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<SEC-DOCUMENT>0000891554-01-501882.txt : 20010409
<SEC-HEADER>0000891554-01-501882.hdr.sgml : 20010409
ACCESSION NUMBER:		0000891554-01-501882
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20001231
FILED AS OF DATE:		20010402

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ADVANCED TECHNICAL PRODUCTS INC
		CENTRAL INDEX KEY:			0000060911
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL FORGING & STAMPINGS [3460]
		IRS NUMBER:				111581582
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-15737
		FILM NUMBER:		1592185

	BUSINESS ADDRESS:	
		STREET 1:		200 MANSELL COURT EAST
		STREET 2:		STE 505
		CITY:			ROSWELL
		STATE:			GA
		ZIP:			30076
		BUSINESS PHONE:		7709930291

	MAIL ADDRESS:	
		STREET 1:		200 MANSELL COURT EAST
		STREET 2:		STE 505
		CITY:			ROSWELL
		STATE:			GA
		ZIP:			30076

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LUNN INDUSTRIES INC /DE/
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LUNN LAMINATES INC
		DATE OF NAME CHANGE:	19780425
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>d70442_10k.txt
<DESCRIPTION>ANNUAL REPORT
<TEXT>


================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

     (Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the fiscal year ended December 31, 2000

                                       OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                         Commission file number: 0-1298

                        ADVANCED TECHNICAL PRODUCTS, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                                   11-1581582
        (State or other jurisdiction                      (I.R.S. Employer
      of incorporation or organization)                  Identification No.)

                         200 Mansell Ct. East, Suite 505
                             Roswell, Georgia 30076
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (770) 993-0291

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

        Title of Each Class            Name of Each Exchange on Which Registered
        -------------------            -----------------------------------------
   Common Stock, $0.01 par value            Nasdaq / National Market System

     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 [_] No [X]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

     [X]

     The aggregate market value of the voting stock held by non-affiliates of
the registrant on March 28, 2001 was $26,486,501 (3,817,874 shares at $6.9375
per share, the closing price of the registrant's common stock on the Nasdaq
National Market on March 30, 2001). As of that date, 5,450,473 shares of the
Company's Common Stock were outstanding.

================================================================================

<PAGE>

                                     PART I

ITEM 1.                             BUSINESS

General

     Advanced Technical Products, Inc. ("ATP" or the "Company") is a Delaware
corporation that manufactures a variety of products in the following principal
business segments: (i) Aerospace and Defense, (ii) Commercial Composites and
(iii) Other Products. Such products are manufactured through four business
units, Marion Composites, Intellitec, Lincoln Composites and Lunn Industries.
The Aerospace and Defense segment designs, develops and manufactures advanced
composite material products, including radomes, aircraft components, missile and
satellite composite structures, engine components, rocket motor cases, pressure
vessels, relocatable shelters, missile launch tubes, torque shafts and fuel
tanks, as well as a wide range of integrated defense systems including
electro-optical systems, chemical and biological detection systems, ordnance
delivery systems and light-weight camouflage systems. The Commercial Composites
segment produces natural gas vehicle ("NGV") fuel tanks, products used in the
exploration and production of oil and gas and other composite-based commercial
products. The Other Products operating segment primarily consists of a
manufacturer of electrical power switching products for specialty vehicles
including recreational vehicles, motor homes, conversion vans, over-the-road
trucks and leisure boats. See Note 5 to the Consolidated Financial Statements of
the Company for a summary of selected financial data of each reportable business
segment. The Company also manufactures structural core materials through its
Alcore business unit which is treated as a discontinued operation for financial
reporting purposes.

     On October 31, 1997, TPG Holdings, Inc., a Delaware corporation ("TPG"),
merged with Lunn Industries, Inc., a Delaware corporation ("Lunn"), under the
name "Advanced Technical Products, Inc." Lunn was originally incorporated in New
York in 1948 and was reincorporated in Delaware in 1987. TPG was formed in 1995
to acquire the business and assets of three operating units of the Brunswick
Technical Group, which was completed on April 28, 1995.

Aerospace and Defense Segment

     Composite Based Products

     Radomes. One of ATP's principal products is high-performance radomes. A
radome is an aerodynamic and environmental cover made of composite materials
that shelters the antenna assembly of a radar set on an airplane, rocket or
missile. Management believes that ATP has approximately a 75% share of the
domestic high-performance radome market and is the sole supplier of radomes for
aircraft such as the EA6B, AV-8B, B-1, B-1B, C-5B, C-17, C-130, F-4, F-5, F-14,
F-15, F-16 and the F/A-18. Additionally, ATP owns ceramic radome manufacturing
technology which enables it to manufacture high temperature, high performance
radomes for interceptor missile applications. ATP has manufactured Patriot
Missile radomes since 1971, and management believes that ATP has been the sole
supplier for the past 15 years.

     Sales of radomes for each of 2000, 1999 and 1998 constituted 9.4%, 10.1%
and 9.0%, respectively, of the total consolidated revenues of ATP.

     Aircraft Components. ATP manufactures composite materials and products for
aerospace and defense applications and is a leading manufacturer of advanced
composite aircraft structures. ATP currently fabricates flap panels, winglets
and landing gear doors for the C-17. Management believes the


                                       2
<PAGE>

C-17 is a high-priority program for the U.S. Air Force and that the production
of these C-17 components will provide a stable stream of revenue for ATP for the
foreseeable future.

     ATP also manufactures composite-based canopies, fuel tanks, wing and floor
panels, fairings and other aircraft components. ATP has participated in
developmental projects that include radar absorbing materials, radar absorbing
structures and frequency selective surfaces for low observable applications.

     ATP's program to supply flap track fairings to The Aerostructures
Corporation is currently in production, and 106 shipsets have been delivered as
of the end of 2000. These parts are installed on the Airbus A330 and A340
aircraft. This "life of the program" contract is anticipated to cover
approximately 500 aircraft.

     In December 1997, ATP entered into a long-term production alliance with
General Electric Aircraft Engines pursuant to which ATP is manufacturing a
composite inlet device for the GE F414-400 turbofan engine to be used in the
U.S. Navy's newest fighter, the F/A-18E/F "Super Hornet." In June 1998, GE
placed an order with an estimated value of $65 million over five years as the
initial step in the GE-ATP alliance. ATP has been delivering product under the
order since late 1998.

     Sales of aircraft components for each of 2000, 1999 and 1998 constituted
24.3%, 22.0% and 18.6%, respectively, of the total consolidated revenues of ATP.

     Rocket Motor Cases. ATP manufactures a variety of rocket motor cases used
in solid propellant propulsion systems that are incorporated into strategic
(long-range) and tactical missile systems as well as orbiting commercial
satellites and deep-space penetration spacecraft. ATP manufactures rocket motor
cases for use in strategic missiles such as the D-5 Trident II, as well as for
tactical missile systems such as the PAC-3 Anti-Missile missile. ATP also
manufactures the ORBUS-21D rocket motor case, which is used in conjunction with
the space shuttle and other unmanned launch vehicles to place satellites into
Earth's orbit, and is also used on deep space missions.

     Pressure Vessels. ATP produces filament wound pressure vessels that are
used predominantly in aircraft, launch vehicles and space applications where
weight minimization is critical. These high-performance pressure vessels are
typically used as a storage container for pressurized helium, nitrogen, xenon
and other gases which are used in critical system applications, including
emergency power, crew capsule impact and flotation, maneuvering, environmental,
fuel feed and purge systems. ATP has been a leader in the integration of
filament winding technology in combination with metal liners that results in
vessels that meet or exceed structural requirements. A number of existing
pressure vessel configurations are currently qualified by prime contractors and
the military. This qualification reduces competition for follow-on orders and
provides a variety of products that can be offered for new applications with
minimal capital investment and production lead time.

     Fuel Tanks. External fuel tanks are used by the military to provide
aircraft with additional operating range. The military requires all-composite
external fuel tanks because they offer a significant weight advantage and
improved crash survivability, greater safety in a fire, and improved gunfire
protection. Management believes that ATP is currently the only qualified
producer of the tank liner for the 230-Gallon AH-64/UH-60 Fuel Tank, which is
used by the U.S. Army. ATP continues to deliver under contracts for the
production of the 480-gallon external fuel tanks for the F/A-18E/F. Deliveries
extend through 2001 under the current contract.

     Vehicle/Missile Structures. ATP's vehicle/missile structure product line
includes composite products used for various structural applications such as
launch vehicles, space, marine and aircraft applications. Products more recently
included in this product line are missile warheads, radar housings, missile


                                       3
<PAGE>

structures, aircraft and missile control surfaces and aircraft engine ducts.
These structures must be light weight and have excellent structural properties
in order to replace conventional metal products. These projects are usually
obtained from various aerospace and defense companies and government
laboratories that need to develop prototype hardware to demonstrate capabilities
of advanced composites.

     Tubular Products. ATP's tubular product line includes missile launch tubes
and torque shafts. The primary products in the launch tube line include the
Multiple Launch Rocket System (MLRS) and the launch canister for the submarine
based Tomahawk Missile. While management believes that the MLRS program is
important to the U.S. Army as an effective, low-cost weapon system, the Army has
a large inventory of these missiles, and the funding level for this program
remains low. Composites offer desirable properties for torque shafts for various
aerospace and defense applications and are presently being used in Boeing
Vertol's 234 helicopter.

     Resin Transfer Molding. Resin transfer molding (RTM) is the fabrication of
a composite component formed by pumping resin into a mold containing
reinforcement material. The rough product is then removed from the mold and
finished. While use of this manufacturing process is primarily driven by its
lower cost, recent advances in materials and equipment have helped to make the
process a viable choice for fabricating composite aircraft and military
structures. ATP supplies 192 parts on the Air Force Air Superiority Fighter, the
F-22, and management believes it is the only qualified non-prime supplier of RTM
components for the Navy's F/A-18E/F.

     In addition to serving as a supplier to the manufacturers of military
aircraft, ATP provides components for commercial aircraft and engine components,
producing over 15,000 jet and turbine engine components annually. ATP continues
to grow this manufacturing process and is expanding into diversified liquid
molding processes, such as Vacuum Assisted Resin Transfer Molding (VARTM), for a
wide variety of applications in support of its aerospace and defense customer
base.

     Metal Bonding. ATP supplies metal bonded products through its Lunn
Industries division. ATP possesses the technology and qualifications required by
The Boeing Company for Phosphoric Acid Anodizing (PAA) and structural bonding to
BAC 5555. This PAA capability allows ATP to service the commercial aircraft
market. Numerous other qualifications allow ATP to provide products and services
to the spaceflight, defense and industrial markets. ATP metal bonded products
can be found in the Boeing 777, 747, 757, 767 and 727 commercial aircraft as
well as numerous defense and satellite applications.

     Other Defense Systems

     Chemical and Biological Defense. ATP continues its role as an industry
leader in the Chemical Defense market. In 1999, ATP entered into a unique
Partnership Agreement with the U.S. Army's Soldier and Biological Chemical
Command (SBCCOM). All subsequent contracts awarded by SBCCOM to ATP will include
an individually designed and tailored Partnering Agreement geared toward
successful contract performance and continuous product and process improvement.
Management believes that this agreement is evidence of ATP's strong position in
this market and the confidence developed between the Company and its customer.

     ATP is a leader in the remote chemical detection sector, which management
expects to be a growth market for the next several years, based on the latest
U.S. defense budgets. ATP is currently performing under a contract to develop
the next generation remote sensor, the Joint Services Lightweight Standoff
Chemical Agent Detector (JSLSCAD). The JSLSCAD contract, awarded in 1997,
consists of a cost-plus development phase worth slightly over $30 million over
four years, plus options for production units potentially worth over $200
million.


                                       4
<PAGE>

     During 2000, the Company continued production on the Improved Chemical
Agent Monitor (ICAM), a monitoring system designed to detect surface
contamination on a wide variety of objects. Full-scale production of the ICAM is
expected to continue through 2002.

      ATP is also actively involved in the development and production of
collective protection systems. Collective protection systems provide a clean and
over-pressured environment for soldiers to conduct their missions. Management
believes that ATP's collective protection systems, such as the internally
developed Bio-Chem Filter Blower Unit (BFBU), are the collective protection
systems of choice for several of the next generation vehicle systems. ATP is the
producer of the M28 Deployable Medical Collective Protection Equipment (CPE).
This product assures a clean environment for field hospital units for both the
U.S. Army and U.S. Air Force. Production of the M28 CPE was completed during
2000. Management has identified further opportunities for ATP's collective
protection systems and plans to pursue these opportunities in 2001.

     With the need for lighter weight vehicles in the medium sized brigade that
the U.S. Army has announced it is seeking to better equip, ATP also has
developed the Chemical Agent Filter Unit (CAFU) which has been geared to meet
the needs of this new Army initiative.

     To support the need for an integrated battlespace, ATP was awarded the
production effort for the Multi-Purpose Integrated Chemical Agent Detector
(MICAD) as a subcontractor to Lockheed Martin. This system integrates the data
from a host of detectors and automatically assembles and communicates the
condition of the battlespace. Production began in late 1999 with deliveries
expected to continue through 2001.

     In 2000, the Company grew its defensive systems segment into the detection
of biological warfare agents. ATP was awarded a contract by the U.S. Army for
low rate initial production of the Joint Biological Point Detection System
(JBPDS). Management believes this system could play a major role in U.S.
national defense.

     Sales of chemical and biological defense systems and related products for
each of 2000, 1999 and 1998 constituted 22.1%, 21.7% and 11.6%, respectively, of
the total consolidated revenues of ATP.

     Shelters/Shelter Integration. ATP designs, develops and produces mobile
military shelters and has developed leading design and automated production
capabilities for honeycomb as well as foam and beam sandwich panel construction
relocatable shelters. Management believes that most of the shelters in the
inventory of the Department of Defense (DOD) were designed and produced by ATP
or its predecessors. The Army Standard Family (ASF) Shelter is a honeycomb
shelter uniquely produced by ATP. The Lightweight Mobile Shelter (LMS) is a
broadly used shelter type for the U.S. Army's High Mobility Multipurpose Wheeled
Vehicle (HMMWV).

     ATP currently produces the Light Medium Tactical Vehicle (LMTV) shop van
for Stewart & Stevenson. This foam and beam shelter is mounted on Stewart &
Stevenson's 2 1/2 ton truck currently being fielded by the U.S. Army.

     ATP has recently broadened its product line with production of the unique
Chemical Biological Protection System Shelter (CBPSS), initial award of Type III
& IV Cargo Bed Covers (CBC), and introduction of the patented Height Reducible
Electronic Enclosure (HREE). Designed for mounting on the U.S. Army's newest 2
1/2 ton truck, management believes that the HREE affords tremendous improvement
in warfighter mobility and logistics, a key thrust of U.S. Army modernization
plans. ATP also provides shelters to Motorola under long term agreements.


                                       5
<PAGE>

     Sales of shelters and shelter integration products for each of 2000, 1999
and 1998 constituted 6.3%, 6.5% and 18.6%, respectively, of the total
consolidated revenues of ATP.

     Ordnance. ATP has been the sole manufacturer of the Volcano launcher
system. Customers for this system include the U.S. Army and other defense prime
contractors. The Company's current focus is on support to fielded systems and
the development of alternative applications of this proven delivery system.

     Tactical Deception. ATP is a leading producer of tactical deception
products for the U.S. Armed Forces and other military customers and has
delivered approximately one million modules of U.S. military Lightweight
Camouflage Screen Systems (LCSS). In 2000, the Company continued production of
LCSS for the U.S. Army Communications Electronics Command. With new
opportunities identified, the production of LCSS could continue through mid-year
2001 and beyond.

Commercial Composites Segment

     Natural Gas Vehicle Fuel Tanks

     ATP believes it maintains the dominant market share in the delivery of
all-composite fuel tanks that contain compressed natural gas for use as a
vehicle fuel. In 2000, the Company delivered its 36,000th NGV tank. The demand
for NGVs in North America continues to be driven by the public's demand for
replacement of diesel buses and their pollution rich exhaust fumes, and federal
legislation which provides incentives or tax credits for the use of alternative
fueled vehicles. Management believes that increased emphasis on relying on more
environmentally-friendly energy sources and on reducing the country's dependence
on foreign oil imports and increasing fuel prices continue to associate national
security and economic benefits with greater use of domestic natural gas. Primary
customers include original equipment manufacturers (OEMs) that design and build
light duty sedans, transit buses, school buses and high fuel use fleet vehicles.
Other customers include vehicle up-fitters or modifiers who install natural gas
fueling and storage components to existing vehicles. ATP performs particularly
valuable custom design work to allow ease of tank installation and mounting
provisions. The Company believes that its background in aerospace projects
provides the foundation for the successful design, development and production of
fuel storage systems (versus tanks alone) that can contain natural gas or
hydrogen in a fashion that couples very high reliability with light weight.
Also, the international market continues to offer increased revenue potential.
In 2000, the Company delivered products for natural gas vehicles used throughout
North America. Products were also delivered to customers in Japan, Mexico,
Europe and some developing countries.

     Sales of NGV fuel tanks and related products for each of 2000, 1999 and
1998 constituted 13.0%, 9.7%, and 10.0%, respectively, of the total consolidated
revenues of ATP.

     Oil and Gas Exploration Products

     Current deepwater oil completion and production technology utilizes heavy
steel tubular systems that require expensive tensioning and buoyancy systems
whose designs are often governed by fatigue considerations. Composite marine
risers provide advantages over conventional steel risers because composite
materials are lighter weight, more fatigue and corrosion resistant, better
thermal insulators and can be designed for improved structural and mechanical
performance. Overall, production platform cost reductions are possible as a
result of the lower weight and greater compliance of composite risers, along
with improvements in system reliability. ATP has completed the development of a
composite rigid riser for use in deepwater oil production and is currently
exploring field testing opportunities for oilfield products including:
production risers, tubing risers, drill risers, choke & kill lines and auxiliary
lines.


                                       6
<PAGE>

     ATP applied the NGV all-composite tank technology to develop an accumulator
tank for the Production Riser Tensioning system on off-shore platforms. There
are as many as four accumulators per well, and the new platforms have in excess
of 25 wells per platform. The all-composite accumulator is lighter weight,
non-corrosive and competitively priced with all-steel accumulators. The ATP
accumulator meets ASME Code X and management believes that currently there is
not a qualified competitor for this product. These accumulators offer some
significant advantages for the platform, and, as a result, the related revenue
is expected to increase significantly over the next several years.

Other Products Segment

     The Company's specialty vehicle electronics group is engaged in the design
and manufacture of electronic products for the specialty vehicle market that are
primarily used to distribute and control electrical power throughout the
vehicle. This market includes recreational vehicles (RVs), conversion vans,
trucks, buses, boats and other vehicles. Currently, ATP sells approximately 250
different products, most of which have been introduced to meet a customer's
request to solve a particular problem.

     ATP's products of this segment fall into three main categories: battery
run-down protection and charging, power switching and control, and 120 volt AC
power management. Many of the battery run-down protection and charging products
are centered around ATP's patented disconnect relay. The power switching and
distribution products center on ATP's unique patented multiplex system. ATP's
patented 120 volt AC power management products are used in RVs to minimize the
overloading of circuit breakers. Management believes that all major motor home
OEM's and all but one of the major van converters currently utilize ATP's
electrical products.

     ATP is currently directing efforts at increasing its market penetration
into the truck, bus and marine industries and increasing sales to major vehicle
fleet operators. ATP has an agreement with Waltco Truck Equipment Co., one of
the world's largest manufacturers of lift gates, to be their exclusive source of
electronic and electrical components. The initial products include a unique
weatherproof "Super Switch", and a controller to prevent damage to the
electro-hydraulic pump motor caused by overuse of the lift gate. Also, ATP
supplies unique energy management systems to Fleetwood Enterprises and to
Winnebago Industries, the two largest manufacturers of motor homes. Management
believes that approximately half of all motor homes built are now installed with
ATP's energy management systems.

     The Company supplies its Programmable Multiplex Control (PMC) for
production buses to Marshall Bus in the United Kingdom. Prototype buses using
this system have been built in the U.S. and are currently being road tested. The
PMC, a new system that simplifies wiring in transportation and commuter buses
worldwide, is the world's first user programmable multiplex system intended for
use in vehicles. A patent on this system has been issued. The system is also
suitable for other specialty vehicles, such as emergency and maintenance
equipment.

     During 1999, the Company signed an exclusive agreement with Horton
Ambulance, a premier emergency vehicle builder, to supply electronics for all
Horton emergency vehicles. Production started in the beginning of 2000. The
Company also continued to make major inroads to the fleet market by supplying
its battery run-down protection for use on all new Federal Express trucks being
built.

Discontinued Operations

     On June 30, 2000, the Company adopted a formal plan to sell its Structural
Core Materials segment, which consists of the operations of the Alcore and
Alcore Brigantine S.A. subsidiaries. During March 2001, the Company announced
that it had entered into a letter of intent for the sale of certain assets of


                                       7
<PAGE>

Alcore and 100% of the stock of the Alcore Brigantine S.A. subsidiary (the
"Transaction"). Consummation of the Transaction is subject to, among other
things, satisfactory completion of due diligence by the purchaser, execution and
delivery of a definitive purchase agreement and certain third party approvals.
The Company anticipates the Transaction will be closed during the second quarter
of 2001.

Competition and Markets

     ATP competes with many manufacturers that, depending on the product
involved, range from large diversified enterprises to smaller companies
specializing in particular products. Management believes that factors that
affect ATP's competitive posture are the quality of products and services, the
ability to employ certain technologies and pricing strategies. ATP competes by
defining and understanding customer and market needs, using its technology base
to develop new product applications that meet those needs, communicating and
demonstrating the technical advantage of its products and building long-term
relationships with its customers.

     There are many companies that compete with ATP in the aerospace and defense
industry. While ATP's management believes that it has an approximate 75% share
of the domestic high-performance radome market and is a leading supplier of
radomes in the domestic and international markets, ATP competes with a number of
other companies in the production of composite based products used in the
aerospace and defense industries. Also, ATP believes it is a leader in the
design and production of chemical and biological detection equipment. While
ATP's market share varies with respect to its other aerospace and defense
products such as rocket motor cases, fuel tanks and pressure vessels, ATP
overall has only a minor share of the total aerospace and defense markets.

     Some of ATP's commercial products are highly specialized and face less
competition in their respective markets. ATP's management believes that ATP has
approximately 90% of the NGV all-composite fuel tank market and is a leading
supplier of battery run-down protection and the power switching and control
devices for the motor home and van conversion OEM markets. Additionally, while
there are numerous producers of standard drill pipe and casing and fiberglass
tubulars, management believes that ATP has a leading position in the application
of advanced composites in the oil and gas industry.

Marketing and Customers

     ATP markets its aerospace and defense products directly to its customers
through its sales force, active membership in various industry groups, and by
participation in industry trade shows. ATP's aerospace and defense products are
sold primarily to agencies of the United States government and to commercial
customers in the aerospace industry. In 2000, sales to the United States
government either directly or by subcontract constituted 69% of ATP's total
consolidated revenue. Major customers include The Boeing Company and Lockheed
Martin Corporation. Combined aerospace component sales to these customers, most
of which are included above as United States government sales by subcontract,
represented approximately 26% of ATP's total consolidated revenues during 2000.
ATP's aerospace and defense products are generally designed and developed to
customer specifications.

     ATP markets and sells NGV fuel tanks and specialty vehicle electronics
primarily to vehicle manufacturers. ATP sells a significant majority of its
specialty vehicle products to a few major customers, the loss of any of which
would have an adverse impact on ATP's specialty vehicle products group.


                                       8
<PAGE>

     In the commercial composites business, it is necessary to carry a
reasonable raw material and finished goods inventory to allow for a rapid
customer response. The average days sales outstanding of accounts receivable for
the commercial products run somewhat longer than for comparable aerospace and
defense products. Also, there is a greater risk of bad debt associated with
commercial products.

     The Company provides warranties on products for material and workmanship
based on standard industry practice. Though ATP has endeavored to design an
extremely safe and durable product, the NGV tank and production riser have a
potential for greater product liability than standard aerospace and defense
products. ATP believes that it has adequate product liability insurance to
offset these risks.

Patents

     ATP owns numerous patents and patent applications, some of which, together
with licenses under patents owned by others, are utilized in its operations.
While such patents and licenses are, in the aggregate, important to the
operation of ATP's business, no existing patent, license or other similar
intellectual property right is of such importance that its loss or termination
would, in the opinion of management, materially affect ATP's business.

Backlog

     ATP's total backlog of contracts as of December 31, 2000 was approximately
$559 million as compared to approximately $549 million as of December 31, 1999.
These year-end backlogs include options or unreleased orders of approximately
$403 million and $404 million for 2000 and 1999, respectively. The backlog
predominantly relates to the aerospace and defense segment.

Government Contracts

     Because the United States government is a primary customer, ATP's revenues
are directly affected by the government's budget process, and inadequate funding
of the operation and maintenance portion of the DOD budget or a reduction in the
budgeted amount for certain programs could have an adverse impact on the revenue
of ATP. All government contracts, and, in general, subcontracts thereunder are
subject to termination in whole or in part at the convenience of the United
States government as well as for default. Long-term government contracts and
related orders are subject to cancellation if appropriations for subsequent
performance periods become unavailable. However, with respect to most contracts
involving the military, ATP would be entitled to receive cancellation payments
upon cancellation of such contracts.

Raw Materials and Supplies

     Raw materials essential to the conduct of all of ATP's business segments
generally are available at competitive prices. To date, ATP has not experienced
significant difficulties in its ability to obtain raw materials and other
supplies needed in its manufacturing processes, nor does ATP expect such
difficulties to arise in the future. ATP ordinarily acquires components and
materials through purchase orders typically covering ATP's requirements for
periods averaging 90 to 120 days.

Research and Development

     Excluding costs reimbursed under federally funded research and development
contracts, ATP has spent $208,000, $417,000 and $558,000 for each of 2000, 1999
and 1998, respectively, on research and development. The research and
development expenses predominantly relate to the aerospace and defense segment.


                                       9
<PAGE>

Seasonality

     The United States government's fiscal year begins on October 1, and the
Company's experience indicates that contracts and options on contracts are
generally awarded just prior to its year end. The lead time to perform the
necessary design work, procure materials and begin production is generally
several months, and this can create a period of low production, revenue and
profits in the first half of each fiscal year of ATP. See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Foreign Operations

     Sales to customers outside the United States totaled approximately 11.0%,
8.4% and 10.6% of ATP's total revenues for each of 2000, 1999 and 1998,
respectively. See Note 5 to the Consolidated Financial Statements of the Company
for additional disclosure of geographical financial data.

Environmental Regulation

     ATP's operations are subject to numerous local, state and federal laws and
regulations concerning the containment and disposal of hazardous materials,
pursuant to which ATP has incurred compliance costs. Such costs to date have not
been material. As described in greater detail under "Item 3. Legal Proceedings",
ATP has received notice that its Lunn Industries operation has been identified
as a potentially responsible party for certain environmental cleanup expenses
associated with a municipal landfill in Babylon, New York. ATP at present cannot
predict with precision what exposure it may face in this matter, but, otherwise
does not presently anticipate the need for significant expenditures to ensure
continued compliance with current environmental protection laws. Regulations in
this area are subject to change and there can be no assurance that future laws
or regulations will not have a material adverse effect on ATP.

Employees

     At December 31, 2000, ATP had 1,215 employees. Approximately 40% of ATP's
employees are covered by four separate collective bargaining agreements with
various international and local unions. ATP's management considers employee
relations generally to be good and believes that the probability is remote that
renegotiating these contracts will have a material adverse effect on its
business.


                                       10
<PAGE>

ITEM 2. PROPERTIES

     ATP's principal executive offices are located in Roswell, Georgia. ATP
maintains various facilities nationwide and considers all of its facilities to
be in relatively good operating condition and adequate for their present uses.
ATP believes that it has sufficient capacity to meet its current and anticipated
manufacturing requirements. The following table sets forth ATP's principal
manufacturing plants:

                                                   Approximate      Leased
                                                     Square           or
                                                     Footage         Owned
                                                     -------         -----
     Marion Composites Division:
         Marion, Virginia........................   1,019,000        Owned

     Intellitec Division:
         Deland, Florida.........................     353,000        Owned

     Lincoln Composites Division:
         Lincoln, Nebraska.......................     226,000        Owned
         Lincoln, Nebraska.......................     126,000       Leased

     Lunn Industries Division:
         Glen Cove, New York.....................      93,000       Leased

     The manufacturing facilities of the Marion Composites Division and the Lunn
Industries Division are used exclusively in connection with ATP's aerospace and
defense segments. While predominantly used in connection with ATP's aerospace
and defense segments, the facilities of the Intellitec Division and the Lincoln
Composites Division are used to some extent in connection with ATP's commercial
segments.

     ATP pays approximately $613,000 in annual rental expense with respect to
its principal leased manufacturing facilities, of which approximately $295,000
relates to facilities in Lincoln, Nebraska, and $318,000 relates to facilities
in Glen Cove, New York.

     Leases covering ATP's leased facilities expire at varying dates generally
within the next 12 years. ATP anticipates no difficulty in either retaining
occupancy through lease renewals, month-to-month occupancy or purchases of
leased facilities, or replacing the leased facilities with equivalent
facilities.

     The above table excludes a lease of a manufacturing facility located in
Jessup, Maryland which is no longer being used by ATP in its operations. As of
December 31, 2000, the Company has subleased substantially all of the Jessup
facility. Management has estimated the amount of remaining lease obligation
costs in excess of anticipated future sublease income to be $334,000 at December
31, 2000, and a liability of the same amount is included as an accrued expense
on the Company's Consolidated Balance Sheet at December 31, 2000.

ITEM 3. LEGAL PROCEEDINGS

      On October 7, 1999, the New York Office of the Attorney General, on behalf
of the New York State Department of Environmental Conservation ("NYSDEC"), sent
a letter to the Company, claiming that Lunn is a potentially responsible party
("PRP") with respect to contamination at the Babylon Landfill in Babylon, New
York. NYSDEC alleges that Lunn sent waste to the Babylon Landfill and that Lunn
is


                                       11
<PAGE>

jointly and severally liable under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") for NYSDEC's response costs in
addition to interest, enforcement and future costs. According to NYSDEC, there
are currently 13 PRPs identified for the Babylon Landfill. NYSDEC documents seem
to indicate that Lunn did transmit waste to the Babylon Landfill, although it is
currently unclear to what extent Lunn contributed to contamination of the
landfill. As a PRP, the Company may be required to pay a portion of the costs of
evaluation and cleanup of this site. Lawsuits and claims involving additional
environmental matters may arise from time to time. The New York Attorney
General's investigation of the inactive CERCLA site in Babylon, New York is in a
preliminary stage, and as a result, management has based its assessment of
potential liability and remediation costs on currently available facts, the
number of PRPs identified, documentation available, currently anticipated and
reasonably identifiable remediation costs, existing technology, presently
enacted laws and regulations and other factors. While the Company may have
rights of contribution or reimbursement under insurance policies, such issues
are not factors in management's estimation of liability. Based on the foregoing
factors, management believes that it is unlikely that the identified matter at
the inactive Babylon, New York site will have a material adverse effect on the
Company's consolidated financial position, results of operations or cash flows.
Accordingly, the Company cannot presently determine the extent of its liability,
if any. The Company has not recorded any liability for the contingency as of
December 31, 2000.

     During January 2000, the Company learned of possible accounting and
financial reporting irregularities at its subsidiary, Alcore, when certain
financial records were seized in connection with a search warrant issued by the
United States District Court - District of Maryland as part of a governmental
investigation. Additionally, the Company has been notified of an investigation
by the United States Securities and Exchange Commission regarding these matters.
The Company and management are cooperating fully with these investigations. The
outcome of these investigations are uncertain at this time.

      The Company and certain of its Officers and Directors have been named in a
number of lawsuits filed during July 2000 in the United States District Court
for the Northern District of Georgia. During January 2001, the lawsuits were
consolidated and an amended complaint was filed. The lawsuit asserts securities
fraud claims based on, among other things, alleged misstatements and omissions
concerning the Company's 1998 and 1999 financial results and condition,
including various violations of generally accepted accounting principles. The
lawsuit purports to be brought on behalf of a class consisting of all persons
who purchased the Company's common stock in the period from April 1998 through
April 2000. The Company intends to defend itself vigorously. It is not possible
to predict the impact that these lawsuits may have on the Company, nor is it
possible to predict whether any other suits or claims may arise out of these
matters in the future. However, it is possible that the present or any future
lawsuits, and any investigations or proceedings arising out of the same or
related facts, depending on their outcomes, could have a material adverse impact
on the Company's financial condition or results of operations in one or more
future periods. The Company has not recorded any liability for these lawsuits as
of December 31, 2000.

      ATP is not a party to any other legal proceedings, other than routine
claims and lawsuits arising in the ordinary course of its business. ATP does not
believe that such claims and lawsuits, individually or in the aggregate, will
have a material adverse effect on the Company's consolidated financial position,
results of operations or cash flows. Compliance with federal, state, local and
foreign laws and regulations pertaining to the discharge of materials into the
environment, or otherwise relating to the protection of the environment, has not
had, and is not anticipated to have, a material effect upon the cash flows,
earnings or competitive position of ATP.


                                       12
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      On October 12, 2000, at the Annual Meeting of the Company's shareholders,
the Company's shareholders elected Messrs. James S. Carter, Gary L. Forbes and
General Johnnie E. Wilson as Class III Directors, and John M. Simon as a Class
II Director. A total of 3,960,881, or 97.5% of the shares of the Company's
common stock present in person or represented by proxy at the Annual Meeting,
voted in favor of the election of Mr. Carter, and 100,873 withheld; 3,980,670,
or 98.0% of the shares of the Company's common stock present in person or
represented by proxy at the Annual Meeting, voted in favor of the election of
Mr. Forbes, and 81,084 withheld; 3,980,931, or 98.0% of the shares of the
Company's common stock present in person or represented by proxy at the Annual
Meeting, voted in favor of the election of Mr. Wilson, and 80,823 withheld; and
3,977,726, or 97.9% of the shares of the Company's common stock present in
person or represented by proxy at the Annual Meeting, voted in favor of the
election of Mr. Simon, and 84,028 withheld.

     Messrs. Alan W. Baldwin's, Robert C. Sigrist's and Lawrence E. Wesneski's
terms of office as Class I Directors continued after the Annual Meeting. Messrs.
Garrett L. Dominy's and Sam P. Douglass's terms of office as Class II Directors
continued after the Annual Meeting.

      At the Annual Meeting, the Company's shareholders also ratified the 2000
Advanced Technical Products, Inc. Stock Option Plan. A total of 2,936,968, or
94.6% of the shares of the Company's common stock present in person or
represented by proxy at the Annual Meeting, voted in favor of ratification,
144,106 voted against ratification and 24,998 abstained.

      At the Annual Meeting, the Company's shareholders also ratified the 2000
Advanced Technical Products, Inc. Non-Employee Directors Stock Option Plan. A
total of 2,902,512 or 93.4% of the shares of the Company's common stock present
in person or represented by proxy at the Annual Meeting, voted in favor of
ratification, 176,760 voted against ratification and 26,800 abstained.

      At the Annual Meeting, the Company's shareholders also ratified the
appointment of KPMG LLP as the Company's independent public accountants for
2000. A total of 3,983,765, or 98.1% of the shares of the Company's common stock
present in person or represented by proxy at the Annual Meeting, voted in favor
of ratification, 54,173 voted against ratification and 23,816 abstained.


                                       13
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     ATP's common stock is traded on the National Market System of the Nasdaq
Stock Market, Inc. under the symbol ""TPX". The following table sets forth the
high and low sales prices of ATP common stock for the calendar quarters
indicated, as reported by the Nasdaq Stock Market, Inc.:

                                                         Market Price
                                                         ------------

       Fiscal Year Ended December 31,                   High         Low
       ------------------------------                   ----         ---

       2000
       First Quarter..........................        $14.312      $ 4.000
       Second Quarter.........................        $ 7.937      $ 3.218
       Third Quarter..........................        $ 4.000      $ 1.781
       Fourth Quarter.........................        $ 8.468      $ 2.750

       1999
       First Quarter..........................        $11.000       $7.500
       Second Quarter.........................        $14.250       $8.875
       Third Quarter..........................        $13.875      $10.750
       Fourth Quarter.........................        $14.000      $12.875

- ----------

     On March 30, 2001, ATP had approximately 1,600 stockholders of record. The
last reported sales price of ATP's common stock on such date was $6.9375.

     ATP has not paid dividends on its common stock and does not currently
intend to pay any cash dividends in the foreseeable future. The determination of
the amount of future cash dividends to be declared and paid on the common stock
of ATP, if any, will depend upon ATP's financial condition, earnings and cash
flows from operations, the level of its capital expenditures, its future
business prospects and other factors that the Board of Directors of ATP deems
relevant. In addition, ATP's debt agreements contain covenants restricting the
payment of cash dividends to ATP's common stockholders.


                                       14
<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

     The selected financial data presented below as of and for the years ended
December 31, 1996 through December 31, 2000, have been derived from the audited
financial statements of ATP and TPG.

     The information presented below should be read in conjunction with Item 7,
"Management's" Discussion and Analysis of Financial Condition and Results of
Operations," the consolidated financial statements of ATP and related notes and
other financial information included elsewhere in this Annual Report on Form
10-K.

<TABLE>
<CAPTION>
                                                                                          ATP                                 TPG
                                                                ------------------------------------------------------     ---------
                                                                   2000           1999           1998           1997          1996
                                                                ---------      ---------      ---------      ---------     ---------
<S>                                                             <C>            <C>            <C>            <C>           <C>
Income Statement Data:

Net revenues                                                    $ 170,725      $ 159,777      $ 142,617      $ 116,870     $ 126,534
Cost of revenues                                                  130,466        124,189        111,005         89,308        94,365
                                                                ---------      ---------      ---------      ---------     ---------
Gross profit                                                       40,259         35,588         31,612         27,562        32,169
General and administrative
    expenses                                                       24,628         24,019         21,310         18,593        21,758
                                                                ---------      ---------      ---------      ---------     ---------
Operating income                                                   15,631         11,569         10,302          8,969        10,411
Interest expense                                                    3,409          2,661          2,564          2,208         2,377
Other expense                                                         203             --             --             --            --
                                                                ---------      ---------      ---------      ---------     ---------
Income before income taxes
   and extraordinary items                                         12,019          8,908          7,738          6,761         8,034
Income tax expense                                                  4,628          3,430          2,979          2,603         3,093
                                                                ---------      ---------      ---------      ---------     ---------
Income before extraordinary items                                   7,391          5,478          4,759          4,158         4,941
Extraordinary item (1)                                                 --             --             --             --           667
                                                                ---------      ---------      ---------      ---------     ---------
Income from continuing operations                                   7,391          5,478          4,759          4,158         4,274

Income (loss) from discontinued operations
   (net of income taxes)                                          (14,713)        (8,638)          (760)            50            --
                                                                ---------      ---------      ---------      ---------     ---------
Net income (loss)                                               $  (7,322)     $  (3,160)     $   3,999      $   4,208     $   4,274
                                                                =========      =========      =========      =========     =========

EPS Data:
   Basic:
       Income from continuing operations                        $    1.37      $    1.02      $    0.89      $    0.98     $    1.06
       Income (loss) from discontinued operations                   (2.76)         (1.63)         (0.15)          0.01            --
                                                                ---------      ---------      ---------      ---------     ---------
       Net income (loss)                                        $   (1.39)     $   (0.61)     $    0.74      $    0.99     $    1.06
                                                                =========      =========      =========      =========     =========

   Diluted:
       Income from continuing operations                        $    1.32      $    0.98      $    0.85      $    0.94     $    1.03
       Income (loss) from discontinued operations                   (2.66)         (1.57)         (0.14)          0.01            --
                                                                ---------      ---------      ---------      ---------     ---------
       Net income (loss)                                        $   (1.34)     $   (0.59)     $    0.71      $    0.95     $    1.03
                                                                =========      =========      =========      =========     =========

Balance Sheet Data:

Working capital                                                 $  24,680      $  15,518      $  16,434      $  16,480     $  18,462
Total assets                                                       98,306        101,998        100,677         85,423        44,723
Long-term debt, including
    current portion                                                27,139         26,065         23,375         18,955        17,222
Redeemable 8% cumulative
    preferred stock                                                 1,000          1,000          1,000          1,000         1,000
Common shareholders' equity                                        20,327         27,816         30,109         26,494         7,018
</TABLE>

(1)  Reflects an extraordinary loss from debt refinancing, net of an income tax
     benefit of $418,000.


                                       15
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following discussion should be read in conjunction with the
consolidated financial statements of ATP and related notes contained elsewhere
in this Annual Report on Form 10-K.

     On May 29, 1998, ATP acquired all of the capital stock of Brigantine S.A.,
a manufacturer of honeycomb products and engineered panels located in France.
The acquired company, renamed Alcore Brigantine S.A., operates as a subsidiary
of Alcore, Inc., which is a subsidiary of the Company. The Alcore and Alcore
Brigantine S.A. operations are accounted for as a discontinued operation of the
Company. The Company's consolidated financial statements include the operating
results for Alcore Brigantine S.A. since the date of the acquisition.

