnify and hold harmless each
of Agent, Lenders and their respective Affiliates, and each such Person's
respective officers, directors, employees, attorneys, agents and
representatives (each, an "Indemnified Person"), from and against any and all
suits, actions, proceedings, claims, damages, losses, liabilities and expenses
(including attorneys' fees and disbursements and other costs of investigation
or defense, including those incurred upon any appeal) which may be instituted
or asserted against or incurred by any such Indemnified Person as the result of
credit having been extended, suspended or terminated under this Agreement and
the other Loan Documents and the administration of such credit, and in
connection with or arising out of the transactions contemplated hereunder and
thereunder and any actions or failures to act in connection therewith,
including any and all Environmental Liabilities and legal costs and expenses
arising out of or incurred in connection with disputes between or among any
parties to any of the Loan Documents (collectively, "Indemnified Liabilities");
provided, that no such Credit Party shall be liable for any indemnification to
an Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from that Indemnified
Person's gross negligence or willful misconduct, as finally determined by a
court of competent jurisdiction. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

(b) To induce Lenders to provide the LIBOR Rate option on
the terms provided herein, if (i) any LIBOR Loans are repaid in whole or in
part prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any provision of this Agreement or any other Loan
Document or is the result of acceleration, by operation of law or otherwise);
(ii) any

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Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall default in making any
borrowing of, conversion into or continuation of LIBOR Loans after Borrower
Representative has given notice requesting the same in accordance herewith; or
(iv) any Borrower shall fail to make any prepayment of a LIBOR Loan after
Borrower Representative has given a notice thereof in accordance herewith,
Borrowers shall jointly and severally indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing. Such indemnification shall include any loss (including
loss of margin) or expense arising from the reemployment of funds obtained by
it or from fees payable to terminate deposits from which such funds were
obtained. For the purpose of calculating amounts payable to a Lender under
this subsection, each Lender shall be deemed to have actually funded its
relevant LIBOR Loan through the purchase of a deposit bearing interest at the
LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder. As promptly as practicable under the circumstances, each Lender
shall provide Borrower Representative with its written calculation of all
amounts payable pursuant to this Section 1.13(b), and such calculation shall be
binding on the parties hereto unless Borrower Representative shall object in
writing within ten (10) Business Days of receipt thereof, specifying the basis
for such objection in detail.

1.14 Access. Each Credit Party which is a party hereto
shall, during normal business hours, from time to time upon three (3) Business
Day's prior notice as frequently as Agent determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors and employees (including officers) of each
Credit Party and to the Collateral, (b) permit Agent, and any of its officers,
employees and agents, to inspect, audit and make extracts from any Credit
Party's books and records, and (c) permit Agent, and its officers, employees
and agents, to inspect, review, evaluate and make test verifications and counts
of the Accounts, Inventory and other Collateral of any Credit Party. If an
Event of Default shall have occurred and be continuing, each such Credit Party
shall provide such access to Agent and to each Lender at all times and without
advance notice. Furthermore, so long as any Event of Default shall have
occurred and be continuing, Borrowers shall provide Agent and each Lender with
access to their suppliers and customers. Each Credit Party shall make
available to Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records which Agent may
request. Each Credit Party shall deliver any document or instrument necessary
for Agent, as it may from time to time reasonably request, to obtain records
from any service bureau or other Person which maintains records for such Credit
Party, and shall maintain duplicate records or supporting documentation on
media, including computer tapes and discs owned by such Credit Party. Agent
will give Lenders at least ten (10) days' prior written notice of regularly
scheduled audits. Representatives of other Lenders may accompany Agent's
representatives on regularly scheduled audits at no charge to Borrowers.

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1.15 Taxes. (a) Any and all payments by each Borrower
hereunder (including any payments made pursuant to Section 12) or under the
Notes shall be made, in accordance with this Section 1.15, free and clear of
and without deduction for any and all present or future Taxes. If any Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder (including any sum payable pursuant to Section 12) or under
the Notes, (i) the sum payable shall be increased as much as shall be necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 1.15) Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, and
(iii) such Borrower shall pay the full amount deducted to the relevant taxing
or other authority in accordance with applicable law. Within thirty (30) days
after the date of any payment of Taxes, Borrower Representative shall furnish
to Agent the original or a certified copy of a receipt evidencing payment
thereof.

(b) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and, within ten (10) days of demand therefor,
pay Agent and each Lender for the full amount of Taxes (including any Taxes
imposed by any jurisdiction on amounts payable under this Section 1.15) paid by
Agent or such Lender, as appropriate, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally asserted.

(c) Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which
payments to be made under this Agreement or under the Notes are exempt from
United States withholding tax under an applicable statute or tax treaty shall
provide to Borrower Representative and Agent a properly completed and executed
IRS Form 4224 or Form 1001 or other applicable form, certificate or document
prescribed by the IRS or the United States certifying as to such Foreign
Lender's entitlement to such exemption (a "Certificate of Exemption"). Any
foreign Person that seeks to become a Lender under this Agreement shall provide
a Certificate of Exemption to Borrower Representative and Agent prior to
becoming a Lender hereunder. No foreign Person may become a Lender hereunder
if such Person is unable to deliver a Certificate of Exemption.

1.16 Capital Adequacy; Increased Costs; Illegality. (a)
If any Lender shall have determined that the adoption after the date hereof of
any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive
regarding capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law) from any central bank or other
Governmental Authority increases or would have the effect of increasing the
amount of capital, reserves or other funds required to be maintained by such
Lender and thereby reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder, then Borrowers shall from time to
time upon demand by such Lender (with a copy of such demand to Agent) pay to
Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of
that reduction and showing the basis of the computation thereof submitted by
such Lender to Borrower

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Representative and to Agent shall, absent manifest error, be final, conclusive
and binding for all purposes.

(b) If, due to either (i) the introduction of or any
change in any law or regulation (or any change in the interpretation thereof)
or (ii) the compliance with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining any Loan, then Borrowers shall from time to time, upon
demand by such Lender (with a copy of such demand to Agent), pay to Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such
increased cost, submitted to Borrower Representative and to Agent by such
Lender, shall be conclusive and binding on Borrowers for all purposes, absent
manifest error. Each Lender agrees that, as promptly as practicable after it
becomes aware of any circumstances referred to above which would result in any
such increased cost, the affected Lender shall, to the extent not inconsistent
with such Lender's internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it and payable to
it by Borrowers pursuant to this Section 1.16(b).

(c) Notwithstanding anything to the contrary contained
herein, if the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender to agree to make or to make or to continue to fund or maintain any LIBOR
Loan, then, unless that Lender is able to make or to continue to fund or to
maintain such LIBOR Loan at another branch or office of that Lender without, in
that Lender's opinion, adversely affecting it or its Loans or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to
Borrower Representative through Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Loans shall
terminate and (ii) each Borrower shall forthwith prepay in full all outstanding
LIBOR Loans owing by such Borrower to such Lender, together with interest
accrued thereon, unless Borrower Representative on behalf of such Borrower,
within five (5) Business Days after the delivery of such notice and demand,
converts all such Loans into a Loan bearing interest based on the Index Rate.

(d) Replacement of Lender in Respect of Increased Costs.
Within fifteen (15) days after receipt by Borrower Representative of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Section 1.15(a), 1.16(a)
or 1.16(b), Borrower Representative may, at its option, notify Agent and such
Affected Lender of its intention to replace the Affected Lender. So long as no
Default or Event of Default shall have occurred and be continuing, Borrower
Representative, with the consent of Agent, may obtain, at Borrowers' expense, a
replacement Lender ("Replacement Lender") for the Affected Lender, which
Replacement Lender must be satisfactory to Agent. If Borrowers obtain a
Replacement Lender within ninety (90) days following notice of their intention
to do so, the Affected Lender must sell and assign its Loans and Commitments to
such Replacement Lender for an amount equal to the principal balance of all
Loans held by the Affected Lender and all accrued interest and Fees with
respect thereto through the date of such sale, provided that Borrowers shall
have

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reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment.

Notwithstanding the foregoing, Borrowers shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within fifteen (15) days following its receipt of
Borrowers' notice of intention to replace such Affected Lender. Furthermore,
if Borrowers give a notice of intention to replace and do not so replace such
Affected Lender within ninety (90) days thereafter, Borrowers' rights under
this Section 1.16(d) shall terminate and Borrowers shall promptly pay all
increased costs or additional amounts demanded by such Affected Lender pursuant
to Sections 1.15(a), 1.16(a) and 1.16(b).

1.17 Single Loan. All Loans to each Borrower and all
of the other Obligations of each Borrower arising under this Agreement and the
other Loan Documents shall constitute one general obligation of that Borrower
secured, until the Termination Date, by all of its Collateral.

2. CONDITIONS PRECEDENT

2.1 Conditions to the Initial Loans.

No Lender shall be obligated to make any Loan or incur any
Letter of Credit Obligations on the Closing Date, or to take, fulfill, or
perform any other action hereunder, until the following conditions have been
satisfied or provided for in a manner reasonably satisfactory to Agent, or
waived in writing by Agent and Lenders:

(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrowers, Agent and Lenders; and Agent shall have received such documents,
instruments, agreements and legal opinions as Agent shall request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, including all those listed in the Closing Checklist attached hereto
as Annex D, each in form and substance satisfactory to Agent.

(b) Repayment of Prior Lender Obligations; Satisfaction
of Outstanding L/Cs. (i) Agent shall have received a fully executed original
or copy of pay-off letters satisfactory to Agent confirming that all of the
Indebtedness owed by any Credit Party to each Prior Lender will be repaid in
full from the proceeds of the Term Loans and the initial Revolving Credit
Advance and all Liens upon any of the property of Borrowers or any of their
Subsidiaries in favor of Prior Lenders shall be terminated by Prior Lenders
immediately upon such payment; and (ii) all letters of credit issued or
guaranteed by any Prior Lender shall have been cash collateralized, supported
by a guaranty of Agent or supported by a Letter of Credit issued pursuant to
Annex B, as mutually agreed upon by Agent, Borrowers and Prior Lender.

(c) Approvals. Agent shall have received (i)
satisfactory evidence that the Credit Parties have obtained all required
consents and approvals of all Persons including all requisite

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Governmental Authorities, to the execution, delivery and performance of this
Agreement and the other Loan Documents and the consummation of the Related
Transactions or (ii) an officer's certificate in form and substance
satisfactory to Agent affirming that no such consents or approvals are
required.

(d) Opening Availability. The Eligible Accounts and
Eligible Inventory of each Borrower supporting the initial Revolving Credit
Advance and the initial Letter of Credit Obligations incurred and the amount of
the Reserves to be established on the Closing Date shall be sufficient in
value, as determined by Agent, to provide Borrowers, collectively, with Net
Borrowing Availability, after giving effect to the initial Revolving Credit
Advance made to each Borrower, the incurrence of any initial Letter of Credit
Obligations and the consummation of the Related Transactions (on a pro forma
basis, with trade payables being paid currently, and expenses and liabilities
being paid in the ordinary course of business and without acceleration of
sales) of at least $5,000,000.

(e) Payment of Fees. Borrowers shall have paid the Fees
required to be paid on the Closing Date in the respective amounts specified in
Section 1.9 (including the Fees specified in the GE Capital Fee Letter), and
shall have reimbursed Agent for all fees, costs and expenses of closing
presented as of the Closing Date, and GE Capital shall have paid a closing fee
to LaSalle National Bank equal to 1% of its Commitment.

(f) Equity and Indebtedness. As of the Closing Date and
after giving effect to the Related Transactions, Holdings shall have
stockholders common equity of approximately $14,100,000 and Holdings and its
Subsidiaries shall not have Indebtedness outstanding in excess of $56,750,000.

(g) Consummation of Related Transactions. Agent and
Lenders shall have received fully executed copies of the Acquisition Agreement
but for the cash consideration thereunder, the Subordinated Notes, and each of
the other Related Transactions Documents, each of which shall be in form and
substance satisfactory to Agent and its counsel. The Acquisition and the other
Related Transactions shall have been consummated in accordance with the terms
of the Acquisition Agreement and the other Related Transactions Documents but
for the payment of the cash purchase price payable on the Closing Date pursuant
to the Acquisition Agreement.

(h)(i) The Credit Parties shall have, immediately prior to
the Acquisition, at least $1,900,000 of cash on hand which will be used to fund
a portion of the cash consideration paid for the Acquisition; (ii) Holdings
shall pay at least $2,400,000 of the consideration for the Acquisition by the
issuance of its common stock; (iii) the cash portion of the consideration paid
for the Acquisition shall not exceed $48,300,000; and (iv) aggregate fees and
closing costs for the Related Transactions will not exceed $3,700,000.

2.2 Further Conditions to Each Loan. Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Loan,
convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit
Obligation, if, as of the date thereof:

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(a) Any representation or warranty by any Credit Party
contained herein or in any of the other Loan Documents shall be untrue or
incorrect as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement; or

(b) Any event or circumstance having a Material Adverse
Effect shall have occurred since the date hereof; or

(c) (i) Any Event of Default shall have occurred and be
continuing or would result after giving effect to any Loan (or the incurrence
of any Letter of Credit Obligations), or (ii) a Default shall have occurred and
be continuing or would result after giving effect to any Loan, and Agent or
Requisite Revolving Lenders shall have determined not to make any Loan or incur
any Letter of Credit Obligation so long as that Default is continuing; or

(d) After giving effect to any Advance (or the incurrence
of any Letter of Credit Obligations), (i) the outstanding principal amount of
the aggregate Revolving Loan would exceed the lesser of the Aggregate Borrowing
Base and the Maximum Amount, less, in each case, the outstanding principal
amount of the Swing Line Loan, or (ii) the outstanding principal amount of the
Revolving Loan of the applicable Borrower would exceed such Borrower's separate
Borrowing Base less the outstanding principal amount of the Swing Line Loan to
that Borrower; or

(e) After giving effect to any Swing Line Advance, (i)
the outstanding principal amount of the Swing Line Loan would exceed Swing Line
Availability, or (ii) the outstanding principal amount of the Swing Line Loan
of the applicable Borrower would exceed such Borrower's separate Borrowing Base
less the outstanding principal amount of the Revolving Loan to that Borrower.

The request and acceptance by any Borrower of the proceeds of any Loan, the
incurrence of any Letter of Credit Obligations or the conversion or
continuation of any Loan into, or as, a LIBOR Loan, as the case may be, shall
be deemed to constitute, as of the date of such request or acceptance, (i) a
representation and warranty by Borrowers that the conditions in this Section
2.2 have been satisfied and (ii) a reaffirmation by Borrowers of the
cross-guaranty provisions set forth in Section 12 and of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.

3. REPRESENTATIONS AND WARRANTIES

To induce Lenders to make the Loans and to incur Letter of
Credit Obligations, the Credit Parties executing this Agreement, jointly and
severally, make the following representations and warranties to Agent and each
Lender with respect to all Credit Parties, each and all of which shall survive
the execution and delivery of this Agreement.

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3.1 Corporate Existence; Compliance with Law. Each
Credit Party (a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation; (b) is duly
qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect; (c) has the requisite
corporate power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now, heretofore and
proposed to be conducted; (d) has all material licenses, permits, consents or
approvals from or by, and has made all filings with, and has given all notices
to, all Governmental Authorities having jurisdiction, to the extent required
for such ownership, operation and conduct; (e) is in compliance with its
charter and by-laws; and (f) subject to specific representations set forth
herein regarding ERISA, Environmental Laws, tax and other laws, is in
compliance with all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

3.2 Executive Offices; FEIN. As of the Closing Date, the
current location of each Credit Party's chief executive office and principal
place of business is set forth in Disclosure Schedule (3.2), and none of such
locations have changed within the twelve (12) months preceding the Closing
Date. In addition, Disclosure Schedule (3.2) lists the federal employer
identification number of each Credit Party.

3.3 Corporate Power, Authorization, Enforceable
Obligations. The execution, delivery and performance by each Credit Party of
the Loan Documents to which it is a party and the creation of all Liens
provided for therein: (a) are within such Person's corporate power; (b) have
been duly authorized by all necessary or proper corporate and shareholder
action; (c) do not contravene any provision of such Person's charter or bylaws;
(d) do not violate in any material respect any law or regulation, or any order
or decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Person is a party or by which such Person or any of its property is
bound; (f) do not result in the creation or imposition of any Lien upon any of
the property of such Person other than those in favor of Agent, on behalf of
itself and Lenders, pursuant to the Loan Documents; and (g) do not require the
consent or approval of any Governmental Authority or any other Person, except
those referred to in Section 2.1(c), all of which will have been duly obtained,
made or complied with prior to the Closing Date. On or prior to the Closing
Date, each of the Loan Documents shall have been duly executed and delivered by
each Credit Party thereto and each such Loan Document shall then constitute a
legal, valid and binding obligation of such Credit Party enforceable against it
in accordance with its terms.

3.4 Financial Statements and Projections. Except for the
Projections, all Financial Statements concerning Holdings and its Subsidiaries
which are referenced below have been prepared in accordance with GAAP
consistently applied throughout the periods covered (except as disclosed
therein and except, with respect to unaudited Financial Statements, for the
absence of footnotes and

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normal year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates thereof
and the results of their operations and cash flows for the periods then ended.

(a) The following Financial Statements attached hereto as
Disclosure Schedule (3.4(A)) have been delivered on or prior to the date
hereof:

(i) The audited combined balance sheets of Tamor and
Housewares at December 31, 1995 and 1996 and the related combined
statements of income, stockholders' equity and cash flows for each of
the three Fiscal Years for the period ended December 31, 1996,
certified by BDO Xxxxxxx.

(ii) The audited consolidated balance sheet at December
30, 1995 and the related consolidated statement(s) of income and cash
flows of Selfix and Shutters for the Fiscal Year then ended.

(iii) The preliminary consolidated audited balance sheets at
December 28, 1996 and the related consolidated statements of income
and cash flow of Selfix and Shutters for the fiscal year then ended.

(b) Pro Forma. The Pro Forma delivered on or prior to
the date hereof and attached hereto as Disclosure Schedule (3.4(B)) was
prepared by Borrowers giving pro forma effect to the Related Transactions, was
based on the unaudited consolidated and consolidating balance sheets of
Borrowers and their Subsidiaries dated as of January 31, 1997, and was prepared
in accordance with GAAP, with only such adjustments thereto as would be
required in accordance with GAAP.

(c) Forecasts. The forecasts delivered on or prior to
the date hereof and attached hereto as Disclosure Schedule (3.4(C)) have been
prepared by Borrowers in light of the past operations of their businesses and
reflect projections for the Fiscal Year beginning on December 29, 1996 on a
month by month basis. The forecasts are based upon estimates and assumptions
stated therein, all of which Borrowers believe to be reasonable and fair in
light of current conditions and current facts known to Borrowers and, as of the
Closing Date, reflect Borrowers' good faith and reasonable estimates of the
future financial performance of Borrowers and of the other information
projected therein for the period set forth therein.

3.5 Material Adverse Effect. Between December 31, 1996
and the Closing Date, (a) no Credit Party has incurred any obligations,
contingent or non-contingent liabilities, liabilities for Charges, long-term
leases or unusual forward or long-term commitments which are not reflected in
the Pro Forma and which, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, (b) no contract, lease or other
agreement or instrument has been entered into by any Credit Party or has become
binding upon any Credit Party's assets and no law or regulation applicable to
any Credit Party has been adopted which has had or could reasonably be expected
to have a

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Material Adverse Effect, and (c) no Credit Party is in default and to the best
of Borrowers' knowledge no third party is in default under any material
contract, lease or other agreement or instrument, which alone or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
Between December 31, 1996 and the Closing Date no event has occurred, which
alone or together with other events, could reasonably be expected to have a
Material Adverse Effect.

3.6 Ownership of Property; Liens. As of the Closing
Date, the real estate ("Real Estate") listed on Disclosure Schedule (3.6)
constitutes all of the real property owned, leased, subleased, or used by any
Credit Party. Each Credit Party owns good and marketable fee simple title to
all of its owned real estate, and valid and marketable leasehold interests in
all of its leased Real Estate, all as described on Disclosure Schedule (3.6),
and copies of all such leases or a summary of terms thereof satisfactory to
Agent have been delivered to Agent. Disclosure Schedule (3.6) further
describes any Real Estate with respect to which any Credit Party is a lessor,
sublessor or assignor as of the Closing Date. Each Credit Party also has good
and marketable title to, or valid leasehold interests in, all of its personal
properties and assets. As of the Closing Date, none of the properties and
assets of any Credit Party are subject to any Liens other than Permitted
Encumbrances, and there are no facts, circumstances or conditions known to any
Credit Party that may result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Encumbrances. Disclosure Schedule
(3.6) also describes any purchase options, rights of first refusal or other
similar contractual rights pertaining to any Real Estate. As of the Closing
Date, no portion of any Credit Party's Real Estate has suffered any material
damage by fire or other casualty loss which has not heretofore been repaired
and restored in all material respects to its original condition or otherwise
remedied. As of the Closing Date, all material permits required to have been
issued or appropriate to enable the Real Estate to be lawfully occupied and
used for all of the purposes for which they are currently occupied and used
have been lawfully issued and are in full force and effect.

3.7 Labor Matters. As of the Closing Date (a) no strikes
or other material labor disputes against any Credit Party are pending or, to
any Credit Party's knowledge, threatened; (b) hours worked by and payment made
to employees of each Credit Party comply with the Fair Labor Standards Act and
each other federal, state, local or foreign law applicable to such matter; (c)
all payments due from any Credit Party for employee health and welfare
insurance have been paid or accrued as a liability on the books of such Credit
Party; (d) except as set forth in Disclosure Schedule (3.7), no Credit Party is
a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement or any employment agreement (and true and
complete copies of any agreements described on Disclosure Schedule (3.7) have
been delivered to Agent); (e) there is no organizing activity involving any
Credit Party pending or, to any Credit Party's knowledge, threatened by any
labor union or group of employees; (f) there are no representation proceedings
pending or, to any Credit Party's knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of any Credit
Party has made a pending demand for recognition; and (g) except as set forth in
Disclosure Schedule (3.7), there are no complaints or charges against any
Credit Party pending or, to the knowledge of any Credit Party, threatened to be
filed with any Governmental Authority or arbitrator based on, arising out of,
in connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.

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3.8 Ventures, Subsidiaries and Affiliates; Outstanding
Stock. Except as set forth in Disclosure Schedule (3.8), no Credit Party has
any Subsidiaries, is engaged in any joint venture or partnership with any other
Person, or is an Affiliate of any other Person. All of the issued and
outstanding Stock of each Credit Party is owned by each of the stockholders and
in the amounts set forth on Disclosure Schedule (3.8). There are no outstanding
rights to purchase, options, warrants or similar rights or agreements pursuant
to which any Credit Party may be required to issue, sell, repurchase or redeem
any of its Stock or other equity securities or any Stock or other equity
securities of its Subsidiaries. All outstanding Indebtedness of each Credit
Party as of the Closing Date is described in Section 6.3 (including Disclosure
Schedule (6.3)).

3.9 Government Regulation. No Credit Party is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940 as amended. No Credit Party is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any other federal or state statute that restricts or limits its
ability to incur Indebtedness or to perform its obligations hereunder. The
making of the Loans by Lenders to Borrowers, the incurrence of the Letter of
Credit Obligations on behalf of Borrowers, the application of the proceeds
thereof and repayment thereof and the consummation of the Related Transactions
will not violate any material provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange Commission.

3.10 Margin Regulations. No Credit Party is engaged, nor
will it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin security" as such terms are defined in Regulation U or G of the Federal
Reserve Board as now and from time to time hereafter in effect (such securities
being referred to herein as "Margin Stock"). No Credit Party owns any Margin
Stock, and none of the proceeds of the Loans or other extensions of credit
under this Agreement will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
any Margin Stock or for any other purpose which might cause any of the Loans or
other extensions of credit under this Agreement to be considered a "purpose
credit" within the meaning of Regulation G, T, U or X of the Federal Reserve
Board. No Credit Party will take or permit to be taken any action which might
cause any Loan Document to violate any regulation of the Federal Reserve Board.

3.11 Taxes. All tax returns, reports and statements,
including information returns, required by any Governmental Authority to be
filed by any Credit Party have been filed with the appropriate Governmental
Authority and all Charges have been paid prior to the date on which any fine,
penalty, interest or late charge may be added thereto for nonpayment thereof
(or any such fine, penalty, interest, late charge or loss has been paid),
excluding Charges or other amounts being contested in accordance with Section
5.2(b). Proper and accurate amounts have been withheld by each Credit Party
from its respective employees for all periods in full and complete compliance
with all applicable federal, state, local and foreign law and such withholdings
have been timely paid to the respective Governmental Authorities. Disclosure
Schedule (3.11) sets forth as of the Closing Date

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those taxable years for which any Credit Party's tax returns are currently
being audited by the IRS or any other applicable Governmental Authority and any
assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding. Except as described on Disclosure Schedule
(3.11), no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties and their respective predecessors are liable for any
Charges: (a) under any agreement (including any tax sharing agreements) or (b)
to each Credit Party's knowledge, as a transferee. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would have a Material Adverse Effect.

3.12 ERISA. (a) Disclosure Schedule (3.12) lists and
separately identifies all Title IV Plans, Multiemployer Plans, ESOPs and
Retiree Welfare Plans. Copies of all such listed Plans, together with a copy
of the latest form 5500 for each such Plan, have been delivered to Agent. Each
Qualified Plan has been determined by the IRS to qualify under Section 401 of
the IRC, and the trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the IRC, and nothing has
occurred which would cause the loss of such qualification or tax-exempt status.
Each Plan is in compliance with the applicable provisions of ERISA and the IRC,
including the filing of reports required under the IRC or ERISA. No Credit
Party or ERISA Affiliate has failed to make any contribution or pay any amount
due as required by either Section 412 of the IRC or Section 302 of ERISA or the
terms of any such Plan. No Credit Party or ERISA Affiliate has engaged in a
prohibited transaction, as defined in Section 4975 of the IRC, in connection
with any Plan, which would subject any Credit Party to a material tax on
prohibited transactions imposed by Section 4975 of the IRC.

(b) Except as set forth in Disclosure Schedule (3.12):
(i) no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or
event described in Section 4062(e) of ERISA with respect to any Title IV Plan
has occurred or is reasonably expected to occur; (iii) there are no pending, or
to the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan with
Unfunded Pension Liabilities has been transferred outside of the "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party
or ERISA Affiliate; and (vi) no liability under any Title IV Plan has been
satisfied with the purchase of a contract from an insurance company that is not
rated AAA by the Standard & Poor's Corporation or the equivalent by another
nationally recognized rating agency.

3.13 No Litigation. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any Credit
Party, threatened against any Credit Party, before any Governmental Authority
or before any arbitrator or panel of arbitrators (collectively, "Litigation"),
(a) which challenges any Credit Party's right or power to enter into or perform
any of its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of

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any Loan Document or any action taken thereunder, or (b) which has a reasonable
risk of being determined adversely to any Credit Party and which, if so
determined, could have a Material Adverse Effect. Except as set forth on
Disclosure Schedule (3.13), as of the Closing Date there is no Litigation
pending or threatened which seeks damages in excess of $250,000 or injunctive
relief or alleges criminal misconduct of any Credit Party.

3.14 Brokers. No broker or finder acting on behalf of any
Credit Party brought about the obtaining, making or closing of the Loans or the
Related Transactions, and no Credit Party has any obligation to any Person in
respect of any finder's or brokerage fees in connection therewith.

3.15 Intellectual Property. As of the Closing Date, each
Credit Party owns or has rights to use all Intellectual Property necessary to
continue to conduct its business as now conducted by it or proposed to be
conducted by it, and each material Patent, Trademark and License is listed,
together with application or registration numbers, as applicable, in Disclosure
Schedule (3.15) hereto. To its knowledge, each Credit Party conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person.

3.16 Full Disclosure. No information contained in this
Agreement, any of the other Loan Documents, any Projections, Financial
Statements or Collateral Reports or other reports from time to time delivered
hereunder or any written statement furnished by or on behalf of any Credit
Party to Agent or any Lender pursuant to the terms of this Agreement contains
or will contain any untrue statement of a material fact or omits or will omit
to state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were
made. The Liens granted to Agent, on behalf of itself and Lenders, pursuant to
the Collateral Documents will at all times be fully perfected first priority
Liens in and to the Collateral described therein, subject, as to priority, only
to Permitted Encumbrances with respect to the Collateral other than Accounts.

3.17 Environmental Matters. (a) Except as set forth in
Disclosure Schedule (3.17), as of the Closing Date: (i) the Real Estate is free
of contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and
which would not result in Environmental Liabilities which could reasonably be
expected to exceed $250,000; (ii) no Credit Party has caused or suffered to
occur any Release of Hazardous Materials on, at, in, under, above, to, from or
about any of its Real Estate; (iii) the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance which
would not result in Environmental Liabilities which could reasonably be
expected to exceed $250,000; (iv) the Credit Parties have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply with
such Environmental Permits would not result in Environmental Liabilities which
could reasonably be expected to exceed $250,000, and all such Environmental
Permits are valid, uncontested and in good standing; (v) no Credit Party is
involved in operations or knows of any facts, circumstances or conditions,
including any Releases of Hazardous Materials, that are likely to result in any

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Environmental Liabilities of such Credit Party which could reasonably be
expected to exceed $250,000, and no Credit Party has permitted any current or
former tenant or occupant of the Real Estate to engage in any such operations;
(vi) there is no Litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material which seeks damages, penalties,
fines, costs or expenses in excess of $25,000 or injunctive relief, or which
alleges criminal misconduct by any Credit Party; (vii) no notice has been
received by any Credit Party identifying it as a "potentially responsible
party" or requesting information under CERCLA or analogous state statutes, and
to the knowledge of the Credit Parties, there are no facts, circumstances or
conditions that may result in any Credit Party being identified as a
"potentially responsible party" under CERCLA or analogous state statutes; and
(viii) the Credit Parties have provided to Agent copies of all existing
environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities, in each case
relating to any Credit Party.

(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or any Credit Party's affairs, and (ii) does not have the capacity
through the provisions of the Loan Documents or otherwise to influence any
Credit Party's conduct with respect to the ownership, operation or management
of any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.

3.18 Insurance. Disclosure Schedule (3.18) lists all
insurance policies of any nature maintained, as of the Closing Date, for
current occurrences by each Credit Party, as well as a summary of the terms of
each such policy.

3.19 Deposit and Disbursement Accounts. Disclosure
Schedule (3.19) lists all banks and other financial institutions at which any
Credit Party maintains deposits and/or other accounts as of the Closing Date,
including any Disbursement Accounts, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number.

3.20 Government Contracts. Except as set forth in
Disclosure Schedule (3.20), as of the Closing Date, no Credit Party is a party
to any contract or agreement with any Governmental Authority and no Credit
Party's Accounts are subject to the Federal Assignment of Claims Act, as
amended (31 U.S.C. Section 3727) or any similar state or local law.

3.21 Customer and Trade Relations. As of the Closing
Date, there exists no actual or, to the knowledge of any Credit Party,
threatened termination or cancellation of, or any material adverse modification
or change in: (a) the business relationship of any Credit Party with any
customer or group of customers whose purchases during the preceding twelve (12)
months caused them to be ranked among the ten largest customers of such Credit
Party; or (b) the business relationship of any Credit Party with any supplier
material to its operations.

3.22 Agreements and Other Documents. As of the Closing
Date, each Credit Party has provided to Agent or its counsel, on behalf of
Lenders, accurate and complete copies (or

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summaries) of all of the following agreements or documents to which any it is
subject and each of which are listed on Disclosure Schedule (3.22): (a) supply
agreements and purchase agreements not terminable by such Credit Party within
sixty (60) days following written notice issued by such Credit Party and
involving transactions in excess of $1,000,000 per annum; (b) any lease of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $500,000 per annum; (c) licenses and
permits held by the Credit Parties, the absence of which could be reasonably
likely to have a Material Adverse Effect; (d) instruments or documents
evidencing Indebtedness of such Credit Party and any security interest granted
by such Credit Party with respect thereto; and (e) instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or options
to purchase equity securities of such Credit Party.

3.23 Solvency. Both before and after giving effect to (a)
the Loans and Letter of Credit Obligations to be made or extended on the
Closing Date or such other date as Loans and Letter of Credit Obligations
requested hereunder are made or extended, (b) the disbursement of the proceeds
of such Loans pursuant to the instructions of Borrower Representative, (c) the
Acquisition, the Refinancing and the consummation of the other Related
Transactions and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is Solvent.

3.24 Acquisition Agreement As of the Closing Date,
Borrowers have delivered to Agent a complete and correct copy of the
Acquisition Agreement (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith). No Credit Party and, to the
Credit Parties' knowledge, no other Person party thereto, is in default in the
performance or compliance with any provisions thereof. The Acquisition
Agreement complies with, and the Acquisition has been consummated in accordance
in all material respects with, all applicable laws. The Acquisition Agreement
is in full force and effect as of the Closing Date, has not been terminated,
rescinded or withdrawn. All requisite approvals by Governmental Authorities
having jurisdiction over Seller, any Credit Party and other Persons referenced
therein, with respect to the transactions contemplated by the Acquisition
Agreement, have been obtained, and no such approvals impose any conditions to
the consummation of the transactions contemplated by the Acquisition Agreement
or to the conduct by any Credit Party of its business thereafter. To the best
of each Credit Party's knowledge, none of the Seller's representations or
warranties in the Acquisition Agreement contain any untrue statement of a
material fact or omit any fact necessary to make the statements therein not
misleading. Each of the representations and warranties given by each
applicable Credit Party in the Acquisition Agreement is true and correct in all
material respects. Notwithstanding anything contained in the Acquisition
Agreement to the contrary, such representations and warranties of the Credit
Parties are incorporated into this Agreement by this Section 3.24 and shall,
solely for purposes of this Agreement and the benefit of Agent and Lenders,
survive the consummation of the Acquisition.

3.25 Subordinated Debt. As of the Closing Date, Borrowers
have delivered to Lenders a complete and correct copy of the Subordinated Notes
(including all schedules, exhibits, amendments, supplements, modifications,
assignments and all other documents delivered pursuant thereto or in connection
therewith). Borrowers have the corporate power and authority to incur the

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Indebtedness evidenced by the Subordinated Notes. The subordination provisions
of the Subordinated Notes are enforceable against the holder of the
Subordinated Notes by Lenders. All Obligations, including the Obligations to
pay principal of and interest on the Loans and the Letter of Credit
Obligations, constitute senior Indebtedness entitled to the benefits of the
subordination provisions contained in the Subordinated Notes. The principal of
and interest on the Notes, all Letter of Credit Obligations and all other
Obligations will constitute "senior debt" as that or any similar term is or may
be used in any other instrument evidencing or applicable to any other
Subordinated Debt. Borrowers acknowledge that each Lender is entering into
this Agreement and is extending the Commitments in reliance upon the
subordination provisions of the Subordinated Notes and this Section 3.25.

4. FINANCIAL STATEMENTS AND INFORMATION

4.1 Reports and Notices. (a) Each Credit Party executing
this Agreement hereby agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to Agent and/or Lenders, as required, the
Financial Statements, notices, Projections and other information at the times,
to the Persons and in the manner set forth in Annex E.

(b) Each Credit Party executing this Agreement hereby
agrees that from and after the Closing Date and until the Termination Date, it
shall deliver to Agent and/or Lenders, as required, the various Collateral
Reports (including Borrowing Base Certificates in the form of Exhibit 4.1(b))
at the times, to the Persons and in the manner set forth in Annex F.

4.2 Communication with Accountants. Each Credit Party
executing this Agreement authorizes Agent and, so long as an Event of Default
shall have occurred and be continuing, each Lender, to communicate directly
with its independent certified public accountants including Xxxxxx Xxxxxxxx &
Company, and authorizes and shall instruct those accountants and advisors to
disclose and make available to Agent and each Lender any and all Financial
Statements and other supporting financial documents, schedules and information
relating to any Credit Party (including copies of any issued management
letters) with respect to the business, financial condition and other affairs of
any Credit Party.

5. AFFIRMATIVE COVENANTS

Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:

5.1 Maintenance of Existence and Conduct of Business.
Each Credit Party shall: (a) do or cause to be done all things reasonably
necessary to preserve and keep in full force and effect its corporate existence
and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; (c) at all
times maintain, preserve and protect all of its assets and properties used or
useful in the conduct of its business, and keep the same in good

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repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to
be made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and (d) transact business only in
such corporate and trade names as are set forth in Disclosure Schedule (5.1).

5.2 Payment of Obligations. (a) Subject to Section
5.2(b), each Credit Party shall pay and discharge or cause to be paid and
discharged promptly all Charges payable by it, including (A) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for labor,
materials, supplies and services or otherwise, before any thereof shall become
past due.

(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges or claims
described in Section 5.2(a); provided, that (i) at the time of commencement of
any such contest no Event of Default shall have occurred and be continuing,
(ii) adequate reserves with respect to such contest are maintained on the books
of such Credit Party, in accordance with GAAP, (iii) such contest is maintained
and prosecuted continuously and with diligence and operates to suspend
collection or enforcement of such Charges or claims or any Lien in respect
thereof, (iv) none of the Collateral becomes subject to forfeiture or loss as a
result of such contest, (v) no Lien shall be imposed to secure payment of such
Charges or claims other than Permitted Encumbrances, (vi) such Credit Party
shall promptly pay or discharge such contested Charges or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence acceptable to Agent of such compliance, payment or discharge,
if such contest is terminated or discontinued adversely to such Credit Party or
the conditions set forth in this Section 5.2(b) are no longer met, and (vii)
Agent has not advised Borrowers in writing that Agent reasonably believes that
nonpayment or nondischarge thereof could have or result in a Material Adverse
Effect.

5.3 Books and Records. Each Credit Party shall keep
adequate books and records with respect to its business activities in which
proper entries, reflecting all financial transactions, are made in accordance
with GAAP and on a basis consistent with the Financial Statements attached as
Disclosure Schedule (3.4(A)).

5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense, maintain the
policies of insurance described on Disclosure Schedule (3.18) in form and with
insurers reasonably acceptable to Agent. If any Credit Party at any time or
times hereafter shall fail to obtain or maintain any of the policies of
insurance required above or to pay all premiums relating thereto, Agent may at
any time or times thereafter obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which Agent
deems advisable. Agent shall have no obligation to obtain insurance for any
Credit Party or pay any premiums therefor. By doing so, Agent shall not be
deemed to have waived any Default or Event of Default arising from any Credit
Party's failure to maintain such insurance or pay any premiums therefor. All
sums so disbursed, including attorneys' fees, court costs and other charges

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related thereto, shall be payable on demand by Borrowers to Agent and shall be
additional Obligations hereunder secured by the Collateral.

(b) Agent reserves the right at any time upon any change
in any Credit Party's risk profile (including any change in the product mix
maintained by any Credit Party or any laws affecting the potential liability of
such Credit Party) upon reasonable prior notice to Borrower Representative to
require additional forms and limits of insurance to, in Agent's reasonable
opinion, adequately protect both Agent's and Lender's interests in all or any
portion of the Collateral and to ensure that each Credit Party is protected by
insurance in amounts and with coverage customary for its industry. If
requested by Agent, each Credit Party shall deliver to Agent from time to time
a report of a reputable insurance broker, satisfactory to Agent, with respect
to its insurance policies.

(c) Each Borrower shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
Each Borrower irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Event of
Default shall have occurred and be continuing or the anticipated insurance
proceeds exceed $750,000 as such Borrower's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Borrower on
any check or other item of payment for the proceeds of such "All Risk" policies
of insurance and for making all determinations and decisions with respect to
such "All Risk" policies of insurance. Agent shall have no duty to exercise
any rights or powers granted to it pursuant to the foregoing power-of-attorney.
Borrower Representative shall promptly notify Agent of any loss, damage, or
destruction to the Collateral in the amount of $250,000 or more, whether or not
covered by insurance. After deducting from such proceeds the expenses, if any,
incurred by Agent in the collection or handling thereof, Agent may, at its
option, apply such proceeds to the reduction of the Obligations in accordance
with Section 1.3(d), or permit or require the applicable Borrower to use such
money, or any part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss, damage or
destruction. Notwithstanding the foregoing, if the casualty giving rise to such
insurance proceeds would not reasonably be expected to have a Material Adverse
Effect and such insurance proceeds do not exceed $750,000 in the aggregate,
Agent shall permit the applicable Borrower to replace, restore, repair or
rebuild the property; provided that if such Borrower shall not have completed
or entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, Agent may apply such
insurance proceeds to the Obligations in accordance with Section 1.3(d). All
insurance proceeds which are to be made available to any Borrower to replace,
repair, restore or rebuild the Collateral shall be applied by Agent to reduce
the outstanding principal balance of the Revolving Loan of such Borrower (which
application shall not result in a permanent reduction of the Revolving Loan
Commitment) and upon such application, Agent shall establish a Reserve against
the separate Borrowing Base of the affected Borrower in an amount equal to the
amount of such proceeds so applied. Thereafter, such funds shall be made
available to that Borrower to provide funds to replace,

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repair, restore or rebuild the Collateral as follows: (i) Borrower
Representative shall request a Revolving Credit Advance be made to such
Borrower in the amount requested to be released; (ii) so long as the conditions
set forth in Section 2.2 have been met, Revolving Lenders shall make such
Revolving Credit Advance; and (iii) the Reserve established with respect to
such insurance proceeds shall be reduced by the amount of such Revolving Credit
Advance. To the extent not used to replace, repair, restore or rebuild the
Collateral, such insurance proceeds shall be applied in accordance with Section
1.3(d).

5.5 Compliance with Laws. Each Credit Party shall comply
with all federal, state, local and foreign laws and regulations applicable to
it, including those relating to licensing, ERISA and labor matters and
Environmental Laws and Environmental Permits, except to the extent that the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

5.6 Supplemental Disclosure. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of an Event of
Default), the Credit Parties shall supplement each Disclosure Schedule hereto,
or any representation herein or in any other Loan Document, with respect to any
matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or which is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall be or
be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite
Lenders in writing; and (b) no supplement shall be required as to
representations and warranties that relate solely to the Closing Date.

5.7 Intellectual Property. Each Credit Party will conduct
its business and affairs without infringement of any Intellectual Property of
any other Person.

5.8 Environmental Matters. Each Credit Party shall and
shall cause each Person within its control to: (a) conduct its operations and
keep and maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance which could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions which are appropriate
or necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining
to the presence, generation, treatment, storage, use, disposal, transportation
or Release of any Hazardous Material on, at, in, under, above, to, from or
about any of its Real Estate; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits
or any Release on, at, in, under, above, to, from or about any Real Estate
which is reasonably likely to result in Environmental Liabilities in excess of

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$25,000; and (d) promptly forward to Agent a copy of any order, notice, request
for information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $500,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable
basis to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability
arising thereunder, or a Release of Hazardous Materials on, at, in, under,
above, to, from or about any of its Real Estate, which, in each case, could
reasonably be expected to have a Material Adverse Effect, then each Credit
Party shall, upon Agent's written request (i) cause the performance of such
environmental audits including subsurface sampling of soil and groundwater, and
preparation of such environmental reports, at Borrowers' expense, as Agent may
from time to time request, which shall be conducted by reputable environmental
consulting firms acceptable to Agent and shall be in form and substance
acceptable to Agent, and (ii) permit Agent or its representatives to have
access to all Real Estate for the purpose of conducting such environmental
audits and testing as Agent deems appropriate, including subsurface sampling of
soil and groundwater. Borrowers shall reimburse Agent for the costs of such
audits and tests and the same will constitute a part of the Obligations secured
hereunder.

5.9 Landlords' Agreements, Mortgagee Agreements and
Bailee Letters. Each Credit Party shall use its best efforts to obtain a
landlord's agreement, mortgagee agreement or bailee letter, as applicable, from
the lessor of each leased property or mortgagee of owned property or with
respect to any warehouse, processor or converter facility or other location
where Collateral is located, which agreement or letter shall contain a waiver
or subordination of all Liens or claims that the landlord, mortgagee or bailee
may assert against the Inventory or Collateral at that location, and shall
otherwise be satisfactory in form and substance to Agent. With respect to such
locations or warehouse space leased or owned as of the Closing Date, if Agent
has not received a landlord or mortgagee agreement or bailee letter as of the
Closing Date, any Borrower's Eligible Inventory at that location shall, in
Agent's discretion, be excluded from the Borrowing Base or be subject to such
Reserves as may be established by Agent in its reasonable credit judgment.
After the Closing Date, no real property or warehouse space shall be leased or
acquired by any Credit Party and no Inventory shall be shipped to a processor
or converter under arrangements established after the Closing Date, unless and
until a satisfactory landlord or mortgagee agreement or bailee letter, as
appropriate, shall first have been obtained with respect to such location;
provided that Borrowers may hold Inventory with a book value not to exceed
$250,000 in the aggregate at newly established locations with Agent's prior
approval and subject to a Reserve established at Agent's discretion. Each
Credit Party shall timely and fully pay and perform its obligations under all
leases and other agreements with respect to each leased location or public
warehouse where any Collateral is or may be located.

5.10 Further Assurances. Each Credit Party executing this
Agreement agrees that it shall and shall cause each other Credit Party to, at
such Credit Party's expense and upon request of Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Agent such further
instruments and do and cause to be done such further acts as may be reasonably
necessary or proper

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in the opinion of Agent to carry out more effectually the provisions and
purposes of this Agreement or any other Loan Document.

5.11 Acquisition Agreement. The Credit Parties shall not
waive any material representation, warranty, covenant or indemnity of Sellers
contained in the Acquisition Agreement and shall diligently enforce the same.

6. NEGATIVE COVENANTS

Each Credit Party executing this Agreement jointly and
severally agrees as to all Credit Parties that, without the prior written
consent of Agent and the Requisite Lenders, from and after the date hereof
until the Termination Date:

6.1 Mergers, Subsidiaries, Etc. No Credit Party shall
directly or indirectly, by operation of law or otherwise, (a) form or acquire
any Subsidiary, or (b) merge with, consolidate with, acquire all or
substantially all of the assets or capital stock of, or otherwise combine with
or acquire, any Person, except that any Borrower may merge with another
Borrower, provided that Borrower Representative shall be the survivor of any
such merger to which it is a party.

6.2 Investments; Loans and Advances. Except as otherwise
expressly permitted by this Section 6, no Credit Party shall make or permit to
exist any investment in, or make, accrue or permit to exist loans or advances
of money to, any Person, through the direct or indirect lending of money,
holding of securities or otherwise, except that (a) Borrowers may hold
investments comprised of notes payable, or stock or other securities issued by
Account Debtors to any Borrower pursuant to negotiated agreements with respect
to settlement of such Account Debtor's Accounts in the ordinary course of
business; (b) each Credit Party may maintain its existing investments in its
Subsidiaries as of the Closing Date; (c) other investments set forth on
Schedule 6.2 hereto; and (d) so long as no Event of Default shall have occurred
and be continuing, Borrowers may make investments up to $5,000,000 in the
aggregate, subject to Control Letters in favor of Agent for the benefit of
Lenders or otherwise subject to a perfected security interest in favor of Agent
for the benefit of Lenders, in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof maturing within one year from the date of acquisition thereof, (ii)
commercial paper maturing no more than one year from the date of creation
thereof and currently having the highest rating obtainable from either Standard
& Poor's Corporation or Xxxxx'x Investors Service, Inc., (iii) certificates of
deposit, maturing no more than one year from the date of creation thereof,
issued by commercial banks incorporated under the laws of the United States of
America, each having combined capital, surplus and undivided profits of not
less than $300,000,000 and having a senior secured rating of "A" or better by a
nationally recognized rating agency (an "A Rated Bank"), and (iv) time
deposits, maturing no more than 30 days from the date of creation thereof with
A Rated Banks. No Credit Party shall maintain funds on deposit in its
disbursement accounts in excess of funds reasonably necessary to cover checks
issued against such account.

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6.3 Indebtedness. (a) No Credit Party shall create,
incur, assume or permit to exist any Indebtedness, except (without duplication)
(i) Indebtedness secured by purchase money security interests permitted in
clause (c) of Section 6.7, (ii) the Loans and the other Obligations, (iii)
deferred taxes, (iv) unfunded pension fund and other employee benefit plan
obligations and liabilities to the extent they are permitted to remain unfunded
under applicable law, (v) existing Indebtedness described in Disclosure
Schedule (6.3) and refinancings thereof or amendments or modifications thereto
which do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and which are
otherwise on terms and conditions no less favorable to any Credit Party, Agent
or any Lender, as determined by Agent, than the terms of the Indebtedness being
refinanced, amended or modified, (vi) the Subordinated Debt outstanding under
the Subordinated Notes, (vii) Indebtedness consisting of intercompany loans and
advances made by any Borrower to any other Credit Party, provided that (A) each
Borrower shall have executed and delivered to each other Borrower, on the
Closing Date, a demand note (collectively, the "Intercompany Notes") to
evidence any such intercompany Indebtedness owing at any time by such Borrower
to such other Borrowers which Intercompany Notes shall be in form and substance
satisfactory to Agent and shall be pledged and delivered to Agent pursuant to
the applicable Pledge Agreement or Security Agreement as additional collateral
security for the Obligations; (B) each Borrower shall record all intercompany
transactions on its books and records in a manner satisfactory to Agent; (C)
the obligations of each Borrower under any such Intercompany Notes shall be
subordinated to the Obligations of such Borrower hereunder in a manner
satisfactory to Agent; (D) at the time any such intercompany loan or advance is
made by any Borrower to any other Borrower and after giving effect thereto,
each such Borrower shall be Solvent; (E) no Default or Event of Default would
occur and be continuing after giving effect to any such proposed intercompany
loan; and (F) in the case of any intercompany Indebtedness, the Borrower
advancing such funds shall have Net Borrowing Availability under its separate
Borrowing Base of not less than the following respective amounts after giving
effect to such intercompany loan: $500,000 in the case of Selfix, $1,000,000
in the case of Tamor and $250,000 in the case of Shutters, and (viii) seven day
notes issued by Holdings to Sellers pursuant to the Acquisition Agreement.

(b) No Credit Party shall, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal of, premium, if
any, interest or other amount payable in respect of any Indebtedness prior to
the maturity thereof, other than (i) the Obligations, (ii) Indebtedness secured
by a Permitted Encumbrance if the asset securing such Indebtedness has been
sold or otherwise disposed of in accordance with Sections 6.8(b) or (c), (iii)
other Indebtedness (excluding Subordinated Debt) not in excess of $250,000, or
(iv) the Subordinated Debt outstanding under the Subordinated Notes to the
extent of mandatory prepayments thereof permitted or required under Section
1.3.

6.4 Employee Loans and Affiliate Transactions.

(a) Except as otherwise expressly permitted in this
Section 6 with respect to Affiliates, no Credit Party shall enter into any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit

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Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. In addition,
if any such transaction or series of related transactions involves payments in
excess of $250,000 in the aggregate, the terms of these transactions must be
disclosed in advance to Agent and Lenders. All such transactions existing as
of the date hereof are described on Disclosure Schedule (6.4(a)).

(b) No Credit Party shall enter into any lending or
borrowing transaction with any employees of any Credit Party, except loans to
their respective employees on an arm's-length basis in the ordinary course of
business consistent with past practices for travel expenses, relocation costs
and similar purposes and stock option financing up to a maximum of $100,000 to
any employee and up to a maximum of $250,000 in the aggregate at any one time
outstanding.

6.5 Capital Structure and Business. No Credit Party
shall (a) make any changes in any of its business objectives, purposes or
operations which could have or result in a Material Adverse Effect, (b) make
any change in its capital structure as described on Disclosure Schedule (3.8),
including the issuance of any shares of Stock, warrants or other securities
convertible into Stock or any revision of the terms of its outstanding Stock,
except that Holdings may make a Qualified Public Offering of its common Stock
so long as (i) the proceeds thereof are applied in prepayment of the
Obligations as required by Section 1.3(b)(iii), and (ii) no Change of Control
occurs after giving effect thereto, or (c) amend its charter or bylaws in a
manner which would adversely affect Agent or Lenders or such Credit Party's
duty or ability to repay the Obligations. No Credit Party shall engage in any
business other than the businesses currently engaged in by it or businesses
reasonably related thereto.

6.6 Guaranteed Indebtedness. No Credit Party shall
create, incur, assume or permit to exist any Guaranteed Indebtedness except (a)
by endorsement of instruments or items of payment for deposit to the general
account of any Credit Party, and (b) for Guaranteed Indebtedness incurred for
the benefit of any other Credit Party if the primary obligation is expressly
permitted by this Agreement.

6.7 Liens. No Credit Party shall create, incur, assume
or permit to exist any Lien on or with respect to its Accounts or any of its
other properties or assets (whether now owned or hereafter acquired) except for
(a) Permitted Encumbrances; (b) Liens in existence on the date hereof and
summarized on Disclosure Schedule (6.7); and (c) Liens created after the date
hereof by conditional sale or other title retention agreements (including
Capital Leases) or in connection with purchase money Indebtedness with respect
to Equipment and Fixtures acquired by any Credit Party in the ordinary course
of business, involving the incurrence of an aggregate amount of purchase money
Indebtedness and Capital Lease Obligations of not more than $5,000,000
outstanding at any one time for all such Liens (provided that such Liens attach
only to the assets subject to such purchase money debt and such Indebtedness is
incurred within twenty (20) days following such purchase and does not exceed
100% of the purchase price of the subject assets). In addition, no Credit
Party shall become a party to any agreement, note, indenture or instrument, or
take any other

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action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of Agent, on behalf of itself and Lenders, as additional
collateral for the Obligations, except operating leases, Capital Leases or
Licenses which prohibit Liens upon the assets that are subject thereto.

6.8 Sale of Stock and Assets. No Credit Party shall
sell, transfer, convey, assign or otherwise dispose of any of its properties or
other assets, including its capital Stock or the capital Stock of any of its
Subsidiaries (whether in a public or a private offering or otherwise but
subject, in the case of Holdings, to the provisions of Section 6.5(b)) or any
of their Accounts, other than (a) the sale of Inventory in the ordinary course
of business, and (b) the sale, transfer, conveyance or other disposition by a
Credit Party of Equipment or Fixtures that are obsolete or no longer used or
useful in such Credit Party's business and having a value not exceeding
$250,000 in the aggregate in any Fiscal Year and (c) so long as no Event of
Default shall have occurred and be continuing other Equipment and Fixtures
having a value not exceeding $250,000 in the aggregate in any Fiscal Year.
With respect to any disposition of assets or other properties permitted
pursuant to clause (b) and clause (c) above, Agent agrees on reasonable prior
written notice to release its Lien on such assets or other properties in order
to permit the applicable Credit Party to effect such disposition and shall
execute and deliver to Borrowers, at Borrowers' expense, appropriate UCC-3
termination statements and other releases as reasonably requested by Borrowers.

6.9 ERISA. No Credit Party shall, or shall cause or
permit any ERISA Affiliate to, cause or permit to occur an event which could
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA.

6.10 Financial Covenants. Borrowers shall not breach or
fail to comply with any of the Financial Covenants (the "Financial Covenants")
set forth in Annex G.

6.11 Hazardous Materials. No Credit Party shall cause or
permit a Release of any Hazardous Material on, at, in, under, above, to, from
or about any of the Real Estate where such Release would (a) violate in any
respect, or form the basis for any Environmental Liabilities under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely impact
the value or marketability of any of the Real Estate or any of the Collateral,
other than such violations or impacts which could not reasonably be expected to
have a Material Adverse Effect.

6.12 Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.

6.13 Cancellation of Indebtedness. No Credit Party shall
cancel any claim or debt owing to it, except for reasonable consideration
negotiated on an arm's-length basis and in the ordinary course of its business
consistent with past practices.

6.14 Restricted Payments. No Credit Party shall make any
Restricted Payment, except (a) intercompany loans and advances between
Borrowers to the extent permitted by Section 6.3 above and payment of the seven
day notes issued pursuant to the Acquisition Agreement, (b)

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dividends and distributions by Subsidiaries of any Borrower paid to such
Borrower, (c) employee loans permitted under Section 6.4(b) above, (d)
Restricted Payments by Borrowers to Holdings in such amounts and at such times
as are necessary to permit Holdings to pay the consolidated federal income
taxes of Holdings and Borrowers, (e) scheduled payments of interest with
respect to the Subordinated Debt (f) the principal amount of the Subordinated
Notes with the proceeds of a public offering of Stock by Holdings and (g) the
Warrant issued on the Closing Date for a call price of $792,040; provided that
as to clauses (f) and (g) Term Loan A and Term Loan B are prepaid by at least
$7,000,000 from the same source of proceeds and provided further that (i) no
Event of Default shall have occurred and be continuing or would result after
giving effect to any payment pursuant to clauses (e), (f) and (g) above, and
(ii) the timing of the payments referred to in clauses (e), (f) and (g) above
shall be set at dates which permit the delivery of Financial Statements
necessary to determine current financial covenant compliance prior to each
payment.

6.15 Change of Corporate Name or Location; Change of
Fiscal Year. No Credit Party shall (a) change its corporate name, or (b)
change its chief executive office, principal place of business, corporate
offices or warehouses or locations at which Collateral is held or stored, or
the location of its records concerning the Collateral, in any case without at
least thirty (30) days prior written notice to Agent and after Agent's written
acknowledgment that any reasonable action requested by Agent in connection
therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken, and
provided that any such new location shall be in the continental United States.
Without limiting the foregoing, no Credit Party shall change its name, identity
or corporate structure in any manner which might make any financing or
continuation statement filed in connection herewith seriously misleading within
the meaning of Section 9-402(7) of the Code or any other then applicable
provision of the Code except upon prior written notice to Agent and Lenders and
after Agent's written acknowledgment that any reasonable action requested by
Agent in connection therewith, including to continue the perfection of any
Liens in favor of Agent, on behalf of Lenders, in any Collateral, has been
completed or taken. No Credit Party shall change its Fiscal Year.

6.16 No Impairment of Intercompany Transfers. No Credit
Party shall directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than this Agreement and the
other Loan Documents) which could directly or indirectly restrict, prohibit or
require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by a Subsidiary
of any Borrower to any Borrower or between Borrowers.

6.17 No Speculative Transactions. No Credit Party shall
engage in any transaction involving commodity options, futures contracts or
similar transactions, except solely to hedge against fluctuations in the prices
of commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.

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6.18 Leases. No Credit Party shall enter into any
operating lease for Equipment or Real Estate, if the aggregate of all such
operating lease payments payable in any year for Holdings and its Subsidiaries
on a consolidated basis would exceed $1,500,000.

6.19 Changes Relating to Subordinated Debt. No Credit
Party shall change or amend the terms of any Subordinated Debt (or any
indenture or agreement in connection therewith) if the effect of such amendment
is to: (a) increase the interest rate on such Subordinated Debt; (b) change the
dates upon which payments of principal or interest are due on such Subordinated
Debt other than to extend such dates; (c) change any default or event of
default other than to delete or make less restrictive any default provision
therein, or add any covenant with respect to such Subordinated Debt; (d) change
the redemption or prepayment provisions of such Subordinated Debt other than to
extend the dates therefor or to reduce the premiums payable in connection
therewith; (e) grant any security or collateral to secure payment of such
Subordinated Debt; or (f) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights to the holder of such Subordinated Debt in a manner
adverse to any Credit Party or Lenders.

6.20 Acquisition Transactions. Notwithstanding any
provision herein contained to the contrary, Borrowers may make intercompany
loans to Holdings on the Closing Date in an amount sufficient to effectuate the
Acquisition.

7. TERM

7.1 Termination. The financing arrangements contemplated
hereby shall be in effect until the Commitment Termination Date, and the Loans
and all other Obligations shall be automatically due and payable in full on
such date.

7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan
Documents, no termination or cancellation (regardless of cause or procedure) of
any financing arrangement under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of the Credit Parties or the
rights of Agent and Lenders relating to any unpaid portion of the Loans or any
other Obligations, due or not due, liquidated, contingent or unliquidated or
any transaction or event occurring prior to such termination, or any
transaction or event, the performance of which is required after the Commitment
Termination Date. Except as otherwise expressly provided herein or in any
other Loan Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided however,
that in all events the provisions of Section 11, the payment obligations under
Sections 1.15 and 1.16, and the indemnities contained in the Loan Documents
shall survive the Termination Date.

8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES

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8.1 Events of Default. The occurrence of any one or more
of the following events (regardless of the reason therefor) shall constitute an
"Event of Default" hereunder:

(a) Any Borrower (i) fails to make any payment of
principal of, or interest on, or Fees owing in respect of, the Loans or any of
the other Obligations when due and payable, or (ii) within ten (10) days
following Agent's demand for such reimbursement or payment of expenses, fails
to pay or reimburse Agent or Lenders for any expense reimbursable hereunder or
under any other Loan Document.

(b) Any Credit Party shall fail or neglect to perform,
keep or observe any of the provisions of Sections 1.4, 1.8, 5.4 or 6, or any of
the provisions set forth in Annexes C or G, respectively.

(c) Any Borrower shall fail or neglect to perform, keep
or observe any of the provisions of Section 4 or any provisions set forth in
Annexes E or F, respectively, and the same shall remain unremedied for five (5)
Business Days or more.

(d) Any Credit Party shall fail or neglect to perform,
keep or observe any other provision of this Agreement or of any of the other
Loan Documents (other than any provision embodied in or covered by any other
clause of this Section 8.1) and the same shall remain unremedied for twenty
(20) days or more.

(e) A default or breach shall occur under any other
agreement, document or instrument to which any Credit Party is a party which is
not cured within any applicable grace period, and such default or breach (i)
involves the failure to make any payment when due in respect of any
Indebtedness (other than the Obligations) of any Credit Party in excess of
$500,000 in the aggregate, or (ii) causes, or permits any holder of such
Indebtedness or a trustee to cause, Indebtedness or a portion thereof in excess
of $500,000 in the aggregate to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment, regardless of whether such
default is waived, or such right is exercised, by such holder or trustee.

(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any material respect, or any
representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (other than a Borrowing
Base Certificate) made or delivered to Agent or any Lender by any Credit Party
is untrue or incorrect in any material respect as of the date when made or
deemed made.

(g) Assets of any Credit Party with a fair market value
of $250,000 or more shall be attached, seized, levied upon or subjected to a
writ or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors of any Credit Party
and such condition continues for thirty (30) days or more.

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(h) A case or proceeding shall have been commenced
against any Credit Party seeking a decree or order in respect of any Credit
Party (i) under Title 11 of the United States Code, as now constituted or
hereafter amended or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any Credit Party or
of any substantial part of any such Person's assets, or (iii) ordering the
winding-up or liquidation of the affairs of any Credit Party, and such case or
proceeding shall remain undismissed or unstayed for sixty (60) days or more or
such court shall enter a decree or order granting the relief sought in such
case or proceeding.

(i) Any Credit Party (i) shall file a petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) shall fail to contest in a timely and appropriate
manner or shall consent to the institution of proceedings thereunder or to the
filing of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of any Credit Party or of any substantial part of any such Person's
assets, (iii) shall make an assignment for the benefit of creditors, (iv) shall
take any corporate action in furtherance of any of the foregoing; or (v) shall
admit in writing its inability to, or shall be generally unable to, pay its
debts as such debts become due.

(j) A final judgment or judgments for the payment of
money in excess of $500,000 in the aggregate at any time outstanding shall be
rendered against any Credit Party and the same shall not, within thirty (30)
days after the entry thereof, have been discharged or execution thereof stayed
or bonded pending appeal, or shall not have been discharged prior to the
expiration of any such stay.

(k) Any material provision of any Loan Document shall for
any reason cease to be valid, binding and enforceable in accordance with its
terms (or any Credit Party shall challenge the enforceability of any Loan
Document or shall assert in writing, or engage in any action or inaction based
on any such assertion, that any provision of any of the Loan Documents has
ceased to be or otherwise is not valid, binding and enforceable in accordance
with its terms), or any security interest created under any Loan Document shall
cease to be a valid and perfected first priority security interest or Lien
(except as otherwise permitted herein or therein) in any of the Collateral
purported to be covered thereby.

(l) Any "Change of Control" shall occur.

(m) Any event shall occur, whether or not insured or
insurable, as a result of which revenue- producing activities cease or are
substantially curtailed at any facility of Borrowers generating more than 10%
of Borrowers' consolidated revenues for the Fiscal Year preceding such event
and such cessation or curtailment continues for more than 30 days.

8.2 Remedies. (a) If any Event of Default shall have
occurred and be continuing or if a Default shall have occurred and be
continuing and Agent or Requisite Revolving Lenders shall have determined not
to make any Advances or incur any Letter of Credit Obligations so long as that

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specific Default is continuing, Agent may (and at the written request of the
Requisite Revolving Lenders shall), without notice, suspend this facility with
respect to further Advances and/or the incurrence of further Letter of Credit
Obligations whereupon any further Advances and Letter of Credit Obligations
shall be made or extended in Agent's sole discretion (or in the sole discretion
of the Requisite Revolving Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Event of Default shall have occurred and be continuing, Agent may (and at the
written request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the
Loans and the Letter of Credit Fees to the Default Rate.

(b) If any Event of Default shall have occurred and be
continuing, Agent may (and at the written request of the Requisite Lenders
shall), (i) terminate this facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrowers and each other Credit Party; and (iii) exercise any rights and
remedies provided to Agent under the Loan Documents and/or at law or equity,
including all remedies provided under the Code; provided, however, that upon
the occurrence of an Event of Default specified in Sections 8.1(g), (h) or (i),
all of the Obligations, including the aggregate Revolving Loan, shall become
immediately due and payable without declaration, notice or demand by any
Person.

8.3 Waivers by Credit Parties. Except as otherwise
provided for in this Agreement or by applicable law, each Credit Party waives
(including for purposes of Section 12): (a) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Agent on which any Credit Party may in any way be liable, and
hereby ratifies and confirms whatever Agent may do in this regard, (b) all
rights to notice and a hearing prior to Agent's taking possession or control
of, or to Agent's replevy, attachment or levy upon, the Collateral or any bond
or security which might be required by any court prior to allowing Agent to
exercise any of its remedies, and (c) the benefit of all valuation, appraisal,
marshalling and exemption laws.

9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT

9.1 Assignment and Participations. (a) The Credit
Parties signatory hereto consent to any Lender's assignment of, and/or sale of
participations in, at any time or times, the Loan Documents, Loans, Letter of
Credit Obligations and any Commitment or of any portion thereof or interest
therein, including any Lender's rights, title, interests, remedies, powers or
duties thereunder, whether evidenced by a writing or not. Any assignment by a
Lender shall (i) require the consent of Agent (which shall not be unreasonably
withheld or delayed; provided that no consent by Borrower Representative shall
be required so long as any Event of Default shall have occurred and be

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continuing) and the execution of an assignment agreement (an "Assignment
Agreement") substantially in the from attached hereto as Exhibit 9.1(a) and
otherwise in form and substance satisfactory to, and acknowledged by, Agent;
(ii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Loans to be assigned to
it for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) if a partial assignment, be in an amount at least
equal to $5,000,000 and, after giving effect to any such partial assignment,
the assigning Lender shall have retained Commitments in an amount at least
equal to $5,000,000; and (iv) include a payment to Agent of an assignment fee
of $3,500. In the case of an assignment by a Lender under this Section 9.1,
the assignee shall have, to the extent of such assignment, the same rights,
benefits and obligations as it would if it were a Lender hereunder. The
assigning Lender shall be relieved of its obligations hereunder with respect to
its Commitments or assigned portion thereof from and after the date of such
assignment. Each Borrower hereby acknowledges and agrees that any assignment
will give rise to a direct obligation of Borrowers to the assignee and that the
assignee shall be considered to be a "Lender". In all instances, each Lender's
liability to make Loans hereunder shall be several and not joint and shall be
limited to such Lender's Pro Rata Share of the applicable Commitment. In the
event Agent or any Lender assigns or otherwise transfers all or any part of a
Note, Agent or any such Lender shall so notify Borrowers and Borrowers shall,
upon the request of Agent or such Lender, execute new Notes in exchange for the
Notes being assigned. Notwithstanding the foregoing provisions of this Section
9.1(a), any Lender may at any time pledge or assign all or any portion of such
Lender's rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank; provided, however, that no such pledge or assignment shall
release such Lender from such Lender's obligations hereunder or under any other
Loan Document.

(b) Any participation by a Lender of all or any part of
its Commitments shall be in an amount at least equal to $5,000,000, and with
the understanding that all amounts payable by Borrowers hereunder shall be
determined as if that Lender had not sold such participation, and that the
holder of any such participation shall not be entitled to require such Lender
to take or omit to take any action hereunder except actions directly affecting
(i) any reduction in the principal amount of, or interest rate or Fees payable
with respect to, any Loan in which such holder participates, (ii) any extension
of the scheduled amortization of the principal amount of any Loan in which such
holder participates or the final maturity date thereof, and (iii) any release
of all or substantially all of the Collateral (other than in accordance with
the terms of this Agreement, the Collateral Documents or the other Loan
Documents). Solely for purposes of Sections 1.13, 1.15, 1.16 and 9.8, each
Borrower acknowledges and agrees that a participation shall give rise to a
direct obligation of Borrowers to the participant and the participant shall be
considered to be a "Lender". Except as set forth in the preceding sentence no
Borrower or Credit Party shall have any obligation or duty to any participant.
Neither Agent nor any Lender (other than the Lender selling a participation)
shall have any duty to any participant and may continue to deal solely with the
Lender selling a participation as if no such sale had occurred.

(c) Except as expressly provided in this Section 9.1, no
Lender shall, as between Borrowers and that Lender, or Agent and that Lender,
be relieved of any of its obligations hereunder

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as a result of any sale, assignment, transfer or negotiation of, or granting of
participation in, all or any part of the Loans, the Notes or other Obligations
owed to such Lender.

(d) Each Credit Party executing this Agreement shall
assist any Lender permitted to sell assignments or participations under this
Section 9.1 as reasonably required to enable the assigning or selling Lender to
effect any such assignment or participation, including the execution and
delivery of any and all agreements, notes and other documents and instruments
as shall be requested and, if requested by Agent, the preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants. Each Credit Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their affairs contained in any selling
materials provided by them and all other information provided by them and
included in such materials, except that any Projections delivered by Borrowers
shall only be certified by Borrowers as having been prepared by Borrowers in
compliance with the representations contained in Section 3.4(c).

(e) A Lender may furnish any information concerning
Borrowers in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants). Each Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 11.8.

(f) So long as no Event of Default shall have occurred
and be continuing, no Lender shall assign or sell participations in any portion
of its Loans or Commitments to a potential Lender or participant, if, as of the
date of the proposed assignment or sale, the assignee Lender or participant
would be subject to capital adequacy or similar requirements under Section
1.16(a), increased costs under Section 1.16(b), an inability to fund LIBOR
Loans under Section 1.16(c), or withholding taxes in accordance with Section
1.16(d).

9.2 Appointment of Agent. GE Capital is hereby appointed
to act on behalf of all Lenders as Agent under this Agreement and the other
Loan Documents. The provisions of this Section 9.2 are solely for the benefit
of Agent and Lenders and no Credit Party nor any other Person shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other Loan
Documents, Agent shall act solely as an agent of Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship
of agency or trust with or for any Credit Party or any other Person. Agent
shall have no duties or responsibilities except for those expressly set forth
in this Agreement and the other Loan Documents. The duties of Agent shall be
mechanical and administrative in nature and Agent shall not have, or be deemed
to have, by reason of this Agreement, any other Loan Document or otherwise a
fiduciary relationship in respect of any Lender. Neither Agent nor any of its
Affiliates nor any of their respective officers, directors, employees, agents
or representatives shall be liable to any Lender for any action taken or
omitted to be taken by it hereunder or under any other Loan Document, or in
connection herewith or therewith, except for damages caused by its or their own
gross negligence or willful misconduct.

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If Agent shall request instructions from Requisite Lenders,
Requisite Revolving Lenders, Supermajority Revolving Lenders or all affected
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders, Requisite Revolving
Lenders, Supermajority Revolving Lenders or all affected Lenders, as the case
may be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting hereunder or under any other Loan Document in accordance with the
instructions of Requisite Lenders, Requisite Revolving Lenders, Supermajority
Revolving Lenders or all affected Lenders, as applicable.

9.3 Agent's Reliance, Etc. Neither Agent nor any of its
Affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Loan Documents, except for
damages caused by its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, Agent: (a) may treat
the payee of any Note as the holder thereof until Agent receives written notice
of the assignment or transfer thereof signed by such payee and in form
satisfactory to Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or the other Loan Documents on the
part of any Credit Party or to inspect the Collateral (including the books and
records) of any Credit Party; (e) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto; and (f) shall incur no
liability under or in respect of this Agreement or the other Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.

9.4 GE Capital and Affiliates. With respect to its
Commitments hereunder, GE Capital shall have the same rights and powers under
this Agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include GE Capital in
its individual capacity. GE Capital and its Affiliates may lend money to,
invest in, and generally engage in any kind

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of business with, any Credit Party, any of their Affiliates and any Person who
may do business with or own securities of any Credit Party or any such
Affiliate, all as if GE Capital were not Agent and without any duty to account
therefor to Lenders. GE Capital and its Affiliates may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges that GE Capital holds disproportionate interests in the
Loans, a Subordinated Note and a warrant for Holdings Stock.

9.5 Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon Agent or any other Lender
and based on the Financial Statements referred to in Section 3.4(a) and such
other documents and information as it has deemed appropriate, made its own
credit and financial analysis of the Credit Parties and its own decision to
enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon 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 decisions in taking or not taking action under
this Agreement. Each Lender acknowledges the potential conflict of interest of
each other Lender as a result of Lenders holding disproportionate interests in
the Loans, and expressly consents to, and waives any claim based upon, such
conflict of interest.

9.6 Indemnification. Lenders agree to indemnify Agent
(to the extent not reimbursed by Borrowers and without limiting the obligations
of Borrowers hereunder), ratably according to their respective Pro Rata Shares,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by Agent in connection
therewith; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's gross negligence
or willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Borrowers.

9.7 Successor Agent. Agent may resign at any time by
giving not less than thirty (30) days' prior written notice thereof to Lenders
and Borrower Representative. Upon any such resignation, the Requisite Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Requisite Lenders and shall have accepted such
appointment within 30 days after the resigning Agent's giving notice of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution
or a subsidiary of a commercial bank or financial institution if such
commercial bank or financial institution is organized under the laws of the
United States of America or of any State thereof and

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has a combined capital and surplus of at least $300,000,000. If no successor
Agent has been appointed pursuant to the foregoing, by the 30th day after the
date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the approval
of Borrower Representative, such approval not to be unreasonably withheld or
delayed; provided that such approval shall not be required if a Default or an
Event of Default shall have occurred and be continuing. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall succeed to and become vested with all the rights, powers, privileges and
duties of the resigning Agent. Upon the earlier of the acceptance of any
appointment as Agent hereunder by a successor Agent or the effective date of
the resigning Agent's resignation, the resigning Agent shall be discharged from
its duties and obligations under this Agreement and the other Loan Documents,
except that any indemnity rights or other rights in favor of such resigning
Agent shall continue. After any resigning Agent's resignation hereunder, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement and the
other Loan Documents. Agent may be removed at the written direction of the
holders (other than Agent) of two-thirds or more of the Commitments (excluding
Agent's Commitment); provided that in so doing, such Lenders shall be deemed to
have waived and released any and all claims they may have against Agent. In
addition to the foregoing, Requisite Lenders may remove Agent upon not less
than ten (10) days' prior written notice to Agent for cause, consisting of one
or more instances of gross negligence or wilful misconduct, as specified in
such notice.

9.8 Setoff and Sharing of Payments. In addition to any
rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of any Event of Default, each Lender and each holder of any Note is hereby
authorized at any time or from time to time, without notice to any Borrower or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all balances held by it at any of its
offices for the account of any Borrower (regardless of whether such balances
are then due to such Borrower) and any other properties or assets any time held
or owing by that Lender or that holder to or for the credit or for the account
of Borrowers against and on account of any of the Obligations which are not
paid when due. Any Lender or holder of any Note exercising a right to set off
or otherwise receiving any payment on account of the Obligations in excess of
its Pro Rata Share thereof shall purchase for cash (and the other Lenders or
holders shall sell) such participations in each such other Lender's or holder's
Pro Rata Share of the Obligations as would be necessary to cause such Lender to
share the amount so set off or otherwise received with each other Lender or
holder in accordance with their respective Pro Rata Shares. Each Lender's
obligation under this Section 9.8 shall be in addition to and not in limitation
of its obligations to purchase a participation in an amount equal to its Pro
Rata Share of the Swing Line Loans under Section 1.1. Each Borrower agrees, to
the fullest extent permitted by law, that (a) any Lender or holder may exercise
its right to set off with respect to amounts in excess of its Pro Rata Share of
the Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holders so purchasing a participation
in the Loans made or other Obligations held

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by other Lenders or holders may exercise all rights of set-off, bankers' lien,
counterclaim or similar rights with respect to such participation as fully as
if such Lender or holder were a direct holder of the Loans and the other
Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the set-off amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right
of set-off, the purchase of participations by that Lender shall be rescinded
and the purchase price restored without interest.

9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.

(a) Advances; Payments. (i) Revolving Lenders shall
refund or participate in the Swing Line Loan in accordance with clauses (iii)
and (iv) of Section 1.1(c). If the Swing Line Lender declines to make a Swing
Line Loan or if Swing Line Availability is zero, Agent shall notify Revolving
Lenders, promptly after receipt of a Notice of Revolving Credit Advance and in
any event prior to 12:30 p.m. (Chicago time) on the date such Notice of
Revolving Advance is received, by telecopy, telephone or other similar form of
transmission. Each Revolving Lender shall make the amount of such Lender's Pro
Rata Share of each Revolving Credit Advance available to Agent in same day
funds by wire transfer to Agent's account as set forth in Annex H not later
than 2:00 p.m. (Chicago time) on the requested funding date, in the case of an
Index Rate Loan and not later than 11:00 a.m. (Chicago time) on the requested
funding date in the case of a LIBOR Loan. After receipt of such wire transfers
(or, in the Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof, Agent shall make the requested Revolving Credit
Advance to the Borrower designated by Borrower Representative in the Notice of
Revolving Credit Advance. All payments by each Revolving Lender shall be made
without setoff, counterclaim or deduction of any kind.

(ii) On the second (2nd) Business Day of each
calendar week or more frequently as aggregate cumulative payments in excess of
$1,000,000 are received with respect to the Loans (other than the Swing Line
Loan) (each, a "Settlement Date"), Agent will advise each Lender by telephone
and telecopy of the amount of such Lender's Pro Rata Share of principal,
interest and Fees paid for the benefit of Lenders with respect to each
applicable Loan. Provided that such Lender has made all payments required to
be made by it and has purchased all participations required to be purchased by
it under this Agreement and the other Loan Documents as of such Settlement
Date, Agent will pay to each Lender such Lender's Pro Rata Share of principal,
interest and Fees paid by Borrowers since the previous Settlement Date for the
benefit of that Lender on the Loans held by it. Such payments shall be made by
wire transfer to such Lender's account (as specified by such Lender in Annex H
or the applicable Assignment Agreement) not later than 1:00 p.m. (Chicago time)
on the next Business Day following each Settlement Date.

(b) Availability of Lender's Pro Rata Share. Agent may
assume that each Revolving Lender will make its Pro Rata Share of each
Revolving Credit Advance available to Agent on each funding date. If such Pro
Rata Share is not, in fact, paid to Agent by such Revolving Lender when due,
Agent will be entitled to recover such amount on demand from such Revolving
Lender without set-off, counterclaim or deduction of any kind. If any
Revolving Lender fails to pay the amount of its Pro Rata Share forthwith upon
Agent's demand, Agent shall promptly notify Borrower

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Representative and Borrowers shall immediately repay such amount to Agent.
Nothing in this Section 9.9(b) or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require Agent to advance funds on behalf of any
Revolving Lender or to relieve any Revolving Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may
have against any Revolving Lender as a result of any default by such Revolving
Lender hereunder. To the extent that Agent advances funds to any Borrower on
behalf of any Revolving Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, Agent shall be entitled to retain for its
account all interest accrued on such Advance until reimbursed by the applicable
Revolving Lender.

(c) Return of Payments. (i) If Agent pays an amount
to a Lender under this Agreement in the belief or expectation that a related
payment has been or will be received by Agent from Borrowers and such related
payment is not received by Agent, then Agent will be entitled to recover such
amount from such Lender on demand without set-off, counterclaim or deduction of
any kind.

(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to any Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest
at such rate, if any, as Agent is required to pay to any Borrower or such other
Person, without set-off, counterclaim or deduction of any kind.

(d) Non-Funding Lenders. The failure of any Revolving
Lender (such Revolving Lender, a "Non-Funding Lender") to make any Revolving
Credit Advance or to purchase any participation in any Swing Line Loan to be
made or purchased by it on the date specified therefor shall not relieve any
other Revolving Lender (each such other Revolving Lender, an "Other Lender") of
its obligations to make such Advance or purchase such participation on such
date, but neither any Other Lender nor Agent shall be responsible for the
failure of any Non-Funding Lender to make an Advance to be made, or to purchase
a participation to be purchased, by such Non-Funding Lender, and no Non-Funding
Lender shall have any obligation to Agent or any Other Lender for the failure
by such Non-Funding Lender. Notwithstanding anything set forth herein to the
contrary, a Non-Funding Lender (so long as it shall remain a Non-Funding
Lender) shall not have any voting or consent rights under or with respect to
any Loan Document or constitute a "Lender" or a "Revolving Lender" (or be
included in the calculation of "Requisite Lenders", "Requisite Revolving
Lenders" or "Supermajority Revolving Lenders" hereunder) for any voting or
consent rights under or with respect to any Loan Document.

(e) Dissemination of Information. Agent will provide
Lenders with any notice of Event of Default received by Agent from, or
delivered by Agent to, any Credit Party. Lenders acknowledge that Borrowers
are required to provide Financial Statements and Collateral Reports to

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Lenders in accordance with Annexes E and F hereto and agree that Agent shall
have no duty to provide the same to Lenders.

(f) Actions in Concert. Anything in this Agreement to
the contrary notwithstanding, each Lender hereby agrees with each other Lender
that no Lender shall take any action to protect or enforce its rights arising
out of this Agreement or the Loan Documents (including exercising any rights of
set-off) without first obtaining the prior written consent of Agent or
Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under this Agreement and the Notes shall be taken in
concert and at the direction or with the consent of Agent.

10. SUCCESSORS AND ASSIGNS

10.1 Successors and Assigns. This Agreement and the other
Loan Documents shall be binding on and shall inure to the benefit of each
Credit Party, Agent, Lenders and their respective successors and assigns
(including, in the case of any Credit Party, a debtor-in-possession on behalf
of such Credit Party), except as otherwise provided herein or therein. No
Credit Party may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder or under any of the other Loan
Documents without the prior express written consent of Agent and Requisite
Lenders. Any such purported assignment, transfer, hypothecation or other
conveyance by any Credit Party without the prior express written consent of
Agent and Requisite Lenders shall be void. The terms and provisions of this
Agreement are for the purpose of defining the relative rights and obligations
of each Credit Party, Agent and Lenders with respect to the transactions
contemplated hereby and no Person shall be a third party beneficiary of any of
the terms and provisions of this Agreement or any of the other Loan Documents.

11. MISCELLANEOUS

11.1 Complete Agreement; Modification of Agreement. The
Loan Documents constitute the complete agreement between the parties with
respect to the subject matter thereof and may not be modified, altered or
amended except as set forth in Section 11.2 below. Any letter of interest,
commitment letter, and/or fee letter (other than the GE Capital Fee Letter)
and/or confidentiality agreement between any Credit Party and Agent or any
Lender or any of their respective affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement.

11.2 Amendments and Waivers. (a) Except for actions
expressly permitted to be taken by Agent, no amendment, modification,
termination or waiver of any provision of this Agreement or any of the Notes,
or any consent to any departure by any Credit Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by Agent and
Borrowers, and by Requisite Lenders, Requisite Revolving Lenders, Supermajority
Revolving Lenders or all affected Lenders, as applicable. Except as set forth
in clauses (b) and (c) below, all such amendments, modifications, terminations
or waivers requiring the consent of any Lenders shall require the written
consent of Requisite Lenders.

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(b) No amendment, modification, termination or waiver of
or consent with respect to any provision of this Agreement which increases the
percentage advance rates set forth in the definition of the Selfix Borrowing
Base, the Tamor Borrowing Base or the Shutters Borrowing Base, or which makes
less restrictive the nondiscretionary criteria for exclusion from Eligible
Accounts and Eligible Inventory set forth in Sections 1.6 and 1.7, shall be
effective unless the same shall be in writing and signed by Agent,
Supermajority Revolving Lenders and Borrowers. No amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement which waives compliance with the conditions precedent set forth in
Section 2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed
by Agent, Requisite Revolving Lenders and Borrowers. Notwithstanding anything
contained in this Agreement to the contrary, no waiver or consent with respect
to any Default (if in connection therewith Agent or Requisite Revolving
Lenders, as the case may be, have exercised its or their right to suspend the
making or incurrence of further Advances or Letter of Credit Obligations
pursuant to Section 8.2(a)) or any Event of Default shall be effective for
purposes of the conditions precedent to the making of Loans or the incurrence
of Letter of Credit Obligations set forth in Section 2.2 unless the same shall
be in writing and signed by Agent, Requisite Revolving Lenders and Borrowers.

(c) No amendment, modification, termination or waiver
shall, unless in writing and signed by Agent and each Lender directly affected
thereby, do any of the following: (i) increase the principal amount of any
Lender's Commitment (which action shall be deemed to directly affect all
Lenders); (ii) reduce the principal of, rate of interest on or Fees payable
with respect to any Loan or Letter of Credit Obligations of any affected
Lender; (iii) change any scheduled payment date or final maturity date of the
principal amount of any Loan of any affected Lender; (iv) waive, forgive,
defer, extend or postpone any payment of interest or Fees as to any affected
Lender; (v) release any Guaranty or, except as otherwise permitted herein or in
the other Loan Documents, permit any Credit Party to sell or otherwise dispose
of any Collateral with a value exceeding $5,000,000 in the aggregate (which
action shall be deemed to directly affect all Lenders); (vi) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans which shall be required for Lenders or any of them to take any action
hereunder; and (vii) amend or waive this Section 11.2 or the definitions of the
terms "Requisite Lenders", "Requisite Revolving Lenders" or "Supermajority
Revolving Lenders" insofar as such definitions affect the substance of this
Section 11.2. Furthermore, no amendment, modification, termination or waiver
affecting the rights or duties of Agent under this Agreement or any other Loan
Document shall be effective unless in writing and signed by Agent, in addition
to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Agent to take
additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No
notice to or demand on any Credit Party in any case shall entitle such Credit
Party or any other Credit Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in

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accordance with this Section 11.2 shall be binding upon each holder of the
Notes at the time outstanding and each future holder of the Notes.

(d) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change"):

(i) requiring the consent of all affected
Lenders, the consent of Requisite Lenders is obtained, but the
consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as
described this clause (i) and in clauses (ii), (iii) and (iv)
below being referred to as a "Non-Consenting Lender"), or

(ii) requiring the consent of Supermajority
Revolving Lenders, the consent of Requisite Revolving Lenders
is obtained, but the consent of Supermajority Revolving
Lenders is not obtained, or

(iii) requiring the consent of Requisite Revolving
Lenders, the consent of Revolving Lenders holding 51% or more
of the aggregate Revolving Loan Commitments is obtained, but
the consent of Requisite Revolving Lenders is not obtained, or

(iv) requiring the consent of Requisite Lenders,
the consent of Lenders holding 51% or more of the aggregate
Commitments is obtained, but the consent of Requisite Lenders
is not obtained,

then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative's request, Agent or a Person acceptable to Agent shall have the
right with Agent's consent and in Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Person, all of the Commitments of such Non-Consenting
Lender for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.

(e) Upon indefeasible payment in full in cash and
performance of all of the Obligations (other than indemnification Obligations
under Section 1.13), termination of the Commitments and a release of all claims
against Agent and Lenders, and so long as no suits, actions proceedings, or
claims are pending or threatened against any Indemnified Person asserting any
damages, losses or liabilities that are Indemnified Liabilities, Agent shall
deliver to Borrowers termination statements, mortgage releases and other
documents necessary or appropriate to evidence the termination of the Liens
securing payment of the Obligations.

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11.3 Fees and Expenses. Borrowers shall reimburse Agent
for all out-of-pocket expenses incurred in connection with the preparation of
the Loan Documents (including the reasonable fees and expenses of all of its
special loan counsel, advisors, consultants and auditors retained in connection
with the Loan Documents and the Related Transactions and advice in connection
therewith). Borrowers shall reimburse Agent (and, with respect to clauses (c)
and (d) below, all Lenders) for all fees, costs and expenses, including the
fees, costs and expenses of counsel or other advisors (including environmental
and management consultants and appraisers) for advice, assistance, or other
representation in connection with:

(a) the forwarding to Borrowers or any other
Person on behalf of Borrowers by Agent of the proceeds of the Loans;

(b) any amendment, modification or waiver of, or
consent with respect to, any of the Loan Documents or Related Transactions
Documents or advice in connection with the administration of the Loans made
pursuant hereto or its rights hereunder or thereunder;

(c) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by Agent, any Lender, any Borrower or
any other Person) in any way relating to the Collateral, any of the Loan
Documents or any other agreement to be executed or delivered in connection
therewith or herewith, whether as party, witness, or otherwise, including any
litigation, contest, dispute, suit, case, proceeding or action, and any appeal
or review thereof, in connection with a case commenced by or against any or all
of the Borrowers or any other Person that may be obligated to Agent by virtue
of the Loan Documents; including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring
of the Loans during the pendency of one or more Events of Default; provided
that in the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;

(d) any attempt to enforce any remedies of Agent
against any or all of the Credit Parties or any other Person that may be
obligated to Agent or any Lender by virtue of any of the Loan Documents;
including any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the Loans during the pendency of one or more
Events of Default; provided that in the case of reimbursement of counsel for
Lenders other than Agent, such reimbursement shall be limited to one counsel
for all such Lenders;

(e) any work-out or restructuring of the Loans
during the pendency of one or more Events of Default;

(f) efforts to (i) monitor the Loans or any of
the other Obligations, (ii) evaluate, observe or assess any of the Credit
Parties or their respective affairs, and (iii) verify, protect, evaluate,
assess, appraise, collect, sell, liquidate or otherwise dispose of any of the
Collateral;

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including all attorneys' and other professional and service providers'
fees arising from such services, including those in connection with any
appellate proceedings; and all expenses, costs, charges and other fees incurred
by such counsel and others in any way or respect arising in connection with or
relating to any of the events or actions described in this Section 11.3 shall
be payable, on demand, by Borrowers to Agent. Without limiting the generality
of the foregoing, such expenses, costs, charges and fees may include: fees,
costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court
costs and expenses; photocopying and duplication expenses; court reporter fees,
costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and expenses for
travel, lodging and food paid or incurred in connection with the performance of
such legal or other advisory services.

11.4 No Waiver. Agent's or any Lender's failure, at any
time or times, to require strict performance by the Credit Parties of any
provision of this Agreement and any of the other Loan Documents shall not
waive, affect or diminish any right of Agent or such Lender thereafter to
demand strict compliance and performance therewith. Any suspension or waiver
of an Event of Default shall not suspend, waive or affect any other Event of
Default whether the same is prior or subsequent thereto and whether the same or
of a different type. Subject to the provisions of Section 11.2, none of the
undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Agent or any Lender, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized
employee of Agent and the applicable required Lenders, and directed to
Borrowers specifying such suspension or waiver.

11.5 Remedies. Agent's and Lenders' rights and remedies
under this Agreement shall be cumulative and nonexclusive of any other rights
and remedies which Agent or any Lender may have under any other agreement,
including the other Loan Documents, by operation of law or otherwise. Recourse
to the Collateral shall not be required.

11.6 Severability. Wherever possible, each provision of
this Agreement and the other Loan Documents shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.

11.7 Conflict of Terms. Except as otherwise provided in
this Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of
the other Loan Documents, the provision contained in this Agreement shall
govern and control.

11.8 Confidentiality. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of

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its own confidential information) to maintain as confidential all confidential
information provided to them by the Credit Parties and designated as
confidential for a period of two (2) years following receipt thereof, except
that Agent and any Lender may disclose such information (a) to Persons employed
or engaged by Agent or such Lender in evaluating, approving, structuring or
administering the Loans and the Commitments; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 11.8 (and any such bona fide assignee or
participant or potential assignee or participant may disclose such information
to Persons employed or engaged by them as described in clause (a) above); (c)
as required or requested by any Governmental Authority or reasonably believed
by Agent or such Lender to be compelled by any court decree, subpoena or legal
or administrative order or process; (d) as, in the opinion of Agent's or such
Lender's counsel, required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation
to which Agent or such Lender is a party; or (f) which ceases to be
confidential through no fault of Agent or such Lender.

11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE
OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN XXXX COUNTY, CITY OF CHICAGO, ILLINOIS SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
CREDIT PARTIES, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND
THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO
BE HEARD BY A COURT LOCATED OUTSIDE OF XXXX COUNTY, CITY OF CHICAGO, ILLINOIS
AND, PROVIDED, FURTHER NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT
PARTY HEREBY WAIVES ANY OBJECTION WHICH SUCH CREDIT PARTY MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY

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WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT
PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.

11.10 Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the parties
desires to give or serve upon any other parties any communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual
receipt and three (3) Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by telecopy or other similar
facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or United States Mail as otherwise
provided in this Section 11.10), (c) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated on Annex I or to
such other address (or facsimile number) as may be substituted by notice given
as herein provided. The giving of any notice required hereunder may be waived
in writing by the party entitled to receive such notice. Failure or delay in
delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrower
Representative or Agent) designated on Annex I to receive copies shall in no
way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.

11.11 Section Titles. The Section titles and Table of
Contents contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.

11.12 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and
separately constitute one agreement.

11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE

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JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY
CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.

11.14 Press Releases. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will in the future issue
any press releases or other public disclosure using the name of GE Capital or
its affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will
consult with GE Capital before issuing such press release or other public
disclosure. Each Credit Party consents to the publication by Agent or any
Lender of a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement.

11.15 Reinstatement. This Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by
or against any Borrower for liquidation or reorganization, should any Borrower
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Borrower's assets, and shall continue to be effective
or to be reinstated, as the case may be, if at any time payment and performance
of the Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by
any obligee of the Obligations, whether as a "voidable preference," "fraudulent
conveyance," or otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.

11.16 Advice of Counsel. Each of the parties represents to
each other party hereto that it has discussed this Agreement and, specifically,
the provisions of Sections 11.9 and 11.13, with its counsel.

11.17 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

12. CROSS-GUARANTY

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12.1 Cross-Guaranty. Each Borrower hereby agrees that
such Borrower is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to Agent and Lenders and their respective successors
and assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or
hereafter owing to Agent and Lenders by each other Borrower. Each Borrower
agrees that its guaranty obligation hereunder is a continuing guaranty of
payment and performance and not of collection, and that its obligations under
this Section 12 shall be absolute and unconditional, irrespective of, and
unaffected by,

(a) the genuineness, validity, regularity,
enforceability or any future amendment of, or change in, this
Agreement, any other Loan Document or any other agreement, document or
instrument to which any Borrower is or may become a party;

(b) the absence of any action to enforce this
Agreement (including this Section 12) or any other Loan Document or
the waiver or consent by Agent and Lenders with respect to any of the
provisions thereof;

(c) the existence, value or condition of, or
failure to perfect its Lien against, any security for the Obligations
or any action, or the absence of any action, by Agent and Lenders in
respect thereof (including the release of any such security);

(d) the insolvency of any Credit Party; or

(e) any other action or circumstances which might
otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor,

it being agreed by each Borrower that its obligations under this Section 12
shall not be discharged until the payment and performance, in full, of the
Obligations has occurred. Each Borrower shall be regarded, and shall be in the
same position, as principal debtor with respect to the Obligations guaranteed
hereunder.

12.2 Waivers by Borrowers. Each Borrower expressly waives
all rights it may have now or in the future under any statute, or at common
law, or at law or in equity, or otherwise, to compel Agent or Lenders to
xxxxxxxx assets or to proceed in respect of the Obligations guaranteed
hereunder against any other Credit Party, any other party or against any
security for the payment and performance of the Obligations before proceeding
against, or as a condition to proceeding against, such Borrower. It is agreed
among each Borrower, Agent and Lenders that the foregoing waivers are of the
essence of the transaction contemplated by this Agreement and the other Loan
Documents and that, but for the provisions of this Section 12 and such waivers,
Agent and Lenders would decline to enter into this Agreement.

12.3 Benefit of Guaranty. Each Borrower agrees that the
provisions of this Section 12 are for the benefit of Agent and Lenders and
their respective successors, transferees, endorsees

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and assigns, and nothing herein contained shall impair, as between any other
Borrower and Agent or Lenders, the obligations of such other Borrower under the
Loan Documents.

12.4 Subordination of Subrogation, Etc. Notwithstanding
anything to the contrary in this Agreement or in any other Loan Document, and
except as set forth in Section 12.7, each Borrower hereby expressly and
irrevocably subordinates to payment of the Obligations any and all rights at
law or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses available to a surety,
guarantor or accommodation co-obligor until the Obligations are indefeasibly
paid in full in cash. Each Borrower acknowledges and agrees that this
subordination is intended to benefit Agent and Lenders and shall not limit or
otherwise affect such Borrower's liability hereunder or the enforceability of
this Section 12, and that Agent, Lenders and their respective successors and
assigns are intended third party beneficiaries of the waivers and agreements
set forth in this Section 12.4.

12.5 Election of Remedies. If Agent or any Lender may,
under applicable law, proceed to realize its benefits under any of the Loan
Documents giving Agent or such Lender a Lien upon any Collateral, whether owned
by any Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any
of its rights and remedies under this Section 12. If, in the exercise of any
of its rights and remedies, Agent or any Lender shall forfeit any of its rights
or remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to "election of remedies" or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action,
even if such action by Agent or such Lender shall result in a full or partial
loss of any rights of subrogation which each Borrower might otherwise have had
but for such action by Agent or such Lender. Any election of remedies which
results in the denial or impairment of the right of Agent or any Lender to seek
a deficiency judgment against any Borrower shall not impair any other
Borrower's obligation to pay the full amount of the Obligations. In the event
Agent or any Lender shall bid at any foreclosure or trustee's sale or at any
private sale permitted by law or the Loan Documents, Agent or such Lender may
bid all or less than the amount of the Obligations and the amount of such bid
need not be paid by Agent or such Lender but shall be credited against the
Obligations. The amount of the successful bid at any such sale, whether Agent,
Lender or any other party is the successful bidder, shall be conclusively
deemed to be the fair market value of the Collateral and the difference between
such bid amount and the remaining balance of the Obligations shall be
conclusively deemed to be the amount of the Obligations guaranteed under this
Section 12, notwithstanding that any present or future law or court decision or
ruling may have the effect of reducing the amount of any deficiency claim to
which Agent or any Lender might otherwise be entitled but for such bidding at
any such sale.

12.6 Limitation. Notwithstanding any provision herein
contained to the contrary, each Borrower's liability under this Section 12
(which liability is in any event in addition to amounts for which such Borrower
is primarily liable under Section 1) shall be limited to an amount not to
exceed as of any date of determination the greater of:

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(a) the net amount of all Loans advanced to any other
Borrower under this Agreement and then re-loaned or otherwise transferred to,
or for the benefit of, such Borrower; and

(b) the amount which could be claimed by Agent and
Lenders from such Borrower under this Section 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law after taking into account,
among other things, such Borrower's right of contribution and indemnification
from each other Borrower under Section 12.7.

12.7 Contribution with Respect to Guaranty Obligations.

(a) To the extent that any Borrower shall make a payment
under this Section 12 of all or any of the Obligations (other than Loans made
to that Borrower for which it is primarily liable) (a "Guarantor Payment")
which, taking into account all other Guarantor Payments then previously or
concurrently made by any other Borrower, exceeds the amount which such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Borrower's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the
Obligations and termination of the Commitments, such Borrower shall be entitled
to receive contribution and indemnification payments from, and be reimbursed
by, each other Borrower for the amount of such excess, pro rata based upon
their respective Allocable Amounts in effect immediately prior to such
Guarantor Payment.

(b) As of any date of determination, the "Allocable
Amount" of any Borrower shall be equal to the maximum amount of the claim which
could then be recovered from such Borrower under this Section 12 without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

(c) This Section 12.7 is intended only to define the
relative rights of Borrowers and nothing set forth in this Section 12.7 is
intended to or shall impair the obligations of Borrowers, jointly and
severally, to pay any amounts as and when the same shall become due and payable
in accordance with the terms of this Agreement, including Section 12.1.
Nothing contained in this Section 12.7 shall limit the liability of any
Borrower to pay the Loans made directly or indirectly to that Borrower and
accrued interest, Fees and expenses with respect thereto for which such
Borrower shall be primarily liable.

(d) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of the
Borrower to which such contribution and indemnification is owing.

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(e) The rights of the indemnifying Borrowers against
other Credit Parties under this Section 12.7 shall be exercisable upon the full
and indefeasible payment of the Obligations and the termination of the
Commitments.

12.8 Liability Cumulative. The liability of Borrowers
under this Section 12 is in addition to and shall be cumulative with all
liabilities of each Borrower to Agent and Lenders under this Agreement and the
other Loan Documents to which such Borrower is a party or in respect of any
Obligations or obligation of the other Borrower, without any limitation as to
amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.

[signature page follows]

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

SELFIX, INC.

By: ________________________________
Title:______________________________

TAMOR CORPORATION

By: ________________________________
Title:______________________________

SHUTTERS, INC.

By: ________________________________
Title:______________________________

GENERAL ELECTRIC CAPITAL
CORPORATION,
Revolving Loan as Agent and Lender
Commitment (including
a Swing Line Commitment
of $500,000):
$15,000,000 By: _______________________________
Title: _____________________________
Selfix Term Loan A
Commitment:
$2,625,000

Tamor Term
Loan A Commitment:
$11,250,000

Shutters Term
Loan A Commitment:
$1,125,000

Selfix Term Loan B
Commitment:
$2,625,000

Tamor Term
Loan B Commitment:
$11,250,000

Shutters Term
Loan B Commitment:
$1,125,000

LASALLE NATIONAL BANK,
Revolving Loan as Lender
Commitment:
$5,000,000 By: _______________________________
Title: _____________________________
Selfix Term Loan A
Commitment:
$875,000

Tamor Term
Loan A Commitment:
$3,750,000

Shutters Term
Loan A Commitment:
$375,000

Selfix Term Loan B
Commitment:
$875,000

Tamor Term
Loan B Commitment:
$3,750,000

Shutters Term
Loan B Commitment:
$375,000

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The following Person is a signatory to this Agreement in its
capacity as a Credit Party and not as a Borrower.

HOME PRODUCTS INTERNATIONAL, INC.

By:
----------------------------------

Title:
-------------------------------

79
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT

DEFINITIONS

Capitalized terms used in the Loan Documents shall have
(unless otherwise provided elsewhere in the Loan Documents) the following
respective meanings and all section references in the following definitions
shall refer to Sections of the Agreement:

"Account Debtor" shall mean any Person who may become
obligated to any Credit Party under, with respect to, or on account of, an
Account.

"Accounts" shall mean all "accounts," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party and, in any
event, including (a) all accounts receivable, other receivables, book debts and
other forms of obligations (other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments) now owned or hereafter received or acquired by
or belonging or owing to any Credit Party, whether arising out of goods sold or
services rendered by it or from any other transaction (including any such
obligations which may be characterized as an account or contract right under the
Code), (b) all of each Credit Party's rights in, to and under all purchase
orders or receipts now owned or hereafter acquired by it for goods or services,
(c) all of each Credit Party's rights to any goods represented by any of the
foregoing (including all unpaid sellers' rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (d) all monies due or to become due to any Credit Party,
under all purchase orders and contracts for the sale of goods or the performance
of services or both by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such Credit
Party) now or hereafter in existence, including the right to receive the
proceeds of said purchase orders and contracts, and (e) all collateral security
and guarantees of any kind, now or hereafter in existence, given by any Person
with respect to any of the foregoing.

"Acquisition" shall mean, collectively, the following
sequential steps: (i) a subsidiary of Holdings will be merged with Selfix and
Selfix will become a wholly-owned Subsidiary of Holdings; (ii) Selfix will
distribute to Holdings approximately $1,900,000 in cash on hand; (iii) Selfix
will distribute to Holdings the capital stock of Shutters; (iv) Housewares will
be merged into a wholly-owned merger Subsidiary of Holdings; (v) Holdings,
through the same acquisition Subsidiary, will acquire, for total consideration
of $50,700,000 (approximately $1,900,000 from cash on hand), 100% of the
outstanding stock of Tamor; (vi) the acquisition Subsidiary will then merge into
Tamor; and (vii) outstanding indebtedness of Selfix, Tamor and Shutters will be
repaid.

"Acquisition Agreement" shall mean collectively (i) the Stock
Purchase
80
Agreement between Selfix and the stockholders of Tamor and (ii) the Agreement
and Plan of Merger among Selfix, Housewares and the stockholders of Housewares,
each made as of January 1, 1997; and (iii) all other documents, agreements and
instruments entered into in connection with the Acquisition.

"Advance" shall mean any Revolving Credit Advance or Swing
Line Advance, as the context may require.

"Affiliate" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, five percent (5%) or more of the
Stock having ordinary voting power in the election of directors of such Persons,
(b) each Person that controls, is controlled by or is under common control with
such Person, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in the case of Borrowers, the immediate family members, spouses
and lineal descendants of individuals who are Affiliates of any Borrower. For
the purposes of this definition, "control" of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall specifically exclude Agent and each Lender.

"Agent" shall mean GE Capital or its successor appointed
pursuant to Section 9.7.

"Aggregate Borrowing Base" shall mean, as of any date of
determination, an amount equal to the sum of the Selfix Borrowing Base, the
Tamor Borrowing Base and the Shutters Borrowing Base.

"Agreement" shall mean the Credit Agreement by and among
Borrowers, the other Credit Parties named therein, GE Capital, as Agent and
Lender and the other Lenders signatory from time to time to the Agreement.

"Appendices" shall have the meaning assigned to it in the
recitals to the Agreement.

"Applicable Margins" means collectively the Applicable
Revolver Index Margin, the Applicable Term Loan A Index Margin, the Applicable
Term Loan B Index Margin, the Applicable Revolver LIBOR Margin and the
Applicable Term Loan A LIBOR Margin and the Applicable Term Loan B LIBOR Margin.

"Applicable Revolver Index Margin" shall mean the per annum
interest rate margin from time to time in effect and payable in addition to the
Index Rate applicable to the Revolving Loan, as determined by reference to
Section 1.5(a) of the Agreement.

"Applicable Revolver LIBOR Margin" shall mean the per annum
interest rate

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from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a) of the
Agreement.

"Applicable Term Loan A Index Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the Index
Rate applicable to Term Loan A, as determined by reference to Section 1.5(a) of
the Agreement.

"Applicable Term Loan A LIBOR Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the LIBOR
Rate applicable to Term Loan A, as determined by reference to Section 1.5(a) of
the Agreement.

"Applicable Term Loan B Index Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the Index
Rate applicable to Term Loan B, as determined by reference to Section 1.5(a) of
the Agreement.

"Applicable Term Loan B LIBOR Margin" shall mean the per annum
interest rate from time to time in effect and payable in addition to the LIBOR
Rate applicable to Term Loan B, as determined by reference to Section 1.5(a) of
the Agreement.

"Assignment Agreement" shall have the meaning assigned to it
in Section 9.1(a).

"Borrower Accounts" shall have the meaning assigned to it in
Annex C.

"Borrower Representative" shall mean Selfix in its capacity as
Borrower Representative pursuant to the provisions of Section 1.1(c).

"Borrowers" and "Borrower" shall have the respective meanings
assigned thereto in the recitals to the Agreement.

"Borrowing Availability" shall have the meaning assigned to it
in Section 1.1(a)(i).

"Borrowing Base" shall mean, as the context may require, the
Selfix Borrowing Base, the Tamor Borrowing Base and the Shutters Borrowing Base
or any such Borrowing Base.

"Borrowing Base Certificate" shall mean a certificate to be
executed and delivered from time to time by each Borrower in the form attached
to the Agreement as Exhibit 4.1(b).

"Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
State of Illinois and in reference to LIBOR Loans shall mean any such day that
is also a LIBOR Business Day.

"Capital Expenditures" shall mean, with respect to any Person,
all expenditures

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(by the issuance of securities, the expenditure of cash or the incurrence of
Indebtedness) by such Person during any measuring period for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and that are required to be capitalized
under GAAP.

"Capital Lease" shall mean, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person.

"Capital Lease Obligation" shall mean, with respect to any
Capital Lease of any Person, the amount of the obligation of the lessee
thereunder that, in accordance with GAAP, would appear on a balance sheet of
such lessee in respect of such Capital Lease.

"Cash Management Systems" shall have the meaning assigned to
it in Section 1.8.

"Change of Control" means any of the following: (a) any person
or group of persons (within the meaning of the Securities and Exchange Act of
1934, as amended) shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended) of 20% or more of the issued and
outstanding shares of capital Stock of Holdings having the right to vote for the
election of directors of Holdings under ordinary circumstances other than the
Ragir Family Trusts; (b) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board of
directors of Holdings (together with any new directors whose election by the
board of directors of Holdings or whose nomination for election by the
stockholders of Holdings 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 elections or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office, (c) Holdings shall cease to own and
control all of the economic and voting rights associated with all of the
outstanding capital Stock of the Borrowers.

"Charges" shall mean all federal, state, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit
Party, (b) any Credit Party's ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party's business.

"Chattel Paper" shall mean any "chattel paper," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.

"Closing Date" shall mean February 27, 1997.

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"Closing Checklist" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Annex D.

"Code" shall mean the Uniform Commercial Code as the same may,
from time to time, be enacted and in effect in the State of Illinois provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Agent's or any Lender's security
interest in any Collateral is governed by the Uniform Commercial Code as enacted
and in effect in a jurisdiction other than the State of Illinois, the term
"Code" shall mean the Uniform Commercial Code as enacted and in effect in such
other jurisdiction solely for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.

"Collateral" shall mean the property covered by the Security
Agreement, the Mortgages and the other Collateral Documents and any other
property, real or personal, tangible or intangible, now existing or hereafter
acquired, that may at any time be or become subject to a security interest or
Lien in favor of Agent, on behalf of itself and Lenders, to secure the
Obligations.

"Collateral Documents" shall mean the Security Agreement, the
Pledge Agreements, the Guaranties, the Mortgages, the Patent Security Agreement,
the Trademark Security Agreement and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations.

"Collateral Reports" shall mean the reports with respect to
the Collateral referred to in Annex F.

"Collection Account" shall mean that certain account of Agent,
account number 502- 328-54 in the name of Agent at Bankers Trust Company in New
York, New York.

"Commitment Termination Date" shall mean the earliest of (a)
August 28, 2002, (b) the date of termination of Lenders' obligations to make
Advances and/or incur Letter of Credit Obligations or permit existing Loans to
remain outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrowers of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of the Revolving Loan Commitment and the Swing Line Commitment to zero
dollars ($0), in accordance with the provisions of Section 1.3(a).

"Commitments" shall mean (a) as to any Lender, the aggregate
of such Lender's Revolving Loan Commitment (including without duplication the
Swing Line Lender's Swing

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Line Commitment) and Term Loan Commitment as set forth on the signature page to
the Agreement or in the most recent Assignment Agreement executed by such Lender
and (b) as to all Lenders, the aggregate of all Lenders' Revolving Loan
Commitments (including without duplication the Swing Line Lender's Swing Line
Commitment) and Term Loan Commitments, which aggregate commitment shall be Sixty
Million Dollars ($60,000,000) on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement.

"Compliance Certificate" shall have the meaning assigned to it
in Annex E.

"Concentration Accounts" shall have the meaning assigned to it
in Annex C.

"Contracts" shall mean all "contracts," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party, in any
event, including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.

"Control Letter" means a letter agreement between Agent and
(i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of any Credit Party, (iii) a futures commission merchant or clearing house with
respect to commodity accounts and commodity contracts held by any Credit Party,
whereby, among other things, the issuer, securities intermediary or futures
commission merchant disclaims any security interest in the applicable financial
assets, acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Agent without further consent by the affected Credit Party.

"Credit Parties" shall mean Holdings and each Borrower.

"Default" shall mean any event which, with the passage of time
or notice or both, would, unless cured or waived, become an Event of Default.

"Default Rate" shall have the meaning assigned to it in
Section 1.5(d).

"Disbursement Accounts" shall have the meaning assigned to it
on Annex C.

"Disclosure Schedules" shall mean the Schedules prepared by
Borrowers and denominated as Disclosure Schedules 1.4 through 6.7 in the Index
to the Agreement.

"Documents" shall mean any "documents," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.

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"Dollars" or "$" shall mean lawful currency of the United
States of America.

"EBITA" shall mean, with respect to any Person for any fiscal
period, EBITDA excluding the add-back of depreciation.

"EBITDA" shall mean, with respect to any Person for any fiscal
period, an amount equal to (a) consolidated net income of such Person for such
period, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii)
gain from extraordinary items for such period, (iv) any aggregate net gain (but
not any aggregate net loss) during such period arising from the sale, exchange
or other disposition of capital assets by such Person (including any fixed
assets, whether tangible or intangible, all inventory sold in conjunction with
the disposition of fixed assets and all securities), and (v) any other non-cash
gains which have been added in determining consolidated net income, in each case
to the extent included in the calculation of consolidated net income of such
Person for such period in accordance with GAAP, but without duplication, plus
(c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items for such period, (iv) the amount of non-cash
charges (including depreciation and amortization) for such period, (v) amortized
debt discount for such period, and (vi) the amount of any deduction to
consolidated net income as the result of any grant to any members of the
management of such Person of any Stock, in each case to the extent included in
the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (2) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership interest,
except to the extent any such income has actually been received by such Person
in the form of cash dividends or distributions; (3) the undistributed earnings
of any Subsidiary of such Person to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.

"Eligible Accounts" shall have the meaning assigned to it in
Section 1.6 of the Agreement.

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"Eligible Inventory" shall have the meaning assigned to it in
Section 1.7 of the Agreement.

"Environmental Laws" shall mean all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), each as from time to time amended, and any and all regulations
promulgated thereunder, and all analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.

"Environmental Liabilities" shall mean, with respect to any
Person, all liabilities, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility study costs, capital costs,
operation and maintenance costs, losses, damages, punitive damages, property
damages, natural resource damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.

"Environmental Permits" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other written
documents required by any Governmental Authority under any Environmental Laws.

"Equipment" shall mean all "equipment," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located and, in any event, including all such Credit Party's machinery
and equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment with software and peripheral equipment (other
than software constituting part of the Accounts), and all engineering,

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processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment,
trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock
and other equipment of every kind and nature, trade fixtures and fixtures not
forming a part of real property, all whether now owned or hereafter acquired,
and wherever situated, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.

"ERISA" shall mean the Employee Retirement Income Security Act
of 1974 (or any successor legislation thereto), as amended from time to time,
and any regulations promulgated thereunder.

"ERISA Affiliate" shall mean, with respect to any Credit
Party, any trade or business (whether or not incorporated) which, together with
such Credit Party, are treated as a "controlled group of corporation," a group
of trades or businesses under "common control," or an "affiliated service group"
within the meaning of Sections 414(b), (c), (m) or (o) of the IRC.

"ERISA Event" shall mean, with respect to any Credit Party or
any ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt status.

"ESOP" shall mean a Plan which is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.

"Event of Default" shall have the meaning assigned to it in
Section 8.1.

"Excess Cash Flow" shall mean, without duplication, with
respect to any Fiscal Year of Borrowers and their Subsidiaries, consolidated net
income plus (a) depreciation, amortization and Interest Expense to the extent
deducted in determining consolidated net income,

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minus (b) Capital Expenditures during such Fiscal Year (excluding the portion
thereof financed from sources other than the Credit Agreement) minus (c)
Interest Expense paid or accrued (excluding any original issue discount,
interest paid in kind or amortized debt discount, to the extent included in
determining Interest Expense) and scheduled principal payments paid or payable
in respect of Funded Debt, plus or minus (as the case may be), (d) extraordinary
gains or losses which are cash items not included in the calculation of net
income, minus (e) mandatory prepayments paid in cash pursuant to Section 1.3
other than mandatory prepayments made pursuant to Sections 1.3(b)(i), 1.3(b)(iv)
or 1.3(d), plus (f) taxes deducted in determining consolidated net income to the
extent not paid for in cash.

"Federal Funds Rate" shall mean, for any day, a floating rate
equal to the weighted average of the rates on overnight Federal funds
transactions among members of the Federal Reserve System, as determined by
Agent.

"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.

"Fees" shall mean any and all fees payable to Agent or any
Lender pursuant to the Agreement or any of the other Loan Documents.

"Financial Statements" shall mean the consolidated and
consolidating income statements, statements of cash flows and balance sheets of
Holdings and Borrowers delivered in accordance with Section 3.4 of the Agreement
and Annex E to the Agreement.

"Fiscal Month" shall mean any of the monthly accounting
periods of Borrowers.

"Fiscal Quarter" shall mean any of the quarterly accounting
periods of Borrowers, ending generally on the Saturday closest to the last day
of March, June, September and December of each year.

"Fiscal Year" shall mean any of the annual accounting periods
of Borrowers ending on December of each year.

"Fixed Charges" shall mean, with respect to any Person for any
fiscal period, the aggregate of all Interest Expense paid or accrued during such
period (other than Interest Expense with respect to the Subordinated Notes not
paid in cash), plus (a) scheduled payments of principal with respect to
Indebtedness during such period.

"Fixed Charge Coverage Ratio" shall mean, with respect to any
Person for any fiscal period, the ratio of (i) EBITDA less the sum of Capital
Expenditures and income taxes paid in cash during such period to (ii) Fixed
Charges.

"Fixtures" shall mean any "fixtures" as such term is defined
in the Code, now

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owned or hereafter acquired by any Credit Party.

"Funded Debt" shall mean, with respect to any Person, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and which by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations.

"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect on the Closing Date, consistently
applied as such term is further defined in Annex G to the Agreement.

"GE Capital Fee Letter" shall mean that certain letter, dated
as of February 24, 1997, between GE Capital and Selfix with respect to certain
Fees to be paid from time to time by Borrowers to GE Capital.

"General Intangibles" shall mean any "general intangibles," as
such term is defined in the Code, now owned or hereafter acquired by any Credit
Party, and, in any event, including all right, title and interest which such
Credit Party may now or hereafter have in or under any Contract, all customer
lists, Licenses, Trademarks, Patents, and all applications therefor and
reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, trade secrets, proprietary or confidential information,
inventions (whether or not patented or patentable), technical information,
procedures, designs, knowledge, know-how, software, data bases, data, skill,
expertise, experience, processes, models, drawings, materials and records,
goodwill (including the goodwill associated with any Trademark or Trademark
License), all rights and claims in or under insurance policies (including
insurance for fire, damage, loss and casualty, whether covering personal
property, real property, tangible rights or intangible rights, all liability,
life, key man and business interruption insurance, and all unearned premiums),
uncertificated securities, choses in action, deposit, checking and other bank
accounts, rights to receive tax refunds and other payments, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.

"Goods" shall mean any "goods" as such term is defined in the
Code, now or hereafter acquired by any Credit Party.

"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, and any agency, department or
other entity exercising

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executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("primary obligations") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) to indemnify the owner of such primary obligation against
loss in respect thereof. The amount of any Guaranteed Indebtedness at any time
shall be deemed to be an amount equal to the lesser at such time of (x) the
stated or determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is made and (y) the maximum amount for which such Person
may be liable pursuant to the terms of the instrument embodying such Guaranteed
Indebtedness; or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.

"Guaranties" shall mean, collectively, the Holdings Guaranty,
and any other guaranty executed by any Guarantor in favor of Agent and Lenders
in respect of the Obligations.

"Guarantors" shall mean Holdings, and each other Person, if
any, which executes a guarantee or other similar agreement in favor of Agent in
connection with the transactions contemplated by the Agreement and the other
Loan Documents.

"Hazardous Material" shall mean any substance, material or
waste which is regulated by or forms the basis of liability now or hereafter
under, any Environmental Laws, including any material or substance which is (a)
defined as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.

"Holdings" shall mean Home Products International, Inc., a
Delaware corporation.

"Holdings Guaranty" shall mean the guaranty of payment of the
Obligations dated as of the Closing Date, executed and delivered by Holdings.

"Holdings Pledge Agreement" shall mean the Pledge Agreement
dated as of the Closing Date executed by Holdings in favor of Agent on behalf of
itself and Lenders, pledging all of the Stock of its Subsidiaries and all
Intercompany Notes owing to or held by it.

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"Housewares" shall mean Houseware Sales, Inc., a Massachusetts
corporation.

"Indebtedness" of any Person shall mean without duplication
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred six (6) months or more,
but excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.

"Indemnified Liabilities" shall have the meaning assigned to
it in Section 1.13.

"Index Rate" shall mean, for any day, a floating rate equal to
the higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus fifty (50) basis points per annum. Each change
in any interest rate provided for in the Agreement based upon the Index Rate
shall take effect at the time of such change in the Index Rate.

"Index Rate Loan" shall mean a Loan or portion thereof bearing
interest by reference to the Index Rate.

"Instruments" shall mean any "instrument," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located, and, in any event, including all certificated securities, all
certificates of deposit, and all notes and other, without limitation, evidences
of indebtedness, other than instruments that constitute, or are a part of a
group of writings that constitute, Chattel Paper.

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"Intellectual Property" shall mean any and all Licenses,
Patents, Trademarks, trade secrets and customer lists.

"Intercompany Notes" shall have the meaning assigned to it in
Section 6.3.

"Interest Coverage Ratio" shall mean, with respect to any
Person for any period, the ratio of EBITDA less the sum of Capital Expenditures
to Interest Expense.

"Interest Expense" shall mean, with respect to any Person for
any fiscal period, interest expense (whether cash or non-cash excluding interest
on the Subordinated Notes paid by the issuance of Subordinated Notes) of such
Person determined in accordance with GAAP for the relevant period ended on such
date, including, in any event, interest expense with respect to any Funded Debt
of such Person.

"Interest Payment Date" means (a) as to any Index Rate Loan,
the first Business Day of each month to occur while such Loan is outstanding,
(b) as to any LIBOR Loan, the last day of the applicable LIBOR Period; provided
that, in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest which is then accrued under the Agreement.

"Inventory" shall mean any "inventory," as such term is
defined in the Code, now or hereafter owned or acquired by any Credit Party,
wherever located, and, in any event, including inventory, merchandise, goods and
other personal property which are held by or on behalf of any Credit Party for
sale or lease or are furnished or are to be furnished under a contract of
service, or which constitute raw materials, work in process or materials used or
consumed or to be used or consumed in such Credit Party's business or in the
processing, production, packaging, promotion, delivery or shipping of the same,
including other supplies.

"Investment Property" shall have the meaning ascribed thereto
in Section 9-115 of the Code in those jurisdictions in which such definition has
been adopted and shall include (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts held by any Credit
Party; (iv) all commodity contracts held by any Credit Party; and (v) all
commodity accounts held by any Credit Party.

"IRC" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.

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"IRS" shall mean the Internal Revenue Service, or any
successor thereto.

"L/C Issuer" shall have the meaning assigned to such term in
Annex B.

"Lenders" shall mean GE Capital, the other Lenders named on
the signature page of the Agreement, and, if any such Lender shall decide to
assign all or any portion of the Obligations, such term shall include such
assignee.

"Letter of Credit Fee" has the meaning ascribed thereto in
Annex B.

"Letter of Credit Obligations" shall mean all outstanding
obligations incurred by Agent and Lenders at the request of Borrower
Representative, whether direct or indirect, contingent or otherwise, due or not
due, in connection with the issuance of a reimbursement agreement or guaranty by
Agent with respect to any Letter of Credit. The amount of such Letter of Credit
Obligations shall equal the maximum amount which may be payable by Agent or
Lenders thereupon or pursuant thereto.

"Letters of Credit" shall mean commercial or standby letters
of credit issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Agent and Lenders have incurred
Letter of Credit Obligations.

"Leverage Ratio" shall mean, with respect to any Person as of
any date of determination, the ratio of (a) Funded Debt, to (b) EBITA.

"LIBOR Business Day" shall mean a Business Day on which banks
in the city of London are generally open for interbank or foreign exchange
transactions.

"LIBOR Loan" shall mean a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.

"LIBOR Period" shall mean, with respect to any LIBOR Loan,
each period commencing on a LIBOR Business Day selected by Borrower
Representative pursuant to the Agreement and ending one, two or three months
thereafter, as set forth in Borrower Representative's irrevocable notice to
Agent as set forth in Section 1.5(e); provided that the foregoing provision
relating to LIBOR Periods is subject to the following:

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

(b) any LIBOR Period that would otherwise extend beyond the
Commitment

X-00
00
Xxxxxxxxxxx Date shall end two (2) LIBOR Business Days prior to such
date;

(c) any LIBOR Period pertaining to a LIBOR Loan that begins on
the last LIBOR 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 LIBOR Period) shall end on the last LIBOR Business Day of a
calendar month;

(d) Borrower Representative shall select LIBOR Periods so as
not to require a payment or prepayment of any LIBOR Loan during a LIBOR
Period for such Loan; and

(e) Borrower Representative shall select LIBOR Periods so that
there shall be no more than five (5) separate LIBOR Loans in existence
at any one time.

"LIBOR Rate" shall mean for each LIBOR Period, a rate of
interest determined by Agent equal to:

(a) the offered rate for deposits in United States Dollars for
the applicable LIBOR Period which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the second full LIBOR Business Day next
preceding the first day of each LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be
used); divided by

(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve system or other
governmental authority having jurisdiction with respect thereto, as now
and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board
which are required to be maintained by a member bank of the Federal
Reserve System (such rate to be adjusted to the nearest one sixteenth
of one percent (1/16th of 1%) or, if there is not a nearest one
sixteenth of one percent (1/16th of 1%), to the next highest one
sixteenth of one percent (1/16th of 1%).

If such interest rates shall cease to be available from
Telerate News Service, the LIBOR Rate shall be determined from such
financial reporting service or other information as shall be mutually
acceptable to Agent and Borrower Representative.

"License" shall mean any Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Credit Party.

"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance,

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or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including any lease or title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Code or comparable law of any
jurisdiction).

"Litigation" shall have the meaning assigned to it in Section
3.13.

"Loan Account" shall have the meaning assigned to it in
Section 1.12.

"Loan Documents" shall mean the Agreement, the Notes, the
Collateral Documents and all other agreements, instruments, documents and
certificates identified in the Closing Checklist executed and delivered to, or
in favor of, Agent and/or Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Credit Party, or any employee of any Credit Party, and delivered to Agent or any
Lender in connection with the Agreement or the transactions contemplated hereby.
Any reference in the Agreement or any other Loan Document to a Loan Document
shall include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
such Agreement as the same may be in effect at any and all times such reference
becomes operative. Notwithstanding the foregoing, the term "Loan Document" shall
exclude documents that evidence or govern the Subordinated Debt.

"Loans" shall mean the Revolving Loan, the Swing Line Loan and
the Term Loans.

"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, assets, operations, prospects or financial or other
condition of the Credit Parties considered as a whole, (b) the Borrowers'
ability to pay any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement, (c) the Collateral or Agent's Liens, on behalf
of itself and Lenders, on the Collateral or the priority of such Liens, or (d)
Agent's or any Lender's material rights and remedies under the Agreement and the
other Loan Documents. Without limiting the foregoing, any event or occurrence
which results or could reasonably be expected to result in losses, costs or
liabilities in excess of (i) $3,500,000 prior to a public offering of Holdings'
common Stock and payment in full of the Subordinated Debt or (ii) $7,500,000
thereafter shall be deemed to have had Material Adverse Effect.

"Maximum Amount" shall mean, at any particular time, an amount
equal to the Revolving Loan Commitment of all Lenders, which shall equal
$20,000,000 as of the Closing Date.

"Mortgaged Properties" shall have the meaning assigned to it
in Annex D.

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"Mortgages" shall mean each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents delivered by any Credit Party to Agent
with respect to the Mortgaged Properties, all in form and substance satisfactory
to Agent.

"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA, to which any Credit Party or ERISA
Affiliate is making, is obligated to make, or has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.

"Net Borrowing Availability" shall mean as of any date of
determination (a) as to all Borrowers, the lesser of (i) the Maximum Amount and
(ii) the Aggregate Borrowing Base, in each case less the sum of the aggregate
Revolving Loan and Swing Line Loan then outstanding, or (b) as to an individual
Borrower, the lesser of (i) the Maximum Amount less the sum of the Revolving
Loan and Swing Line Loan outstanding to all other Borrowers and (ii) that
Borrower's separate Borrowing Base, less the sum of the Revolving Loan and Swing
Line Loan outstanding to that Borrower.

"Net Worth" shall mean, with respect to any Person as of any
date of determination, the book value of the assets (including, but not limited
to all general intangibles and goodwill) of such Person, minus (a) reserves
applicable thereto, and minus (b) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), will be
determined in accordance with GAAP.

"Notes" shall mean the Revolving Notes, the Swing Line Notes
and the Term Notes, collectively.

"Notice of Conversion/Continuation" shall have the meaning
assigned to it in Section 1.5(e).

"Notice of Revolving Credit Advance" shall have the meaning
assigned to it in Section 1.1(a).

"Obligations" shall mean all loans, advances, debts,
liabilities and obligations, for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated or determinable) owing by
any Credit Party to Agent or any Lender, and all covenants and duties regarding
such amounts, of any kind or nature, present or future, whether or not evidenced
by any note, agreement or other instrument, arising under the Agreement or any
of the other Loan Documents. This term includes all principal, interest
(including all interest which accrues after the commencement of any case or
proceeding in bankruptcy after the insolvency of, or for the reorganization of
any Credit Party, whether or not allowed in such proceeding), Fees, Charges,
expenses, attorneys' fees and any other sum chargeable to any Credit Party under
the Agreement

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or any of the other Loan Documents. Notwithstanding the foregoing, the term
"Obligations" shall exclude any portion of the Subordinated Debt. However, the
term Obligations expressly excludes the Subordinated Debt.

"Overadvance" shall have the meaning assigned to it in Section
1.1(a)(iii).

"Patent Security Agreements" shall mean the Patent Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.

"Patent License" shall mean rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right with
respect to any invention on which a Patent is in existence.

"Patents" shall mean all of the following in which any Credit
Party now holds or hereafter acquires any interest: (a) all letters patent of
the United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or any
other country, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State or Territory thereof, or any other country, and (b)
all reissues, continuations, continuations-in-part or extensions thereof.

"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.

"Permitted Encumbrances" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental Charges
not yet due and payable; (b) pledges or deposits of money securing obligations
under workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation; (c) pledges or deposits of money securing
bids, tenders, contracts (other than contracts for the payment of money) or
leases to which any Credit Party is a party as lessee made in the ordinary
course of business; (d) deposits of money securing statutory obligations of any
Credit Party; (e) inchoate and unperfected workers', mechanics' or similar liens
arising in the ordinary course of business, so long as such Liens attach only to
Equipment, Fixtures and/or Real Estate; (f) carriers', warehousemen's,
suppliers' or other similar possessory liens arising in the ordinary course of
business and not past due, so long as such Liens attach only to Inventory; (g)
deposits securing, or in lieu of, surety, appeal or customs bonds in proceedings
to which any Credit Party is a party; (h) any attachment or judgment lien not
constituting an Event of Default under Section 8.1(j), so long as such Lien only
attaches to Real Estate; (i) zoning restrictions, easements, licenses, or other
restrictions on the use of any Real Estate or other minor irregularities in
title (including leasehold title) thereto, so long as the same do not materially
impair the use, value, or marketability of such Real Estate; (j) presently
existing or hereinafter created Liens in favor of Agent, on behalf of Lenders;
and (k) Liens expressly permitted under clauses (b) and (c) of Section 6.7 of
the Agreement.

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"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof).

"Plan" shall mean, at any time, an employee benefit plan, as
defined in Section 3(3) of ERISA, which any Credit Party maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or
were employed by any Credit Party.

"Pledge Agreements" shall mean the Pledge Agreement executed
and delivered by Holdings as of the Closing Date and any pledge agreements
entered into after the Closing Date by any Credit Party (as required by the
Agreement or any other Loan Document).

"Prior Lender" shall mean each of LaSalle National Bank, Fleet
Bank and Flagship Bank.

"Proceeds" shall mean "proceeds," as such term is defined in
the Code and, in any event, shall include (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to any Credit Party from time
to time with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to any Credit Party from time to time
in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of governmental authority), (c) any claim of
any Credit Party against third parties (i) for past, present or future
infringement of any Patent or Patent License, or (ii) for past, present or
future infringement or dilution of any Trademark or Trademark License, or for
injury to the goodwill associated with any Trademark or Trademark License, (d)
any recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral, and (e) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral, upon disposition or otherwise.

"Pro Forma" means the unaudited consolidated and consolidating
balance sheet of Borrowers and their Subsidiaries as of January 31, 1997, after
giving pro forma effect to the Related Transactions.

"Projections" means Borrowers' budgeted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, all prepared on a Subsidiary by
Subsidiary or division by division basis, if applicable, and otherwise
consistent with the historical Financial Statements of the Borrowers, together
with appropriate supporting details and a statement of underlying assumptions.

"Pro Rata Share" shall mean with respect to all matters
relating to any Lender (a)

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with respect to the Revolving Loan or the Swing Line Loan, the percentage
obtained by dividing (i) the Revolving Loan Commitment, including the Swing Line
Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments,
including the Swing Line Commitment of all Lenders, and (b) with respect to the
Term Loan, the percentage obtained by dividing (i) the Term Loan Commitment of
that Lender by (ii) the aggregate Term Loan Commitments of all Lenders, as any
such percentages may be adjusted by assignments permitted pursuant to Section
9.1.

"Qualified Plan" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.

"Qualified Public Offering" shall mean a firm underwritten
public offering of common stock registered on form X-0, X-0 or S-3 under the
Securities Act of 1933, as amended, by a nationally recognized investment
banking firm, resulting in net proceeds to the issuer of at least $10,000,000,
and after giving effect to which the issuer shall be qualified for listing on
the NASDAQ National Market, the American Stock Exchange or the New York Stock
Exchange.

"Real Estate" shall have the meaning assigned to it in Section
3.6.

"Refinancing" shall mean the repayment in full by Borrowers of
the Prior Lender Obligations on the Closing Date.

"Refunded Swing Line Loan" shall have the meaning assigned to
it in Section 1.1(c)(iii).

"Related Transactions" means each borrowing under the
Revolving Loan and the Term Loans on the Closing Date, the Acquisition, the
Reorganization, the Refinancing, the issuance of the Subordinated Notes, the
payment of all fees, costs and expenses associated with all of the foregoing and
the execution and delivery of all of the Related Transactions Documents.

"Related Transactions Documents" shall mean the Loan
Documents, the Acquisition Agreement, and the Subordinated Notes.

"Release" shall mean any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.

"Requisite Lenders" shall mean (a) Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the Commitments of all Lenders, or
(b) if the Commitments have been terminated, more than sixty-six and two-thirds
percent (66 2/3%) of the aggregate outstanding amount of all Loans (with the
Swing Line Loan being attributed to the Lender making such Loan) and Letter of
Credit Obligations; provided that so long as all of the Commitments are held by
GE Capital and LaSalle National Bank, "Requisite Lenders" shall

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mean both of such Lenders.

"Requisite Revolving Lenders" shall mean (a) Lenders having
more than sixty-six and two-thirds percent (66 2/3%) of the Revolving Loan
Commitments of all Lenders, or (b) if the Revolving Loan Commitments have been
terminated, more than sixty-six and two-thirds percent (66 2/3%) of the
aggregate outstanding amount of the Revolving Loan (with the Swing Line Loan
being attributed to the Lender making such Loan) and Letter of Credit
Obligations.

"Reserves" shall mean, with respect to the Borrowing Base of
any Borrower (a) reserves established by Agent from time to time against
Eligible Inventory pursuant to Section 5.9, (b) reserves established pursuant to
Section 5.4(c), and (c) such other reserves against Eligible Accounts or
Eligible Inventory of any Borrower which Agent may, in its reasonable credit
judgment, establish from time to time. Without limiting the generality of the
foregoing, Reserves established to ensure the payment of accrued Interest
Expenses, Environmental Liabilities or Indebtedness shall be deemed to be a
reasonable exercise of Agent's credit judgment.

"Restricted Payment" shall mean (a) the declaration or payment
of any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's Stock,
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of a Person's Stock or any other payment or distribution
made in respect thereof, either directly or indirectly, (c) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
any Subordinated Debt; (d) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire Stock of such Person now or hereafter outstanding (other
than by means of cancellation of Subordinated Debt); (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Person's Stock or of a claim
for reimbursement, indemnification or contribution arising out of or related to
any such claim for damages or rescission; (f) any payment, loan, contribution,
or other transfer of funds or other property to any Stockholder of such Person;
and (g) any payment of management fees (or other fees of a similar nature) by
such Person to any Stockholder of such Person or their Affiliates.

"Retiree Welfare Plan" shall mean, at any time, a Plan that is
a "welfare plan" as defined in Section 3(1) of ERISA, that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.

"Revolving Credit Advance" shall have the meaning assigned to
it in Section 1.1(a)(i).

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"Revolving Lenders" shall mean, as of any date of
determination, Lenders having a Revolving Loan Commitment.

"Revolving Loan" shall mean as the context may require, at any
time, the sum of (i) the aggregate amount of Revolving Credit Advances
outstanding to any Borrower or to all Borrowers plus (ii) the aggregate Letter
of Credit Obligations incurred on behalf of any Borrower or all Borrowers.

"Revolving Loan Commitment" shall mean (a) as to any Lender,
the aggregate commitment of such Lender to make Revolving Credit Advances
(including without duplication Swing Line Advances) and/or incur Letter of
Credit Obligations as set forth in the signature page to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances (including without duplication Swing Line Advances) and/or incur Letter
of Credit Obligations, which aggregate commitment shall be Twenty Million
($20,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.

"Revolving Note" shall have the meaning assigned to it in
Section 1.1(a)(ii).

"Security Agreement" shall mean the Security Agreement of even
date herewith entered into among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.

"Selfix" means Selfix, Inc., a Delaware corporation.

"Selfix Borrowing Base" shall mean, as of any date of
determination by Agent, from time to time, an amount equal to the sum at such
time of:

(a) eighty-five percent (85%) of Selfix's Eligible Accounts,
less any Reserves established by Agent at such time; and

(b) fifty percent (50%) of the book value of Selfix's Eligible
Inventory valued on a first-in, first-out basis (at the lower of cost
or market), less any Reserves established by Agent at such time.

"Selfix Term Loan A" shall have the meaning assigned to it in
Section 1.1(b)(i).

"Selfix Term Loan A Commitment" shall mean (a) as to any
Lender with a Selfix Term Loan A Commitment, the commitment of such Lender to
make its Pro Rata Share of the Selfix Term Loan A as set forth on the signature
page to the Agreement or in the most recent Assignment Agreement executed by
such Lender, and (b) as to all Lenders with a Selfix Term Loan A Commitment, the
aggregate commitment of all Lenders to make the Selfix Term Loan A,

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which aggregate commitment shall be Three Million Five Hundred Thousand Dollars
($3,500,000) on the Closing Date.

"Selfix Term Loan B" shall have the meaning assigned to it in
Section 1.1(b)(i).

"Selfix Term Loan B Commitment" shall mean (a) as to any
Lender with a Selfix Term Loan B Commitment, the commitment of such Lender to
make its Pro Rata Share of the Selfix Term Loan B as set forth on the signature
page to the Agreement or in the most recent Assignment Agreement executed by
such Lender, and (b) as to all Lenders with a Selfix Term Loan B Commitment, the
aggregate commitment of all Lenders to make the Selfix Term Loan B, which
aggregate commitment shall be Three Million Five Hundred Thousand Dollars
($3,500,000) on the Closing Date.

"Sellers" shall mean Xxxxxxx Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxxxx
X. Tata, Xxxxxxx X. Tata, Xxxxxxx X. Tata, Xxxxxx Xxxxxxx, Xxxxx Xxxxx and
Xxxxxx Xxxxx.

"Shutters" means Shutters, Inc., an Illinois corporation.

"Shutters Borrowing Base" shall mean, as of any date of
determination by Agent, from time to time, an amount equal to the sum at such
time of:

(a) eighty-five percent (85%) of Shutters' Eligible Accounts,
less any Reserves established by Agent at such time; and

(b) fifty percent (50%) of the book value of Shutters'
Eligible Inventory valued on a first-in, first-out basis (at the lower
of cost or market), less any Reserves established by Agent at such
time.

"Shutters Term Loan A" shall have the meaning assigned to it
in Section 1.1(b)(i).

"Shutters Term Loan A Commitment" shall mean (a) as to any
Lender with a Shutters Term Loan A Commitment, the commitment of such Lender to
make its Pro Rata Share of the Shutters Term Loan A as set forth on the
signature page to the Agreement or in the most recent Assignment Agreement
executed by such Lender, and (b) as to all Lenders with a Shutters Term Loan A
Commitment, the aggregate commitment of all Lenders to make the Shutters Term
Loan A, which aggregate commitment shall be One Million Five Hundred Thousand
Dollars ($1,500,000) on the Closing Date.

"Shutters Term Loan B" shall have the meaning assigned to it
in Section 1.1(b)(i).

"Shutters Term Loan B Commitment" shall mean (a) as to any
Lender with a Shutters Term Loan B Commitment, the commitment of such Lender to
make its Pro Rata Share of the Shutters Term Loan B as set forth on the
signature page to the Agreement or in the most

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recent Assignment Agreement executed by such Lender, and (b) as to all Lenders
with a Shutters Term Loan B Commitment, the aggregate commitment of all Lenders
to make the Shutters Term Loan B, which aggregate commitment shall be One
Million Five Hundred Thousand Dollars ($1,500,000) on the Closing Date.

"Solvent" shall mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person; (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probably liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (d) 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 property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as litigation, guarantees and pension
plan liabilities) at any time shall be computed as the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can be reasonably be expected to become an actual or matured liability.

"Stock" shall mean all shares, options, warrants, general or
limited partnership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership or equivalent entity whether
voting or nonvoting, including common stock, preferred stock or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended).

"Subordinated Debt" shall mean the Indebtedness of Borrowers
evidenced by the Subordinated Notes and any other Indebtedness of any Credit
Party subordinated to the Obligations in a manner and form satisfactory to Agent
and Lenders in their sole discretion, as to right and time of payment and as to
any other rights and remedies thereunder.

"Subordinated Notes" shall mean those certain Subordinated
Equity Bridge Notes due on the eighth anniversary of the date hereof issued by
Borrowers, jointly and severally, in the original principal amount of
$7,000,000, and all payment-in-kind notes issued to pay interest with respect
thereto.

"Subsidiary" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person and/or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and

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(b) any partnership or limited liability company in which such Person and/or one
or more Subsidiaries of such Person shall have an interest (whether in the form
of voting or participation in profits or capital contribution) of more than
fifty percent (50%) or of which any such Person is a general partner or may
exercise the powers of a general partner.

"Supermajority Revolving Lenders" shall mean (a) Lenders
having eighty percent (80%) or more of the Revolving Loan Commitments of all
Lenders, or (b) if the Revolving Loan Commitments have been terminated, eighty
percent (80%) or more of the aggregate outstanding amount of the Revolving Loan
(with the Swing Line Loan being attributed to the Lender making such Loan) and
Letter of Credit Obligations.

"Swing Line Advance" has the meaning assigned to it in Section
1.1(c)(i).

"Swing Line Availability" has the meaning assigned to it in
Section 1.1(c)(i).

"Swing Line Commitment" shall mean, as to the Swing Line
Lender, the commitment of the Swing Line Lender to make Swing Line Loans as set
forth on the signature page to the Agreement, which commitment constitutes a
subfacility of the Revolving Loan Commitment of the Swing Line Lender.

"Swing Line Lender" shall mean GE Capital.

"Swing Line Loan" shall mean, as the context may require, at
any time, the aggregate amount of Swing Line Advances outstanding to any
Borrower or to all Borrowers.

"Swing Line Loan Participation Certificate" shall mean a
certificate delivered pursuant to Section 1.1(c)(iv).

"Swing Line Note" has the meaning assigned to it in Section
1.1(c)(ii).

"Tamor" means Tamor Corporation, a Massachusetts corporation.

"Tamor Borrowing Base" shall mean, as of any date of
determination by Agent, from time to time, an amount equal to the sum at such
time of:

(a) eighty-five percent (85%) of Tamor's Eligible Accounts,
less any Reserves established by Agent at such time; and

(b) fifty percent (50%) of the book value of Tamor's Eligible
Inventory valued on a first-in, first-out basis (at the lower of cost
or market), less any Reserves established by Agent at such time.

"Tamor Term Loan A" shall have the meaning assigned to it in
Section 1.1(b)(i).

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"Tamor Term Loan A Commitment" shall mean (a) as to any Lender
with a Tamor Term Loan Commitment, the commitment of such Lender to make its Pro
Rata Share of the Tamor Term Loan A as set forth on the signature page to the
Agreement or in the most recent Assignment Agreement executed by such Lender,
and (b) as to all Lenders with a Tamor Term Loan Commitment, the aggregate
commitment of all Lenders to make the Tamor Term Loan, which aggregate
commitment shall be Fifteen Million Dollars ($15,000,000) on the Closing Date.

"Tamor Term Loan B" shall have the meaning assigned to it in
Section 1.1(c)(i).

"Tamor Term Loan B Commitment" shall mean (a) as to any Lender
with a Tamor Term Loan Commitment, the commitment of such Lender to make its Pro
Rata Share of the Tamor Term Loan B as set forth on the signature page to the
Agreement or in the most recent Assignment Agreement executed by such Lender,
and (b) as to all Lenders with a Tamor Term Loan Commitment, the aggregate
commitment of all Lenders to make the Tamor Term Loan, which aggregate
commitment shall be Fifteen Million Dollars ($15,000,000) on the Closing Date.

"Taxes" shall mean taxes, levies, imposts, deductions, Charges
or withholdings, and all liabilities with respect thereto, excluding taxes
imposed on or measured by the net income of Agent or a Lender by the
jurisdictions under the laws of which Agent and Lenders are organized or any
political subdivision thereof.

"Term Lenders" shall mean those Lenders having Term Loan
Commitments.

"Term Loan" shall have the meaning assigned to it in Section
1.1(b).

"Term Loan Commitment" shall mean, collectively, the Selfix
Term Loan A Commitment, the Tamor Term Loan A Commitment, the Shutters Term Loan
A Commitment, the Selfix Term Loan B Commitment, the Tamor Term Loan B
Commitment, the Shutters Term Loan B Commitment,

"Term Note" shall have the meaning assigned to it in Section
1.1(b)(i).

"Termination Date" shall mean the date on which the Loans have
been indefeasibly repaid in full and all other Obligations under the Agreement
and the other Loan Documents have been completely discharged and Letter of
Credit Obligations have been cash collateralized, cancelled or backed by
stand-by letters of credit in accordance with Annex B, and none of Borrowers
shall have any further right to borrow any monies under the Agreement.

"Title IV Plan" shall mean an employee pension benefit plan,
as defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV of

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ERISA, which any Credit Party or ERISA Affiliate maintains, contributes to or
has an obligation to contribute to, or has maintained, contributed to or had an
obligation to contribute to, on behalf of participants who are or were employed
by any of them.

"Trademark Security Agreements" shall mean the Trademark
Security Agreements made in favor of Agent, on behalf of Lenders, by each
applicable Credit Party.

"Trademark License" shall mean rights under any written
agreement now owned or hereafter acquired by any Credit Party granting any right
to use any Trademark.

"Trademarks" shall mean all of the following now owned or
hereafter acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other country or
any political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.

"Unfunded Pension Liability" shall mean, at any time, the
aggregate amount, if any, of the sum of (a) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions for
funding purposes in effect under such Title IV Plan, and (b) for a period of
five (5) years following a transaction which might reasonably be expected to be
covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by any Credit Party or any ERISA Affiliate as a result of such
transaction.

All other undefined terms contained in any of the Loan
Documents shall, unless the context indicates otherwise, have the meanings
provided for by the Code as in effect in the State of Illinois to the extent the
same are used or defined therein. Unless otherwise specified, references in the
Agreement or any of the Appendices to a Section, subsection or clause refer to
such Section, subsection or clause as contained in the Agreement. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.

Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine,

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feminine or neuter gender shall include the masculine, feminine and neuter
genders. The words "including", "includes" and "include" shall be deemed to be
followed by the words "without limitation"; references to Persons include their
respective successors and assigns (to the extent and only to the extent
permitted by the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations. Whenever any provision in any Loan
Document refers to the knowledge (or an analogous phrase) of any Credit Party,
such words are intended to signify that such Credit Party has actual knowledge
or awareness of a particular fact or circumstance or that such Credit Party, if
it had exercised reasonable diligence, would have known or been aware of such
fact or circumstance.

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ANNEX B (Section 1.2)
TO
CREDIT AGREEMENT

LETTERS OF CREDIT

(a) Issuance. Subject to the terms and conditions of the
Agreement, Agent and Revolving Lenders agree to incur, from time to time prior
to the Commitment Termination Date, upon the request of Borrower Representative
on behalf of the applicable Borrower and for such Borrower's account, Letter of
Credit Obligations by causing Letters of Credit to be issued (by a bank or other
legally authorized Person selected by or acceptable to Agent in its sole
discretion (each, an "L/C Issuer")) for such Borrower's account and guaranteed
by Agent; provided, however, that if the L/C Issuer is a Revolving Lender, then
such Letters of Credit shall not be guaranteed by Agent but rather each
Revolving Lender shall, subject to the terms and conditions hereinafter set
forth, purchase (or be deemed to have purchased) risk participations in all such
Letters of Credit issued with the written consent of Agent, as more fully
described in paragraph (b)(ii) below. The aggregate amount of all such Letter of
Credit Obligations shall not at any time exceed the least of (i) Ten Million
($10,000,000) (the "L/C Sublimit"), and (ii) the Maximum Amount less the
aggregate outstanding principal balance of the Revolving Credit Advances and the
Swing Line Loan, and (iii) the Aggregate Borrowing Base less the aggregate
outstanding principal balance of the Revolving Credit Advances and the Swing
Line Loan. Furthermore, the aggregate amount of any Letter of Credit Obligations
incurred on behalf of any Borrower shall not at any time exceed such Borrower's
separate Borrowing Base less the aggregate principal balance of the Revolving
Credit Advances and the Swing Line Loan to such Borrower. Except for two IRB
Letters of Credit outstanding on the Closing Date that have an Expiry Date of
April 1, 1998, no such Letter of Credit shall have an expiry date which is more
than one year following the date of issuance thereof, and neither Agent nor
Revolving Lenders shall be under any obligation to incur Letter of Credit
Obligations in respect of, or purchase risk participations in, any Letter of
Credit having an expiry date which is later than the Commitment Termination
Date.

(b) (i) Advances Automatic; Participations. In the event that
Agent or any Revolving Lender shall make any payment on or pursuant to any
Letter of Credit Obligation, such payment shall then be deemed automatically to
constitute a Revolving Credit Advance to the applicable Borrower under Section
1.1(a) of the Agreement regardless of whether a Default or Event of Default
shall have occurred and be continuing and notwithstanding any Borrower's failure
to satisfy the conditions precedent set forth in Section 2, and each Revolving
Lender shall be obligated to pay its Pro Rata Share thereof in accordance with
the Agreement. The failure of any Revolving Lender to make available to Agent
for Agent's own account its Pro Rata Share of any such Revolving Credit Advance
or payment by Agent under or in respect of a Letter of Credit shall not relieve
any other Revolving Lender of its obligation hereunder to make available to
Agent its Pro Rata Share thereof, but no Revolving Lender shall be responsible
for the failure
109
of any other Revolving Lender to make available such other Revolving Lender's
Pro Rata Share of any such payment.

(ii) If it shall be illegal or unlawful for any
Borrower to incur Revolving Credit Advances as contemplated by paragraph (b)(i)
above because of an Event of Default described in Section 8.1(h) or (i) or
otherwise or if it shall be illegal or unlawful for any Revolving Lender to be
deemed to have assumed a ratable share of the reimbursement obligations owed to
an L/C Issuer, or if the L/C Issuer is a Revolving Lender, then (i) immediately
and without further action whatsoever, each Revolving Lender shall be deemed to
have irrevocably and unconditionally purchased from Agent (or such L/C Issuer,
as the case may be) an undivided interest and participation equal to such
Revolving Lender's Pro Rata Share (based on the Revolving Loan Commitments) of
the Letter of Credit Obligations in respect of all Letters of Credit then
outstanding and (ii) thereafter, immediately upon issuance of any Letter of
Credit, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation in such Revolving Lender's Pro Rata Share
(based on the Revolving Loan Commitments) of the Letter of Credit Obligations
with respect to such Letter of Credit on the date of such issuance. Each
Revolving Lender shall fund its participation in all payments or disbursements
made under the Letters of Credit in the same manner as provided in the Agreement
with respect to Revolving Credit Advances.

(c) Cash Collateral. If Borrowers are required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, each Borrower will pay to Agent for the
benefit of Revolving Lenders cash or cash equivalents acceptable to Agent ("Cash
Equivalents") in an amount equal to 105% of the maximum amount then available to
be drawn under each applicable Letter of Credit outstanding for the benefit of
such Borrower. Such funds or Cash Equivalents shall be held by Agent in a cash
collateral account (the "Cash Collateral Account") maintained at a bank or
financial institution acceptable to Agent. The Cash Collateral Account shall be
in the name of the applicable Borrower and shall be pledged to, and subject to
the control of, Agent, for the benefit of Agent and Lenders, in a manner
satisfactory to Agent. Each Borrower hereby pledges and grants to Agent, on
behalf of Lenders, a security interest in all such funds and Cash Equivalents
held in the Cash Collateral Account from time to time and all proceeds thereof,
as security for the payment of all amounts due in respect of the Letter of
Credit Obligations and other Obligations, whether or not then due. The
Agreement, including this Annex B, shall constitute a security agreement under
applicable law.

If any Letter of Credit Obligations, whether or not then due
and payable, shall for any reason be outstanding on the Commitment Termination
Date, Borrowers shall either (i) provide cash collateral therefor in the manner
described above, or (ii) cause all such Letters of Credit and guaranties thereof
to be canceled and returned, or (iii) deliver a stand-by letter (or letters) of
credit in guaranty of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like tenor and duration as, and in an amount
equal to 105% of the

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aggregate maximum amount then available to be drawn under, the Letters of Credit
to which such outstanding Letter of Credit Obligations relate and shall be
issued by a Person, and shall be subject to such terms and conditions, as are be
satisfactory to Agent in its sole discretion.

From time to time after funds are deposited in the Cash
Collateral Account by any Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, in such order as
Agent may elect, as shall be or shall become due and payable by such Borrower to
Lenders with respect to such Letter of Credit Obligations of such Borrower and,
upon the satisfaction in full of all Letter of Credit Obligations of such
Borrower, to any other Obligations of any Borrower then due and payable.

No Borrower nor any Person claiming on behalf of or through
any Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrowers to Lenders in respect thereof, any funds remaining in the
Cash Collateral Account shall be applied to other Obligations when due and owing
and upon payment in full of such Obligations, any remaining amount shall be paid
to Borrowers or as otherwise required by law.

(d) Fees and Expenses. Borrowers agree to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (x) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (y) for
each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "Letter of Credit Fee") in an amount equal to two
percent (2.0%) per annum multiplied by the maximum amount available from time to
time to be drawn under the applicable Letter of Credit. Such fee shall be paid
to Agent for the benefit of the Revolving Lenders in arrears, on the first day
of each month. In addition, Borrowers shall pay to any L/C Issuer, on demand,
such fees (including all per annum fees), charges and expenses of such L/C
Issuer in respect of the issuance, negotiation, acceptance, amendment, transfer
and payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.

(e) Request for Incurrence of Letter of Credit Obligations.
Borrower Representative shall give Agent at least two (2) Business Days prior
written notice requesting the incurrence of any Letter of Credit Obligation,
specifying the date such Letter of Credit Obligation is to be incurred,
identifying the beneficiary and the Borrower to which such Letter of Credit
Obligation relates and describing the nature of the transactions proposed to be
supported thereby. The notice shall be accompanied by the form of the Letter of
Credit (which shall be acceptable to the L/C Issuer) to be guarantied.
Notwithstanding anything contained herein to the contrary, Letter of Credit
applications by Borrower Representative and approvals by Agent may be made and
transmitted pursuant to electronic codes and security measures mutually agreed
upon and established by and among Borrower Representative, Agent and the L/C
Issuer.

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(f) Obligation Absolute. The obligation of Borrowers to
reimburse Agent and Revolving Lenders for payments made with respect to any
Letter of Credit Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
Borrowers and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following circumstances:

(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other
agreement;

(ii) the existence of any claim, set-off, defense or other
right which any Borrower or any of their respective Affiliates or any
Lender may at any time have against a beneficiary or any transferee of
any Letter of Credit (or any Persons or entities for whom any such
transferee may be acting), Agent, any Lender, or any other Person,
whether in connection with the Agreement, the Letter of Credit, the
transactions contemplated herein or therein or any unrelated
transaction (including any underlying transaction between any Borrower
or any of their respective Affiliates and the beneficiary for which the
Letter of Credit was procured);

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

(iv) payment by Agent or any L/C Issuer under any Letter of
Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document which does not comply with the terms of
such Letter of Credit or such guaranty;

(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or

(vi) the fact that a Default or an Event of Default shall have
occurred and be continuing.

(g) Indemnification; Nature of Lenders' Duties. In addition to
amounts payable as elsewhere provided in the Agreement, Borrowers hereby agree
to pay and to protect, indemnify, and save harmless Agent and each Lender from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including attorneys' fees and allocated costs of internal
counsel) which Agent or any Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit or guaranty
thereof, or (ii) the failure of Agent or any Lender seeking indemnification or
of any L/C Issuer to honor a demand for payment under any Letter of Credit or
guaranty thereof as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government

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or Governmental Authority, in each case other than to the extent solely as a
result of the gross negligence or willful misconduct of Agent or such Lender (as
finally determined by a court of competent jurisdiction).

As between Agent and any Lender and Borrowers, Borrowers
assume all risks of the acts and omissions of, or misuse of any Letter of Credit
by beneficiaries of any Letter of Credit. In furtherance and not in limitation
of the foregoing, to the fullest extent permitted by law neither Agent nor any
Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued 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, which may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
provided that, in the case of any payment by Agent under any Letter of Credit or
guaranty thereof, Agent shall be liable to the extent such payment was made
solely as a result of its gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction) in determining that the demand
for payment under such Letter of Credit or guaranty thereof complies on its face
with any applicable requirements for a demand for payment under such Letter of
Credit or guaranty thereof; (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 payment under any Letter of Credit or
guaranty thereof or of the proceeds thereof; (vii) for the credit of the
proceeds of any drawing under any Letter of Credit or guaranty thereof; and
(viii) for any consequences arising from causes beyond the control of Agent or
any Lender. None of the above shall affect, impair, or prevent the vesting of
any of Agent's or any Lender's rights or powers hereunder or under the
Agreement.

Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by Borrowers in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between or among Borrowers and such L/C
Issuer.

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ANNEX C (Section 1.8)
TO
CREDIT AGREEMENT

CASH MANAGEMENT SYSTEMS

Each Borrower shall, and shall cause its Subsidiaries to, establish and
maintain the Cash Management Systems described below:

(a) On or before the Closing Date and until the Termination
Date, each Borrower shall (i) establish lock boxes ("Lock Boxes") at one or more
of the banks set forth on Disclosure Schedule (3.19), and shall request in
writing and otherwise take such reasonable steps to ensure that all Account
Debtors forward payment directly to such Lock Boxes, and (ii) deposit and cause
its Subsidiaries to deposit or cause to be deposited promptly, and in any event
no later than the first Business Day after the date of receipt thereof, all
cash, checks, drafts or other similar items of payment relating to or
constituting payments made in respect of any and all Collateral (whether or not
otherwise delivered to a Lock Box) into bank accounts in such Borrower's name or
any such Subsidiary's name (collectively, the "Borrower Accounts") at banks set
forth on Disclosure Schedule (3.19) (each, a "Relationship Bank"). On or before
the Closing Date, each Borrower shall have established a concentration account
in its name (each a "Concentration Account" and collectively, the "Concentration
Accounts") at the bank or banks which shall be designated as the Concentration
Account bank for each such Borrower on Disclosure Schedule (3.19) (each a
"Concentration Account Bank" and collectively, the "Concentration Account
Banks"), which banks shall be satisfactory to Agent.

(b) On or before the Closing Date (or such later date as Agent
shall consent to in writing), each Concentration Account Bank, each bank where a
Disbursement Account is located and all other Relationship Banks, shall have
entered into tri-party blocked account agreements with Agent, for the benefit of
itself and Lenders, and the applicable Borrower and Subsidiaries thereof, as
applicable, in form and substance acceptable to Agent, which shall become
operative on or prior to the Closing Date. Each such blocked account agreement
shall provide, among other things, that (i) all items of payment deposited in
such account and proceeds thereof deposited in the applicable Concentration
Account are held by such bank as agent or bailee-in-possession for Agent, on
behalf of Lenders, (ii) the bank executing such agreement has no rights of
setoff or recoupment or any other claim against such account, as the case may
be, other than for payment of its service fees and other charges directly
related to the administration of such account and for returned checks or other
items of payment, and (iii) from and after the Closing Date (A) with respect to
banks at which a Borrower Account is located, such bank agrees to forward
immediately all amounts in each Borrower Account to such Borrower's
Concentration Account Bank and to commence the process of daily sweeps from such
Borrower Account into

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the applicable Concentration Account and (B) with respect to each Concentration
Account Bank, such bank agrees to immediately forward all amounts received in
the applicable Concentration Account to the Collection Account through daily
sweeps from such Concentration Account into the Collection Account. No Borrower
shall, or shall cause or permit any Subsidiary thereof to, accumulate or
maintain cash in disbursement or payroll accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date and amounts necessary to meet minimum balance requirements.

(c) So long as no Default or Event of Default has occurred and
is continuing, Borrowers may amend Disclosure Schedule (3.19) to add or replace
a Relationship Bank, Lock Box or Borrower Account or to replace any
Concentration Account or any Disbursement Account; provided, however, that (i)
Agent shall have consented in writing in advance to the opening of such account
or Lock Box with the relevant bank and (ii) prior to the time of the opening of
such account or Lock Box, the applicable Borrower and/or the Subsidiaries
thereof, as applicable, and such bank shall have executed and delivered to Agent
a tri-party blocked account agreement, in form and substance satisfactory to
Agent. Borrowers shall close any of their accounts (and establish replacement
accounts in accordance with the foregoing sentence) promptly and in any event
within thirty (30) days of notice from Agent that the creditworthiness of any
bank holding an account is no longer acceptable in Agent's reasonable judgment,
or as promptly as practicable and in any event within sixty (60) days of notice
from Agent that the operating performance, funds transfer and/or availability
procedures or performance with respect to accounts or lockboxes of the bank
holding such accounts or Agent's liability under any tri-party blocked account
agreement with such bank is no longer acceptable in Agent's reasonable judgment.

(d) The Lock Boxes, Borrower Accounts, Disbursement Accounts
and the Concentration Accounts shall be cash collateral accounts, with all cash,
checks and other similar items of payment in such accounts securing payment of
the Loans and all other Obligations, and in which each Borrower and each
Subsidiary thereof shall have granted a Lien to Agent, on behalf of itself and
Lenders, pursuant to the Security Agreement.

(e) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with Section 1.10 of the Agreement and
shall be applied (and allocated) by Agent in accordance with Section 1.11 of the
Agreement. In no event shall any amount be so applied unless and until such
amount shall have been credited in immediately available funds to the Collection
Account.

(f) Each Borrower may maintain, in its name, an account (each
a "Disbursement Account" and collectively, the "Disbursement Accounts") at a
bank acceptable to Agent into which Agent shall, from time to time, deposit
proceeds of Revolving Credit Advances and Swing Line Advances made to such
Borrower pursuant to Section 1.1 for use by such Borrower solely in accordance
with the provisions of Section 1.4.

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(g) Each Borrower shall and shall cause its Affiliates,
officers, employees, agents, directors or other Persons acting for or in concert
with such Borrower (each a "Related Person") to (i) hold in trust for Agent, for
the benefit of itself and Lenders, all checks, cash and other items of payment
received by such Borrower or any such Related Person, and (ii) within one (1)
Business Day after receipt by such Borrower or any such Related Person of any
checks, cash or other items or payment, deposit the same into a Borrower Account
of such Borrower. Each Borrower and each Related Person thereof acknowledges and
agrees that all cash, checks or items of payment constituting proceeds of
Collateral are the property of Agent and Lenders. All proceeds of the sale or
other disposition of any Collateral, shall be deposited directly into the
applicable Borrower Accounts.

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ANNEX D (SECTION 2.1(A))
TO
CREDIT AGREEMENT

SCHEDULE OF ADDITIONAL CLOSING DOCUMENTS

In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in Annex A to the Agreement):

A. Appendices. All Appendices to the Agreement, in form and substance
satisfactory to Agent.

B. Revolving Notes, Swing Line Notes and Term Notes. Duly executed
originals of the Revolving Notes, Swing Line Notes and Term Notes for each
applicable Lender, dated the Closing Date.

C. Security Agreement. Duly executed originals of the Security
Agreement, dated the Closing Date, and all instruments, documents and agreements
executed pursuant thereto.

D. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of Lenders.

E. Security Interests and Code Filings. (a) Evidence satisfactory to
Agent that Agent (for the benefit of itself and Lenders) has a valid and
perfected first priority security interest in the Collateral, including (i) such
documents duly executed by each Credit Party (including financing statements
under the Code and other applicable documents under the laws of any jurisdiction
with respect to the perfection of Liens) as Agent may request in order to
perfect its security interests in the Collateral and (ii) copies of Code search
reports listing all effective financing statements that name any Credit Party as
debtor, together with copies of such financing statements, none of which shall
cover the Collateral, except for those relating to the Prior Lender Obligations
(all of which shall be terminated on the Closing Date).

(b) Evidence satisfactory to Agent, including copies, of all
UCC-1 and other financing statements filed in favor of any Credit Party with
respect to each location, if any, at which Inventory may be consigned.

(c) Control Letters from (i) all issuers of uncertificated
securities and financial assets held by each Borrower, (ii) all securities
intermediaries with respect to all securities
117
accounts and securities entitlements of any Borrower, and (iii) all futures
commission agents and clearing houses with respect to all commodities contracts
and commodities accounts held by any Borrower.

F. Payoff Letters; Termination Statements. Copies of duly executed
payoff letters, in form and substance satisfactory to Agent, by each of LaSalle
National Bank, Fleet Bank and Flagship Bank, together with (a) UCC-3 or other
appropriate termination statements, in form and substance satisfactory to Agent,
manually signed by each Prior Lender terminating all liens of each Prior Lender
upon any of the personal property of each Credit Party, and (b) termination of
all blocked account agreements, bank agency agreements or other similar
agreements or arrangements or arrangements in favor of each Prior Lender.

G. Intellectual Property Security Agreements. Duly executed originals
of Trademark Security Agreements and Patent Security Agreements, each dated the
Closing Date and signed by each Credit Party which owns Trademarks and/or
Patents, as applicable, all in form and substance satisfactory to Agent,
together with all instruments, documents and agreements executed pursuant
thereto.

H. Acquisition Agreement. Final and complete copies of the Acquisition
Agreement.

(i) Tamor Stock Purchase Agreement with all schedules;
(ii) Agreement and Plan of Merger re Houseware Sales.

I. Subordinated Notes. A final and complete copy of the Subordinated
Notes Documents.

(i) Subordinated Notes Purchase Agreement;
(ii) Subordinated Notes;
(iii) Subordinated Notes Security Agreement;
(iv) UCC-1 Financing Statements in favor of GE Capital
individually;
(v) Warrant; and
(vi) Allocation Agreement.

J. Initial Borrowing Base Certificate. Duly executed originals of an
initial Borrowing Base Certificate from each Borrower, dated the Closing Date,
reflecting information concerning Eligible Accounts and Eligible Inventory of
such Borrower.

K. Initial Notice of Revolving Credit Advance. Duly executed originals
of a Notice of Revolving Credit Advance, dated the Closing Date, with respect to
the initial Revolving Credit Advance to be requested by Borrower Representative
on the Closing Date.

L. Letter of Direction. (i) Duly executed originals of a letter of
direction from Borrower Representative addressed to Agent, on behalf of itself
and Lenders, with respect to the

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disbursement on the Closing Date of the proceeds of the Term Loans and the
initial Revolving Credit Advance.

(ii) Funds Flow Memorandum

M. Cash Management System; Blocked Account Agreements. Evidence
satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with Annex C to the Agreement have been established and are currently
being maintained in the manner set forth in such Annex C, together with copies
of duly executed tri-party blocked account and lock box agreements, satisfactory
to Agent, with the banks as required by Annex C.

N. Charter and Good Standing. For each Credit Party, such Person's (a)
charter and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.

O. Bylaws and Resolutions. For each Credit Party, (a) such Person's
bylaws, together with all amendments thereto and (b) resolutions of such
Person's Board of Directors and stockholders, approving and authorizing the
execution, delivery and performance of the Loan Documents to which such Person
is a party and the transactions to be consummated in connection therewith, each
certified as of the Closing Date by such Person's corporate secretary or an
assistant secretary as being in full force and effect without any modification
or amendment.

P. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.

Q. Opinions of Counsel. Duly executed originals of opinions of Much,
Shelist, Freed, Denenberg, Ament, Xxxx & Xxxxxxxxxx, counsel for the Credit
Parties, together with any local counsel opinions requested by Agent, each in
form and substance satisfactory to Agent and its counsel, dated the Closing
Date, and each accompanied by a letter addressed to such counsel from the Credit
Parties, authorizing and directing such counsel to address its opinion to Agent,
on behalf of Lenders, and to include in such opinion an express statement to the
effect that Agent and Lenders are authorized to rely on such opinion.

R. Guaranty. Duly executed originals of the Holdings Guaranty.

S. Pledge Agreement. Duly executed originals of each of the Pledge
Agreement accompanied by (a) share certificates representing all of the
outstanding Stock being pledged

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pursuant to such Pledge Agreement and stock powers for such share certificates
executed in blank and (b) the original Intercompany Notes and other instruments
evidencing Indebtedness being pledged pursuant to such Pledge Agreement, duly
endorsed in blank.

T. Accountants' Letter. A letter authorizing the independent certified
public accountants of the Credit Parties to communicate with Agent and Lenders
in accordance with Section 4.2 and acknowledging Lenders' reliance on the
auditor's certification of past and future Financial Statements.

U. Appointment of Agent for Service. An appointment of CSC Corporation
as each Credit Party's agent for service of process.

V. Solvency Opinion. To Agent for the benefit of Lenders a solvency
opinion satisfactory by Valuation Research in form and substance satisfactory to
Agent.

W. Fee Letter. Duly executed originals of the GE Capital Fee Letter.

X. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer and Chief Financial
Officer of each Borrower, dated the Closing Date, stating that, since September
30, 1996 (a) no event or condition has occurred or is existing which could
reasonably be expected to have a Material Adverse Effect; (b) there has been no
material adverse change in the industry in which any Borrower operates; (c) no
Litigation has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by the
Agreement and the other Loan Documents; (d) there have been no Restricted
Payments made by any Credit Party; and (e) there has been no material increase
in liabilities, liquidated or contingent, and no material decrease in assets of
any Borrower or any of its Subsidiaries.

Y. Waivers. Agent, on behalf of Lenders, shall have received landlord
waivers and consents, bailee letters and mortgagee agreements in form and
substance satisfactory to Agent, in each case as required pursuant to Section
5.9.

Z. Real Estate Documents. Mortgages, title insurance policies and other
real estate documents as set forth on Annex D-1 hereto.

AA. Environmental Reports. Agent shall have received Phase I
Environmental Site Assessment Reports, consistent with American Society for
Testing and Materials (ASTM) Standard E 1527-94 and applicable state
requirements, on all of the owned Real Estate, dated no more than 6 months prior
to the Closing Date, prepared by environmental engineers satisfactory to Agent,
all in form and substance satisfactory to Agent, in its sole discretion; and
Agent shall have further received such environmental review and audit reports,
including Phase II reports, with respect to all of Tamor's owned Real Estate of
any Credit Party and Agent shall be satisfied, in its sole discretion, with the
contents of all such environmental reports. Agent shall have

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received letters executed by the environmental firms preparing such
environmental reports, in form and substance satisfactory to Agent, authorizing
Agent and Lenders to rely on such reports.

BB. Audited Financials; Financial Condition. Agent shall have received
Borrowers' preliminary draft audited Financial Statements for the Fiscal Year
ended December 31, 1996. Each Borrower shall have provided Agent with its
current operating statements, a consolidated and consolidating balance sheet and
statement of cash flows, the Pro Forma, Projections, and a Borrowing Base
Certificate with respect to such Borrower certified by its Chief Financial
Officer, in each case in form and substance satisfactory to Agent, and Agent
shall be satisfied, in its sole discretion, with all of the foregoing. Agent
shall have further received a certificate of the Chief Executive Officer and/or
the Chief Financial Officer of each Borrower, based on such Pro Forma and
Projections, to the effect that (a) such Borrower will be Solvent upon the
consummation of the transactions contemplated herein; (b) the Pro Forma fairly
presents the financial condition of such Borrower as of the date thereof after
giving effect to the transactions contemplated by the Loan Documents; (c) the
Projections are based upon estimates and assumptions stated therein, all of
which such Borrower believes to be reasonable and fair in light of current
conditions and current facts known to such Borrower and, as of the Closing Date,
reflect such Borrower's good faith and reasonable estimates of its future
financial performance and of the other information projected therein for the
period set forth therein; (d) the Fair Salable Balance Sheet was prepared on the
same basis as the Pro Forma, except that Borrowers' assets are set forth therein
at their fair salable values on a going concern basis, and the liabilities set
forth therein include all contingent liabilities of Borrower stated at the
reasonably estimated present values thereof; and (e) containing such other
statements with respect to the solvency of such Borrower and matters related
thereto as Agent shall request.

CC. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may, in its sole discretion, request.

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ANNEX E (Section 4.1(a))
TO
CREDIT AGREEMENT

FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING

Borrowers shall deliver or cause to be delivered to Agent or
to Agent and Lenders, as indicated, the following:

(a) Monthly Financials. To Agent and Lenders, within thirty
(30) days after the end of each Fiscal Month, financial information regarding
Holdings and its Subsidiaries, certified by the Chief Financial Officer of
Borrower Representative, consisting of consolidated and consolidating (i)
unaudited balance sheets as of the close of such Fiscal Month and the related
statements of income and cash flow for that portion of the Fiscal Year ending as
of the close of such Fiscal Month; (ii) unaudited statements of income and cash
flows for such Fiscal Month, setting forth in comparative form the figures for
the corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments); and (iii) a summary of the outstanding balance
of all Intercompany Notes as of the last day of that Fiscal Month. Such
financial information shall be accompanied by the certification of the Chief
Financial Officer of Borrower Representative that (i) such financial information
presents fairly in accordance with GAAP (subject to normal year-end adjustments)
the financial position and results of operations of Borrowers and their
Subsidiaries, on a consolidated and consolidating basis, in each case as at the
end of such month and for the period then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default;

(b) Quarterly Financials. To Agent and Lenders, within
forty-five (45) days after the end of each Fiscal Quarter, consolidated and
consolidating financial information regarding Holdings and its Subsidiaries,
certified by the Chief Financial Officer of Borrower Representative, including
(i) unaudited balance sheets as of the close of such Fiscal Quarter and the
related statements of income and cash flow for that portion of the Fiscal Year
ending as of the close of such Fiscal Quarter and (ii) unaudited statements of
income and cash flows for such Fiscal Quarter, in each case setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections for such Fiscal Year, all prepared in
accordance with GAAP (subject to normal year-end adjustments). Such financial
information shall be accompanied by (A) a statement in reasonable detail (each,
a "Compliance Certificate"showing the calculations used in determining
compliance with each of the financial covenants set forth on Annex G which is
tested on a quarterly basis and (B) the certification of the Chief Financial
Officer of Borrower Representative that (i) such financial information

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presents fairly in accordance with GAAP (subject to normal year-end adjustments)
the financial position, results of operations and statements of cash flows of
Holdings and its Subsidiaries, on both a consolidated and consolidating basis,
as at the end of such Fiscal Quarter and for the period then ended, (ii) any
other information presented is true, correct and complete in all material
respects and that there was no Default or Event of Default in existence as of
such time or, if a Default or Event of Default shall have occurred and be
continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default. In addition, Borrowers shall deliver to Agent
and Lenders, within forty-five (45) days after the end of each Fiscal Quarter, a
management discussion and analysis which includes a comparison to budget for
that Fiscal Quarter and a comparison of performance for that Fiscal Quarter to
the corresponding period in the prior year;

(c) Operating Plan. To Agent and Lenders, as soon as
available, but not later than thirty (30) days after the end of each Fiscal
Year, an annual operating plan for each Borrower, approved by the Board of
Directors of such Borrower, for the following year, which will include a
statement of all of the material assumptions on which such plan is based, will
include monthly balance sheets and a monthly budget for the following year and
will integrate sales, gross profits, operating expenses, operating profit, cash
flow projections and Borrowing Availability projections all prepared on the same
basis and in similar detail as that on which operating results are reported (and
in the case of cash flow projections, representing management's good faith
estimates of future financial performance based on historical performance), and
including plans for personnel, Capital Expenditures and facilities;

(d) Annual Audited Financials. To Agent and Lenders, within
ninety (90) days after the end of each Fiscal Year, audited Financial Statements
for Holdings and its Subsidiaries on a consolidated and consolidating basis,
consisting of balance sheets and statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the figures for the
previous Fiscal Year and the figures contained in the Projections for such
Fiscal Year, which Financial Statements shall be prepared in accordance with
GAAP, certified without qualification, by an independent certified public
accounting firm of national standing or otherwise acceptable to Agent. Such
Financial Statements shall be accompanied by (i) a statement prepared in
reasonable detail showing the calculations used in determining compliance with
each of the financial covenants set forth on Annex G, (ii) a report from such
accounting firm to the effect that, in connection with their audit examination,
nothing has come to their attention to cause them to believe that a Default or
Event of Default has occurred (or specifying those Defaults and Events of
Default that they became aware of), it being understood that such audit
examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) a letter addressed to Agent, on behalf of itself and Lenders, in
form and substance reasonably satisfactory to Agent and subject to standard
qualifications taken by nationally recognized accounting firms, signed by such
accounting firm acknowledging that Agent and Lenders are entitled to rely upon
such accounting firm's certification of such audited Financial Statements, (iv)
the annual letters to such accountants in connection with their audit
examination detailing contingent liabilities and

E-125

123
material litigation matters, and (v) the certification of the Chief Executive
Officer or Chief Financial Officer of Holdings that all such Financial
Statements present fairly in accordance with GAAP the financial position,
results of operations and statements of cash flows of Borrowers and their
Subsidiaries on a consolidated and consolidating basis, as at the end of such
year and for the period then ended, and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall
have occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default;

(e) Management Letters. To Agent and Lenders, within five (5)
Business Days after receipt thereof by any Credit Party, copies of all
management letters, exception reports or similar letters or reports received by
such Credit Party from its independent certified public accountants;

(f) Default Notices. To Agent and Lenders, as soon as
practicable, and in any event within five (5) Business Days after an executive
officer of any Borrower has actual knowledge of the existence of any Default,
Event of Default or other event which has had a Material Adverse Effect,
telephonic or telecopied notice specifying the nature of such Default or Event
of Default or other event, including the anticipated effect thereof, which
notice, if given telephonically, shall be promptly confirmed in writing on the
next Business Day;

(g) SEC Filings and Press Releases. To Agent and Lenders,
promptly upon their becoming available, copies of: (i) all Financial Statements,
reports, notices and proxy statements made publicly available by any Credit
Party to its security holders; (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any Credit Party with
any securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material adverse changes or developments in the business of any such Person;

(h) Subordinated Debt and Equity Notices. To Agent and
Lenders, as soon as practicable, copies of all material written notices given or
received by any Credit Party with respect to any Subordinated Debt or Stock of
such Person, and, within two (2) Business Days after any Credit Party obtains
knowledge of any matured or unmatured event of default with respect to any
Subordinated Debt, notice of such event of default;

(i) Supplemental Schedules. To Agent and Lenders, supplemental
disclosures, if any, required by Section 5.6 of the Agreement;

(j) Litigation. To Agent and Lenders in writing, promptly upon
learning thereof, notice of any Litigation commenced or threatened against any
Credit Party that (i) seeks damages in excess of $100,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or ERISA Affiliate in connection with any
Plan, (iv) alleges criminal misconduct by any Credit Party, or (v) alleges the
violation of any law

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regarding, or seeks remedies in connection with, any Environmental Liabilities;

(k) Insurance Notices. To Agent and Lenders, disclosure of
losses or casualties required by Section 5.4 of the Agreement;

(l) To Agent and Lenders, copies of (i) any and all default
notices received under or with respect to any leased location or public
warehouse where Collateral is located, and (ii) such other notices or documents
as Agent may request in its reasonable discretion; and

(m) Other Documents. To Agent and Lenders, such other
financial and other information respecting any Credit Party's business or
financial condition as Agent or any Lender shall, from time to time, request.

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125
ANNEX F (Section 4.1(b))
TO
CREDIT AGREEMENT

COLLATERAL REPORTS

Borrowers shall deliver or cause to be delivered the
following:

(a) To Agent and any Lender that has requested copies thereof
in writing, on the first Business Day of each week as of the last day of the
prior week, a Borrowing Base Certificate with respect to each Borrower, in each
case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;

(b) To Agent, upon its request, and in no event less
frequently than five (5) Business Days after the end of each Fiscal Month
(together with a copy of all or any part of such delivery requested by any
Lender in writing after the Closing Date), each of the following:

(i) with respect to each Borrower, a summary of Inventory by
location and type with a supporting perpetual Inventory report, in each
case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion; and

(ii) with respect to each Borrower, a monthly trial balance
showing Accounts outstanding aged from invoice due date as follows: 1
to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more,
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion.

(c) To Agent, at the time of delivery of each of the monthly
Financial Statements delivered pursuant to Annex E, a reconciliation of the
Accounts trial balance and month-end Inventory reports of each Borrower to such
Borrower's general ledger and monthly Financial Statements delivered pursuant to
such Annex E, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion;

(d) To Agent, at the time of delivery of each of the annual
Financial Statements delivered pursuant to Annex E, (i) a listing of government
contracts of each Borrower subject to the Federal Assignment of Claims Act of
1940; and (ii) a list of any applications for the registration of any Patent, or
Trademark with the United States Patent and Trademark Office or any similar
office or agency which any Credit Party thereof has filed in the prior Fiscal
Quarter;

(e) Each Borrower, at its own expense, shall deliver to Agent
the results of each physical verification, if any, which such Borrower or any of
its Subsidiaries may in their
126
discretion have made, or caused any other Person to have made on their behalf,
of all or any portion of their Inventory (and, if a Default or an Event of
Default shall have occurred and be continuing, each Borrower shall, upon the
request of Agent, conduct, and deliver the results of, such physical
verifications as Agent may require);

(f) Each Borrower, at its own expense, shall deliver to Agent
such appraisals of its assets as Agent may request at any time after the
occurrence and during the continuance of a Default or an Event of Default, such
appraisals to be conducted by an appraiser, and in form and substance,
satisfactory to Agent; and

(g) Such other reports, statements and reconciliations with
respect to the Borrowing Base or Collateral of any or all Credit Parties as
Agent shall from time to time request in its reasonable discretion.

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127
ANNEX G (Section 6.10)
TO
CREDIT AGREEMENT

FINANCIAL COVENANTS

Borrowers shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:

(a) Maximum Capital Expenditures. Holdings and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures in excess of $8,500,000,
during any Fiscal Year.

(b) Minimum Fixed Charge Coverage Ratio. Holdings and its Subsidiaries
shall have on a consolidated basis at the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio for the 12-month period then ended (or with
respect to the Fiscal Quarters ending on or before September 30, 1997, the
period commencing on December 29, 1996 and ending on the last day of such Fiscal
Quarter) of not less than the following:

1.0 to 1.0 for each Fiscal Quarter ending in September, 1997; December, 1997;
March, 1998; and June, 1998

1.0 to 1.0 for each Fiscal Quarter ending in September, 1998; and
December, 1998
1.2 to 1.0 for the Fiscal Quarter ending in March, 1999; and
each Fiscal Quarter end thereafter.

(c) Minimum EBITA. Holdings and its Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth below, EBITA for
the respective periods set forth below of not less than the following:

Period EBITA

the two fiscal quarters ending in June of 1997 $ 4,400,000
the three fiscal quarters ending in September of 1997 $ 8,000,000
the four fiscal quarters ending in:
December of 1997 $11,300,000
March of 1998 $12,000,000
June of 1998 $13,000,000
September of 1998 $14,000,000
December of 1998 $14,200,000
March of 1999 $14,500,000
June of 1999 $14,750,000
September of 1999 $15,500,000
December of 1999 $16,500,000
March of 2000 $16,750,000

128

June of 2000 $17,000,000
September of 2000 $17,250,000
December of 2000 $17,400,000
March of 2001 $17,750,000
June of 2001 $17,900,000
September of 2001 $18,100,000
December of 2001 $18,250,000
March of 2002 $18,950,000
June of 2002 $19,500,000
September of 2002 $19,500,000
and each Fiscal Quarter thereafter $22,000,000

(d) Minimum Net Worth. Holdings and its Subsidiaries on a consolidated
basis shall maintain at all times Net Worth equal to or greater than $14,100,000
measured as of the last day of each Fiscal Quarter and increased by an amount
equal to fifty percent (50%) of the cumulative positive net income from the
Closing Date through the last day of that Fiscal Quarter.

(e) Minimum Interest Coverage Ratio. Holdings and its Subsidiaries on a
consolidated basis shall have at the end of each Fiscal Quarter set forth below,
an Interest Coverage Ratio for the 12-month period then ended (or with respect
to the Fiscal Quarters ending on or before September 30, 1997, the period
commencing on December 29, 1996 and ending on the last day of such Fiscal
Quarter) of not less than the following:

1.75 to 1.0 for three fiscal quarters ending in September of 1997
2.0 to 1.0 for each Fiscal Quarter ending in December of 1997 and
March of 1998
2.25 to 1.0 for each Fiscal Quarter ending in June of 1998 and
September of 1998
2.0 to 1.0 for the Fiscal Quarter ending in December of 1998 and
each Fiscal Quarter end thereafter.

Unless otherwise specifically provided herein, any accounting
term used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (a) changes in

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accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or successor thereto or any
agency with similar functions), (b) changes in accounting principles concurred
in by any Borrower's certified public accountants; (c) purchase accounting
adjustments under A.P.B. 16 and/or 17 and EITF 88-16, and the application of the
accounting principles set forth in FASB 109, including the establishment of
reserves pursuant thereto and any subsequent reversal (in whole or in part) of
such reserves; and (d) the reversal of any reserves established as a result of
purchase accounting adjustments. All such adjustments resulting from
expenditures made subsequent to the Closing Date (including capitalization of
costs and expenses or payment of pre-Closing Date liabilities) shall be treated
as expenses in the period the expenditures are made and deducted as part of the
calculation of EBITDA in such period. If Agent, Borrowers and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in the Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrowers and Requisite Lenders cannot agree upon
the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all Financial Statements delivered
and all calculations of financial covenants and other standards and terms in
accordance with the Agreement and the other Loan Documents shall be prepared,
delivered and made without regard to the underlying Accounting Change.

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130
ANNEX H (Section 9.9(a))
TO
CREDIT AGREEMENT

WIRE TRANSFER INFORMATION

Name: General Electric Capital Corporation
Bank: Bankers Trust Company
New York, New York
ABA No.: 000000000
Account No.: 00000000
Account Name: GECC/CF Depository
Reference: Selfix, Inc.
Reference Number: CFC 4075
131
ANNEX I (Section 11.10)
TO
CREDIT AGREEMENT

NOTICE ADDRESSES

(A) If to Agent or GE Capital, at

General Electric Capital Corporation
000 Xxxx Xxxxxxx Xxxxxx - Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Selfix Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000

with copies to:

Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000

and

General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000

(B) If to any Borrower, to Borrower Representative, at

Selfix, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
132
with copies to:

Much, Shelist, Freed, Denenberg,
Ament, Xxxx & Xxxxxxxxxx
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Telecopier No.: (000) 000-0000
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