FORM 10-Q

                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549


          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934


               FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996


                      Commission file number 1-5318


                              KENNAMETAL INC.
           (Exact name of registrant as specified in its charter)


               PENNSYLVANIA                        25-0900168
       (State or other jurisdiction             (I.R.S. Employer
             of incorporation)                 Identification No.)


                   ROUTE 981 AT WESTMORELAND COUNTY AIRPORT
                              P.O. BOX 231
                      LATROBE, PENNSYLVANIA  15650
            (Address of registrant's principal executive offices)


   Registrant's telephone number, including area code:  (412) 539-5000


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  YES [X]  NO [ ]


Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:


         TITLE OF EACH CLASS                OUTSTANDING AT APRIL 30, 1996
- ----------------------------------------    -----------------------------
Capital Stock, par value $1.25 per share              26,655,200


                                KENNAMETAL INC.
                                   FORM 10-Q
                         FOR QUARTER ENDED MARCH 31, 1996

                               TABLE OF CONTENTS


                       PART I.  FINANCIAL INFORMATION

Item No.
- --------

   1.   Financial Statements:

        Condensed Consolidated Balance Sheets (Unaudited)
        March 31, 1996 and June 30, 1995

        Condensed Consolidated Statements of Income (Unaudited)
        Three months and nine months ended March 31, 1996 and 1995

        Condensed Consolidated Statements of Cash Flows (Unaudited)
        Nine months ended March 31, 1996 and 1995

        Notes to Condensed Consolidated Financial Statements (Unaudited)

   2.   Management's Discussion and Analysis of Financial Condition and
        Results of Operations

                      PART II.  OTHER INFORMATION

   1.   Legal Proceedings

   5.   Other Information

   6.   Exhibits and Reports on Form 8-K


                              PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
KENNAMETAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- -------------------------------------------------
(in thousands)
                                                       March 31,     June 30,
                                                          1996         1995
ASSETS                                                 ----------   ----------
Current Assets:
  Cash and equivalents                                  $ 12,624     $ 10,827
  Accounts receivable, less allowance for
    doubtful accounts of $10,227 and $12,106             192,442      175,405
  Inventories                                            211,944      200,680
  Deferred income taxes                                   22,262       22,362
                                                        --------     --------
  Total current assets                                   439,272      409,274
                                                        --------     --------
Property, Plant and Equipment:
  Land and buildings                                     150,636      151,905
  Machinery and equipment                                390,889      365,275
  Less accumulated depreciation                         (278,218)    (256,838)
                                                        --------     --------
  Net property, plant and equipment                      263,307      260,342
                                                        --------     --------
Other Assets:
  Investments in affiliated companies                      7,875        6,873
  Intangible assets, less accumulated
    amortization of $20,355 and $19,009                   33,768       32,253
  Deferred income taxes                                   41,064       56,629
  Other                                                    7,560       16,238
                                                        --------     --------
  Total other assets                                      90,267      111,993
                                                        --------     --------
  Total assets                                          $792,846     $781,609
                                                        ========     ========
LIABILITIES
Current Liabilities:
  Current maturities of term debt and capital leases    $ 20,249     $ 17,475
  Notes payable to banks                                  57,760       53,555
  Accounts payable                                        58,223       60,211
  Accrued vacation pay                                    19,929       18,424
  Other                                                   59,105       75,537
                                                        --------     --------
  Total current liabilities                              215,266      225,202
                                                        --------     --------
Term Debt and Capital Leases, Less Current Maturities     68,482       78,700
Deferred Income Taxes                                     21,458       20,998
Other Liabilities                                         51,327       51,615
                                                        --------     --------
  Total liabilities                                      356,533      376,515
                                                        --------     --------
Minority Interest in Consolidated Subsidiaries            11,750       13,209
                                                        --------     --------
SHAREHOLDERS' EQUITY
Shareholders' Equity:
  Preferred stock, 5,000 shares authorized; none issued      -            -
  Capital stock, $1.25 par value; 70,000 and 30,000
    shares authorized; 29,370 shares issued               36,712       36,712
  Additional paid-in capital                              86,712       85,768
  Retained earnings                                      336,739      297,838
  Treasury shares, at cost; 2,714 and 2,793 shares held  (36,097)     (36,737)
  Cumulative translation adjustments                         497        8,304
                                                        --------     --------
  Total shareholders' equity                             424,563      391,885
                                                        --------     --------
  Total liabilities and shareholders' equity            $792,846     $781,609
                                                        ========     ========
See accompanying notes to condensed consolidated financial statements.



KENNAMETAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
- -------------------------------------------------------
(in thousands, except per share data)
Three Months Ended Nine Months Ended March 31, March 31, -------------------- ------------------- 1996 1995 1996 1995 -------- -------- -------- -------- OPERATIONS: Net sales $286,095 $268,064 $800,172 $717,237 Cost of goods sold 162,129 148,839 461,960 412,604 -------- -------- -------- -------- Gross profit 123,966 119,225 338,212 304,633 Research and development expenses 5,346 4,695 15,287 13,477 Selling, marketing and distribution expenses 61,037 56,743 181,044 159,847 General and administrative expenses 16,810 14,954 48,484 41,396 Amortization of intangibles 417 363 1,199 1,891 -------- -------- -------- -------- Operating Income 40,356 42,470 92,198 88,022 Interest expense 2,896 3,136 9,008 9,602 Other income (expense) 204 (784) 889 (829) -------- -------- -------- -------- Income before taxes 37,664 38,550 84,079 77,591 Provision for income taxes 14,300 16,400 33,200 32,900 -------- -------- -------- -------- Net income $ 23,364 $ 22,150 $ 50,879 $ 44,691 ======== ======== ======== ======== PER SHARE DATA: Earnings per share $0.88 $0.84 $1.91 $1.69 ======== ======== ======== ======== Dividends per share $0.15 $0.15 $0.45 $0.45 ======== ======== ======== ======== Weighted average shares outstanding 26,644 26,524 26,622 26,463 ======== ======== ======== ======== See accompanying notes to condensed consolidated financial statements.
KENNAMETAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - ----------------------------------------------------------- (in thousands) Nine Months Ended March 31, -------------------------- 1996 1995 ---------- ---------- OPERATING ACTIVITIES: Net income $50,879 $44,691 Adjustments for noncash items: Depreciation and amortization 29,889 29,138 Other 11,950 9,136 Changes in certain assets and liabilities: Accounts receivable (21,042) (26,287) Inventories (15,091) (26,075) Accounts payable and accrued liabilities (3,880) (14,735) Other (4,147) 6,726 ------- ------- Net cash flow from operating activities 48,558 22,594 ------- ------- INVESTING ACTIVITIES: Purchases of property, plant and equipment (40,537) (27,323) Disposals of property, plant and equipment 5,131 984 Other 304 (1,369) ------- ------- Net cash flow used for investing activities (35,102) (27,708) ------- ------- FINANCING ACTIVITIES: Increase in short-term debt 4,993 11,093 Increase in term debt 7,734 5,206 Reduction in term debt (13,713) (4,791) Dividend reinvestment and employee stock plans 1,583 3,910 Cash dividends paid to shareholders (11,978) (11,901) ------- ------- Net cash flow from (used for) financing activities (11,381) 3,517 ------- ------- Effect of exchange rate changes on cash (278) 767 ------- ------- CASH AND EQUIVALENTS: Net increase (decrease) in cash and equivalents 1,797 (830) Cash and equivalents, beginning 10,827 17,190 ------- ------- Cash and equivalents, ending $12,624 $16,360 ======= ======= SUPPLEMENTAL DISCLOSURES: Interest paid $ 7,753 $ 8,285 Income taxes paid 31,378 18,707 See accompanying notes to condensed consolidated financial statements. KENNAMETAL INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - ---------------------------------------------------------------- 1. The condensed consolidated financial statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's 1995 Annual Report. The condensed consolidated balance sheet as of June 30, 1995 has been derived from the audited balance sheet included in the Company's 1995 Annual Report. These interim statements are unaudited; however, management believes that all adjustments necessary for a fair presentation have been made and all adjustments are normal, recurring adjustments. The results for the nine months ended March 31, 1996 are not necessarily indicative of the results to be expected for the full fiscal year. 2. Inventories are stated at lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for a significant portion of domestic inventories and the first-in, first-out (FIFO) method or average cost for other inventories. The Company used the LIFO method of valuing its inventories for approximately 55 percent of total inventories at March 31, 1996. Because inventory valuations under the LIFO method are based on an annual determination of quantities and costs as of June 30 of each year, the interim LIFO valuations are based on management's projections of expected year-end inventory levels and costs. Therefore, the interim financial results are subject to any final year-end LIFO inventory adjustments. 3. The major classes of inventory as of the balance sheet dates were as follows (in thousands): March 31, June 30, 1996 1995 ---------- ---------- Finished goods $168,077 $147,231 Work in process and powder blends 62,389 65,231 Raw materials and supplies 21,369 24,629 -------- -------- Inventory at current cost 251,835 237,091 Less LIFO valuation (39,891) (36,411) -------- -------- Total inventories $211,944 $200,680 ======== ======== 4. The Company has been involved in various environmental cleanup and remediation activities at several of its manufacturing facilities. In addition, the Company has been named as a potentially responsible party at four Superfund sites in the United States. However, it is management's opinion, based on its evaluations and discussions with outside counsel and independent consultants, that the ultimate resolution of these environmental matters will not have a material adverse effect on the results of operations, financial position or cash flows of the Company. The Company maintains a Corporate Environmental, Health and Safety (EH&S) Department to facilitate compliance with environmental regulations and to monitor and oversee remediation activities. In addition, the Company has established an EH&S administrator at each of its domestic manufacturing facilities. The Company's financial management team periodically meets with members of the Corporate EH&S Department and the Corporate Legal Department to review and evaluate the status of environmental projects and contingencies. On a quarterly and annual basis, management establishes or adjusts financial provisions and reserves for environmental contingencies in accordance with Statement of Financial Accounting Standards (SFAS) No. 5, "Accounting for Contingencies." 5. Prior to its acquisition by the Company, a non-U.S. subsidiary recorded sales of approximately $60 million in calendar 1993 under contracts with a certain customer to provide various equipment, know-how and training for a manufacturing facility. Upon the acquisition by the Company, the subsidiary decided to complete performance under the contracts with this customer but not to enter into any such contracts in the future. Pursuant to a United States embargo effective June 6, 1995, the subsidiary suspended performance under the contracts pending issuance by the U.S. government of definitive embargo regulations. Other than finalizing the transfer of know-how and training to commence production, performance was substantially completed prior to the suspension. The estimated costs to complete performance are not material and were accrued in the consolidated financial statements. The customer disputed the suspension and advised that it might file suit to require completion of performance as well as for compensation for alleged damages. However, the subsidiary reinstituted performance following the issuance of definitive embargo regulations in September of 1995. Management believes that the ultimate resolution of this matter will not have a material adverse impact on the financial position of the Company. 6. On January 29, 1996, the Company's Board of Directors approved a plan to build a manufacturing facility in Shanghai, China at a cost of approximately $20 million. The Company will own 100 percent of the plant, which will manufacture tools made of cemented carbides and other hard materials for metalcutting applications. Construction is expected to begin during fiscal 1996, with manufacturing planned to begin in January 1998. The Board of Directors also approved a capital expenditure to begin a pilot project to manufacture solid carbide drills in Pennsylvania. 7. On April 29, 1996, the Board of Directors approved the Company's plan to relocate its North American Metalworking Headquarters from Raleigh, N.C. to Latrobe, Pa. (the Plan). The relocation is being made to globalize key functions and to provide a more efficient and focused corporate structure. The action will affect approximately 300 employees in Raleigh, N.C., all of whom will be offered the opportunity to move to Latrobe, Pa. As a result, an estimated pretax charge of approximately $3.5 million will occur in the fourth quarter of fiscal 1996. The charge will be taken to cover the one-time costs of employee separation arrangements and early retirement costs of those who choose not to move. Implementation of the Plan is expected to be completed during fiscal 1998. In connection with the Plan, the Company will construct a new headquarters building at an estimated cost of $20 million. The costs resulting from the relocation of employees, hiring and training new employees, and other costs resulting from the temporary duplication of certain operations have not been included in the one-time charge and will be included in operating expenses as incurred. The costs related to these items are estimated to be approximately $9 million pretax and will be incurred during the next two fiscal years. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES There were no material changes in financial position, liquidity or capital resources between June 30, 1995 and March 31, 1996. The ratio of current assets to current liabilities was 2.0 as of March 31, 1996 and 1.8 as of June 30, 1995. The debt to capital ratio (i.e., total debt divided by the sum of total debt and shareholders' equity) was 26 percent as of March 31, 1996, and 28% as of June 30, 1995. Capital expenditures are estimated to be $60-70 million in fiscal year 1996. Expenditures are being made to modernize facilities, upgrade machinery and equipment, and acquire new information technology. Capital expenditures are being financed with cash from operations and borrowings under existing revolving credit agreements with banks. RESULTS OF OPERATIONS SALES AND EARNINGS During the quarter ended March 31, 1996, consolidated sales were $286 million, up 7 percent from $268 million in the same quarter last year. Net income was $23.4 million, or $0.88 per share, as compared with net income of $22.2 million, or $0.84 per share in the same quarter last year. During the nine month period ended March 31, 1996, consolidated sales were $800 million, up 12 percent from $717 million last year. Net income was $50.9 million, or $1.91 per share, compared to $44.7 million, or $1.69 per share last year. For the quarter ended March 31, 1996, sales increased in the Europe and Asia- Pacific Metalworking markets, in the Industrial Supply market, and in the Mining and Construction market. Sales declined in the North America Metalworking market, which contributed to a less favorable sales mix. The Industrial Supply market accounted for the largest gain as a result of increased sales through mail order and full service supply programs. Earnings were impacted due to higher costs associated with the focused factory initiative, and ongoing investments related to the implementation of SAP client server information systems. Earnings were also reduced by higher manufacturing costs due to lower production levels. The following table presents the Company's sales by market and geographic area (in thousands):
Three Months Ended March 31, Nine Months Ended March 31, ------------------------------- ----------------------------- Percent Percent 1996 1995 Change 1996 1995 Change -------- -------- ------- -------- -------- ------- By Market:* Metalworking: North America $ 97,524 $101,631 (4)% $274,600 $272,848 1% Europe 73,417 71,667 2 206,548 181,976 14 Asia-Pacific 9,144 6,066 51 25,715 17,740 45 Industrial Supply 69,677 56,433 23 185,354 146,338 27 Mining and Construction 36,333 32,267 13 107,955 98,335 10 -------- -------- ---- -------- -------- --- Net sales $286,095 $268,064 7% $800,172 $717,237 12% ======== ======== ==== ======== ======== === By Geographic Area: Within the United States $175,813 $164,605 7% $488,173 $446,504 9% Non United States 110,282 103,459 7 311,999 270,733 15 -------- -------- --- -------- -------- --- Net sales $286,095 $268,064 7% $800,172 $717,237 12% ======== ======== === ======== ======== === * Historically, sales were classified into three product classes: Metalworking, Mining and Construction, and Metallurgical Powders. Previously, the Industrial Supply market was included as a component of Metalworking products. The balance of Metalworking now is categorized three ways: North America, Europe and Asia-Pacific. Metallurgical Powders will be combined with the Mining and Construction market. Prior year amounts have been reclassified to conform to the current presentation.
METALWORKING MARKETS During the March 1996 quarter, sales in the North America Metalworking market decreased 4 percent from the previous year. Sales of domestic metalcutting inserts and toolholding devices decreased 4 percent as sales growth was affected by poor weather conditions and the slowing U.S. economy. Sales of metalworking products increased 12 percent in Canada. Sales in the Europe Metalworking market increased 5 percent. Demand for metalworking products was slow in Germany, while sales grew at a faster pace in the United Kingdom and France. Including the impact of unfavorable foreign currency translation effects, sales in the Europe Metalworking market increased 2 percent. Sales were affected by declining economic conditions, primarily in Germany. In the Asia-Pacific Metalworking market, sales rose 12 percent as a result of increased demand. Including unfavorable foreign currency translation effects, sales in the Asia-Pacific Metalworking market increased 9 percent. Effective July 1, 1995, Kennametal began to consolidate its majority owned subsidiaries in China and Japan. For the nine month period, sales in the North America Metalworking market were up 1 percent on slightly lower volumes and modest price increases. Sales were impacted by lower demand due to slowing economic conditions in the United States. In the Europe Metalworking market, sales increased 14 percent because of higher sales volumes and the impact of favorable foreign currency translation effects. In the Asia-Pacific Metalworking market, sales increased 45 percent because of increased demand and the impact of newly-consolidated subsidiaries in Japan and China. Excluding foreign currency translation effects, sales in the Europe Metalworking market increased 9 percent from last year. INDUSTRIAL SUPPLY MARKET During the March 1996 quarter, sales in the Industrial Supply market increased 23 percent as a result of increased sales through mail order and full service supply programs. The Industrial Supply market now represents almost 25 percent of total sales. Sales rose as a result of innovative marketing programs and the successful geographic expansion program at J&L Industrial Supply, and because of new and existing full service supply programs with large customers. Also, on April 15, 1996, J&L opened a location in Phoenix, Az., and one additional J&L location, St. Louis, Mo., is scheduled to open during the fourth quarter of fiscal 1996. For the nine month period, sales in the Industrial Supply market increased 27 percent due to innovative marketing programs and the geographic expansion program at J&L, and due to new and existing full service supply programs with large customers. During the nine month period ending March 31, 1996, J&L opened 5 locations and now operates a total of 16 locations in the United States and one location in the United Kingdom. MINING AND CONSTRUCTION MARKET During the March 1996 quarter, sales in the Mining and Construction market increased 13 percent from the previous year as a result of strong domestic demand for mining and highway construction tools. International sales of highway construction tools decreased 30 percent due to a slow start of the construction season while mining tools increased slightly due to the start-up of a joint venture in China. For the nine month period, sales of mining and construction tools increased 10 percent from the prior year primarily because of increased domestic demand for highway construction and mining tools and because of the start-up of a joint venture in China. GROSS PROFIT MARGIN As a percentage of sales, gross profit margin for the March 1996 quarter was 43.3 percent as compared with 44.5 percent in the prior year. The gross profit margin benefited from higher sales volume and modest price increases. These benefits were offset by a less favorable sales mix, higher costs associated with the implementation of focused factories, and reduced manufacturing efficiencies due to lower production volumes. For the nine month period, the gross profit margin was 42.3 percent, compared with 42.5 percent last year. The gross profit margin benefited from higher sales volumes and modest price increases. However, these benefits were partially offset by a less favorable sales mix, higher costs associated with the implementation of focused factories, and reduced manufacturing efficiencies due to lower production volumes. OPERATING EXPENSES For the quarter ended March 31, 1996, operating expenses as a percentage of sales were 29.1 percent compared to 28.5 percent last year. Operating expenses increased 9 percent primarily because of costs related to implementation of new SAP client server information systems, costs necessary to support the higher sales levels, increased spending on research and development, and marketing and branch program expansion. For the nine month period, operating expenses as a percentage of sales were 30.6 percent compared to 29.9 percent last year. Operating expenses increased primarily because of costs related to implementation of new SAP client server information systems, costs necessary to support the higher sales levels, increased spending on research and development, and marketing and branch program expansion. INCOME TAXES The effective tax rate for the March 1996 quarter was 38 percent compared to an effective tax rate of 42.5 percent in the prior year. The reduction in the effective tax rate resulted from certain tax benefits derived from international operations. For the nine month period, the effective tax rate was 39.5 percent compared to 42.4 percent in the prior year. The decrease in the effective tax rate for the nine month period is the result of lower estimated non-U.S. taxes and additional benefits derived from international operations. OUTLOOK In looking to the fourth quarter ending June 30, 1996, management expects consolidated sales to be comparable to the third quarter of fiscal 1996. Sales in the Metalworking markets will be similar to the previous quarter given the current economic conditions. Sales in the Industrial Supply market should benefit from the expansion of locations, catalog sales and full service supply programs. Sales in the Mining and Construction market should increase from additional domestic and international demand. The foregoing are "forward-looking statements" as defined in Section 21E of the Securities Exchange Act of 1934. Actual results can differ from those in the forward-looking statements to the extent that the economic conditions in the United States and Europe are not sustained. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The information set forth in Note 4 to the condensed consolidated financial statements, contained in Part I, Item 1 of this Form 10-Q, is incorporated by reference herein and supplements the information previously reported in Part I, Item 3 of the Company's Form 10-K for the year ended June 30, 1995, which is also incorporated by reference herein. It is management's opinion, based on its evaluation and discussions with outside counsel, that the Company has viable defenses to these cases and that, in any event, the ultimate resolutions of these matters will not have a materially adverse effect on the results of operations, financial position or cash flows of the Company. ITEM 5. OTHER INFORMATION The Board of Directors approved the Company's plan to further consolidate its global headquarters in Latrobe, Pa., including the relocation of its North American Metalworking Headquarters from Raleigh, N.C. (the Plan). The relocation is being made to globalize key functions and to provide a more efficient and focused corporate structure. As a result, an estimated pretax charge will occur in the fourth quarter of fiscal 1996 of approximately $3.5 million. Implementation of the Plan is expected to be completed during fiscal 1998. On April 30, 1996, the Company issued a press release announcing the Plan. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K REFERENCE (a) Exhibits --------- (10.17) Credit Agreement dated April 19, 1996 by and among Kennametal Inc. and Deutsche Bank AG; Mellon Bank, N.A.; and PNC Bank, National Association Filed herewith (27) Financial Data Schedule for nine months ended March 31, 1996 Filed herewith (99) Press Release Dated April 30, 1996 Filed herewith (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended March 31, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KENNAMETAL INC. Date: May 13, 1996 By: /s/ RICHARD J. ORWIG ------------------------- Richard J. Orwig Vice President Chief Financial and Administrative Officer
                               CREDIT AGREEMENT

                          dated as of April 19, 1996

                                    among 

                               KENNAMETAL INC.,
                                 As Borrower

                                     and

                                DEUTSCHE BANK AG,
                New York Branch and/or Cayman Islands Branch,
                              MELLON BANK, N.A.,
                                      and
                      PNC BANK, NATIONAL ASSOCIATION, 
                                  as Lenders


                              Table of Contents


SECTION			    TITLE

ARTICLE I		DEFINITIONS; CONSTRUCTION
      1.01		Certain Definitions
      1.02		Construction
      1.03		Accounting Principles
      1.04		Dollar Equivalent

ARTICLE II		THE CREDITS
       2.01		Revolving Credit Loans
       2.02		Bid Loans
       2.03		Making of Revolving Credit Loans
       2.04		Interest Rates, Funding Periods; Amounts
       2.05		Conversion or Renewal of Interest Rate Options
       2.06		Repayments
       2.07		Interest Payment Dates
       2.08		Facility Fees
       2.09		Pro Rata Treatment; Payments Generally
       2.10		Additional Compensation in Certain Circumstances
       2.11		Taxes
       2.12		Funding by Branch, Subsidiary or Affiliate
       2.13		Currency Equivalents
       2.14		Lender's Sharing of Information

ARTICLE III		REPRESENTATIONS AND WARRANTIES
       3.01		Corporate Status
       3.02		Corporate Power and Authorization
       3.03		Execution and Biding Effect
       3.04		Governmental Approvals and Filings
       3.05		Absence of Conflicts
       3.06		Audited Financial Statements
       3.07		Interim Financial Statements
       3.08		Absence of Undisclosed Liabilities
       3.09		Absence of Material Adverse Changes
       3.10		Subsidiaries and Other Investments
       3.11		Accurate and Complete Disclosure
       3.12		Margin Regulations
       3.13		Litigation
       3.14		Absence of Events of Default
       3.15		Absence of Other Conflicts
       3.16		Insurance
       3.17		Title to Property
       3.18		Intellectual Property
       3.19		Taxes
       3.20		Employee Benefits
       3.21		Environmental Matters
       3.22		Investment Company; Public Utility Holding

ARTICLE IV		CONDITIONS OF LENDING
       4.01		Conditions to Initial Loans
       4.02		Conditions to All Loans

ARTICLE V		AFFIRMATIVE COVENANTS
       5.01		Basic Reporting Requirements
       5.02		Insurance.
       5.03		Payment of Taxes and Other Potential Charges and
			Priority Claims
       5.04		Preservation of Corporate Status
       5.05		Governmental Approvals and Filings
       5.06		Maintenance of Properties
       5.07		Avoidance of Other Conflicts
       5.08		Financial Accounting Practices
       5.09		Use of Proceeds
       5.10		Nature of Business

ARTICLE VI		NEGATIVE COVENANTS
       6.01		Financial Covenants
       6.02		Liens
       6.03		Guarantees, Indemnities, etc.
       6.04		Mergers
       6.05		Disposition of Accounts
       6.06		Limitation on Other Restrictions or Dividends
			by Subsidiaries, etc.
       6.07		Limitation on Other Restrictions on Amendment
			of the Loan Documents, etc.

ARTICLE VII		DEFAULTS
       7.01		Events of Default
       7.02		Consequences of an Event of Default

ARTICLE VIII		MISCELLANEOUS
       8.01		Holidays
       8.02		Records
       8.03		Amendments and Waivers
       8.04		No Implied Waiver; Cumulative Remedies
       8.05		Notices
       8.06		Expenses; Taxes; Indemnity
       8.07		Severability
       8.08		Prior Understandings
       8.09		Duration; Survival
       8.11		Limitation on Payments
       8.12		Set-Off
       8.14		Successors and Assigns; Participations; Assignments
       8.15		Relationship Among the Lenders
       8.16		Confidentiality
       8.17		Governing Law; Submission to Jurisdiction: Waiver of Jury
			Trial; Limitation of Liability
       8.18		Judgment Currency


                               CREDIT AGREEMENT


		THIS AGREEMENT, dated as of April 19, 1996, by and among 
KENNAMETAL INC., a Pennsylvania corporation (the "Borrower"), and the lenders 
parties hereto from time to time (the "Lenders", as defined further below).

                                   Recital:

		The Borrower has requested the Lenders to enter into this 
Agreement and extend credit as provided for herein.

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

                                   ARTICLE I
                           DEFINITIONS; CONSTRUCTION

		1.01.  Certain Definitions.  (a)  In addition to other words and 
terms defined elsewhere in this Agreement, the following terms are defined in 
the Sections of this Agreement indicated below:

              TERM                              SECTION
              ----                              -------
Affected Lender                           2.04 (d)
Base Rate                                 2.04 (a)
Base Rate Option                          2.04 (a)
Bid Loans Maturity Date                   2.02 (e)
Bid Loans Confirmation                    2.02 (c)
Bid Rate                                  2.02 (b) (iii)
Contractual Currency                      8.18 (a)
Cross Default Event                       7.01 (f)
Cross Default Obligation                  7.01 (f)
Euro-Rate Funding Period                  2.04 (b)
Euro-Rate Option                          2.04 (a) (ii)
Facility Fees                             2.08 
Funding Breakage Date                     2.10 (b)
Funding Breakage Indemnity                2.10 (b)
GAAP                                      1.03
Governmental Action                       3.04
Initial Revolving Credit
   Committed Amount                       2.01 (a)
Judgment Currency                         8.18 (a)
Letter of Credit                          6.03
Liquidation Currency                      8.18 (b)
Notional Euro-Rate Funding Office         2.12 (a)
Participants                              8.14 (b)
Permitted Liens                           6.02
Purchasing Lenders                        8.14 (c)
Related Litigation                        8.17 (b)
Revolving Credit Commitment               2.01 (a)
Revolving Credit Committed Amount         2.01 (a)
Revolving Credit Loans                    2.01 (a)
Transfer Lender Notes                     8.14 (c) (iv)

	(b)  In addition to other words and terms defined elsewhere in 
this Agreement, as used herein the following words and terms shall have the 
following meanings, respectively, unless the context hereof otherwise clearly 
requires:

	"Affiliate" of a Person shall mean (a) any Person which directly 
or indirectly controls, or is controlled by, or is under common control 
with, such Person and (b) any director or officer (or, in the case of a 
Person which is not a corporation, any individual having analogous 
powers) of such Person or of a Person who is an Affiliate of such Person 
within the meaning of the preceding clause (a).  For purposes of the 
preceding sentence, "control" of a Person means (i) the possession, 
directly or indirectly, of the power to direct or cause the direction of 
the management or policies of such Person, whether through the ownership 
of voting securities, by contract or otherwise and (ii) in any case 
shall include direct or indirect ownership (beneficially or of record) 
of, or direct or indirect power to vote, 5% or more of the outstanding 
shares of such Person (or in the case of a Person that is not a 
corporation, 5% or more of any class of equity interest).

	"Alternate Currencies" shall mean lawful currency of the Federal 
Republic of Germany, Canada and the United Kingdom.

	"Applicable Lending Office" shall mean, with respect to each 
Lender, such Lender's Domestic Lending Office in the case of the Base 
Rate Portion and such Bank's Eurocurrency Lending Office in the case of 
the Euro-Rate Portion.

	"Applicable Margin(s)" means for purposes of calculating (i) the 
applicable interest margin for the Euro-Rate Portion of any Revolving 
Credit Loan and (ii) the applicable rate of the Facility Fee for any 
date for purposes of Section 2.08 hereof, that percent per annum as set 
forth in the following table by reference to the column across from the 
applicable Level of the Consolidated Funded Debt Ratio.  For purposes 
hereof the Level of the Consolidated Funded Debt Ratio shall be 
determined as of the last day of each fiscal quarter of Borrower based 
upon the computations set forth in the most recent Performance Pricing 
Certificate delivered to and approved by the Lenders pursuant to Section 
5.01(c) (ii) hereof, and the corresponding Applicable Margins may be 
applied and effective as of the first Business Day of the month 
following the date on which the most recent Performance Pricing 
Certificate was required to be delivered (a "Pricing Effective
Date") to the Euro-Rate Portion of all then outstanding Loans and Loans 
thereafter made, renewed or converted and to the Facility Fees accruing 
from and after such Pricing Effective Date.

	If a Performance Pricing Certificate is not received by the date 
it is required to be delivered under Section 5.01 (c) (ii), without 
limiting any other rights and remedies of the Lenders, the Applicable 
Margin will be increased to that corresponding to Level IV from and as 
of the next Pricing Effective Date to the day which is five days after 
the date on which such Performance Pricing Certificate actually is 
delivered.  If the financial statements delivered pursuant to  Section 
5.01 (a) or 5.01 (b) demonstrate that the Level (and therefore the 
Applicable Margin) is higher or lower than that indicated by the most 
recent Performance Pricing Certificate, then such higher or lower Level 
and Applicable Margin shall be deemed to have been in effect retroactive 
to the immediately preceding Pricing Effective Date.

                 CONSOLIDATED          EURO-RATE      FACILITY FEE
                    FUNDED             APPLICABLE      APPLICABLE
                  DEBT RATIO             MARGIN          MARGIN
                  ----------           ----------      ----------
Level I 	Equal to or less
		than .75 to 1.00         .1250%          .0750%

Level II	Greater than .75
		to 1.00 but less
		than or equal to
		1.25 to 1.00             .1500%          .1000%

Level III	Greater than 1.25
		to 1.00 but less than
		or equal to 2.25 to
		1.00                     .2250%          .1250%

Level IV	Greater than 2.25
		to 1.00                  .4000%          .2500%

	The "Applicable Margin(s)" for the period from the Closing Date to 
the first Pricing Effective Date shall be those corresponding to Level 
II. 

	"Base Rate Portion" of any Loan or Loans shall mean at any time  
the portion, including the whole, of such Loan or Loans bearing interest 
at such time (i) under the Base Rate Option or (ii) in accordance with 
Section 2.09 (c) (ii) 
hereof.  If no Loan or Loans is specified, "Base Rate Portion" shall 
refer to the Base Rate Portion of all Loans outstanding at such time.

	"Bid Loan Borrowing" shall mean a  borrowing consisting of a Bid 
Loan or concurrent Bid Loans having the same Funding Period.

	"Bid Loan" shall mean a Loan from a  Lender to the Borrower 
pursuant to the procedures described in Section 2.02.

	"Bid Loan Notes" shall mean the promissory notes of the Borrower 
executed and delivered under Section 2.02(k), and any promissory note 
issued in substitution therefor pursuant to Section 8.14(c), together 
with all extensions, renewals, refinancings or refundings thereof in 
whole or in part.

	"Business Day" shall mean any day other than a Saturday, Sunday, 
public holiday under the laws of the Commonwealth of Pennsylvania or 
other day on which banking institutions are authorized or obligated to 
close in the cities in which the Lenders' Domestic Offices are located.

	"Capital Expenditures" of any Person shall mean, for any period, 
all expenditures (whether paid in cash or accrued as liabilities during 
such period) of such Person during such period which would be classified 
as capital expenditures in accordance with GAAP (including, without 
limitation, expenditures for maintenance and repairs which are 
capitalized, and Capitalized Leases to the extent an asset is recorded 
in connection therewith in accordance with GAAP).

	"Capitalized Lease" shall mean at any time any lease which is, or 
is required under GAAP to be, capitalized on the balance sheet of the 
lessee at such time, and "Capitalized Lease Obligation" of any Person at 
any time shall mean the aggregate amount which is, or is required under 
GAAP to be, reported as a liability on the balance sheet of such Person 
under a Capitalized Lease.

	"CERCLA" shall mean the Comprehensive Environmental Response, 
Compensation and Liability Act, as amended, and any successor statute of 
similar import, and regulations thereunder, in each case as in effect 
from time to time.

	"Change in Control" shall be deemed to have occurred if after the 
date hereof, any Person or related group of Persons shall have come into 
possession of, directly or indirectly, the power to direct or cause the 
direction of or the power to veto (or shall in fact exercise any such 
power) the management and policies of the Borrower through the ownership 
or control of more than thirty percent (30%) of the voting securities of 
the Borrower, whether through ownership of securities or partnership or 
other ownership interest, by contract or otherwise.

	"Closing Date" shall mean the date of the first Loan hereunder.

	"Code" means the Internal Revenue Code of 1986, as amended, and 
any successor statute of similar import, and regulations thereunder, in 
each case as in effect from time to time.  References to sections of the 
Code shall be construed also to refer to any successor sections.

	"Commitments" of a Lender shall mean the Lender's Revolving Credit 
Commitment.

	"Consolidated Funded Debt Ratio" means the ratio of (i) the 
aggregate Indebtedness of the Borrower and its Consolidated Subsidiaries 
as of the end of the fiscal quarter immediately prior to the date of 
computation thereof, to (ii) Consolidated Operating Cash Flow for the 
four fiscal quarters immediately prior to the date of the computation 
thereof.

	"Consolidated Interest Expense" for any period shall mean the 
total interest expense of the Borrower and its Consolidated Subsidiaries 
for such period determined on a  consolidated basis in accordance with 
GAAP.

	"Consolidated Net Income" for any period shall mean the net 
earnings (or loss) after taxes of the Borrower and its consolidated 
Subsidiaries for such period determined on a consolidated basis in 
accordance with GAAP.

	"Consolidated Operating Cash Flow" for any period, with respect to 
the Borrower and its Consolidated Subsidiaries shall mean the sum of (a) 
Consolidated Net Income for such period, (b) Consolidated Interest 
Expense for such period, (c) depreciation and amortization, (d) charges 
for foreign, federal, state and local income taxes for such period, and 
(e) extraordinary losses to the extent included in determining 
Consolidated Net Income for such period, minus extraordinary gains to 
the extent included in determining Consolidated Net Income for such 
period, all as determined on a consolidated basis in accordance with 
GAAP.

	"Consolidated Subsidiary" shall mean those Subsidiaries whose 
accounts are or should be consolidated with those of the Company in 
accordance with GAAP.

	"Consolidated Tangible Net Worth" at any time shall mean the total 
amount of stockholders' equity of the Borrower and its Consolidated 
Subsidiaries at such time determined on a consolidated basis in 
accordance with GAAP, except that there shall be deducted therefrom (i) 
treasury stock, (ii) preferred stock containing any provision for 
mandatory cash redemption or cash redemption at the option of the holder 
and (iii) the book value of all intangible assets of the Borrower and 
its Consolidated Subsidiaries at such time determined on a consolidated 
basis in accordance with GAAP, including but not limited to goodwill, 
organization cost, patents, copyrights, trademarks, trade names, 
franchises, licenses, research and development expenses, unamortized 
debt discount and expense and further including but not limited to all 
write-ups after the date hereof in the value of assets above historical 
cost less depreciation or amortization required by GAAP, except for 
write-ups in the value of (i) marketable securities to the extent 
permitted by the valuation principle of "lower of cost or market" to the 
extent permitted by GAAP, (ii) investments in common stock accounted for 
by the equity method to the extent permitted by GAAP and (iii) 
investment made in an enterprise doing business abroad resulting from 
changes in exchange rates to the extent permitted by GAAP.

	"Controlled Group Member" shall mean each trade or business 
(whether or not incorporated) which together with the Borrower is 
treated as a single employer under Section 4001 (a) (14) or 4001 (b) (1) 
of ERISA or Section 414 (b), (c), (m) or (o) of the Code.

	"Corresponding Source of Funds" shall mean, in the case of each 
Lender's Pro Rata share of any Funding Segment of the Euro-Rate Portion, 
the proceeds of hypothetical receipts by such Lender's Notional Euro-
Rate Funding Office or by such Lender through a Notional Euro-Rate 
Funding Office of one or more deposits in Dollars or the Alternate 
Currency, as the case may be, in the interbank eurocurrency market at 
the beginning of the Euro-Rate Funding Period corresponding to such 
Funding Segment having maturities approximately equal to such Euro-Rate 
Funding Period and in an aggregate amount approximately equal to such 
Lender's Pro Rata share of such Funding Segment.

	"Dollar," "Dollars" and the symbol "$" shall mean lawful money of 
the United States of America.

	"Domestic Lending Office" means, with respect to each Lender, the 
office of such Lender specified as its "Domestic Lending Office" below 
its name on the signature page hereto, or such other office of such 
Lender as such Lender may from time to time specify to the Borrower and 
the other Lenders.

	"Environmental Affiliate" shall mean, with respect to any Person, 
any other Person whose liability (contingent or otherwise) for any 
Environmental Claim such Person has retained, assumed or otherwise is 
liable for (by Law, agreement or otherwise).

	"Environmental Approvals" shall mean any Governmental Action 
pursuant to or required under any Environmental Law.

	"Environmental Claim" shall mean, with respect to any Person, any 
action, suit, proceeding, investigation, notice, claim, complaint, 
demand, request for information or other communication (written or oral) 
by any other Person (including but not limited to any Governmental 
Authority, citizens' group or present or former employee of such Person) 
alleging, asserting or claiming any actual or potential (a) violation of 
any Environmental Law, (b) liability under any Environmental Law or (c) 
liability for investigatory costs, cleanup costs, governmental response 
costs, natural resources damages, property damages, personal injuries, 
fines or penalties arising out of, based on or resulting from the 
presence, or release into the environment, of any Environmental Concern 
Materials at any location, whether or not owned by such Person.

	"Environmental Concern Materials" shall mean any flammable 
substance, explosive, radioactive material, hazardous material, 
hazardous waste, toxic substance, solid waste, pollutant, contaminant of 
any related material, raw material, substance, product or by-product of 
any substance regulated by any Environmental Law (including but not 
limited to any "hazardous substance" as defined in CERCLA or any similar 
state Law).

	"Environmental Law" shall mean any Law, whether now existing or 
subsequently enacted or amended, relating to (a) pollution or protection 
of the environment, including natural resources, (b) exposure of 
Persons, including but not limited to employees, to Environmental 
Concern Materials, (c) protection of the public health or welfare from 
the effects of products, by-products, wastes, emissions, discharges or 
releases of Environmental Concern Materials or (d) regulation of the 
manufacture, use or introduction into commerce of Environmental Concern 
Materials including their manufacture, formulation, packaging, labeling, 
distribution, transportation, handling, storage or disposal.  Without 
limitation, "Environmental Law" shall also include any Environmental 
Approval and the terms and conditions thereof.

	"ERISA" shall mean the Employee Retirement Income Security Act of 
1974, as amended, and any successor statute of similar import, and 
regulations thereunder, in each case in effect from time to time.  
References to sections of ERISA shall be construed also to refer to any 
successor sections.

	"Eurocurrency Lending Office" means, with respect to any Bank, the 
Office of such Bank specified as its "Eurocurrency Lending Office" below 
its name on the signature page hereto (or, if no such office is 
specified, its Domestic Lending Office), or such other office of such 
Lender as such Lender may from time to time specify to the Borrower and 
the other Lenders.

	"Euro-Rate" for any day shall mean for each Lender's Pro Rata 
share of each Funding Segment of the Euro-Rate Portion corresponding to 
a proposed or existing Euro-Rate Funding Period the rate per annum which 
is the highest of the rates determined by each Lender by dividing (the 
resulting quotient to be rounded upward to the nearest 1/100 of 1%) (a) 
the rate of interest (which shall be the same for each day in such Euro-
Rate Funding Period) determined in good faith by such Lender in 
accordance with its usual procedures (which determination shall be 
conclusive absent manifest error) to be the average of the rates per 
annum for deposits in Dollars or an Alternate Currency, as the case may 
be, offered to major money center banks in the London Interbank market 
at approximately 11:00 a.m., London time, two London Business Days prior 
to the first day of such Euro-Rate Funding Period for delivery on the 
first day of such Euro-Rate Funding Period in amounts comparable to such 
Funding Segment and having maturities comparable to such Funding Period 
by (b) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.  
If any Lender fails to provide a Euro-Rate upon request the highest of 
the rates actually furnished by the Lenders shall be the "Euro-Rate".

	"Euro-Rate Portion" of any Loan or Loans shall mean at any time 
the portion, including the whole, of such Loan or Loans bearing interest 
at any time under the Euro-Rate Option or at a rate calculated by 
reference to the Euro-Rate under Section 2.09 (c) (i) hereof.  If no 
Loan or Loans is specified, "Euro-Rate Portion" shall refer to the Euro-
Rate Portion of all Loans outstanding at such time.

	"Euro-Rate Reserve Percentage" for any day shall mean the 
percentage (expressed as a decimal, rounded upward to the nearest 1/100 
of 1%), as determined in good faith by a Lender (which determination 
shall be conclusive absent manifest error), which is in effect on such 
day as prescribed by the Board of Governors of the Federal Reserve 
System (or any successor) representing the maximum reserve requirement 
(including, without limitation, supplemental, marginal and emergency 
reserve requirements) with respect to eurocurrency funding (currently 
referred to as "Eurocurrency liabilities") of a member bank in such 
System.  The Euro-Rate shall be adjusted automatically as of the 
effective date of each change in the Euro-Rate Reserve Percentage.  The 
Euro-Rate Option shall be calculated in accordance with the foregoing 
whether or not such Lender is actually required to hold reserves in 
connection with its eurocurrency funding or, if required to hold such 
reserves, is required to hold reserves at the "Euro-Rate Reserve 
Percentage" as herein defined.

	"Event of Default" shall mean any of the Events of Default 
described in Section 7.01 hereof.

	"Existing Credit Agreement" shall mean the Credit Agreement dated 
as of July 29, 1993 between the Borrower and Lenders, as amended.

	"Federal Funds Effective Rate" for any day shall mean the rate per 
annum (rounded upward to the nearest 1/100 of 1%) determined by each 
Lender (which determination shall be conclusive absent manifest error) 
to be the rate per annum announced by the Federal Reserve Bank of New 
York (or any successor) on such day as being the weighted average of the 
rates on overnight Federal funds transactions arranged by Federal funds 
brokers on the previous trading day, as computed and announced by such 
Federal Reserve Bank (or any successor) in substantially the same manner 
as such Federal Reserve Bank computes and announces the weighted average 
it refers to as the "Federal Funds Effective Rate" as of the date of 
this Agreement; provided, that if such Federal Reserve Bank (or its 
successor) does not announce such rate on any day, the "Federal Funds 
Effective Rate" for such day shall be the Federal Funds Effective Rate 
for the last day on which such rate was announced.

	"Fees" shall mean the  Facility Fees.

	"Funding Period" shall mean the period during which an interest 
rate Option or Bid Rate shall apply, selected in accordance with Section 
2.04 or 2.02(j).

	"Funding Segment" of the Euro-Rate Portion  of the Loans  at any 
time shall mean the entire principal amount of such Portion to which at 
the time in question there is applicable a particular Funding Period 
beginning on a particular day and ending on a particular day.

	"Governmental Authority" shall mean any government or political 
subdivision or any agency, authority, bureau, central bank, commission, 
department or instrumentality of either, or any court, tribunal, grand 
jury or arbitrator, in each case whether foreign or domestic.

	"Guaranty Equivalent":  A Person (the "Deemed Guarantor") shall be 
deemed to be subject to a Guaranty Equivalent in respect of any 
Indebtedness (the "Assured Obligation") of another Person (the "Deemed 
Obligor") if the Deemed Guarantor directly or indirectly guarantees, 
becomes surety for, endorses, assumes, agrees to indemnify the Deemed 
Obligor against, or otherwise agrees, becomes or remains liable 
(contingently or otherwise) for, such Assured Obligation.

	"Indebtedness" of a Person shall mean:

	(a)  All obligations on account of money borrowed by, or 
credit extended	to or on behalf of, or for or on account of 
deposits with or advances to, such Person, other than trade 
accounts payable incurred in the ordinary course of business and 
consistent with past practice;

	(b)  All obligations of such Person evidenced by bonds, 
debentures, notes or similar instruments;

	(c)  All obligations of such Person for the deferred 
purchase price of property or services and all obligations secured 
by a Lien on property owned by such Person (whether or not 
assumed);

	(d)  All obligations of such Person under Capitalized Leases 
(without regard to any limitation of the rights and remedies of the 
holder of such Lien or the lessor under such Capitalized Lease to 
repossession or sale of such property);

	(e)  From the date a letter of credit issuer makes payment 
on a drawing under a letter of credit issued for the account of 
such Person, such Person's obligation to reimburse such issuer for 
such payment.

	(f)  All obligations of such Person in respect of 
acceptances or similar obligations issued for the account of such 
Person; and

	(g)  All obligations of such Person under a product 
financing or similar arrangements described in paragraph 8 of FASB 
Statement of Accounting Standards No. 49 or any similar requirement 
of GAAP.

	"Indemnified Parties" shall mean the Lenders, their respective 
affiliates, and the directors, officers, employees, attorneys and agents 
of each of the foregoing. 

	"Law" shall mean any law (including common law), constitution, 
statute, treaty, convention, regulation, rule, ordinance, order, 
injunction, writ, decree or award of any Governmental Authority.

	"Lender" shall mean any of the Lenders listed on the signature 
pages hereof and Persons becoming Lenders pursuant to Section 8.14 
hereof, but excluding Persons who cease to be Lenders pursuant to 
Section 8.14 hereof.

	"Lien" shall mean any mortgage, deed of trust, pledge, lien, 
security interest, charge or other encumbrance or security arrangement 
of any nature whatsoever, including but not limited to any conditional 
sale or title retention arrangement, and any assignment, deposit 
arrangement or lease intended as, or having the effect of, security.

	"Loan" shall mean any loan (including Revolving Credit Loans and 
Bid Loans) by a Lender to the Borrower under this Agreement, and "Loans" 
shall mean all Loans made by the Lenders under this Agreement.

	"Loan Documents" shall mean this Agreement, the Notes and Transfer 
Supplements and all other agreements and instruments extending, 
renewing, refinancing or refunding any indebtedness, obligation or 
liability arising under any of the foregoing, in each case as the same 
may be amended, modified or supplemented from time to time hereafter.

	"London Business Day" shall mean a Business Day on which dealings 
are carried on in the London interbank market and banks are open for 
business in London.

	"Material Adverse Effect" shall mean: (a) a material adverse 
effect on the business, operations or condition (financial or otherwise) 
of the Borrower and its Subsidiaries taken as a whole, (b) a material 
adverse effect on the ability of the Borrower to perform or comply with 
any of the terms and conditions of any Loan Document, or (c) a material 
adverse effect on the legality, validity, binding effect, enforceability 
or admissibility into evidence of any Loan Document, or the ability of 
any Lender to enforce any material rights or remedies under or in 
connection with any Loan Document (other than any such effects relating 
to loan agreements generally and not to the Loan Documents in 
particular).

	"Maturity Date" shall mean March 31, 2001

	"Multiemployer Plan" shall mean any employee benefit plan which is 
a "multiemployer plan" within the meaning of Section 4001 (a) (3) of 
ERISA and to which the Borrower or any Controlled Group Member has or 
had an obligation to contribute.

	"Note" or "Notes" shall mean the Revolving Credit Notes(s) or the 
Bid Loan Note(s), as the case may be, of the Borrower executed and 
delivered under this Agreement, together with all extensions, renewals, 
refinancings or refundings of any thereof in whole or in part.

	"Obligations" shall mean all indebtedness, obligations and 
liabilities of the Borrower to any Lender from time to time arising 
under or in connection with or related to or evidenced by this Agreement 
or any other Loan Document, and all extensions, renewals or refinancings 
thereof, whether such indebtedness, obligations or liabilities are 
direct or indirect, otherwise secured or unsecured, joint or several, 
absolute or contingent, due or to become due, whether for payment or 
performance, now existing or hereafter arising.  Without limitation of 
the foregoing, such indebtedness, obligations and liabilities include 
the principal amount of Loans, interest, Fees, indemnities or expenses 
under or in connection with this Agreement or any other Loan Document, 
and all extensions, renewals and refinancings thereof, whether or not 
such Loans were made in compliance with the terms and conditions of this 
Agreement or in excess of the obligation of the Lenders to lend.  
Obligations shall remain Obligations notwithstanding any assignment or 
transfer or any subsequent assignment or transfer of any of the 
Obligations or any interest therein.

	"Option" shall mean the Base Rate Option or the Euro-Rate Option, 
as the case may be.

	"Other Advances" means any loan or advance to Borrower made 
pursuant to uncommitted lines of credit (or similar arrangements) with 
any of PNC Bank, N.A., Mellon Bank, N.A. or Deutsche Bank and/or 
commercial paper pass through vehicles utilized by PNC Bank, N.A., 
Mellon Bank, N.A. or Deutsche Bank. 

	"Payment Office" means, for Dollars, the Domestic Lending Office 
of each Lender and, for the Alternate Currencies, the Eurocurrency 
Lending Office of each Lender or such office of each Lender as shall 
from time to time be selected by such Lender and notified by such Lender 
to the Borrower.

	"PBGC" means the Pension Benefit Guaranty Corporation established 
under Title IV of ERISA or any other governmental agency, department or 
instrumentality succeeding to the functions of said corporation.

	"Pension-Related Event" shall mean any of the following events or 
conditions:

	(a) Any action is taken by any Person (i) to terminate, or 
which would result in the termination of, a Plan either pursuant to 
its terms or by operation of law (including, without limitation, 
any amendment of a Plan which would result in a termination under 
Section 4041 (e) of ERISA), or (ii) to have a trustee appointed for 
a Plan pursuant to Section 4042 of ERISA;

	(b) PBGC notifies any Person of its determination that an 
event described in Section 4042 of ERISA has occurred with respect 
to a Plan, that a Plan should be terminated, or that a trustee 
should be appointed for a Plan;

	(c) Any Reportable Event occurs with respect to a Plan;

	(d) Any action occurs or is taken which could result in the 
Borrower becoming subject to liability for a complete or partial 
withdrawal by any Person from a Multiemployer Plan (including, 
without limitation, seller liability incurred under Section 4204 
(a) (2) of ERISA), or the Borrower or any Controlled Group Member 
receives from any Person a notice or demand for payment on account 
of any such alleged or asserted liability; or

	(e) (i) There occurs any failure to meet the minimum funding 
standard under Section 302 of ERISA or Section 412 of the Code with 
respect to a Plan, or any tax return is filed showing any tax 
payable under Section 4971 (a) of the Code with respect to any such 
failure, or the Borrower of any Controlled Group Member receives a 
notice of deficiency from the Internal Revenue Service with respect 
to any alleged or asserted such failure, or (ii) any request is 
made by any Person for a variance from the minimum funding 
standard, or an extension of the period for amortizing unfunded 
liabilities, with respect to a Plan.

	"Performance Pricing Certificate" shall mean a certificate in 
substantially the form of Exhibit C hereto, duly completed in a manner 
satisfactory to the Lenders and executed by a Responsible Officer of the 
Borrower.

	"Person" shall mean an individual, corporation, partnership, 
trust, unincorporated association, joint venture, joint-stock company, 
Governmental Authority or any other entity.

	"Plan" means any employee pension benefit plan within the meaning 
of Section 3 (2) of ERISA (other than a Multiemployer Plan) covered by 
Title IV of ERISA by reason of Section 4021 of ERISA, of which the 
Borrower or any Controlled Group Member is or has been within the 
preceding five years a "contributing sponsor" within the meaning of 
Section 4001 (a) (13) of ERISA, or which is or has been within the 
preceding five years maintained for employees of the Borrower or any 
Controlled Group Member.

	"Portion" shall mean the Base Rate Portion or the Euro-Rate 
Portion, as the case may be.

	"Potential Default" shall mean any event or condition which with 
notice, passage of time or a determination by the Lenders pursuant to 
Sections 7.01 (i), 7.01 (j) or 7.01 (k), or any combination of the 
foregoing, would constitute an Event of Default.

	"Pricing Effective Date" shall have the meaning set forth in the 
definition of "Applicable Margin."

	"Prime Rate" shall mean the interest rate per annum (calculated on 
the basis of a year of 365 or 366 days, as the case may be, and actual 
days elapsed) announced from time to time by Mellon Bank, N.A. as its 
prime rate.  The Prime Rate may be greater than or less than other 
interest rates charged by Mellon Bank, N.A. to other borrowers and is 
not solely based or dependent upon the interest rate which Mellon Bank, 
N.A. may charge any particular borrower or class of borrowers.

	"Pro Rata" shall mean from or to each Lender in proportion to: (i) 
when used with reference to a particular type of Loan, the percentage 
such Lender's outstanding Loans of such type represents of all 
outstanding Loans of such type, or if no Loans of such type are 
outstanding, the percentage such Lender's Commitment with respect to 
such type of Loans represents of the Commitments of all Lenders with 
respect to such type of Loans and (ii) when used with reference to all 
Loans, the percentage such Lender's outstanding Loans represents of all 
outstanding Loans, or if no Loans are outstanding, the percentage such 
Lender's Commitments represents of Commitments of all Lenders.

	"Quarterly Compliance Certificate" shall mean a certificate in 
substantially the form of Exhibit D hereto, duly completed and executed 
by a Responsible Officer of the Borrower.

	"Regular Payment Date" shall mean the last day of each June, 
September, December and March after the date hereof.

	"Reportable Event" means (i) a reportable event described in 
Section 4043 of ERISA and regulations thereunder for which the 30-day 
notice to the PBGC has not been waived pursuant to such regulations, 
(ii) a withdrawal by a substantial employer from a Plan to which more 
than one employer contributes, as referred to in Section 4063 (b) of 
ERISA, (iii) a cessation of operations at a facility causing more than 
twenty percent (20%) of Plan participants to be separated from 
employment, as referred to in Section 4068 (f) of ERISA, or (iv) a 
failure to make a required installment or other payment with respect to 
a Plan when due in accordance with Section 412 of the Code of Section 
302 of ERISA which causes the total unpaid balance of missed 
installments and payments (including unpaid interest) to exceed 
$750,000.

	"Responsible Officer" shall mean the President, Chief Financial 
Officer, Treasurer or any Vice President of the Borrower.

	"Revolving Credit Note" shall mean the promissory notes of the 
Borrower executed and delivered under Section 2.01 (c) hereof, any 
promissory note  issued in substitution therefor pursuant to Sections 
2.13 (b) or 8.14 (c) hereof, together with all extensions, renewals, 
refinancings or refundings thereof in whole or part.

	"Standard Notice" shall mean an irrevocable notice provided to 
each Lender on a Business Day which is

	(a)  On the same Business Day in the case of selection of, 
conversion to or renewal of the Base Rate Option or repayment of 
any Base Rate Portion;

	(b)  At least two London Business Days in advance in the 
case of selection of the Euro-Rate Option or repayment of any Euro-
Rate Portion denominated in Dollars; and

	(c)  At least three London Business Days in advance in the 
case of selection of the Euro-Rate Option or repayment of any Euro-
Rate Portion denominated in the Alternate Currencies.

	Standard Notice must be provided no later than 11:00 a.m., (or 
10:00 a.m. in the case of clause (b) above) (at the Domestic Lending 
Office of each Lender) on the last day permitted for such notice.

	"Subsidiary" of a Person at any time shall mean any corporation of 
which a majority (by number of shares or number of votes) of any class 
of outstanding capital stock normally entitled to vote for the election 
of one or more directors (regardless of any contingency which does or 
may suspend or dilute the voting rights of such class) is at such time 
owned directly or indirectly, beneficially or of record, by such Person 
or one or more Subsidiaries of such Person, and any trust of which a 
majority of the beneficial interest is at such time owned directly or 
indirectly, beneficially or of record, by such Person or one or more 
Subsidiaries or such Person.

	"Taxes" shall have the meaning set forth in Section 2.11 hereof.

	"Total  Committed Amounts" shall mean the sum of the  Revolving 
Credit Committed Amounts of all Lenders.

	"Transfer Effective Date" shall have the meaning set forth in the 
applicable Transfer Supplement.

	"Transfer Supplement" shall have the meaning set forth in Section 
8.14 (c) hereof.

	"Treasury Rate" as of any Funding Breakage Date shall mean the 
rate per annum determined by the applicable Lender (which determination 
shall be conclusive absent manifest error) to be the yield to maturity 
(expressed as a decimal and, in the case of the United States Treasury 
bills, converted to a bond equivalent yield) for United States Treasury 
securities maturing on the last day of the corresponding Funding Period 
and trading in the secondary market in reasonable volume (or if no such 
securities mature on such date, the rate determined by standard 
securities interpolation methods as applied to the series of securities 
maturing as close as possible to, but earlier than, such date, and the 
series of such securities maturing as close as possible to, but later 
than, such date).

	1.02.  Construction.  Unless the context of this Agreement 
otherwise clearly requires, references to the plural include the singular, the 
singular, the plural and the part the whole; "or" has the inclusive meaning 
represented by the phrase "and/or"; and "property" includes all properties and 
assets of any kind or nature, tangible or intangible, real, personal or mixed. 
References in this Agreement to "determination" (and similar terms) by any 
Lender include good faith estimates by such Lender (in the case of 
quantitative determinations) and good faith beliefs by such Lender (in the 
case of qualitative determinations).  The words "hereof," "herein," 
"hereunder" and similar terms in this Agreement refer to this Agreement as a 
whole and not to any particular provision of this Agreement.  The section and 
other headings contained in this Agreement and the Table of Contents preceding 
this Agreement are for reference purposes only and shall not control or affect 
the construction of this Agreement or the interpretation thereof in any 
respect.  Section, subsection and exhibit references are to this Agreement 
unless otherwise specified.

	1.03.  Accounting Principles.

	(a)  As used herein, "GAAP" shall mean generally accepted 
accounting principles in the United States (as such principles may change from 
time to time), applied on a basis consistent with the principles used in 
preparing the Borrower's financial statements as of June 30, 1995 and the 
fiscal year then ended.

	(b)  Except as other provided in this Agreement, all computations 
and determinations as to accounting or financial matters shall be made, and 
all financial statements to be delivered pursuant to this Agreement shall be 
prepared, in accordance with GAAP (including principles of consolidation where 
appropriate), and all accounting or financial terms shall have the meanings 
ascribed to such terms by GAAP.

	1.04.  Dollar Equivalent.  For purposes of this Agreement, the 
equivalent in Dollars of any Alternate Currency or the equivalent in any 
Alternate Currency of Dollars shall be determined in accordance with Section 
2.13.

                            ARTICLE II
                            THE CREDITS

	2.01  Revolving Credit Loans.

	(a) Subject to the terms and conditions and relying upon the 
representations and warranties herein set forth, each Lender, severally and 
not jointly, agrees (such agreement being herein called such Lender's 
"Revolving Credit Commitment") to make loans ("Revolving Credit Loans") to the 
Borrower at any time or from time to time on or after the date hereof and to 
but not including the Maturity Date; provided (A) at no time shall the sum of 
the outstanding aggregate principal amount of all  Revolving Credit Loans and 
Bid Loans exceed the Total  Committed Amount (or an equivalent amount thereof 
in the Alternate Currencies) and (B) at all times the outstanding aggregate 
principal amount of all Revolving Credit Loans made by each Lender shall be 
equal to the product of the percentage which its Revolving Credit Committed 
Amount represents of the Total Committed Amount times the outstanding 
aggregate principal amount of all Revolving Credit Loans.  Each Lender's  
"Revolving Credit Committed Amount" at any time shall be equal to the amount 
set forth as its "Initial Revolving Credit Committed Amount" below its name on 
the signature pages hereof (or the equivalent thereof in any Alternate 
Currency), as such amount may have been reduced under Section 2.01 (e) hereof 
at such time, and subject to transfer to another Lender as provided in Section 
8.14 hereof.

	(b)  Nature of Credit.  Within the limits of time and amount set 
forth in this Section 2.01, and subject to the provisions of this Agreement, 
the Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder.

	(c)  Revolving Credit Notes.  The obligation of the Borrower to 
repay the unpaid principal amount of the Revolving Credit Loans made to it by 
each Lender and to pay interest thereon shall be evidenced in part by 
promissory notes of the Borrower, dated the Closing Date (the "Revolving 
Credit Notes") in substantially the form attached hereto as Exhibit A, with 
the blanks appropriately filled, payable to the order of such Lender.

	(d)  Maturity.  To the extent not due and payable earlier, the 
Revolving Credit Loans shall be due and payable on the Maturity Date.

	(e)  Reduction of the Revolving Credit Committed Amounts.  The 
Borrower may at any time or from time to time reduce Pro Rata the Revolving 
Credit Committed Amounts of the Lenders to an aggregate amount (which may be 
zero) not less than the sum of the unpaid principal amount of the Revolving 
Credit Loans  and the Bid Loans, as the case may be, then outstanding plus the 
principal amount of all Revolving Credit Loans and the Bid Loans, as the case 
may be, not yet made as to which notice has been given by the Borrower under 
Section 2.03 or 2.02 hereof.  Any reduction of the Revolving Credit Committed 
Amounts shall be in an aggregate amount which is an integral multiple of 
$3,000,000. Reduction of the Revolving Credit Committed Amounts shall be made 
by providing not less than three Business Days' notice (which notice shall be 
irrevocable) to such effect to each Lender.

	2.02.  Bid Loans.

	(a)  Bid Loans.  The Borrower may, as set forth in this Section 
2.02, request one or more of the Lenders to make one or more Bid Loans to the 
Borrower at any time or from time to time prior to the  Maturity Date.  Each 
Lender may, but shall have no obligation to, offer to make one or more such 
Bid Loans and the Borrower may, but shall have no obligation to, accept any 
such offers in the manner set forth in this Section 2.02.  The sum of the 
outstanding aggregate principal amount of all Bid Loans and all Revolving 
Credit Loans shall at no time exceed the Total Committed Amount (or an 
equivalent amount thereof in the Alternate Currencies).  All Bid Loans shall 
be denominated in Dollars.

	(b)  Bid Loan Procedures.    Prior to 11:00 a.m., Pittsburgh time, 
on the Business Day of any Bid Loan, the Borrower and the Lender making such 
Bid Loan shall have verbally agreed that such Lender will make and the 
Borrower will accept such Bid Loan, which agreement shall include agreement as 
to the following matters:

	(i)  the proposed date of such Bid Loan and the Funding 
Period therefor;

	(ii) the principal amount of such Bid Loan, selected in 
accordance with Section 2.02(a); and

	(iii) the fixed rate of interest per annum, calculated on 
the basis of a 365 or 366 day year, as the case may be,(rounded upwards, 
if necessary, to the nearest 1/10,000th of 1%) (the "Bid Rate") 
applicable to such Bid Loan.

	(c)  Confirmation to the Lenders.  The Borrower shall, by 11:30 
a.m., Pittsburgh time, on the day (which shall be a Business Day) of a 
proposed Bid Loan, deliver to each Lender, by telex or telecopy, confirmation 
of the Bid Loans it has agreed to accept and that any Lender or Lenders have 
agreed to make on such day in substantially the form of Exhibit E (a "Bid Loan 
Confirmation").  The Bid Loan Confirmation shall specify (i) the principal 
amount of each outstanding and pending Loan, including such Bid Loan(s) being 
made; (ii) the Funding Period for each outstanding and pending Loan, including 
such Bid Loan(s) being made; (iii) the interest rate applicable to each 
outstanding and pending Loan, including such Bid Loan(s) being made; (iv) the 
identity of the Lender for each outstanding and pending Loan,  including such 
Bid Loan(s) being made and (v) the principal amount of each outstanding and 
pending Other Advance, together with the principal amount, and maturity date 
thereof, the interest applicable thereto and the identity of the lender 
thereof.

	(d)  Funding of Bid Loans.  Not later than 3:00 p.m. Pittsburgh 
time, on the date agreed to by the Borrower and a Lender pursuant to Section 
2.02 (b), such Lender shall make the amount of its Bid Loan available to the 
Borrower in immediately available funds at the Borrower's Account No.127-1718 
at Mellon Bank, N.A. or such other Borrower account as may be designated in 
the Bid Loan Confirmation.  If any Lender makes a new Bid Loan hereunder on a 
day on which the Borrower is to repay all or any part of an outstanding Bid 
Loan from such Lender, such Lender shall apply the proceeds of its new Bid 
Loan to make such repayment and only an amount equal to the difference (if 
any) between the amount being borrowed and the amount being repaid shall be 
made available by such Lender to the Borrower as provided by this Section 2.02 
(d), or remitted by the Borrower to such Lender as provided in Section 2.09, 
as the case may be.

	(e)  Bid Loan Maturity Dates.  The principal amount of each Bid 
Loan shall be due and payable on the last day of the applicable Funding Period 
agreed to by the Borrower and the Lender making such Bid Loan (the "Bid Loan 
Maturity Date").  Bid Loans shall not be prepaid.

	(f)  Bid Loan Interest Payment Dates.  Interest on each Bid Loan 
shall be due and payable on the Bid Loan Maturity Date thereof and thereafter 
on demand at the rates provided for in Section 2.09 (c).

	(g)  Utilization of Revolving Credit Commitment.  For purposes of 
determining the available Revolving Credit Commitments of the Lenders at any 
time , each outstanding Bid Loan shall be deemed to have utilized the 
Revolving Credit Commitments of the Lenders (including those Lenders that have 
not made such Bid Loan) Pro Rata in accordance with their Revolving Credit 
Commitments.

	(h)  Interest Rates for Bid Loans.  The outstanding principal 
amount of each Bid Loan shall bear interest for each day until due at a rate 
per annum equal to the Bid Rate quoted by the Lender making such Bid Loan.

	(i)  Principal Amounts.  The aggregate principal amount of each 
Bid Loan shall be at least $1,000,000 or a higher integral multiple of 
$100,000.

	(j)  Funding Periods.  The Funding  Period for any Bid Loan shall 
be for any period up to and including 90 days; provided, (i) no such Funding 
Period shall end after the Maturity Date and (ii) the Borrower shall, in 
selecting such Funding Periods, allow for foreseeable mandatory repayments of 
the Loans.

	(k)  Bid Loan Notes.  The obligation of the Borrower to repay the 
unpaid principal amount of the Bid Loans made to it by each Lender and to pay 
interest thereon shall be evidenced in part by promissory notes of the 
Borrower, dated of even date herewith substantially the form attached hereto 
as  Exhibit B, payable to the order of such Lender.

	2.03.  Making of Revolving Credit Loans.  Whenever the Borrower 
desires that the Lenders make Revolving Credit Loans, the Borrower shall 
provide Standard Notice to each Lender setting forth the following 
information.

	(a)  The date, which shall be a Business Day, on which such 
proposed Loans are to be made and the amount of each Lender's Loan;

	(b)  Whether such Loans shall be denominated in Dollars or an 
Alternate Currency;

	(c)  The aggregate principal amount of such proposed Loans, which 
shall be the sum of the principal amounts selected pursuant to clause 
(e) of this Section 2.03, and which shall be an integral multiple of 
$100,000 (or the equivalent thereof in an Alternate Currency) not less 
than $1,000,000 (or the equivalent thereof in an Alternate Currency);

	(d)  The interest rate Option or Options selected in accordance 
with Section 2.04 (a) hereof and the principal amounts selected in 
accordance with Section 2.04 (c) hereof of the Base Rate Portion and 
each Funding Segment of the Euro-Rate Portion of such proposed Loans; 

	(e)  With respect to each such Funding Segment of such proposed 
Loans, the Funding Period to apply to such Funding Segment, selected in 
accordance with Section 2.04 (b) hereof and

	(f)  A summary of all then outstanding and pending Loans and Other 
Advances, including the amounts thereof, the identity of the lender or 
lenders making or to make such Loans or Other Advances, the currency in 
which such Loans or Other Advances were made or are to be made and the 
Funding Period or maturity dates thereof.

Unless any applicable condition specified in Article IV hereof has not been 
satisfied, on the date specified in such Standard Notice each Lender shall 
make the proceeds of its Revolving Credit Loans available to the Borrower in 
immediately available funds at the Borrower's Account No. 127-1718 at Mellon 
Bank, N.A. or such other Borrower account as may be designated in such 
Standard Notice  at such Lender's Applicable Lending Office, no later than 
3:00 p.m., Pittsburgh time, in funds immediately available at such Office.

	2.04.  Interest Rates, Funding Periods, and Amounts. 

	(a)  Optional Bases of Borrowing.  The unpaid principal amount of 
the Loans shall bear interest for each day until due on one or more bases 
selected by the Borrower from among the interest rate Options set forth below.  
Subject to the provisions of this Agreement the Borrower may select different 
Options to apply simultaneously to different Portions of the Loans and may 
select different Funding Segments to apply simultaneously to different parts 
of the Euro-Rate Portion of the Loans.  The aggregate number of Funding 
Segments applicable to the Euro-Rate Portion of the Revolving Credit Loans at 
any time shall not exceed five. The Base Rate Option shall only be available 
with respect to Loans denominated in Dollars.

	(i)  Base Rate Option:  A rate per annum for each day (computed on 
the basis of a year of 365 or 366 days and actual days elapsed) equal to 
the Base Rate for such day.  The "Base Rate" for any day shall mean the 
greater of (a) the Prime Rate for such day and (b) 0.25% plus the 
Federal Funds Effective Rate for such day such interest rate to change 
automatically from time to time effective as of the effective date of 
each change in the Prime Rate or the Federal Funds Effective Rate.  If 
on any date the Federal Funds Rate cannot be ascertained, then the Base 
Rate shall be determined on the basis of the Prime Rate.

	(ii)  Euro-Rate Option:  A rate per annum (based on a year of 360 
days and actual days elapsed) for each day equal to the Euro-Rate for 
such day plus the Applicable Margin for such day. 

	(iii)  Notification:  Each Lender shall, upon request, give prompt 
notice to the Borrower of the Euro-Rate determined or adjusted in 
accordance with the definitions of the Euro-Rate, which determination or 
adjustment shall be conclusive if made in good faith.  The Borrower 
shall give written notice to the Lenders setting forth the rate quoted 
by each Lender, and designating the highest thereof as the Euro-Rate, 
promptly upon determining such Euro-Rate, and in no event later than 
3:00 p.m. on the day Standard Notice with respect to such Loan is given.

	(b)  Funding Periods.  At any time when the Borrower shall select, 
convert to or renew the Euro-Rate Option to apply to any part of 
the Loans, the Borrower shall specify one or more Funding Periods 
during which each such Option shall apply. Such Funding Periods 
shall be for one week and one, two, three or six months for 
Revolving Credit Loans ("Euro-Rate Funding Period"), provided that:

	(i)  Each Euro-Rate Funding Period shall begin on a London 
Business Day, and the term "month", when used in connection with a Euro-
Rate Funding Period, shall be construed in accordance with prevailing 
practices in the interbank eurocurrency market at the commencement of 
such Euro-Rate Funding Period, as determined in good faith by each 
Lender (which determination shall be conclusive absent manifest error);

	(ii)  The Borrower may not select a Funding Period that would end 
after the Maturity Date; and

	(iii)  The Borrower shall, in selecting any Funding Period for the 
Loans, allow for foreseeable mandatory repayments of the Loans.

	(c)  Transactional Amounts.  Every selection of, conversion from, 
conversion to or renewal of an interest rate Option and every payment or 
repayment of any Loans shall be in a principal amount such that after giving 
effect thereto the aggregate principal amount of the Base Rate Portion of the 
Revolving Credit Loans, or the aggregate principal amount of each Funding 
Segment of the Euro-Rate Portion of the Revolving Credit Loans, shall be as 
set forth below:

PORTION OR FUNDING SEGMENT          ALLOWABLE AGGREGATE PRINCIPAL AMOUNTS
- --------------------------          -------------------------------------
Base Rate Portion                   Any;

Each Funding Segment of the
Euro-Rate Portion                   $1,000,000 or an integral multiple of
                                    $100,000 in excess of $1,000,000.

	(d)  Euro-Rate Unascertainable; Impracticability.  If

	(i)  on any date on which a Euro-Rate would otherwise be set any 
Lender shall have determined in good faith (which determination shall be 
conclusive absent manifest error) that:

	(A)  adequate and reasonable means do not exist for 
ascertaining such Euro-Rate,

	(B)  a contingency has occurred which materially and 
adversely affects the interbank eurocurrency market,  or

	(C)  the effective cost to such Lender of funding a proposed 
Funding Segment of the Euro-Rate Portion from a Corresponding 
Source of Funds shall exceed the Euro-Rate applicable to such 
Funding Segment, or

	(ii)  at any time any Lender shall have determined in good faith 
(which determination shall be conclusive absent manifest error) that the 
making, maintenance or funding of any part of the Euro-Rate Portion in 
Dollars or any Alternate Currency has been made impracticable, or 
unlawful by compliance by such Lender or a Notional Euro-Rate Funding 
Office in good faith with any Law or guideline or interpretation or 
administration thereof by any Governmental Authority charged with the 
interpretation or administration thereof or with any request or 
directive or any such Governmental Authority (whether or not having the 
force of law);

	then, and in any such event, such Lender may notify the Borrower 
and the other Lenders of such determination.  Upon such date as shall be 
specified in such notice (which shall not be earlier than the date such notice 
is given), the obligation of such Lender to allow the Borrower to select, 
convert to or renew the Euro-Rate Option or to make Loans or redenominate 
Loans in Dollars or any Alternate Currency (whichever event has given rise to 
an event described in clause (i) or (ii) above) shall be suspended until such 
Lender shall have later notified the Borrower and the other Lenders of such 
Lender's determination in good faith (which determination shall be conclusive 
absent manifest error) that the circumstances giving rise to such previous 
determination no longer exist.

	If any Lender notifies the Borrower of a determination under 
subsection (ii) of this Section 2.04 (d), the Euro-Rate Portion of the Loans 
of such Lender (the "Affected Lender") shall automatically be converted to the 
Base Rate Option as of the date specified in such notice (and accrued interest 
thereon shall be due and payable on such date).

	If at the time a Lender makes a determination under subsection (i) 
or (ii) of this Section 2.04 (d) the Borrower previously has notified the 
Lenders that it wishes to select, convert to or renew the Euro-Rate Option 
with respect to any proposed Loans but such Loans have not yet been made, such 
notification shall be deemed to provide for selection of, conversion to or 
renewal of the Base Rate Option instead of the Euro-Rate Option with respect 
to such Loans of such Lender.

	2.05.  Conversion or Renewal of Interest Rate Options.  

	(a)  Conversion or Renewal of Dollar Loans.  Subject to the 
provisions of Section 2.04 and 2.10 (b) hereof, and if no Event of Default or 
Potential Default shall have occurred and be continuing or shall exist, the 
Borrower may (i) convert any interest rate Option or Options applicable to 
Loans denominated in a particular currency to one or more different interest 
rate Options applicable to Loans denominated in the same currency and (ii) may 
renew the Euro-Rate Option as to any Funding Segment of the Euro-Rate Portion 
denominated in the same currency:

	(i)  At any time with respect to conversion from the Base Rate 
Option; or

	(ii)  At the expiration of any Funding Period with respect to 
conversions from or renewals of the Euro-Rate Option as to the Funding 
Segment corresponding to such expiring Funding Period.

	(b)  Conversion of Currency.  Subject to the provisions of 
Sections 2.04 and 2.10 hereof, and if no Event of Default or Potential Default 
shall have occurred and be continuing or shall exist, the Borrower may convert 
any Loans denominated in Dollars bearing interest under any interest rate 
Option to Loans denominated in an Alternate Currency bearing interest under 
the Euro-Rate Option, and may convert any Loans denominated in an Alternate 
Currency bearing interest at the Euro-Rate Option to Loans denominated in 
Dollars bearing interest at any interest rate Option; provided that any such 
conversion relating to any Funding Segment of the Euro-Rate Portion may only 
occur on the last day of the corresponding Funding Period.

	(c)  Procedures.  Whenever the Borrower desires to convert or 
renew any interest rate Option or Options or currency, the Borrower shall 
provide to each Lender Standard Notice setting forth the following 
information:

	(i)  The date, which shall be a Business Day, on which the 
proposed conversion or renewal is to be made;

	(ii)  The proposed currency conversion, if any;

	(iii)  The principal amounts selected in accordance with Section 
2.04 (c) hereof of the Base Rate Portion and each Funding Segment of the 
Euro-Rate Portion to be converted from or renewed;

	(iv)  The interest rate Option or Options selected in accordance 
with Section 2.04 (a) hereof and the principal amounts selected in 
accordance with Section 2.04 (c) hereof of the Base Rate Portion and 
each Funding Segment of the Euro-Rate Portion to be converted to; and

	(v)  With respect to each Funding Segment to be converted to or 
renewed, the Funding Period selected in accordance with Section 2.04 (b) 
hereof to apply to such Funding Segment.

Standard Notice having been so provided, after the date specified in such 
Standard Notice, interest shall be calculated upon the principal amount of the 
Loans as so converted or renewed.  Interest on the principal amount of any 
part of the Loans converted or renewed (automatically or otherwise) shall be 
due and payable on the conversion or renewal date.

	(d)  Failure to Convert or Renew.  Absent due notice from the 
Borrower of conversion or renewal on the last day of any Funding Period, any 
part of the Euro-Rate Portion for which such notice is not received shall be 
converted automatically to a Loan denominated in Dollars bearing interest at 
the Base Rate Option on the last day of the expiring Funding Period.

	2.06.  Repayments.  (a)  Generally.  Wherever the Borrower desires 
or is required to repay any part of its Loans, it shall provide Standard 
Notice to each Lender setting forth the following information:

	(i)  Whether such repayment is to be applied to the Revolving 
Credit Loans or Bid Loans;

	(ii)  The date, which shall be a Business Day, on which the 
proposed repayment is to be made;

	(iii)  The total principal amount of such repayment, which shall 
be the sum of the principal amounts selected pursuant to clause (iv) of 
this Section 2.06 and

	(iv)  The principal amounts selected in accordance with Section 
2.04 (c) hereof of the Base Rate Portion and each part of each Funding 
Segment of the Euro-Rate Portion and the principal amount selected in 
accordance with Section 2.02 (i) hereof of Bid Loans (identified by 
reference to their Funding Period).

Standard Notice having been so provided, on the date specified in  such 
Standard Notice, the principal amounts of the Base Rate Portion and each part 
of the Euro-Rate Portion specified in such notice, together with interest on 
each such principal amount to such date, shall be due and payable.

	(b)  Optional Repayments.  The Borrower shall have the right at 
its option from time to time to repay its Revolving Credit Loans in whole or 
part without premium or penalty (subject, however, to Section 2.10 (b) 
hereof):

	(i)  At any time with respect to any part of the Base Rate 
Portion; or

	(ii)  At the expiration of any Funding Period with respect to 
repayment of any Bid Loan, or the Euro-Rate Portion with respect to any 
part of the Funding Segment corresponding to such expiring Funding 
Period.

Any such repayment shall be made in accordance with Section 2.09 hereof.

	(c)  Mandatory Repayments Required as a Result of Currency 
Fluctuations.

	If on the last day of any Euro-Rate Funding Period for any Funding 
Segment of the Revolving Credit Loans, that is denominated in an Alternate 
Currency, the equivalent in Dollars of the aggregate principal amount of the 
Loans then outstanding exceeds 105% of the Total Committed Amounts, the 
Borrower shall on such last day repay an aggregate principal amount of such 
type of Loans so that after such repayment, the Dollar equivalent of the 
outstanding principal amount of the Loans shall not exceed the Total Committed 
Amounts.

	2.07.  Interest Payment Dates.  Interest on the Base Rate Portion 
shall be due and payable on each Regular Payment Date.  Interest on each 
Funding Segment of the Euro-Rate Portion shall be due and payable on the last 
day of the corresponding Euro-Rate Funding Period , as the case may be, and, 
if a Euro-Rate Funding Period is longer than three months, also every third 
month during such Funding Period.  After maturity of any part of the Loans (by 
acceleration or otherwise), interest on such part of the Loans shall be due 
and payable on demand.

	2.08  Facility Fees.  The Borrower shall pay to each Lender a 
facility fee (the "Facility Fee") equal to the Applicable Margin relating to 
the Facility Fee per annum (based on a year of 365 or 366 days, as the case 
may be, and actual days elapsed) for each day from and including the date of 
this Agreement to but not including the Maturity Date, on the amount (not less 
than zero) equal to such Lender's Revolving Credit Committed Amount on such 
day. Such Facility Fee shall be due and payable for the preceding period for 
which such fee has not been paid:  (i)  on each Regular Payment Date, and (ii) 
on the Maturity Date.

	2.09.  Pro Rata Treatment; Payments Generally.

	(a)  Pro Rata Treatment.  Each borrowing of Revolving Credit Loans 
and each conversion and renewal of interest rate Options hereunder shall be 
made, and all payments made in respect of principal of and interest on 
Revolving Credit Loans and Fees due from the Borrower hereunder or under the 
Revolving Credit Notes shall be applied, Pro Rata from and to each Lender, as 
the case may be, except for payments of interest involving an Affected Lender 
as provided in Section 2.04 (d) hereof and payments to a Lender subject to a 
withholding deduction under Section 2.11 (c) hereof.  All payments made in 
respect of principal of any Bid Loan Borrowing due from the Borrower hereunder 
or under the Bid Loan Notes shall be made to each Lender participating in such 
Bid Loan Borrowing in proportion to the respective principal amounts of their 
outstanding Bid Loans comprising such Bid Loan Borrowing.  All payments made 
in respect of interest on any Bid Loan Borrowing due from the Borrower 
hereunder or under the Bid Loan Notes shall be made to each Lender 
participating in such Bid Loan Borrowing in proportion to the respective 
amounts of accrued and unpaid interest on their Bid Loans comprising such Bid 
Loan Borrowing, except for payments to a Lender subject to a withholding 
deduction under Section 2.11 (c) hereof.  The failure of any Lender to make a 
Loan shall not relieve any other Lender of its obligation to lend hereunder; 
no Lender shall be responsible for the failure of any other Lender to make a 
Loan.

	(b)  Payments Generally.  All payments and repayments to be made 
by the Borrower in respect of principal, interest, Fees, indemnity, expenses 
or other amounts due from the Borrower hereunder or under any Loan Document 
shall be payable to each Lender in Dollars (or in the case of interest and 
principal of Loans denominated in an Alternate Currency, in such Alternate 
Currency) at 3:00 o'clock p.m. (at the relevant Payment Office of such Lender) 
at its Payment Office in funds immediately available at such Payment Office.  
All such payments shall be made on the day when due without presentment, 
demand, protest or notice of any kind, all of which are hereby expressly 
waived, and an action therefor shall immediately accrue, without setoff, 
counterclaim, withholding or other deduction of any kind or nature, except for 
payments to a Lender subject to a withholding deduction under Section 2.11 (c) 
hereof.  Any payment or repayment received by such Lender after 3:00 o'clock 
p.m. (at such Lender's Payment Office), on any day shall be deemed to have 
been received on the next succeeding Business Day.

	(c)  Interest on Overdue Amounts.  To the extent permitted by Law, 
after there shall have become due (by acceleration or otherwise) principal, 
interest, Fees, indemnity, expenses or any other amounts due from the Borrower 
hereunder or under any Loan Document, such amounts shall bear interest for 
each day until paid (before and after judgment), payable on demand, at a rate 
per annum which for each day shall be equal to the following:

	(i)  In the case of any part of the Euro-Rate Portion of any Loans 
or any Bid Loan, (A) until the end of the applicable then-current 
Funding Period at a rate per annum 2% above the rate otherwise 
applicable to such part, and (B) thereafter in accordance with the 
following clause ; and

	(ii)  In the case of any other amount due from the Borrower 
hereunder or under any Loan Document, 2% above the then-current Base 
Rate Option.

	To the extent permitted by Law, interest accrued on any amount 
which has become due hereunder or under any Loan Document shall compound on a 
day-by-day basis, and hence shall be added daily to the overdue amount to 
which such interest relates.

	2.10.  Additional Compensation in Certain Circumstances.  

	(a)  Increased Costs or Reduced Return Resulting From Taxes, 
Reserves, Capital Adequacy Requirements, Expenses, Etc.  If any Law or 
guideline or interpretation or application thereof by any Governmental 
Authority charged with the interpretation or administration thereof or 
compliance with any request or directive of any Governmental Authority 
(whether or not having the force of law) now existing or hereafter adopted:

	(i)  subjects any Lender or any Notional Euro-Rate Funding Office 
to any tax or changes the basis of taxation with respect to this 
Agreement, the Notes, the Loans or payments by the Borrower of 
principal, interest, or other amounts due from the Borrower hereunder or 
under the Notes (except for taxes on the overall net income or overall 
gross receipts of such Lender or such Notional Euro-Rate Funding Office 
imposed by the jurisdictions (federal, state and local) in which such 
Lender's principal office or Notional Euro-Rate Funding Office is 
located),

	(ii)  imposes, modifies or deems applicable any reserve, special 
deposit or similar requirement against credits or commitments to extend 
credit, credit  extended by, assets (funded or contingent) of, deposits 
with or for the account of, other acquisitions of funds by, such Lender 
or any Notional Euro-Rate Funding Office (other than requirements 
expressly included herein in the determination of the Euro-Rate 
hereunder),

	(iii)  imposes, modifies or deems applicable any capital adequacy 
or similar requirement (A) against assets (funded or contingent) of, or 
credits or commitments to extend credit, credit extended by, any Lender 
or any Notional Euro-Rate Funding Office, or (B) otherwise applicable to 
the obligations of any Lender or any Notional Euro-Rate Funding Office 
under this Agreement, or

	(iv)  imposes upon any Lender or any Notional Euro-Rate Funding 
Office any other condition or expense with respect to this Agreement, 
the Notes or its making, maintenance or funding of any Loan,

and the result of any of the foregoing is to increase the cost to, reduce the 
income receivable by, or impose any expense (including loss of margin) upon 
any Lender, any Notional Euro-Rate Funding Office or, in the case of clause 
(iii) hereof, any Person controlling a Lender, with respect to this Agreement, 
the Notes or the making, maintenance or funding of any Loan (or, in the case 
of any capital adequacy or similar requirement, to have the effect of reducing 
the rate of return on such Lender's or controlling Person's capital, taking 
into consideration such Lender's or controlling Person's policies with respect 
to capital adequacy) by an amount which such Lender deems to be material (such 
Lender being deemed for this purpose to have been made, maintained or funded 
each Funding Segment of the Euro-Rate Portion from a Corresponding Source of 
Funds), such Lender may from time to time notify the Borrower of the amount 
determined in good faith (using any averaging and attribution methods) by such 
Lender (which determination shall be conclusive absent manifest error) to be 
necessary to compensate such Lender or such Notional Euro-Rate Funding Office 
for such increase, reduction or imposition; provided, no such compensation 
shall be payable to any Lender with respect to periods prior to 90 days prior 
to the date such Lenders give such notice.  Such amount shall be due and 
payable by the Borrower to such Lender ten Business Days after such notice is 
given.

	(b)  Funding Breakage.  In addition to all other amounts payable 
hereunder, if and to the extent for any reason (including without limitation 
any attempted revocation of a Standard Notice given pursuant to Section 2.03, 
2.05 or 2.06 hereof) any part of any Funding Segment of any Euro-Rate Portion 
of the Loans becomes due (by acceleration or otherwise), or is paid, repaid or 
converted to another interest rate Option (whether or not such payment, 
repayment or conversion is mandatory or automatic and whether or not such 
payment or repayment is then due), on a day other than the last day of the 
corresponding Funding Period (the date such amount so becomes due, or is so 
paid, repaid or converted, being referred to as the "Funding Breakage Date"), 
the Borrower shall pay each Lender an amount ("Funding Breakage Indemnity") 
determined by such Lender as follows:

	(i)  first, calculate the following amount: (A) the principal 
amount of such Funding Segment of the Loans owing to such Lender which 
so became due, or which was so paid, repaid or converted, times (B) the 
rate of interest applicable to such principal amount on the Funding 
Breakage Date minus the Treasury Rate as of the Funding Breakage Date, 
times (C) the number of days from and including the Funding Breakage 
Date to but not including the last day of such Funding Period, times (D) 
1/360; and

	(ii)  the Funding Breakage Indemnity to be paid by the Borrower to 
such Lender shall be the amount equal to the present value as of the 
Funding Breakage Date (discounted at the Treasury Rate as of such 
Funding Breakage Date, and calculated on the basis of a year of 365 or 
366 days, as the case may be, and actual days elapsed) of the amount 
described in the preceding clause (i)  which amount described in the 
preceding clause (i) is assumed for purposes of such present value 
calculation to be payable on the last day of the corresponding Funding 
Period).

Such Funding Breakage Indemnity shall be due and payable on demand.  In 
addition, the Borrower shall, on the due date for payment of any Funding 
Breakage Indemnity, pay to such Lender an additional amount equal to interest 
on such Funding Breakage Indemnity from the Funding Breakage Date to but not 
including such due date at the Base Rate Option (calculated on the basis of a 
year of 365 or 366 days and actual days elapsed).  The amount payable to each 
Lender under this Section 2.10 (b) shall be determined in good faith by such 
Lender, and such determination shall be conclusive absent manifest error.

	The Lenders agree that if any Funding Breakage Indemnity will be 
due and payable as a result of an event described in Section 2.04 (d) (ii) 
hereof, the Lenders will take such action to minimize the amount of such 
Funding Breakage Indemnity to the extent such Lender determines in its sole 
discretion that such action is practicable and would not have an adverse 
effect on such Lender or any Notional Euro-Rate Funding Office (it being 
assumed for purposes of such determination that each Funding Segment of the 
Euro-Rate Portion is actually made or maintained by or refunded through a 
Corresponding Source of Funds).

	2.11.  Taxes.

	(a)  Payments Net of Taxes.  For so long as and to the extent each 
Lender (and Participant) complies with Section 2.11 (c) with respect to 
delivery of the forms referred to therein to the extent required therein, all 
payments made by the Borrower under this Agreement or any other Loan Document 
shall be made free and clear of, and without reduction or withholding for or 
on account of, any present or future income, stamp or other taxes, levies, 
imposts, duties, charges, fees, deductions or withholdings, now or hereafter 
imposed, levied, collected, withheld or assessed by any Governmental 
Authority, and all liabilities with respect thereto, excluding

	(i)  in the case of each Lender, income or franchise taxes imposed 
on such Lender by the jurisdiction under the laws of which such Lender 
is organized and the country in which such jurisdiction of organization 
is located of any political subdivision or taxing authority thereof or 
therein or as a result of a connection between such Lender and any 
jurisdiction other than a connection resulting solely from this 
Agreement and the transactions contemplated hereby, and

	(ii)  in the case of each Lender, income or franchise taxes 
imposed by any jurisdiction (federal, state and local) in which such 
Lender's lending offices which make or book Loans are located or any 
political subdivision or taxing authority thereof or therein

(all such non-excluded taxes, levies, imposts, deductions, charges or 
withholdings being hereinafter called "Taxes").  If any Taxes are required to 
be withheld or deducted from any amounts payable to any Lender under this 
Agreement or any other Loan Document, the Borrower shall pay the relevant 
amount of such Taxes and the amounts so payable to such Lender shall be 
increased to the extent necessary to yield to such Lender (after payment of 
all Taxes) interest or any such other amounts payable hereunder at the rates 
or in the amounts specified in this Agreement and the other Loan Documents.  
Whenever any Taxes are paid by the Borrower with respect to payments made in 
connection with this Agreement or any other Loan Document, as promptly as 
possible thereafter, the Borrower shall send to such Lender, as the case may 
be, a certified copy of an original official receipt received by the Borrower 
showing payment thereof.

	(b)  Indemnity.  The Borrower hereby indemnifies each of the 
Lenders for the full amount of all Taxes required to be withheld or deducted 
from any amounts payable by or on behalf of the Borrower hereunder or under 
any of the other Loan Documents, any such Taxes paid by such Lender, any 
present or future claims, liabilities or losses with respect to or resulting 
from any omission to pay or delay in paying any such Taxes (including any 
incremental Taxes, interest or penalties that may become payable by such 
Lender as a result of any failure to pay such Taxes), whether or not such 
Taxes were correctly or legally asserted.  Such indemnification shall be made 
within 30 days from the date such Lender makes written demand therefor.

	(c)  Withholding and Backup Withholding.  Each Lender that is 
incorporated or organized under the laws of any jurisdiction other than the 
United States or any State thereof agrees that, on or prior to the date any 
payment is due to be made to it hereunder or under any other Loan Document, it 
will furnish to the Borrower

	(i)  two valid, duly completed copies of United States Internal 
Revenue Service Form 4224 or United States Internal Revenue Form 1001 or 
successor applicable form as the case may be, certifying in each case 
that such Lender is entitled to receive payments under this Agreement 
and the other Loan Documents without deduction or withholding of any 
United States federal income taxes, and

	(ii)  a valid, duly completed Internal Revenue Service Form W-8 or 
W-9 or successor applicable form, as the case may be, to establish an 
exemption from United States backup withholding tax.

Each Lender which so delivers to the Borrower a Form 1001 or 4224 and Form W-8 
or W-9, or successor applicable forms agrees to deliver to the Borrower two 
further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor 
applicable forms, or other manner of certification, as the case may be, on or 
before the date that any such form expires or becomes obsolete or otherwise is 
required to be resubmitted as a condition to obtaining an exemption from 
withholding tax, or after the occurrence of any event requiring a change in 
the most recent form previously delivered by it, and such extensions or 
renewals thereof as may reasonably be requested by the Borrower, certifying in 
the case of a Form 1001 or Form 4224 that such Lender is entitled to receive 
payments under this Agreement or any other Loan Document without deduction or 
withholding of any United States Federal income taxes, unless in any such 
cases an event (including any changes in Law) has occurred prior to the date 
on which any such delivery would otherwise be required which renders all such 
forms inapplicable or which would prevent such Lender from duly completing and 
delivering any such letter or form with respect to it and such Lender advises 
the Borrower that it is not capable of receiving payments without any 
deduction or withholding of the United States federal income tax, and in the 
case of a Form W-8 or W-9, establishing an exemption from United States backup 
withholding tax.

	2.12.  Funding by Branch, Subsidiary or Affiliate.

	(a)  Notional Funding.  Each Lender shall have the right from time 
to time, prospectively or retrospectively, without notice to the Borrower, to 
deem any branch, subsidiary or affiliate of such Lender to have made, 
maintained or funded any part of the Euro-Rate Portion at any time.  Any 
branch, subsidiary or affiliate so deemed shall be known as a "Notional Euro-
Rate Funding Office."  Such Lender shall deem any part of the Euro-Rate 
Portion of the Loans or the funding therefor to have been transferred to a 
different Notional Euro-Rate Funding Office if such transfer would avoid or 
cure an event or condition described in Section 2.04 (d) (ii) hereof or would 
lessen compensation payable by the Borrower under Section 2.10 (a) hereof, and 
if such Lender determines in its sole discretion that such transfer would be 
practicable and would not have a material adverse effect on such part of the 
Loans, such Lender or any Notional Euro-Rate Funding Office (it being assumed 
for purposes of such determination that each part of the Euro-Rate Portion is 
actually made or maintained by or funded through the corresponding Notional 
Euro-Rate Funding Office).  Notional Euro-Rate Funding Offices may be selected 
by such Lender without regard to such Lender's actual methods of making, 
maintaining or funding Loans or any sources of funding actually used by or 
available to such Lender.

	(b)  Actual Funding.  Each Lender shall have the right from time 
to time to make or maintain any part of the Euro-Rate Portion by arranging for 
a branch, subsidiary or affiliate of such Lender to make or maintain such part 
of the Euro-Rate Portion.  Such Lender shall have the right to (i) hold any 
applicable Note payable to its order for the benefit and account of such 
branch, subsidiary or affiliate or (ii) request the Borrower to issue one or 
more promissory notes in the principal amount of such Euro-Rate Portion, in 
substantially the form attached hereto as Exhibit A , as the case may be, with 
the blanks appropriately filled, payable to such branch, subsidiary or 
affiliate and with appropriate changes reflecting that the holder thereof is 
not obligated to make any additional Loans to the Borrower.  The Borrower 
agrees to comply promptly with any request under subsection (ii) of this 
Section 2.12 (b).  If any Lender causes a branch, subsidiary or affiliate to 
make or maintain any part of the Euro-Rate Portion hereunder, all terms and 
conditions of this Agreement shall, except where the context clearly requires 
otherwise, be applicable to such part of the Euro-Rate Portion and to any note 
payable to the order of such branch, subsidiary or affiliate to the same 
extent as if such part of the Euro-Rate Portion were made or maintained and 
such note were a Revolving Credit Note,  as the case may be, payable to such 
Lender's order.

	2.13.  Currency Equivalents.  For purposes of the provisions of 
this Article II, the equivalent in Dollars of an Alternate Currency and the 
equivalent in an Alternate Currency of Dollars shall be determined (i) for 
Deutsche Marks and Pounds Sterling by using the appropriate fixings shown on 
Reuters Page DRBX screen at 8:00 a.m., New York time, and (ii) for Canadian 
Dollars by using the Bank of Canada "Noon Fixing" shown on Reuters Page RBCM 
Screen at 12:00 o'clock (noon) New York time, in each case on the date such 
determination is made.

	2.14.  Lender's Sharing of Information.  Each Lender agrees that, 
upon the request of any other Lender, it shall promptly provide such 
requesting Lender with information in writing with respect to Loans and Other 
Advances made to Borrower by it and/or commercial paper vehicles utilized by 
it, including the amounts, currencies and maturity dates thereof and such 
other information as may be reasonably requested.

                             ARTICLE III
                    REPRESENTATIONS AND WARRANTIES

	The Borrower hereby represents and warrants to each Lender as 
follows:

	3.01.  Corporate Status.  The Borrower and each Subsidiary of the 
Borrower is a corporation duly organized, validly existing and in good 
standing under the laws of its jurisdiction of incorporation.  The Borrower 
and each Subsidiary of the Borrower has corporate power and authority to own 
its property and to transact the business in  which it is engaged or presently 
proposes to engage.  The Borrower and each Subsidiary of the Borrower is duly 
qualified to do business as a foreign corporation and is in good standing in 
all jurisdictions in which the ownership of its properties or the nature of 
its activities or both makes such qualification necessary or advisable, except 
for matters that, individually or in the aggregate, would not have a Material 
Adverse Effect.

	3.02.  Corporate Power and Authorization.  The Borrower has 
corporate power and authority to execute, deliver, perform, and take all 
actions contemplated by, each Loan Document, and all such action has been duly 
and validly authorized by all necessary corporate proceedings on its part.  
Without limitation of the foregoing, the Borrower has the corporate power and 
authority to borrow pursuant to the Loan Documents to the fullest extent 
permitted thereby from time to time, and has taken all necessary corporate 
action to authorize such borrowings.

	3.03.  Execution and Binding Effect.  This Agreement and each 
other Loan Document which is required to be delivered on or before the Closing 
Date pursuant to Section 4.01 hereof has been duly and validly executed and 
delivered by the Borrower.  This Agreement and each such other Loan Document 
constitutes, and each other Loan Document when executed and delivered by the 
Borrower will constitute, the legal, valid and binding obligation of the 
Borrower enforceable against the Borrower in accordance with its terms, except 
as the enforceability thereof may be limited by bankruptcy, insolvency or 
other similar laws of general application affecting the enforcement of 
creditors' rights or by general principles of equity limiting the availability 
of equitable remedies.

	3.04.  Governmental Approvals and Filings.  No approval, order, 
consent, authorization, certificate, license, permit or validation of, or 
exemption or other action by, or filing, recording or registration with, or 
notice to, any Governmental Authority (collectively, "Governmental Action") is 
or will be necessary or advisable in connection with execution and delivery of 
any Loan Document, consummation by the Borrower of the transactions herein or 
therein contemplated, performance of or compliance with the terms and 
conditions hereof or thereof by the Borrower or to ensure the legality, 
validity, binding effect, enforceability or admissibility in evidence hereof 
or thereof.  

	3.05.  Absence of Conflicts.   Neither the execution and delivery 
of any Loan Document by the Borrower, nor consummation by the Borrower of the 
transactions herein or therein contemplated, nor performance of or compliance 
with the terms and conditions hereof or thereof by the Borrower does or will

	(a)  violate or conflict with any Law, or

	(b)  violate, conflict with or result in a breach of any term or 
condition of, or constitute a default under, or result in (or give rise 
to any right, contingent or otherwise, of any Person to cause) any 
termination, cancellation, prepayment or acceleration of performance of, 
or result in the creation or imposition of (or give rise to any 
obligation, contingent or otherwise, to create or impose) any Lien upon 
any of property of the Borrower or any Subsidiary of the Borrower 
pursuant to, or otherwise result in (or give rise to any right, 
contingent or otherwise, of any Person to cause) any material change in 
any right, power, privilege, duty or obligation of the Borrower or any 
Subsidiary of the Borrower under or in connection with,

	(i)  the articles of incorporation or by-laws (or other 
constituent documents) of the Borrower or any such Subsidiary,

	(ii)  any agreement or instrument which is material to the 
Borrower and its Subsidiaries taken as a whole creating, evidencing 
or securing any Indebtedness or Guaranty Equivalent to which the 
Borrower or any such Subsidiary of the Borrower is a party or by 
which any of them or any of their respective properties (now owned 
or hereafter acquired) may be subject or bound, or

	(iii)  any other agreement or instrument which is material 
to the Borrower and its Subsidiaries taken as a whole to which the 
Borrower or any such Subsidiary is a  party or by which any of them 
or any of their respective properties (now owned or hereafter 
acquired) may be subject or bound.

	3.06.  Audited Financial Statements.  The Borrower has  heretofore 
furnished to each Lender consolidated balance sheets of the Borrower and its 
consolidated Subsidiaries as of June 30, 1995 and the related consolidated 
statements of income, cash flows and changes in stockholders' equity for the 
fiscal year then ended, as examined and reported on by Arthur Andersen LLP, 
independent certified public accountants for the Borrower, who delivered an 
unqualified opinion in respect thereof.  Such financial statements (including 
the notes thereto) present fairly the financial condition of the Borrower and 
its consolidated Subsidiaries as of the end of such fiscal year and the 
results of their operations and their cash flows for the fiscal year then 
ended, all in conformity with GAAP.

	3.07.  Interim Financial Statements.  The Borrower has heretofore 
furnished to each Lender interim consolidated balance sheets of the Borrower 
and its consolidated Subsidiaries as of the end of each of the first two 
fiscal quarters of the fiscal year beginning July 1, 1995, together with the 
related consolidated statements of income, cash flows and changes in 
stockholders' equity for the applicable fiscal periods ending on each such 
date.  Such financial statements (including the notes thereto) present fairly 
the financial condition of the Borrower and its consolidated Subsidiaries as 
of the end of each such fiscal quarter and the results of their operations and 
their cash flows for the fiscal periods then ended, all in conformity with 
GAAP, subject to normal and recurring year-end audit adjustments and except 
that such financial statements do not contain all of the footnote disclosures 
required by GAAP.

	3.08.  Absence of Undisclosed Liabilities.  Neither the Borrower 
nor any Subsidiary of the Borrower has any liability or obligation of any 
nature whatsoever (whether absolute, accrued, contingent or otherwise, whether 
or not due), forward or long-term commitments or unrealized or anticipated 
losses from unfavorable commitments, except (a) as disclosed in the financial 
statements referred to in Sections 3.06, and 3.07 hereof, (b) matters that, 
individually or in the aggregate, would not have a Material Adverse Effect, or 
(c) liabilities, obligations, commitments and losses incurred after June 30, 
1995, in the ordinary course of business and consistent with past practices.

	3.09.  Absence of Material Adverse Changes.  Since June 30, 1995, 
there has been no material adverse change in the business, operations or 
condition (financial or otherwise) of the Borrower and its Subsidiaries taken 
as a whole.

	3.10.  Subsidiaries and Other Investments.  The Borrower directly 
or indirectly owns the issued and outstanding capital stock of every class and 
series of the corporations, and equity interests in the joint ventures, 
partnerships and other entities, set forth in Schedule 3.10 and directly or 
indirectly owns none of the capital stock of any other corporation, 
association, trust or other entity, and no interest, share in the equity of 
any partnership, joint venture, or other entity or enterprise in excess of an 
aggregate book value of $1,000,000, except as otherwise set forth in Schedule 
3.10.  All of the outstanding shares of stock directly or indirectly owned by 
the Company in each corporation listed on Schedule 3.10 are duly authorized, 
validly issued, fully paid and nonassessable.

	3.11.  Accurate and Complete Disclosure.  All written financial 
and other factual information heretofore, contemporaneously or hereafter 
provided by or on behalf of the Borrower or any Subsidiary to any Lender 
pursuant to or in connection this Agreement (or any predecessor agreement) is 
or will be (as the case may be) true and accurate in all material respects on 
the date as of which such information is dated (or, if not dated, when 
received by such Lender) and does not or will not (as the case may be) omit to 
state any material fact necessary to make such information (taken as a whole) 
not misleading at such time in light of the circumstances in which it was 
provided.  The Borrower has disclosed to each Lender every fact or 
circumstance known to the Borrower which has, or which could have so far as 
the Borrower can now reasonably forsee, a Material Adverse Effect.

	3.12.  Margin Regulations.  No part of the proceeds of any Loan 
hereunder will be used for the purpose of buying or carrying any "margin 
stock," as such term is used in Regulations G and U of the Board of Governors 
of the Federal Reserve System, as amended from time to time, or to extend 
credit to others for the purpose of buying or carrying any "margin stock".  
Neither the Borrower nor any Subsidiary of the Borrower is engaged in the 
business of extending credit to others for the purpose of buying or carrying 
"margin stock".  The aggregate value of all "margin stock" owned by the 
Borrower and its Subsidiaries (including stock held as treasury stock by the 
Borrower) does not exceed 25% of the value of the total assets of the 
Borrower.  Neither the making of any Loan nor any use of proceeds of any such 
Loan will violate or conflict with the provisions of Regulations G, T, U or X 
of the Board of Governors of the Federal Reserve System, as amended from time 
to time.

	3.13.  Litigation.  There is no pending or (to the Borrower's 
knowledge after due inquiry) threatened action, suit, or proceeding, or any 
investigation by or before any Governmental Authority, against or affecting 
the Borrower or any Subsidiary of the Borrower, except for (a) matters set 
forth in Schedule 3.13 hereto, (b) matters described in the financial 
statements referred to in Section 3.06 and 3.07 hereof, and (c) matters that, 
individually or in the aggregate, would not reasonably be expected to have a 
Material Adverse Effect.

	3.14.  Absence of Events of Default.  No event has occurred and is 
continuing and no condition exists which constitutes an Event of Default or 
Potential Default.

	3.15.  Absence of Other Conflicts.  Neither the Borrower nor any 
Subsidiary of the Borrower is in violation of or conflict with, or is subject 
to any contingent liability on account of any violation of or conflict with:

	(a)  any Law,

	(b)  its articles of incorporation or by-laws (or other 
constituent documents), or

	(c)  any agreement or instrument or arrangement to which it is 
party or by which any of its properties (now owned or hereafter 
acquired) may be subject or bound,

except for matters that, individually or in the aggregate, would not have a 
Material Adverse Effect.

	3.16.  Insurance.  The Borrower and each Subsidiary of the 
Borrower maintains with financially sound and reputable insurers not related 
to or affiliated with the Borrower insurance with respect to its properties 
and business and against at least such liabilities, casualties and 
contingencies and in at least such types and amounts as is customary in the 
case of corporations engaged in the same or a similar business or having 
similar properties similarly situated.

	3.17.  Title to Property.  The Borrower and each Subsidiary of the 
Borrower has good and marketable title to all real property owned or purported 
to be owned by it and good title to all other property of whatever nature 
owned or purported to be owned by it, including but not limited to all 
property reflected in the most recent audited balance sheet referred to in 
Section 3.06 hereof or submitted pursuant to Section 5.01 (a) hereof (except 
as sold or otherwise disposed of in the ordinary course of business after the 
date of such balance sheet or, after the Closing Date, as otherwise permitted 
by the Loan Documents), in each case free and clear of all Liens, other than 
Permitted Liens.

	3.18.  Intellectual Property.  The Borrower and each Subsidiary of 
the Borrower owns, or is licensed or otherwise has the right to use, all the 
patents, trademarks, service marks, names (trade, service, fictitious or 
otherwise), copyrights, technology (including but not limited to computer 
programs and software), processes, data bases and other rights, free from 
burdensome restrictions, material to the ownership or operation of its 
properties and its business as presently conducted and presently planned to be 
conducted without material conflict with the rights of others.

	3.19.  Taxes.  All tax and information returns required to be 
filed by or on behalf of the Borrower or any Subsidiary of the Borrower have 
been properly prepared, executed and filed, except for failures to properly 
prepare, execute and file which in the aggregate would not have a Material 
Adverse Effect.  All taxes, assessments, fees and other governmental charges 
upon the Borrower or any Subsidiary of the Borrower or upon any of their 
respective properties, incomes, sales or franchises which are due and payable 
have been paid, except for failures to pay which in the aggregate would not 
have a Material Adverse Effect.  The reserves and provisions for taxes on the 
books of the Borrower and each Subsidiary of the Borrower are adequate in all 
material respects for all open years and for its current fiscal period.  
Neither the Borrower nor any Subsidiary of the Borrower knows of any proposed 
additional assessment or basis for any assessment for additional taxes 
(whether or not reserved against) which assessments or potential assessments 
would in the aggregate have a Material Adverse Effect. Except as set forth on 
Schedule 3.19, neither the Borrower nor any Subsidiary of the Borrower nor any 
of their respective consolidated return group has at any time filed a 
consolidated tax return with any Person other than the Borrower and its 
Subsidiaries.

	3.20.  Employee Benefits.  Each Plan has been maintained, in all 
material respects, in accordance with its terms and with all provisions of 
ERISA applicable thereto, no Pension-Related Event has occurred and is 
continuing with respect to any Plan and neither the Borrower nor any of its 
Controlled Group Members has incurred any liability to the PBGC, other than 
the payment of periodic PBGC premiums.

	3.21.  Environmental Matters.  In the ordinary course of its 
business, the Borrower conducts an ongoing review of the effect of 
Environmental Laws on the business, operations and properties of the Borrower 
and its Subsidiaries, in the course of which it identifies and evaluates 
associated liabilities and costs (including, without limitation, any capital 
or operating expenditures required for clean-up or closure of properties 
presently or previously owned or operated, any capital or operating 
expenditures required to achieve or maintain compliance with environmental 
protection standards imposed by Law or as a condition of any license, permit 
or contract, any related constraints on operating activities, including any 
periodic or permanent shutdown of any facility or reduction in the level or 
change in the nature of operations conducted thereat and any actual potential 
liabilities to third parties, including employees, and any related costs and 
expenses).  On the basis of this review, the Borrower has reasonably concluded 
that Environmental Laws are unlikely to have a Material Adverse Effect.  No 
Liens exist, and no conditions exist which could result in the filing of 
Liens, against any property of the Borrower or any Subsidiary of the Borrower 
or any of their respective Environmental Affiliates, under any Environmental 
Law, which Liens in the aggregate could have a Material Adverse Effect.  

	3.22.  Investment Company; Public Utility Holding Company.  The 
Borrower is not (a) an "investment company" or a  company "controlled" by an 
investment company within the meaning of the Investment Company Act of 1940, 
as amended, or (b) a "holding company" or a "subsidiary company" of a "holding 
company" or an "affiliate" of either a "holding company" or a "subsidiary 
company" within the meaning of the Public Utility Holding Company Act of 1935, 
as amended.

                            ARTICLE IV
                      CONDITIONS OF LENDING

	4.01.  Conditions to Initial Loans.  The effectiveness of this 
Agreement and the obligation of each Lender to make any Loan on the Closing 
Date is subject to the satisfaction, immediately prior to or concurrently with 
the making of such Loan, of the following conditions precedent, in addition to 
the conditions precedent set forth in Section 4.02 hereof:

	(a)  Agreement; Notes.  Each Lender shall have received an 
executed counterpart of this Agreement, duly executed by the Borrower, 
and an executed Revolving Credit Note,  and Bid  Loan Note conforming to 
the requirements hereof, duly executed on behalf of the Borrower.

	(b)  Corporate Proceedings.  Each Lender shall have received 
certificates by the Secretary or Assistant Secretary of the Borrower 
dated as of the Closing Date as to (i) true copies of the articles of 
incorporation and by-laws (or other constituent documents) of the 
Borrower in effect on such date (ii) true copies of all corporate action 
taken by the Borrower relative to this Agreement and the other Loan 
Documents and (iii) the incumbency and signature of the officers of the 
Borrower executing this Agreement and the other Loan Documents together 
with satisfactory evidence of the incumbency of such Secretary or 
Assistant Secretary.

	(c)  Existing Agreement.  The Borrower shall have repaid all 
amounts, whether principal, interest, fees or otherwise, outstanding 
under the Existing Credit Agreements and shall have terminated all 
commitments to lend thereunder; provided, however, that (i) the Lenders 
and the Borrower hereby agree that any Commitments to lend under the 
Existing Credit Agreement shall be terminated upon the execution of this 
Agreement automatically and without further action by any party and (ii) 
so long as all other conditions to lending under this Agreement have 
been satisfied, Loans under this Agreement on the date hereof shall be 
used to repay any amounts outstanding under the Existing Agreement. 

	(d)   Legal Opinions of Counsel to the Borrower.  Each Lender 
shall have received an opinion addressed to each Lender, dated the 
Closing Date, of David Cofer, Esquire, General Counsel of the Borrower, 
in substantially the form attached hereto as Exhibit F.

	(e)  Fees, Expenses, etc.  All fees and other compensation and 
expenses required to be paid to the Lenders pursuant hereto or pursuant 
to any other written agreement on or prior to the Closing Date shall 
have been paid or received.

	(f)  Additional Matters.  Each Lender shall have received such 
other certificates, opinions, documents and instruments as may be 
reasonably requested by any Lender.  All corporate and other 
proceedings, and all documents, instruments and other matters in 
connection with the transactions contemplated by this Agreement and the 
other Loan Documents shall be satisfactory in form and substance to each 
Lender.

	(g)  No Material Adverse Change.  There shall not have occurred 
any event, act or condition which could have a Material Adverse Effect.


	4.02.  Conditions to All Loans.  The obligation of each Lender to 
make any Loan pursuant to Section 2.02 or 2.03 (but not to convert or renew 
any Loan pursuant to Section 2.05) is subject to performance by the Borrower 
of its obligations to be performed hereunder or under the other Loan Documents 
on or before the date of such Loan, satisfaction of the conditions precedent 
set forth herein and in the other Loan Documents and to satisfaction of the 
following further conditions precedent:

	(a)  Notice.  Appropriate notice of such Loan shall have been 
given by the Borrower as provided in Article II hereof.

	(b)  Representations and Warranties.  Each of the representations 
and warranties made by the Borrower in Article III hereof (other than 
Section  3.09 and Section 3.10) shall be true and correct in all 
material respects on and as of such date as if made on and as of such 
date, both before and after giving effect to the Loans requested to be 
made on such date; provided that for purposes of this Section 4.02 (b), 
as it relates to the representations and warranties contained in Section 
3.13, Schedule 3.13 shall be deemed to be updated by and to the extent 
that any such action, suit, proceeding or investigation is set forth in 
any Form 10-K, 10-Q or 8-K filed by the Borrower and provided to the 
Lenders pursuant to this Agreement after the date hereof.

	(c)  No Defaults.  No Event of Default or Potential Default shall 
have occurred and be continuing on such date or after giving effect to 
the Loans requested to be made on such date.

	(d)  No Violations of Law, etc.  Neither the making nor use of the 
Loans shall cause any Lender to violate or conflict with any Law.

	(e)  Authorization.  Such Loan and the amount thereof, when 
aggregated with all other outstanding Loans and Other Advances 
outstanding shall be duly authorized by and within the corporate 
authority of, Borrower both before and after giving effect to the Loans 
and Other Advances requested to be made on such date.

Each request by the Borrower for any Loan shall constitute a representation 
and warranty by the Borrower that the conditions set forth in this Section 
4.02 have been satisfied as of the date of such request.  Failure of the 
Lenders to receive notice from the Borrower to the contrary before such Loan 
is made shall constitute a further representation and warranty by the Borrower 
that the conditions referred to in this Section 4.02 have been satisfied as of 
the date such Loan is made.

                                  ARTICLE V
                            AFFIRMATIVE COVENANTS

	The Borrower hereby covenants to each Lender as follows:

	5.01.  Basic Reporting Requirements.

	(a)  Annual Audit Reports.  As soon as practicable, and in any 
event within 120 days after the close of each fiscal year of the Borrower, the 
Borrower shall furnish to each Lender statements of income, cash flows and 
changes in stockholders' equity of the Borrower and its consolidated 
Subsidiaries for such fiscal year and a consolidated balance sheet of the 
Borrower and its consolidated Subsidiaries as of the close of such fiscal 
year, and notes to each, all in reasonable detail, setting forth in 
comparative form the corresponding figures for the preceding fiscal year.  
Such financial statements shall be accompanied by an opinion of independent 
certified public accountants of recognized national standing selected by the 
Borrower and reasonably satisfactory to the Lenders.  Such opinion shall be 
free of exceptions or qualifications not reasonably acceptable to the Lenders.  
Such opinion in any event shall contain a written statement of such 
accountants substantially to the effect that (i) such accountants examined 
such financial statements in accordance with generally accepted auditing 
standards and accordingly made such tests of accounting records and such other 
auditing procedures as such accountants considered necessary in the 
circumstances and (ii) in the opinion of such accountants such financial 
statements present fairly the financial position of the Borrower and its 
consolidated Subsidiaries as of the end of such fiscal year and the results of 
their operations and their cash flows and changes in stockholders' equity for 
such fiscal year, in conformity with GAAP.

	(b)  Quarterly Consolidated Reports.  As soon as practicable, and 
in any event within 60 days after the close of each of the first three fiscal 
quarters of each fiscal year of the Borrower, the Borrower shall furnish to 
each Lender consolidated statements of income, cash flows and changes in 
stockholders' equity of the Borrower and its consolidated Subsidiaries for 
such fiscal quarter and for the period from the beginning of such fiscal year 
to the end of such fiscal quarter and unaudited consolidated balance sheet of 
the Borrower and its consolidated Subsidiaries as of the close of such fiscal 
quarter, all in reasonable detail, setting forth in comparative form the 
corresponding figures for the same periods or as of the same date during the 
preceding fiscal year (except for the consolidated balance sheet, which shall 
set forth in comparative form the corresponding balance sheet as of the prior 
fiscal year end).  Such financial statements shall be certified by a 
Responsible Officer of the Borrower as presenting fairly the financial 
position of the Borrower and its consolidated Subsidiaries as of the end of 
such fiscal quarter and the results of their operations and their cash flows 
and changes in stockholders' equity for such fiscal year, in conformity with 
GAAP, subject to normal and recurring year-end audit adjustments.

	(c)  Quarterly Compliance Certificates; Performance Pricing 
Certificate.  The Borrower shall deliver to each Lender (i) a Quarterly 
Compliance Certificate concurrently with the delivery of the financial 
statements referred to in subsections (a) and (b) of this Section 5.01, and 
(ii) a Performance Pricing Certificate within 55 days after the end of each 
fiscal quarter, commencing with the quarter ending March 31, 1996.

	(d)  Certain Other Reports and Information.  Promptly upon their 
becoming available to the Borrower, the Borrower shall deliver to each Lender 
a copy of (i) all regular or special reports, registration statements and 
amendments to the foregoing which the Borrower or any Subsidiary shall file 
with the Securities and Exchange Commission (or any successor thereto) or (ii) 
all reports, proxy statements, financial statements and other information 
distributed by the Borrower to its stockholders, bondholders or the financial 
community generally.

	(e)  Further Information.  The Borrower will promptly furnish to 
each Lender such other information and in such form as  any Lender may 
reasonably request from time to time.

	(f)  Notice of Certain Events.  Promptly upon becoming aware of 
any of the following, the Borrower shall give each Lender notice thereof, 
together with a written statement of a Responsible Officer of the Borrower 
setting forth the details thereof and any action with respect thereto taken or 
proposed to be taken by the Borrower:

	(i)  Any Event of Default or Potential Default.

	(ii)  Any Material Adverse Effect.

	(iii)  Any pending or threatened action, suit, proceeding of 
investigation by or before any Governmental Authority against or 
affecting the Borrower or any Subsidiary of the Borrower, except for 
matters that if adversely decided, individually or in the aggregate, 
would not have a Material Adverse Effect.

	(iv)  Any material violation, breach or default by the Borrower or 
any Subsidiary of the Borrower of or under any agreement or instrument 
material to the business, operations, condition (financial or otherwise) 
or prospects of the Borrower and its Subsidiaries taken as a whole.

	(v)  Any Pension-Related Event.  Such notice shall be accompanied 
by: (A) a copy of any notice, request, return, petition or other 
document received by the Borrower or any Controlled Group Member from 
any Person, or which has been or is to be filed with or provided to any 
Person (including without limitation the Internal Revenue Service, PBGC 
or any Plan participant, beneficiary, alternate payee or employer 
representative), in connection with such Pension-Related Event, and (B) 
in the case of any Pension-Related Event with respect to a Plan, the 
most recent Annual Report (5500 Series), with attachments thereto, and 
the most recent actuarial valuation report, for such Plan, unless such 
documents shall have been previously provided to the Lenders.

	(vi)  Any Environmental Claim pending or threatened against the 
Borrower or any Subsidiary of the Borrower or any of their respective 
Environmental Affiliates, or any past or present acts, omissions, events 
or circumstances (including but not limited to any dumping, leaching, 
deposition, removal, abandonment, escape, emission, discharge or release 
of any Environmental Concern Material at, on or under any facility or 
property now or previously owned, operated or leased by the Borrower or 
any Subsidiary of the Borrower or any of their respective Environmental 
Affiliates) that could form the basis of such Environmental Claim, which 
Environmental Claims, individually or in the aggregate, would be 
reasonably expected to have a Material Adverse Effect.

	(g)  Visitation; Verification.  The Borrower shall permit such 
Persons as any Lender may designate from time to time to visit and inspect any 
of the properties of the Borrower and of any Subsidiary, to examine their 
respective books and records and take copies and extracts therefrom and to 
discuss their respective affairs with their respective directors, officers, 
employees and independent accountants during regular business hours and as 
often as any Lender may reasonably request.  The Borrower hereby authorizes 
such officers, employees and independent accountants to discuss with each 
Lender the affairs of the Borrower and its Subsidiaries.  Each Lender shall 
have the right during regular business hours to examine and verify accounts, 
inventory and other properties and liabilities of the Borrower and its 
Subsidiaries from time to time during regular business hours, and the Borrower 
shall cooperate, and shall cause each Subsidiary to cooperate, with the 
Lenders in such verification.

	5.02.  Insurance.  The Borrower shall, and shall cause each 
Subsidiary to, maintain with financially sound and reputable insurers 
insurance with respect to its properties and business and against such 
liabilities, casualties and contingencies and of such types and in such 
amounts as is customary in the case of corporations engaged in the same or 
similar businesses or having similar properties similarly situated.

	5.03.  Payment of Taxes and Other Potential Charges and Priority 
Claims.  The Borrower shall, and shall cause each Subsidiary to, pay or 
discharge

	(a)  on or prior to the date on which penalties attach thereto, 
all taxes, assessments and other governmental charges imposed upon it or 
any of its properties;

	(b)  on or prior to the date when due, all lawful claims of 
materialmen, mechanics, carriers, warehousemen, landlords and other like 
Persons which, if unpaid, might result in the creation of a Lien upon 
any such property; and

	(c)  on or prior to the date when due, all other lawful claims 
which, if unpaid, might result in the creation of a Lien upon any such 
property or which, if unpaid, might give rise to a claim entitled to 
priority over general creditors of the Borrower or such Subsidiary in a 
case under Title 11 (Bankruptcy) of the United States Code, as amended, 
or under foreign bankruptcy, insolvency or similar Laws;

provided, that unless and until foreclosure, distraint, levy, sale or similar 
proceedings shall have been commenced the Borrower or such Subsidiary need not 
pay or discharge any such tax, assessment, charge or claim so long as (x) the 
validity thereof is contested in good faith and by appropriate proceedings 
diligently conducted, (y) such reserves or other appropriate provisions as may 
be required by GAAP shall have been made therefor, and (z) such failure to pay 
or discharge would not have a Material Adverse Effect. 

	5.04.  Preservation of Corporate Status.   The Borrower shall, and 
shall cause each of its Subsidiaries to maintain its status as a corporation 
duly organized, validly existing and in good standing under the laws of its 
jurisdiction of incorporation, provided, however, that (i) so long as no Event 
of Default or Potential Default then exists or would be created thereby, the 
Borrower may terminate the corporate existence of any of its Subsidiaries if, 
in the good faith judgment of the appropriate officers of Borrower, such 
termination would not be disadvantageous to the Borrower or the Lender in any 
material respect and (ii) the Borrower and its Subsidiaries may enter into 
transactions permitted by Section 6.04 hereof.  The Borrower shall, and shall 
cause each of its Subsidiaries to, be duly qualified to do business as a 
foreign corporation and in good standing in all jurisdictions in which the 
ownership of its properties or the nature of its business or both make such 
qualification necessary or advisable, except for matters that, individually or 
in the aggregate, would not have a Material Adverse Effect.

	5.05.  Governmental Approvals and Filings.  The Borrower shall, 
and shall cause each Subsidiary to, keep and maintain in full force and effect 
all Governmental Actions necessary or advisable in connection with execution 
and delivery of any Loan Document by the Borrower, consummation by the 
Borrower of the transactions herein or therein contemplated, performance of or 
compliance with the terms and conditions hereof or thereof by the Borrower or 
to ensure the legality, validity, binding effect, enforceability or 
admissibility in evidence hereof or thereof.

	5.06.  Maintenance of Properties.  The Borrower shall, and shall 
cause each Subsidiary to, maintain or cause to be maintained in good repair, 
working order and condition (reasonable wear and tear excepted) the properties 
now or hereafter owned, leased or otherwise possessed by it and shall make or 
cause to be made all needful and proper repairs, renewals, replacements and 
improvements thereto so that the business of the Borrower and its Subsidiaries 
taken as a whole may be properly and advantageously conducted at all times.

	5.07.  Avoidance of Other Conflicts.  The Borrower shall not, and 
shall not permit any of its Subsidiaries to, violate or conflict with, be in 
violation of or conflict with, or be or remain subject to any liability 
(contingent or otherwise) on account of any violation or conflict with

	(a)  any Law,

	(b)  its articles of incorporation or by-laws (or other 
constituent documents), or

	(c)  any agreement or instrument to which it is party or by which 
any of them or any of their respective Subsidiaries is a party or by 
which any of them or any of their respective properties (now owned or 
hereafter acquired) may be subject or bound

except for matters that would not, individually or in the aggregate, have a 
Material Adverse Effect.

	5.08.  Financial Accounting Practices.  The Borrower shall, and 
shall  cause each Subsidiary to, make and keep books, records and accounts 
which, in reasonable detail, accurately and fairly reflect its transactions 
and dispositions of its assets and maintain a system of internal accounting 
controls sufficient to provide reasonable assurances that (a) transactions are 
executed in accordance with management's general or specific authorization, 
(b) transactions are recorded as necessary (i) to permit preparation of 
consolidated financial statements in conformity with GAAP and (ii) to maintain 
accountability for assets, (c) access to assets is permitted only in 
accordance with management's general or specific authorization and (d) the 
recorded accountability for assets is compared with the existing assets at 
reasonable intervals and appropriate action is taken with respect to any 
differences.

	5.09.  Use of Proceeds.  The Borrower will use (i) the proceeds of 
the Loans made on the Closing Date to repay in full all principal, interest, 
fees and other amounts outstanding under the Existing Credit Agreement; and 
(ii) and the proceeds of all other Loans for general corporate purposes.

	5.10.  Nature of Business.  Neither the Company nor any Subsidiary 
will engage in any business if, as a result, the general nature of the 
business, taken on a consolidated basis, which would then be engaged in by the 
Company and its Subsidiaries would be substantially and significantly changed 
from the general nature of the business engaged in by the Company and its 
Subsidiaries taken on a consolidated basis on the date of this Agreement.

                            ARTICLE VI
                         NEGATIVE COVENANTS

	The Borrower hereby covenants to each Lender as follows:

	6.01.  Financial Covenants.

	(a)  Consolidated Tangible Net Worth.  Consolidated Tangible Net 
Worth shall not at any time be less than $350,000,000 plus 40% of the 
Consolidated Net Income for each fiscal year of Borrower from and including 
1997, it being understood that there shall be no downward adjustment for any 
fiscal year in which Consolidated Net Income is negative.

	(b)  Consolidated Funded Debt Ratio .  The Consolidated Funded 
Debt Ratio shall not exceed 3.25 to 1.

	6.02.  Liens.  The Borrower shall not, and shall not permit any 
Subsidiary to, at any time create, incur, assume or suffer to exist any Lien 
on any of its property (now owned or hereafter acquired) without making 
effective provision whereby the Obligations shall be secured equally and 
ratably with the Indebtedness or other obligations secured by any such Lien, 
or agree, become or remain liable (contingently or otherwise) to do any of the 
foregoing, except for the following ("Permitted Liens"):

	(a)  Liens existing on the date hereof securing obligations 
existing on the date hereof, as such Liens and obligations are listed in 
Schedule 6.02 hereto (and Liens securing successor obligations incurred 
to refinance predecessor obligations allowed under this subsection (a), 
provided that in each case the successor obligation is an obligation of 
the same Person subject to the predecessor Indebtedness and is not 
greater than (and is not otherwise on terms less advantageous than) the 
predecessor obligation immediately before such refinancing, and the Lien 
securing the successor obligation does not extend to any property other 
than that subject to the Lien securing the predecessor obligation 
immediately before such refinancing);

	(b)  Liens arising from taxes, assessments, charges or claims 
described in Section 5.03 hereof that are not yet due or that remain 
payable without penalty or to the extent permitted to remain unpaid 
under the proviso to such Section 5.03;

	(c)  Deposits or pledges of cash or securities in the ordinary 
course of business to secure (i) workmen's compensation, unemployment 
insurance or other social security obligations, (ii) performance of 
bids, tenders, trade contracts (other than for payment of money) or 
leases, (iii) stay, surety or appeal bonds, or (iv) other obligations of 
a like nature incurred in the ordinary course of business;

	(d)  Liens by a Borrower or Subsidiary on property securing all or 
part of the purchase price thereof and Liens (whether or not assumed) 
existing on property at the time of purchase thereof by the Borrower or 
a Subsidiary, provided that:

	(i)  such Lien is confined solely to the property so 
purchased, improvements thereto and proceeds thereof,

	(ii)  the aggregate amount secured by all such Liens on any 
particular property at the time purchased by the Borrower or such 
Subsidiary, as the case may be, shall not exceed 100% of the lesser 
of the purchase price of such property or the fair market value of 
such property at the time of purchase;

	(e)  Liens resulting from progress payments or partial payments 
under United States Government contracts or subcontracts hereunder;

	(f)  Zoning restrictions, easements, minor restrictions on the use 
of real property, minor irregularities in title thereto and other minor 
Liens that do not secure the payment of money or the performance of an 
obligation and that do not in the aggregate materially detract from the 
value of the property and assets of, or materially impair its use in the 
business of, the Borrower and its Subsidiaries taken as a whole;

	(g)  Agreements in debt instruments to provide security for the 
obligations evidenced thereby in the future (but not any Liens actually 
granted pursuant to such agreements), which debt instruments are issued 
by Subsidiaries of the Borrower organized under the laws of Germany and 
contain general business conditions of the type customarily incorporated 
into debt instruments governed by German Law; and

	(h)  Other Liens, provided that the aggregate amount of 
Indebtedness secured thereby does not exceed 20% of Consolidated 
Tangible Net Worth at any time.

"Permitted Lien" shall in no event include any Lien imposed by, or required to 
be granted pursuant to, ERISA or any Environmental Law, which individually or 
in the aggregate could have a Material Adverse Effect.

	6.03.  Guaranties, Indemnities, etc.  The Borrower shall not, and 
shall not permit any Subsidiary to, be or become subject to or bound by any 
Guaranty Equivalent, or to have any letter of credit issued for the Borrower's 
or any Subsidiary's account (a "Letter of Credit"), or agree, become or remain 
liable (contingently or otherwise) to do any of the foregoing, except:

	(a)  Contingent liabilities arising from the endorsement of 
negotiable or other instruments for deposit or collection or similar 
transactions in the ordinary course of business; 

	(b)  Indemnities by the Borrower or any Subsidiary of the 
liabilities of its directors or officers or employees in their 
capacities as such as permitted by Law;

	(c)  Guaranty Equivalents of Assured Obligations of Consolidated 
Subsidiaries which constitute "Indebtedness," and

	(d)  Guaranty Equivalents of Assured Obligations of Persons other 
than Consolidated Subsidiaries which, together with the face amount of 
all Letters of Credit, do not in the aggregate exceed $25,000,000 at any 
time.

	6.04.  Mergers.  The Borrower shall not, and shall not permit any 
Subsidiary to, merge with or into or consolidate with any other Person, or 
agree, become or remain liable (contingently or otherwise) to do any of the 
foregoing; provided that if no Event of Default or Potential Default shall 
occur and be continuing or shall exist at such time or after giving effect to 
such transaction including specifically, without limitation, any noncompliance 
with Section 5.10:

	(a)  A Subsidiary may merge with or into or consolidate with any 
other Person, or 

	(b)  The Borrower may merge with any person, firm or corporation, 
so long as the Borrower is the surviving corporation.

	6.05.  Dispositions of Accounts.  The Borrower shall not sell, 
assign, discount, transfer, or otherwise dispose of, voluntarily or 
involuntarily, any of its accounts receivable or chattel paper, with or 
without recourse, or agree, become or remain liable (contingently or 
otherwise) to do any of the foregoing, except

	(a)  sales, assignments, transfers and other dispositions in 
the ordinary course of business; and

	(b)  financings based upon direct or indirect security 
interests in, or purchase of, accounts receivable not exceeding 
$10,000,000 aggregate principal amount at any one time outstanding.

	6.06.  Limitation on Other Restrictions or Dividends by 
Subsidiaries, etc.  The Borrower shall not permit any Subsidiary to be or 
become subject to any restriction of any nature (whether arising by operation 
of Law, by agreement, by its articles of incorporation, by-laws or other 
constituent documents of such Subsidiary from time to time) to (a) declare and 
pay dividends with respect to capital stock owned by the Borrower or any 
Subsidiary, (b) pay any indebtedness, obligations or liabilities from time to 
time owed to the Borrower or any Subsidiary, (c) make loans or advances to the 
Borrower or any Subsidiary, except:

	(a)  Restrictions pursuant to the Loan Documents; and

	(b)  Legal restrictions of general applicability under Law.

	6.07.  Limitation on Other Restrictions on Amendment of the Loan 
Documents, etc.  The Borrower shall not, and shall not permit any Subsidiary 
to, enter into, become or remain subject any agreement or instrument to which 
the Borrower or such Subsidiary is a party or by which either of them or any 
of their respective properties (now owned or hereafter acquired) may be 
subject or bound that would prohibit or require the consent of any Person to 
any amendment, modification, supplement or waiver to any of the Loan 
Documents, except for the Loan Documents.

                             ARTICLE VII
                               DEFAULTS

	7.01.  Events of Default.  An Event of Default shall mean the 
occurrence or existence of one or more of the following events or conditions 
(for any reason, whether voluntary, involuntary or effected or required by 
Law):

	(a)  The Borrower shall fail to pay when due principal of any 
Loan.

	(b)  The Borrower shall fail to pay when due (i) any interest on 
any Loan or any Fees, and such failure shall have continued for a period 
of three Business Days or (ii) any indemnity or expenses or any other 
amount due hereunder or under any other Loan Document and such failure 
shall have continued for a period of five Business Days.

	(c)  Any representation or warranty made or deemed made by the 
Borrower or in pursuant to any Loan Document, or any statement made by 
the Borrower in any financial statement, certificate, report, exhibit or 
document furnished by the Borrower to any Lender pursuant to any Loan 
Document, shall prove to have been false or misleading in any material 
respect as of the time when made or deemed made (including by omission 
of material information necessary to make such representation, warranty 
or statement not misleading).

	(d)  The Borrower shall default in the performance of observance 
of any of the covenants contained in Sections 5.01 (f) (i), 5.09, 5.10, 
6.01, 6.04 or 6.05 hereof. 

	(e)  The Borrower shall default in the performance of  observance 
of any other covenant, agreement or duty under this Agreement or any 
other Loan Document and (i) in the case of a default under Section 6.02, 
6.03, 6.06 or 6.07 such default shall have continued for a period of 
three Business Days, (ii) in the case of a default under Section 5.01 
hereof (other than as referred to in subsection (f) (i) thereof) such 
default shall have continued for a period of ten days and (iii) in the 
case of any other default such default shall have continued for a period 
of 30 days after written notice thereof from any Lender to the Borrower.

	(f)  Any Cross-Default Event shall occur with respect to any 
Cross-Default Obligation; provided, that if a Cross- Default Event would 
have occurred with respect to a Cross-Default Obligation but for the 
grant of a waiver or similar indulgence, a Cross-Default Event shall 
nevertheless be deemed to have occurred if the Borrower or any 
Subsidiary of the Borrower directly or indirectly gave or agreed to give 
any consideration for such waiver or indulgence (including but not 
limited to a reduction in maturity, an increase in rates or the granting 
of collateral).  As used herein, "Cross-Default Obligation" shall mean 
any Indebtedness or any Guaranty Equivalent (or set of related 
Indebtedness or Guaranty Equivalents) of the Borrower or any Subsidiary 
of the Borrower in excess of $5,000,000 in aggregate principal amount.  
As used herein, "Cross-Default Event" with respect to a Cross-Default 
Obligation shall mean the occurrence of  any default, event or condition 
which causes or which would permit any Person or Persons to cause or 
which would with the giving of notice or the passage of time or both 
would permit any Person or Persons to cause all or any part of such 
Cross-Default Obligation to become due (by acceleration, mandatory 
repayment or repurchase, or otherwise) before its otherwise stated 
maturity, or failure to pay all or any part of such Cross-Default 
Obligation at its stated maturity.

	(g)  One or more judgments for the payment of money shall have 
been entered against the Borrower or any Subsidiary, which judgment or 
judgments exceed $10,000,000 in the aggregate, and such judgment or 
judgments shall have remained undischarged and unstayed for a period of 
forty-five consecutive days.

	(h)  One or more writs or warrants of attachment, garnishment, 
execution, distraint or similar process exceeding in value the aggregate 
amount of $10,000,000 shall have been issued against the Borrower or any 
Subsidiary or any of their respective properties and shall have remained 
undischarged and unstayed for a period of forty-five consecutive days.

	(i)  Any Governmental Action now or hereafter made by or with any 
Governmental Authority in connection with any Loan Document is not 
obtained or shall have ceased to be in full force and effect or shall 
have been modified or amended or shall have been held to be illegal or 
invalid and the Lenders shall determine in good faith that such failures 
to obtain or remain in full force and effect, modifications, amendments, 
illegalities and invalidities in the aggregate could have a Material 
Adverse Effect.

	(j)  Any Loan Document or term or provision thereof shall cease to 
be in full force and effect (except in accordance with the express terms 
of such Loan Document) and the Lenders shall determine in good faith 
that such cessation could have a Material Adverse Effect, or the 
Borrower shall, or shall purport to, terminate (except in accordance 
with the terms of such Loan Document), repudiate, declare voidable or 
void or otherwise contest, any Loan Document or term or provision 
thereof or any obligation or liability of the Borrower thereunder.

	(k)  Any one or more Pension-Related Events referred to in 
subsection (a) (ii), (b) or (e) of the definition of "Pension-Related 
Event" shall have occurred and the Lenders shall determine in good faith 
that the liabilities associated with such Pension-Related Events are 
reasonably likely to exceed $5,000,000; or any one or more other 
Pension-Related Events shall have occurred and the Lenders shall 
determine in good faith that such other Pension-Related Events, 
individually or in the aggregate, could have a Material Adverse Effect.

	(l)  A Change of Control shall have occurred.

	(m)  A proceeding shall have been instituted in respect of the 
Borrower or any Subsidiary of the Borrower

	(i)  seeking to have an order for relief entered in respect 
of such Person, or seeking a declaration or entailing a finding 
that such Person is insolvent or a similar declaration or finding, 
or seeking dissolution, winding-up, charter revocation or 
forfeiture, liquidation, reorganization, arrangement, adjustment, 
composition or other similar relief with respect to such Person, 
its assets or its debts under any Law relating to bankruptcy, 
insolvency, relief of debtors or protection of creditors, 
termination of legal entities (other than as permitted by Section 
5.04) or any other similar Law now or hereafter in effect, or

	(ii)  seeking appointment of a receiver, trustee, 
liquidator, assignee, sequestrator or other custodian for such 
Person or for all or any substantial part of its property (other 
than as permitted by Section 5.04 hereof).

and such proceeding shall result in the entry, making or grant of any 
such order for relief, declaration, finding, relief or appointment, or 
such proceeding shall 
remain undismissed and unstayed for a period of sixty consecutive days.

	(n)  The Borrower or any Subsidiary of the Borrower shall become 
insolvent, shall fail to pay, become unable to pay, or state that it is 
or will be unable to pay, its debts as they become due,  or shall make a 
general assignment for the benefit of creditors; the Borrower shall 
voluntarily suspend transaction of its business; the Borrower or any 
Subsidiary shall institute (or fail to controvert in a timely and 
appropriate manner) a proceeding described in Section 7.01 (m) (i) 
hereof, or (whether or not any such proceeding has been instituted) 
shall consent to or acquiesce in any such order for relief, declaration, 
finding or relief described therein; the Borrower or any Subsidiary of 
the Borrower shall institute (or fail to controvert in a timely and 
appropriate manner) a proceeding described in Section 7.01 (m)(ii) 
hereof, or (whether or not any such proceeding has been instituted) 
shall consent to or acquiesce in any such appointment or to the taking 
of possession by any such custodian of all or any substantial part of 
its property; the Borrower or, to the extent not permitted by Section 
5.04 hereof, any Subsidiary of the Borrower shall dissolve, wind-up, 
revoke or forfeit its charter (or other constituent documents) or 
liquidate itself or any substantial part of its property or shall take 
any action in furtherance of any of the foregoing.

	7.02.  Consequences of an Event of Default.

	(a)  If an Event of Default specified in subsections (a) through 
(l) of Section 7.01 hereof shall occur and be continuing or shall exist, then, 
in addition to all other rights and remedies which any Lender may have 
hereunder or under any other Loan Document, at law, in equity or otherwise, 
the Lenders shall be under no further obligation to make Loans hereunder, and 
each Lender may be notice to the Borrower and the other Lenders, from time to 
time do any or all of the following:

	(i)  Declare its Commitments terminated, whereupon such 
Commitments will terminate and any Fees hereunder shall be immediately 
due and payable without presentment, demand, protest or further notice 
of any kind, all of which are hereby waived, and an action therefor 
shall immediately accrue.

	(ii)  Declare the unpaid principal amount of its Loans, interest 
accrued thereon and all other Obligations owing to it to be immediately 
due and payable without presentment, demand, protest or further notice 
of any kind, all of which are hereby waived, and an action therefor 
shall immediately accrue.

	(b)  If an Event of Default specified in subsection (m) or (n) of 
Section 7.01 hereof shall occur or exist, then in addition to all other rights 
and remedies which any Lender may have hereunder or under any other Loan 
Document, at law, in equity or otherwise, the Commitments shall automatically 
terminate and the Lenders shall be under no further obligation to make Loans, 
and the unpaid principal amount of the Loans, interest accrued thereon and all 
other Obligations shall become immediately due and payable without 
presentment, demand, protest or notice of any kind, all of which are hereby 
waived, and an action therefor shall immediately accrue.

                           ARTICLE VIII
                           MISCELLANEOUS

	8.01.  Holidays.  Whenever any payment or action to be made or 
taken hereunder or under any other Loan Document shall be stated to be due on 
a day which is not a Business Day, such payment or action shall be made or 
taken on the next following Business Day and such extension of time shall be 
included in computing interest or fees, if any, in connection with such 
payment or action.

	8.02.  Records.  The unpaid principal amount of the Loans owing to 
each Lender, the unpaid interest accrued thereon, the interest rate or rates 
applicable to such unpaid principal amount, the duration of such 
applicability, each Lender's Revolving Credit Committed Amount, and the 
accrued and unpaid Fees shall at all times be ascertained from the records of 
such Lender, which shall be conclusive absent manifest error.

	8.03.  Amendments and Waivers.  Neither this Agreement nor any 
Loan Document may be amended, modified, supplemented or waived without the 
consent of the Borrower and all Lenders.  Any such amendment, modification, 
supplement or waiver must be in writing and shall be effective only to the 
extent set forth in such writing.  Any Event of Default or Potential Default 
waived or consented to in any such amendment, modification or supplement shall 
be deemed to be cured and not continuing to the extent and for the period set 
forth in such waiver or consent, but no such waiver or consent shall extend to 
any other or subsequent Event of Default or Potential Default or impair any 
right consequent thereto.

	8.04.  No Implied Waiver; Cumulative Remedies.  No course of 
dealing and no delay or failure of any Lender in exercising any right, power 
or privilege under this Agreement or any other Loan Document shall affect any 
other or future exercise thereof or exercise of any other right, power or 
privilege; nor shall any single or partial exercise of any such right, power 
or privilege or any abandonment or discontinuance of steps to enforce such a 
right, power or privilege preclude any further exercise thereof or of any 
other right, power or privilege.  The rights and remedies of the Lenders under 
this Agreement and any other Loan Document are cumulative and not exclusive of 
any rights or remedies which any Lender would otherwise have hereunder or 
thereunder, at law, in equity or otherwise.

	8.05.  Notices.

	(a)  Except to the extent otherwise expressly permitted hereunder 
or thereunder, all notices, requests, demands, directions and other 
communications (collectively "notices") under this Agreement or any Loan 
Document shall be in writing (including telexed and facsimile transmission) 
and shall be sent by first-class mail, or by nationally-recognized overnight 
courier, or by telex or facsimile transmission (with confirmation in writing 
mailed first-class or sent by such an overnight courier), or by personal 
delivery.  All notices shall be sent to the applicable party at the address 
stated on the signature pages hereof in accordance with the last unrevoked 
written direction from such party to the other parties hereto, in all cases 
with postage or other charges prepaid.  Any such properly given notice shall 
be effective when received.

	(b)  Each Lender may rely on any notice (whether or not such 
notice is made in a manner permitted or required by this Agreement or any Loan 
Document) purportedly made by or on behalf of the Borrower, no Lender shall 
have any duty to verify the identity or authority or any Person giving such 
notice.

	8.06.  Expenses; Taxes; Indemnity.

	(a)  The Borrower agrees to pay or cause to be paid and to save 
each Lender harmless against liability for the payment of all reasonable out-
of-pocket costs and expenses (including but not limited to reasonable fees and 
expenses of counsel) incurred by such Lender from time to time arising from or 
relating to (i) the negotiation, preparation, execution, delivery, 
administration and performance of this Agreement and the other Loan Documents, 
(ii) any requested amendments, modifications, supplements, waivers or consents 
(whether or not ultimately entered into or granted) to this Agreement or any 
Loan Document, and (iii) the enforcement or preservation of rights under this 
Agreement or any Loan Document (including but not limited to any such costs or 
expenses arising from or relating to (A) collection or enforcement of an 
outstanding Loan or any other amount owing hereunder or thereunder by such 
Lender, and (B) any litigation, proceeding, dispute, work-out, restructuring 
or rescheduling related in any way to this Agreement or the Loan Documents).

	(b)  The Borrower hereby agrees to pay all stamp, document, 
transfer, recording, filing, registration, search, sales and excise fees and 
taxes and all similar impositions now or hereafter determined by any Lender to 
be payable in connection with this Agreement or any other Loan Documents or 
any other documents, instruments or transactions pursuant to or in connection 
herewith or therewith, and the Borrower agrees to save each Lender harmless 
from and against any and all present or future claims, liabilities or losses 
with respect to or resulting from any omission to pay or delay in paying any 
such fees, taxes or impositions.

	(c)  The Borrower hereby agrees to reimburse and indemnify each of 
the Indemnified Parties from and against any and all losses, liabilities, 
claims, damages, expenses, obligations, penalties, actions, judgments, suits, 
costs or disbursements of any kind or nature whatsoever (including, without 
limitation, the fees and disbursements of counsel for such Indemnified Party 
in connection with any investigative, administrative or judicial proceeding 
commenced or threatened, whether or not such Indemnified Party shall be 
designated a party thereto) that may at any time be imposed on, asserted 
against or incurred by such Indemnified Party as a result of, or arising out 
of, or in any way related to or by reason of, this Agreement or any other Loan 
Document, any transaction from time to time contemplated hereby or thereby, or 
any transaction financed in whole or in part of directly or indirectly with 
the proceeds of any Loan (and without in any way limiting the generality of 
the foregoing, including any violation or breach of any Environmental Law or 
any other Law by the Borrower or any Subsidiary of the Borrower or any 
Environmental Affiliate of any of them; any Environmental Claim arising out of 
the management, use, control, ownership or operation of property by any of 
such Persons, including all on-site and off-site activities involving 
Environmental Concern Materials; any grant of collateral; or any exercise by 
any Lender of any of its rights or remedies under this Agreement or any other 
Loan Document); but excluding any such losses, liabilities, claims, damages, 
expenses, obligations, penalties, actions, judgments, suits, costs or 
disbursements resulting solely from the gross negligence or willful misconduct 
of such Indemnified Party, as finally determined by a court of competent 
jurisdiction.  If and to the extent that the foregoing obligations of the 
Borrower under this subsection (c), or any other indemnification obligation of 
the Borrower hereunder or under any other Loan Document, are unenforceable for 
any reason, the Borrower hereby agrees to make the maximum contribution to the 
payment and satisfaction of such obligations which is permissible under 
applicable Law.

	8.07.  Severability.  The provisions of this Agreement are 
intended to be severable.  If any provision of this Agreement shall be held 
invalid or unenforceable in whole or in part in any jurisdiction such 
provision shall, as to such jurisdiction, be ineffective to the extent of such 
invalidity or unenforceability without in any manner affecting the validity or 
enforceability thereof in any other jurisdiction or the remaining provisions 
hereof in any jurisdiction.

	8.08.  Prior Understandings.  This Agreement and the other Loan 
Documents supersede all prior and contemporaneous understandings and 
agreements, whether written or oral, among the parties hereto relating to the 
transactions provided for herein and therein.

	8.09.  Duration; Survival.  All representations and warranties of 
the Borrower contained herein or in any other Loan Document or made in 
connection herewith or therewith shall survive the making of, and shall not be 
waived by the execution and delivery, of this Agreement or any other Loan 
Document, any investigation by or knowledge of any Lender, the making of any 
Loan, or any other event or condition whatever.  All covenants and agreements 
of the Borrower contained herein or in any other Loan Document shall continue 
in full force and effect from and after the date hereof so long as the 
Borrower may borrow hereunder and until payment in full of all Obligations.  
Without limitation, all obligations of the Borrower hereunder or under any 
other Loan Document to make payments to or indemnify any Lender shall survive 
the payment in full of all other Obligations, termination of the Borrower's 
rights to borrow hereunder, and all other events and conditions whatever.

	8.10.  Counterparts.  This Agreement may be executed in any number 
of counterparts and by the different parties hereto on separate counterparts 
each of which, when so executed, shall be deemed an original, but all such 
counterparts shall constitute but one and the same instrument.

	8.11.  Limitation on Payments.  The parties hereto intend to 
conform to all applicable Laws in effect from time to time limiting the 
maximum rate of interest that may be charged or collected.  Accordingly, 
notwithstanding any other provision hereof or of any other Loan Document, the 
Borrower shall not be required to make any payment to or for the account of 
any Lender, and each Lender shall refund any payment made by the Borrower, to 
the extent that such requirement or such failure to refund would violate or 
conflict with non-waiveable provisions of applicable Laws limiting the maximum 
amount of interest which may be charged or collected by such Lender.

	8.12.  Set-Off.  The Borrower hereby agrees that, to the fullest 
extent permitted by Law, if any Obligation of the Borrower shall be due and 
payable (by acceleration or otherwise), each Lender shall have the right, 
without notice to the Borrower, to set-off against and to appropriate and 
apply to such Obligation any indebtedness, liability or obligation of any 
nature owing to the Borrower by such Lender, including but not limited to all 
deposits (whether time or demand, general or special, provisionally credited 
or finally credited, whether or not evidenced by a certificate of deposit) now 
or hereafter maintained by the Borrower with such Lender.  Such right shall be 
absolute and unconditional in all circumstances and, without limitation, shall 
exist whether or not such Lender or any other Person shall have given notice 
or made any demand to the Borrower or any other Person, whether such 
indebtedness, obligation or liability owed to the Borrower is contingent, 
absolute, matured or unmatured (it being agreed that such Lender may deem such 
indebtedness, obligation or liability to be then due and payable at the time 
of such setoff), and regardless of the existence or adequacy of any 
collateral, guaranty or any other security, right or remedy available to any 
Lender or any other Person.  The Borrower hereby agrees that, to the fullest 
extent permitted by Law, any Participant and any branch, subsidiary or 
affiliate of any Lender or any Participant shall have the same rights of set-
off as a Lender is provided in this Section (regardless of whether such 
Participant, branch, subsidiary or affiliate would otherwise be deemed in 
privity with or a direct creditor of the Borrower).  The rights provided by 
this Section are in addition to all other rights of set-off and bankers' liens 
and all other rights and remedies which any Lender (or any such Participant, 
branch, subsidiary or affiliate) may otherwise have under this Agreement, any 
other Loan Document, at law or in equity, or otherwise, and nothing in this 
Agreement or any Loan Document shall be deemed a waiver or prohibition of or 
restriction on the right of set-off or bankers' lien of any such Person.

	8.13.  Sharing of Collections.  The Lenders hereby agree among 
themselves that if any Lender shall receive (by voluntary payment, realization 
upon security, set-off or from any other source) any amount on account of the 
Loans, interest thereon, or any other Obligation contemplated by this 
Agreement or the other Loan Documents to be made by the Borrower Pro Rata to 
all Lenders (or Pro Rata to holders of Notes of a particular type) in greater 
proportion than any such amount received by any other Lender, then the Lender 
receiving such proportionately greater payment shall notify each other Lender 
of such receipt, and equitable adjustment will be made in the manner stated in 
this Section so that, in effect, all such excess amounts will be shared 
ratably among all of the Lenders.  The Lender receiving such excess amount 
shall purchase (which it shall be deemed to have done simultaneously upon the 
receipt of such excess amount) for cash from the other Lenders a participation 
in the applicable Obligations owed to such other Lenders in such amount as 
shall result in a ratable sharing by all Lenders of such excess amount (and to 
such extent the receiving Lender shall be a Participant).  If all or any 
portion of such excess amount is thereafter recovered from the Lender making 
such purchase, such purchase shall be rescinded and the  purchase price 
restored to the extent of such recovery, together with interest or other 
amounts, if any, required by Law to be paid by the Lender making such 
purchase.  The Borrower hereby consents to and confirms the foregoing 
arrangements.  Each Participant shall be bound by this Section as fully as if 
it were a Lender hereunder.

	8.14.  Successors and Assigns; Participations; Assignments.  

	(a)  Successors and Assigns.  This Agreement shall be binding upon 
and inure to the benefit of the Borrower, the Lenders, all future holders of 
the Notes, and their respective successors and assigns, except that the 
Borrower may not assign or transfer any of its rights hereunder or interests 
herein without the prior written consent of all the Lenders, and any purported 
assignment without such consent shall be void.

	(b)  Participations.  Any Lender may, in the ordinary course of 
its commercial banking business and in accordance with applicable Law, at any 
time sell participations to one or more commercial banks or other Persons 
(each a "Participant") in all or a portion of its rights and obligations under 
this Agreement and the other Loan Documents (including, without limitation, 
all or a portion of its Commitments and the Loans owing to it and any Note 
held by it); provided, that

	(i)  any such participation shall be in a minimum aggregate 
principal amount of $5,000,000 of the Commitments and Loans then 
outstanding;

	(ii)  any such Lender's obligations under this Agreement and the 
other Loan Documents shall remain unchanged,

	(iii)  such Lender shall remain solely responsible to the other 
parties hereto for the performance of such obligations,

	(iv)  the parties hereto shall continue to deal solely and 
directly with such Lender in connection with such Lender's rights and 
obligations under this Agreement and each of the other Loan Documents,

	(v)  such Participant shall be bound by the provisions of Section 
8.13 hereof, and

	(vi)  no Participant (unless such Participant is an affiliate of 
such Lender, or is itself a Lender) shall be entitled to require such 
Lender to take or refrain from taking action under this Agreement or 
under any other Loan Document, except that such Lender may agree with 
such Participant that such Lender will not, without such Participant's 
consent, take action (A) to increase such Lender's Revolving Credit 
Committed Amount, over the amount thereof then in effect, or extend the 
Maturity Date, or (B) reduce the principal amount of or extend the 
scheduled final maturity of any of such Lender's Loans, or reduce the 
rate of interest or extend the time for payment of interest borne by any 
such Loan or extend the time for payment of or reduce the amount of any 
Fees or reduce or postpone the date for payment of any other fees, 
expenses, indemnities or amounts payable under any Loan Document.

The Borrower agrees that any such Participant shall be entitled to the 
benefits of Sections 2.10, 2.11 and 8.06 with respect to its participation in 
the Commitments and the Loans outstanding from time to time; provided, that no 
such Participant shall be entitled to receive any greater amount pursuant to 
such Sections than the transferor Lender would have been entitled to receive 
in respect of the amount of the participation transferred to such Participant 
had no such transfer occurred.

	(c)  Assignments.  Any Lender may, in the ordinary course of its 
commercial banking business and in accordance with applicable Law, at any time 
assign all or a portion of its rights and obligations under this Agreement and 
the other Loan Documents (including, without limitation, all or any portion of 
its Commitments and Loans owing to it and any Note held by it) to any Lender, 
any affiliate of a Lender or to one or more additional commercial banks or 
other Persons (each a "Purchasing Lender"); provided, that

	(i) any such assignment to a Purchasing Lender which is not a 
Lender or an affiliate of a Lender shall be made only with the consent 
of the Borrower (which consent shall not be unreasonably withheld), 
except no such consent shall be required after the occurrence of an 
Event of Default under Sections 7.01 (m) or (n) hereof,

	(ii)  if a Lender makes such an assignment of less than all of its 
then remaining rights and obligations under this Agreement and the other 
Loan Documents, such transferor Lender shall retain, after such 
assignment, a minimum principal amount of $10,000,000 of the Commitments 
and Loans then outstanding, and such assignment shall be in a minimum, 
aggregate principal amount of $5,000,000 of the Commitments and Loans 
then outstanding,

	(iii)  each such assignment shall be of a constant, and not a 
varying, percentage of each Commitment of the transferor Lender and of 
all of the transferor Lender's rights and obligations under this 
Agreement and the other Loan Documents, and

	(iv)  each such assignment shall be made pursuant to a Transfer 
Supplement in substantially the form of Exhibit G to this Agreement, 
duly completed  (a "Transfer Supplement"). 

	Notwithstanding the foregoing, any Lender assigning its rights and 
obligations under this Agreement may retain any Bid Loans made by it 
outstanding at such time, and in such case shall retain its rights 
hereunder in respect of any Bid Loans so retained until such Bid Loans 
have been repaid in full in accordance with this Agreement.

In order to effect any such assignment, the transferor Lender and the 
Purchasing Lender shall execute and deliver to the Borrower a  duly completed 
Transfer Supplement (including the consents required by clause 8.14 (c) (i) 
with respect to such assignment, together with any Note or Notes subject to 
such assignment (the "Transferor Lender Notes").  Upon such execution and 
delivery from and after the close of business on the Transfer Effective Date 
specified in such Transfer Supplement

	(x)  the Purchasing Lender shall be a party hereto and, to the 
extent provided in such Transfer Supplement, shall have the rights and 
obligations of a Lender hereunder; provided, as of the Transfer 
Effective Date, such Purchasing Lender shall not be entitled to receive 
in respect of the amount of the Loans and Commitments transferred to 
such Purchasing Lender any amount under Section 2.11 that is greater 
than the amount which the transferor Lender would have been entitled to 
receive had no such transfer occurred (although it may receive such 
greater amounts after the Transfer Effective Date if the right to 
receive such greater amounts arises as a result of circumstances not 
existing on the Transfer Effective Date), and

	(y)  the transferor Lender thereunder shall be released from its 
obligations under this Agreement to the extent so transferred (and, in 
the case of a Transfer Supplement covering all or the remaining portion 
of a transferor Lender's rights and obligations under this Agreement, 
such transferor Lender shall cease to be a party to this Agreement) from 
and after the Transfer Effective Date, except that such transferor 
Lender shall continue to be entitled to the benefits of Sections 2.10, 
2.11 and 8.06 hereof with respect to its activities as a Lender prior to 
the Transfer Effective Date.

On or prior to the Transfer Effective Date specified in a Transfer Supplement, 
the Borrower, at its expense, shall execute and deliver to the Purchasing 
Lender new Notes evidencing such Purchasing Lender's assigned Commitments or 
Loans and to the transferor Lender replacement Notes evidencing the Loans or 
Commitments retained by the transferor Lender (such Notes to be in exchange 
for, but not in payment of, those Notes then held by such transferor Lender).  
Each such Note shall be dated the date and be substantially in the form of the 
predecessor Note.  The Transferor Lender shall mark the predecessor Notes 
"exchanged" and deliver them to the Borrower.  Accrued interest and accrued 
fees shall be paid to the Purchasing Lender at the same time or times provided 
in the predecessor Notes and this Agreement.

	(d)  Financial and Other Information.  The Borrower authorizes 
each Lender to disclose, subject to the provisions of Section 8.16 hereof, to 
any Participant or Purchasing Lender (each, a "transferee") and any 
prospective transferee any and all financial and other information in such 
Person's possession concerning the Borrower and its Subsidiaries and 
Affiliates which has been or may be delivered to such Person by or on behalf 
of the Borrower in connection with this Agreement or any other Loan Document 
or such Person's credit evaluation of the Borrower and its Subsidiaries and 
Affiliates.

	(e)  Assignments to Federal Reserve Bank.  Any Lender may at any 
time assign all or any portion of its rights under this Agreement, including 
without limitation any Loans owing to it, and any Note held by it to a Federal 
Reserve Bank.  No such assignment shall relieve the transferor Lender from its 
obligations hereunder.

	8.15.  Relationship Among the Lenders.  No Lender is making any 
representation or warranty to any other Lender or the Borrower and assumes no 
responsibility with respect to (a) the execution, delivery, effectiveness, 
enforceability, genuineness, validity or adequacy of this Agreement or any 
other Loan Document, (b) any recital, representation, warranty, document, 
certificate, report or statement in, provided for in, received under or in 
connection with, this Agreement or any other Loan Document, (c) the 
performance or observance of any of the terms or conditions of this Agreement 
or any other Loan Document on the part of the Borrower, (d) the business, 
operations, condition (financial or otherwise) or prospects of the Borrower or 
any other Person, or (e) the existence of any Event of Default or Potential 
Default.  Each Lender confirms that it has made its own credit analysis and 
decision independently and without reliance upon any other Lender and, based 
on such documents and information as it shall deem appropriate at the time, 
will make its own decisions to take or not take action under or in connection 
with this Agreement or any other Loan Document.  No Lender is acting as the 
agent for any other Lender hereunder or under any other Loan Document.

	8.16.  Confidentiality.  Each Lender, each Participant, each 
Purchasing Lender and each subsequent holder of any Note by acceptance thereof 
shall be deemed to agree that any and all information of any kind (whether 
written or oral) obtained pursuant to this Agreement that shall not then be or 
have become generally available to the public, shall be kept and maintained in 
strictest confidence, and shall not be disclosed or disseminated to any other 
party, except (a) to any regulatory agency having apparent authority to 
examine the loan portfolio, books and records of such Lender, Participant, 
Purchasing Lender or any such subsequent holder, (b) in response to any 
subpoena or other appropriate legal process to which such Lender, Participant, 
Purchasing Lender or any such subsequent holder is subject, (c) pursuant to 
any Law or regulation, (d) to outside accountants, lawyers or other 
professionals employed by such Lender, Participant, Purchasing Lender or any 
such subsequent holder in  connection with this Agreement who agree to observe 
these restrictions on confidentiality, and (e) to any prospective Participant 
or transferee of any Note which agrees to observe these restrictions on 
confidentiality.

	8.17.  Governing Law; Submission to Jurisdiction; Waiver of Jury 
Trial; Limitation of Liability.

	(a)  Governing Law.  THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS 
(EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN 
DOCUMENTS) SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH 
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CHOICE OF LAW 
PRINCIPLES.

	(b)  Certain Waivers.  THE BORROWER HEREBY IRREVOCABLY AND 
UNCONDITIONALLY:

	(i)  AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON 
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR 
ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN 
CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") 
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION 
SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION 
OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT 
IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING 
HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER TO BRING ANY ACTION, SUIT OR 
PROCEEDING IN ANY OTHER FORUM);

	(ii)  WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE 
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, 
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN 
INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY 
RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT 
HAVE JURISDICTION OVER THE BORROWER;

	(iii)  CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR 
OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED 
U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES 
DESCRIBED IN SECTION 8.05 HEREOF, AND CONSENTS AND AGREES THAT SUCH 
SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE 
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF 
PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND

	(iv)  WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.

	(c)  Limitation of Liability.  TO THE FULLEST EXTENT PERMITTED BY 
LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY LENDER OR ANY AFFILIATE, 
DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY SPECIAL, 
INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY 
CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR 
ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN 
CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY 
OTHER THEORY OF LIABILITY).  THE BORROWER HEREBY WAIVES, RELEASES AND AGREES 
NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY 
EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED 
TO EXIST IN ITS FAVOR.

	8.18. Judgment Currency.  (a)  The specification in this Agreement 
and in the other Loan Documents of payment in Dollars or an Alternate Currency 
at the Lender's Payment Offices is of the essence hereof and thereof.  If any 
court or tribunal shall render a judgment or order for the payment of any 
amounts owing to any Lender under this Agreement or any other Loan Document or 
for the payment of damages in respect of any breach of this Agreement or any 
other Loan Document or under or in respect of a judgment or order of another 
court or tribunal for payment of such amounts or damages, and if such judgment 
or order is expressed in a currency (the "Judgment Currency") other than the 
currency payable hereunder (the "Contractual Currency"), the Borrower shall 
indemnify and hold harmless each Lender against any deficiency in terms of the 
Contractual Currency in the amounts received by such Lender arising or 
resulting from any variation as between (i) the rate of exchange at which the 
Contractual Currency is converted into the Judgment Currency for the purposes 
of such judgment or order and (ii) the rate of exchange at which such Lender 
would, in accordance with normal banking procedures, be able to purchase the 
Contractual Currency with the amount of the Judgment Currency actually 
received by such Lender on the London Business Day following such receipt by 
such Lender.

	(b)  If the Borrower shall wind up, liquidate, dissolve or become 
bankrupt while there remains outstanding any amounts owing to any Lender under 
this Agreement or any other Loan Document or any damages owing to any Lender 
in respect of a breach of this Agreement or any other Loan Document or any 
judgment or order rendered in respect of such amounts or damages, the Borrower 
shall indemnify and hold each Lender harmless against any deficiency in terms 
of the Contractual Currency in the amounts received by such Lender arising or 
resulting from any variation as between (i) the rate of exchange at which the 
Contractual Currency is converted into another currency (the "Liquidation 
Currency") for purposes of such winding-up, liquidation, dissolution or 
bankruptcy with regard to the amount in the Contractual Currency due or 
contingently due under this Agreement or any other Loan Document (other than 
this Section 8.18 (b)), or under any judgment or order into which the relevant 
obligations under this Agreement or any other Loan Document shall have been 
merged and (ii) the rate of exchange at which such Lender could, in accordance 
with normal banking procedures, be able to purchase the Contractual Currency 
with the Liquidation Currency at the earlier of (A) the date of payment of 
such amounts or damages and (B) the final date or dates for the filing of 
proofs of a claim in such winding-up, liquidation, dissolution or bankruptcy.  
As used in the preceding sentence, the "final date or dates for the filing of 
proofs of a claim in a winding-up, liquidation, dissolution or bankruptcy" 
shall be the date fixed by the liquidator or other appropriate person or 
otherwise applicable under applicable Law as being the last practicable date 
as of which the liabilities of the Borrower may be ascertained for such 
winding-up, liquidation, dissolution or bankruptcy before payment by the 
liquidator or other appropriate person is respect thereof.

	(c)  The indemnities provided by Sections 8.18 (a) and (b) hereof 
shall constitute obligations of the Borrower separate and independent from its 
other obligations under this Agreement and the other Loan Document, shall give 
rise to separate and independent causes of action against the Borrower, shall 
apply irrespective of any indulgence granted by any Lender from time to time 
and shall continue in full force and effect notwithstanding any judgment or 
order or the filing of any proof or proofs in the winding-up, liquidation, 
dissolution or bankruptcy of the Borrower for a liquidated sum or sums in 
respect of other amounts due under this Agreement or any other Loan Document 
or any damages owing to any Lender in respect of a breach of this Agreement or 
any other Loan Document or any judgment rendered in respect of such amounts or 
damages.

	IN WITNESS WHEREOF, the parties hereto, by their officers 
thereunto duly authorized, have executed and delivered this Agreement as of 
the date first above written.

Attest:                             KENNAMETAL INC.

/s/ DAVID T. COFER                  By: /s/ JAMES E. MORRISON
- --------------------------------        -----------------------------------
Title: Vice President, Secretary        Title: Vice President and Treasurer
       and General Counsel
                                    Address for Notices:
                                    Route 981 South near Westmoreland
                                       County Airport
                                    Latrobe, PA  l5650
                                    Attn:  Treasurer
                                    Telephone:     (412) 539-5180
                                    Telecopier:    (412) 539-4668


                                    MELLON BANK, N.A.

                                    By: /s/ MARTIN T. HANNING
                                        ---------------------
                                        Title: Vice President

                                    Initial Revolving Credit
                                    Committed Amount :  $30,000,000

                                    Address for Notices:
                                    Domestic Lending Office:
                                    Eurocurrency Lending Office:

                                    Mellon Bank, N.A.
                                    Three Mellon Bank Center
                                    153-2302
                                    Pittsburgh, PA  15259
                                    Attn: Patricia Martin
                                    Telephone:     (412) 234-4710
                                    Telecopier:    (412) 236-2028


                                    PNC BANK, NATIONAL ASSOCIATION

                                    By: s/s LAWRENCE W. JACOBS
                                        ----------------------
                                        Title: Vice President

                                    Initial Revolving Credit
                                    Committed Amount:  $30,000,000

                                    Address for Notices:
                                    Domestic Lending Office:
                                    Eurocurrency Lending Office:

                                    PNC Bank, National Association
                                    One PNC Plaza
                                    Fifth Avenue and Wood Street
                                    Pittsburgh, PA  15265

                                    Attn:  Kennametal Relationship Manager

                                    Telephone:     (412) 762-2524
                                    Telex:         866 533
                                    Telecopier:    (412) 762-6484


                                    DEUTSCHE BANK AG, New York Branch
                                    and/or Cayman Islands Branch

                                    By: s/s STEPHAN A. WIEDEMAN
                                        -----------------------
                                        Title: Vice President

                                    By: s/s HANS-JOSEF THIELE  
                                        -----------------------
                                        Title: Vice President

                                    Initial Revolving Credit
                                    Committed Amount:  $30,000,000

                                    Address for Notices:
                                    Domestic Lending Office;
                                    Eurocurrency Lending Office:

                                    Deutsche Bank AG, New York Branch
                                    31 West 52nd Street
                                    New York NY  10019
                                    Attn:  Kennametal Relationship Manager
                                           Corporate Finance-Domestic
                                           Attn:  Mr. R-P Mikolayczyk

                                    Telephone:     (212) 474-8237
                                    Telex:         429 166
                                         (Answerback:   DEUTBKNY)
                                    Telecopier:    (212) 474-8212

46




 

5 This schedule contains summary financial information extracted from the March 31, 1996 Condensed Consolidated Financial Statements (unaudited) and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS JUN-30-1996 JUL-01-1995 MAR-31-1996 12,624 0 202,669 10,227 211,944 439,272 541,525 278,218 792,846 215,266 0 36,712 0 0 387,851 792,846 800,172 800,172 461,960 461,960 16,486 1,303 9,008 84,079 33,200 50,879 0 0 0 50,879 1.91 0

                                                    KENNAMETAL INC.
                                                    Corporate Public Relations
                                                    Latrobe, PA 15650
                                                    412-539-4618

                                                    CONTACT: Charles T. Glazer

FOR IMMEDIATE RELEASE



                          KENNAMETAL TO CONSOLIDATE
                              GLOBAL HEADQUARTERS

                     Raleigh Office Will Move To Latrobe


Latrobe, Pa. -- April 30, 1996 -- Kennametal Inc. (NYSE: KMT) announced today 
a plan to further consolidate the corporation's global headquarters in 
Latrobe, Pa., including the moving of its North American Metalworking 
Headquarters from Raleigh, N.C.

     The action will affect approximately 300 employees in Raleigh, many of 
whom will move to Latrobe.

     "This consolidation supports our long-range strategic objectives, 
including the creation of a global marketing organization," said Robert L. 
McGeehan, president and chief executive officer.  "It will result in a much 
more efficient and focused corporate structure that will bring even more value 
to our customers.  As we grow globally in today's competitive environment, it 
is imperative that we function with maximum efficiency.  This plan will 
further improve our day-to-day communication, market planning, forecasting, 
sales, customer service and overall administration."

     McGeehan added that relocating from the Raleigh location also will result 
in certain cost savings.  He stressed that the consolidation plan was 
thoroughly reviewed and that the decision was made in the best interest of the 
corporation's future.

     "If we are to continue to be the world leader in our industry," McGeehan 
continued, "we must leverage all the resources and talent we have available.  
This consolidation will bring together our marketing people, our engineering, 
manufacturing, distribution services, research and development people and our 
administrative leadership on a corporate campus that includes our industry 
leading, $30-million corporate technology center."

     In addition to operational efficiencies, Kennametal expects to see 
significant long-term financial benefits.  "This consolidation is part of our 
long-range strategy to remain a global leader and to stay ahead of the 
competition," said Richard J. Orwig, vice president, chief financial and 
administrative officer.  "We will take a pretax charge of $3.5 million in the 
quarter ending June 30, 1996, and additional charges of approximately $9 
million over the next two years as the move occurs.  After the consolidation 
is finalized, we'll realize very favorable, long-term financial benefits from 
this move."

     The consolidation also includes the relocation of certain facilities 
within the Latrobe area.  Construction of a new corporate headquarters 
building is expected to begin by July 1996 on land Kennametal already owns 
between its existing headquarters building and the Corporate Technology Center 
on Route 981 south.  "When we complete our new building in September 1997," 
Orwig continued, "it will house our corporate headquarters, global marketing 
and certain other functions.  We'll move employees from Raleigh, along with 
those employees currently in our Center Drive location and the Eiseman 
Building (1004 Ligonier Street, Latrobe), into the new building and into our 
existing headquarters building."

     The new building will be approximately 130,000 square feet.  Kennametal 
will invest nearly $20 million to construct the new building, renovate the 
existing headquarters building and make other significant improvements to its 
headquarters campus property.  Once complete, Kennametal's three-building 
headquarters complex will total approximately 380,000 square feet of space and 
will house approximately 700 employees.

     "We have received tremendous cooperation from our government leaders," 
added McGeehan. "This project has received strong support from Governor Ridge, 
Secretary of Commerce Hagen and their staffs, and from other officials in the 
state, Westmoreland County, Unity Township and the Eastern Westmoreland 
Development Corporation."

     "All our research and analysis strongly support this decision," said H. 
Patrick Mahanes, vice president and chief operating officer.  "If we are to 
remain globally competitive, we need to be more focused and efficient.  This 
move will centralize our marketing efforts and our functional management.  It 
will maximize our creativity and innovation, and will enable us to quickly and 
consistently develop new products, new applications, new services and new 
approaches to solving our customers' business challenges."

     Mahanes added that this consolidation project will not affect 
Kennametal's operations at its Charlotte, Henderson or Roanoke Rapids, North 
Carolina sites, which together employ approximately 360 persons.  "Our 
strategy calls for continuing manufacturing at Henderson and Roanoke Rapids," 
Mahanes continued, "and maintaining our Charlotte customer service center.  
These operations are successful and the only effect of the Raleigh action will 
be to provide them with even greater headquarters support."

     Kennametal's move is positive news for western Pennsylvania, which has 
seen many companies and jobs move to the sunbelt over the past decade.  CEO 
McGeehan added, "For Kennametal, this is a wise decision.  We always have been 
headquartered in Latrobe.  We have deep roots in western Pennsylvania, but 
today, we are a different company and are competing in a different world.  
Challenges lie ahead, but I know Kennametal people will meet those challenges.  
This consolidation will make us even stronger and better than we are today."

                                  # # # # #