     Historically, approximately 60% to 80% of ATP's products and services have
been sold to the United States government through prime contracts directly with
governmental agencies, primarily the DOD, or through subcontracts with other
governmental contractors. During the mid-1980s, the defense industry began to be
negatively impacted by a perceived reduction of threats from the former Soviet
Union and affiliated countries in eastern Europe. In addition, increased
competition for the United States federal budget dollars resulted in a reduction
in real dollars in the United States defense budget over the last decade.
Defense spending has recently begun to stabilize in the United States, and
management of ATP believes that budgeted procurement spending will increase
slightly over the next few years.

     The contraction of the United States defense budget over the last decade
and the resulting excess capacity and intensified competition among defense
contractors has resulted in significant industry consolidation. ATP's strategy
includes the pursuit of acquisitions which will increase its revenue base and
improve its cost competitiveness through reduced overhead costs, facility
consolidations and the elimination of other duplicative costs. However, because
of the uncertainty of the nature and size of these opportunities, as well as
ATP's financial leverage, there can be no assurances that the financing
necessary to pay for acquisitions can be obtained on commercially reasonable
terms, if at all.

     Although the long-term impact of industry consolidation and the defense
spending budget cannot be predicted with certainty, management of ATP believes
that it is positioned to increase its presence in the United States defense
industry and increase its ongoing diversification efforts into foreign defense
markets and selected commercial markets.


                                       16
<PAGE>

     The United States government's fiscal year begins on October 1, and
contracts and options on contracts are generally awarded just prior to its year
end. ATP's experience indicates that the lead time to perform the necessary
design work, procure material and begin production is generally several months,
and this can create a period of low production, revenue and profits in the first
half of each fiscal year of ATP. Over the last five years, the percentage of
sales and operating earnings (excluding corporate general and administrative
expenses) generated in the second half of the year have been as follows:

                                                          EARNINGS BEFORE
YEAR (1)                                      SALES      INTEREST & TAXES
- --------                                      -----      ----------------

2000 ....................................      50%             56%

1999 ....................................      50%             47%

1998 ....................................      59%             80%

1997 ....................................      56%             74%

1996 ....................................      56%             64%

(1)      All years' included are based on results of continuing operations

Restatement of Previously Reported Financial Statements

       During January 2000, the Company learned of possible accounting and
financial reporting irregularities at its subsidiary, Alcore, when certain
financial records were seized in connection with a search warrant issued by the
United States District Court - District of Maryland as part of a governmental
investigation. Additionally, the Company has been notified of an investigation
by the United States Securities and Exchange Commission regarding these matters.

       After becoming aware of the possible irregularities, the Company engaged
special counsel and forensic accountants to assist in its investigation of the
possible irregularities. As a result, the Company has previously restated its
1998 consolidated financial statements (including its quarterly financial
statements for the first, second and third quarters of 1999).

       Substantially all of the adjustments to restate the 1998 financial
statements relate to operations which have been subsequently classified as
discontinued by the Company and are contained in the restated results of
discontinued operations in the accompanying Consolidated Financial Statements.

       The following discussion of 1998 amounts relates to the Company's results
of operations as restated for the adjustments determined necessary by the
Company's investigation.

Discontinued Operations

     On June 30, 2000, the Company adopted a formal plan to sell its Structural
Core Materials segment, which consists of the operations of the Alcore and
Alcore Brigantine S.A. subsidiaries. During March 2001, the Company announced
that it had entered into a letter of intent for the sale of certain assets of
Alcore and 100% of the stock of the Alcore Brigantine S.A. subsidiary (the
"Transaction"). Consummation of the Transaction is subject to, among other
things, satisfactory


                                       17
<PAGE>

completion of due diligence by the purchaser, execution and delivery of a
definitive purchase agreement and certain third party approvals. The Company
anticipates the Transaction will be closed during the second quarter of 2001.

     The following discussion relates to the Company's results of operations as
restated to account for the Structural Core Materials segment as a discontinued
operation for all years reported.

Results of Operations

         The following table sets forth, for the periods indicated, the
components of the statements of operations expressed as a percentage of
revenues.

                                             2000          1999          1998
                                            -----         -----         -----

Net revenues                                100.0%        100.0%        100.0%
Cost of revenues                             76.4%         77.7%         77.8%
                                            -----         -----         -----
Gross profit                                 23.6%         22.3%         22.2%
General and administrative
    expenses                                 14.4%         15.0%         14.9%
                                            -----         -----         -----
Operating income                              9.2%          7.3%          7.3%
Interest expense                              2.0%          1.7%          1.8%
Other expense                                 0.1%          0.0%          0.0%
                                            -----         -----         -----
Income before income taxes                    7.1%          5.6%          5.5%
Income tax expense                            2.7%          2.1%          2.1%
                                            -----         -----         -----
Income from continuing operations             4.4%          3.5%          3.4%
Loss from discontinued operations
   (net of income taxes)                     (8.6)%        (5.4)%        (0.5)%
                                            -----         -----         -----
Net income (loss)                            (4.2)%        (1.9)%         2.9%
                                            =====         =====         =====

Year Ended December 31, 2000 Compared with the Year Ended December 31, 1999

     Revenues increased $10.9 million, or 6.9% from $159.8 million in 1999 to
$170.7 million in 2000. Positive revenue variations in 2000 compared to 1999
include: (i) increased deliveries of composite components on several long-term
aerospace and defense programs, including the F-18E/F and C-17 military aircraft
and the Airbus A330 and A340 commercial aircraft, (ii) increased shipments of
the Company's commercial composites products and (iii) increased revenues on
chemical defense contracts, primarily from the MICAD program.

     Gross profit as a percentage of revenues was 23.6% in 2000 compared to
22.3% in 1999. The increase in gross profit percentage was primarily
attributable to increased sales of the Commercial Composites business segment
and cost efficiencies associated with increased sales from the other product
lines.

     General and administrative expenses increased $0.6 million, or 2.5%, from
$24.0 million in 1999 to $24.6 million in 2000. General and administrative
expenses include non-recurring charges of $1.3 million recorded in the second
quarter of 2000, including costs incurred in


                                       18
<PAGE>

connection with the termination of a January 2000 merger agreement and severance
costs. Excluding the non-recurring charges, general and administrative expenses,
as a percentage of revenues, decreased from 15.0% in 1999 to 13.7% in 2000, the
result of higher revenues and reduced general and administrative spending.

     Operating income was $15.6 million, or 9.2% of revenues, in 2000, compared
to $11.6 million, or 7.3% of revenues, in 1999. Excluding the non-recurring
general and administrative costs of $1.3 million discussed in the previous
paragraph, operating income was $16.9 million in 2000, an increase of $5.3
million, or 46.1%, compared to 1999. The increase in operating income results
primarily from increased revenues, improved operating results of the Commercial
Composites segment and increased profits on advanced composite components
delivered on certain Aerospace and Defense programs.

     Interest expense in 2000 increased $748,000, or 28.1%, primarily the result
of an increase in average loan balances outstanding and an increase in average
interest rates during 2000 compared to 1999.

     Income tax expense was $4.6 million in 2000 compared to $3.4 million in
1999. The increase results from higher income before taxes as the effective
income tax rate was 38.5% for both years.

     Total loss from discontinued operations increased by $6.1 million, from
$8.6 million in 1999 to $14.7 million in 2000. The 2000 loss includes an
after-tax provision of $10.0 million for the estimated loss on disposal of the
discontinued Structural Core Material business segment.

Year Ended December 31, 1999 Compared with the Year Ended December 31, 1998

     Revenues increased $17.2 million, or 12.0% from $142.6 million in 1998 to
$159.8 million in 1999. The increase in revenues in 1999 was primarily
attributable to the following factors: (i) increased revenues on chemical
defense contracts, including two large contracts which were in the design or
start-up phase during most of 1998 and were in full production during all of
1999, (ii) increased deliveries of composite components on several long-term
aerospace / defense programs, including the C-17 and F-18E/F military aircraft
and (iii) increased shipments of the Company's commercial products, including
specialty vehicle electronics and NGV fuel tanks. These increases were partially
offset by a decrease in shipments on shelter contracts.

      Gross profit as a percentage of revenues was 22.3% in 1999, compared to
22.2% for the comparable period in 1998. An increase in the gross profit rate on
revenues of the Company's Commercial Composites business segment were nearly
offset by a decrease in profit rates on revenues of the Aerospace and Defense
business segment.

     General and administrative expenses increased $2.7 million, or 12.7%, from
$21.3 million in 1998 to $24.0 million in 1999. The increase reflects: (i)
higher corporate expense primarily resulting from nonrecurring costs incurred in
connection with a proposed merger of the Company and (ii) a general increase in
business activity. As a percentage of revenues, general and administrative
expenses increased from 14.9% in 1998 to 15.0% in 1999.


                                       19
<PAGE>

     Operating income was $11.6 million in 1999, compared to $10.3 million in
1998. The increase is primarily attributable to the increased sales volume.
Operating income as a percentage of revenues was 7.3% for both 1999 and 1998.

     Interest expense in 1999 increased $97,000, primarily the result of an
increase in average loan balances outstanding and an increase in average
interest rates during 1999 compared to 1998.

     Income tax expense was $3.4 million in 1999 compared to $3.0 million in
1998. The increase results from higher income before taxes as the effective
income tax rate was 38.5% for both years.

     Total loss from discontinued operations increased by $7.8 million, from
$0.8 million in 1998 to $8.6 million in 1999. The 1999 discontinued operations
results reflect losses incurred at Alcore primarily the result of: (i)
production inefficiencies experienced in the moving of certain operations to a
new leased facility, including abnormally high production scrap rates and
increased costs for machinery and equipment re-arrangement and set-up, (ii)
lower sales prices caused by intensified competition in the commercial aerospace
industry and (iii) a write-off of excess and obsolete inventories and capital
equipment.

Financial Condition and Liquidity

     Cash flow used in operations was $312,000 in 2000 compared to $5.7 million
of cash flow provided by operations in 1999. Working capital, excluding
short-term debt balances, increased $8.8 million in 2000 to $52.2 million. This
increase was the result of (i) an increase of $7.1 million in accounts
receivable, resulting primarily from higher sales volume in the last quarter of
2000 compared to 1999 and an increase in the percentage of revenues generated by
commercial customers which, in general have a tendency to be slower paying than
the Company's Aerospace and Defense customers, (ii) an increase of $1.2 million
in inventory, reflecting generally higher business activity levels, (iii) an
increase of $1.0 million in cash and cash equivalents, primarily the result of
$700,000 of collateral payments made during 2000 in connection with a letter of
credit agreement between the Company and a bank and (iv) a net decrease in other
working capital components of $0.5 million. Net cash used in investing
activities totaled $1.6 million in 2000, and resulted exclusively from capital
expenditures.

     On October 10, 2000, the Company entered into a new financing agreement
with its primary lender. At December 31, 2000, the Company's credit facility
with this lending institution totaled $46.0 million consisting of: (1) $27.0
million of revolving credit against eligible receivable and inventory balances,
(2) a $16.6 million term loan and (3) a $2.4 million capital equipment loan. As
of December 31, 2000, the Company had approximately $3.5 million of unused
borrowing availability on this credit facility, net of $1.7 million of reserves
against the revolving loan borrowing base for outstanding stand-by letters of
credit commitments and other items. The term loan is payable quarterly based on
a seven-year amortization period. Equipment loan principal payments are made
monthly based on a five-year amortization period. The interest rates on the
loans are set quarterly based on the Company's performance against
debt-to-earnings ratios specified in the agreement. Interest rates can range
from LIBOR (the London Interbank Offered Rates) plus 2.75% to LIBOR plus 1.0% on
the revolving loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and
equipment loans. Alternatively, the Company may elect interest rates based on
the lending institution's prime rate with the revolving loan ranging from prime
plus


                                       20
<PAGE>

0.5% to prime plus 0.25% and the term and equipment loans ranging from prime
plus 0.75% to prime plus 0.50%. Interest is paid monthly in arrears on all
loans. The credit facility matures on October 31, 2003. The Company is subject
to several financial and nonfinancial covenants under the $46.0 million credit
facility. At December 31, 2000, the Company was in violation of certain
financial covenants. Such violations were cured as a result of an amendment to
the agreement dated March 30, 2001.

     During October 2000, the Company entered into an agreement with a lender
for a three year, $7,000,000 loan in the form of a junior secured credit
facility. The loan bears interest payable monthly in arrears at an annual rate
of 12.5%, and an additional 2.5% of payment-in-kind interest that is payable at
maturity. The loan matures in October 2003. In connection with the loan, ATP
also issued warrants giving the lender the right to purchase 320,000 shares of
the Company's common stock at an exercise price of $4.42 per share. The warrants
are exercisable at any time prior to the fifth anniversary of the credit
facility closing. Alternatively, at any time after 18 months from the closing,
but prior to the expiration of the warrants, the lender may elect to require the
Company to repurchase each warrant for an amount equal to 10% of ATP's EBITDA
(earnings before interest, taxes, depreciation and amortization) divided by
320,000 ("Put Option"). The Put Option is subject to a maximum cap of
$1,750,000. In the event of an exercise of the Put Option resulting in a
repurchase price of $1,000,000 or greater, the Company has the right to satisfy
up to 50% of the obligation by issuing a promissory note to the lender, with
principal payments amortized evenly over 18 months. The Company is subject to
several financial and nonfinancial covenants under the loan agreement. At
December 31, 2000, the Company was in violation of certain financial covenants.
Such violations were cured as a result of an amendment to the agreement dated
April 2, 2001.

      At December 31, 2000, the Company's backlog of orders and long-term
contracts was approximately $559 million compared to $549 million and $552
million at December 31, 1999 and 1998, respectively. The backlog includes firm
released orders of approximately $156 million, $146 million and $161 million at
December 31, 2000, 1999 and 1998, respectively. Approximately 80% of the
Company's firm released backlog at December 31, 2000 is expected to be delivered
in 2001.

     As discussed above, the Company has made capital expenditures totaling $1.6
million during 2000, which have been financed by increased borrowings under the
revolving loan portion of the Company's credit facility. The Company invested
approximately $13.8 million in capital equipment and facility improvements
during the two-year period ending December 31, 1999. These investments were made
primarily in support of several new long-term aerospace and defense contracts
that are now in full production, and facility and equipment upgrades relating to
NGV tank production. As a result, management believes that future short-term
capital spending requirements will be limited to a normal sustaining maintenance
level plus a relatively low amount of expenditures that will be cost justified
by anticipated incremental program revenues. However, the Company will consider
other future capital expenditure investments beyond the maintenance level when
such investments are deemed to be strategic or critical to the Company's growth.

     The Company also anticipates its plan to sell its Structural Core Materials
segment will generate additional future cash proceeds. The Company presently
anticipates disposal of the segment during the second quarter of 2001. See Note
3 to the Consolidated Financial Statements of the Company.

     Management of ATP believes that cash flows from operations, available
borrowings under its current credit facility and the additional subordinated
financing obtained during October 2000 are


                                       21
<PAGE>

adequate to sustain the Company's current operating level and expected growth
for the next one to three years. However, should circumstances arise affecting
cash flow or requiring capital expenditures beyond those anticipated by the
Company, there can be no assurance that such funds will be available on
commercially reasonable terms, if at all.

Factors Affecting Future Operating Results

     This Annual Report on Form 10-K contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The
forward-looking statements are those that do not state historical facts and are
inherently subject to risk and uncertainties. The forward-looking statements
contained herein are based on current expectations and entail various risks and
uncertainties that could cause actual results to differ materially from those
projected in such forward-looking statements. Some of such risks and
uncertainties are described below.

     Dependence on Principal Industries. The revenues of ATP are concentrated in
the aerospace and defense industries. Sales to non-aerospace and non-defense
industries, although growing, are anticipated to approximate 20% to 25% of total
revenues of ATP for the foreseeable future. ATP's success will be heavily
dependent on its ability to successfully obtain major new defense orders
currently planned to be released by the United States government and government
prime contractors, as well as the continued strength of the aerospace industry,
particularly the commercial aircraft industry. No assurances can be given that
ATP will be able to successfully obtain all or even a major portion of the
targeted defense industry orders anticipated to be placed. The commercial
aerospace industry is a cyclical business, and the demand by commercial airlines
for new aircraft is highly dependent upon a variety of factors, which
historically have been related to the stability and health of the United States
and world economies.

     Risks of Reductions or Changes in Military Expenditures. The primary
customers of ATP are agencies of the DOD. Sales under contracts with the DOD or
under subcontracts that identify the DOD as the ultimate purchaser represented
approximately 69% of ATP's 2000 revenues. The United States defense budget has
declined in real terms since the mid-1980s, resulting in some delays in new
program starts, program stretch-outs and program cancellations. The United
States defense budget has begun to stabilize and even increased in real dollars
over the last several years. A major portion of ATP's DOD business is expected
to be funded by the procurement and research, development, test and evaluation
segments of the defense budget. Procurement and research, development, test and
evaluation funding has been significantly reduced over the last decade but is
expected to remain relatively stable or grow slightly over the next decade. A
significant portion of ATP's DOD business is also expected to be funded by the
operations and maintenance portion of the DOD budget, which has declined less
than the other segments. A further significant decline or reallocation of the
procurement, research, development, test and evaluation or operations and
maintenance segments of the DOD budget could materially and adversely affect
ATP's"sales and earnings. The loss or significant curtailment of ATP's material
United States defense contracts would also materially and adversely affect ATP's
future sales and earnings.

     Competition. The market for ATP's products is highly competitive. ATP
competes with numerous competitors, a number of which possess substantially
greater financial, marketing, personnel and other resources. Continued
consolidation of major aerospace companies could result in program cancellations
as well as increased demand for price concessions. This, together with increased
competition for available business, could translate into downward pressure on


                                       22
<PAGE>

gross margins with resulting lower overall profit margins. Vendor prices for
production materials such as resins, liquid and film adhesives, reinforcing
fiber materials and other materials and supplies could increase as demand for
aircraft parts and assemblies increase to match higher build rates for
commercial and military aircraft. Higher material prices and demand for lower
aircraft part and assembly prices could place increasing pressure on ATP's
operating margins and net income. Although management of ATP believes that the
Company is well-positioned to maintain or improve its place among its
competitors, there can be no assurance that ATP will be able to compete
successfully in the future.

     Financial Leverage. ATP has a significant amount of indebtedness, which
could make it difficult to obtain additional financing for working capital,
capital expenditures, acquisitions or other purposes. Moreover, the terms of
ATP's indebtedness impose various restrictions and covenants on ATP which could
potentially limit ATP's ability to respond to market conditions or to take
advantage of business opportunities. ATP's ability to meet its debt service
obligations and to reduce total debt will be dependent upon its future
performance, which, in turn, will be subject to general conditions in the
aerospace and defense industries and to financial, business and other factors
affecting the operations of ATP, many of which will be beyond its control.

     Other Factors. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, income
and expenses, and disclosure of contingent assets and contingent liabilities at
the date of the financial statements and during the reporting period. Actual
results could differ materially from those estimates.

     The Company believes that inflation has not had a material effect on the
results of its operations in the periods covered by this report.

Year 2000 Issues

     ATP completed its year 2000 (Y2K) preparation plan which included the
following steps: assessment, modification / implementation and testing. The
Company has not experienced any significant malfunctions or errors in its
internal information technology ("IT") and non-IT systems that are critical to
its operations since January 1, 2000. A few minor application problems were
identified and resolved early in the year 2000. The Company is not aware of any
significant Y2K issues or problems that may have arisen for its significant
customers and suppliers. Based on currently available information, the Company
is not aware of any significant continued exposure to Y2K systems issues.

    ATP's Y2K costs have not been budgeted and tracked as independent projects,
but have been incurred in conjunction with normal sustaining activities. ATP
estimates that such costs, including the replacement or upgrading of outdated,
noncompliant hardware and software were less than $250,000.

Recent Accounting Pronouncements

      SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, is effective for the Company beginning January 2001. The
new Statement requires all derivatives to be recorded on the balance sheet at
fair value and establishes accounting treatment for three types of hedges:
hedges of changes in the fair value of assets, liabilities or firm commitments,
hedges


                                       23
<PAGE>

of the variable cash flows of forecasted transactions, and hedges of foreign
currency exposures of net investments in foreign operations. The Company does
not anticipate there will be a material impact on the results of operations or
financial position upon adoption of this standard.

     In September 1999, the Financial Accounting Standards Board issued Emerging
Issues Task Force ("EITF") Issue No. 99-5, Accounting for Pre-Production Costs
Related to Long-Term Supply Arrangements. Among other things, EITF Issue No.
99-5 provides additional guidance on how entities should account for costs
incurred to design and develop molds, dies, and tooling that will be used to
produce products that will be sold under long-term supply arrangements. The
Company adopted the provisions of EITF Issue No. 99-5 on January 1, 2000. As a
result, there was no material impact on the results of operations for any
periods reported.

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, which
clarifies certain conditions to be met in order to recognize revenue. The
adoption of guidelines contained in Staff Accounting Bulletin No. 101 did not
materially impact the results of operations for any periods reported.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to changes in interest rates primarily relating to
its $46.0 million credit facility. However, the carrying value of borrowings
under the credit facility generally approximate fair value due to the variable
rate nature of such borrowings. The interest rates are set quarterly based on
the Company's performance against debt-to-earnings ratios specified in the
agreement. Interest rates can range from LIBOR plus 2.75% to LIBOR plus 1.0% on
the revolving loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and
equipment loans. Alternatively, the Company may elect interest rates based on
the lending institution's prime rate with the revolving loan ranging from prime
plus 0.5% to prime plus 0.25% and the term and equipment loans ranging from
prime plus 0.75% to prime plus 0.50%. At December 31, 2000, the Company had
$40.9 million outstanding under the credit facility at a weighted-average
interest rate of 9.71%.

     In addition, the Company has $2.0 million of bonds payable at December 31,
2000 for which it has entered an interest rate swap agreement with a financial
institution to fix the interest rate at 5.07% through the year 2012.

     The Company has not entered into transactions which subject it to material
foreign currency transaction gains and losses.


                                       24
<PAGE>

ITEM 8. FINANCIAL STATEMENTS


                          Independent Auditors' Report


The Board of Directors and Shareholders
Advanced Technical Products, Inc.:


We have audited the accompanying consolidated balance sheets of Advanced
Technical Products, Inc. and subsidiaries (the "Company") as of December 31,
2000 and 1999, and the related consolidated statements of operations,
comprehensive income (loss), and cash flows for each of the years in the
three-year period ended December 31, 2000. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Advanced Technical
Products, Inc. and subsidiaries at December 31, 2000 and 1999, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America.


                                                   /S/ KPMG LLP


Atlanta, Georgia
February 23, 2001, except as to Note 8,
which is as of April 2, 2001


                                       25
<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999

                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                                              2000           1999
                                                                                                           ---------      ---------
<S>                                                                                                        <C>              <C>
                                     ASSETS
CURRENT ASSETS:
    Cash and cash equivalents                                                                              $   1,666      $     655
    Accounts receivable (net of allowance for doubtful accounts of $455 in 2000 and
        $541 in 1999)                                                                                         25,811         18,674
    Inventories and costs relating to long-term contracts and programs in
        process, net of progress payments                                                                     42,742         41,576
    Prepaid income taxes                                                                                       1,251          2,054
    Other prepaid expenses                                                                                     1,252            378
    Deferred income taxes                                                                                      3,284          3,900
                                                                                                           ---------      ---------
                        Total current assets                                                                  76,006         67,237
                                                                                                           ---------      ---------

PROPERTY, PLANT AND EQUIPMENT:
    Buildings and improvements                                                                                 2,307          2,282
    Machinery and equipment                                                                                   16,696         15,534
    Construction in progress                                                                                     929          1,096
    Less-accumulated depreciation                                                                            (10,931)        (8,196)
                                                                                                           ---------      ---------
                        Net property, plant and equipment                                                      9,001         10,716
                                                                                                           ---------      ---------

DEFERRED INCOME TAXES                                                                                          2,819            778

NET ASSETS OF DISCONTINUED OPERATIONS                                                                          6,971         20,359

OTHER NONCURRENT ASSETS                                                                                        3,509          2,908
                                                                                                           ---------      ---------
                        Total assets                                                                       $  98,306      $ 101,998
                                                                                                           =========      =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                                                       $  13,259      $  13,998
    Accrued expenses                                                                                          10,529          9,773
    Short-term debt                                                                                           27,497         27,881
    Current portion of capital lease obligations                                                                  41             67
                                                                                                           ---------      ---------
                        Total current liabilities                                                             51,326         51,719

LONG-TERM LIABILITIES:
    Long-term debt, net of current portion                                                                    21,370         19,696
    Capital lease obligations, net of current portion                                                             30             74
    Other liabilities                                                                                          4,253          1,693
                                                                                                           ---------      ---------
                        Total liabilities                                                                     76,979         73,182

Mandatorily redeemable preferred stock, 8% cumulative, redeemable, $1.00 par
    value, 1,000,000 shares authorized, issued and outstanding                                                 1,000          1,000

SHAREHOLDERS' EQUITY:
    Preferred stock, undesignated, 1,000,000 shares authorized, no shares issued and outstanding                  --             --
    Common stock, $.01 par value, 30,000,000 shares authorized, 5,375,822 shares and 5,306,438
       shares issued and outstanding as of December 31, 2000 and 1999, respectively                               54             53
    Additional paid-in capital                                                                                17,151         16,816
    Retained earnings                                                                                          3,653         11,055
    Notes receivable from officers                                                                              (135)          (135)
    Accumulated other comprehensive income (loss)                                                               (396)            27
                                                                                                           ---------      ---------
                        Total shareholders' equity                                                            20,327         27,816
                                                                                                           ---------      ---------
                        Total liabilities and shareholders' equity                                         $  98,306        101,998
                                                                                                           =========      =========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.



                                       26
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 2000, 1999 and 1998

                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                        2000              1999              1998
                                                                                    -----------       -----------       -----------
<S>                                                                                 <C>               <C>               <C>
Revenues                                                                            $   170,725       $   159,777       $   142,617

Cost of revenues                                                                        130,466           124,189           111,005

General and administrative expenses                                                      24,628            24,019            21,310
                                                                                    -----------       -----------       -----------
        Operating income                                                                 15,631            11,569            10,302

Interest expense                                                                          3,409             2,661             2,564

Other expense                                                                               203                --                --
                                                                                    -----------       -----------       -----------
        Income before income tax expense                                                 12,019             8,908             7,738

Income tax expense                                                                        4,628             3,430             2,979
                                                                                    -----------       -----------       -----------
        Income from continuing operations                                                 7,391             5,478             4,759

Discontinued operations:
        Loss from operations of segment to be disposed of                                (2,322)           (8,638)             (760)
        Provision for loss on disposal of business segment,
            including operating losses during the phase-out period                      (12,391)               --                --
                                                                                    -----------       -----------       -----------
        Loss from discontinued operations (net of income tax benefit)                   (14,713)           (8,638)             (760)

Net income (loss)                                                                   $    (7,322)      $    (3,160)      $     3,999
                                                                                    ===========       ===========       ===========

Net income (loss) per share:
        Basic:   Income from continuing operations                                  $      1.37       $      1.02       $      0.89
                 Loss from discontinued operations                                        (2.76)            (1.63)            (0.15)
                                                                                    -----------       -----------       -----------
                 Net income (loss)                                                  $     (1.39)      $     (0.61)      $      0.74
                                                                                    ===========       ===========       ===========

        Diluted: Income from continuing operations                                  $      1.32       $      0.98       $      0.85
                 Loss from discontinued operations                                        (2.66)            (1.57)            (0.14)
                                                                                    -----------       -----------       -----------
                 Net income (loss)                                                        (1.34)            (0.59)             0.71
                                                                                    ===========       ===========       ===========

Weighted average number of common and common
     equivalent shares outstanding:
        Basic                                                                         5,337,775         5,273,214         5,270,520
                                                                                    ===========       ===========       ===========
        Diluted                                                                       5,532,786         5,503,905         5,526,130
                                                                                    ===========       ===========       ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       27
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
              For the Years Ended December 31, 2000, 1999 and 1998

                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                2000          1999          1998
                                                              -------       -------       -------
<S>                                                           <C>           <C>           <C>
Net income (loss)                                             $(7,322)      $(3,160)      $ 3,999

Other comprehensive income (loss):
       Minimum pension liability adjustment                      (367)          601          (320)

       Foreign currency translation adjustment                    (56)           51            --

                                                              -------       -------       -------
Comprehensive income (loss)                                   $(7,745)      $(2,508)      $ 3,679
                                                              =======       =======       =======
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       28
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 2000, 1999 and 1998

                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                                   2000         1999         1998
                                                                                                 --------     --------     --------
<S>                                                                                              <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                                            $ (7,322)    $ (3,160)    $  3,999
    Adjustments to reconcile net income (loss) to net cash provided by
        (used in) operating activities:
          Depreciation and amortization                                                             2,906        2,996        2,105
          Deferred income taxes                                                                    (1,195)      (2,287)         (17)
          Other non-cash charges                                                                      136           --           22
          Estimated loss on disposition of discontinued operations                                 13,517           --           --
          Changes in operating assets and liabilities:
                       Accounts receivable                                                         (7,137)       5,391         (648)
                       Inventories                                                                 (1,166)      (6,672)      (5,044)
                       Other assets and liabilities                                                  (560)      (1,425)        (256)
                       Accounts payable                                                              (739)       1,745          249
                       Accrued expenses                                                               796        3,218         (726)
                       Net assets of discontinued operations                                          452        5,897          993
                                                                                                 --------     --------     --------
                                  Net cash provided by (used in) operating activities                (312)       5,703          677
                                                                                                 --------     --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
          Capital expenditures                                                                     (1,020)      (3,018)      (5,633)
          Cash payments for businesses acquired, net of cash acquired                                  --           --       (2,907)
          Net investing activities of discontinued operations                                        (553)      (2,010)      (3,111)
                                                                                                 --------     --------     --------
                                 Net cash used in investing activities                             (1,573)      (5,028)     (11,651)
                                                                                                 --------     --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
          Proceeds of borrowings                                                                    7,146        3,163       19,527
          Repayments of borrowings                                                                 (4,228)      (3,638)      (8,084)
          Proceeds from exercise of stock options and warrants                                         12           90           16
          Common stock issued under employee stock purchase plan                                      188          205           --
          Cash dividends paid                                                                        (120)         (40)         (40)
          Payments under capital lease obligations                                                    (70)         (55)         (46)
          Net financing activities of discontinued operations                                         (32)        (962)         324
                                                                                                 --------     --------     --------
                                 Net cash provided by (used in) financing activities                2,896       (1,237)      11,697
                                                                                                 --------     --------     --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                1,011         (562)         723

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                          655        1,217          494
                                                                                                 --------     --------     --------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                           $  1,666     $    655     $  1,217
                                                                                                 ========     ========     ========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
          Assets acquired through capital leases                                                 $     --     $    504     $    416

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
          Cash paid for interest                                                                 $  4,347     $  3,911     $  3,635
          Cash paid for income taxes                                                             $    142     $  3,236     $  3,776
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       29
<PAGE>

                        ADVANCED TECHNICAL PRODUCTS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2000, 1999 and 1998


1. SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

          The consolidated financial statements include the accounts of Advanced
          Technical Products, Inc. (the "Company" or "ATP") and its
          subsidiaries, all of which are 100% owned. The Company is incorporated
          in the state of Delaware, with corporate headquarters located in
          Roswell, Georgia. Principal manufacturing operations are located in
          Marion, Virginia; Lincoln, Nebraska; Deland, Florida; and Glen Cove,
          New York. The Company's subsidiaries include: Technical Products
          Group, Inc., Alcore, Inc. ("Alcore"), Marion Properties, Inc., Lincoln
          Properties, Inc., Deland Properties, Inc., and Alcore Brigantine S.A.
          All significant intercompany transactions and balances have been
          eliminated upon consolidation. The Company's financial statements have
          been restated to segregate the results of operations and the net
          assets of the Company's discontinued Structural Core Materials
          segment, which is comprised of Alcore and Alcore Brigantine S.A.

     Revenue Recognition

          Revenues and anticipated profits under long-term fixed price
          production contracts are recorded on the percentage of completion
          method, principally using units-of-delivery as the measurement basis
          for effort accomplished. Delivery of units are generally made upon
          acceptance by the customer in accordance with contract terms.

          Revenues under certain long-term fixed price contracts which require a
          significant amount of development effort in relation to total contract
          value are recorded based on the accomplishment of milestones as
          specified by contract terms. Revenues under cost reimbursable type
          contracts are recorded as costs are incurred.

          Amounts representing claims for equitable adjustment are included in
          estimates of future contract revenues used for preparing estimates of
          contract profitability at completion only when realization is probable
          and amounts can be reasonably estimated. The amounts included in
          estimates of future contract revenues for outstanding claims which had
          not been finalized were approximately $7.4 million and $7.3 million as
          of December 31, 2000 and 1999, respectively.

          Estimated losses on contracts are recorded in full when identified.


                                       30
<PAGE>

     Cash and Cash Equivalents

          Cash equivalents consist of highly liquid financial instruments with
          an original maturity of three months or less.

     Research and Development Costs

          Company-sponsored research and development costs are reported as part
          of general and administrative expenses. Revenues and costs incurred in
          connection with customer-sponsored research and development contracts
          are accounted for as contract revenues and costs.

     Inventories

          Inventories, other than inventoried costs relating to long-term
          contracts and programs, are valued at the lower of first-in, first-out
          cost or market (net realizable value). Inventory cost relating to
          long-term contracts and programs includes material, labor,
          manufacturing overhead and tooling costs dedicated to a contract or
          program. Costs attributed to units delivered under certain long-term
          contracts and programs are based on the estimated average cost of all
          units to be produced as determined under the learning curve concept
          which anticipates a predictable decrease in unit costs as production
          techniques become more efficient through repetition. In accordance
          with industry practice, costs in inventory include amounts relating to
          contracts with long production cycles, some of which are not expected
          to be realized within one year. Customer progress payments received on
          long-term contracts are recorded as an offset to related inventory
          balances.

     Use of Estimates

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting period.
          In particular, accounting for long-term contracts requires management
          estimates of future contract revenues and costs used for preparing
          estimates at contract completion and determining contract
          profitability reflected in the financial statements. Actual results
          could differ from those estimates.


                                       31
<PAGE>

     Fair Value of Financial Instruments

          The fair value of the Company's debt is estimated based upon the cash
          flows discounted using the interest rates available to the Company for
          debt with similar terms and remaining maturities. The carrying value
          of the Company's debt approximates fair value due to the variable rate
          nature of the borrowings and/or the short maturity of the borrowings.
          The carrying value of all other financial instruments approximates
          fair value due to the short-term nature of such instruments.

     Property, Plant and Equipment

          Property additions are recorded at cost. Depreciation is charged
          against operations over three to ten years for machinery and equipment
          and seven to forty years for buildings and improvements. Improvements
          to leased property are amortized over the life of the lease or the
          estimated life of the improvement, whichever is shorter. Straight-line
          and accelerated methods of depreciation are used for financial
          reporting and accelerated methods are used for tax purposes where
          permitted. Depreciation expense of continuing operations for the years
          ended December 31, 2000, 1999 and 1998 is $2,735,000, $2,843,000 and
          $1,908,000, respectively.

     Earnings (Loss) Per Share

          Basic earnings (loss) per share is computed by dividing net income
          (loss) available for common shares by the weighted-average number of
          shares of common stock outstanding during the year. Diluted earnings
          (loss) per share is computed by dividing net income (loss) available
          for common shares by the sum of (1) the weighted-average number of
          shares of common stock outstanding during the period, (2) the dilutive
          effect of the assumed exercise of stock options using the treasury
          stock method and (3) the dilutive effect of other potentially dilutive
          securities.

     Stock Options

          The Company has adopted Statement of Financial Accounting Standards
          ("SFAS") No. 123, Accounting for Stock-Based Compensation, which
          permits entities to recognize as expense over the vesting period the
          fair value of all stock-based awards on the date of the grant.
          Alternatively, SFAS No. 123 allows entities to continue to apply the
          provisions of Accounting Principles Board ("APB") Opinion No. 25 and
          provide pro forma net income and pro forma income per share
          disclosures for stock option grants as if the fair-value-based method
          defined in SFAS No. 123 had been applied. The Company has elected to
          continue to apply the provisions of APB Opinion No. 25 and provide the
          pro forma disclosures of SFAS No. 123.


                                       32
<PAGE>

     Income Taxes

          Income taxes are accounted for under the asset and liability method.
          Deferred tax assets and liabilities are recognized for the expected
          future tax consequences attributable to differences between the
          financial statement carrying amounts of existing assets and
          liabilities and their respective tax bases and operating loss and tax
          credit carryforwards. Deferred tax assets and liabilities are measured
          using enacted tax rates expected to apply to taxable income in the
          years in which those temporary differences are expected to be
          recovered or settled. The effect on deferred tax assets and
          liabilities of a change in tax rates is recognized in income in the
          period that includes the enactment date.

     Goodwill

          Goodwill, which represents the excess of purchase price over the fair
          value of net assets acquired, is amortized on the straight-line basis
          over the estimated useful life, but not in excess of 40 years. The
          Company assesses the recoverability of this intangible asset by
          determining whether the amortization of the goodwill balance over its
          remaining life can be recovered through undiscounted future operating
          cash flows of the acquired operation. The amount of goodwill
          impairment, if any, is measured based on projected discounted future
          operating cash flows using a discount rate reflecting the Company's
          average cost of funds. The assessment of the recoverability of
          goodwill will be impacted if estimated future operating cash flows are
          not achieved. During 2000, 1999 and 1998, no such goodwill impairment
          has been identified by the Company, other than that identified as part
          of the 2000 provision for loss on disposal of the Company's
          discontinued Structural Core Materials business segment (see Note 3).

     Long-Lived Assets

          In accordance with SFAS No. 121, Accounting for the Impairment of
          Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, the
          Company reviews for the impairment of long-lived assets whenever
          events or changes in circumstances indicate the carrying amount of an
          asset may not be recoverable. The carrying value of a long-lived asset
          is considered impaired when the anticipated undiscounted cash flow
          from the asset is separately identifiable and is less than its
          carrying value. In that event, a loss is recognized based on the
          amount by which the carrying value exceeds the fair value of the
          long-lived asset. Fair value is determined primarily using the
          anticipated cash flows discounted at a rate commensurate with the risk
          involved. Losses on long-lived assets to be disposed of are determined
          in a similar manner, except that fair values are reduced for the cost
          to dispose. During 2000, 1999 and 1998, no such impairment losses have
          been identified by the Company, other than that identified as part of
          the 2000 provision for loss on disposal of the Company's discontinued
          Structural Core Materials business segment (see Note 3).


                                       33
<PAGE>

     Foreign Currency Translation

          The local currency has been used as the functional currency in the
          country in which the Company conducts business outside of the United
          States. The assets and liabilities denominated in a foreign currency
          are translated into U.S. dollars at the current rate of exchange at
          the balance sheet date and revenues and expenses are translated at the
          average monthly exchange rates. The translation gains and losses are
          included as a separate component of other comprehensive income (loss).
          Transaction gains and losses included in results of operations are not
          material.

     Comprehensive Income (Loss)

          The Company applies the provisions of SFAS No. 130, Reporting
          Comprehensive Income, which requires the reporting of other
          comprehensive income in addition to net income from operations. Other
          comprehensive income (loss) for the Company consists of changes to its
          additional minimum pension liability and foreign currency translation
          adjustments.

     Other Expense

          Other expense consists primarily of certain legal and other costs
          incurred in connection with the Company's governmental investigations
          relating to Alcore and a class action shareholder lawsuit (see Note
          19).


                                       34
<PAGE>

2. RESTATEMENT OF PREVIOUSLY REPORTED FINANCIAL STATEMENTS

     During January 2000, the Company learned of possible accounting and
     financial reporting irregularities at its subsidiary, Alcore, when certain
     financial records were seized in connection with a search warrant issued by
     the United States District Court - District of Maryland as part of a
     governmental investigation. Additionally, the Company has been notified of
     an investigation by the United States Securities and Exchange Commission
     regarding these matters (Note 19).

     After becoming aware of the possible irregularities, the Company engaged
     special counsel and forensic accountants to assist in its investigation of
     the possible irregularities. As a result, the Company has previously
     restated its 1998 consolidated financial statements (including its
     quarterly financial statements for the first, second and third quarters of
     1999).

     Substantially all of the adjustments to restate the 1998 financial
     statements relate to operations which have been subsequently classified as
     discontinued by the Company and are contained in the restated results of
     discontinued operations in the accompanying Consolidated Financial
     Statements (see Note 3).

     Certain legal and other costs incurred by the Company during 2000 in its
     investigation of the aforementioned irregularities as well as other costs
     directly related to the aforementioned governmental investigations in the
     aggregate amount of approximately $1.3 million have been included in the
     2000 loss from discontinued operations.

3. DISCONTINUED OPERATIONS

     On June 30, 2000, the Company adopted a formal plan to sell its Structural
     Core Materials segment, which consists of the operations of the Alcore and
     Alcore Brigantine S.A. subsidiaries. During March 2001, the Company
     announced that it had entered into a letter of intent for the sale of
     certain assets of Alcore and 100% of the stock of the Alcore Brigantine
     S.A. subsidiary (the "Transaction"). Consummation of the Transaction is
     subject to, among other things, satisfactory completion of due diligence by
     the purchaser, execution and delivery of a definitive purchase agreement
     and certain third party approvals. The Company anticipates the Transaction
     will be closed during the second quarter of 2001.



                                       35
<PAGE>

     Assets and liabilities of the Structural Core Materials segment to be
     disposed of consisted of the following at December 31, 2000 and 1999 (in
     thousands):

<TABLE>
<CAPTION>
                                                               2000           1999
                                                             --------       --------
<S>                                                          <C>            <C>
               Cash                                          $     68       $     --

               Accounts receivable                              2,764          2,699

               Inventories                                      4,575          3,206

               Prepaid expenses                                    56             90
               Property, plant and equipment                   12,053         13,464

               Other noncurrent assets                          5,213          5,452
               Accounts payable                                (1,275)        (1,562)

               Accrued expenses                                  (456)          (450)

               Long-term debt                                  (1,146)          (802)
               Capital lease obligations                       (1,364)        (1,738)

               Reserve for loss on disposal of segment        (13,517)            --
                                                             --------       --------
                      Net assets to be disposed of           $  6,971       $ 20,359
                                                             ========       ========
</TABLE>

     Net assets to be disposed of have been separately classified in the
     accompanying Consolidated Balance Sheets, and the December 31, 1999 balance
     sheet has been restated to conform with the current year's presentation.

     Operating results of the Structural Core Materials segment for all periods
     reported are shown separately as results from discontinued operations in
     the accompanying Consolidated Financial Statements. Net revenues of the
     Structural Core Materials segment were approximately $23.2 million, $19.4
     million and $21.8 million for the years ended December 31, 2000, 1999 and
     1998, respectively. These amounts are not included in revenues in the
     accompanying Consolidated Statements of Operations.


                                       36
<PAGE>

Discontinued operation results, including income tax impact, are summarized as
follows for the years ended December 31, 2000, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                                                 2000          1999          1998
                                                                                               --------      --------      --------
<S>                                                                                            <C>           <C>           <C>
Loss from operations of segment to be disposed:

      Loss before taxes                                                                        $ (3,775)     $(13,142)     $ (1,236)

      Income tax benefit                                                                          1,453         4,504           476
                                                                                               --------      --------      --------
      Loss after tax                                                                           $ (2,322)     $ (8,638)     $   (760)
                                                                                               ========      ========      ========

Provision for loss on disposal of business segment:

       Operating losses during the phase-out period:
                Loss before taxes:
                        Incurred as of end of year                                             $ (2,294)     $     --      $     --
                        Estimated future operating losses through date of disposal               (1,300)           --            --
                                                                                               --------      --------      --------
            Total operating losses during the phase-out period                                   (3,594)           --            --
                Income tax benefit                                                                1,222            --            --
                                                                                               --------      --------      --------
                Loss after tax                                                                   (2,372)           --            --
                                                                                               --------      --------      --------

       Estimated loss on disposal of business segment:
                Loss before taxes                                                               (12,217)           --            --
                Income tax benefit                                                                2,198            --            --
                                                                                               --------      --------      --------
                Loss after tax                                                                  (10,019)           --            --
                                                                                               --------      --------      --------

       Total provision for loss on disposal of business segment:
                Loss before taxes                                                               (15,811)           --            --
                Income tax benefit                                                                3,420            --            --
                                                                                               --------      --------      --------
                Loss after tax                                                                  (12,391)           --            --
                                                                                               --------      --------      --------

Total loss from discontinued operations:

      Loss before taxes                                                                         (19,586)      (13,142)       (1,236)

      Income tax benefit                                                                          4,873         4,504           476
                                                                                               --------      --------      --------
      Loss after tax                                                                           $(14,713)     $ (8,638)     $   (760)
                                                                                               ========      ========      ========

Loss per share:

   Basic:
          Loss from operations of segment to be disposed                                       $  (0.44)     $  (1.63)        (0.15)
          Estimated loss on disposal of business segment                                          (2.32)           --            --
                                                                                               --------      --------      --------
            Total loss from discontinued operations                                            $  (2.76)     $  (1.63)     $  (0.15)
                                                                                               ========      ========      ========

   Diluted:
          Loss from operations of segment to be disposed                                       $  (0.42)     $  (1.57)     $  (0.14)
          Estimated loss on disposal of business segment                                          (2.24)           --            --
                                                                                               --------      --------      --------
            Total loss from discontinued operations                                            $  (2.66)     $  (1.57)     $  (0.14)
                                                                                               ========      ========      ========
</TABLE>

Discontinued operation results include general interest expense allocations of
approximately $933,000, $984,000 and $741,000 for the years ended December 31,
2000, 1999 and 1998, respectively.


                                       37
<PAGE>

4. ACQUISITION

     On May 29, 1998, the Company acquired all of the capital stock of
     Brigantine S.A., a manufacturer of honeycomb products and engineered panels
     located in France. The acquired company was renamed Alcore Brigantine S.A.
     and operates as a subsidiary of Alcore. The acquisition was accounted for
     as a purchase and the total purchase price of $3,329,000 consisted of (1)
     $2,502,000 cash paid to the seller, (2) $500,000 in deferred payments
     evidenced by a note payable and (3) $327,000 of direct transaction costs.
     As a result of the transaction, the Company recorded $2,307,000 of
     goodwill, which was being amortized using the straight-line method over 40
     years. The Company's consolidated financial statements include the
     operating results for Alcore Brigantine S.A. since the date of the
     acquisition. The pro forma results of operations for 1998, assuming the
     acquisition had been made at the beginning of that year, would not be
     materially different from reported results.

     Alcore Brigantine S.A. is part of the Company's discontinued Structural
     Core Materials business segment, and is being accounted for as a
     discontinued operation (see Note 3).

5. SEGMENT REPORTING AND CUSTOMER CONCENTRATION

     The Company applies the provisions of SFAS No. 131, Disclosures about
     Segments of an Enterprise and Related Information, which established
     standards for the manner in which public business enterprises report
     information about operating segments.

     The Company's operations include two reportable business segments: (1)
     Aerospace and Defense and (2) Commercial Composites. All other operating
     segments have not met the quantitative thresholds for determining
     reportable segments. A description and financial data for the segments are
     summarized below.

     Aerospace and Defense

     The Aerospace and Defense markets served by the Company primarily consist
     of the United States government (Department of Defense), which the Company
     sells to on a prime and subcontract basis, and the commercial aerospace
     market. The Company designs, develops and manufactures a wide range of
     advanced composite products, advanced electronic and electro-optical
     components and other integrated defense systems for this market segment.
     Products include radomes and composite structures for high-performance
     military and commercial aviation, lightweight relocatable shelters, rocket
     motor cases, pressure vessels, fuel tanks for military aircraft, advanced
     electronic and electro-optical components, biological and chemical warfare
     detection and protection systems, metal bonded panels and other composite
     assemblies using fibers and reinforced plastics. This reportable segment
     consists of four operating segments which have been aggregated for segment
     reporting purposes.

     Commercial Composites

     The Commercial Composites segment designs and manufactures composite parts
     and components for the automotive, oil and gas and other commercial
     industries, including fuel tanks for natural gas vehicles, accumulator
     bottles, flexible drill pipe and other products.


                                       38
<PAGE>

     Other

     The remainder of the Company's business consists of operations which have
     not met the quantitative thresholds for separate segment disclosure. Other
     consists primarily of a segment that manufactures electrical power
     switching products for specialty vehicles including recreational vehicles,
     motor homes, conversion vans, over-the-road trucks and leisure boats.

Selected financial data by business segment as of and for the years ended
December 31, 2000, 1999 and 1998 follows (in thousands):

<TABLE>
<CAPTION>
                                                            2000                  1999                  1998
                                                         ---------             ---------             ---------
<S>                                                      <C>                   <C>                   <C>
Net revenues (all from external customers)

    Aerospace and Defense                                $ 140,336             $ 133,214             $ 118,897

    Commercial Composites                                   21,668                16,663                15,856

    Other operating segments                                 8,721                 9,900                 7,864
                                                         ---------             ---------             ---------
                Total                                    $ 170,725             $ 159,777             $ 142,617
                                                         =========             =========             =========

Operating income (loss)

    Aerospace and Defense                                $  13,233             $  11,420             $  12,154

    Commercial Composites                                    6,779                 2,730                   798

    Other operating segments                                  (102)                  941                   423

    Corporate                                               (4,279)               (3,522)               (3,073)
                                                         ---------             ---------             ---------
                Total                                    $  15,631             $  11,569             $  10,302
                                                         =========             =========             =========

Identifiable assets

    Aerospace and Defense                                $  64,945             $  60,708             $  57,545

    Commercial Composites                                    9,221                 7,089                 6,877

    Other operating segments                                 2,563                 3,020                 2,945

    Corporate                                               14,606                10,822                 9,988
                                                         ---------             ---------             ---------
                Total                                    $  91,335             $  81,639             $  77,355
                                                         =========             =========             =========

Capital expenditures

    Aerospace and Defense                                $     782             $   2,556             $   4,222

    Commercial Composites                                      204                   155                 1,336

    Other operating segments                                    34                   207                    44

    Corporate                                                   --                   100                    31
                                                         ---------             ---------             ---------
                Total                                    $   1,020             $   3,018             $   5,633
                                                         =========             =========             =========

Depreciation and amortization

    Aerospace and Defense                                $   2,285             $   2,466             $   1,703

    Commercial Composites                                      324                   289                   177

    Other operating segments                                   156                   144                   157

    Corporate                                                  141                    97                    68
                                                         ---------             ---------             ---------
                Total                                    $   2,906             $   2,996             $   2,105
                                                         =========             =========             =========
</TABLE>


                                       39
<PAGE>

     The following table presents the geographic location of the customer for
     revenues as of and for the years ended December 31, 2000, 1999 and 1998 (in
     thousands):

                                     2000         1999         1998
                                   --------     --------     --------
           United States           $151,979     $146,374     $127,529
           Foreign countries         18,746       13,403       15,088
                                   --------     --------     --------
              Total                $170,725     $159,777     $142,617
                                   ========     ========     ========

     Major Customer Information

     Revenues from the U.S. government on a prime or sub-contract basis during
     2000, 1999, and 1998 were approximately 69% of total revenues for each year
     reported. Approximately 19%, 16% and 14% of total revenues for 2000, 1999
     and 1998, respectively, were from The Boeing Company. No other customers
     comprised 10% or more of total revenues for the periods reported. All of
     the revenues from the U.S. government and The Boeing Company reported were
     included as part of the Aerospace and Defense business segment. More than
     92% of total revenues were on a fixed-price basis for all periods reported.

     As a government contractor, the Company is exposed to certain inherent
     industry risks and uncertainties including technological obsolescence,
     changes in government policies, dependence on the federal defense budget
     and annual congressional appropriation and allotment of funds. Although the
     Company's major programs have been well supported during recent years,
     future spending reductions and funding limitations could negatively impact
     future operations.

6. INVENTORIES

     Inventories at December 31, 2000 and 1999 consisted of the following (in
     thousands):

                                              2000            1999
                                            --------        --------
           Finished goods                   $  1,281        $  1,433
           Work in process                    29,555          28,157
           Raw materials                      13,560          16,902
           Progress payments                  (1,654)         (4,916)
                                            --------        --------
                 Total                      $ 42,742        $ 41,576
                                            ========        ========

     Work in process includes costs on major long-term aerospace and defense
     programs which are in the early stages of performance and have experienced
     actual costs to date in excess of the estimated average cost of all units
     to be produced as determined under the learning curve concept. Such costs
     included in work in process were approximately $14.2 million and $12.1
     million at December 31, 2000 and 1999, respectively. The Company has
     assumed additional orders beyond those currently included in firm released
     backlog in its estimates of average unit cost of all units to be produced.
     Recovery of the deferred production costs is dependent on the number of
     units ultimately sold, actual selling prices and associated future
     production costs. Sales significantly under estimates or costs
     significantly over estimates could result in the realization of substantial
     program


                                       40
<PAGE>

     losses in future years. Included in the $14.2 million of work in process at
     December 31, 2000 related to these contracts is approximately $4.0 million
     of costs associated with outstanding claims, the recovery of which is
     dependent on future negotiation and settlement. Of the remaining $10.2
     million of deferred production costs relating to these contracts, $8.5
     million would not be absorbed in cost of sales based on existing firm
     orders at December 31, 2000.

7. LEASES

     The Company has various lease agreements for offices, factories and
     equipment. The longest lease obligation extends to 2013. Most leases
     contain renewal options and some contain purchase options. No leases
     contain restrictions on the Company's activities concerning dividends,
     further leasing or additional debt.

     The Company is obligated under various capital leases for certain machinery
     and equipment that expire at various dates through 2002. The gross amount
     of machinery and equipment and related accumulated amortization recorded
     under capital leases as of December 31, 2000 and 1999 were as follows (in
     thousands):

                                                       2000        1999
                                                      -----       -----
            Machinery and equipment                   $ 182       $ 268
            Less accumulated amortization               (98)        (93)
                                                      -----       -----
                      Net capital lease assets        $  84       $ 175
                                                      =====       =====

     Future minimum rental payments at December 31, 2000 under agreements
     classified as operating leases with noncancelable terms in excess of one
     year, and the present value of future minimum capital lease payments are as
     follows (in thousands):

                                                     Capital     Operating
                                                     Leases        Leases
                                                     ------        ------
         Year ending December 31:
          2001                                        $ 47        $ 1,231
          2002                                          32          1,079
          2003                                          --            879
          2004                                          --            652
          2005                                          --            271
          Beyond 2005                                   --          1,545
                                                      ----        -------
          Total minimum lease payments                  79        $ 5,657
                                                      ====        =======

          Less amounts representing interest            (8)
                                                      ----
          Net principal portion                         71
          Less portion due within one year             (41)
                                                      ----

          Long-term portion                           $ 30
                                                      ====

     The schedule of operating lease obligations excludes the Company's
     obligation of $1,598,000 for the remaining five years and three months on a
     lease of a manufacturing facility located in Jessup, Maryland which is no
     longer being used by ATP in its


                                       41
<PAGE>

     operations. As of December 31, 2000, the Company has subleased
     substantially all of the Jessup facility. Management has estimated the
     amount of remaining lease obligation costs in excess of anticipated future
     sublease income to be $334,000 at December 31, 2000, and a liability of the
     same amount is included as an accrued expense on the Company's Consolidated
     Balance Sheet at December 31, 2000.

     Rent expense for the years ended December 31, 2000, 1999 and 1998 consisted
     of the following (in thousands):

                                      2000         1999         1998
                                    -------      -------      -------

            Basic expense           $ 1,686      $ 1,535      $ 1,437
            Sublease income            (254)        (254)        (253)
                                    -------      -------      -------
            Rent expense, net       $ 1,432      $ 1,281      $ 1,184
                                    =======      =======      =======

8. DEBT

     Short-term debt of the Company at December 31 consisted of the following
     (in thousands):

<TABLE>
<CAPTION>
                                                                         2000           1999
                                                                        -------       -------
<S>                                                                     <C>           <C>
            Revolving loans                                             $21,799       $21,653
            Current maturities of long-term debt                          5,698         6,228
                                                                        -------       -------
                         Total                                          $27,497       $27,881
                                                                        =======       =======
</TABLE>

     Long-term debt of the Company at December 31 consisted of the following (in
     thousands):

<TABLE>
<CAPTION>
                                                                         2000           1999
                                                                        -------       -------
<S>                                                                     <C>           <C>
            Term loans                                                  $16,635       $19,408
            Equipment loans                                               2,448         3,288
            Subordinated debt, net of  unamortized loan
                  discount of $1,627                                      5,373            --
            Deferred obligation                                              --           334
            Bonds payable                                                 2,000         2,200
              Other long-term debt                                          612           694
                                                                        -------       -------
                        Total long-term debt                             27,068        25,924
            Less current portion                                          5,698         6,228
                                                                        -------       -------
                        Long-term debt, net of current portion          $21,370       $19,696
                                                                        =======       =======
</TABLE>

     Scheduled maturities of long-term debt are as follows (in thousands):

            2001                                                        $ 5,698
            2002                                                          3,697
            2003                                                         17,314
            2004                                                             87
            2005                                                             91
            Thereafter                                                      181
                                                                        -------
                        Total                                           $27,068
                                                                        =======

     Revolving, Term and Equipment Loans

     On October 10, 2000, the Company entered into a new financing agreement
     with its primary lender. At December 31, 2000, the Company's credit
     facility with this lending


                                       42
<PAGE>

     institution totaled $46.0 million consisting of: (1) $27.0 million of
     revolving credit against eligible receivable and inventory balances, (2) a
     $16.6 million term loan and (3) a $2.4 million capital equipment loan. As
     of December 31, 2000, the Company had approximately $3.5 million of unused
     borrowing availability on this credit facility, net of $1.7 million of
     reserves against the revolving loan borrowing base for outstanding stand-by
     letters of credit commitments ($1.4 million) and other items ($0.3
     million).

     The revolving, term and equipment loans are secured by substantially all of
     the Company's assets. The interest rates on the loans are set quarterly
     based on the Company's performance against debt-to-earnings ratios
     specified in the agreement. Interest rates can range from LIBOR (the London
     Interbank Offered Rates) plus 2.75% to LIBOR plus 1.0% on the revolving
     loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and equipment
     loans. Alternatively, the Company may elect interest rates based on the
     lending institution's prime rate with rates on the revolving loan ranging
     from prime plus 0.5% to prime plus 0.25% and rates on the term and
     equipment loans ranging from prime plus 0.75% to prime plus 0.50%. The
     weighted average interest rates in effect at December 31, 2000 and 1999 for
     the revolving, term and equipment loans were as follows:

                                            2000         1999
                                            ----         ----
              Revolving loans               9.53%        8.50%
              Term loans                    9.91%        9.00%
              Equipment loans               9.94%        9.00%

     Interest is paid monthly in arrears on all loans. The term loan is payable
     quarterly based on a seven-year amortization period. Equipment loan
     principal payments are made monthly based on a five-year amortization
     period. The credit facility matures on October 31, 2003.

     The Company is subject to several financial and nonfinancial covenants
     under the credit facility. At December 31, 2000, the Company was in
     violation of certain financial covenants. Such violations were cured as a
     result of an amendment to the agreement dated March 30, 2001.

     Subordinated Debt

     On October 10, 2000, the Company entered into an agreement with a lender
     for a three year, $7,000,000 million loan in the form of a junior secured
     credit facility. The loan bears interest payable monthly in arrears at an
     annual rate of 12.5%, and an additional 2.5% of payment-in-kind interest
     that is payable at maturity. The loan matures on October 31, 2003. In
     connection with the loan, ATP also issued warrants giving the lender the
     right to purchase 320,000 shares of the Company's common stock at an
     exercise price of $4.42 per share. The warrants are exercisable at any time
     prior to the fifth anniversary of the credit facility closing.
     Alternatively, at any time after 18 months from the closing, but prior to
     the expiration of the warrants, the lender may elect to require the Company
     to repurchase each warrant for an amount equal to 10% of ATP's EBITDA
     (earnings before interest, taxes, depreciation and amortization) divided by
     320,000 (the "Put Option"). The Put Option is subject to a maximum cap of
     $1,750,000. In the event of an exercise of the Put Option resulting in a
     repurchase price of $1,000,000 or greater, the Company has the right to
     satisfy up to 50% of the obligation by issuing a promissory note to the
     lender, with principal payments amortized evenly over 18 months. In
     addition, the Company has a call right in the event that the holders of the
     warrants


                                       43
<PAGE>

     initiate a demand registration or elect to exercise their piggyback
     registration rights in accordance with the agreement. The loan is secured
     by substantially all of the Company's assets.

     The Company allocated the $7,000,000 proceeds from the loan to the
     subordinated debt ($5,250,000) and stock warrants ($1,750,000) based on
     their respective fair values. The fair value of the stock warrants is
     reflected as a debt discount and is being amortized as interest expense
     over the three year life of the debt using the interest method. The amount
     of amortization recorded as interest expense for the year ended December
     31, 2000 was $122,000. The Company has included the value assigned to the
     stock warrants in other long-term liabilities in the accompanying
     Consolidated Balance Sheet at December 31, 2000.

     The Company is subject to several financial and nonfinancial covenants
     under the loan agreement. At December 31, 2000, the Company was in
     violation of certain financial covenants. Such violations were cured as a
     result of an amendment to the agreement dated April 2, 2001.

     Bonds Payable and Other Debt

     Bonds payable result from a financing agreement with the State of Maryland
     dated May 14, 1997 to provide $2.6 million in 15 year tax-exempt industrial
     development bonds bearing interest at a variable rate adjusted weekly to
     finance the purchase of the Belcamp, Maryland honeycomb manufacturing
     facility and an adjacent 3.2 acre parcel of land. The Company has entered
     into an interest rate swap agreement with a financial institution to fix
     the interest rate on the tax exempt bonds at 5.07% through the year 2012.
     The bonds payable require annual principal payments of $220,000 for 2001
     through 2004 and $140,000 for 2005 through 2012, and are secured by a
     letter of credit agreement between the Company and a bank. On May 12, 2000,
     the letter of credit agreement was amended for a period extending to May
     15, 2001. As a condition of the amended agreement, ATP delivered collateral
     to the bank in the form of qualified investment securities as defined with
     a value of $100,000 as of the date of execution of the amendment.
     Additional collateral in $150,000 increments was delivered on or before
     each of July 1, August 1, September 1, and October 1, 2000. The Company is
     subject to several financial and nonfinancial covenants under this
     financing agreement. At December 31, 2000, the Company was in violation of
     a financial covenant. It is anticipated that the lender will waive this and
     future violations, which are expected by the Company during 2001. However,
     since such future waivers are not assured, the Company has classified the
     total amount of the bonds as current at December 31, 2000. On March 16,
     2001 the letter of credit agreement was extended to August 16, 2001.

     On July 7, 1997, in conjunction with the tax exempt bond financing, the
     Company entered into a ten-year $810,000 Maryland Industrial and Commercial
     Redevelopment Fund loan agreement with interest set at a fixed rate of 5.1%
     annually, plus a five-year $60,000 loan from Harford County, Maryland with
     interest set at a fixed rate of 5.5%. The unpaid balance of these loans are
     reported as other long-term debt and totaled $612,000 and $694,000 at
     December 31, 2000 and 1999, respectively.


                                       44
<PAGE>

9. RETIREMENT AND EMPLOYEE BENEFIT COSTS

     Defined Contribution Plans

     The Company has retirement and savings plans for substantially all of the
     Company's employees which allow participants to make contributions up to
     15% of their base pay via payroll deductions pursuant to Section 401(k) of
     the Internal Revenue Code. Under the plan, the Company may make
     discretionary matching contributions. The Company's match for the 2000 plan
     year was 50% of each participant's pretax contributions, limited to 4% of
     their salary. The cost of the employer match for 2000, 1999, and 1998 was
     $644,000, $588,000 and $545,000, respectively.

     Union employees at the Glen Cove, New York facility are covered by a
     defined contribution retirement plan, the cost of which was $27,000,
     $32,000 and $33,000 for 2000, 1999 and 1998, respectively.

     Defined Benefits Plans

     The majority of hourly union employees of the Company, other than those at
     the Glen Cove, New York facility, are covered by defined benefit pension
     plans with benefits generally based on negotiated rates and years of
     service. The Company's funding policy is to contribute annually the minimum
     required amount determined by its actuaries.

     The change in benefit obligation, change in plan assets and funded status
     of the defined benefit plans for 2000 and 1999 is summarized as follows (in
     thousands):

<TABLE>
<CAPTION>
                                                                  2000           1999
                                                                -------        -------
<S>                                                             <C>            <C>
           Change in benefit obligation:
                  Balance at beginning of year                  $ 2,832        $ 2,803
                  Service cost                                      258            359
                  Interest cost                                     246            218
                  Plan amendments                                    --              7
                  Actuarial (gain) loss                             295           (406)
                  Benefits paid                                    (171)          (149)
                                                                -------        -------
                  Balance at end of year                        $ 3,460        $ 2,832
                                                                =======        =======

          Change in plan assets:
                   Balance at beginning of year                 $ 2,087        $ 1,186
                  Actual return on plan assets                     (164)           324
                  Employer contributions                          1,065            726
                  Benefits paid                                    (171)          (149)
                                                                -------        -------
                  Balance at end of year                        $ 2,817        $ 2,087
                                                                =======        =======

          Funded status:
                  Funded status at end of year                  $  (643)       $  (745)
                  Unrecognized net actuarial (gain) loss            635            (26)
                  Unrecognized prior service cost                   799            881
                                                                -------        -------
                  Prepaid benefit cost                          $   791        $   110
                                                                =======        =======
</TABLE>


                                       45
<PAGE>

     The amounts recognized in the Consolidated Balance Sheets at December 31,
     2000 and 1999 consist of (in thousands):

                                                         2000           1999
                                                        -------       -------
          Prepaid benefit cost                          $   791       $   151
          Accrued benefit cost                               --           (41)
          Additional minimum liability                   (1,434)         (854)
          Intangible asset                                  798           816
          Accumulated other comprehensive income            636            38
                                                        -------       -------
            Prepaid benefit cost                        $   791       $   110
                                                        =======       =======

     The net periodic benefit cost of the defined benefit plans for the years
     ended December 31, 2000, 1999 and 1998 by components was as follows (in
     thousands):

                                                  2000        1999        1998
                                                 -----       -----       -----
          Service cost                           $ 258       $ 359       $ 233
          Interest cost                            246         218         180
          Expected return on plan assets          (202)       (111)        (65)
          Amortization of prior service cost        82          82          82
          Amortization of actuarial loss            --          34          24
                                                 -----       -----       -----

                  Net periodic benefit cost      $ 384       $ 582       $ 454
                                                 =====       =====       =====

     Assumptions used to measure the projected benefit obligation and the
     expected long-term rate of return on plan assets as of December 31 were as
     follows:

                                                  2000     1999     1998
                                                  ----     ----     ----
          Discount rate                           7.50%    8.00%    6.75%
          Expected return on plan assets          8.00%    8.00%    8.00%


                                       46
<PAGE>

10. SHAREHOLDERS' EQUITY

     The activity in the equity accounts for the period January 1, 1998 through
     December 31,

<TABLE>
<CAPTION>
                                                                                                    Notes     Accumulated
                                                          Common Stock     Additional             Receivable  Other Com-
                                                                            Paid-in    Retained      from     prehensive
                                                       Shares     Amount    Capital    Earnings    Officers   Income (Loss)  Total
                                                      --------   --------   --------   --------    --------    --------    --------
<S>                                                      <C>     <C>        <C>        <C>         <C>         <C>         <C>
Balance, January 1, 1998                                 5,220   $     52   $ 16,506   $ 10,376    $   (135)   $   (305)   $ 26,494

Exercise of stock options and warrants                      20       --           16       --          --          --            16
Net income                                                --         --         --        3,999        --          --         3,999
Preferred dividends declared                              --         --         --          (80)       --          --           (80)
Additional minimum pension liability                      --         --         --         --          --          (320)       (320)
                                                      --------   --------   --------   --------    --------    --------    --------
Balance, December 31, 1998                               5,240         52     16,522     14,295        (135)       (625)     30,109

Exercise of stock options and warrants                      46          1         89       --          --          --            90
Shares issued under employee stock plan                     20       --          205       --          --          --           205
Net loss                                                  --         --         --       (3,160)       --          --        (3,160)
Preferred dividends declared                              --         --         --          (80)       --          --           (80)
Additional minimum pension liability                      --         --         --         --          --           601         601
Foreign currency translation gain                         --         --         --         --          --            51          51
                                                      --------   --------   --------   --------    --------    --------    --------
Balance, December 31, 1999                               5,306         53     16,816     11,055        (135)         27      27,816

Exercise of stock options and warrants                      30       --           12       --          --          --            12
Shares issued under employee stock plan                     40          1        187       --          --          --           188
Remeasurement of stock warrants                           --         --          136       --          --          --           136
Net loss                                                  --         --         --       (7,322)       --          --        (7,322)
Preferred dividends declared                              --         --         --          (80)       --          --           (80)
Additional minimum pension liability                      --         --         --         --          --          (367)       (367)
Foreign currency translation loss                         --         --         --         --          --           (56)        (56)
                                                      --------   --------   --------   --------    --------    --------    --------
Balance, December 31, 2000                               5,376   $     54   $ 17,151   $  3,653    $   (135)   $   (396)   $ 20,327
                                                      ========   ========   ========   ========    ========    ========    ========
</TABLE>

     2000 is summarized as follows (in thousands):

     Under the 1997 Advanced Technical Products, Inc. Stock Option Plan (the
     "1997 Plan"), the Company may grant nonstatutory and incentive stock
     options to employees of the Company for the purchase of the Company's
     common stock at an exercise price equal to at least 100% of the fair market
     value as of the date of grant (110% of such fair market value if the
     optionee owns more that 10% of the combined voting power of all classes of
     stock of the Company). The Company has authorized 300,000 shares of common
     stock for the 1997 Plan. Options granted through December 31, 2000 have
     10-year terms and vest at the rate of 20% on each of the five anniversary
     dates following the year of the grant. At December 31, 2000, no options
     were available for grant under the 1997 Plan.

     On September 12, 2000, the Company adopted the 2000 Advanced Technical
     Products, Inc. Stock Option Plan (the "2000 Plan"), which provides for
     stock option grants on terms substantially the same as the 1997 Plan. The
     Company has authorized 500,000 shares of common stock for the 2000 Plan.
     Options granted through December 31, 2000 have 10-year terms and vest at
     the rate of 20% on each of the five anniversary dates


                                       47
<PAGE>

     following the year of the grant. At December 31, 2000, approximately
     302,000 options were available for grant under the 2000 Plan.

     On November 6, 1997, the Company adopted the Advanced Technical Products,
     Inc. Non-Employee Directors Stock Option Plan (the "1997 Director Plan"),
     the terms of which are the same as the 1997 Plan, except that options are
     to be granted only to non-employee members of the Company's board of
     directors. Stock options for 100,000 shares of common stock are authorized
     under this plan. Options under the plan are automatically granted and
     initial grants to purchase 7,500 shares were given to directors serving on
     November 6, 1997. In addition, newly elected directors will be granted
     7,500 shares on the date of their initial election to the board. The
     initial options vest at a rate of 33 1/3 % on each day preceding the annual
     meeting of the stockholders of the Company for the three years subsequent
     to the option grant. Continuing non-employee directors also automatically
     receive grants of options to purchase 1,000 shares immediately following
     each annual meeting of stockholders. These options vest 100% on the day
     immediately preceding the annual stockholders meeting following the grant
     date and have 10-year terms. At December 31, 2000, approximately 23,000
     options were available for grant under the 1997 Director Plan.

     On September 12, 2000, the Company adopted the 2000 Advanced Technical
     Products, Inc. Non-Employee Directors Stock Option Plan, which provides for
     stock option grants on terms substantially the same as the 1997 Director
     Plan. The Company has authorized 100,000 shares of common stock for the
     2000 Director Plan. No options were granted under this plan as of December
     31, 2000.

     A summary of stock option transactions for 2000, 1999 and 1998 follows
     (shares in thousands):

                                                                 Weighted
                                                    Stock        Average
                                                   Options       Exercise
                                                 Outstanding      Price
                                                 -----------      -----

          At December 31, 1997                       526        $  7.91

          Options granted                             10          13.61
          Options exercised                          (18)          0.88
          Options canceled                            (4)          9.84
                                                     ---

            At December 31, 1998                     514           8.26

          Options granted                              6          13.50
          Options exercised                          (46)          1.96
           Options canceled                          (11)         15.00
                                                     ---

          At December 31, 1999                       463           8.79

          Options granted                            401           3.29
          Options exercised                          (30)          0.41
          Options canceled                           (76)         12.11
                                                     ---

           At December 31, 2000                      758        $  7.68
                                                     ===        =======


                                       48
<PAGE>

     The following table summarizes information about stock options outstanding
     at December 31, 2000 (shares in thousands):

<TABLE>
<CAPTION>
                                                                      Exercisable
                                                                -----------------------

                     Number of     Weighted-      Weighted-                   Weighted-
                      Shares        Average        Average                     Average
   Range of         Subject to     Remaining      Exercise      Number of     Exercise
Exercise Prices       Option         Life          Price          Shares       Price
- ---------------     ----------     ---------      --------      ---------     ---------
<S>                    <C>         <C>             <C>             <C>        <C>
$ 0.41-$ 4.99          516         8.8 years       $ 2.65           80        $ 0.41
$ 5.00-$10.00           68         1.0 years         7.39           68          7.39
$10.01-$15.00          174         6.9 years        14.86          126         14.85
</TABLE>

     The Company accounts for these plans under APB Opinion No. 25, under which
     no compensation cost has been recognized. Had compensation cost for these
     plans been determined based on the fair value at grant date under the
     fair-value-based method in SFAS No. 123, the Company's net income (loss)
     would have been changed to the pro forma amounts indicated below (in
     thousands, except for per share amounts):

                                           2000         1999         1998
                                        ---------    ---------    ---------
     Net income (loss):
         As reported                    $  (7,322)   $  (3,160)   $   3,999
         Pro forma                         (7,618)      (3,449)       3,740

     Net income (loss) per share:
         As reported:
              Basic                     $   (1.39)   $   (0.61)   $    0.74
              Diluted                       (1.34)       (0.59)        0.71

         Pro forma:
              Basic                     $   (1.44)   $   (0.67)   $    0.69
              Diluted                       (1.39)       (0.64)        0.66

     The per share weighted average fair value of options granted in 2000, 1999
     and 1998 was $2.27, $7.60 and $7.63, respectively, as estimated using the
     Black-Scholes option-pricing model with the following assumptions:

                                                 2000       1999        1998
                                               --------    -------    -------
     Risk free interest rate                      5.77%      5.95%      5.95%
     Expected dividend yield                         0%         0%         0%
     Expected stock volatility                      50%        45%        45%
     Expected option life                      10 years    7 years    7 years


                                       49
<PAGE>

     Stock Warrants

     A summary of stock warrant transactions for 2000, 1999 and 1998 follows
     (shares are in thousands):

                                                                 Weighted
                                                    Stock        Average
                                                   Warrants      Exercise
                                                 Outstanding      Price
                                                 -----------      -----
          At December 31, 1997                        66        $  6.85
          Warrants exercised                          (2)          5.00
                                                     ---

          At December 31, 1998                        64           6.91
          Warrants expired                            (4)         15.00
                                                     ---

          At December 31, 1999                        60           6.37
          Warrants granted                           320           4.42
          Warrants expired                           (10)          5.00
                                                     ---

          At December 31, 2000                       370        $  4.72
                                                     ===        =======

     In connection with a loan agreement entered into on October 10, 2000, ATP
     issued warrants giving the lender the right to purchase 320,000 shares of
     the Company's common stock at an exercise price of $4.42 per share (see
     Note 8).

     Certain warrant agreements contain anti-dilutive provisions providing for
     certain adjustments in the exercise price and the number of shares to be
     received upon exercise in the event of subsequent sales of stock by the
     Company below the initial warrant exercise price.

     During 2000, the Company extended the expiration date of approximately
     27,000 warrants to March 31, 2001. The fair value of the warrants as
     estimated at the date of extension using the Black-Scholes option-pricing
     model was approximately $136,000. This amount was charged to general and
     administrative expense during 2000.

     Employee Stock Purchase Plan

     On October 29, 1998, the Company adopted the 1998 Advanced Technical
     Products, Inc. Employee Stock Purchase Plan to encourage substantially all
     employees of the Company to remain in its employ and to have an opportunity
     to acquire a proprietary interest in the Company. Under the plan, employees
     may elect to use payroll withholdings to acquire shares of the Company's
     common stock at a per share price reflecting fair market value at the
     beginning or end of each calendar quarter, whichever is lower. The Company
     has authorized 1,000,000 shares of common stock under the plan. The plan
     was approved by the stockholders of the Company during 1999. During 2000
     and 1999, approximately 40,000 shares and 20,000 shares, respectively, were
     issued under the plan at a weighted average price of $4.75 for 2000 and
     $9.96 for 1999. No shares were issued under the plan prior to 1999.


                                       50
<PAGE>

     Stockholder Rights Plan

     On March 3, 2000, the Company adopted a stockholder rights plan to assist
     ATP's stockholders in realizing fair value and equal treatment in the event
     of any attempted unsolicited takeover of the Company and to protect the
     Company and its stockholders against coercive takeover tactics. Under the
     plan, a dividend of one preferred stock purchase right was declared for
     each share of common stock outstanding at the close of business on the
     record date, March 10, 2000. No separate certificates evidencing the rights
     will be issued unless and until they become exercisable. The rights
     generally will not become exercisable until a person or group acquires 15
     percent or more of ATP common stock in a transaction that is not approved
     in advance by the board of directors. In that event, each right will
     entitle the holder, other than the unapproved acquirer and its affiliates,
     to acquire, by payment of the then-applicable exercise price, initially
     $38, subject to adjustment, shares of ATP common stock with a market value
     equal to two times the exercise price. In addition, if the rights were
     triggered by such a non-approved attempted acquisition and ATP were
     thereafter to be acquired in a merger in which all stockholders were not
     treated alike, stockholders with unexercised rights, other than the
     unapproved acquirer and its affiliates, would be entitled to purchase
     common stock of the acquirer with a value of twice the exercise price of
     the rights.

11. MANDATORILY REDEEMABLE PREFERRED STOCK

     The Company has 1,000,000 shares of 8% cumulative and mandatorily
     redeemable preferred stock outstanding at December 31, 2000 and 1999. In
     case of liquidation, the holders of preferred stock will be paid out of the
     assets of the Company in cash equal to $1.00 per share, plus any
     accumulated and unpaid dividends, before the common stockholders.

     The Company may, at its option, redeem any or all of the outstanding shares
     of the preferred stock for cash equal to $1.00 per share, plus any
     accumulated and unpaid dividends. The preferred shares are subject to
     mandatory redemption at the above-stated value on the earlier of April 28,
     2001 or the date on which occurs a change in the ownership of 50% or more
     of the assets or the common stock of the Company.

12. RELATED-PARTY TRANSACTIONS

     At December 31, 2000 and 1999, certain officers of the Company have
     outstanding promissory notes in the aggregate amount of $134,865, which
     were issued to the Company as consideration for the paid-in capital in
     excess of par value for the shares of stock they own. Common shares of the
     Company owned by each employee have been pledged as collateral to secure
     the payment of the promissory notes. The notes carry an interest rate of
     the lesser of 8% and the highest rate permitted by applicable law.
     Principal and accrued interest payments are due in full upon maker's sale
     of any pledged stock or on April 28, 2001, if earlier. The notes may be
     repaid at any time at the option of the maker without penalty.

     A director of the Company is also a managing director of Allen & Company,
     Inc. ("Allen"), which rendered financial consulting services to the Company
     in 1999,


                                       51
<PAGE>

     including the preparation of a fairness opinion in connection with a
     proposed merger of ATP. The Company paid Allen $100,000 in 2000 and
     $150,000 in 1999 for financial consulting fees rendered.

13. TECHNOLOGICAL EXPENDITURES

     Technological expenditures, excluding reimbursed projects, for the years
     ended December 31, 2000, 1999 and 1998 consisted of the following (in
     thousands):

                                                2000     1999     1998
                                                ----     ----     ----

          Research and development              $208     $417     $558
          Engineering and other                   77      370      138
                                                ----     ----     ----
                      Total                     $285     $787     $696
                                                ====     ====     ====

     The Company was also reimbursed $13.3 million, $13.8 million and $11.3
     million under federally funded research and development contracts during
     the years ended December 31, 2000, 1999 and 1998, respectively.

14. INCOME TAXES

     The combined provision for U.S. federal and state income taxes allocated to
     income from continuing operations for the years ended December 31, 2000,
     1999 and 1998 consisted of the following (in thousands):

                                          2000       1999       1998
                                        -------    -------    -------

          Current                       $ 5,823    $ 5,717    $ 2,996
          Deferred                       (1,195)    (2,287)       (17)
                                        -------    -------    -------
          Total income tax expense      $ 4,628    $ 3,430    $ 2,979
                                        =======    =======    =======

     The federal statutory tax rate for the years ended December 31, 2000, 1999
     and 1998 is reconciled to the effective tax rate as follows:

                                                    2000    1999    1998
                                                    ----    ----    ----

          Federal statutory rate                    34.0%   34.0%   34.0%
          State and local taxes, net
            of federal effect                        3.7     3.7     3.7
          Other, net                                 0.8     0.8     0.8
                                                    ----    ----    ----

          Effective tax rate                        38.5%   38.5%   38.5%
                                                    ====    ====    ====


                                       52
<PAGE>

     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and liabilities at December 31, 2000
     and 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                      2000        1999
                                                                    --------    --------
<S>                                                                 <C>         <C>
           Deferred tax assets-
              Excess of tax over book capitalized inventory costs   $    355    $    347
              Reserves not deductible until paid                       2,819       3,321
              Allowance for doubtful accounts                            175         208
              Estimated loss on disposal of discontinued segment       3,670          --
              Other                                                      245          15
              Net operating loss carryforwards                         3,058       2,603
                                                                    --------    --------
                             Total deferred tax assets                10,322       6,494

          Deferred tax liabilities-
              Depreciation                                             1,925       1,155
                                                                    --------    --------

           Net deferred tax asset before valuation allowance           8,397       5,339

           Valuation allowance                                        (2,294)       (661)
                                                                    --------    --------
           Net deferred tax asset                                   $  6,103    $  4,678
                                                                    ========    ========
</TABLE>

     The Company has net operating loss carryforwards of approximately $4.7
     million which were generated from operations of the Company's Lunn and
     Alcore divisions prior to its merger with ATP. Such carryforwards may be
     applied against future taxable income and expire at varying dates between
     2002 and 2011. As a result of the merger and the subsequent ownership
     change of Lunn, the timing of the realization of the Company's net
     operating loss carryforwards is subject to Section 382 of the Internal
     Revenue Code ("Section 382"). Section 382 generally provides that, if a
     corporation undergoes an ownership change, the amount of taxable income
     that the corporation may offset with net operating loss carryforwards is
     subject to an annual limitation. The Company's estimated annual limitation
     under Section 382 is $1,020,000.

     In addition, Alcore has generated an estimated net operating loss
     carryforward of approximately $26.6 million for state income tax purposes.
     Such carryforwards may be applied against future taxable income at the
     state income tax level and expire in 2018 and 2019. Valuation allowances of
     $1,463,000 and $661,000 were established at December 31, 2000 and 1999,
     respectively, representing reserves for the state income tax effect for all
     of the net deferred tax assets generated from the Alcore losses. A
     valuation allowance of $831,000 was established at December 31, 2000 for
     the estimated portion of the loss on disposal of discontinued business
     segment which may not be currently deductible in the year of disposal.

     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely than not that some portion or all of the deferred
     tax assets will not be realized. The ultimate realization of deferred tax
     assets is dependent upon the generation of future taxable income during the
     periods in which those temporary differences become deductible. Management
     considers the scheduled reversal of deferred tax assets and liabilities,
     projected future taxable income and tax planning strategies in making this
     assessment. As of December 31, 2000, it is management's assessment that it
     is more likely than not that the Company will realize the benefits of all
     the deductible differences recorded at that date, with the exception of the
     potential tax benefits at the state income


                                       53
<PAGE>

     tax level of the Alcore net operating loss carryforward and for certain of
     the costs included in the loss on disposal of discontinued segment.

15. EARNINGS (LOSS) PER SHARE

Earnings (loss) per share are calculated as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                2000           1999           1998
                                                                              --------       --------       --------
<S>                                                                           <C>            <C>            <C>
     Income from continuing operations                                        $  7,391       $  5,478       $  4,759
     Less:  preferred stock dividends accrued                                      (80)           (80)           (80)
                                                                              --------       --------       --------
     Income from continuing operations available
          for common shares                                                   $  7,311       $  5,398       $  4,679
                                                                              ========       ========       ========

     Loss from discontinued operations                                        $(14,713)      $ (8,638)      $   (760)
                                                                              ========       ========       ========

     Net income (loss)                                                        $ (7,322)      $ (3,160)      $  3,999
     Less:  preferred stock dividends accrued                                      (80)           (80)           (80)
                                                                              --------       --------       --------
     Net income (loss) available for common shares                            $ (7,402)      $ (3,240)      $  3,919
                                                                              ========       ========       ========

     Weighted average number of common shares outstanding:
                     --Basic                                                     5,338          5,273          5,271
                       Add: assumed stock conversions, net of
                       assumed treasury stock purchases:
                          --stock options                                          166            195            220

                          --stock warrants                                          29             36             35
                                                                              --------       --------       --------
                     --Diluted                                                   5,533          5,504          5,526
                                                                              ========       ========       ========
</TABLE>

16. ACCRUED EXPENSES

     Accrued expenses at December 31, 2000 and 1999 consisted of the following
     (in thousands):

                                                            2000         1999
                                                          -------      -------

          Payroll and other compensation                  $ 6,257      $ 5,800
          Medical expenses                                  1,032        1,002
          Loss on operating lease obligation (note 7)         334          425
          Interest expense                                    463          350
          Other                                             2,443        2,196
                                                          -------      -------
                               Total                      $10,529      $ 9,773
                                                          =======      =======


                                       54
<PAGE>

17. OTHER NONCURRENT ASSETS

     Other noncurrent assets as of December 31, 2000 and 1999 are summarized as
     follows (in thousands):

<TABLE>
<CAPTION>
                                                                         2000          1999
                                                                        ------        ------
<S>                                                                     <C>           <C>
          Goodwill, net of accumulated amortization of
              $66 in 2000 and $45 in 1999                               $  767        $  788
          Intangible asset - defined benefit pension plans                 799           816
          Assets of non-qualified deferred compensation plan             1,069           839
          Other                                                            874           465
                                                                        ------        ------
                          Total                                         $3,509        $2,908
                                                                        ======        ======
</TABLE>

18. OTHER LIABILITIES

     Other long-term liabilities as of December 31, 2000 and 1999 are summarized
     as follows (in thousands):

<TABLE>
<CAPTION>
                                                                              2000             1999
                                                                             ------           ------
<S>                                                                          <C>              <C>
          Liability under stock warrant agreement (Note 8)                   $1,750           $   --
          Additional minimum pension liability                                1,434              854
          Liability under non-qualified deferred compensation plan            1,069              839
                                                                             ------           ------
                             Total                                           $4,253           $1,693
                                                                             ======           ======
</TABLE>

19. CONTINGENCIES

     On October 7, 1999, the New York Office of the Attorney General, on behalf
     of the New York State Department of Environmental Conservation ("NYSDEC"),
     sent a letter to the Company, claiming that Lunn is a potentially
     responsible party ("PRP") with respect to contamination at the Babylon
     Landfill in Babylon, New York. NYSDEC alleges that Lunn sent waste to the
     Babylon Landfill and that Lunn is jointly and severally liable under the
     Comprehensive Environmental Response, Compensation and Liability Act for
     NYSDEC's response costs in addition to interest, enforcement and future
     costs. According to NYSDEC, there are currently 13 PRPs identified for the
     Babylon Landfill. NYSDEC documents seem to indicate that Lunn did transmit
     waste to the Babylon Landfill, although it is currently unclear to what
     extent Lunn contributed to contamination of the landfill. Accordingly, the
     Company cannot at present determine the extent of its liability, if any.
     The Company has not recorded any liability for the contingency as of
     December 31, 2000.

     During January 2000, the Company was notified of an investigation by the
     United States Securities and Exchange Commission as a result of possible
     accounting and financial reporting irregularities at Alcore. The Company
     and management are cooperating fully with this investigation and the
     governmental investigation referred to in note 2. The outcome of these
     investigations are uncertain at this time.


                                       55
<PAGE>

     The Company and certain of its Officers and Directors have been named in a
     number of lawsuits filed during July 2000 in the United States District
     Court for the Northern District of Georgia. During January 2001, the
     lawsuits were consolidated and an amended complaint was filed. The lawsuit
     asserts securities fraud claims based on, among other things, alleged
     misstatements and omissions concerning the Company's 1998 and 1999
     financial results and condition, including various violations of generally
     accepted accounting principles. The lawsuit purports to be brought on
     behalf of a class consisting of all persons who purchased the Company's
     common stock in the period from April 1998 through April 2000. The Company
     intends to defend itself vigorously. It is not possible to predict the
     impact that these lawsuits may have on the Company, nor is it possible to
     predict whether any other suits or claims may arise out of these matters in
     the future. However, it is possible that the present or future lawsuits,
     and any investigations or proceedings arising out of the same or related
     facts, depending on their outcome, could have a material adverse impact on
     the Company's financial condition or results of operations in one or more
     future periods.



                                       56
<PAGE>

20. SUMMARY OF QUARTERLY INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      2000  -By Quarter
                                                          -------------------------------------------------------------------------
                                                            First          Second           Third           Fourth        Total Year
                                                          ---------       ---------       ---------       ---------       ---------
                                                                             (in thousands, except per share data)
<S>                                                       <C>             <C>             <C>             <C>             <C>
Net revenues                                              $  41,359       $  44,709       $  42,089       $  42,568       $ 170,725

Operating income                                          $   3,560       $   3,335       $   4,396       $   4,340       $  15,631

Income from continuing operations                         $   1,721       $   1,565       $   2,209       $   1,896       $   7,391

Loss from discontinued operations                         $  (1,614)      $  (1,412)      $      --       $ (11,687)      $ (14,713)

Net income (loss)                                         $     107       $     153       $   2,209       $  (9,791)      $  (7,322)

Earnings (loss) per share - diluted:
       Income from continuing operations                  $    0.31       $    0.28       $    0.40       $    0.33       $    1.32
       Loss from discontinued operations                  $   (0.29)      $   (0.26)      $      --       $   (2.05)      $   (2.66)
       Net income (loss)                                  $    0.02       $    0.02       $    0.40       $   (1.72)      $   (1.34)
</TABLE>

<TABLE>
<CAPTION>
                                                                                      1999  -By Quarter
                                                          -------------------------------------------------------------------------
                                                            First          Second           Third           Fourth        Total Year
                                                          ---------       ---------       ---------       ---------       ---------
                                                                             (in thousands, except per share data)
<S>                                                       <C>             <C>             <C>             <C>             <C>
Net revenues                                              $  36,900       $  43,108       $  39,878       $  39,891       $ 159,777

Operating income                                          $   2,399       $   3,732       $   2,965       $   2,473       $  11,569

Income from continuing operations                         $   1,093       $   1,911       $   1,409       $   1,065       $   5,478

Loss from discontinued operations                         $    (907)      $  (1,398)      $  (2,337)      $  (3,996)      $  (8,638)

Net income (loss)                                         $     186       $     513       $    (928)      $  (2,931)      $  (3,160)

Earnings (loss) per share - diluted:
       Income from continuing operations                  $    0.20       $    0.34       $    0.25            0.19       $    0.98
       Loss from discontinued operations                  $   (0.17)      $   (0.25)      $   (0.42)          (0.72)      $   (1.57)
       Net income (loss)                                  $    0.03       $    0.09       $   (0.17)      $   (0.53)      $   (0.59)
</TABLE>


                                       57
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not Applicable.


                                    PART III

ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT

     For information concerning directors and executive officers of the Company,
see the information set forth following the caption "ELECTION OF DIRECTORS" in
the Company's definitive proxy statement to be filed no later than 120 days
after the end of the fiscal year covered by this Form 10-K (the "Proxy
Statement"), which information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     The information set forth following the caption "EXECUTIVE COMPENSATION" in
the Company's Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND OF MANAGEMENT

     The information set forth following the caption "ELECTION OF DIRECTORS" in
the Company's Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information set forth following the caption "TRANSACTIONS WITH
DIRECTORS, OFFICERS AND AFFILIATES" in the Company's Proxy Statement is
incorporated herein by reference.


                                       58
<PAGE>

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this report:

     1.   Financial Statements:

          Independent auditor's report

          Consolidated balance sheets at December 31, 2000 and 1999

          Consolidated statements of operations for the years ended December 31,
          2000, 1999 and 1998

          Consolidated statements of comprehensive income (loss) for the years
          ended December 31, 2000, 1999 and 1998

          Consolidated statements of cash flows for the years ended December 31,
          2000, 1999 and 1998

          Notes to consolidated financial statements

     2.   Financial Statement Schedules:

          None


                                       59
<PAGE>

3.   Exhibits:

Exhibit
  No.                      Description
  ---                      -----------

2.1    Agreement and Plan of Merger dated June 6, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc., as amended by Amendment to
       Agreement and Plan of Merger dated August 22, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc. (exhibits and schedules omitted)
       (incorporated by reference to Exhibit 2.1 to the Company's Current Report
       on Form 8-K dated November 14, 1997).

3.1    Amended and Restated Certificate of Incorporation of the Company
       (incorporated by reference to Exhibit 3 to the Company's Quarterly Report
       on Form 10-QSB for the period ended September 30, 1997).

3.2    Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
       Company's Quarterly Report on Form 10-QSB for the period ended September
       30, 1996).

10.1   Lease covering the Jessup, Maryland Plant (incorporated by reference to
       the Company's Annual Report on Form 10-K for the year ended December 31,
       1992).

10.2   Lease for the Company's facilities located in Glen Cove, New York dated
       January 1, 1995 between Grill Leasing Corp. and Lunn Industries, Inc.
       (incorporated by reference to Exhibit 10.12 to the Company's Quarterly
       Report on Form 10-QSB for the period ended March 31, 1995).

10.3   Amendment to the Company's 1994 Stock Incentive Plan adopted at the 1996
       Annual Shareholders Meeting on September 26, 1996 (incorporated by
       reference to Exhibit 10.1 to the Company's Quarterly Report on Form
       10-QSB for the period ended September 30, 1996).

10.4   Engagement letter dated February 21, 1996 between the Company and J.E.
       Sheehan & Co., Inc. for the placement of 3.5 million shares of the
       Company's common stock in a private placement (incorporated by reference
       to Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB for
       period ended March 31, 1996).

10.5   Credit Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.26 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.6   Promissory Note dated November 15, 1996 payable to the order of First
       Union National Bank of Maryland (incorporated by reference to Exhibit
       10.27 to the Company's Annual Report on Form 10-KSB for the year ended
       December 31, 1996).

10.7   Security Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.28 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.8   Loan Agreement dated as of May 1, 1997 between Maryland Industrial
       Development Authority and Alcore, Inc. (incorporated by reference to
       Exhibit 10.2 to the Company's Current Report on Form 8-K dated June 2,
       1997).


                                       60
<PAGE>

10.9   Trust Indenture dated as of May 1, 1997 by and among Maryland Industrial
       Development Financing Authority, First Union National Bank of Virginia
       and Branch Banking and Trust Company (incorporated by reference to
       Exhibit 10.3 to the Company's Current Report on Form 8-K dated June 2,
       1997).

10.10  Promissory Note dated May 15, 1997 payable to Maryland Industrial
       Development Financing Authority for the sum of $2.6 million (incorporated
       by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.11  Guaranty Agreement dated May 1, 1997 made by Lunn Industries, Inc. in
       favor of First Union National Bank of North Carolina (incorporated by
       reference to Exhibit 10.4 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.12  Letter of Credit and Reimbursement Agreement by and between Alcore, Inc.
       and First Union National Bank of North Carolina dated May 1, 1997
       (incorporated by reference to Exhibit 10.5 to the Company's Current
       Report on Form 8-K dated June 2, 1997).

10.13  Security Agreement dated as of May 1, 1997 by and among Alcore, Inc.,
       Lunn Industries, Inc., First Union Bank of North Carolina, The Maryland
       Industrial Development Financing Authority and First Union National Bank
       of Maryland (incorporated by reference to Exhibit 10.2 to the Company's
       Current Report on Form 8-K dated June 2, 1997).

10.14  Loan and Security Agreement dated December 27, 1996, by and among Fleet
       Capital Corporation and Technical Products Group, Inc., Marion
       Properties, Inc., Deland Properties, Inc. and Lincoln Properties, Inc.
       (incorporated by reference to Exhibit 10.14 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.15  First Amendment to Loan and Security Agreement dated June 10, 1997, by
       and among Fleet Capital Corporation and Technical Products Group, Inc.,
       Marion Properties, Inc., Deland Properties, Inc. and Lincoln Properties,
       Inc. (incorporated by reference to Exhibit 10.15 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.16  Second Amendment to Loan and Security Agreement dated October 31, 1997,
       by and among Fleet Capital Corporation and Technical Products Group,
       Inc., Marion Properties, Inc., Deland Properties, Inc. and Lincoln
       Properties, Inc. (incorporated by reference to Exhibit 10.16 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.17  Secured Promissory Note payable to Fleet Capital Corporation executed by
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.18  Equipment Promissory Note payable to Fleet Capital Corporation executed
       by Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.19  Form of Commercial Net Building and Ground Lease of Lincoln Air Park West
       by


                                       61
<PAGE>

       and between Brunswick Corporation and Airport Authority of the City of
       Lincoln, Nebraska, together with form of Lease Extension Agreement,
       regarding various facilities of the Lincoln Composites Division located
       in Lincoln, Nebraska (incorporated by reference to Exhibit 10.19 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.20  Lease dated October 15, 1997 by and between LPR Partnership and Technical
       Products Group, Inc., through the Lincoln Composites Division, regarding
       premises located in Lincoln, Nebraska (incorporated by reference to
       Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.21* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and James S. Carter (incorporated by reference to
       Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.22* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and Garrett L. Dominy (incorporated by reference to
       Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.23* 1997 Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.24* Form of Incentive Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.25* Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.25 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.26* Form of Nonqualified Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.26 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.27* Technical Products Group, Inc. Deferred Compensation Plan (incorporated
       by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.28* Rabbi Trust Agreement executed in connection with Technical Products
       Group, Inc. Deferred Compensation Plan (incorporated by reference to
       Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.29  Lease Agreement dated January 21, 1998 by and between FRP Lakeside L.P.,
       as landlord, and Alcore, Inc., as tenant (incorporated by reference to
       Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended April 3, 1998).

10.30  Lease Agreement dated April 14, 1998 by and between Mansell Overlook 200,
       LLC, and Advanced Technical Products, Inc. (incorporated by reference to
       Exhibit 10.29


                                       62
<PAGE>

       to the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended April 3, 1998).

10.31  Amended and Restated Loan and Security Agreement dated March 31, 1998
       between Advanced Technical Products, Inc., Alcore,Inc., Technical
       Products Group, Inc., Marion Properties, Inc., Deland Properties, Inc.
       and Lincoln Properties, Inc., collectively, as borrower, and Fleet
       Capital Corporation, as lender (incorporated by reference to Exhibit
       10.31 to the Company's Quarterly Report on Form 10-Q for the quarterly
       period ended July 3, 1998).

10.32  First Amendment to Amended and Restated Loan and SecurityAgreement dated
       June 26, 1998 by and between Advanced Technical Products, Inc., Alcore,
       Inc., Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as borrower,
       and Fleet Capital Corporation, as lender (incorporated by reference to
       Exhibit 10.32 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.33  Second Amended and Restated Equipment Promissory Note dated June 26,
       1998, executed by Advanced Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Properties, Inc. (incorporated by reference to
       Exhibit 10.33 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.34  Lease Agreement dated May 11, 1998 by and between George W. Hendricks and
       Barbara J. Hendricks and the Lincoln Composites Division of Advanced
       Technical Products, Inc. (incorporated by reference to Exhibit 10.34 to
       the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended October 2, 1998).

10.35  Advanced Technical Products, Inc. 1998 Employee Stock Purchase Plan dated
       October 29, 1998 (incorporated by reference to the Company's Proxy
       Statement on Form 14A dated October 1, 1999)

10.36  Agreement and Plan of Merger dated September 3, 1999 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to the Company's Proxy Statement on Form
       14A dated October 1, 1999)

10.37  Advanced Technical Products, Inc. 401 (k) Plan Adoption Agreement dated
       September 16, 1999 (filed herewith)

10.38  January 2000 Agreement and Plan of Merger dated January 28, 2000 by and
       among Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP
       Holding Corp. (incorporated by reference to Exhibit 2.1 to the Company's
       Current Report on Form 8-K dated January 28, 2000)

10.39  Termination Agreement and Plan dated January 28, 2000 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to Exhibit 2.2 to the Company's Current
       Report on Form


                                       63
<PAGE>

       8-K dated January 28, 2000) Rights Agreement dated March 3, 2000 between
       the Company and American Stock Transfer & Trust Company, as Rights Agent
       10.40 (incorporated by reference to Exhibit 4.1 to the Company's Current
       Report on Form 8-K dated March 9, 2000)

10.40  Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and Garrett L. Dominy 10.41* (filed
       herewith)

10.42* Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and James S. Carter (filed herewith)

10.43  Amendment to Letter of Credit and Reimbursement Agreement by and between
       Alcore, Inc. and First Union National Bank dated May 12, 2000 (to be
       filed by amendment)

10.44  Pledge and Security Agreement made by Alcore, Inc. to and for the benefit
       of First Union National Bank dated May 12, 2000 (to be filed by
       amendment) Second Amended and Restated Loan and Security Agreement dated
       October 10, 2000 by and among Advanced Technical Products, Inc., 10.45
       Alcore, Inc., Technical Products Group, Inc., Marion Properties, Inc.,
       Deland Properties, Inc. and Lincoln Properties, Inc., collectively, as
       borrower, and Fleet Capital Corporation, as Agent and a Lender , and
       Certain Lenders, as Lenders (filed herewith) Loan and Security Agreement
       dated October 10, 2000 by and among Back Bay Capital Funding, LLC, the
       Lender, and Advanced 10.46 Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as Borrower
       (filed herewith)

21.1   List of subsidiaries of Advanced Technical Products, Inc.

23.1   Consent of KPMG LLP.


- ----------

*    Indicates management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K:

     None


                                       64
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Section 13 or 15(d) 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, in the City of
Roswell, State of Georgia, on March 30, 2001

ADVANCED TECHNICAL PRODUCTS, INC.


                                           /S/ JAMES P. HOBT
                                           -----------------------------
                                           James P. Hobt

                                       (a) Vice President

                                       (b) Chief Financial Officer


     Pursuant tot he requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
          Signature                                   Title                                    Date
          ---------                                   -----                                    ----
<S>                                     <C>                                               <C>

      /S/ JAMES P. HOBT       ,          Chief Financial Officer and                      March 30, 2001
- -----------------------------                      Treasurer,
        James P. Hobt                   (Principal Financial Officer and
                                          Principal Accounting Officer)


    /S/ GARRETT L. DOMINY     ,            Chief Executive Officer,                       March 30, 2001
- -----------------------------                     President
      Garrett L. Dominy                 (Principal Executive Officer)
                                                and Director


     /S/ GARY L. FORBES                     Chairman of the Board,                        March 30, 2001
- -----------------------------                   and Director
       Gary L. Forbes


     /S/ JAMES S. CARTER                           Director                               March 30, 2001
- -----------------------------
       James S. Carter


     /S/ ALAN W. BALDWIN                           Director                               March 30, 2001
- -----------------------------
       Alan W. Baldwin


    /S/ ROBERT C. SIGRIST                          Director                               March 30, 2001
- -----------------------------
      Robert C. Sigrist
</TABLE>


                                       65
<PAGE>

<TABLE>
<S>                                     <C>                                               <C>

  /S/ LAWRENCE E. WESNESKI                         Director                               March 30, 2001
- -----------------------------
    Lawrence E. Wesneski


     /S/ SAM P. DOUGLASS                           Director                               March 30, 2001
- -----------------------------
      Sam P. Douglass


      /S/ JOHN M. SIMON                            Director                               March 30, 2001
- -----------------------------
        John M. Simon


    /S/ JOHNNIE E. WILSON                          Director                               March 30, 2001
- -----------------------------
      Johnnie E. Wilson
</TABLE>


                                       66
<PAGE>

                                  EXHIBIT INDEX

Exhibit
  No.                      Description
  ---                      -----------

2.1    Agreement and Plan of Merger dated June 6, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc., as amended by Amendment to
       Agreement and Plan of Merger dated August 22, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc. (exhibits and schedules omitted)
       (incorporated by reference to Exhibit 2.1 to the Company's Current Report
       on Form 8-K dated November 14, 1997).

3.1    Amended and Restated Certificate of Incorporation of the Company
       (incorporated by reference to Exhibit 3 to the Company's Quarterly Report
       on Form 10-QSB for the period ended September 30, 1997).

3.2    Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
       Company's Quarterly Report on Form 10-QSB for the period ended September
       30, 1996).

10.1   Lease covering the Jessup, Maryland Plant (incorporated by reference to
       the Company's Annual Report on Form 10-K for the year ended December 31,
       1992).

10.2   Lease for the Company's facilities located in Glen Cove, New York dated
       January 1, 1995 between Grill Leasing Corp. and Lunn Industries, Inc.
       (incorporated by reference to Exhibit 10.12 to the Company's Quarterly
       Report on Form 10-QSB for the period ended March 31, 1995).

10.3   Amendment to the Company's 1994 Stock Incentive Plan adopted at the 1996
       Annual Shareholders Meeting on September 26, 1996 (incorporated by
       reference to Exhibit 10.1 to the Company's Quarterly Report on Form
       10-QSB for the period ended September 30, 1996).

10.4   Engagement letter dated February 21, 1996 between the Company and J.E.
       Sheehan & Co., Inc. for the placement of 3.5 million shares of the
       Company's common stock in a private placement (incorporated by reference
       to Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB for
       period ended March 31, 1996).

10.5   Credit Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.26 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.6   Promissory Note dated November 15, 1996 payable to the order of First
       Union National Bank of Maryland (incorporated by reference to Exhibit
       10.27 to the Company's Annual Report on Form 10-KSB for the year ended
       December 31, 1996).

10.7   Security Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.28 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.8   Loan Agreement dated as of May 1, 1997 between Maryland Industrial
       Development Authority and Alcore, Inc. (incorporated by reference to
       Exhibit 10.2 to the Company's Current Report on Form 8-K dated June 2,
       1997).

10.9   Trust Indenture dated as of May 1, 1997 by and among Maryland Industrial


                                       67
<PAGE>

       Development Financing Authority, First Union National Bank of Virginia
       and Branch Banking and Trust Company (incorporated by reference to
       Exhibit 10.3 to the Company's Current Report on Form 8-K dated June 2,
       1997).

10.10  Promissory Note dated May 15, 1997 payable to Maryland Industrial
       Development Financing Authority for the sum of $2.6 million (incorporated
       by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.11  Guaranty Agreement dated May 1, 1997 made by Lunn Industries, Inc. in
       favor of First Union National Bank of North Carolina (incorporated by
       reference to Exhibit 10.4 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.12  Letter of Credit and Reimbursement Agreement by and between Alcore, Inc.
       and First Union National Bank of North Carolina dated May 1, 1997
       (incorporated by reference to Exhibit 10.5 to the Company's Current
       Report on Form 8-K dated June 2, 1997).

10.13  Security Agreement dated as of May 1, 1997 by and among Alcore, Inc.,
       Lunn Industries, Inc., First Union Bank of North Carolina, The Maryland
       Industrial Development Financing Authority and First Union National Bank
       of Maryland (incorporated by reference to Exhibit 10.2 to the Company's
       Current Report on Form 8-K dated June 2, 1997).

10.14  Loan and Security Agreement dated December 27, 1996, by and among Fleet
       Capital Corporation and Technical Products Group, Inc., Marion
       Properties, Inc., Deland Properties, Inc. and Lincoln Properties, Inc.
       (incorporated by reference to Exhibit 10.14 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.15  First Amendment to Loan and Security Agreement dated June 10, 1997, by
       and among Fleet Capital Corporation and Technical Products Group, Inc.,
       Marion Properties, Inc., Deland Properties, Inc. and Lincoln Properties,
       Inc. (incorporated by reference to Exhibit 10.15 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.16  Second Amendment to Loan and Security Agreement dated October 31, 1997,
       by and among Fleet Capital Corporation and Technical Products Group,
       Inc., Marion Properties, Inc., Deland Properties, Inc. and Lincoln
       Properties, Inc. (incorporated by reference to Exhibit 10.16 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.17  Secured Promissory Note payable to Fleet Capital Corporation executed by
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.18  Equipment Promissory Note payable to Fleet Capital Corporation executed
       by Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.19  Form of Commercial Net Building and Ground Lease of Lincoln Air Park West
       by


                                       68
<PAGE>

       and between Brunswick Corporation and Airport Authority of the City of
       Lincoln, Nebraska, together with form of Lease Extension Agreement,
       regarding various facilities of the Lincoln Composites Division located
       in Lincoln, Nebraska (incorporated by reference to Exhibit 10.19 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.20  Lease dated October 15, 1997 by and between LPR Partnership and Technical
       Products Group, Inc., through the Lincoln Composites Division, regarding
       premises located in Lincoln, Nebraska (incorporated by reference to
       Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.21* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and James S. Carter (incorporated by reference to
       Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.22* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and Garrett L. Dominy (incorporated by reference to
       Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.23* 1997 Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.24* Form of Incentive Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.25* Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.25 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.26* Form of Nonqualified Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.26 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.27* Technical Products Group, Inc. Deferred Compensation Plan (incorporated
       by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.28* Rabbi Trust Agreement executed in connection with Technical Products
       Group, Inc. Deferred Compensation Plan (incorporated by reference to
       Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.29  Lease Agreement dated January 21, 1998 by and between FRP Lakeside L.P.,
       as landlord, and Alcore, Inc., as tenant (incorporated by reference to
       Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended April 3, 1998).

10.30  Lease Agreement dated April 14, 1998 by and between Mansell Overlook 200,
       LLC, and Advanced Technical Products, Inc. (incorporated by reference to
       Exhibit 10.29


                                       69
<PAGE>

       to the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended April 3, 1998).

10.31  Amended and Restated Loan and Security Agreement dated March 31, 1998
       between Advanced Technical Products, Inc., Alcore,Inc., Technical
       Products Group, Inc., Marion Properties, Inc., Deland Properties, Inc.
       and Lincoln Properties, Inc., collectively, as borrower, and Fleet
       Capital Corporation, as lender (incorporated by reference to Exhibit
       10.31 to the Company's Quarterly Report on Form 10-Q for the quarterly
       period ended July 3, 1998).

10.32  First Amendment to Amended and Restated Loan and SecurityAgreement dated
       June 26, 1998 by and between Advanced Technical Products, Inc., Alcore,
       Inc., Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as borrower,
       and Fleet Capital Corporation, as lender (incorporated by reference to
       Exhibit 10.32 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.33  Second Amended and Restated Equipment Promissory Note dated June 26,
       1998, executed by Advanced Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Properties, Inc. (incorporated by reference to
       Exhibit 10.33 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.34  Lease Agreement dated May 11, 1998 by and between George W. Hendricks and
       Barbara J. Hendricks and the Lincoln Composites Division of Advanced
       Technical Products, Inc. (incorporated by reference to Exhibit 10.34 to
       the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended October 2, 1998).

10.35  Advanced Technical Products, Inc. 1998 Employee Stock Purchase Plan dated
       October 29, 1998 (incorporated by reference to the Company's Proxy
       Statement on Form 14A dated October 1, 1999)

10.36  Agreement and Plan of Merger dated September 3, 1999 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to the Company's Proxy Statement on Form
       14A dated October 1, 1999)

10.37  Advanced Technical Products, Inc. 401 (k) Plan Adoption Agreement dated
       September 16, 1999 (filed herewith)

10.38  January 2000 Agreement and Plan of Merger dated January 28, 2000 by and
       among Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP
       Holding Corp. (incorporated by reference to Exhibit 2.1 to the Company's
       Current Report on Form 8-K dated January 28, 2000)

10.39  Termination Agreement and Plan dated January 28, 2000 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to Exhibit 2.2 to the Company's Current
       Report on Form


                                       70
<PAGE>

       8-K dated January 28, 2000) Rights Agreement dated March 3, 2000 between
       the Company and American Stock Transfer & Trust Company, as Rights Agent
       10.40 (incorporated by reference to Exhibit 4.1 to the Company's Current
       Report on Form 8-K dated March 9, 2000)

10.40  Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and Garrett L. Dominy 10.41* (filed
       herewith)

10.42* Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and James S. Carter (filed herewith)

10.43  Amendment to Letter of Credit and Reimbursement Agreement by and between
       Alcore, Inc. and First Union National Bank dated May 12, 2000 (to be
       filed by amendment)

10.44  Pledge and Security Agreement made by Alcore, Inc. to and for the benefit
       of First Union National Bank dated May 12, 2000 (to be filed by
       amendment) Second Amended and Restated Loan and Security Agreement dated
       October 10, 2000 by and among Advanced Technical Products, Inc., 10.45
       Alcore, Inc., Technical Products Group, Inc., Marion Properties, Inc.,
       Deland Properties, Inc. and Lincoln Properties, Inc., collectively, as
       borrower, and Fleet Capital Corporation, as Agent and a Lender , and
       Certain Lenders, as Lenders (filed herewith) Loan and Security Agreement
       dated October 10, 2000 by and among Back Bay Capital Funding, LLC, the
       Lender, and Advanced 10.46 Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as Borrower
       (filed herewith)

21.1   List of subsidiaries of Advanced Technical Products, Inc.

23.1   Consent of KPMG LLP.


- ----------

*    Indicates management contract or compensatory plan or arrangement.


                                       71

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>2
<FILENAME>d70442_ex21-1.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>



                                                                    Exhibit 21.1

            List of Subsidiaries of Advanced Technical Products, Inc.


                                                   State or Jurisdiction
      Name of Subsidiary                              of Incorporation
      ------------------                              ----------------
Technical Products Group, Inc.                           Delaware
Alcore, Inc.                                             Delaware
Lincoln Properties, Inc.                                 Delaware
Marion Properties, Inc.                                  Delaware
Deland Properties, Inc.                                  Delaware
Alcore Brigantine                                        France





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>d70442_ex23-1.txt
<DESCRIPTION>CONSENT OF INDEPENDENT ACCOUNTANTS
<TEXT>

                                  Exhibit 23.1


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors
Advanced Technical Products, Inc.

     We consent to incorporation by reference in the registration statements
(No. 333-19759, 333-52885 and 333-66817) on Form S-8 of Advanced Technical
Products, Inc. of our report dated February 23, 2001, except as to Note 8, which
is as of April 2, 2001, relating to the consolidated balance sheets of Advanced
Technical Products, Inc. and subsidiaries as of December 31, 2000 and 1999, and
the related consolidated statements of operations, comprehensive income (loss),
and cash flows for each of the years in the three-year period ended December 31,
2000, which report appears in the December 31, 2000 annual report on Form 10-K
of Advanced Technical Products, Inc.


                                                              /s/ KPMG LLP

Atlanta, Georgia
April 2, 2001

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>4
<FILENAME>d70442_ex10-45.txt
<DESCRIPTION>AMENDED & RESTATED LAON & SECURITY AGREEMENT
<TEXT>


                                                                   Exhibit 10.45








                           SECOND AMENDED AND RESTATED

                           LOAN AND SECURITY AGREEMENT

                                  by and among

                       ADVANCED TECHNICAL PRODUCTS, INC.,

                                  ALCORE, INC.,

                         TECHNICAL PRODUCTS GROUP, INC.,

                            MARION PROPERTIES, INC.,

                            DELAND PROPERTIES, INC.,

                                       and

                            LINCOLN PROPERTIES, INC.

                                   as Borrower

                           FLEET CAPITAL CORPORATION,

                              as Agent and a Lender

                                       and

                                CERTAIN LENDERS,

                                   as Lenders

                          Dated as of October 10, 2000

                        $27,000,000 Revolving Credit Loan

                            $16,635,428.56 Term Loan

                          $2,588,216.69 Equipment Loan


<PAGE>




                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                              <C>
SECTION 1.        CREDIT FACILITY.................................................................................2

         1.1      Revolving Credit Loans..........................................................................2
                  1.1.1     Loans and Reserves....................................................................2
                  1.1.2     Use of Proceeds.......................................................................2
                  1.1.3     Discretionary Advances................................................................2
         1.2      Term and Equipment Loan.........................................................................3
                  1.2.1     Term Loan.............................................................................3
                  1.2.2     Equipment Loan........................................................................3
         1.3      Adjustments Generally...........................................................................3
         1.4      Notes...........................................................................................4
         1.5      Letters of Credit; LC Guaranties................................................................4
         1.6      All Loans to Constitute One Obligation..........................................................4
         1.7      Joint and Several Liability; Rights of Contribution.............................................4
         1.8      Structure of Credit Facility....................................................................6

SECTION 2.        INTEREST, FEES AND CHARGES......................................................................6

         2.1      Interest........................................................................................6
                  2.1.1     Rates of Interest.....................................................................6
                  2.1.2     Default Rate of Interest..............................................................6
                  2.1.3     Maximum Interest......................................................................7
         2.2      Computation of Interest and Fees................................................................8
         2.3      Lender Fees.....................................................................................8
                  2.3.1     Letter of Credit and LC Guaranty Fees.................................................8
                  2.3.2     Commitment Fee........................................................................9
                  2.3.3     Audit and Appraisal Fees..............................................................9
         2.4      Reimbursement of Expenses.......................................................................9
         2.5      Bank Charges....................................................................................9

SECTION 3.        LOAN ADMINISTRATION............................................................................10

         3.1      Manner of Borrowing Revolving Credit Loans.....................................................10
                  3.1.1     Loan Requests........................................................................10
                  3.1.2     Disbursement.........................................................................11
                  3.1.3     Authorization........................................................................11
         3.2      Payments.......................................................................................11
                  3.2.1     Principal............................................................................11
                  3.2.2     Interest.............................................................................12
                  3.2.3     Costs, Fees and Charges..............................................................12
                  3.2.4     Other Obligations....................................................................12
         3.3      Mandatory Prepayments..........................................................................12
                  3.3.1     Proceeds of Sale, Loss, Destruction or Condemnation of Collateral....................12
                  3.3.2     Excess Cash Flow Recapture...........................................................13
         3.4      Optional Prepayments...........................................................................13
         3.5      Application of Payments and Collections........................................................13
         3.6      Loan Account...................................................................................14
         3.7      Statements of Account..........................................................................14
         3.8      Additional Provisions Regarding Eurodollar Loans...............................................14
         3.9      Capital Adequacy and Other Adjustments.........................................................14
         3.10     Taxes..........................................................................................15
         3.11     Required Termination and Prepayment............................................................16
         3.12     Compensation...................................................................................17
         3.13     Booking of Eurodollar Loans....................................................................17
         3.14     Assumptions Concerning Funding of Eurodollar Loans.............................................17
         3.15     Optional Prepayment/Replacement of Agent or Lenders in Respect of Increased Costs..............17
</TABLE>

<PAGE>


<TABLE>
<S>                                                                                                              <C>
SECTION 4.        TERM AND TERMINATION...........................................................................18

         4.1      Term of Agreement..............................................................................18
         4.2      Termination....................................................................................18
                  4.2.1     Termination by Lender................................................................18
                  4.2.2     Termination by Borrower..............................................................18
                  4.2.3     Termination Charges..................................................................18
                  4.2.4     Effect of Termination................................................................19

SECTION 5.        SECURITY INTERESTS.............................................................................19

         5.1      Security Interest in Collateral................................................................19
         5.2      Cross-Collateralization........................................................................20
         5.3      Lien Perfection; Further Assurances............................................................20
         5.4      Lien on Realty; Collateral Assignments of Leases...............................................20

SECTION 6.        COLLATERAL ADMINISTRATION......................................................................21

         6.1      General........................................................................................21
                  6.1.1     Location of Collateral...............................................................21
                  6.1.2     Insurance of Collateral..............................................................21
                  6.1.3     Protection of Collateral.............................................................22
         6.2      Administration of Accounts.....................................................................22
                  6.2.1     Records, Schedules and Assignments of Accounts.......................................22
                  6.2.2     Discounts, Allowances, Disputes......................................................22
                  6.2.3     Taxes................................................................................23
                  6.2.4     Account Verification.................................................................23
                  6.2.5     Maintenance of Dominion Account......................................................23
                  6.2.6     Collection of Accounts; Proceeds of Collateral.......................................23
         6.3      Administration of Inventory....................................................................24
                  6.3.1     Records and Reports of Inventory.....................................................24
                  6.3.2     Returns of Inventory.................................................................24
         6.4      Administration of Equipment....................................................................24
                  6.4.1     Records and Schedules of Equipment...................................................24
                  6.4.2     Dispositions of Equipment............................................................24
                  6.4.3     Condition of Equipment...............................................................25
         6.5      Payment of Charges.............................................................................25

SECTION 7.        REPRESENTATIONS AND WARRANTIES.................................................................25

         7.1      General Representations and Warranties.........................................................25
                  7.1.1     Organization and Qualification.......................................................25
                  7.1.2     Corporate Power and Authority........................................................25
                  7.1.3     Legally Enforceable Agreement........................................................26
                  7.1.4     Capital Structure....................................................................26
                  7.1.5     Corporate Names......................................................................26
                  7.1.6     Business Locations; Agent for Process................................................26
                  7.1.7     Title to Properties; Priority of Liens...............................................26
                  7.1.8     Accounts.............................................................................27
                  7.1.9     Financial Statements; Fiscal Year....................................................28
                  7.1.10    Full Disclosure......................................................................28
                  7.1.11    Solvent Financial Condition..........................................................28
                  7.1.12    Surety Obligations...................................................................28
                  7.1.13    Taxes................................................................................28
                  7.1.14    Brokers..............................................................................29
                  7.1.15    Patents, Trademarks, Copyrights and Licenses.........................................29
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                              <C>
                  7.1.16    Governmental Consents................................................................29
                  7.1.17    Compliance with Laws.................................................................29
                  7.1.18    Restrictions.........................................................................29
                  7.1.19    Litigation...........................................................................29
                  7.1.20    No Defaults..........................................................................30
                  7.1.21    Leases...............................................................................30
                  7.1.22    Pension Plans........................................................................30
                  7.1.23    Trade Relations......................................................................30
                  7.1.24    Labor Relations......................................................................30
         7.2      Continuous Nature of Representations and Warranties............................................31
         7.3      Survival of Representations and Warranties; Subsidiaries.......................................31

SECTION 8.        COVENANTS AND CONTINUING AGREEMENTS............................................................31

         8.1      Affirmative Covenants..........................................................................31
                  8.1.1     Visits and Inspections...............................................................31
                  8.1.2     Notices..............................................................................31
                  8.1.3     Financial Statements.................................................................32
                  8.1.4     Landlord and Storage Agreements......................................................33
                  8.1.5     Guarantor Financial Statements.......................................................33
                  8.1.6     Projections..........................................................................33
                  8.1.7     Taxes................................................................................33
                  8.1.8     Compliance with Laws.................................................................33
                  8.1.9     Insurance............................................................................34
                  8.1.10    Backlog Reports......................................................................34
         8.2      Negative Covenants.............................................................................34
                  8.2.1     Mergers; Consolidations; Acquisitions................................................34
                  8.2.2     Loans................................................................................34
                  8.2.3     Total Indebtedness...................................................................34
                  8.2.4     Affiliate Transactions...............................................................35
                  8.2.5     Limitation on Liens..................................................................35
                  8.2.6     Subordinated Debt....................................................................36
                  8.2.7     Distributions........................................................................36
                  8.2.8     Disposition of Assets................................................................37
                  8.2.9     Stock of Subsidiaries................................................................37
                  8.2.10    Bill-and-Hold Sales, Etc.............................................................37
                  8.2.11    Restricted Investment................................................................37
                  8.2.12    Operating Leases.....................................................................37
                  8.2.13    Tax Consolidation....................................................................37
                  8.2.14    Compliance with Assignment of Claims Act.............................................37
                  8.2.15    Alcore Investment Account............................................................38
         8.3      Specific Financial Covenants...................................................................38
                  8.3.1     Fixed Charge Ratio...................................................................38
                  8.3.2     Interest Coverage Ratio..............................................................39
                  8.3.3     Adjusted Tangible Net Worth..........................................................39
                  8.3.4     Senior Indebtedness to EBITDA........................................................39
                  8.3.5     Capital Expenditures.................................................................40

SECTION 9.        CONDITIONS PRECEDENT...........................................................................40

         9.1      Documentation..................................................................................40
         9.2      No Default.....................................................................................41
         9.3      Other Loan Documents...........................................................................41
         9.4      Evidence of Perfection and Priority of Liens in Collateral.....................................41
         9.5      Articles of Incorporation......................................................................41
         9.6      Good Standing Certificates.....................................................................41
</TABLE>


<PAGE>


<TABLE>
<S>                                                                                                              <C>
         9.7      Opinion Letter.................................................................................41
         9.8      Insurance......................................................................................41
         9.9      Disbursement Letter............................................................................41
         9.10     Title Insurance Policies.......................................................................41
         9.11     No Litigation..................................................................................42
         9.12     Stock Pledge Agreements........................................................................42

SECTION 10.  EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT...................................................42

         10.1     Events of Default..............................................................................42
                  10.1.1    Payment of Notes.....................................................................42
                  10.1.2    Payment of Other Obligations.........................................................42
                  10.1.3    Misrepresentations...................................................................42
                  10.1.4    Breach of Specific Covenants.........................................................42
                  10.1.5    Breach of Other Covenants............................................................42
                  10.1.6    Default Under Security Documents/Other Agreements....................................43
                  10.1.7    Other Defaults.......................................................................43
                  10.1.8    Uninsured Losses.....................................................................43
                  10.1.9    Adverse Changes......................................................................43
                  10.1.10   Insolvency and Related Proceedings...................................................43
                  10.1.11   Business Disruption; Condemnation....................................................43
                  10.1.12   Change of Ownership..................................................................44
                  10.1.13   ERISA................................................................................44
                  10.1.14   Challenge to Agreement...............................................................44
                  10.1.15   Repudiation of or Default Under Guaranty Agreement...................................44
                  10.1.16   Criminal Forfeiture..................................................................44
                  10.1.17   Judgments............................................................................44
                  10.1.18   Dominion Account.....................................................................44
                  10.1.19   Subordinated Debt....................................................................44
         10.2     Acceleration of the Obligations................................................................45
         10.3     Other Remedies.................................................................................45
         10.4     Remedies Cumulative; No Waiver.................................................................46

SECTION 11.  ASSIGNMENTS AND PARTICIPATIONS; AGENT...............................................................47

         11.1     Assignments and Participations in Loans........................................................47
         11.2     Agent..........................................................................................48
         11.3     Consents.......................................................................................52
         11.4     Set Off and Sharing of Payments................................................................53
         11.5     Disbursement of Funds..........................................................................53
         11.6     Settlements, Payments and Information..........................................................54
         11.7     Dissemination of Information...................................................................55

SECTION 12.  MISCELLANEOUS.......................................................................................56

         12.1     The Term "Borrower" or "Borrowers..............................................................56
         12.2     Power of Attorney..............................................................................56
         12.3     Indemnity......................................................................................57
         12.4     Amendments and Waivers.........................................................................58
         12.5     Severability...................................................................................59
         12.6     Successors and Assigns.........................................................................59
         12.7     Cumulative Effect; Conflict of Terms...........................................................59
         12.8     Execution in Counterparts......................................................................59
         12.9     Notice.........................................................................................59
         12.10    Lender's Consent...............................................................................60
         12.11    Credit Inquiries...............................................................................60
         12.12    Time of Essence................................................................................60
</TABLE>


<PAGE>

<TABLE>
<S>                                                                                                              <C>
         12.13    Entire Agreement; Appendix A and Exhibits and Schedules........................................61
         12.14    Interpretation.................................................................................61
         12.15    GOVERNING LAW; CONSENT TO FORUM................................................................61
         12.16    WAIVERS BY BORROWER............................................................................62
         12.17    WAIVER OF CONSUMER RIGHTS......................................................................62
         12.18    ORAL AGREEMENTS INEFFECTIVE....................................................................63
         12.19    Nonapplicability of Chapter 346 of the Texas Finance Code......................................63
         12.20    Certain Matters of Construction................................................................63
         12.21    RELEASE........................................................................................63
         12.22    Confidentiality................................................................................63
         12.23    Amendment and Restatement......................................................................64
         12.24    Intercreditor Agreement........................................................................64
</TABLE>





<PAGE>


                             SCHEDULES AND EXHIBITS

       Schedule 1                -            Lenders and Commitments
       Schedule 1.5              -            Letters of Credit
       Schedule 7.1.13           -            Taxes
       Schedule 8.2.10           -            Storage Arrangements

       Exhibit A-1               -            Form of Revolving Credit Note
       Exhibit A-2               -            Form of Term Note
       Exhibit A-3               -            Form of Equipment Note
       Exhibit B                 -            Business Locations
       Exhibit C                 -            Foreign Qualifications
       Exhibit D                 -            Capital Structure
       Exhibit E                 -            Corporate Names
       Exhibit F                 -            Tax Identification Numbers
       Exhibit G                 -            Intellectual Property
       Exhibit H                 -            Contracts Restricting Borrower
       Exhibit I                 -            Litigation
       Exhibit J                 -            Capitalized Leases
       Exhibit K                 -            Operating Leases
       Exhibit L                 -            Pension Plans
       Exhibit M                 -            Labor Relations
       Exhibit N                 -            Permitted Liens
       Exhibit O                 -            Permitted Indebtedness
       Exhibit P                 -            Form of Compliance Certificate
       Exhibit Q                 -            Form of Borrowing Notice
       Exhibit R                 -            Form of Lender Addition Agreement


<PAGE>


 SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT DATED OCTOBER 10, 2000
    BY AND AMONG ADVANCED TECHNICAL PRODUCTS, INC., ALCORE, INC., TECHNICAL
             PRODUCTS GROUP, INC., MARION PROPERTIES, INC., DELAND
    PROPERTIES, INC. AND LINCOLN PROPERTIES, INC., COLLECTIVELY, AS BORROWER,
             AND FLEET CAPITAL CORPORATION, AS AGENT AND A LENDER ,
                        AND CERTAIN LENDERS, AS LENDERS


             SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as of
October 10, 2000, by and among ADVANCED TECHNICAL PRODUCTS, INC. ("ATP"), a
Delaware corporation, ALCORE, INC. ("Alcore"), a Delaware corporation, TECHNICAL
PRODUCTS GROUP, INC. ("Technical Products"), a Delaware corporation, MARION
PROPERTIES, INC. ("Marion"), a Delaware corporation, DELAND PROPERTIES, INC.
("DeLand"), a Delaware corporation, and LINCOLN PROPERTIES, INC. ("Lincoln"), a
Delaware corporation (ATP, Alcore, Technical Products, Marion, DeLand and
Lincoln being referred to individually, collectively, and jointly and severally,
as "Borrower"), each Borrower having an office at 200 Mansell Ct., East, Suite
505, Roswell, GA 30076, FLEET CAPITAL CORPORATION, a Rhode Island corporation
("Fleet") with an office at 5950 Sherry Lane, Suite 300, Dallas, Texas 75225, as
Agent (Fleet, in such capacity, the "Agent"), and certain Lenders (as defined
below). Capitalized terms used in this Agreement have the meanings assigned to
them in Appendix A, General Definitions. Accounting terms not otherwise
specifically defined herein shall be construed in accordance with GAAP
consistently applied.

     A. Borrower and Fleet have entered into that certain Amended and Restated
Loan and Security Agreement dated as of March 31, 1998, as amended by that
certain (1) First Amendment to Amended and Restated Loan and Security Agreement
dated as of June 26, 1998, (2) Second Amendment to Amended and Restated Loan and
Security Agreement dated as of March 23, 1999, (3) Third Amendment to Amended
and Restated Loan and Security Agreement dated as of September 22, 1999, (4)
Fourth Amendment to Amended and Restated Loan and Security Agreement dated as of
February 18, 2000, (5) Fifth Amendment to Amended and Restated Loan and Security
Agreement dated as of May 16, 2000, (6) Sixth Amendment to Amended and Restated
Loan and Security Agreement dated as of May 31, 2000 and (7) Seventh Amendment
to Amended and Restated Loan and Security Agreement dated as of August 14, 2000
(as amended, the "Restated Loan Agreement"), which agreement entirely amended
and restated that certain Loan and Security Agreement dated as of December 27,
1996, by and among Fleet and Technical Products, Marion, DeLand and Lincoln.


<PAGE>

     B. Borrower has requested and, subject to the terms and conditions of this
Agreement, Fleet has agreed to entirely amend and restate the Restated Loan
Agreement to, among other things, (1) provide for the syndication of the
Agreement and the addition of certain Lenders hereto, (2) extend the maturity
date applicable to the Loans, (3) provide for the extension by all Lenders of
such amounts as shall be necessary for Lenders to hold the Loans in an amount
equal to their respective Pro Rata Share of the Commitments, it being the
intention of Borrower, Agent, and all Lenders that the Revolving Credit Loans,
Letters of Credit, Term Loan(s) and Equipment Loan(s) existing under the
Restated Loan Agreement as of the Closing Date shall continue, remain
outstanding and not be repaid on the Closing Date, but shall be assigned and
reallocated among the Lenders as provided in this Agreement and, accordingly,
the Loans and Commitments are not in novation or discharge thereof and (4) allow
and provide for certain other matters as hereinafter set forth.

     NOW, THEREFORE, for and in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Lender and Borrower covenant and agree as follows:

SECTION 1. CREDIT FACILITY

     Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a credit facility of up to the Total Credit
Facility, available upon Borrower's request therefor, as follows:

     1.1 Revolving Credit Loans.

          1.1.1 Loans and Reserves. Lenders agree, during the term of this
     Agreement and for so long as no Default or Event of Default exists, to make
     Revolving Credit Loans to Revolving Credit Borrowers from time to time, as
     requested by Borrower in the manner set forth in Section 3.1.1 hereof, up
     to a maximum principal amount at any time outstanding equal to the
     Borrowing Base at such time minus the LC Amount and reserves, if any. Agent
     shall have the right to establish reserves in such amounts, and with
     respect to such matters, as Agent shall deem necessary or appropriate,
     against the amount of Revolving Credit Loans which Revolving Credit
     Borrowers may otherwise request under this Section 1.1, including, without
     limitation, with respect to (a) price adjustments, damages, unearned
     discounts, returned products or other matters for which credit memoranda
     are issued in the ordinary course of Revolving Credit Borrowers' business;
     (b) obsolescence of Inventory; (c) slow moving Inventory; (d) other sums
     chargeable against Borrower's Loan Account as Revolving Credit Loans under
     any section of this Agreement; (e) amounts owing by Borrower to any Person
     to the extent secured by a Lien on, or trust over, any Property of
     Borrower; (f) all amounts of past due rent or other charges owing at such
     time by Borrower to any landlord of any premises where any of the
     Collateral is located; and (g) such other matters, events, conditions or
     contingencies as to which Agent, in its reasonable judgment, determines
     reserves should be established from time to time hereunder.


<PAGE>

          1.1.2 Use of Proceeds. The Revolving Credit Loans shall be used solely
     for Borrower's general operating capital needs in a manner consistent with
     the provisions of this Agreement and Applicable Law. In no event shall any
     proceeds of any Revolving Credit Loans be used to purchase or to carry,
     reduce, retire or refinance any Indebtedness incurred to purchase or carry
     any margin stock (within the meaning of Regulation U of the Federal Reserve
     Board).

          1.1.3 Discretionary Advances. Notwithstanding the limitations on the
     maximum amount of Revolving Credit Loans set forth in Section 1.1.1 or the
     proviso set forth in Section 3.2.1, Agent may, in its sole discretion, (a)
     at any time, make Revolving Credit Loans of up to ten percent (10%) in
     excess of the Borrowing Base and (b) during the continuance of an Event of
     Default, make Revolving Credit Loans in excess of the Borrowing Base
     (without regard to limitation on amount) for the purpose of preserving or
     protecting the Collateral.

     1.2 Term and Equipment Loan.

          1.2.1 Term Loan. On the Closing Date, (a) the Existing Term Loan shall
     automatically, and without any action on the part of any Person, be deemed
     converted into the Term Loan hereunder and (b) Lenders shall take such
     steps, which may include the making of assignments, Loans, and such other
     adjustments among the Lenders, as shall be necessary and as the Agent shall
     reasonably direct so that after giving effect to such adjustments, Lenders
     shall hold the Term Loan in an amount equal to their respective Pro Rata
     Share of the Term Loan Commitment. On the Closing Date, all LIBOR Interest
     Periods under the Restated Loan Agreement in respect of the Existing Term
     Loan shall remain in effect, and such Loans shall continue as Eurodollar
     Loans hereunder. The proceeds of the Term Loan shall be used solely for
     purposes for which the proceeds of the Revolving Credit Loans are
     authorized to be used. Borrower may not reborrow any amount repaid with
     respect to the Term Loan.

          1.2.2 Equipment Loan. On the Closing Date, (a) the Existing Equipment
     Loan shall automatically, and without any action on the part of any Person,
     be deemed converted into the Equipment Loan hereunder and (b) Lenders shall
     take such steps, which may include the making of assignments, Loans, and
     such other adjustments among the Lenders, as shall be necessary and as the
     Agent shall reasonably direct so that after giving effect to such
     adjustments, Lenders shall hold the Existing Equipment Loan in an amount
     equal to their respective Pro Rata Share of the Equipment Loan Commitment.
     On the Closing Date, all LIBOR Interest Periods under the Restated Loan
     Agreement in respect of the Existing Equipment Loan shall remain in effect,
     and such Loans shall continue as Eurodollar Loans hereunder. The proceeds
     of the Equipment Loan shall be used solely for purposes for which the
     proceeds of the Revolving Credit Loans are authorized to be used. Borrower
     may not reborrow any amount repaid with respect to the Equipment Loan.

     1.3 Adjustments Generally. On the day that is three (3) Business Days prior
to the Closing Date, the Agent shall notify each Lender of the amount of Loans
required to be made by such Lender (if any) to Borrower on the Closing Date, and
of any other assignments or

<PAGE>

adjustments that the Agent deems necessary and advisable such that after giving
effect to the transactions contemplated to occur on the Closing Date, each
Lender shall hold the Loans in an amount equal to its Pro Rata Share of all
Revolving Credit Loans, the Term Loan and the Equipment Loan then outstanding to
Borrower. The sum of the unused Commitments of all Lenders plus the outstanding
amount of (a) all Revolving Credit Loans, (b) the Term Loan and (c) the
Equipment Loan shall not exceed the Total Loan Commitment. Any assignments made
pursuant to this Section 1.3 shall be deemed to occur hereunder automatically on
the Closing Date and without any requirement for additional documentation, and
in the case of any such assignment, the assigning party shall be deemed to
represent and warrant to each assignee that it has not created any adverse claim
upon the interest being assigned and that such interest is free and clear of any
adverse claim. Each Lender hereby agrees to give effect to the instructions of
the Agent to such Lender contained in the notice described above.

     1.4 Notes. Borrower shall execute and deliver, with appropriate insertions,
to each Lender, (a) a Term Note to evidence Lender's Term Loan Commitment, (b)
an Equipment Note to evidence Lender's Equipment Loan Commitment and (c) a
Revolving Note to evidence Lender's Revolving Loan Commitment. In the event of
an assignment under Section 11.1, Borrower shall, upon surrender of the
assigning Lender's Notes, issue new Notes to reflect the interest held by the
assigning Lender and its assignee. Each Revolving Credit Loan shall be evidenced
by this Agreement, the Revolving Credit Note(s) and notations made from time to
time by Agent in its books and records, including computer records. Agent shall
record in its books and records, including computer records, the principal
amount of the Revolving Credit Loans owing to each Lender from time to time.
Agent's books and records shall constitute presumptive evidence, absent manifest
error, of the accuracy of the information contained therein. Failure by Agent to
make any such notation or record shall not affect the obligations of Borrower to
Lenders with respect to the Revolving Credit Loans.

     1.5 Letters of Credit; LC Guaranties. Agent agrees that the Letters of
Credit set forth on Schedule 1.5 hereto, previously issued by Fleet National
Bank pursuant to the Restated Loan Agreement for the account of Revolving Credit
Borrowers, shall remain outstanding in accordance with their respective terms
and shall be deemed to be Letters of Credit issued and outstanding under this
Agreement. In addition, for so long as no Default or Event of Default exists,
and if requested by Borrower, to (a) issue its, or cause to be issued by its
Affiliate's, standby Letters of Credit for the account of Revolving Credit
Borrowers and/or (b) execute LC Guaranties by which Lender or its Affiliate
shall guaranty the payment or performance by Revolving Credit Borrowers of their
reimbursement obligations with respect to standby Letters of Credit; provided,
that the LC Amount at any time shall not exceed $3,500,000. No Letter of Credit
or LC Guaranty shall have an expiration date that is after the Termination Date.
Any amounts paid by Agent under any LC Guaranty or in connection with any Letter
of Credit shall be treated as Revolving Credit Loans, shall be secured by all of
the Collateral and shall bear interest and be payable at the same rate and in
the same manner as Revolving Credit Loans. Each Lender shall be deemed to have
purchased a participation in each Letter of Credit and each LC Guaranty that is
issued by Agent or its Affiliate on behalf of Borrower in an amount equal to its
Pro Rata Share thereof.


<PAGE>

     1.6 All Loans to Constitute One Obligation. All Loans shall constitute one
general joint and several obligation of Borrowers, and shall be secured by
Agent's security interest in and Lien upon all of the Collateral, for the
benefit of Lenders, and by all other security interests and Liens heretofore,
now or at any time or times hereafter granted by Borrower to Agent.

     1.7 Joint and Several Liability; Rights of Contribution.

          (a) Each Borrower states and acknowledges that: (i) pursuant to this
     Agreement, Borrowers desire to utilize their borrowing potential on a
     consolidated basis to the same extent possible if they were merged into a
     single corporate entity and that this Agreement reflects the establishment
     of credit facilities which would not otherwise be available to such
     Borrower if each Borrower were not jointly and severally liable for payment
     of all of the Obligations; (ii) it has determined that it will benefit
     specifically and materially from the advances of credit contemplated by
     this Agreement; (iii) it is both a condition precedent to the obligations
     of Lenders hereunder and a desire of the Borrowers that each Borrower
     execute and deliver to Lenders this Agreement; and (iv) Borrowers have
     requested and bargained for the structure and terms of and security for the
     advances contemplated by this Agreement.

          (b) Each Borrower hereby irrevocably and unconditionally: (i) agrees
     that it is jointly and severally liable to Lenders for the full and prompt
     payment of the Obligations and the performance by each Borrower of its
     obligations hereunder in accordance with the terms hereof; (ii) agrees to
     fully and promptly perform all of its obligations hereunder with respect to
     each advance of credit hereunder as if such advance had been made directly
     to it; and (iii) agrees as a primary obligation to indemnify Agent or
     Lenders on demand for and against any loss incurred by Agent or Lenders as
     a result of any of the obligations of any one or more of the Borrowers
     being or becoming void, voidable, unenforceable or ineffective for any
     reason whatsoever, whether or not known to Agent or Lenders or any Person,
     the amount of such loss being the amount which Agent and/or Lenders would
     otherwise have been entitled to recover from any one or more of the
     Borrowers.

          (c) It is the intent of each Borrower that the indebtedness,
     obligations and liability hereunder of no one of them be subject to
     challenge on any basis, including, without limitation, pursuant to any
     applicable fraudulent conveyance or fraudulent transfer laws. Accordingly,
     as of the date hereof, the liability of each Borrower under this Section
     1.7, together with all of its other liabilities to all Persons as of the
     date hereof and as of any other date on which a transfer or conveyance is
     deemed to occur by virtue of this Agreement, calculated in amount
     sufficient to pay its probable net liabilities on its existing Indebtedness
     as the same become absolute and matured ("Dated Liabilities") is, and is to
     be, less than the amount of the aggregate of a fair valuation of its
     property as of such corresponding date ("Dated Assets"). To this end, each
     Borrower under this Section 1.7, (i) grants to and recognizes in each other
     Borrower, ratably, rights of subrogation and contribution in the amount, if
     any, by which the Dated Assets of such Borrower, but for the aggregate of
     subrogation and contribution in its favor recognized herein, would exceed
     the Dated Liabilities of such Borrower or, as the case may be, (ii)

<PAGE>

     acknowledges receipt of and recognizes its right to subrogation and
     contribution ratably from each of the other Borrowers in the amount, if
     any, by which the Dated Liabilities of such Borrower, but for the aggregate
     of subrogation and contribution in its favor recognized herein, would
     exceed the Dated Assets of such Borrower under this Section 1.7. In
     recognizing the value of the Dated Assets and the Dated Liabilities, it is
     understood that Borrowers will recognize, to at least the same extent of
     their aggregate recognition of liabilities hereunder, their rights to
     subrogation and contribution hereunder. It is a material objective of this
     Section 1.7 that each Borrower recognizes rights to subrogation and
     contribution rather than be deemed to be insolvent (or in contemplation
     thereof) by reason of an arbitrary interpretation of its joint and several
     obligations hereunder. In addition to and not in limitation of the
     foregoing provisions of this Section 1.7, the Borrowers, Agent and Lenders
     hereby agree and acknowledge that it is the intent of each Borrower, Agent
     and each Lender that the obligations of each Borrower hereunder be in all
     respects in compliance with, and not be voidable pursuant to, applicable
     fraudulent conveyance and fraudulent transfer laws.

     1.8 Structure of Credit Facility. Each Borrower agrees and acknowledges
that the present structure of the credit facilities detailed in this Agreement
is based in part upon the financial and other information presently known to
Agent and Lenders regarding each Borrower, the corporate structure of Borrowers,
and the present financial condition of each Borrower. Each Borrower hereby
agrees that Agent and each Lender shall have the right, in its sole credit
judgment, to require that any or all of the following changes be made to these
credit facilities: (a) restrict loans and advances between Borrowers, (b)
establish separate lockbox and dominion accounts for Revolving Credit Borrowers
and, upon and after the occurrence of a Default or Event of Default, for each
other Borrower, (c) separate the Term Loans into separate term loans to such of
the Borrowers as shall be determined by Agent, and (d) establish such other
procedures as shall be reasonably deemed by Agent to be useful in tracking where
Loans are made under this Agreement and the source of payments received by Agent
on such Loans.

SECTION 2. INTEREST, FEES AND CHARGES

     2.1 Interest.

          2.1.1 Rates of Interest. The outstanding principal amount of the Loans
     shall bear interest at the following rates per annum (individually called,
     as applicable, an "Applicable Annual Rate"): (a) each Eurodollar Loan shall
     bear interest at a rate per annum equal to LIBOR plus the appropriate
     Applicable Margin then in effect for the LIBOR Interest Period applicable
     thereto and (b) each Base Rate Loan shall bear interest at a rate per annum
     equal to the Base Rate plus the appropriate Applicable Margin then in
     effect for Base Rate Loans. Unless Borrower delivers a Borrowing Notice to
     Lender in accordance with Section 3.1.1(a) hereof irrevocably electing that
     all or any portion of the Loans are to bear interest at a rate based upon
     LIBOR, all of the Loans shall bear interest at a rate based upon the Base
     Rate as provided in clauses (a) and (b) of this Section 2.1.1. The rate of
     interest applicable to Base Rate Loans shall increase or decrease by an
     amount equal to any increase or decrease in the Base Rate, effective as of
     the opening of business on the day that any such change in the Base Rate
     occurs.


<PAGE>

          2.1.2 Default Rate of Interest. Upon and after the occurrence of an
     Event of Default, and during the continuation thereof, the principal amount
     of all Loans shall bear interest at a rate per annum equal to 2.00% above
     the Applicable Annual Rate or other interest rate otherwise applicable
     thereto (the "Default Rate").

          2.1.3 Maximum Interest.

               (a) Notwithstanding anything to the contrary in this Agreement or
          otherwise, (i) if at any time the amount of interest computed on the
          basis of the Applicable Annual Rate or the Default Rate would exceed
          the amount of such interest computed upon the basis of the maximum
          rate of interest permitted by applicable state or federal law in
          effect from time to time hereafter (the "Maximum Legal Rate"), the
          interest payable under this Agreement shall be computed upon the basis
          of the Maximum Legal Rate, but any subsequent reduction in the
          Applicable Annual Rate or Default Rate, as applicable, shall not
          reduce such interest thereafter payable hereunder below the amount
          computed on the basis of the Maximum Legal Rate until the aggregate
          amount of such interest accrued and payable under this Agreement
          equals the total amount of interest which would have accrued if such
          interest had been at all times computed solely on the basis of the
          Applicable Annual Rate or Default Rate, as applicable; and (ii) unless
          preempted by federal law, the Applicable Annual Rate or Default Rate,
          as applicable, from time to time in effect hereunder may not exceed
          the "weekly ceiling" from time to time in effect under Chapter 303 of
          the Texas Finance Code (or, if Agent elects, the "monthly ceiling"
          from time to time in effect under Chapter 303 of the Texas Finance
          Code). If the applicable state or federal law is amended in the future
          to allow a greater rate of interest to be charged under this Agreement
          than is presently allowed by applicable state or federal law, then the
          limitation of interest hereunder shall be increased to the maximum
          rate of interest allowed by applicable state or federal law as
          amended, which increase shall be effective hereunder on the effective
          date of such amendment, and all interest charges owing to Agent and/or
          Lenders by reason thereof shall be payable in accordance with Section
          3.2.2 hereof.

               (b) Excess Interest. No agreements, conditions, provisions or
          stipulations contained in this Agreement or any other instrument,
          document or agreement between Borrower and Agent and/or any Lender or
          default of Borrower, or the exercise by Agent or Lenders of the right
          to accelerate the payment of the maturity of principal and interest,
          or to exercise any option whatsoever contained in this Agreement or
          any other Loan Document, or the arising of any contingency whatsoever,
          shall entitle Agent or any Lender to contract for, charge, or receive,
          in any event, interest exceeding the Maximum Legal Rate. In no event
          shall Borrower be obligated to pay interest exceeding such Maximum
          Legal Rate and all agreements, conditions or stipulations, if any,
          which may in any event or contingency whatsoever operate to bind,
          obligate or compel Borrower to pay a rate of interest exceeding the
          Maximum Legal Rate,

<PAGE>

          shall be without binding force or effect, at law or in equity, to the
          extent only of the excess of interest over such Maximum Legal Rate. In
          the event any interest is contracted for, charged or received in
          excess of the Maximum Legal Rate ("Excess Interest"), Borrower
          acknowledges and stipulates that any such contract, charge, or receipt
          shall be the result of an accident and bona fide error, and that any
          Excess received by Agent and/or Lenders shall be applied, first, to
          reduce the principal then unpaid hereunder; second, to reduce the
          other Obligations; and third, returned to Borrower, it being the
          intention of the parties hereto not to enter at any time into a
          usurious or otherwise illegal relationship. Borrower recognizes that,
          with fluctuations in the Applicable Annual Rate and the Maximum Legal
          Rate, such a result could inadvertently occur. By the execution of
          this Agreement, Borrower covenants that (i) the credit or return of
          any Excess Interest shall constitute the acceptance by Borrower of
          such Excess Interest, and (ii) Borrower shall not seek or pursue any
          other remedy, legal or equitable, against Agent and/or any Lender,
          based in whole or in part upon contracting for, charging or receiving
          of any interest in excess of the maximum authorized by applicable law.
          For the purpose of determining whether or not any Excess has been
          contracted for, charged or received by Agent and/or any Lender, all
          interest at any time contracted for, charged or received by Agent
          and/or any Lender in connection with this Agreement shall be
          amortized, prorated, allocated and spread in equal parts during the
          entire term of this Agreement.

               (c) Incorporation by this Reference. The provisions of Section
          2.1.3(b) shall be deemed to be incorporated into every document or
          communication relating to the Obligations which sets forth or
          prescribes any account, right or claim or alleged account, right or
          claim of Agent and/or any Lender with respect to Borrower (or any
          other obligor in respect of Obligations), whether or not any provision
          of Section 2.1.3(b) is referred to therein. All such documents and
          communications and all figures set forth therein shall, for the sole
          purpose of computing the extent of the Obligations and obligations of
          the Borrowers (or any other obligor) asserted by Agent and/or any
          Lender thereunder, be automatically re-computed by the Borrowers or
          any obligor, and by any court considering the same, to give effect to
          the adjustments or credits required by Section 2.1.3(b).

     2.2 Computation of Interest and Fees. Interest, Letter of Credit and LC
Guaranty Fees and unused line fees hereunder shall be calculated daily and shall
be computed on the actual number of days elapsed over a year of 360 days. For
the purpose of computing interest hereunder, all items of payment received by
Agent shall be deemed applied by Agent on account of the Obligations (subject to
final payment of such items) one (1) Business Day after receipt by Agent of such
items in Agent's account located in Chicago, Illinois, and Agent shall be deemed
to have received such item of payment on the date specified in Section 3.5
hereof.

     2.3 Lender Fees.


<PAGE>

          2.3.1 Letter of Credit and LC Guaranty Fees. Borrower shall pay to
     Agent, for the account of Lenders for standby Letters of Credit and LC
     Guaranties of standby Letters of Credit, one and one-half percent (1.50%)
     per annum of the aggregate face amount of such Letters of Credit and LC
     Guaranties outstanding from time to time during the term of this Agreement,
     plus all normal and customary charges associated with issuance thereof,
     which fees and charges shall be deemed fully earned upon issuance of each
     such Letter of Credit or LC Guaranty, shall be due and payable on the first
     Business Day of each month and shall not be subject to rebate or proration
     upon the termination of this Agreement for any reason.

          2.3.2 Commitment Fee. Borrower shall pay to Agent, for the account of
     Lenders a commitment fee equal to one-half of one percent (0.50%) per annum
     of the amount by which the Average Monthly Revolving Credit Loan Balance is
     less than the Total Revolving Credit Facility. The commitment fee shall be
     payable monthly, in arrears, on the first day of each calendar month
     hereafter.

          2.3.3 Audit and Appraisal Fees. Borrower shall reimburse Agent for all
     reasonable out-of-pocket costs and expenses incurred by Agent in connection
     with audits and appraisals of Borrower's books and records and such other
     matters as Agent shall deem appropriate. All such out-of-pocket expenses
     shall be payable on demand.

     2.4 Reimbursement of Expenses. If, at any time or times regardless of
whether or not an Event of Default then exists, Agent or any Lender incurs legal
or accounting expenses or any other costs or out-of-pocket expenses in
connection with (a) the negotiation and preparation of this Agreement or any of
the other Loan Documents, any amendment of or modification of this Agreement or
any of the other Loan Documents, or any sale or attempted sale of any interest
herein to any other Person; (b) the administration of this Agreement or any of
the other Loan Documents and the transactions contemplated hereby and thereby
(other than Agent's or any Lender's overhead costs and expenses associated with
the day to day administration of the Loans); (c) any litigation, contest,
dispute, suit, proceeding or action (whether instituted by Agent, Borrower, any
Lender or any other Person) in any way relating to the Collateral, this
Agreement or any of the other Loan Documents or Borrower's affairs; (d) any
attempt to enforce any rights of Agent or any Lender against Borrower or any
other Person which may be obligated to Agent or any Lender by virtue of this
Agreement or any of the other Loan Documents, including the Account Debtors; or
(e) any attempt to inspect, verify, protect, preserve, restore, collect, sell,
liquidate or otherwise dispose of or realize upon the Collateral; then all such
legal and accounting expenses, other costs and out of pocket expenses of Agent
or any such Lender shall be charged to Borrower. All amounts chargeable to
Borrower under this Section 2.4 shall be Obligations secured by all of the
Collateral, shall be payable on demand to Agent or the relevant Lender, as
applicable, and shall bear interest from the date such demand is made until paid
in full at the rate applicable to Revolving Credit Loans from time to time.
Borrower shall also reimburse Agent for expenses incurred by Agent in its
administration of the Collateral to the extent and in the manner provided in
Section 6 hereof.

     2.5 Bank Charges. Borrower shall pay to Agent, on demand, any and all
normal and customary fees, costs or expenses which Agent pays to a bank or other
similar institution arising

<PAGE>

out of or in connection with (a) the forwarding to Borrower or any other Person
on behalf of Borrower, or by Agent, of proceeds of loans made by Agent to
Borrower pursuant to this Agreement and (b) the depositing for collection, by
Agent, of any check or item of payment received or delivered to Agent on account
of the Obligations.

SECTION 3. LOAN ADMINISTRATION

     3.1 Manner of Borrowing Revolving Credit Loans. Borrowings under the credit
facility established pursuant to Section 1 hereof shall be as follows:

          3.1.1 Loan Requests.

               (a) A request for a Eurodollar Loan shall be made, or shall be
          deemed to be made, if Borrower gives Agent notice of its intention to
          borrow in the form of Exhibit Q hereto (a "Borrowing Notice"), in
          which notice Borrower shall specify (i) the aggregate amount of such
          Eurodollar Loan, (ii) the requested date of such Eurodollar Loan,
          (iii) the Applicable Annual Rate selected in accordance with Section
          2.1.1, and (iv) the LIBOR Interest Period applicable thereto. If
          Borrower selects a Eurodollar Loan, Borrower shall give Agent the
          Borrowing Notice no later than 11:00 a.m. Dallas, Texas time at least
          two (2) Business Days prior to the requested date of the Eurodollar
          Loan. Notwithstanding anything herein to the contrary, Agent shall
          have the right to refuse to accept a request for a Eurodollar Loan and
          to refuse to make a Eurodollar Loan if at the date such request is
          made or such Eurodollar Loan is to be made there exists a Default or
          an Event of Default.

               (b) A request for a Base Rate Loan shall be made, or shall be
          deemed to be made, in the following manner: (i) Borrower shall give
          Agent notice of its intention to borrow, in which notice Borrower
          shall specify the amount of the proposed borrowing and the proposed
          borrowing date, no later than 11:00 a.m. Dallas, Texas time on the
          proposed borrowing date; provided, however, that Agent shall have the
          right to refuse to accept such a request or make such a Loan if at
          such time there exists a Default or an Event of Default; or (ii) the
          coming due of any amount required to be paid under this Agreement,
          under the Term Notes, the Equipment Notes or any of the other Loan
          Documents, as principal, accrued interest, fees or other charges,
          shall be deemed irrevocably to be a request by Borrower from Agent for
          a Revolving Credit Loan on the due date of, and in an aggregate amount
          required to pay, such principal, accrued interest, fees or other
          charges and the proceeds of each such Revolving Credit Loan may be
          disbursed by Agent by way of direct payment of the relevant Obligation
          and shall bear interest at the rate of interest applicable to
          Revolving Credit Loans (whether or not any Default, Event of Default
          or Out-of-Formula Condition exists at the time of or would result from
          such Revolving Credit Loan). As an accommodation to Borrower, Agent
          may permit telephonic requests for loans and electronic transmittal of
          instructions, authorizations, agreements or reports to Agent by
          Borrower. Unless Borrower specifically directs Agent in writing not to
          accept or

<PAGE>

          act upon telephonic or electronic communications from Borrower, Agent
          shall have no liability to Borrower for any loss or damage suffered by
          Borrower as a result of Agent's honoring of any requests, execution of
          any instructions, authorizations or agreements or reliance on any
          reports communicated to Agent telephonically or electronically and
          purporting to have been sent to Agent by any individual from time to
          time designated by Borrower as an authorized officer and Agent shall
          have no duty to verify the origin or authenticity of any such
          communication.

          3.1.2 Disbursement. Borrower hereby irrevocably authorizes Agent to
     disburse the proceeds of each Loan requested, or deemed to be requested,
     pursuant to this Section 3.1.2 as follows: (a) the proceeds of each Loan
     requested under Section 3.1.1(a) or Section 3.1.1(b)(i) shall be disbursed
     by Agent in lawful money of the United States of America in immediately
     available funds, in the case of the initial borrowing, in accordance with
     the terms of the written disbursement letter from Borrower, and in the case
     of each subsequent borrowing, by wire transfer to such bank account as may
     be agreed upon by Borrower and Agent from time to time or elsewhere if
     pursuant to a written direction from Borrower; and (b) the proceeds of each
     Revolving Credit Loan requested under Section 3.1.1(b)(ii) shall be
     disbursed by Agent by way of direct payment of the relevant interest or
     other Obligation.

          3.1.3 Authorization. Borrower hereby irrevocably authorizes Agent, in
     Agent's sole discretion, to advance to Borrower, and to charge Borrower's
     Loan Account hereunder as a Revolving Credit Loan, a sum sufficient to pay
     all interest accrued on the Obligation during the immediately preceding
     month and to pay all costs, fees and expenses at any time owed by Borrower
     to Agent hereunder.

     3.2 Payments. All payments with respect to any of the Obligations shall be
made to Agent, for the account of the relevant Lenders, on the date when due, in
Dollars and in immediately available funds, without any offset or counterclaim.
Except where evidenced by notes or other instruments issued or made by Borrower
to Agent and/or any Lender specifically containing payment provisions which are
in conflict with this Section 3.2 (in which event the conflicting provisions of
said notes or other instruments shall govern and control), the Obligations shall
be payable as follows:

          3.2.1 Principal.

               (a) Revolving Credit Loans. Principal payable on account of
          Revolving Credit Loans shall be payable by Borrower to Agent, for the
          account of Lenders, immediately upon the earliest of (i) except as
          otherwise provided in Section 3.3 hereof, the receipt by Agent or
          Borrower of any proceeds of any of the Collateral, to the extent of
          said proceeds, (ii) the occurrence of an Event of Default in
          consequence of which Agent or Requisite Lenders elect to accelerate
          the maturity and payment of the Obligations, or (iii) termination of
          this Agreement pursuant to Section 4 hereof; provided, however, that
          if an Out-of-Formula Condition shall exist at any time, Borrower
          shall, on demand by Agent,

<PAGE>

          repay the Obligations to the extent necessary to eliminate the
          Out-of-Formula Condition.

               (b) Term Loan. Principal on the Term Loan shall be due and
          payable quarterly, commencing on October 1, 2000 and continuing on the
          first day of each January, April, July and October thereafter to and
          including the first day of July, 2003, in installments of $693,142.86
          each. The entire unpaid principal balance then outstanding, together
          with any and all other amounts due hereunder in respect of the Term
          Loan, shall be due and payable on the Termination Date, or on any
          earlier termination of the Loan Agreement pursuant to Section 4
          hereof.

               (c) Equipment Loan. Principal on the Equipment Loan shall be due
          and payable monthly, commencing on October 1, 2000 and continuing on
          the first day of each month thereafter to and including the first day
          of July, 2003, in installments of $69,999.65 each. The entire unpaid
          principal balance then outstanding, together with any and all other
          amounts due hereunder in respect of the Equipment Loan, shall be due
          and payable on the Termination Date, or on any earlier termination of
          the Loan Agreement pursuant to Section 4 hereof.

          3.2.2 Interest. Interest accrued on the Loans shall be due and payable
     in Dollars and in immediately available funds on the earliest of (a) the
     first calendar day of each month (for the immediately preceding month),
     computed through the last calendar day of the preceding month, (b) the
     occurrence of an Event of Default in consequence of which Requisite Lenders
     elect to accelerate the maturity and payment of the Obligations, (c) with
     respect to any Eurodollar Loan, the last day of the applicable LIBOR
     Interest Period, or (d) termination of this Agreement pursuant to Section 4
     hereof.

          3.2.3 Costs, Fees and Charges. Costs, fees and charges payable
     pursuant to this Agreement shall be payable by Borrower as and when
     provided in Section 2 hereof, to Agent for its own account, or for the
     account of certain Lenders, or to any other Person designated by Agent or
     such Lender in writing.

          3.2.4 Other Obligations. The balance of the Obligations requiring the
     payment of money, if any, shall be payable by Borrower to Agent and/or any
     Lender as and when provided in this Agreement, the Other Agreements or the
     Security Documents, or, if no date of payment is otherwise specified in the
     Loan Documents, on demand.

     3.3 Mandatory Prepayments.

          3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of
     Collateral. If Borrower sells any of the Equipment or real Property, or if
     any of the Collateral is lost or destroyed or taken by condemnation,
     Borrower shall pay to Agent, for the account of Lenders, unless otherwise
     agreed by Requisite Lenders, as and when received by Borrower and as a
     mandatory prepayment of either or all of the Term Loan or the Equipment
     Loan, as determined by Agent (or, at Agent's option, such of the other
     Obligations as Agent may elect), a sum equal to the net proceeds (including
     insurance

<PAGE>

     payments) in excess of $500,000 received by Borrower from such sale, loss,
     destruction or condemnation; provided, however, that the net proceeds of
     any Collateral received by Borrower in connection with the Proposed Sales
     shall be applied to the Obligations as follows: (a) first, to the Term
     Loans and/or Equipment Loans in an amount equal to (i) in respect of the
     Alcore Sale, $1,300,000, or (ii) in respect of the Specialty Vehicle Sale,
     $2,000,000; and (b) second, to the Revolving Credit Loans. Nothing in this
     Section 3.3.1 shall authorize Borrower to sell any of the Collateral
     without Agent's prior written consent except as otherwise expressly
     provided elsewhere in this Agreement.

          3.3.2 Excess Cash Flow Recapture. Borrower shall prepay the Term Loan
     or, if the Term Loan has been repaid in full, the Equipment Loan in an
     amount equal to forty percent (40%) of the amount of Borrower's Excess Cash
     Flow with respect to each fiscal year of Borrower during the term hereof,
     commencing with the fiscal year ending December 31, 2001, with such payment
     being made, with respect to any fiscal year, within two (2) Business Days
     following the earlier to occur of (a) the due date for delivery by Borrower
     to Agent of its annual audited financial statements as required by Section
     8.1.3 hereof, or (b) Agent's receipt of such financial statements and the
     Compliance Certificate related thereto. Amounts applied to Loans pursuant
     to this Section 3.3 shall, without premium or penalty, be applied ratably
     to such Loans in inverse order of their maturities.

     3.4 Optional Prepayments. Borrower may, at its option from time to time,
prepay installments of the Term Loan and the Equipment Loan with internally
generated funds. Amounts applied to the Term Loan or Equipment Loan pursuant to
this Section 3.4 shall be applied ratably to such Loans in inverse order of
their maturities. Except for the charges payable under Section 4.2.3, hereof, in
the case of the termination of this Agreement by Borrower, such prepayments
shall be without premium or penalty.

     3.5 Application of Payments and Collections. All items of payment received
by Agent by 12:00 noon, Dallas, Texas time, on any Business Day shall be deemed
received on that Business Day. All items of payment received after 12:00 noon,
Dallas, Texas time, on any Business Day shall be deemed received on the
following Business Day. Borrower irrevocably waives the right to direct the
application of any and all payments and collections at any time or times
hereafter received by Agent or any Lender from or on behalf of Borrower, and
Borrower does hereby irrevocably agree that Agent or any Lender shall have the
continuing exclusive right to apply and reapply any and all such payments and
collections received at any time or times hereafter by Agent or its agent
against the Obligations, in such manner as Agent may deem advisable,
notwithstanding any entry by Agent upon any of its books and records. If as the
result of collections of Accounts as authorized by Section 6.2.6 hereof a credit
balance exists in the Loan Account, such credit balance shall not accrue
interest in favor of Borrower, but shall be available to Borrower at any time or
times for so long as no Default or Event of Default exists. Such credit balance
shall not be applied or be deemed to have been applied as a prepayment of the
Term Loan or the Equipment Loan, except that Agent may, at its option, offset
such credit balance against any of the Obligations upon and after the occurrence
of an Event of Default.


<PAGE>

     3.6 Loan Account. Each Lender shall establish an account on its books
(each, a "Loan Account") and shall enter its Pro Rata Share of the Loans as
debits to the Loan Account and shall also record in the respective Loan Account
all payments made by Borrower on any Obligations and all proceeds of Collateral
which are finally paid to Agent and received by such Lender, and may record
therein, in accordance with customary accounting practice, other debits and
credits, including interest and all charges and expenses properly chargeable to
Borrower.

     3.7 Statements of Account. Agent will account to Borrower monthly with a
statement of Loans, charges and payments made pursuant to this Agreement, and
such account rendered by Agent shall be deemed final, binding and conclusive
upon Borrower unless Agent is notified by Borrower in writing to the contrary
within thirty (30) days after the date each accounting is deemed to have been
sent pursuant to Section 12.9. Such notice shall only be deemed an objection to
those items specifically objected to therein.

     3.8 Additional Provisions Regarding Eurodollar Loans.

          (a) Borrower may select LIBOR with respect to all or any portion of
     the Loans in accordance with the provisions of Section 3.1.1(a) hereof and
     of this Section 3.8; provided, however, that (i) each Eurodollar Loan shall
     be in a principal amount of not less than $2,000,000 and, if greater than
     $2,000,000, in integral multiples of $1,000,000, and (ii) no more than
     three (3) LIBOR Interest Periods in the aggregate may be in existence at
     any one time. Borrower shall select LIBOR Interest Periods with respect to
     Eurodollar Loans so that no LIBOR Interest Period expires after the end of
     the Stated-Termination Date. An outstanding Base Rate Loan may be converted
     to a Eurodollar Loan at any time subject to the provisions of this Section
     3.8.

          (b) Each Eurodollar Loan shall bear interest from and including the
     first day of the LIBOR Interest Period applicable thereto (but not
     including the last day of such LIBOR Interest Period) at the interest rate
     determined as applicable to such Eurodollar Loan, but interest on such
     Eurodollar Loan shall be payable as provided in Section 3.2.2 hereof. If at
     the end of a LIBOR Interest Period for an outstanding Eurodollar Loan,
     Borrower has failed to deliver to Agent a new Borrowing Notice with respect
     to such Eurodollar Loan or to pay such Eurodollar Loan, then such
     Eurodollar Loan shall be converted to a Base Rate Loan on and after the
     last day of such LIBOR Interest Period and shall remain a Base Rate Loan
     until paid or until the effective date of a new Borrowing Notice with
     respect thereto.

     3.9 Capital Adequacy and Other Adjustments. In the event Agent or any
Lender shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by Agent or such Lender or any corporation controlling Agent or
such Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) from any central
bank or governmental agency or body having jurisdiction does or shall have the
effect of increasing the amount of capital, reserves or other funds required to
be maintained by Agent or such Lender or

<PAGE>

any corporation controlling Agent or such Lender and thereby reducing the rate
of return on Agent's or such Lender's or such corporation's capital as a
consequence of its obligations hereunder, then Borrower shall from time to time
within fifteen (15) days after notice and demand from such Lender (with a copy
to Agent) or Agent (together with the certificate referred to in the next
sentence) pay to Agent or such Lender additional amounts sufficient to
compensate Agent or such Lender for such reduction. A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by Agent or any Lender to Borrower shall constitute presumptive
evidence, absent manifest error, of the accuracy of such computation.

     3.10 Taxes.

          (a) No Deductions. Any and all payments or reimbursements made
     hereunder or under the Notes shall be made free and clear of and without
     deduction for any and all taxes, levies, imposts, deductions, charges or
     withholdings, and all liabilities with respect thereto; excluding, however,
     the following: taxes imposed on the net income of any Lender or Agent by
     the jurisdiction under the laws of which Agent or such Lender is organized
     or doing business or any political subdivision thereof and taxes imposed on
     its net income by the jurisdiction of Agent's or such Lender's applicable
     lending office or any political subdivision thereof (all such taxes,
     levies, imposts, deductions, charges or withholdings and all liabilities
     with respect thereto excluding such taxes imposed on net income, herein
     "Tax Liabilities"). If Borrower shall be required by law to deduct any such
     Tax Liabilities from or in respect of any sum payable hereunder to Agent or
     any Lender, then the sum payable hereunder shall be increased as may be
     necessary so that, after making all required deductions, Agent or such
     Lender receives an amount equal to the sum it would have received had no
     such deductions been made.

          (b) Changes in Tax Laws. In the event that, subsequent to the Closing
     Date, (i) any changes in any existing law, regulation, treaty or directive
     or in the interpretation or application thereof, (ii) any new law,
     regulation, treaty or directive enacted or any interpretation or
     application thereof, or (iii) compliance by any Lender with any request or
     directive (whether or not having the force of law) from any governmental
     authority, agency or instrumentality:

               (i) does or shall subject Agent or any Lender to any tax of any
          kind whatsoever with respect to this Agreement, the other Loan
          Documents or any Loans made or Letters of Credit issued hereunder, or
          change the basis of taxation of payments to Agent or such Lender of
          principal, fees, interest or any other amount payable hereunder
          (except for net income taxes, or franchise taxes imposed in lieu of
          net income taxes, imposed generally by federal, state or local taxing
          authorities with respect to interest or commitment or other fees
          payable hereunder or changes in the rate of tax on the overall net
          income of Agent or such Lender); or

               (ii) does or shall impose on Agent or any Lender any other
          condition or increased cost in connection with the transactions
          contemplated hereby or

<PAGE>

          participations herein; and the result of any of the foregoing is to
          increase the cost to Agent or such Lender of issuing any Letter of
          Credit or making or continuing any Loan hereunder, as the case may be,
          or to reduce any amount receivable hereunder, then, in any such case,
          Borrower shall promptly pay to Agent or such Lender, upon its demand,
          any additional amounts necessary to compensate Agent or such Lender,
          on an after-tax basis, for such additional cost or reduced amount
          receivable, as determined by Agent or such Lender with respect to this
          Agreement or the other Loan Documents. If Agent or any Lender becomes
          entitled to claim any additional amounts pursuant to this Section, it
          shall promptly notify Borrower of the event by reason of which Agent
          or such Lender has become so entitled. A certificate as to any
          additional amounts payable pursuant to the foregoing sentence
          submitted by Agent or any Lender to Borrower shall, absent manifest
          error, be final, conclusive and binding for all purposes.

          (c) Foreign Lenders. Each Lender organized under the laws of a
     jurisdiction outside the United States (a "Foreign Lender") as to which
     payments to be made under this Agreement or under the Notes are exempt from
     United States withholding tax or are subject to United States withholding
     tax at a reduced rate under an applicable statute or tax treaty shall
     provide to Borrower and Agent (i) a properly completed and executed
     Internal Revenue Service Form 4224 or Form 1001 or other applicable form,
     certificate or document prescribed by the Internal Revenue Service of the
     United States certifying as to such Foreign Lender's entitlement to such
     exemption or reduced rate of withholding with respect to payments to be
     made to such Foreign Lender under this Agreement, or under the Notes (a
     "Certificate of Exemption"), or (ii) a letter from any such Foreign Lender
     stating that it is not entitled to any such exemption or reduced rate of
     withholding (a "Letter of Non-Exemption"). Prior to becoming a Lender under
     this Agreement and within fifteen (15) days after a reasonable written
     request of Borrower or Agent from time to time thereafter, each Foreign
     Lender that becomes a Lender under this Agreement shall provide a
     Certificate of Exemption or a Letter of Non-Exemption to Borrower and
     Agent.

          If a Foreign Lender is entitled to an exemption with respect to
     payments to be made to such Foreign Lender under this Agreement (or to a
     reduced rate of withholding) and does not provide a Certificate of
     Exemption to Borrower and Agent within the time periods set forth in the
     preceding paragraph, Borrower shall withhold taxes from payments to such
     Foreign Lender at the applicable statutory rates and Borrower shall not be
     required to pay any additional amounts as a result of such withholding;
     provided, however, that all such withholding shall cease upon delivery by
     such Foreign Lender of a Certificate of Exemption to Borrower and Agent.

     3.11 Required Termination and Prepayment. If on any date any Lender shall
have reasonably determined (which determination shall be final and conclusive
and binding upon all parties) that the making or continuation of its Eurodollar
Loans has become unlawful or impossible by compliance by that Lender in good
faith with any law, governmental rule, regulation or order (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful), then, and in any such event, that Lender shall promptly give

<PAGE>

notice (by telephone confirmed in writing) to Borrower and Agent of that
determination. Subject to prior withdrawal of a Borrowing Notice or prepayment
of Eurodollar Loans as contemplated by Section 3.15, the obligation of that
Lender to make or maintain its Eurodollar Loans during any such period shall be
terminated at the earlier of the termination of the LIBOR Interest Period then
in effect or when required by law and Borrower shall no later than the
termination of the LIBOR Interest Period in effect at the time any such
determination pursuant to this Section 3.11 is made or, earlier when required by
law, repay or prepay Eurodollar Loans together with all interest accrued thereon
or convert Eurodollar Loans to Base Rate Loans.

     3.12 Compensation. Borrower shall compensate each Lender, upon written
request by such Lender (which request shall set forth in reasonable detail the
basis for requesting such amounts and which shall, absent manifest error, be
conclusive and binding upon all parties hereto), for all reasonable actual
losses, expenses, and liabilities for any loss sustained by such Lender in
connection with any re-employment of funds arising out of: (a) any prepayment of
any of its Eurodollar Loans occurs on a date that is not the last day of LIBOR
Interest Period applicable to that Loan; (b) if for any reason (other than a
default by such Lender) a borrowing of any Eurodollar Loan does not occur on a
date specified therefor in a Borrowing Notice or a telephonic request for
borrowing or conversion/continuation; (c) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by Borrower; or (d) as a consequence of any other default by Borrower to
repay its Eurodollar Loans when required by the terms of this Agreement;
provided, that during the period while any such amounts have not been paid, such
Lender shall reserve an equal amount from amounts otherwise available to be
borrowed under the Revolving Credit Loans.

     3.13 Booking of Eurodollar Loans. Each Lender may make, carry or transfer
Eurodollar Loans at, to, or for the account of, any of its branch offices or the
office of an affiliate of such Lender.

     3.14 Assumptions Concerning Funding of Eurodollar Loans. Calculation of all
amounts payable to each Lender under Section 3.12 shall be made as though each
Lender had actually funded its relevant Eurodollar Loan through the purchase of
a deposit bearing interest in an amount equal to the amount of that Eurodollar
Loan and having maturity comparable to the relevant LIBOR Interest Period and
through the transfer of such deposit from an offshore office to a domestic
office in the United States of America; provided, however, that each Lender may
fund each of its Eurodollar Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
Section 3.12.

     3.15 Optional Prepayment/Replacement of Agent or Lenders in Respect of
Increased Costs. Within fifteen (15) days after receipt by Borrower of written
notice and demand from Agent or any Lender (an "Affected Lender") for payment of
additional costs as provided in Section 3.9 or 3.10(b), Borrower may, at its
option, notify Agent and such Affected Lender of its intention to do one of the
following:

          (a) Borrower may obtain, at Borrower's expense, a replacement Lender
     ("Replacement Lender") for such Affected Lender, which Replacement Lender
     shall be reasonably satisfactory to Agent. In the event Borrower obtains a
     Replacement Lender


<PAGE>

     within ninety (90) days following notice of its intention to do so, the
     Affected Lender shall sell and assign its Loans and Commitments to such
     Replacement Lender; provided, that Borrower has reimbursed such Affected
     Lender for its increased costs for which it is entitled to reimbursement
     under this Agreement through the date of such sale and assignment.

          (b) Borrower may prepay in full all outstanding Obligations owed to
     such Affected Lender and terminate such Affected Lender's Commitments.
     Borrower shall, within ninety (90) days following notice of its intention
     to do so, prepay in full all outstanding Obligations owed to such Affected
     Lender (including such Affected Lender's increased costs for which it is
     entitled to reimbursement under this Agreement through the date of such
     prepayment) and terminate such Affected Lender's Commitments.

SECTION 4. TERM AND TERMINATION

     4.1 Term of Agreement. Subject to Lenders' right to cease making Loans to
Borrower upon or after the occurrence of any Default or Event of Default, this
Agreement shall be in effect through the Termination Date.

     4.2 Termination.

          4.2.1 Termination by Lenders. Upon at least sixty (60) days prior
     written notice to Borrower, Requisite Lenders may terminate this Agreement
     as of the Termination Date and Requisite Lenders may terminate this
     Agreement without notice upon or after the occurrence of an Event of
     Default.

          4.2.2 Termination by Borrower. Upon at least sixty (60) days prior
     written notice to Agent, Borrower may, at its option, terminate this
     Agreement; provided, however, that no such termination shall be effective
     until Borrower has paid all of the Obligations in immediately available
     funds and all Letters of Credit and LC Guaranties have expired or have been
     cash collateralized to Agent's satisfaction. Any notice of termination
     given by Borrower shall be irrevocable unless Agent otherwise agrees in
     writing, and Agent shall not have an obligation to make any Loans or issue
     or procure any Letters of Credit or LC Guaranties on or after the
     termination date stated in such notice. Except as specifically provided in
     Section 3.4 above (with respect to optional prepayments of the Term Loan or
     the Equipment Loan), Borrower may elect to terminate this Agreement in its
     entirety only. Except as specifically provided in Section 3.4 above (with
     respect to optional prepayments of the Term Loan or the Equipment Loan), no
     section of this Agreement or type of Loan available hereunder may be
     terminated singly.

          4.2.3 Termination Charges. On the effective date of termination of
     this Agreement for any reason, Borrower shall pay to Agent, for the account
     of Lenders (in addition to the then outstanding principal, accrued interest
     and other charges owing to Lenders under the terms of this Agreement and
     any of the other Loan Documents), as liquidated damages for the loss of the
     bargain and not as a penalty, an amount equal to 1.0% of the Total Credit
     Facility if termination occurs during the first 12-month period

<PAGE>

     following the date hereof (October 10, 2000 through October 9, 2001); 0.50%
     of the Total Credit Facility if termination occurs during the second
     12-month period following the date hereof (October 10, 2001 through October
     9, 2002); and 0.5% of the Total Credit Facility if termination occurs at
     any time thereafter. Notwithstanding the foregoing, if termination occurs
     on or thirty (30) days prior to the Termination Date, then no termination
     charge shall be payable.

          4.2.4 Effect of Termination. All of the Obligations shall be
     immediately due and payable upon the termination date stated in any notice
     of termination of this Agreement. All undertakings, agreements, covenants,
     warranties and representations of Borrower contained in the Loan Documents
     shall survive any such termination and Agent shall retain its Liens in the
     Collateral, for the benefit of Lenders, and all of its rights and remedies
     under the Loan Documents notwithstanding such termination until Borrower
     has paid the Obligations to Lender, in full, in immediately available
     funds, together with the applicable termination charge, if any.
     Notwithstanding the payment in full of the Obligations, Agent shall not be
     required to terminate its security interests in the Collateral unless, with
     respect to any loss or damage Agent and/or Lenders may incur as a result of
     dishonored checks or other items of payment received by Agent and/or
     Lenders from Borrower or any Account Debtor and applied to the Obligations,
     Agent shall, at its option, (a) have received a written agreement, executed
     by Borrower and by any Person whose loans or other advances to Borrower are
     used in whole or in part to satisfy the Obligations, indemnifying Agent and
     Lenders from any such loss or damage; or (b) have retained such monetary
     reserves and Liens on the Collateral for such period of time as Agent, in
     its reasonable discretion, may deem necessary to protect Agent and/or
     Lenders from any such loss or damage.

SECTION 5. SECURITY INTERESTS

     5.1 Security Interest in Collateral. To secure the prompt payment and
performance to Lenders of all of the Obligations, each Borrower hereby grants to
Agent, for the benefit of Lenders, a continuing security interest in and Lien
upon all of each Borrower's assets, including all of the following Property and
interests in Property of Borrower, whether now owned or existing or hereafter
created, acquired or arising and wheresoever located:

          (a) All Accounts;

          (b) All Inventory;

          (c) All Equipment;

          (d) All General Intangibles;

          (e) All investment property (as defined in Section 9.115 of the Code);

          (f) All real Property;


<PAGE>

          (g) All monies and other Property of any kind now or at any time or
     times hereafter in the possession or under the control of Agent or any
     Lender or a bailee or Affiliate of Agent or any Lender;

          (h) All accessions to, substitutions for and all replacements,
     products and cash and non-cash proceeds of (a) through (g) above,
     including, without limitation, proceeds of and unearned premiums with
     respect to insurance policies insuring any of the Collateral; and

          (i) All books and records (including, without limitation, customer
     lists, credit files, computer programs, print-outs, and other computer
     materials and records) of Borrower pertaining to any of (a) through (h)
     above;

provided, however, that the foregoing grant of security interest shall not
include the Alcore Investment Account or any monies and/or investment property
deposited and/or held therein as of the date hereof.

     5.2 Cross-Collateralization. Each Borrower agrees that the Collateral
pledged by such Borrower hereunder shall secure all of the Obligations of the
Borrower. Upon and after a Default or an Event of Default by any Borrower, Agent
may pursue all rights and remedies that Lenders may have against all or any part
of the Collateral regardless of which Borrower has legal title to such
Collateral. Each Borrower hereby acknowledges that this cross-collateralization
of the Collateral owned by such Borrower is in consideration of Lenders
extending the credit hereunder and is mutually beneficial to each Borrower.

     5.3 Lien Perfection; Further Assurances. Borrower shall execute such UCC-1
financing statements as are required by the Code and such other instruments,
assignments or documents as are necessary to perfect Agent's Lien upon any of
the Collateral, for the benefit of Lenders, and shall take such other action as
may be required to perfect or to continue the perfection of Agent's Lien upon
the Collateral. Unless prohibited by Applicable Law, Borrower hereby authorizes
Agent to execute and file any such financing statement on Borrower's behalf. The
parties agree that a carbon, photographic or other reproduction of this
Agreement shall be sufficient as a financing statement and may be filed in any
appropriate office in lieu thereof. At Agent's request, Borrower shall also
promptly execute or cause to be executed and shall deliver to Agent any and all
documents, instruments and agreements deemed necessary by Agent to give effect
to or carry out the terms or intent of the Loan Documents.

     5.4 Lien on Realty; Collateral Assignments of Leases. The due and punctual
payment and performance of the Obligations shall also be secured by the Lien
created by each Mortgage upon all real Property of Borrower described therein.
The Mortgage shall be executed by Borrower in favor of Agent, for the benefit of
Lenders, and shall be duly recorded, at Borrower's expense, in each office where
such recording is required to constitute a fully perfected Lien on the real
Property covered thereby. Borrower shall deliver to Agent, at Borrower's
expense, mortgagee title insurance policies issued by a title insurance company
satisfactory to Agent, which policies shall be in form and substance
satisfactory to Agent and shall insure a valid first Lien in favor of Agent on
the Property covered thereby, subject only to those exceptions

<PAGE>

acceptable to Agent and its counsel. Borrower shall deliver to Agent such other
documents, including all currently existing as-built survey prints of the real
Property, as Agent and its counsel may request relating to the real Property
subject to each Mortgage. The due and punctual payment and performance of the
Obligations shall also be secured by each Collateral Assignment of Lease of the
leasehold interest of Technical Products in all real Property described therein.
Each Collateral Assignment of Lease shall be executed by Technical Products in
favor of Agent, for the benefit of Lenders, and shall be duly recorded, at
Borrower's expense, in each office where such recording is required to
constitute a fully perfected Lien on the leasehold interest of Technical
Products in the real Property covered thereby.

SECTION 6. COLLATERAL ADMINISTRATION

     6.1 General

          6.1.1 Location of Collateral. All tangible items of Collateral, other
     than Inventory in transit, motor vehicles, and investment property held in
     an account with a securities intermediary shall at all times be kept by
     Borrower and its Subsidiaries at one or more of the business locations set
     forth in Exhibit B hereto and shall not, without the prior written approval
     of Agent, be moved therefrom, except prior to an Event of Default and
     Agent's and/or Lenders' acceleration of the maturity of the Obligations in
     consequence thereof, for (a) sales of Inventory in the ordinary course of
     business and (b) removals in connection with dispositions of Equipment that
     are authorized by Section 6.4.2 hereof.

          6.1.2 Insurance of Collateral. Borrower shall maintain and pay for
     insurance upon all Collateral wherever located and with respect to
     Borrower's business, covering casualty, hazard, public liability and such
     other risks in such amounts and with such insurance companies as are
     reasonably satisfactory to Agent. Borrower shall deliver the originals or
     certified copies of such policies to Agent with satisfactory lender's loss
     payable endorsements, which policies shall name Agent, for the benefit of
     Lenders, as sole loss payee, assignee or additional insured, as
     appropriate. Each policy of insurance or endorsement shall contain a clause
     requiring the insurer to give not less than thirty (30) days prior written
     notice to Agent in the event of cancellation of the policy for any reason
     whatsoever and a clause specifying that the interest of Agent shall not be
     impaired or invalidated by any act or neglect of Borrower or the owner of
     the Property or by the occupation of the premises for purposes more
     hazardous than are permitted by said policy. If Borrower fails to provide
     and pay for such insurance, Agent may, at its option, but shall not be
     required to, procure the same and charge Borrower therefor. Borrower agrees
     to deliver to Agent, promptly as rendered, true copies of all reports made
     in any reporting forms to insurance companies.

          6.1.3 Protection of Collateral. All expenses of protecting, storing,
     warehousing, insuring, handling, maintaining and shipping the Collateral,
     any and all excise, property, sales and use taxes imposed by any Applicable
     Law on any of the Collateral or in respect of the sale thereof, and all
     other payments required to be made by Agent and/or Lenders to any Person to
     realize upon any Collateral shall be borne and paid by Borrower. If

<PAGE>

     Borrower fails to promptly pay any portion thereof when due, Agent may, at
     its option, but shall not be required to, pay the same and charge Borrower
     therefor. Neither the Agent nor any Lender shall be liable or responsible
     in any way for the safekeeping of any of the Collateral or for any loss or
     damage thereto (except for reasonable care in the custody thereof while any
     Collateral is in Agent's or any Lender's actual possession) or for any
     diminution in the value thereof, or for any act or default of any
     warehouseman, carrier, forwarding agency, or other Person whomsoever, but
     the same shall be at Borrower's sole risk.

     6.2 Administration of Accounts.

          6.2.1 Records, Schedules and Assignments of Accounts. Borrower shall
     keep accurate and complete records of its Accounts and all payments and
     collections thereon and shall submit to Agent on such periodic basis as
     Agent shall request a sales and collections report for the preceding
     period, in form satisfactory to Agent. On or before the twentieth day of
     each month from and after the date hereof, Borrower shall deliver to Agent,
     in form acceptable to Agent, a detailed aged trial balance of all Accounts
     existing as of the last day of the preceding month, specifying the names,
     addresses, face value, dates of invoices and due dates for each Account
     Debtor obligated on an Account so listed ("Schedule of Accounts"), and,
     upon Agent's request therefor, copies of proof of delivery and the original
     copy of all documents, including, without limitation, repayment histories
     and present status reports relating to the Accounts so scheduled and such
     other matters and information relating to the status of then existing
     Accounts as Agent shall reasonably request. In addition, if Accounts in an
     aggregate face amount in excess of $100,000 become ineligible because they
     fall within one of the specified categories of ineligibility set forth in
     the definition of Eligible Accounts or otherwise established by Agent,
     Borrower shall notify Agent of such occurrence on the first Business Day
     following the day such occurrence becomes known to Borrower and the
     Borrowing Base shall thereupon be adjusted to reflect such occurrence. If
     requested by Agent, Borrower shall execute and deliver to Agent agings and
     formal written assignments of all of its Accounts weekly or daily, which
     shall include all Accounts that have been created since the date of the
     last assignment, together with copies of invoices or invoice registers
     related thereto.

          6.2.2 Discounts, Allowances, Disputes. If Borrower grants any
     discounts, allowances or credits that are not shown on the face of the
     invoice for the Account involved, Borrower shall report such discounts,
     allowances or credits, as the case may be, to Agent as part of the next
     required Schedule of Accounts. If any amounts due and owing in excess of
     $100,000 are in dispute between Borrower and any Account Debtor, Borrower
     shall provide Agent with written notice thereof at the time of submission
     of the next Schedule of Accounts, explaining in detail the reason for the
     dispute, all claims related thereto and the amount in controversy. Upon and
     after the occurrence of an Event of Default, Agent shall have the right to
     settle or adjust all disputes and claims directly with the Account Debtor
     and to compromise the amount or extend the time for payment of the Accounts
     upon such terms and conditions as Agent may deem advisable, and to

<PAGE>

     charge the deficiencies, costs and expenses thereof, including attorney's
     fees, to Borrower.

          6.2.3 Taxes. If an Account includes a charge for any tax payable to
     any governmental taxing authority, Agent is authorized, in its sole
     discretion, to pay the amount thereof to the proper taxing authority for
     the account of Borrower and to charge Borrower therefor; provided, however,
     that Agent shall not be liable for any such taxes to any governmental
     taxing authority that may be due by Borrower.

          6.2.4 Account Verification. Whether or not a Default or an Event of
     Default has occurred, any of Agent's officers, employees or agents shall
     have the right, at any time or times hereafter, in the name of any Lender,
     any designee of any Lender or Borrower, to verify the validity, amount or
     any other matter relating to any Accounts by mail, telephone, telegraph or
     otherwise. Borrower shall cooperate fully with Agent in an effort to
     facilitate and promptly conclude any such verification process.

          6.2.5 Maintenance of Dominion Account. Borrower shall maintain a
     Dominion Account pursuant to a lockbox arrangement acceptable to Agent with
     such banks as may be selected by Borrower and be acceptable to Agent;
     provided, however, that Borrower may, at its option, elect to terminate the
     Dominion Account upon providing Lender five (5) days prior written notice
     of its election to terminate the Dominion Account. Borrower shall issue to
     any such banks an irrevocable letter of instruction directing such banks to
     deposit all payments or other remittances received in the lockbox to the
     Dominion Account for application on account of the Obligations. All funds
     deposited in the Dominion Account shall immediately become the property of
     Agent, for the benefit of Lenders, and Borrower shall obtain the agreement
     by such banks in favor of Agent to waive any offset rights against the
     funds so deposited.

          6.2.6 Collection of Accounts; Proceeds of Collateral. To expedite
     collection, Borrower shall endeavor in the first instance to make
     collection of its Accounts for Agent and Lenders. All remittances received
     by Borrower in respect of Accounts, together with the proceeds of any other
     Collateral, shall be held as Agent's property by Borrower as trustee of an
     express trust for Agent's benefit and Borrower shall immediately deposit
     same in kind in the Dominion Account. Agent retains the right at all times
     after the occurrence of a Default or an Event of Default to notify Account
     Debtors that Accounts have been assigned to Agent and to collect Accounts
     directly in its own name and to charge the collection costs and expenses,
     including reasonable attorneys' fees to Borrower.

     6.3 Administration of Inventory.

          6.3.1 Records and Reports of Inventory. Borrower shall keep accurate
     and complete records of its Inventory. Borrower shall furnish Lender
     Inventory reports in form and detail satisfactory to Agent at such times as
     Agent may request, but at least once each month, not later than the
     twentieth (20th) day of such month.


<PAGE>

          6.3.2 Returns of Inventory. Borrower shall not return any of its
     Inventory to a supplier or vendor thereof, or any other Person, whether for
     cash, credit against future purchases or then existing payables, or
     otherwise, unless (a) such return is in the ordinary course of business of
     Borrower and such Person, (b) no Default or Event of Default exists or
     would result therefrom, (c) the return of such Inventory will not result in
     an Out-of-Formula Condition, (d) if the value of all Inventory returned in
     any month exceeds $250,000, Borrower promptly notifies Agent thereof, and
     (e) any payments received by Borrower in connection with any such return is
     promptly turned over to Agent for application to the obligations related to
     the Obligations related to the Loans.

     6.4 Administration of Equipment.

          6.4.1 Records and Schedules of Equipment. Borrower shall keep accurate
     records itemizing and describing the kind, type, quality, quantity and
     value of its Equipment and all dispositions made in accordance with Section
     6.4.2 hereof, and shall furnish Agent with a current schedule containing
     the foregoing information on at least an annual basis and more often if
     requested by Agent. Immediately on request therefor by Agent, Borrower
     shall deliver to Agent any and all evidence of ownership, if any, of any of
     the Equipment.

          6.4.2 Dispositions of Equipment. Borrower will not sell, lease or
     otherwise dispose of or transfer any of the Equipment or any part thereof
     without the prior written consent of Agent; provided, however, that the
     foregoing restriction shall not apply, for so long as no Default or Event
     of Default exists, to (a) dispositions of Equipment which, in the aggregate
     during any consecutive twelve-month period, has a fair market value or book
     value, whichever is less, of $500,000 or less, provided that all proceeds
     thereof are remitted to Agent for application to the Term Loan or the
     Equipment Loan (or, at Agent's option, such other of the Obligations as
     Agent may elect), (b) replacements of Equipment that is substantially worn,
     damaged or obsolete with Equipment of like kind, function and value;
     provided, that the replacement Equipment shall be acquired prior to or
     concurrently with any disposition of the Equipment that is to be replaced,
     the replacement Equipment shall be free and clear of Liens other than
     Permitted Liens that are not Purchase Money Liens, and Borrower shall have
     given Agent at least six (6) days' prior written notice of such disposition
     and (c) dispositions in connection with the Proposed Sales.

          6.4.3 Condition of Equipment. Borrower represents and warrants to
     Agent and Lenders that the Equipment is in good operating condition and
     repair, and all necessary replacements of and repairs thereto shall be made
     so that the value and operating efficiency of the Equipment shall be
     maintained and preserved, reasonable wear and tear excepted. Borrower will
     not permit any of the Equipment to become affixed to any real Property
     leased to Borrower so that an interest arises therein under the real estate
     laws of the applicable jurisdiction unless the landlord of such real
     Property has executed a landlord waiver or leasehold mortgage in favor of
     and in form acceptable to Agent, and Borrower will not permit any of the
     Equipment to become an accession to any personal

<PAGE>

     Property that is subject to a Lien unless the Lien is a Permitted Lien
     (other than a Purchase Money Lien).

     6.5 Payment of Charges. All amounts chargeable to Borrower under Section 6
hereof shall be Obligations secured by all of the Collateral, shall be payable
on demand and shall bear interest from the date such advance was made until paid
in full at the rate applicable to Revolving Credit Loans from time to time.

SECTION 7. REPRESENTATIONS AND WARRANTIES

     7.1 General Representations and Warranties. To induce Agent and Lenders to
enter into this Agreement and to make advances hereunder, Borrower warrants and
represents to Agent and Lenders and covenants with Agent and Lenders that:

          7.1.1 Organization and Qualification. Each Borrower and its
     Subsidiaries is a corporation duly organized, validly existing and in good
     standing under the laws of the jurisdiction of its incorporation. Each
     Borrower and its Subsidiaries is duly qualified and is authorized to do
     business and is in good standing as a foreign corporation in each state or
     jurisdiction listed on Exhibit C hereto and in all other states and
     jurisdictions where the character of its Properties or the nature of its
     activities make such qualification necessary, except where the failure to
     be so qualified would not have a Material Adverse Effect.

          7.1.2 Corporate Power and Authority. Each Borrower and its
     Subsidiaries is duly authorized and empowered to enter into, execute,
     deliver and perform this Agreement and each of the other Loan Documents to
     which it is a party. The execution, delivery and performance of this
     Agreement and each of the other Loan Documents have been duly authorized by
     all necessary corporate action and do not and will not (a) require any
     consent or approval of the shareholders of any Borrower or any of its
     Subsidiaries; (b) contravene any Borrower's or any of its Subsidiaries,
     charter, articles or certificate of incorporation or by-laws; (c) violate,
     or cause any Borrower or any of its Subsidiaries to be in default under,
     any provision of any law, rule, regulation, order, writ, judgment,
     injunction, decree, determination or award in effect having applicability
     to any Borrower or any of its Subsidiaries; (d) result in a breach of or
     constitute a default under any indenture or loan or credit agreement or any
     other agreement, lease or instrument to which any Borrower or any of its
     Subsidiaries is a party or by which it or its Properties may be bound or
     affected; or (e) result in, or require, the creation or imposition of any
     Lien (other than Permitted Liens) upon or with respect to any of the
     Properties now owned or hereafter acquired by any Borrower or any of its
     Subsidiaries.

          7.1.3 Legally Enforceable Agreement. This Agreement is, and each of
     the other Loan Documents when delivered under this Agreement will be, a
     legal, valid and binding obligation of each Borrower and its Subsidiaries,
     enforceable against them in accordance with its respective terms, except to
     the extent that such enforcement may be limited by applicable bankruptcy,
     insolvency or similar laws affecting creditors' rights generally or by
     principles of equity pertaining to the availability of equitable remedies.


<PAGE>

          7.1.4 Capital Structure. Exhibit D hereto states (a) the correct name
     of each of the Subsidiaries of each Borrower, its jurisdiction of
     incorporation and the percentage of its Voting Stock owned by such
     Borrower, (b) the name of each of each Borrower's corporate or joint
     venture Affiliates and the nature of the affiliation, (c) the number,
     nature and holder of all outstanding Securities of each Borrower and each
     Subsidiary of such Borrower and (d) the number of authorized, issued and
     treasury shares of each Borrower and each Subsidiary of such Borrower. Each
     Borrower has good title to all of the shares it purports to own of the
     stock of each of its Subsidiaries, free and clear in each case of any Lien,
     other than Permitted Liens. All such shares have been duly issued and are
     fully paid and non-assessable. Except as set forth on Exhibit D, there are
     no outstanding options to purchase, or any rights or warrants to subscribe
     for, or any commitment or agreements to issue or sell, or any Securities or
     obligations convertible into, or any powers of attorney relating to, shares
     of the capital stock of any Borrower or any of its Subsidiaries. There are
     no outstanding agreements or instruments binding upon any of Borrower's
     shareholders relating to the ownership of its shares of capital stock. ATP
     is the beneficial and legal holder of all outstanding capital stock of each
     of Alcore, Technical Products, Marion, DeLand and Lincoln.

          7.1.5 Corporate Names. Neither any Borrower nor any of its
     Subsidiaries has been known as or used any corporate, fictitious or trade
     names except those listed on Exhibit E hereto. Except as set forth on
     Exhibit E, neither any Borrower nor any of its Subsidiaries has been the
     surviving corporation of a merger or consolidation or acquired all or
     substantially all of the assets of any Person.

          7.1.6 Business Locations; Agent for Process. Each Borrower's and its
     Subsidiaries' chief executive office and other places of business are as
     listed on Exhibit B hereto. During the preceding five-year period, neither
     any Borrower nor any of its Subsidiaries has had an office, place of
     business or agent for service of process in any state other than as listed
     on Exhibit B. Except as shown on Exhibit B, no Inventory of any Borrower or
     any of its Subsidiaries is stored with a bailee, warehouseman or similar
     Person, nor is any Inventory consigned to any Person.

          7.1.7 Title to Properties; Priority of Liens. Each Borrower and its
     Subsidiaries have good and indefeasible title to and fee simple ownership
     of, or valid and subsisting leasehold interests in, all of their real
     Property, and good title to all of the Collateral and all of their other
     Property, in each case, free and clear of all Liens except Permitted Liens.
     Each Borrower and each of its Subsidiaries has paid or discharged all
     lawful claims which, if unpaid, might become a Lien against any of such
     Borrower's Properties that is not a Permitted Lien. The Liens granted to
     Agent under Section 5 hereof are first priority Liens, subject only to
     Permitted Liens.

          7.1.8 Accounts. Agent and Lenders may rely, in determining which
     Accounts of Revolving Credit Borrowers are Eligible Accounts, on all
     statements and representations made by Revolving Credit Borrowers with
     respect to any Account or Accounts. Unless otherwise indicated in writing
     to Agent, with respect to each Account:


<PAGE>

               (a) It is genuine and in all respects what it purports to be, and
          it is not evidenced by a judgment;

               (b) It arises out of a completed, bona fide sale and delivery of
          goods or rendition of services by a Revolving Credit Borrower in the
          ordinary course of its business and in accordance with the terms and
          conditions of all purchase orders, contracts or other documents
          relating thereto and forming a part of the contract between such
          Revolving Credit Borrower and its Account Debtor;

               (c) It is for a liquidated amount maturing as stated in the
          duplicate invoice covering such sale or rendition of services, a copy
          of which has been furnished or is available to Agent;

               (d) Such Account, and Agent's security interest therein, is not
          subject to any offset, Lien, deduction, defense, dispute, counterclaim
          or any other adverse condition except for disputes resulting in
          returned goods where the amount in controversy is deemed by Agent to
          be immaterial, and each such Account is absolutely owing to a
          Revolving Credit Borrower and is not contingent in any respect or for
          any reason;

               (e) The applicable Revolving Credit Borrower has made no
          agreement with any Account Debtor thereunder for any extension,
          compromise, settlement or modification of any such Account or any
          deduction therefrom, except discounts or allowances which are granted
          by such Revolving Credit Borrower in the ordinary course of its
          business for prompt payment and which are reflected in the calculation
          of the net amount of each respective invoice related thereto and are
          reflected in the Schedules of Accounts submitted to Lender pursuant to
          Section 6.2.1 hereof;

               (f) There are no facts, events or occurrences which in any way
          impair the validity or enforceability of any Accounts or tend to
          reduce the amount payable thereunder from the face amount of the
          invoice and statements delivered to Agent with respect thereto;

               (g) To the best of Revolving Credit Borrowers' knowledge, the
          Account Debtor thereunder (i) had the capacity to contract at the time
          any contract or other document giving rise to the Account was executed
          and (ii) such Account Debtor is Solvent; and

               (h) To the best of Revolving Credit Borrowers' knowledge, there
          are no proceedings or actions which are threatened or pending against
          any Account Debtor thereunder which might result in any material
          adverse change in such Account Debtor's financial condition or the
          collectibility of such Account.

          7.1.9 Financial Statements; Fiscal Year. The Consolidated balance
     sheets of Borrower as of December 31, 1999, and the related statements of
     income, changes in

<PAGE>

     stockholder's equity, and changes in financial position for the periods
     ended on such dates, have been prepared in accordance with GAAP (excluding
     incentive compensation accrual), and present fairly the financial position
     of Borrower at such dates and the results of the operations of Borrower for
     such periods. Since December 31, 1999, there has been no material change in
     the condition, financial or otherwise, of any Borrower and no change in the
     aggregate value of Equipment and real Property owned by each Borrower,
     except changes in the ordinary course of business, none of which
     individually or in the aggregate has been materially adverse, other than as
     described in Exhibit I or as disclosed to Fleet in financial statements
     delivered in connection with the Restated Loan Agreement. The fiscal year
     of each Borrower ends on December 31 of each year.

          7.1.10 Full Disclosure. The financial statements referred to in
     Section 7.1.9 hereof do not, nor does this Agreement or any other written
     statement of any Borrower to Lenders, contain any untrue statement of a
     material fact or omit a material fact necessary to make the statements
     contained therein or herein not misleading. There is no fact or
     circumstances which any Borrower has failed to disclose to Lenders in
     writing and which may reasonably be expected to have a Material Adverse
     Effect.

          7.1.11 Solvent Financial Condition. Each Borrower and its respective
     Subsidiaries are now and, after giving effect to the Loans to be made to be
     issued hereunder, at all times will be, Solvent.

          7.1.12 Surety Obligations. Neither any Borrower nor any of its
     Subsidiaries is obligated as surety or indemnitor under any surety or
     similar bond or other contract issued or entered into any agreement to
     assure payment, performance or completion of performance of any undertaking
     or obligation of any Person.

          7.1.13 Taxes. ATP's federal tax identification number is 111581582.
     Alcore's federal tax identification number is 521762126. Technical
     Products' federal tax identification number is 76-0467373. DeLand's federal
     tax identification number is 76-0467374. Lincoln's federal tax
     identification number is 76-0467376. Marion's federal tax identification
     number is 76-0467375. The federal tax identification number of each of each
     Borrower's Subsidiaries is shown on Exhibit F hereto. Each Borrower and
     each of its Subsidiaries has filed all federal, state and local tax returns
     and other reports it is required by law to file and has paid, or made
     provision for the payment of, all Taxes upon it, its income and Properties
     as and when such Taxes are due and payable, except to the extent being
     Properly Contested or as otherwise set forth on Schedule 7.1.13. The
     provision for Taxes on the books of ATP and its Subsidiaries are adequate
     for all years not closed by applicable statutes, and for its current fiscal
     year.

          7.1.14 Brokers. There are no claims for brokerage commissions,
     finder's fees or investment banking fees in connection with the
     transactions contemplated by this Agreement.

          7.1.15 Patents, Trademarks, Copyrights and Licenses. Each Borrower and
     its Subsidiaries own or possess all the patents, trademarks, service marks,
     trade names,

<PAGE>

     copyrights and licenses necessary for the present and planned future
     conduct of their business without any conflict with the rights of others.
     All such patents, trademarks, service marks, trade names, copyrights,
     licenses and other similar rights are listed on Exhibit G hereto.

          7.1.16 Governmental Consents. Each Borrower and its Subsidiaries have,
     and are in good standing with respect to, all governmental consents,
     approvals, licenses, authorizations, permits, certificates, inspections and
     franchises necessary to continue to conduct their business as heretofore or
     proposed to be conducted by them and to own or lease and operate their
     Properties as now owned or leased by them.

          7.1.17 Compliance with Laws. Each Borrower and its Subsidiaries have
     duly complied with, and their Properties, business operations and
     leaseholds are in compliance in all material respects with, the provisions
     of all Applicable Law and there have been no citations, notices or orders
     of noncompliance issued to any Borrower or any of its Subsidiaries under
     any such law, rule or regulation. Each of each Borrower and its
     Subsidiaries has established and maintains an adequate monitoring system to
     insure that it remains in compliance with all federal, state and local
     laws, rules and regulations applicable to it. No Inventory has been
     produced in violation of the Fair Labor Standards Act (29 U.S.C. ss. 201 et
     seq.), as amended.

          7.1.18 Restrictions. Neither any Borrower nor any of its Subsidiaries
     is a party or subject to any contract, agreement, or charter or other
     corporate restriction, which has or could be reasonably expected to have a
     Material Adverse Effect. Neither any Borrower nor any of its Subsidiaries
     is a party or subject to any contract or agreement which restricts its
     right or ability to incur Indebtedness, other than as set forth on Exhibit
     H hereto, none of which prohibit the execution of or compliance with this
     Agreement or the other Loan Documents by any Borrower or any of its
     Subsidiaries, as applicable.

          7.1.19 Litigation. Except as set forth on Exhibit I hereto, there are
     no actions, suits, proceedings or investigations pending, or to the
     knowledge of any Borrower, threatened, against or affecting any Borrower or
     any of its Subsidiaries, or the business, operations, Properties,
     prospects, profits or condition of any Borrower or any of its Subsidiaries.
     Neither any Borrower nor any of its Subsidiaries is in default with respect
     to any order, writ, injunction, judgment, decree or rule of any court,
     governmental authority or arbitration board or tribunal.

          7.1.20 No Defaults. No event has occurred and no condition exists
     which would, upon or after the execution and delivery of this Agreement or
     any Borrower's performance hereunder, constitute a Default or an Event of
     Default. Neither any Borrower nor any of its Subsidiaries is in default,
     and no event has occurred and no condition exists which constitutes, or
     which with the passage of time or the giving of notice or both would
     constitute, a default in the payment of any Indebtedness to any Person for
     Money Borrowed.


<PAGE>

          7.1.21 Leases. Exhibit J hereto sets forth a complete listing of all
     capitalized leases of each Borrower and its Subsidiaries on the date hereof
     and Exhibit K hereto sets forth a complete listing of all operating leases
     of each Borrower and its Subsidiaries on the date hereof. Each of each
     Borrower and its Subsidiaries is in full compliance with all of the terms
     of each of its respective capitalized and operating leases.

          7.1.22 Pension Plans. Except as disclosed on Exhibit L hereto, neither
     any Borrower nor any of its Subsidiaries has any Plan on the date hereof.
     Each Borrower and each of its Subsidiaries is in full compliance with the
     requirements of ERISA and the regulations promulgated thereunder with
     respect to each Plan. No fact or situation that could result in a material
     adverse change in the financial condition of any Borrower or any of its
     Subsidiaries exists in connection with any Plan. Neither any Borrower nor
     any of its Subsidiaries has any withdrawal liability in connection with a
     Multiemployer Plan.

          7.1.23 Trade Relations. There exists no actual or threatened
     termination, cancellation or limitation of, or any modification or change
     in, the business relationship between any Borrower or any of its
     Subsidiaries and any customer or any group of customers whose purchases
     individually or in the aggregate are material to the business of such
     Borrower or any of its Subsidiaries, or with any material supplier, and
     there exists no condition or state of facts or circumstances which would
     materially affect adversely any Borrower or any of its Subsidiaries or
     prevent any Borrower or any of its Subsidiaries from conducting such
     business after the consummation of the transaction contemplated by this
     Agreement in substantially the same manner in which it has heretofore been
     conducted.

          7.1.24 Labor Relations. Except as described on Exhibit M hereto,
     neither any Borrower nor any of its Subsidiaries is a party to any
     collective bargaining agreement on the date hereof. On the date hereof,
     there are no material grievances, disputes or controversies with any union
     or any other organization of any Borrower's or any of its Subsidiaries'
     employees, or threats of strikes, work stoppages or any asserted pending
     demands for collective bargaining by any union or organization.

     7.2 Continuous Nature of Representations and Warranties. Each
representation and warranty contained in this Agreement and the other Loan
Documents shall be continuous in nature and shall remain accurate, complete and
not misleading at all times during the term of this Agreement, except for
changes in the nature of a Borrower's or its Subsidiaries' business or
operations that would render the information in any exhibit attached hereto
either inaccurate, incomplete or misleading, so long as Agent has consented to
such changes or such changes are expressly permitted by this Agreement, and
except for such representations and warranties that by their nature are limited
only to a specific date in time.

     7.3 Survival of Representations and Warranties; Subsidiaries. All
representations and warranties of Borrower contained in this Agreement or any of
the other Loan Documents shall survive the execution, delivery and acceptance
thereof by Agent and/or Lenders and the parties thereto and the closing of the
transactions described therein or related thereto. For purposes of Section 7.1
and 7.2, the term "Subsidiaries" shall not include Brigantine.


<PAGE>

SECTION 8. COVENANTS AND CONTINUING AGREEMENTS

     8.1 Affirmative Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Agent or any Lender, each
Borrower covenants that, unless otherwise consented to by Requisite Lenders in
writing, it shall:

          8.1.1 Visits and Inspections. Permit representatives of Agent, from
     time to time, as often as may be reasonably requested, but only during
     normal business hours, to (a) visit and inspect its Properties and the
     Properties of each of their respective Subsidiaries, and (b) inspect, audit
     and make extracts from its books and records, and discuss with its
     officers, employees and independent accountants, its business, assets,
     liabilities, financial condition, business prospects and results of
     operations.

          8.1.2 Notices. Notify Agent and each Lender in writing (a) of the
     occurrence of any event or the existence of any fact which renders any
     representation or warranty in this Agreement or any of the other Loan
     Documents inaccurate, incomplete or misleading; (b) promptly after
     Borrower's learning thereof, of the commencement of any litigation
     affecting Borrower or any of its Properties, whether or not the claim is
     considered by Borrower to be covered by insurance, and of the institution
     of any administrative proceeding which if determined adversely to Borrower,
     would have a Material Adverse Effect; (c) at least sixty (60) days prior
     thereto, of Borrower's opening of any new office or place of business or
     Borrower's closing of any existing office or place of business; (d)
     promptly after Borrower's learning thereof, of any labor dispute to which
     Borrower may become a party, any strikes or walkouts relating to any of its
     plants or other facilities, and the expiration of any labor contract to
     which it is a party or by which it is bound; (e) promptly after Borrower's
     learning thereof, of any material default by any Loan Party under any note,
     indenture, loan agreement, mortgage, lease, deed, guaranty or other similar
     agreement relating to any Indebtedness of Borrower exceeding $500,000; (f)
     promptly after the occurrence thereof, of any Default or Event of Default;
     (g) promptly after the occurrence thereof, of any default by any obligor
     under any note or other evidence of Indebtedness payable to Borrower (other
     than trade receivables) in an amount exceeding $100,000; and (h) promptly
     after the rendition thereof, of any judgment rendered against any Loan
     Party in an amount exceeding $50,000.

          8.1.3 Financial Statements. Keep, and cause each Subsidiary to keep,
     adequate records and books of account with respect to its business
     activities in which proper entries are made in accordance with GAAP
     reflecting all its financial transactions; and cause to be prepared and
     furnished to Agent and each Lender the following (all to be prepared in
     accordance with GAAP applied on a consistent basis, unless Borrower's
     certified public accountants concur in any change therein and such change
     is disclosed to Agent and each Lender and is consistent with GAAP):

               (a) not later than ninety (90) days after the close of each
          fiscal year of Borrower, unqualified audited financial statements of
          Borrower, as of the end of such year, on a Consolidated basis (with a
          footnote exhibiting the consolidating

<PAGE>

          information used in preparing such audited financial statements),
          certified by a firm of independent certified public accountants of
          recognized standing selected by Borrower, but acceptable to Agent
          (except for a qualification for a change in accounting principles with
          which the accountant concurs);

               (b) not later than thirty (30) days after the end of each month
          hereafter, including the last month of Borrower's fiscal year,
          unaudited interim financial statements of Borrower, as of the end of
          such month and of the portion of Borrower's financial year then
          elapsed, on a Consolidated basis, certified by the principal financial
          officer of ATP as prepared in accordance with GAAP (excluding
          incentive compensation accrual) and fairly presenting the financial
          position and results of Borrower on a combined basis, for such month
          and period subject only to changes from audit and year-end adjustments
          and except that such statements need not contain notes;

               (c) promptly after the sending or filing thereof, as the case may
          be, copies of any proxy statements, financial statements or reports
          which ATP or any other Borrower has made available to its shareholders
          and copies of any regular, periodic and special reports or
          registration statements which ATP or any other Borrower files with the
          Securities and Exchange Commission or any governmental authority which
          may be substituted therefor, or any national securities exchange;

               (d) promptly after the filing thereof, copies of any annual
          report to be filed in accordance with ERISA in connection with each
          Plan; and

               (e) such other data and information (financial and otherwise) as
          Agent, from time to time, may reasonably request, bearing upon or
          related to the Collateral or any Borrower's and each of its
          Subsidiaries' financial condition or results of operations.

     Concurrently with the delivery of the financial statements described in
clause (a) of this Section 8.1.3, Borrower shall forward to Agent a copy of the
accountants' letter to ATP's management that is prepared in connection with such
financial statements and also shall cause to be prepared and shall furnish to
Agent a certificate of the aforesaid certified public accountants certifying to
Agent and Lenders that, based upon their examination of the financial statements
of Borrower performed in connection with their examination of said financial
statements, they are not aware of any Default or Event of Default, or, if they
are aware of such Default or Event of Default, specifying the nature thereof,
and acknowledging, in a manner satisfactory to Agent, that they are aware that
Agent and Lenders are relying on such financial statements in making their
decisions with respect to the Loans. Concurrently with the delivery of the
financial statements described in clauses (a) and (b) of this Section 8.1.3, or
more frequently if requested by Agent, Borrower shall cause to be prepared and
furnished to Agent and each Lender a Compliance Certificate in the form of
Exhibit P hereto executed by the chief financial officer of Borrower.


<PAGE>

          8.1.4 Landlord and Storage Agreements. Provide Agent with copies of
     all agreements between any Borrower or any of its Subsidiaries and any
     landlord or warehouseman which owns any premises at which any Inventory
     may, from time to time, be kept.

          8.1.5 Guarantor Financial Statements. In addition to the financial
     statements of Borrower to be supplied pursuant to Section 8.1.3 hereof,
     deliver or cause to be delivered to Agent and each Lender financial
     statements for each Guarantor other than Borrower (if any), in form and
     substance satisfactory to Agent, at such intervals and covering such time
     periods as Agent may request.

          8.1.6 Projections. No later than thirty (30) days prior to the end of
     each fiscal year of Borrower, deliver to Agent and each Lender the budgeted
     Consolidated balance sheets, profit and loss statements, statement of
     changes and capitalization statements (all prepared on a consistent basis
     with the historical financial statements of Borrower, together with
     appropriate supporting details and a statement of underlying assumptions)
     for the forthcoming fiscal year, month by month, of Borrower.

          8.1.7 Taxes Pay and discharge, and cause each Subsidiary to pay and
     discharge, all Taxes prior to the date on which such Taxes become
     delinquent or penalties attach thereto, except and to the extent only that
     such Taxes are being Properly Contested.

          8.1.8 Compliance with Laws. Comply and cause each Subsidiary to
     comply, with all Applicable Law, including all laws, statutes, regulations
     and ordinances regarding the collection, payment and deposit of Taxes, and
     all ERISA and Environmental Laws, and obtain and keep in force any and all
     licenses, permits, franchises, or other governmental authorizations
     necessary to the ownership of its Properties or to the conduct of its
     business, which violation or failure to obtain might have a Material
     Adverse Effect.

          8.1.9 Insurance. In addition to the insurance required herein with
     respect to the Collateral, Borrower shall maintain, with financially sound
     and reputable insurers, insurance with respect to its Properties and
     business against such casualties and contingencies of such type (including
     product liability, business interruption, larceny, embezzlement, or other
     criminal misappropriation insurance) as is customary in the business of
     Borrower and in such amounts as are acceptable to Agent.

          8.1.10 Backlog Reports. In addition to all other reports and
     information to be supplied hereunder to Lenders, Borrower shall supply on a
     monthly basis to Agent and each Lender a report detailing the backlog of
     Revolving Credit Borrowers in satisfying its orders, such report to be in
     form acceptable to Lenders.

     8.2 Negative Covenants. During the term of this Agreement, and thereafter
for so long as there are any Obligations to any Lender, Borrower covenants that,
unless Requisite Lenders first consent thereto in writing, it will not:


<PAGE>

          8.2.1 Mergers; Consolidations; Acquisitions. Merge or consolidate, or
     permit any Subsidiary of Borrower to merge or consolidate, with any Person;
     nor acquire, nor permit any of its Subsidiaries to acquire, all or any
     substantial part of the Properties of any Person.

          8.2.2 Loans. Make, or permit any of the Subsidiaries to make, any
     loans or other advances of money (other than for salary, travel advances,
     advances against commissions and other similar advances in the ordinary
     course of business) to any Person.

          8.2.3 Total Indebtedness. Create, incur, assume, or suffer to exist,
     or permit any of its Subsidiaries to create, incur or suffer to exist, any
     Indebtedness, except:

               (a) Obligations owing to Agent or Lenders;

               (b) Subordinated Debt existing on the date of this Agreement or
          evidenced by any debt instruments (including, without limitation, any
          Put Notes) hereinafter issued by ATP to Back Bay upon exercise of the
          Registration Put Right or the Put Option, as the case may be, in
          accordance with the terms of the Warrant Purchase Agreement, as in
          effect on the date hereof;

               (c) Indebtedness of any Subsidiary of Borrower to Borrower;

               (d) accounts payable to trade creditors and current operating
          expenses (other than for Money Borrowed) which are not aged more than
          45 days from the due date, in each case incurred in the ordinary
          course of business and paid within such time period, unless the same
          are being Properly Contested;

               (e) obligations to pay Rentals permitted by Section 8.2.12;

               (f) Permitted Purchase Money Indebtedness;

               (g) contingent liabilities arising out of endorsements of checks
          and other negotiable instruments for deposit or collection in the
          ordinary course of business;

               (h) Indebtedness existing on the date hereof and described on
          Exhibit O hereto; and

               (i) Indebtedness not included in paragraphs (a) through (h) above
          which, as to Borrower, does not exceed at any time, in the aggregate,
          the sum of $500,000.

          8.2.4 Affiliate Transactions. Enter into, or be a party to, or permit
     any of its Subsidiaries to enter into or be a party to, any transaction
     with any Affiliate or


<PAGE>

     stockholder, except in the ordinary course of and pursuant to the
     reasonable requirements of Borrower's or such Subsidiary's business and
     upon fair and reasonable terms which are fully disclosed to each Lender and
     are no less favorable than would be obtained in a comparable arm's length
     transaction with a Person not an Affiliate or stockholder of Borrower or
     such Subsidiary.

          8.2.5 Limitation on Liens. Create or suffer to exist, or permit any of
     its Subsidiaries to create or suffer to exist, any Lien upon any of its
     Property, income or profits, whether now owned or hereafter acquired,
     except:

               (a) Liens at any time granted in favor of Agent, for the benefit
          of Lenders;

               (b) Liens for taxes (excluding any Lien imposed pursuant to any
          of the provisions of ERISA) not yet due or being Properly Contested;

               (c) Liens arising in the ordinary course of its business by
          operation of law or regulation, but only if (i) payment in respect of
          any such Lien is not at the time required or (ii) the Indebtedness
          secured by such Lien is being Properly Contested and such Lien does
          not materially detract from the value of its Property or materially
          impair the use thereof in the operation of its business;

               (d) Purchase Money Liens securing Permitted Purchase Money
          Indebtedness;

               (e) Liens securing Indebtedness of one of Borrower's Subsidiaries
          to Borrower or another such Subsidiary;

               (f) Rights of the United States of America or any department,
          agency or instrumentality thereof pursuant to the "Government Property
          Clause" and "Progress Payment Clause", if any, in any contract with
          Revolving Credit Borrowers;

               (g) such other Liens as appear on Exhibit N hereto; and

               (h) such other Liens as Requisite Lenders may hereafter approve
          in writing.

          8.2.6 Subordinated Debt. Make, or permit any of its Subsidiaries to
     make, any payment of all or any part of any Subordinated Debt or take any
     other action or omit to take any other action in respect of any
     Subordinated Debt (including, but not limited to, any amendment, supplement
     or modification of any agreement, instrument or document evidencing any
     such Subordinated Debt), except in accordance with the
     intercreditor/subordination agreement relative thereto.


<PAGE>

          8.2.7 Distributions. Declare or make, or permit any of its
     Subsidiaries to declare or make, any Distributions; provided, however, that
     so long as no Default or Event of Default then exists or would arise
     therefrom, any Borrower (other than ATP) may (a) pay dividends on its
     common stock for the purpose of permitting ATP to pay dividends on its
     preferred stock (provided, however, that the aggregate amount of all such
     dividends paid by all such Borrowers during any calendar year shall not
     exceed, in respect of the fiscal year ending December 31, 2000, $160,000,
     and, in respect of all other fiscal years, $80,000), and (b) pay Cash Taxes
     imposed or levied upon ATP, as and when due; provided, further, however,
     that upon the exercise of the Registration Put Right or the Put Option by
     Back Bay pursuant to Section 7.13(b) or 7.16, respectively, of the Warrant
     Purchase Agreement, ATP may pay to Back Bay the purchase price payable upon
     exercise of such Registration Put Right or Put Option, as the case may be,
     in the amount, in the form and in the manner contemplated by Sections
     7.13(b) and 7.16, respectively, of the Warrant Purchase Agreement, in each
     case, so long as (a) no Default or Event of Default then exists or would
     arise therefrom, (b) after giving effect to the payment of the cash portion
     of such purchase price, Availability is not less than $4,000,000, and (c)
     after giving effect to the payment of such purchase price, Borrower will be
     in compliance, on a pro forma basis, with each of the financial covenants
     set forth in Section 8.3 hereof; provided, further, however, that in the
     event any debt instruments (including, without limitation, any Put Notes)
     are issued by ATP to Back Bay upon exercise of the Registration Put Right
     or the Put Option by Back Bay, ATP may make scheduled payments of principal
     and interest when due on such debt instruments, in any case, so long as (x)
     no Default or Event of Default then exists or would arise therefrom, (y)
     after giving effect to the payment of any such principal or interest
     payments, Availability is not less than $4,000,000, and (z) after giving
     effect to the payment of any such principal or interest payments, Borrower
     will be in compliance, on a pro forma basis, with each of the financial
     covenants set forth in Section 8.3 hereof.

          8.2.8 Disposition of Assets. Sell, lease or otherwise dispose of any
     of, or permit any its Subsidiaries to sell, lease or otherwise dispose of
     any of its Properties, including any disposition of Property as part of a
     sale and leaseback transaction, to or in favor of any Person, except (a)
     sales of Inventory in the ordinary course of business for so long as no
     Event of Default exists hereunder, (b) a transfer of Property to Borrower
     by a Subsidiary of Borrower, (c) dispositions in connection with any
     Proposed Sale (provided, however, that prior to the consummation of the any
     Proposed Sale, Agent shall have been provided with definitive documentation
     related to such Proposed Sale, and such documentation and the terms thereof
     (including, without limitation, the purchase/sales price) shall be
     satisfactory to Agent in its sole discretion) and (d) other dispositions
     expressly authorized by this Agreement.

          8.2.9 Stock of Subsidiaries. Permit any of its Subsidiaries to issue
     any additional shares of its capital stock, except director's qualifying
     shares.

          8.2.10 Bill-and-Hold Sales, Etc. Make a sale to any customer on a
     bill-and-hold, guaranteed sale, sale and return, sale on approval or
     consignment basis, or any sale on a repurchase or return basis (other than
     those set forth on Schedule 8.2.10); provided,

<PAGE>

     however, that Revolving Credit Borrowers may make sales to the United
     States of America or any department, agency or instrumentality thereof, and
     may retain the sold goods on its premises if such goods have been approved
     by a government inspector having authority to approve such goods
     (hereinafter referred to as "Government Bill-and-Hold Goods").

          8.2.11 Restricted Investment. Make or have, or permit any of its
     Subsidiaries to make or have, any Restricted Investment.

          8.2.12 Operating Leases. Become, or permit any of its Subsidiaries to
     become, a lessee under any operating lease (other than a lease under which
     Borrower or any of its Subsidiaries is lessor) of Property if the aggregate
     Rentals payable during any current or future period of twelve (12)
     consecutive months under the lease in question and all other leases under
     which Borrower or any of its Subsidiaries is then lessee would exceed
     $2,000,000. The term "Rentals" means, as of the date of determination, all
     payments which the lessee is required to make by the terms of any lease.

          8.2.13 Tax Consolidation. File or consent to the filing of any
     consolidated income tax return with any Person other than its Subsidiaries
     or another Borrower.

          8.2.14 Compliance with Assignment of Claims Act. Fail to expeditiously
     assign to Agent, upon request of Agent, in a manner satisfactory to Agent,
     the right of Revolving Credit Borrowers to payment of all then existing and
     thereafter arising Accounts where the Account Debtor is the United States
     of America or any department, agency or instrumentality thereof, so as to
     comply with the Assignment of Claims Act of 1940 (31 U.S.C. ss. 203 et
     seq.).

          8.2.15 Alcore Investment Account. Transfer or deposit any monies or
     other Property to or in the Alcore Investment Account, other than the
     $700,000 of cash deposited in such account prior to the date hereof.

     8.3 Specific Financial Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to any Lender, Borrower
covenants that, unless otherwise consented to by Requisite Lenders in writing:

          8.3.1 Fixed Charge Ratio. Borrower shall maintain, on a Consolidated
     basis, for each time period set forth below, a Fixed Charge Ratio of not
     less than the ratio set forth below for each period corresponding thereto:

                              Period                                 Ratio
                              ------                                 -----

      (a)      Nine month period ending on September 30,       (a)   1.0 to 1.0
               2000, and twelve month period ending on
               December 31, 2000

<PAGE>

      (b)      Twelve month period ending respectively on      (b)   1.10 to 1.0
               each of March 31, 2001, June 30, 2001,
               September 30, 2001, and December 31, 2001

      (c)      Twelve month period ending respectively on      (c)   1.20 to 1.0
               each of March 31, 2002, June 30, 2002,
               September 30, 2002, December 31, 2002, March
               31, 2003, and June 30, 2003

          8.3.2 Interest Coverage Ratio. Borrower shall maintain, on a
     Consolidated basis, for each time period set forth below, an Interest
     Coverage Ratio of not less than the ratio set forth below for each period
     corresponding thereto:

                               Period                             Ratio
                               ------                             -----

       (a)      Nine month period ending September 30, 2000    (a)  1.80 to 1.0
                and twelve month period ending
                December 31, 2000

       (b)      Twelve month period ending respectively on     (b)  2.50 to 1.0
                each of March 31, 2001, June 30, 2001,
                September 30, 2001, and December 31, 2001

       (c)      Twelve month period ending respectively on     (c)  3.00 to 1.0
                each of March 31, 2002, June 30, 2002,
                September 30, 2000, December 31, 2002, March
                31, 2003, and June 30, 2003


<PAGE>

          8.3.3 Adjusted Tangible Net Worth. Borrower shall maintain, on a
     Consolidated basis, as of the end of each fiscal quarter set forth below,
     an Adjusted Tangible Net Worth of not less than the amount set forth below
     for each period corresponding thereto:

                           Date                             Amount
                           ----                             ------

     (a)   September 30, 2000                              (a)    $20,000,000

     (b)   December 31, 2000                               (b)    $22,000,000

     (c)   March 31, 2001, June 30, 2001, September 30,    (c)    $24,000,000
           2001, and December 31, 2001

     (d)   March 31, 2002, June 30, 2002, September 30,    (d)    $28,000,000
           2002, and December 31, 2002

     (e)   March 31, 2003 and June 30, 2003                (e)    $31,000,000

          8.3.4 Senior Indebtedness to EBITDA. Borrower shall maintain, on a
     Consolidated basis, as of the end of each fiscal quarter set forth below, a
     ratio of (a) Senior Indebtedness on such date to (b) Modified EBITDA of not
     greater than the ratio set forth below for each period corresponding
     thereto:

                              Date                               Ratio
                              ----                               -----

     (a)   September 30, 2000                               (a)    4.0 to 1.0

     (b)   December 31, 2000                                (b)    3.50 to 1.0

     (c)   March 31, 2001, June 30, 2001, September 30,     (c)    3.0 to 1.0
           2001, December 31, 2001, March 31, 2002,
           June 30, 2002, September 30, 2002, and
           December 31, 2002

     (d)   March 31, 2003 and June 30, 2003                 (d)    2.80 to 1.0

          8.3.5 Capital Expenditures. The Borrower shall not make Capital
     Expenditures (including, in connection with Capitalized Lease Obligations)
     which, in the aggregate, as to Borrower and its Subsidiaries, exceed the
     amount set forth below for each period corresponding thereto:

<PAGE>

                        Fiscal year ending                        Amount
                        ------------------                        ------

      (a)      December 31, 2000                        (a)      $2,500,000
      (b)      December 31, 2001                        (b)      $4,000,000
      (c)      December 31, 2002                        (c)      $4,500,000
      (d)      December 31, 2003                        (d)      $5,000,000


SECTION 9. CONDITIONS PRECEDENT

     Notwithstanding any other provision of this Agreement or any of the other
Loan Documents, and without affecting in any manner the rights of Agent or any
Lender under the other sections of this Agreement, no Lender shall be required
to make any Loan under this Agreement unless and until each of the following
conditions have been and continue to be satisfied:

     9.1 Documentation. Agent shall have received, in form and substance
satisfactory to Agent and its counsel, a duly executed copy of this Agreement
and the other Loan Documents, together with such additional documents,
instruments and certificates as Agent and its counsel shall require in
connection therewith from time to time, all in form and substance satisfactory
to Agent and its counsel.

     9.2 No Default. No Default or Event of Default shall exist.

     9.3 Other Loan Documents. Each of the conditions precedent set forth in the
other Loan Documents shall have been satisfied.

     9.4 Evidence of Perfection and Priority of Liens in Collateral. Agent shall
have received copies of all filing receipts or acknowledgments issued by any
governmental authority to evidence any filing or recordation necessary to
perfect the Liens of Agent, for the benefit of Lenders, in the Collateral and
evidence in form satisfactory to Agent that such Liens constitute valid and
perfected security interests and Liens, and that there are no other Liens upon
any Collateral except for Permitted Liens.

     9.5 Articles of Incorporation. Agent shall have received a copy of the
Articles or Certificate of Incorporation of each Borrower, and all amendments
thereto, certified by the Secretary of State or other appropriate official of
the jurisdiction of such Borrower's incorporation.

     9.6 Good Standing Certificates. Agent shall have received good standing
certificates for each Borrower, issued by the Secretary of State or other
appropriate official of Borrower's jurisdiction of incorporation and each
jurisdiction where the conduct of Borrower's business activities or ownership of
its Property necessitates qualification.

     9.7 Opinion Letter. Agent shall have received a favorable, written opinion
of counsel to Borrower, as to the transactions contemplated by this Agreement,
to be in form and substance satisfactory to Agent and Agent's counsel, in their
sole discretion.


<PAGE>

     9.8 Insurance. Agent shall have received copies of the casualty insurance
policies of Borrower, together with loss payable endorsements on Agent's
standard form of loss payee endorsement naming Agent, for the benefit of
Lenders, as loss payee and copies of Borrower's liability insurance policies,
together with endorsements naming Agent as an additional insured.

     9.9 Disbursement Letter. Agent shall have received written instructions
from Borrower directing application of proceeds of the initial Loans made
pursuant to this Agreement, and an initial Borrowing Base Certificate from
Borrower, in form satisfactory to Agent.

     9.10 Title Insurance Policies. Agent shall have received fully paid
mortgagee title insurance policies or endorsements (or binding commitments to
issue the same, marked to Agent's satisfaction to evidence the form of such
policies or endorsements to be delivered after the Closing Date), in standard
ALTA form issued by a title insurance company satisfactory to Agent, each in an
amount equal to not less than the fair market value of the real Property or
leasehold interest, as the case may be, subject to the relevant Mortgage,
insuring such Mortgage to create a valid Lien on all real Property and valid
Liens on the leasehold interest described therein in favor of Agent, for the
benefit of Lenders, with no exceptions that Agent shall not have approved in
writing.

     9.11 No Litigation. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of this
Agreement or the consummation of the transactions contemplated hereby.

     9.12 Stock Pledge Agreements. Agent shall have received the Stock Pledge
Agreements, in form and substance satisfactory to Agent, duly executed by ATP,
together with all the original stock certificates issued to ATP by each of
Alcore, Technical Products, Marion, DeLand and Lincoln, and together with a
stock power for each such stock certificate, duly executed in blank by ATP.

SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

     10.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default":

          10.1.1 Payment of Notes. Borrower shall fail to pay any installment of
     principal, interest or premium, if any, owing on the Revolving Credit
     Notes, Term Notes or the Equipment Notes on the due date of such
     installment.

          10.1.2 Payment of Other Obligations. Borrower shall fail to pay any of
     the Obligations that are not evidenced by the Revolving Credit Notes, Term
     Notes or the Equipment Notes on the due date thereof (whether due at stated
     maturity, on demand, upon acceleration or otherwise).


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          10.1.3 Misrepresentations. Any representation, warranty or other
     statement made or furnished to Agent or any Lender by or on behalf of any
     Borrower, any Subsidiary of any Borrower or Guarantor in this Agreement,
     any of the other Loan Documents or any instrument, certificate or financial
     statement furnished in compliance with or in reference thereto proves to
     have been false or misleading in any material respect when made or
     furnished or when reaffirmed pursuant to Section 7.2 hereof.

          10.1.4 Breach of Specific Covenants. Borrower shall fail or neglect to
     perform, keep or observe any covenant contained in Sections 6.1.1, 6.2,
     8.1.1, 8.1.3(a), (b), (c) or (d), 8.2 or 8.3 hereof on the date that
     Borrower is required to perform, keep or observe such covenant.

          10.1.5 Breach of Other Covenants. Borrower shall fail or neglect to
     perform, keep or observe any covenant contained in this Agreement (other
     than a covenant which is dealt with specifically elsewhere in this Section
     10.1) and the breach of such other covenant is not cured to Requisite
     Lenders' satisfaction within five (5) days after the sooner to occur of
     Borrower's receipt of notice of such breach from Agent or the date on which
     such failure or neglect first becomes known to any officer of Borrower.

          10.1.6 Default Under Security Documents/Other Agreements. Any event of
     default shall occur under, or Borrower shall default in the performance or
     observance of any term, covenant, condition or agreement contained in, any
     of the Security Documents or the Other Agreements and such default shall
     continue beyond any applicable grace period.

          10.1.7 Other Defaults. There shall occur any default or event of
     default on the part of Borrower under any agreement, document or instrument
     to which Borrower is a party or by which Borrower or any of its Property is
     bound, creating or relating to any Indebtedness (other than the Obligations
     or Subordinated Debt) if the payment or maturity of such Indebtedness is
     accelerated in consequence of such event of default or demand for payment
     of such Indebtedness is made.

          10.1.8 Uninsured Losses. Any material loss, theft, damage or
     destruction of any of the Collateral not fully covered (subject to such
     deductibles as Agent shall have permitted) by insurance.

          10.1.9 Adverse Changes. There shall occur any material adverse change
     in the financial condition or business prospects of the Loan Parties, taken
     as a whole.

          10.1.10 Insolvency and Related Proceedings. Any Loan Party shall cease
     to be Solvent or shall suffer the appointment of a receiver, trustee,
     custodian or similar fiduciary, or shall make an assignment for the benefit
     of creditors, or any petition for an order for relief shall be filed by or
     against any Loan Party under the Bankruptcy Code (if against a Loan Party,
     the continuation of such proceeding for more than thirty (30) days), or any
     Loan Party shall make any offer of settlement, extension or composition to
     such Loan Party's unsecured creditors generally.


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          10.1.11 Business Disruption; Condemnation. There shall occur a
     cessation of a substantial part of the business of any Borrower, any
     Subsidiary of any Borrower or any Guarantor for a period which
     significantly affects such Borrower's or such Guarantor's capacity to
     continue its business, on a profitable basis; or any Borrower, any
     Subsidiary of any Borrower or any Guarantor shall suffer the loss or
     revocation of any license or permit now held or hereafter acquired by such
     Borrower or such Guarantor which could reasonably be expected to have a
     Material Adverse Effect; or any Borrower or any Guarantor shall be
     enjoined, restrained or in any way prevented by court, governmental or
     administrative order from conducting all or any material part of its
     business affairs; or any material lease or agreement pursuant to which any
     Borrower or any Guarantor leases, uses or occupies any Property shall be
     canceled or terminated prior to the expiration of its stated term; or any
     material part of the Collateral shall be taken through condemnation or the
     value of such Property shall be materially impaired through condemnation.

          10.1.12 Change of Ownership. ATP shall cease to own and control,
     beneficially and of record, 100% of the issued and outstanding capital
     stock of each of Alcore, Technical Products, Marion, DeLand and Lincoln.

          10.1.13 ERISA. A Reportable Event shall occur which Agent, in its sole
     discretion, shall determine in good faith constitutes grounds for the
     termination by the Pension Benefit Guaranty Corporation of any Plan or for
     the appointment by the appropriate United States district court of a
     trustee for any Plan, or if any Plan shall be terminated or any such
     trustee shall be requested or appointed, or if any Borrower, any Subsidiary
     of any Borrower or any Guarantor is in "default" (as defined in Section
     4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
     resulting from such Borrower's, such Subsidiary's or such Guarantor's
     complete or partial withdrawal from such Plan.

          10.1.14 Challenge to Agreement. Any Borrower, any Subsidiary of any
     Borrower or any Guarantor, or any Affiliate of any of them, shall challenge
     or contest in any action, suit or proceeding the validity or enforceability
     of this Agreement, or any of the other Loan Documents, the legality or
     enforceability of any of the Obligations or the perfection or priority of
     any Lien granted to Agent.

          10.1.15 Repudiation of or Default Under Guaranty Agreement. Any
     Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed
     by such Guarantor, or shall repudiate such Guarantor's liability thereunder
     or shall be in default under the terms thereof.

          10.1.16 Criminal Forfeiture. Any Borrower, any Subsidiary of any
     Borrower or any Guarantor shall be criminally indicted or convicted under
     any law that could lead to a forfeiture of any Property of any Borrower,
     any Subsidiary of Borrower or any Guarantor.


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          10.1.17 Judgments. Any (a) money judgment is filed against any
     Borrower, any Subsidiary of any Borrower or any Guarantor or any of their
     respective Property, and such judgment shall remain unpaid, unsatisfied by
     insurance, and unstayed for more than thirty (30) days, whether or not
     consecutive, or (b) writ of attachment or similar process is filed against
     any Borrower, any Subsidiary of any Borrower or any Guarantor, or any of
     their respective Property, and such writ of attachment or similar process
     is not bonded or secured in an amount and manner reasonably satisfactory to
     Agent.

          10.1.18 Dominion Account. Borrower shall fail to maintain a Dominion
     Account or shall notify Agent that it intends to terminate its existing
     Dominion Account.

          10.1.19 Subordinated Debt. There shall occur any event of default on
     the part of Borrower under any agreement, document or instrument to which
     Borrower is a party or by which Borrower or any of its Property is bound,
     creating or relating to any Subordinated Debt, unless such event of default
     shall have been waived.

     10.2 Acceleration of the Obligations. Without in any way limiting the right
of Agent to demand payment of any portion of the Obligations payable on demand
in accordance with Section 3.2 hereof, upon or at any time after the occurrence
of an Event of Default, all or any portion of the Obligations shall, at the
option of Agent and/or Requisite Lenders and without presentment, demand protest
or further notice by Agent, become at once due and payable and Borrower shall
forthwith pay to Agent, the full amount of such Obligations; provided, however,
that upon the occurrence of an Event of Default specified in Section 10.1.10
hereof, all of the Obligations shall become automatically due and payable
without declaration, notice or demand by Agent and/or Lenders.

     10.3 Other Remedies. Upon and after the occurrence of an Event of Default,
Agent shall have and may exercise from time to time the following rights and
remedies:

          10.3.1 All of the rights and remedies of a secured party under the
     Code or under other Applicable Law, and all other legal and equitable
     rights to which Agent and/or any Lender may be entitled, all of which
     rights and remedies shall be cumulative and shall be in addition to any
     other rights or remedies contained in this Agreement or any of the other
     Loan Documents, and none of which shall be exclusive.

          10.3.2 The right to take immediate possession of the Collateral, and
     to (a) require Borrower to assemble the Collateral, at Borrower's expense,
     and make it available to Agent at a place designated by Agent which is
     reasonably convenient to both parties, and (b) enter any premises where any
     of the Collateral shall be located and to keep and store the Collateral on
     said premises until sold (and if said premises be the Property of Borrower,
     then Borrower agrees not to charge Agent for storage thereof).

          10.3.3 The right to sell or otherwise dispose of all or any Collateral
     in its then condition, or after any further manufacturing or processing
     thereof, at public or private sale or sales, with such notice as may be
     required by law, in lots or in bulk, for

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     cash or on credit, all as Agent, in its sole discretion, may deem
     advisable. Borrower agrees that any requirement of notice to Borrower of
     any proposed public or private sale or other disposition of Collateral by
     Agent shall be deemed reasonable notice thereof if given at least ten (10)
     days prior thereto, and such sale may be at such locations as Agent may
     designate in said notice. Agent shall have the right to conduct such sales
     on Borrower's premises, without charge therefor, and such sales may be
     adjourned from time to time in accordance with Applicable Law. Agent shall
     have the right to sell, lease or otherwise dispose of the Collateral, or
     any part thereof, for cash, credit or any combination thereof, and Agent
     may purchase all or any part of the Collateral at public or, if permitted
     by law, private sale and, in lieu of actual payment of such purchase price,
     may set off the amount of such price against the Obligations. The proceeds
     realized from the sale of any Collateral may be applied, after allowing two
     (2) Business Days for collection, first to the costs, expenses and
     attorneys' fees incurred by Agent or any Lender in collecting the
     Obligations, in enforcing the rights of Agent or such Lender under the Loan
     Documents and in collecting, retaking, completing, protecting, removing,
     storing, advertising for sale, selling and delivering any Collateral,
     second to the interest due upon any of the Obligations; and third, to the
     principal of the Obligations. If any deficiency shall arise, each Borrower
     shall remain jointly and severally liable to Agent and Lenders therefor.

          10.3.4 The right to exercise all of Agent's rights and remedies under
     the Mortgage with respect to any real Property forming a part of the
     Collateral.

     Agent is hereby granted a license or other right to use, without charge,
Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks and advertising matter, or any Property of a
similar nature, as it pertains to the Collateral, in advertising for sale and
selling any Collateral and Borrower's rights under all licenses and all
franchise agreements shall inure to Agent's benefit.

          10.3.5 Agent may, at its option, require Borrower to deposit with
     Agent funds equal to the LC Amount and, if Borrower fails to promptly make
     such deposit, Lender may advance such amount as a Revolving Credit Loan
     (whether or not an Out-of-Formula Condition is created thereby). Any such
     deposit or advance shall be held by Agent as a reserve to fund future
     payments on such LC Guaranties and future drawings against such Letters of
     Credit. At such time as all LC Guaranties have been paid or terminated and
     all Letters of Credit have been drawn upon or expired, any amounts
     remaining in such reserve shall be applied against any outstanding
     Obligations, or, if all Obligations have been indefeasibly paid in full,
     returned to Borrower.

     10.4 Remedies Cumulative; No Waiver. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of Borrower
contained in this Agreement and the other Loan Documents, or in any document
referred to herein or contained in any agreement supplementary hereto or in any
schedule or in any Guaranty Agreement given to Agent or contained in any other
agreement between Agent and/or any Lender and Borrower, heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and not
in derogation or substitution of any of the terms, covenants, conditions, or
agreements of Borrower

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herein contained. The failure or delay of Agent and/or any Lender to require
strict performance by Borrower of any provision of this Agreement or to exercise
or enforce any rights, Liens, powers, or remedies hereunder or under any of the
aforesaid agreements or other documents or security or Collateral shall not
operate as a waiver of such performance, Liens, rights, powers and remedies, but
all such requirements, Liens, rights, powers, and remedies shall continue in
full force and effect until all Loans and all other Obligations owing or to
become owing from Borrower to Agent and/or any Lender shall have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or any of the other Loan
Documents and no Event of Default by Borrower under this Agreement or any other
Loan Documents shall be deemed to have been suspended or waived by Agent and/or
any Lender, unless such suspension or waiver is by an instrument in writing
specifying such suspension or waiver and is signed by a duly authorized
representative of Agent and Requisite Lenders and directed to Borrower.

SECTION 11. ASSIGNMENTS AND PARTICIPATIONS; AGENT

     11.1 Assignments and Participations in Loans.

          (a) Each Lender may assign its rights and delegate its obligations
     under this Agreement to another Person; provided, that (i) such Lender
     shall first obtain the written consent of Agent, and, while no Default or
     Event of Default exists, Borrower, in each case which consent shall not be
     unreasonably withheld, (ii) the amount of Commitments and Loans of the
     assigning Lender being assigned shall in no event be less than the lesser
     of (A) $5,000,000 or (B) the entire amount of the Commitments and Loans of
     such assigning Lender, and (iii) (A) each such assignment shall be of a Pro
     Rata Share of all such assigning Lender's Loans and Commitments hereunder,
     and (B) the parties to such assignment shall execute and deliver to Agent
     for acceptance and recording a Lender Addition Agreement together with (1)
     a processing and recording fee of $5,000 payable to Agent and (2) the Notes
     originally delivered to the assigning Lender. Upon receipt of all of the
     foregoing, Agent shall notify Borrower of such assignment and Borrower
     shall comply with its obligations under the second sentence of Section 1.4.
     In the case of an assignment authorized under this Section 11.1, the
     assignee shall have, to the extent of such assignment, the same rights,
     benefits and obligations as it would if it were a Lender hereunder. The
     assigning Lender shall be relieved of its obligations hereunder with
     respect to its Commitment or assigned portion thereof. Borrower hereby
     acknowledges and agrees that any assignment will give rise to a direct
     obligation of Borrower to the assignee and that the assignee shall be
     considered to be a "Lender" hereunder. Borrower may not sell, assign or
     transfer any interest in this Agreement, any of the other Loan Documents,
     or any of the Obligations, or any portion thereof, including Borrower's
     rights, title, interests, remedies, powers, and duties hereunder or
     thereunder.

          (b) Each Lender may sell participations in all or any part of any
     Loans made by it to another Person; provided, that any such participation
     shall be in a minimum amount of $5,000,000, and provided, further, that all
     amounts payable by Borrower hereunder shall be determined as if that Lender
     had not sold such participation and the holder of any such participation
     shall not be entitled to require such Lender to take or

<PAGE>

     omit to take any action hereunder except action directly effecting (i) any
     reduction in the principal amount, interest rate or fees payable with
     respect to any Loan in which such holder participates; (ii) any extension
     of the Termination Date or the date fixed for any payment of principal,
     interest or fees payable with respect to any Loan in which such holder
     participates; and (iii) any release of substantially all of the Collateral
     (other than in accordance with the terms of this Agreement or the Loan
     Documents). Borrower hereby acknowledges and agrees that the Participant
     under each participation shall for purposes of Sections 3.9, 3.10, 3.11,
     3.12, 3.15, 11.4 and 12.3 be considered to be a "Lender" hereunder.

          (c) Except as otherwise provided in this Section 11.1 no Lender shall,
     as between Borrower and that Lender, be relieved of any of its obligations
     hereunder as a result of any sale, assignment, transfer or negotiation of,
     or granting of participation in, all or any part of the Loans or other
     Obligations owed to such Lender. Each Lender may furnish any information
     concerning Borrower and its Subsidiaries in the possession of that Lender
     from time to time to assignees and participants (including prospective
     assignees and participants) provided that the Persons obtaining such
     information agrees to maintain the confidentiality of such information to
     the extent required by Section 12.22.

          (d) Notwithstanding any other provision set forth in this Agreement,
     any Lender may at any time create a security interest in all or any portion
     of its rights under this Agreement (including, without limitation, the
     Loans owing to it and the Notes held by it in favor of any Federal Reserve
     Bank in accordance with Regulation A of the Board of Governors of the
     Federal Reserve System).

          (e) Borrower agrees to use its reasonable best efforts to assist any
     Lender in assigning or selling participations in all or any part of any
     Loans made by such Lender to another Person identified by such Lender.

     11.2 Agent.

          (a) Appointment. Each Lender hereby designates and appoints Fleet as
     its agent under this Agreement and the Loan Documents, and each Lender
     hereby irrevocably authorizes Agent to take such action or to refrain from
     taking such action on its behalf under the provisions of this Agreement and
     the Loan Documents and to exercise such powers as are set forth herein or
     therein, together with such other powers as are reasonably incidental
     thereto. Agent is authorized and empowered by Lenders to amend, modify, or
     waive any provisions of this Agreement or the other Loan Documents on
     behalf of Lenders subject to the requirement that certain of Lenders'
     consent be obtained in certain instances as provided in Section 12.4. Agent
     agrees to act as such on the express conditions contained in this Section
     11.2. The provisions of this Section 11.2 are solely for the benefit of
     Agent and Lenders and neither Borrower nor any Loan Party shall have any
     rights as a third party beneficiary of any of the provisions hereof. In
     performing its functions and duties under this Agreement, Agent shall act
     solely as an administrative representative of Lenders and does not assume
     and shall not be deemed to

<PAGE>

     have assumed any obligation toward or relationship of agency or trust with
     or for Lenders, Borrower or any Loan Party. Agent may perform any of its
     duties hereunder, or under the Loan Documents, by or through its agents or
     employees.

          (b) Nature of Duties. Agent shall have no duties, obligations or
     responsibilities except those expressly set forth in this Agreement or in
     the Loan Documents. The duties of Agent shall be mechanical and
     administrative in nature. Agent shall not have by reason of this Agreement
     a fiduciary relationship in respect of any Lender. Each Lender shall make
     its own independent investigation of the financial condition and affairs of
     Borrower in connection with the extension of credit hereunder and shall
     make its own appraisal of the creditworthiness of Borrower, and Agent shall
     have no duty or responsibility, either initially or on a continuing basis,
     to provide any Lender with any credit or other information with respect
     thereto, whether coming into its possession before the Closing Date or at
     any time or times thereafter. If Agent seeks the consent or approval of any
     Lenders to the taking or refraining from taking any action hereunder, then
     Agent shall send notice thereof to each Lender. Agent shall promptly notify
     each Lender any time that the applicable percentage of Lenders have
     instructed Agent to act or refrain from acting pursuant hereto.

          (c) Rights, Exculpation, Etc. Neither Agent nor any of its officers,
     directors, employees or agents shall be liable to any Lender for any action
     taken or omitted by them hereunder or under any of the Loan Documents, or
     in connection herewith or therewith, except that Agent shall be obligated
     on the terms set forth herein for performance of its express obligations
     hereunder, and except that Agent shall be liable with respect to its own
     gross negligence or willful misconduct. Agent shall not be liable for any
     apportionment or distribution of payments made by it in good faith and if
     any such apportionment or distribution is subsequently determined to have
     been made in error the sole recourse of any Lender to whom payment was due
     but not made, shall be to recover from other Lenders any payment in excess
     of the amount to which they are determined to be entitled (and such other
     Lenders hereby agree to return to such Lender any such erroneous payments
     received by them). In performing its functions and duties hereunder, Agent
     shall exercise the same care which it would in dealing with loans for its
     own account, but Agent shall not be responsible to any Lender for any
     recitals, statements, representations or warranties herein or for the
     execution, effectiveness, genuineness, validity, enforceability,
     collectibility, or sufficiency of this Agreement or any of the Loan
     Documents or the transactions contemplated thereby, or for the financial
     condition of any Loan Party. Agent shall not be required to make any
     inquiry concerning either the performance or observance of any of the
     terms, provisions, or conditions of this Agreement or any of the Loan
     Documents or the financial condition of any Loan Party, or the existence or
     possible existence of any Default or Event of Default. Agent may at any
     time request instructions from Lenders with respect to any actions or
     approvals which by the terms of this Agreement or of any of the Loan
     Documents Agent is permitted or required to take or to grant, and Agent
     shall be absolutely entitled to refrain from taking any action or to
     withhold any approval and shall not be under any liability whatsoever to
     any Person for refraining from taking any action or withholding any
     approval under any of the Loan Documents until it shall have received such
     instructions from the applicable

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     percentage of the Lenders. Without limiting the foregoing, no Lender shall
     have any right of action whatsoever against Agent as a result of Agent
     acting or refraining from acting under this Agreement or any of the other
     Loan Documents in accordance with the instructions of the applicable
     percentage of the Lenders and notwithstanding the instructions of Lenders,
     Agent shall have no obligation to take any action if it, in good faith
     believes that such action exposes Agent to any liability.

          (d) Reliance. Agent shall be entitled to rely upon any written
     notices, statements, certificates, orders or other documents or any
     telephone message or other communication (including any writing, telex,
     telecopy or telegram) believed by it in good faith to be genuine and
     correct and to have been signed, sent or made by the proper Person, and
     with respect to all matters pertaining to this Agreement or any of the Loan
     Documents and its duties hereunder or thereunder, upon advice of counsel
     selected by it. Agent shall be entitled to rely upon the advice of legal
     counsel, independent accountants, and other experts selected by Agent in
     its sole discretion.

          (e) Indemnification. Each Lender, severally, agrees to reimburse and
     indemnify Agent for and against any and all liabilities, obligations,
     losses, damages, penalties, actions, judgments, suits, costs, expenses,
     advances, or disbursements of any kind or nature whatsoever which may be
     imposed on, incurred by, or asserted against Agent in any way relating to
     or arising out of this Agreement or any of the Loan Documents or any action
     taken or omitted by Agent under this Agreement for any of the Loan
     Documents, in proportion to each Lender's Pro Rata Share of the Total
     Credit Facility, respectively; provided, however, that no Lender shall be
     liable for any portion of such liabilities, obligations, losses, damages,
     penalties, actions, judgments, suits, costs, expenses, advances or
     disbursements resulting from Agent's gross negligence or willful
     misconduct. The obligations of Lenders under this Section 11.2(e) shall
     survive the payment in full of the Obligations and the termination of this
     Agreement.

          (f) Fleet Individually. With respect to its Commitments and the Loans
     made by it, and the Notes issued to it, Fleet shall have and may exercise
     the same rights and powers hereunder and is subject to the same obligations
     and liabilities as and to the extent set forth herein for any other Lender.
     The terms "Lenders" or "Requisite Lenders" or any similar terms shall,
     unless the context clearly otherwise indicates, include Fleet in its
     individual capacity as a Lender or one of the Requisite Lenders. Fleet may
     lend money to, and generally engage in any kind of banking, trust or other
     business with any Loan Party as if it were not acting as Agent pursuant
     hereto.

          (g) Successor Agent.

               (i) Resignation. Agent may resign from the performance of all its
          functions and duties hereunder at any time by giving at least thirty
          (30) Business Days' prior written notice to Borrower and the Lenders.
          Such resignation shall take effect upon the acceptance by a successor
          Agent of appointment pursuant to clause (ii) below or as otherwise
          provided below.


<PAGE>

               (ii) Appointment of Successor. Upon any such notice of
          resignation pursuant to clause (g)(i) above, Requisite Lenders shall,
          upon receipt of Borrower's prior consent which shall not unreasonably
          be withheld, appoint a successor Agent. If a successor Agent shall not
          have been so appointed within said thirty (30) Business Day period,
          the retiring Agent, upon notice to Borrower, shall then appoint a
          successor Agent who shall serve as Agent until such time, as Requisite
          Lenders, upon receipt of Borrower's prior written consent which shall
          not be unreasonably withheld, appoint a successor Agent as provided
          above.

               (iii) Successor Agent. Upon the acceptance of any appointment as
          Agent under the Loan Documents by a successor Agent, such successor
          Agent shall thereupon succeed to and become vested with all the
          rights, powers, privileges and duties of the retiring Agent, and the
          retiring Agent shall be discharged from its duties and obligations
          under the Loan Documents. After any retiring Agent's resignation as
          Agent under the Loan Documents, the provisions of this Section 11.2
          shall inure to its benefit as to any actions taken or omitted to be
          taken by it while it was Agent under the Loan Documents.

          (h)  Collateral Matters.

               (i) Release of Collateral. Lenders hereby irrevocably authorize
          Agent, at its option and in its discretion, to release any Lien
          granted to or held by Agent upon any property covered by this
          Agreement or the Loan Documents (A) upon termination of the
          Commitments and payment and satisfaction of all Obligations; (B)
          constituting property being sold or disposed of if Borrower certifies
          to Agent that the sale or disposition is made in compliance with the
          provisions of this Agreement (and Agent may rely in good faith
          conclusively on any such certificate, without further inquiry); or (C)
          constituting property leased to Borrower under a lease which has
          expired or been terminated in a transaction permitted under this
          Agreement or is about to expire and which has not been, and is not
          intended by Borrower to be, renewed or extended. In addition, during
          any fiscal year of Borrower (X) Agent may release Collateral having a
          book value of not more than $2,000,000, (Y) Agent, with the consent of
          Requisite Lenders, may release Collateral having a book value greater
          than $2,000,000.

               (ii) Confirmation of Authority; Execution of Releases. Without in
          any manner limiting Agent's authority to act without any specific or
          further authorization or consent by Lenders (as set forth in Section
          11.2(h)(i)), each Lender agrees to confirm in writing, upon request by
          Borrower, the authority to release any property covered by this
          Agreement or the Loan Documents conferred upon Agent under Section
          11.2(h)(i). So long as no Event of Default is then continuing, upon
          receipt by Agent of confirmation from the requisite percentage of
          Lenders, of its authority to release any particular item or types of
          property covered by this Agreement or the Loan Documents, and upon at
          least five (5) Business Days prior written request by Borrower, Agent
          shall (and is hereby irrevocably authorized by Lenders to) execute
          such documents as may be

<PAGE>

          necessary to evidence the release of the Liens granted to Agent for
          the benefit of Lenders herein or pursuant hereto upon such Collateral;
          provided, however, that (A) Agent shall not be required to execute any
          such document on terms which, in Agent's opinion, would expose Agent
          to liability or create any obligation or entail any consequence other
          than the release of such Liens without recourse or warranty, and (B)
          such release shall not in any manner discharge, affect or impair the
          Obligations or any Liens upon (or obligations of any Loan Party, in
          respect of), all interests retained by any Loan Party, including,
          without limitation, the proceeds of any sale, all of which shall
          continue to constitute part of the property covered by this Agreement
          or the Loan Documents.

               (iii) Absence of Duty. Agent shall have no obligation whatsoever
          to any Lender or any other Person to assure that the property covered
          by this Agreement or the Loan Documents exists or is owned by Borrower
          or is cared for, protected or insured or has been encumbered or that
          the Liens granted to Agent on behalf of Lenders herein or pursuant
          hereto have been properly or sufficiently or lawfully created,
          perfected, protected or enforced or are entitled to any particular
          priority, or to exercise at all or in any particular manner or under
          any duty of care, disclosure, or fidelity, or to continue exercising,
          any of the rights, authorities and powers granted or available to
          Agent in this Section 11.2(h) or in any of the Loan Documents, it
          being understood and agreed that in respect of the property covered by
          this Agreement or the Loan Documents or any act, omission, or event
          related thereto, Agent may act in any manner it may deem appropriate,
          in its discretion, given Agent's own interest in property covered by
          this Agreement or the Loan Documents as one of the Lenders and that
          Agent shall have no duty or liability whatsoever to any of the other
          Lenders; provided, that Agent shall exercise the same care which it
          would in dealing with loans for its own account.

          (i) Agency for Perfection. Each Lender hereby appoints each other
     Lender as agent for the purpose of perfecting Lenders' security interest in
     Collateral which, in accordance with Article 9 of the Code in any
     applicable jurisdiction, can be perfected only by possession. Should any
     Lender (other than Agent) obtain possession of any such Collateral, such
     Lender shall notify Agent thereof, and, promptly upon Agent's request
     therefor, shall deliver such Collateral to Agent or in accordance with
     Agent's instructions.

          (j) Exercise of Remedies. Each Lender agrees that it will not have any
     right individually to enforce or seek to enforce this Agreement or any Loan
     Document or to realize upon any collateral security for the Loans, it being
     understood and agreed that such rights and remedies may be exercised only
     by Agent.

     11.3 Consents.

          (a) In the event Agent requests the consent of a Lender and does not
     receive a written denial thereof within five (5) Business Days after such
     Lender's receipt of such request, then such Lender will be deemed to have
     given such consent.


<PAGE>

          (b) In the event Agent requests the consent of a Lender and such
     consent is denied, then Fleet may, at its option, require such Lender to
     assign its interest in the Loans to Fleet for a price equal to the then
     outstanding principal amount thereof plus accrued and unpaid interest and
     fees due such Lender, which interest and fees will be paid when collected
     from Borrower. In the event that Fleet elects to require any Lender to
     assign its interest to Fleet, Fleet will so notify such Lender in writing
     within forty-five (45) days following such Lender's denial, and such Lender
     will assign its interest to Fleet no later than five (5) days following
     receipt of such notice.

     11.4 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender is hereby authorized by Borrower at any time or from time to time,
with reasonably prompt subsequent notice to Borrower or to any other Person (any
prior or contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (a) balances held by such Lender or such
holder at any of its offices for the account of Borrower or any of its
Subsidiaries (regardless of whether such balances are then due to Borrower or
its Subsidiaries), and (b) other property at any time held or owing by such
Lender or such holder to or for the credit or for the account of Borrower or any
of its Subsidiaries, against and on account of any of the Obligations which are
not paid when due; except that no Lender or any such holder shall exercise any
such right without the prior written consent of Agent. Any Lender which has
exercised its right to set off shall, to the extent the amount of any such set
off exceeds its Pro Rata Share of the Obligations, purchase for cash (and the
other Lenders or holders shall sell) participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share such excess with each other Lender or holder in accordance
with their respective Pro Rata Shares. Borrower agrees, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and may sell participations in such excess to other Lenders and holders, and (b)
any Lender or holder so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of Loans and other
Obligations in the amount of such participation.

     11.5 Disbursement of Funds. Agent may, on behalf of Lenders, disburse funds
to Borrower for Loans requested. Each Lender shall reimburse Agent on demand for
all funds disbursed on its behalf by Agent, or if Agent so requests, each Lender
will remit to Agent its Pro Rata Share of any Loan before Agent disburses same
to Borrower. If Agent elects to require that funds be made available prior to
disbursement to Borrower, Agent shall advise each Lender by telephone, telex or
telecopy of the amount of such Lender's Pro Rata Share of such requested Loan no
later than (a) one (1) Business Day prior to the funding date applicable thereto
for Eurodollar Loans and (b) by 1:00 p.m. Dallas, Texas time on the funding date
for Base Rate Loans, and each such Lender shall pay Agent such Lender's Pro Rata
Share of such requested Loan, in same day funds, by wire transfer to Agent's
account not later than 10:00 a.m. Dallas, Texas time on such funding date for
Eurodollar Loans and 3:00 p.m. Dallas, Texas time for Base Rate Loans. If any
Lender fails to pay the amount of its Pro Rata Share forthwith upon Agent's

<PAGE>

demand, Agent shall promptly notify Borrower, and Borrower shall immediately
repay such amount to Agent. Any repayment required pursuant to this Section 11.5
shall be without premium or penalty. Nothing in this Section 11.5 or elsewhere
in this Agreement or the other Loan Documents, including without limitation the
provisions of Section 11.6, shall be deemed to require Agent to advance funds on
behalf of any Lender or to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Agent or Borrower may have
against any Lender as a result of any default by such Lender hereunder.

     11.6 Settlements, Payments and Information.

          (a) Revolving Credit Loans and Payments; Fee Payments.

               (i) The Revolving Credit Loans may fluctuate from day to day
          through Agent's disbursement of funds to, and receipt of funds from,
          Borrower. In order to minimize the frequency of transfers of funds
          between Agent and each Lender notwithstanding terms to the contrary
          set forth in Section 3 and Section 11.5, Revolving Credit Loans and
          repayments may be settled according to the procedures described in
          Sections 11.6(a)(ii) and 11.6(a)(iii) of this Agreement. Payments of
          principal, interest and fees in respect of the Term Loan and Equipment
          Loan will be settled on the Business Day received in accordance with
          the provisions of Section 2. Notwithstanding these procedures, each
          Lender's obligation to fund its Pro Rata Share of any advances made by
          Agent to Borrower will commence on the date such advances are made by
          Agent. Such payments will be made by such Lender without set-off,
          counterclaim or reduction of any kind.

               (ii) Once each week, or more frequently (including daily), if
          Agent so elects (each such day being a "Settlement Date"), Agent will
          advise each Lender by 1 p.m. Dallas, Texas time by telephone, telex,
          or telecopy of the amount of each such Lender's Pro Rata Share of the
          Revolving Credit Loans. In the event payments are necessary to adjust
          the amount of such Lender's share of the Revolving Credit Loans to
          such Lender's Pro Rata Share of the Revolving Credit Loans, the party
          from which such payment is due will pay the other, in same day funds,
          by wire transfer to the other's account not later than 3:00 p.m.
          Dallas, Texas time on the Business Day following the Settlement Date.

               (iii) On the first Business Day of each month ("Interest
          Settlement Date"), Agent will advise each Lender by telephone, telefax
          or telecopy of the amount of interest and fees charged to and
          collected from Borrower for the proceeding month in respect of the
          Revolving Credit Loans. Provided that such Lender has made all
          payments required to be made by it under this Agreement, Agent will
          pay to such Lender, by wire transfer to such Lender's account (as
          specified by such Lender on the signature page of this Agreement as
          amended by such Lender from time to time after the date hereof
          pursuant to the notice provisions contained herein or in the
          applicable Lender Addition Agreement) not

<PAGE>

          later than 3 p.m. Dallas, Texas time on the next Business Day
          following the Interest Settlement Date such Lender's share of such
          interest and fees.

          (b) Availability of Lenders' Pro Rata Share.

               (i) Unless Agent has been notified by a Lender prior to any
          proposed funding date of such Lender's intention not to fund its Pro
          Rata Share of the Revolving Credit Loan amount requested by Borrower,
          Agent may assume that such Lender will make such amount available to
          Agent on the proposed funding date or the Business Day following the
          next Settlement Date, as applicable. If such amount is not, in fact,
          made available to Agent by such Lender when due, Agent will be
          entitled to recover such amount on demand from such Lender without
          set-off, counterclaim, or deduction of any kind.

               (ii) Nothing contained in this Section 11.6(b) will be deemed to
          relieve a Lender of its obligation to fulfill its Commitments or to
          prejudice any rights Agent or Borrower may have against such Lender as
          a result of any default by such Lender under this Agreement.

               (iii) Without limiting the generality of the foregoing, each
          Lender shall be obligated to fund its Pro Rata Share of any Revolving
          Credit Loans made with respect to any draw on a Lender Letter of
          Credit.

          (c) Return of Payments.

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

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

     11.7 Dissemination of Information. Agent will provide Lenders with any
information received by Agent from Borrower which is required to be provided to
a Lender hereunder; provided, however, that Agent shall not be liable to Lenders
for any failure to do so, except to the extent that such failure is attributable
to Agent's gross negligence or willful misconduct.


<PAGE>

SECTION 12. MISCELLANEOUS

     12.1 The Term "Borrower" or "Borrowers". All references to "Borrower" or
"Borrowers" herein shall refer to and include each of ATP, Alcore, Technical
Products, Marion, DeLand and Lincoln separately and all representations
contained herein shall be deemed to be separately made by each of them, and each
of the covenants, agreements and obligations set forth herein shall be deemed to
be the joint and several covenants, agreements and obligations of them. Any
notice, request, consent, report or other information or agreement delivered to
Lender by any Borrower shall be deemed to be ratified by, consented to and also
delivered by the other Borrower. Each Borrower recognizes and agrees that each
covenant and agreement of "Borrower" or "Borrowers" under this Agreement and the
other Loan Documents shall create a joint and several obligation of the
Borrowers, which may be enforced against Borrowers, jointly, or against each
Borrower separately. Without limiting the terms of this Agreement and the other
Loan Documents, security interests granted under this Agreement and other Loan
Documents in properties, interests, assets and collateral shall extend to the
properties, interests, assets and collateral of each Borrower. Similarly, the
term "Obligations" shall include, without limitation, all obligations,
liabilities and indebtedness of such corporations, or any one of them, to
Lenders, whether such obligations, liabilities and indebtedness shall be joint,
several, joint and several or individual.

     12.2 Power of Attorney. Borrower hereby irrevocably designates, makes,
constitutes and appoints Agent (and all Persons designated by Agent) as
Borrower's true and lawful attorney (and agent-in-fact) and Agent, or Agent's
agent, may, without notice to Borrower and in either Borrower's or Agent's name,
but at the cost and expense of Borrower:

          12.2.1 At such time or times as Agent or said agent, in its sole
     discretion, may determine, endorse Borrower's name on any checks, notes,
     acceptances, drafts, money orders or any other evidence of payment or
     proceeds of the Collateral which come into the possession of Agent or under
     Agent's control.

          12.2.2 At such time or times upon or after the occurrence of an Event
     of Default as Agent or its agent in its sole discretion may determine: (a)
     demand payment of the Accounts from the Account Debtors, enforce payment of
     the Accounts by legal proceedings or otherwise, and generally exercise all
     of Borrower's rights and remedies with respect to the collection of the
     Accounts; (b) settle, adjust, compromise, discharge or release any of the
     Accounts or other Collateral or any legal proceedings brought to collect
     any of the Accounts or other Collateral; (c) sell or assign any of the
     Accounts and other Collateral upon such terms, for such amounts and at such
     time or times as Agent deems advisable; (d) take control, in any manner, of
     any item of payment or proceeds relating to any Collateral; (e) prepare,
     file and sign Borrower's name to a proof of claim in bankruptcy or similar
     document against any Account Debtor or to any notice of lien, assignment or
     satisfaction of lien or similar document in connection with any of the
     Collateral; (f) receive, open and dispose of all mail addressed to Borrower
     and to notify postal authorities to change the address for delivery thereof
     to such address as Agent may designate; (g) endorse the name of Borrower
     upon any of the items of payment or proceeds relating to any Collateral and
     deposit the same to the account of Agent on

<PAGE>

     account of the Obligations; (h) endorse the name of Borrower upon any
     chattel paper, document, instrument, invoice, freight bill, bill of lading
     or similar document or agreement relating to the Accounts, Inventory and
     any other Collateral; (i) use Borrower's stationery and sign the name of
     Borrower to verifications of the Accounts and notices thereof to Account
     Debtors; (j) use the information recorded on or contained in any data
     processing equipment and computer hardware and software relating to the
     Accounts, Inventory, Equipment and any other Collateral; (k) make and
     adjust claims under policies of insurance; and (l) do all other acts and
     things necessary, in Agent's determination, to fulfill Borrower's
     obligations under this Agreement.

     12.3 Indemnity. BORROWER HEREBY INDEMNIFIES, HOLDS HARMLESS, AND SHALL
DEFEND AGENT AND EACH LENDER AND THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS,
COUNSEL AND EMPLOYEES ("INDEMNIFIED PERSONS") FROM AND AGAINST ANY AND ALL
LOSSES, LIABILITIES, DAMAGES, COSTS, EXPENSES, SUITS, ACTIONS AND PROCEEDINGS
("LOSSES") EVER SUFFERED OR INCURRED BY ANY INDEMNIFIED PERSON ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION CONTEMPLATED HEREBY,
INCLUDING, WITHOUT LIMITATION, ANY LOSSES CAUSED BY THE NEGLIGENCE OF ANY SUCH
INDEMNIFIED PERSON, BUT NOT INCLUDING ANY (I) LOSSES CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY SUCH INDEMNIFIED PERSON OR (II) LOSSES
SUFFERED BY ANY INDEMNIFIED PERSON AS THE RESULT OF ANY ACTION, SUIT OR
PROCEEDING INSTITUTED AGAINST ANY SUCH INDEMNIFIED PERSON BY ANOTHER INDEMNIFIED
PERSON, AND BORROWER SHALL REIMBURSE AGENT, EACH LENDER AND EACH OTHER
INDEMNIFIED PERSON FOR ANY EXPENSES (INCLUDING IN CONNECTION WITH THE
INVESTIGATION OF, PREPARATION FOR OR DEFENSE OF ANY ACTUAL OR THREATENED CLAIM,
ACTION OR PROCEEDING ARISING THEREFROM, INCLUDING ANY SUCH COSTS OF RESPONDING
TO DISCOVERY REQUESTS OR SUBPOENAS, REGARDLESS OF WHETHER LENDER OR SUCH OTHER
INDEMNIFIED PERSON IS A PARTY THERETO). WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THIS INDEMNITY SHALL EXTEND TO ANY CLAIMS ASSERTED AGAINST AGENT OR
ANY OTHER INDEMNIFIED PERSON BY ANY PERSON UNDER ANY ENVIRONMENTAL LAWS OR
SIMILAR LAWS BY REASON OF BORROWER'S OR ANY OTHER PERSON'S FAILURE TO COMPLY
WITH LAWS APPLICABLE TO SOLID OR HAZARDOUS WASTE MATERIALS OR OTHER TOXIC
SUBSTANCES. BORROWER MAY SELECT COUNSEL WITH RESPECT TO ANY LOSSES; PROVIDED,
HOWEVER, EACH INDEMNIFIED PERSON SHALL HAVE THE RIGHT TO MONITOR THE PROGRESS OF
ANY CLAIMS, SUITS AND ADMINISTRATIVE PROCEEDINGS DEFENDED BY BORROWER HEREUNDER
WITH COUNSEL OF SUCH INDEMNIFIED PERSON'S CHOICE, OR CONDUCT ITS DEFENSE THROUGH
COUNSEL OF SUCH INDEMNIFIED PERSON'S CHOICE, IN THE EVENT THAT (I) SUCH
INDEMNIFIED PERSON DETERMINES IN GOOD FAITH THAT THE CONDUCT OF ITS DEFENSE BY
BORROWER COULD BE MATERIALLY PREJUDICIAL TO SUCH INDEMNIFIED PERSON'S INTERESTS
OR THAT OTHER REASONABLE GROUNDS EXIST WHICH DEMONSTRATE A LACK OF EFFECTIVENESS
OR HIGH LEVEL OF QUALITY IN THE CONDUCT OF SUCH DEFENSE BY BORROWER, AND (II)
PRIOR TO RETAINING

<PAGE>

SUCH COUNSEL FOR SUCH PURPOSE, SUCH INDEMNIFIED PERSON SHALL CONSULT WITH
BORROWER AND SHALL ATTEMPT IN GOOD FAITH TO AGREE UPON COUNSEL TO CONDUCT THE
DEFENSE ON BEHALF OF BORROWER AND SUCH INDEMNIFIED PERSON, AND IN EACH CASE THE
FEES AND DISBURSEMENTS OF SUCH COUNSEL SHALL BE PAID BY BORROWER; PROVIDED,
HOWEVER, THAT IF SUCH MUTUAL AGREEMENT IS NOT REACHED WITHIN A REASONABLE TIME
ON SELECTING COUNSEL, THEN SUCH INDEMNIFIED PERSON MAY RETAIN ITS OWN COUNSEL AT
BORROWER'S EXPENSE. NOTWITHSTANDING ANY CONTRARY PROVISION OF THIS AGREEMENT,
THE OBLIGATION OF BORROWER UNDER THIS SECTION 11.3 SHALL SURVIVE THE PAYMENT IN
FULL OF THE OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT.

     12.4 Amendments and Waivers.

          (a) Except as otherwise provided herein, no amendment, modification,
     termination, or waiver of any provision of this Agreement or any Loan
     Document, or consent to any departure by any Loan Party therefrom, shall in
     any event be effective unless the same shall be in writing and signed by
     Requisite Lenders or Agent, as applicable; provided, that no amendment,
     modification, termination, or waiver shall, unless in writing and signed by
     all applicable Lenders, do any of the following: (i) increase the
     Commitment of any Lender; (ii) reduce the principal of, rate of interest on
     or fees payable with respect to any Loan; (iii) reduce the rate of interest
     with respect to any Letter of Credit; (iv) extend the scheduled due date of
     any installment of principal, interest, or fees payable with respect to the
     Loans; (v) change the percentage of the Commitments or of the aggregate
     unpaid principal amount of the Loans, or the percentage of Lenders which
     shall be required for Lenders or any of them to take any action hereunder;
     (vi) release all or substantially all of the Collateral (provided, that
     consent to such release shall not be required if such release is made after
     and during the continuance of an Event of Default in connection with the
     sale or disposition of the Collateral by Agent pursuant to Section 10.3.3);
     (vii) amend or waive this Section 12.3 or the definitions of the terms used
     in this Section 12.3 insofar as the definitions affect the substance of
     this Section 12.3; (viii) consent to the assignment or other transfer by
     any Loan Party of any of its rights and obligations under any Loan
     Document; and (ix) increase the percentages contained in the definition of
     Borrowing Base; and, provided, further, that no amendment, modification,
     termination or waiver affecting the rights or duties of Agent under any
     Loan Document shall in any event be effective, unless in writing and signed
     by Agent, in addition to the Lenders required herein above to take such
     action.

          (b) Each amendment, modification, termination or waiver shall be
     effective only in the specific instance and for the specific purpose for
     which it was given. No amendment, modification, termination or waiver shall
     be required for Agent to take additional Collateral pursuant to any Loan
     Document.

          (c) No amendment, modification or waiver of any provision of any
     Letter of Credit shall be applicable without the written concurrence of the
     issuer of such Letter of

<PAGE>

     Credit. No notice to or demand on Borrower or any other Loan Party in any
     case shall entitle Borrower or any other Loan Party to any other or further
     notice or demand in similar or other circumstances. Any amendment,
     modification, termination, waiver or consent effected in accordance with
     this Section 12.3 shall be binding upon each Lender, and, if signed by a
     Loan Party, on such Loan Party.

     12.5 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

     12.6 Successors and Assigns. This Agreement, the Other Agreements and the
Security Documents shall be binding upon and inure to the benefit of the
successors and assigns of Borrower and Lenders permitted under Section 11.1
hereof.

     12.7 Cumulative Effect; Conflict of Terms. The provisions of the Other
Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in Section 3.2 hereof
and except as otherwise provided in any of the other Loan Documents by specific
reference to the applicable provision of this Agreement, if any provision
contained in this Agreement is in direct conflict with, or inconsistent with,
any provision in any of the other Loan Documents, the provision contained in
this Agreement shall govern and control.

     12.8 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which counterparts taken together shall constitute but one and the
same instrument.

     12.9 Notice. All notices, requests and demands to or upon a party hereto
shall be in writing and shall be sent by certified or registered mail, return
receipt requested, by personal delivery against receipt, by overnight courier or
by facsimile transmission and shall be deemed to have been validly served, given
or delivered immediately when delivered against receipt or one (1) Business Day
after deposit in the U.S. mail, postage prepaid, or with an overnight courier or
in the case of facsimile transmission, when sent, answerback received, in each
case addressed as follows:

          If to Agent:                 Fleet Capital Corporation
                                       5950 Sherry Lane, Suite 300
                                       Dallas, TX 75225
                                       Attention: Loan Administration Manager
                                       Facsimile No.: (214) 706-7066

<PAGE>

          With a copy to:              Patton Boggs LLP
                                       2001 Ross Avenue, Suite 3000
                                       Dallas, TX 75201
                                       Attention: R. Jeffery Cole, Esq.
                                       Facsimile No.: (214) 758-1550

          If to Borrower:              Advanced Technical Products, Inc.
                                       200 Mansell Ct. East, Suite 505
                                       Roswell, GA  30076
                                       Attention: Garrett L. Dominy
                                       Facsimile No.: (770) 993-1986

          With a copy to:              Gardere & Wynne, L.L.P.
                                       Thanksgiving Tower
                                       1601 Elm Street, Suite 3000
                                       Dallas, TX 75201
                                       Attention: Barry D. Drees, Esq.
                                       Facsimile No.: (214) 999-3567

          If to Lenders:               See Schedule 1

or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.9; provided, however, that any notice,
request or demand to or upon Agent and/or any Lender pursuant to Section 3.1.1
or 4.2.2 hereof shall not be effective until received by Agent or such Lender.
Any written notice or demand that is not sent in conformity with the provisions
hereof shall nevertheless be effective on the date that such notice is actually
received by the noticed party.

     12.10 Agent's or Lenders' