AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT BY AND AMONG MORTON INDUSTRIAL GROUP, INC., THE GUARANTORS FROM TIME TO TIME PARTY HERETO, THE PURCHASERS AND BMO NESBITT BURNS CAPITAL (U.S.), INC., AS AGENT DATED AS OF JUNE 23, 2004

EXHIBIT 99.2

AMENDED AND RESTATED
NOTE AND WARRANT PURCHASE AGREEMENT

BY AND AMONG

MORTON INDUSTRIAL GROUP, INC.,
THE GUARANTORS FROM TIME TO TIME PARTY HERETO,
THE PURCHASERS

AND

BMO NESBITT BURNS CAPITAL (U.S.), INC.,
AS AGENT

DATED AS OF JUNE 23, 2004

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PURCHASER SCHEDULE

MORTON INDUSTRIAL GROUP, INC.
AMENDED AND RESTATED
NOTE AND WARRANT
PURCHASE AGREEMENT

     This Amended and Restated Note and Warrant Purchase Agreement is entered into as of June 23, 2004, (the “ Agreement ”), by and among Morton Industrial Group, Inc., a Georgia corporation (the “ Company ”), each of the Subsidiaries from time to time becoming a party hereto, as Guarantors, each of the purchasers set forth in the Purchaser Schedule hereto (together with any other transferee or other Person that becomes a holder of any Note, collectively, the " Purchasers ” and individually, a “ Purchaser ”), and BMO Nesbitt Burns Capital (U.S.), Inc., in its capacity as agent hereunder (hereinafter referred to as " BMO ” or the “ Agent ”).

     WHEREAS, Agent, the Company and certain other parties entered into that certain Note and Warrant Purchase Agreement dated as of March 26, 2004 (the " Original Purchase Agreement ”), pursuant to which, among other things: Agent purchased from the Company (i) a Senior Secured Subordinated Promissory Note in the aggregate principal amount of $10,000,000 (the “ Original BMO Note ”) and (ii) a Stock Purchase Warrant to acquire shares of the Common Stock of the Company (the “ Original BMO Warrant ”);

     WHEREAS, JZ Equity Partners PLC, a company formed under the laws of England and Wales (“ JZ Partners ”) and Prism Mezzanine Fund SBIC, L.P., a Delaware limited partnership (“ Prism ” and, together with BMO and JZ Partners, the “ Investors ”) desire to lend money to the Company and become a party to, and be subject to the terms of, the Purchase Agreement as if each of them were originally named a party thereunder;

     WHEREAS, the Company has requested the Investors to extend an additional loan to the Company in the aggregate amount of $2,000,000 to repay certain of the Company’s senior debt and certain expenses of the Company;

     WHEREAS, as a result of the transactions contemplated by this Agreement, a portion of the obligations under the Original BMO Note will be paid off and the Original BMO Warrant will be reduced; and

     WHEREAS, the parties hereto have agreed to amend and restate in its entirety the Original Purchase Agreement in accordance with the terms of this Agreement.

     The parties hereto agree as follows:

SECTION 1

PURCHASE AND SALE OF THE NOTES AND WARRANTS

     Section 1.1 Notes and Warrants.

          (a) Sale and Issuance of Securities. Subject to the terms and conditions hereof, at the Closing the Company shall sell to the Purchasers and the Purchasers shall purchase from the Company (i) the Notes in the aggregate principal amount of $12,000,000, in the

amounts set forth opposite each Purchaser’s name as set forth in the Purchaser Schedule, and (ii) the Warrants to purchase in the aggregate nine percent (9%) of the Company’s common stock on a fully-diluted basis, in the amounts set forth opposite each Purchaser’s name as set forth in the Purchaser Schedule.

          (b) Guaranties. The obligations of the Company under the Notes, the Collateral Documents and, with respect to the payment to each Purchaser of the Put Price (as defined in the Warrants), shall be guaranteed by each Subsidiary of the Company pursuant to a guaranty in form and substance acceptable to the Agent (the “ Guaranty ”).

     Section 1.2 The Closing. The closing of the separate purchases and sales of the Securities (the “ Closing ”) shall take place at the offices of Vedder, Price, Kaufman & Kammholz, P.C., at 10:00 a.m. on June 23, 2004 (the “ Closing Date ”), or at such other place or on such other date as may be mutually agreeable to the Company, the Agent and the Purchasers. At the Closing, the Company shall deliver to the Purchasers instruments evidencing the Notes and the Warrants to be purchased by such Purchaser, payable to the order of such Purchaser or its nominee or registered in such Purchaser’s or its nominee’s name, respectively, upon payment by such Purchaser of the amount set forth opposite such Purchaser’s name in the Purchaser Schedule, by wire transfer of immediately available funds to an account specified in writing by the Company to the Agent at least two (2) Business Days prior to the Closing.

     Section 1.3 Pro Rata Payment. All payments to the Purchasers or any other holders of the Notes (whether for principal, interest or otherwise) shall be made pro rata among such holders based upon the aggregate unpaid principal amount of the Notes held by each such holder. If any holder of any of the Notes obtains any payment (whether voluntary or involuntary) of principal, interest or other amount with respect to any of the Notes in excess of such holder’s pro rata share of such payments obtained by all holders of the Notes, such holder hereby agrees to purchase from the other holders of the Notes a participation in the Notes held by them as is necessary to cause such holders to share the excess payment ratably among each of them as provided in this Section 1.3.

SECTION 2

INTEREST

     Section 2.1 Interest Rate.

          (a) The A Notes shall bear interest on the unpaid balance thereof at the aggregate rate of 16% per annum, and shall be payable at the times specified in the A Notes, which interest shall be segregated into Current Interest and Deferred Interest, all as more fully specified in the A Notes.

          (b) The B Note shall bear interest on the unpaid balance thereof at the aggregate rate of 14% per annum and having such other terms as set forth in such B Note, and shall be payable at the times specified in the B Note, which interest shall be segregated into Current Interest and Deferred Interest, all as more fully specified in the B Note.

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     Section 2.2 Computation of Interest. All interest shall be computed on the basis of a year of 360 days for the actual number of days elapsed.

     Section 2.3 Default Rate. Notwithstanding anything to the contrary contained herein, while any Event of Default exists or after acceleration, the Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all Notes at a rate per annum equal to the rate specified in Section 10.2 of this Agreement. Any interest above the aggregate rate specified in Section 2.1 required to be paid under this Section 2.3 shall be deemed to be Current Interest.

SECTION 3

FEES, PREPAYMENTS, TERMINATIONS,
APPLICATIONS AND NOTATIONS

     Section 3.1 Fees.

          (a) Commitment Fee. For the period from and including the date hereof to but not including the Maturity Date, the Company shall pay to the Agent for the ratable benefit of the Purchasers as hereinafter set forth, a commitment fee of $40,000.

          (b) Audit and Appraisal Fees. The Company shall pay to the Agent for its own use and benefit reasonable charges for audits of the Collateral by the Agent or its agents or representatives in such amounts as the Agent may from time to time reasonably request (the Agent acknowledging and agreeing that such charges shall be computed in the same manner as it at the time customarily uses for the assessment of charges for similar collateral audits actually performed by it). The Agent, on behalf of the Purchasers, shall be entitled to conduct two (2) such audits (each a “ Scheduled Field Audit ”) during each calendar year (unless any Default or Event of Default has occurred, in which case there shall be no limit on the number of such audits). In the absence of any Default or Event of Default, the Company shall not be required to reimburse the Agent for more than two (2) Scheduled Field Audits per calendar year.

     Section 3.2 Voluntary Prepayments of Notes.

          (a) Optional Prepayments of the Notes. At any time and from time to time, the Company may, at its option, upon notice as provided in Section 3.2(b), prepay all or any portion of the principal balance of the Notes, on any quarterly payment date, in minimum increments of $500,000, plus a prepayment premium equal to the product obtained by multiplying (i) the amount being prepaid by (ii) the percentage set forth below opposite the time period in which such prepayment shall occur (the “ Prepayment Premium ”):

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In addition, the Company may, at its option, upon notice as provided in Section 3.2(b), prepay all or any portion of the Deferred Interest on any quarterly payment date without having to pay a prepayment premium. Except as provided in Section 3.2(a) and 3.2(c) hereof, the Notes may not be voluntarily prepaid by the Company.

          (b) Notice of Optional Prepayments; Officer’s Certificate. The Company will give each holder of the Notes written notice of such optional prepayment under Section 3.2(a) not less than two (2) Business Days prior to the date fixed for such prepayment. Each such notice shall be accompanied by an officer’s certificate (i) stating the principal amount and holder of each Note to be prepaid and the principal amount thereof to be prepaid, (ii) stating the proposed date of prepayment and any conditions relating thereto and (iii) stating the Prepayment Premium required under Section 3.2(a) (calculated as of the date of such prepayment).

          (c) Contingent Prepayments of Notes on Change of Control; Officer’s Certificates.

          (i) In the event of a Change of Control, the Company will, at least thirty (30) days and not more than sixty (60) days prior to such Change of Control, give written notice thereof to each holder of the Securities, which shall contain a written irrevocable notice that the Company will prepay (a “ Prepayment Notice ”), by a date (the “ Prepayment Date ”) specified in such notice (which date shall be on or prior to the effective date of the Change of Control), all of the Obligations under the Notes held by such holder in full (and not in part) in cash. Such notice may state that the Company’s prepayment is conditioned upon the consummation of such Change of Control. The Company shall pay to such holder the outstanding principal amount of all Notes then held by such holder, together with all accrued and unpaid interest thereon and all other amounts thereunder. In the event of a prepayment of the Notes in connection with a Change of Control, no Prepayment Premium shall be due in connection therewith and neither the Company nor any Guarantor shall be liable therefor.

          (ii) Any notice by the Company to prepay the Notes, and any subsequent prepayment thereof pursuant to this Section 3.2(c), shall be accompanied by an officer’s certificate (A) stating the principal amount of each Note to be prepaid, (B) stating the Prepayment Date, (C) stating the accrued interest and all other amounts thereunder on each such Note to the Prepayment Date to be prepaid, (D) stating the Prepayment Premium payable in connection with such proposed prepayment (calculated as of the date of such notice or prepayment, as the case may be), (E) certifying that the conditions of this Section 3.2(c) have been fulfilled, and (F) specifying the nature of the Change of Control, the transactions or proposed transactions resulting in such Change of Control and the date or proposed date of the occurrence of such Change of Control.

     Section 3.3 Place of Payments. All payments of principal, interest, fees and all other amounts payable hereunder shall be made to such Purchaser’s account as specified in the Purchaser Schedule on the date any such payment is due and payable. All such payments shall be made in lawful money of the United States of America, by wire transfer of immediately available funds at the place of payment, without setoff or counterclaim and without reduction for,

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and free from, any and all present or future taxes, levies, imposts, duties, fees, charges, deductions, withholdings, restrictions or conditions of any nature imposed by any government or any political subdivision or taxing authority thereof (but excluding any taxes imposed on or measured by the net income of such Purchaser). Payments received by such Purchaser after 1:00 p.m. (Chicago time) or any date shall be deemed received as of the opening of business on the next Business Day. Except as herein provided, all payments shall be received by the Agent for the ratable account of the Purchasers and shall be promptly distributed by the Agent ratably to the Purchasers. No amount paid or prepaid on the Notes may be reborrowed.

     Section 3.4 Application of Payments Anything contained herein to the contrary notwithstanding, all payments and collections received in respect of the Notes and other Obligations by the Agent or any of the Purchasers, after acceleration or the final maturity of the Obligations as a result of an Event of Default, shall be remitted to the Agent and distributed as follows:

          (a) first, to the payment of any outstanding costs and expenses incurred by the Agent in protecting, preserving or enforcing rights under this Agreement and the other Operative Documents and in any event including all costs and expenses of a character which the Company has agreed to pay under Section 13.4 hereof (such funds to be retained by the Agent for its own account unless it has previously been reimbursed for such costs and expenses by the Purchasers, in which event such amounts shall be remitted to the Purchasers to reimburse them for payments theretofore made to the Agent);

          (b) second, to the payment of any outstanding interest or other fees or indemnification amounts due under the Operative Documents other than for principal of the Notes, ratably as among the Agent and the Purchasers in accord with the amount of such interest and other fees or Obligations owing each;

          (c) third, to the payment of all other unpaid Obligations and all other indebtedness, obligations, and liabilities of the Company and its Subsidiaries secured by the Operative Documents (including, without limitation, the Put Price and any Deferred Put Obligation) to be allocated pro rata in accordance with the aggregate unpaid amounts owing to each holder thereof; and

          (d) fourth, to the Company or to whoever the Agent reasonably determines to be lawfully entitled thereto.

SECTION 4

COLLATERAL

     Section 4.1 Collateral. The payment and performance of the Obligations shall at all times be secured by, among other things, (a) all of the Company’s and its Subsidiaries’ accounts, chattel paper, documents, instruments, general intangibles, inventory, equipment and certain other assets and property of the Company and its Subsidiaries, in each case whether now owned or held or hereafter acquired or arising, pursuant to that certain Security Agreement from the Company and its Subsidiaries dated as of March 26, 2004, as the same has been or may hereafter

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be amended, modified or supplemented from time to time (the " Security Agreement ”), (b) all of the capital stock of the Subsidiaries and certain other assets and property of the Company and its Subsidiaries, in each case whether now owned or held or hereafter acquired or arising, pursuant to that certain Pledge Agreement from the Company dated as of March 26, 2004, as the same has been or may be hereafter amended, modified or supplemented from time to time (the “ Pledge Agreement ”), and (c) the real estate and related assets and properties of the Company and its Subsidiaries, in each case whether now owned or held or hereafter acquired or arising, pursuant to mortgages and trust deeds reasonably acceptable to the Agent as to form and substance (as supplemented or otherwise modified from time to time, collectively the " Mortgages ” and individually each a “ Mortgage ”).

     Section 4.2 Guaranties. Payment of obligations evidenced by the Notes and the other Obligations shall at all times be jointly and severally guaranteed by each Subsidiary pursuant hereto or pursuant to a Guaranty issued by such Subsidiary. In the event any Subsidiary is hereafter acquired or formed, the Company shall also cause such Subsidiary to execute such Collateral Documents (having terms and conditions substantially similar to those executed by the Company and its Subsidiaries in connection with the purchase and sale of the Securities under this Agreement) as the Agent may then require, granting in favor of the Agent for the benefit of the holders of the Notes a security interest in and lien on the assets of such Subsidiary as collateral security for the Notes and the other Obligations, together with such other instruments, documents, certificates and opinions required by the Agent in connection therewith.

     Section 4.3 Further Assurances. The Company covenants and agrees that it shall, and shall cause each Subsidiary to, comply with all terms and conditions of each of the Collateral Documents and that the Company shall, and shall cause each Subsidiary to, at any time and from time to time as requested by the Agent, execute and deliver such further instruments and do such other acts as the Agent or the Majority Holders may deem necessary or desirable to provide for or protect or perfect the Lien of the Agent in the Collateral.

     Section 4.4 Collections. The Company shall establish and maintain such arrangements as shall be necessary or appropriate to assure that all proceeds of the Collateral of the Company and its Subsidiaries are deposited (in the same form as received) in accounts maintained with a financial institution reasonably satisfactory to, and under the dominion and control of, the Agent (subject to the dominion and control of the Senior Bank Agent), such accounts to constitute special restricted accounts, the Company and Guarantors acknowledging that the Agent has (and is hereby granted) a lien on such accounts and all funds contained therein to secure the Obligations. It shall be a condition to the Company’s or any Subsidiary’s right to establish and maintain such deposit accounts at any time following the Closing Date, that the financial institutions maintaining such accounts shall have delivered to the Agent blocked account agreements reasonably satisfactory to the Agent in form and substance pursuant to which such financial institutions acknowledge the Agent’s Lien thereon, waive any right of offset or bankers’ liens thereon (other than (i) Liens of the Senior Bank Agent which are subject to the Subordination Agreement and (ii) with respect to account maintenance charges and returned items). Agent acknowledges that Harris Trust and Savings Bank is a satisfactory financial institution for purposes of this Section 4.4.

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SECTION 5

DEFINITIONS; INTERPRETATION.

     Section 5.1 Definitions. The following terms when used herein shall have the following meanings:

     " A Notes ” means and includes those certain Senior Secured Subordinated Promissory Notes dated the date hereof in the aggregate principal amount of Nine Million Fifty Thousand Dollars $9,050,000, issued to BMO and JZ Partners by the Company pursuant to this Agreement, in substantially the form attached hereto as Exhibit A-1, with the blanks appropriately filled in, as may be amended, restated, replaced, substituted or otherwise modified from time to time.

     " Acquisition ” means (i) the acquisition of all or any substantial part of the assets, property or business of any other Person, firm or corporation, (ii) any acquisition of a majority of the common stock or other equity securities of any firm or corporation, or (iii) any other transaction pursuant to which a Person is newly allocated a majority of the profits or losses of any other Person.

     " Affiliate ” means any Person, directly or indirectly controlling, controlled by, or under direct or indirect common control with, another Person. A Person shall be deemed to control another Person for the purposes of this definition if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the other Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise; provided that, in any event, any Person that owns, directly or indirectly, 5% or more of the securities having the ordinary voting power for the election of directors or governing body of a corporation or 5% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.

     " Agent ” means BMO Nesbitt Burns Capital (U.S.), Inc. and any successor thereto appointed pursuant to Section 11.1 hereof.

     " Authorized Representative ” means those Persons shown on the list of officers and employees of the Company pursuant to Section 7.2(h) hereof or on any update of any such list provided by the Company to the Agent, or any further or different officers and employees so named by any Authorized Representative in a written notice to the Agent.

     " B Note ” means and includes that certain Senior Secured Subordinated Promissory Note dated the date hereof in the aggregate principal amount of Two Million Nine Hundred Fifty Thousand Dollars $2,950,000, issued to Prism by the Company pursuant to this Agreement, in substantially the form attached hereto as Exhibit A-2, with the blanks appropriately filled in, as may be amended, restated, replaced, substituted or otherwise modified from time to time.

     " BMO ” means BMO Nesbitt Burns Capital (U.S.), Inc., a Delaware corporation.

     " Board ” shall mean the board of directors (or comparable managers) of a Person.

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     " Borrowing Base ” shall have the meaning given such term in the Senior Credit Agreement as in effect on the date hereof.

     " Borrowing Base Certificate ” shall have the meaning given such term in the Senior Credit Agreement as in effect on the date hereof.

     " Business Day ” means any day (other than a Saturday or Sunday) on which banks are not authorized or required to close in Chicago, Illinois.

     " Capital Expenditures ” means, for any period, capital expenditures of the Company and its Subsidiaries during such period as defined and classified in accordance with GAAP.

     " Capital Lease ” means any lease of Property which, in accordance with GAAP, is required to be capitalized on the balance sheet of the lessee.

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

     " Capitalized Lease Obligation ” means the amount of the liability shown on the balance sheet of any Person in respect of a Capital Lease determined in accordance with GAAP.

     " Cash Maturities ” means, with reference to any period, the aggregate amount of payments required to be made by the Company and its Subsidiaries during such period with respect to principal on all Indebtedness (whether at maturity, as a result of mandatory sinking fund redemption, scheduled mandatory prepayment or otherwise).

     " CERCLA” is defined in Section 6.15(b).

     " Change of Control ” means the occurrence, at any time after the date hereof, of (i) any Person or two or more Persons acting in concert acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act), directly or indirectly, of securities of the Company (or other securities convertible into such securities) representing more than twenty-five percent (25%) of the combined voting power of all securities of the Company entitled to vote in the election of directors; or (ii) commencing after the date hereof, individuals who as of the date hereof were directors of the Company ceasing for any reason to constitute a majority of the Parent Board unless the Persons replacing such individuals were nominated by William D. Morton or the Parent Board; or (iii) any Person or two or more Persons acting in concert acquiring by contract or otherwise, or entering into a contract or arrangement which upon consummation will result in its or their acquisition of, or control over, securities of the Company (or other securities convertible into such securities) representing more than twenty-five percent (25%) of the combined voting power of all securities of the Company entitled to vote in the election of directors; or (iv) except for Permitted Transfers, either William D. Morton or Mark W. Mealy

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ceases any time and for any reason own and to hold of record at least ninety percent (90%) of the securities of the Company which he owns and holds of record on March 26, 2004; or (v) William D. Morton shall fail to own or be a party to one or more contracts or arrangements giving him voting control over at least fifty-one percent (51%) of the combined voting power of all securities of the Company entitled to vote in the election of directors.

     " Closing Date ” means the date on which the Agent has received signed counterpart signature pages of this Agreement from each of the signatories and the conditions in Section 7.1 and 7.2 hereof have been fulfilled.

     " Code ” means the Internal Revenue Code of 1986, as amended, and any successor statute thereto.

     " Collateral Documents ” means the Security Agreement, the Pledge Agreement, the Mortgages and all other mortgages, deeds of trust, security agreements, assignments, financing statements and other documents as shall from time to time secure the Obligations.

     " Consolidated Entity ” means, collectively, the Company and each of its Subsidiaries that are consolidated for financial reporting purposes.

     " Consolidated Net Income ” means, with reference to any period, the net income (or net deficit) of the Company and its Subsidiaries for such period as computed on a consolidated basis in accordance with GAAP.

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

     " Credit Parties ” means the Company and the Domestic Subsidiaries, and the term “ Credit Party ” shall mean any of the foregoing unless the context in which such term is used shall otherwise require.

     " Current Interest ” means the rate of twelve percent (12.00%) per annum (computed on the basis of a 360-day year and the actual number of days elapsed in any year) on the unpaid principal amount of the Notes outstanding from time to time from and including the date of issuance thereof until the date paid, or if less, at the highest rate then permitted under applicable law.

     " Default ” means any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.

     " Deferred Interest ” means the rate of four percent (4%) per annum (computed on the basis of a 360-day year and the actual number of days elapsed in any year) on the unpaid principal amount of the Notes outstanding from time to time from and including the date of issuance thereof until the date paid, or if less, at the highest rate then permitted under applicable law.

     " Deferred Put Obligations ” shall have the meaning given such term in the Warrants.

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     " Domestic Subsidiary ” means each Subsidiary of the Company which is organized under the laws of the United States of America or any State thereof.

     " EBIT ” means, with reference to any period, Consolidated Net Income for such period plus all amounts deducted in arriving at such Consolidated Net Income for such period in respect of (i) Interest Expense for such period, plus (ii) federal, state and local income taxes for such period, plus (iii) with respect to any applicable accounting period of the Company, to the extent such charges against Consolidated Net Income are reflected on the Company’s annual audited financial statements for the most recent fiscal year then ended, (x) non-cash charges reflecting impairment charges arising from SFAS No. 142 (Goodwill and Other Intangible Assets), for such period, and (y) non-cash charges for accretion of discount on, or interest on, preferred stock of the Company for such period, plus or minus (iv) non-cash charges or gains resulting from any valuation of the Warrants in accordance with the provisions of FAS 150.

     " EBITDA ” means, with reference to any period, EBIT for such period plus all amounts properly deducted in arriving at such Consolidated Net Income for such period in respect of depreciation of fixed assets and amortization of intangible assets during such period on the books of the Company and its Subsidiaries; provided, that EBITDA for the fiscal quarters of the Company listed below shall be deemed by the parties hereto to be, notwithstanding the other provisions of this definition, $3,401,000 for the fiscal quarter ended June 30, 2003, $2,324,000 for the fiscal quarter ended September 30, 2003, and $2,365,000 for the fiscal quarter ended December 31, 2003.

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

     " Environmental Laws ” means any present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, licenses, authorizations and permits of, and agreements with, any governmental authority, in each case relating to Environmental Matters.

     " Environmental Matters ” means any matter arising out of or relating to health and safety, or pollution or protection of the environment or workplace, including any of the foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, discharge, release, control or cleanup of any Hazardous Materials.

     " ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto.

     " Event of Default ” means any event or condition identified as such in Section 10.1 hereof.

     " Fixed Charge Coverage Ratio ” means, as of the last day of each fiscal quarter of the Company, the ratio of (i) EBITDA for the four fiscal quarters of the Company ending on such date, less Capital Expenditures for such four fiscal quarters, to (ii) the sum for such four fiscal quarters of (a) Interest Expense (but excluding therefrom all payment-in-kind interest and non-cash interest relating to the Warrants in accordance with the provisions of FAS 150), (b) Cash

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Maturities, (c) federal, state and local income taxes and (d) without duplication of the foregoing, stock redemption payments required to be made pursuant to the terms of the Stock Redemption Agreement; provided that , for all calculations of the Fixed Charge Coverage Ratio for fiscal quarters ending through and including December 31, 2004, (1) Interest Expense for the four fiscal quarters then ended shall be deemed by the parties hereto to be equal to the product of (x) Interest Expense incurred during the period (the " post-closing period ”) from and including the effective date through and including the last day of such period and (y) a fraction, the numerator of which is 365 and the denominator of which is the number of days in such post-closing period, (2) Cash Maturities for the four fiscal quarters then ended shall be deemed by the parties hereto to be equal to the product of (x) Cash Maturities during the post-closing period and (y) a fraction, the numerator of which is 365 and the denominator of which is the number of days in such post-closing period, and (3) stock redemption payments required to be made during the four fiscal quarters then ended shall be deemed by the parties hereto to be $500,000.

     " GAAP ” means generally accepted accounting principles as in effect from time to time, applied by the Company and its Subsidiaries on a basis consistent with the preparation of the Company’s audited financial statements referred to in Section 6.5 hereof.

     " Guarantor ” means each Subsidiary that is a signatory hereto or that executes and delivers to the Agent a Guaranty along with the accompanying closing documents required by Section 4.2 hereof.

     " Guaranteed Obligations ” is defined in Section 12.1 hereof.

     " Guaranty ” means this Agreement as to Guarantors party hereto and otherwise, a letter to the Agent in the form of Exhibit E hereto executed by a Subsidiary whereby it acknowledges it is party hereto as a Guarantor under Section 12 hereof and also in the case of any Subsidiary not organized under the laws of the United States of any State thereof, such other form of guaranty as shall be reasonably acceptable to the Agent and the Majority Holders.

     " Hazardous Material ” means all or any of the following: (i) substances that are defined or listed in, or otherwise classified pursuant to, any Environmental Laws or regulations as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity; (ii) oil, petroleum or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (iii) any flammable substances or explosives or any radioactive materials; and (iv) asbestos in any form or electrical equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls.

     " Hedging Liability ” means the liability of the Company to any of the Senior Lenders or their Affiliates in respect of any interest rate swaps, interest rate caps, interest rate collars, or other interest rate hedging arrangements as the Company may from time to time enter into with any one or more of the Senior Lenders or their Affiliates. Unless and until the amount of the Hedging Liability is fixed and determined, the Hedging Liability shall be deemed to be the

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market value of the notional amount of the hedge from the date of computation to the date the hedge expires.

     " Indebtedness ” means for any Person (without duplication) (i) all indebtedness created, assumed or incurred in any manner by such Person representing money borrowed (including by the issuance of debt securities), (ii) all indebtedness for the deferred purchase price of property or services (but specifically excluding (x) trade accounts payable arising in the ordinary course of business which are not more than 180 days past due and (y) unsecured indebtedness of the type and in the amount permitted pursuant to Section 8.14(f) hereof), (iii) all indebtedness secured by any Lien upon Property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness, (iv) all indebtedness secured by a purchase money mortgage or other Lien to secure all or part of the purchase price of Property subject to such mortgage or Lien, (v) all Capitalized Lease Obligations of such Person, (vi) all obligations of such Person on or with respect to letters of credit, bankers’ acceptances and other extensions of credit whether or not representing obligations for borrowed money, (vii) each “ non-compete ” and like payment owed by such Person in connection with an Acquisition, to the extent such payment would be classified as a liability under GAAP, and (viii) with respect to the Company or any of its Subsidiaries, all obligations of such Persons to pay the Purchase Price (and, to the extent all or any portion of such amount is reinstated pursuant to the Stock Redemption Agreement, the Stated Redemption Amount) for the Subject Stock under, and as such capitalized terms are defined in, the Stock Redemption Agreement, it being understood that for the purpose of calculating compliance with the terms and provisions of this Agreement, the amount of “Indebtedness” at any time of the type described in this clause (viii) shall be agreed by the parties to be the arithmetical sum of all such obligations then due and unpaid or to become due at any time in the future under such agreement as in effect at the time of determination, provided that there shall be excluded from this definition of “Indebtedness” the obligations of the Company under the Warrants, notwithstanding any contrary treatment thereof under GAAP.

     " Interest Expense ” means, with reference to any period (the “ measurement period ”), the sum of all interest expense with respect to Indebtedness or Hedging Liabilities relating to indebtedness (including imputed interest charges with respect to Capitalized Lease Obligations and all amortization of debt discount and expense) of the Company and its Subsidiaries for such measurement period determined in accordance with GAAP (and including, for any measurement period in the overall calculation of Interest Expense for such measurement period, the net amount of interest expense relating to Hedging Liabilities during such measurement period, whether positive or negative).

     " Investors ” has the meaning given such term in the second “Whereas” clause hereof.

     " Investor Rights Agreement ” means that certain Investor Rights Agreement dated as of March 26, 2004, as amended by that certain Joinder and First Amendment to Investor Rights Agreement dated the date hereof, among the Company, Agent and the Purchasers and certain other Persons, as the same has been or may hereafter be further amended, modified, supplemented or restated from time to time in accordance with the terms hereof.

     " Junior Subordinated Debt ” means, collectively (x) the currently outstanding Indebtedness of the Company evidenced by those two Non-Negotiable Promissory Notes

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(subordinated) each dated as of April 8, 1998, one payable to the order of Joseph T. Buie, Jr. in the currently outstanding principal amount of $1,198,358, and the second payable to the order of Ernest J. Butler in the currently outstanding principal amount of $569,632, (y) Indebtedness to Worthington under the Settlement Agreement and the Stock Redemption Agreement and (z) any other indebtedness for borrowed money which shall be subordinated in right of payment to the prior payment of the Obligations by written provisions acceptable to the Agent and Majority Holders in form and substance and otherwise pursuant to documentation, in an amount, and containing interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies and other material terms in form and substance satisfactory to the Agent and Majority Holders.

     " JZ Partners ” has the meaning given such term in the second “Whereas” clause hereof.

     " Lien ” means any mortgage, lien, security interest, pledge, charge or encumbrance of any kind in respect of any Property, including the interests of a vendor or lessor under any conditional sale, capital lease or other title retention arrangement.

     " Majority Holders ” means, as of the date of determination thereof, the holders of at least fifty-one percent (51%) of the outstanding principal amount of the Notes and the holders of at least fifty-one percent (51%) of the Underlying Capital Stock (on an as-converted basis).

     " Material Adverse Effect ” means (a) a material adverse change in, or material adverse effect upon, the operations, business, Property, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the ability of the Company or any Subsidiary to perform its material obligations under any Operative Document, or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability against the Company or any Subsidiary of any Operative Document or the rights and remedies of the Agent and the Purchasers thereunder or (ii) the perfection or priority of any Lien granted under any Collateral Document.

     " Material Plan ” is defined in Section 10.1(j) hereof.

     " Maturity Date ” means (x) March 26, 2009, or (y) if earlier, such earlier date on which the Notes are accelerated in whole pursuant to Sections 10.1 or 10.2 hereof.

     " Mid-Central ” means Mid-Central Plastics, Inc., an Iowa corporation.

     " Mid-Central Notes ” means those certain promissory notes received by Mid-Central as partial consideration for the Mid-Central Sale, including without limitation the Three Month Note, the Six Month Note and the Subordinated Note as defined in the asset purchase agreement for the Mid-Central Sale, all of which are subject to the terms of the Wells Fargo Subordination Agreement.

     " Mid-Central Sale ” means the sale by Mid-Central to Innovative Injection Technologies, Inc. of substantially all of its assets, including without limitation its right, title and interest in and to its real property and associated improvements and certain personal property associated therewith located at 2360 Grand Avenue, West Des Moines, Iowa.

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     " Mortgage ” is defined in Section 4.1 hereof.

     " Morton South Carolina ” means Morton Metalcraft Co. of South Carolina, a South Carolina corporation.

     " Notes ” means and includes, collectively, the A Notes and the B Note.

     " Obligations ” means all obligations of the Company to pay the principal and interest on the Notes, all fees and charges payable hereunder, and all other payment obligations of the Company arising under or in relation to any Operative Document, including, without limitation, the Put Price and any Deferred Put Obligations, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired.

     " Officer’s Certificate ” means a certificate signed on behalf of the Company by the Company’s president, CEO or chief financial officer, stating that (a) the officers signing such certificate have made or have caused to be made such investigations as are necessary in order to permit them to verify the accuracy of the information set forth in such certificate and (b) such certificate does not misstate any material fact and does not omit to state any fact necessary to make the certificate not misleading.

     " Operative Documents ” means this Agreement, the Notes, the Warrants, the Investor Rights Agreement, the Guaranties, the Collateral Documents and all other documents, instruments and agreements executed by or on behalf of the Company and delivered concurrently herewith or at any time hereafter to or for the Purchasers, Agent or any Affiliate of Purchasers or Agent, all as amended, restated or supplemented from time to time.

     " Option Plans ” means the Stock Option Plan and the Company Director Plan, as each such term is defined in Section 6.21(a) hereof.

     " Original BMO Note ” has the meaning given such term in the first “Whereas” clause hereof.

     " Original BMO Warrant ” has the meaning given such term in the first “Whereas” clause hereof.

     " Original Purchase Agreement ” has the meaning given such term in the first “Whereas” clause hereof.

     " Parent Board ” has the meaning given such term in Section 8.11 hereof.

     " Payment Default ” means in Event of Default as described in Section 10.1(a) after the expiration of any applicable grace period.

     " PBGC ” means the Pension Benefit Guaranty Corporation or any Person succeeding to any or all of its functions under ERISA.

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     " Person ” means an individual, partnership, corporation, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof.

     " Permitted Transfers ” means any sale, assignment, transfer, pledge, hypothecation, mortgage, encumbrance or other disposition of all or any of the Capital Stock of the Company held by William Morton or Mark Mealy, respectively, as follows: (i) by way of gift to any member of his family or to any trust or other estate planning entity for his benefit or the benefit of any such family member, provided that any such transferee shall agree in writing with the Company and the Purchasers, as a condition to such transfer, to be bound by all of the provisions of this Agreement to the same extent as if such transferee were such transferor; or (ii) by will or the laws of descent and distribution, in which event each such transferee shall be bound by all of the provisions of this Agreement to the same extent as if such transferee were such transferor. As used herein, the word “family” shall include any spouse, lineal ancestor or descendant.

     " Plan ” means any employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code that either (i) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group, (ii) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, or (iii) under which a member of the Controlled Group has any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years or by reason of being deemed a contributing sponsor under Section 4064 of ERISA.

     " Pledge Agreement ” is defined in Section 4.1 hereof.

     " Prism ” has the meaning given such term in the second “Whereas” clause hereof.

     " Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

     " Reportable Event ” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided, however , that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

     " Securities ” means, collectively, the Notes and the Warrants.

     " Securities Act ” means the Securities Act of 1933, as amended, or any similar federal law then in force.

     " Security Agreement ” is defined in Section 4.1 hereof.

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     " Securities and Exchange Commission ” includes any governmental body or agency succeeding to the functions thereof.

     " Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force.

     " Senior Bank Agent ” means Harris Trust and Savings Bank, in its capacity as agent under the Senior Credit Agreement and any successor thereto appointed pursuant to the Senior Credit Agreement.

     " Senior Credit Agreement ” means that certain Second Amended and Restated Credit Agreement, dated as of March 26, 2004, as amended by that certain First Amendment to Second Amended and Restated Credit Agreement dated the date hereof, by and among the Company, certain guarantor parties thereto, the Senior Lenders and the Senior Bank Agent, as further amended, supplemented or modified from time to time, including, without limitation, any agreement refinancing in whole or in part the “Obligations” (as defined therein) as permitted under the Subordination Agreement.

     " Senior Credit Documents ” means the Senior Credit Agreement and the related agreements, documents and instruments, as amended, modified or supplemented in accordance with the Subordination Agreement.

     " Senior Debt ” means the Indebtedness of the Company and extension of credit by the Senior Lenders under the Senior Credit Agreement, together with extensions of credit pursuant to any modifications of the Senior Credit Agreement, to the extent permitted under the Subordination Agreement, as the same may be amended, modified, supplemented or restated from time to time in accordance with the provisions of this Agreement.

     " Senior Lenders ” means the financial institutions from time to time party to the Senior Credit Agreement.

     " Settlement Agreement ” means that certain Settlement Agreement dated as of November 20, 2003 by and between Worthington Industries, Inc., Worthington and the Company.

     " Shares ” shall mean certificated or uncertificated instruments or denominations that represent the ownership of the Capital Stock of any Person.

     " SMP ” means SMP Steel Corporation, a South Carolina corporation.

     " Stock Redemption Agreement ” means that certain Stock Redemption Agreement dated as of December 23, 2003 between the Company and Worthington.

     " Subordination Agreement ” means that certain Subordination and Intercreditor Agreement dated as of March 26, 2004, as amended by that certain First Amendment to Subordination and Intercreditor Agreement dated the date hereof, by and between the Agent and Senior Bank Agent, as the same has been or may hereafter be further amended, modified, supplemented or restated from time to time in accordance with the terms hereof.

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     " Subsidiary ” means any corporation or other Person more than 50% of the outstanding ordinary voting shares or other equity interests of which is at the time directly or indirectly owned by the Company, by one or more of its Subsidiaries, or by the Company and one or more of such Subsidiaries.

     " Subsidiary Board ” has the meaning given such term in Section 8.11 of this Agreement.

     " Tax ” or “ Taxes ” means federal, state, county, local, foreign or other income, gross receipts, ad valorem, franchise, profits, sales or use, transfer, registration, excise, utility, environmental, communications, real or personal property, capital stock, license, payroll, wage or other withholding, employment, social security, severance, stamp, occupation, alternative or add-on minimum, estimated and other taxes of any kind whatsoever (including, without limitation, deficiencies, penalties, additions to tax, and interest attributable thereto) whether disputed or not.

     " Tax Return ” means any return, information report or filing with respect to Taxes, including any schedules attached thereto and including any amendment thereof.

     " Total Funded Debt ” means, at any time the same is to be determined, the aggregate of all Indebtedness of the Company and its Subsidiaries at such time, plus all Indebtedness of any other Person which is directly or indirectly guaranteed by the Company or any of its Subsidiaries or which the Company of any of its Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which the Company or any of its Subsidiaries has otherwise assured a creditor against loss.

     " Total Funded Debt/EBITDA Ratio ” means, as of the last day of any fiscal quarter of the Company, the ratio of (x) Total Funded Debt as of such date to (y) EBITDA for the four fiscal quarters of the Company ending on such date.

     " Total Senior Funded Debt ” means, at any time the same is to be determined, Total Funded Debt at such time minus the sum of (i) the principal balance of the Obligations, and (ii) the principal balance of Junior Subordinated Debt then outstanding to Messrs. Bouie and Butler, and (iii) amounts owing by the Company to Worthington pursuant to the Settlement Agreement or the Stock Redemption Agreement.

     " Total Senior Funded Debt/EBITDA Ratio ” means, as of the last day of any fiscal quarter of the Company, the ratio of (x) Total Senior Funded Debt as of such date to (y) EBITDA for the four fiscal quarters of the Company ending on such date.

     " Underlying Capital Stock ” means (a) the Capital Stock issued or issuable upon exercise of the Warrants and (b) any Capital Stock issued or issuable with respect to the securities referred to in clause (a) above by way of dividend or split or in connection with a combination of Shares, recapitalization, merger, consolidation or other reorganization. For purposes of this Agreement, any Person who exercises a Warrant shall be deemed to be the holder of the Underlying Capital Stock obtainable upon exercise of such Warrant, and such Person shall be entitled to exercise the rights of a holder of Underlying Capital Stock hereunder. As to any particular Shares of Underlying Capital Stock, such Shares shall cease to be Underlying Capital Stock when they have been (i) effectively registered under the Securities Act

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and disposed of in accordance with the registration statement covering them, (ii) distributed to the public through a broker, dealer or market maker pursuant to Rule 144 under the Securities Act (or any similar provision then in force) or (iii) repurchased by the Company or any of its Subsidiaries.

     " Unfunded Vested Liabilities ” means, for any Plan at any time, the amount (if any) by which the present value of all vested nonforfeitable accrued benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.

     " Unused Revolving Credit Commitments ” shall have the meaning given such term in the Senior Credit Agreement.

      “Warrants” means and includes those certain Stock Purchase Warrants issued by the Company in favor of the Purchasers to acquire an aggregate of nine percent (9%) of the Capital Stock of the Company, on a fully-diluted basis, in substantially the form attached hereto as Exhibit B, with the blanks appropriately filled in, as may be amended, restated, replaced, substituted or otherwise modified from time to time, and “ Warrant ” means each of the Warrants issued hereunder, individually.

     " Welfare Plan ” means a “welfare plan” as defined in Section 3(1) of ERISA.

     " Wells Fargo Subordination Agreement ” means that certain Subordination Agreement dated as of June 20, 2003 made by the Company for the benefit of Wells Fargo Business Credit, Inc. and relating to the Mid-Central Notes, in the form delivered to the Agent.

     " Wholly Owned Subsidiary ” means a Subsidiary of the Company all of the issued and outstanding shares of capital stock (other than directors’ qualifying shares as required by law) or other equity interests are owned by the Company and/or one or more Wholly Owned Subsidiaries within the meaning of this definition.

     " Worthington ” means WI Products, Inc., f/k/a Worthington Custom Plastics, Inc.

     Section 5.2 Interpretation. The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. All references to time of day herein are references to Chicago, Illinois time unless otherwise specifically provided. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement.

     Section 5.3 Change in Accounting Principles. If, after the date of this Agreement, there shall occur any change in generally accepted accounting principles from those used in the preparation of the financial statements referred to in Section 6.5 hereof and such change shall result in a change in the method of calculation of any financial covenant, standard or term found in this Agreement, either the Company or the Majority Holders may by notice to the holders of the Notes and the Company, respectively, require that the Agent (at the direction of the Majority

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Holders) and the Company negotiate in good faith to amend such covenant, standard and term so as equitably to reflect such change in accounting principles, with the desired result being that the criteria for evaluating the financial condition of the Company and its Subsidiaries shall be the same as if such change had not been made. No delay by the Company or the Majority Holders in requiring such negotiation shall limit their right to so require such a negotiation at any time after such a change in accounting principles. Without limiting the generality of the foregoing, the Company shall neither be deemed to be in compliance with any financial covenant hereunder nor out of compliance with any financial covenant hereunder if such state of compliance or noncompliance, as the case may be, would not exist but for the occurrence of a change in accounting principles after the date hereof.

SECTION 6

REPRESENTATIONS AND WARRANTIES.

     The Company represents and warrants to the Agent and the Purchasers as follows:

     Section 6.1 Organization and Qualification. The Company is duly organized, validly existing and in good standing as a corporation under the laws of the State of Georgia, and has full and adequate corporate power to own its Property and carry on its business as now conducted. The Company is duly licensed or qualified and in good standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such licensing or qualification unless and to the extent that the failure to be so licensed or qualified or to be in such good standing would not have any material adverse effect on the financial condition, Properties, business, or operations of the Company or in its ability to perform or the Agent’s ability to enforce performance of the Company’s obligations under the Operative Documents.

     Section 6.2 Subsidiaries. Each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or organized, as the case may be, has full and adequate power to own its Property and carry on its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such licensing or qualification unless and to the extent that the failure to be so licensed or qualified or to be in such good standing would not have any material adverse effect on the financial condition, Properties, business or operations of the Company and its Subsidiaries taken as a whole or in its ability to perform or the Agent’s ability to enforce performance of the Company’s obligations under the Operative Documents. Schedule 6.2 hereto identifies each Subsidiary, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of each class of its Capital Stock or other equity interests owned by the Company and the Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class of its authorized Capital Stock and other equity interests and the number of shares of each class issued and outstanding. All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares and other equity interests indicated on Schedule 6.2 as owned by the Company or a Subsidiary are owned, beneficially and of record, by the Company or such Subsidiary free and

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clear of all Liens, other than Liens in favor of the Senior Bank Agent that are subject to the Subordination Agreement. There are no outstanding commitments or other obligations of any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Subsidiary.

     Section 6.3 Authority and Validity of Obligations. The Company has full right and authority to enter into this Agreement and the other Operative Documents executed by it, to issue its Notes and Warrants, to grant to the Agent the Liens described in the Collateral Documents executed by the Company, and to perform all of its obligations hereunder and under the other Operative Documents executed by it. Each Subsidiary has full right and authority to enter into the Operative Documents executed by it, to grant to the Agent the Liens described in the Collateral Documents executed by such Person, and to perform all of its obligations under the Operative Documents executed by it. The Operative Documents delivered by the Company and its Subsidiaries have been duly authorized, executed, and delivered by such Persons and constitute valid and binding obligations of the Company and its Subsidiaries enforceable against them in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law); and this Agreement and the other Operative Documents do not, nor does the performance or observance by the Company or any Subsidiary of any of the matters and things herein or therein provided for, (a) contravene or constitute a default under any provision of law or any judgment, injunction, order or decree binding upon the Company or any Subsidiary or any provision of the organizational documents ( e.g. , charter, certificate or articles of incorporation and by-laws, certificate or articles of association and operating agreement, partnership agreement, or other similar organizational documents) of the Company or any Subsidiary, (b) contravene or constitute a default under any covenant, indenture or agreement of or affecting the Company or any Subsidiary or any of their Property, in each case where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (c) result in the creation or imposition of any Lien on any Property of the Company or any Subsidiary other than the Liens (i) granted in favor of the Agent pursuant to the Collateral Documents, and (ii) granted in favor of the Senior Bank Agent that are subject to the Subordination Agreement.

     Section 6.4 Use of Proceeds; Margin Stock. The Company shall use the proceeds of the issuance of the Notes to refinance all or a part of its existing senior credit facility, to pay fees and expenses associated with such refinancing and general working capital purposes. Neither the Company nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Note hereunder will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock.

     Section 6.5 Financial Reports. The consolidated balance sheet of the Company and its Subsidiaries as at December 31, 2003 and the related consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for the fiscal year then ended, and accompanying notes thereto, which financial statements are accompanied by the audit report of KPMG LLP, independent public accountants, and the unaudited interim consolidated balance

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sheet of the Company and its Subsidiaries as at February 29, 2004 and the related consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for the two (2) months then ended, heretofore furnished to the Purchasers, fairly present the consolidated financial condition of the Company and its Subsidiaries as at said dates and the consolidated results of their operations and cash flows for the periods then ended in conformity with GAAP applied on a consistent basis. Neither the Company nor any of its respective Subsidiaries has contingent liabilities which are material to it other than as indicated on such financial statements or, with respect to future periods, on the financial statements furnished pursuant to Section 8.5 hereof. Since December 31, 2003, no event or condition has occurred which would have a Material Adverse Effect.

     Section 6.6 Full Disclosure. The statements and information furnished to the Agent and the Purchasers in connection with the negotiation of this Agreement and the commitments by the Purchasers to provide all or part of the financing contemplated hereby do not contain any untrue statements of a material fact or omit a material fact necessary to make the material statements contained therein or herein not misleading, the Purchasers acknowledging that as to any projections furnished to any Purchaser, the Company only represents that the same were prepared on the basis of information and estimates the Company believed to be reasonable.

     Section 6.7 Good Title. The Company and its respective Subsidiaries have good and defensible title to their respective Property as reflected on the most recent consolidated balance sheet of the Company and its Subsidiaries furnished to the Purchasers (except for sales of assets by the Company and such Subsidiaries in the ordinary course of their respective businesses), subject to no Liens other than such thereof as are specifically identified on Schedule 6.7 or, with the exception of Liens on real Property, permitted by Section 8.15 hereof.

     Section 6.8 Litigation and Other Controversies. There is no litigation or governmental proceeding or labor controversy pending, nor to the knowledge of the Company threatened, against the Company or any of its Subsidiaries which if adversely determined would result in any material adverse change in the financial condition, Properties, business or operations of the Company and its Subsidiaries taken as a whole.

     Section 6.9 Taxes. All Tax Returns with respect to any material Tax required to be filed by the Company or any Subsidiary in any jurisdiction have, in fact, been filed, and all Taxes upon the Company or any Subsidiary or upon any of their respective Properties, income or franchises, which are shown to be due and payable in such returns, have been paid. The Company does not know of any proposed additional Tax assessment against the Company or any Subsidiary which if paid (taking into consideration any cash segregated for such purpose) would have a Material Adverse Effect. Adequate provisions in accordance with GAAP for Taxes on the books of the Company and each Subsidiary have been made, or (to the extent such provisions have not been made) adequate cash reserves for such Taxes have been segregated, in each case for all open years, and for its current fiscal period. No Consolidated Entity has made an election under §341(f) of the Code. No Consolidated Entity is liable for the Taxes of another Person that is not a Subsidiary in an amount under (i) Treasury Regulation §1.1502-6 (or comparable provisions of state, local or foreign law), (ii) as a transferee or successor, (iii) by contract or indemnity, or (iv) otherwise. No Consolidated Entity is a party to any tax sharing agreement. Each Consolidated Entity has disclosed on its federal income Tax Returns any position taken for

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which substantial authority (within the meaning of Code §6662(d)(2)(B)(i)) did not exist at the time the Tax Return was filed. No Consolidated Entity has made any payments, is obligated to make payments or is a party to an agreement that could obligate it to make any payments that would not be deductible under Code §280G.

     Section 6.10 Approvals. No authorization, consent, license, exemption, filing or registration with any court or governmental department, agency or instrumentality, nor any approval or consent of the stockholders of the Company or any other Person, is or will be necessary to the valid execution, delivery or performance by the Company of this Agreement, the Operative Documents, the Notes, the Warrants or the Investor Rights Agreement.

     Section 6.11 Affiliate Transactions. Neither the Company nor any of its Subsidiaries is a party to any contracts or agreements with any of its Affiliates (other than with Wholly Owned Subsidiaries) on terms and conditions which are less favorable to the Company or such Subsidiary than would be usual and customary in similar contracts or agreements between Persons not affiliated with each other.

     Section 6.12 Investment Company; Public Utility Holding Company. Neither the Company nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or a “public utility holding company” within the meani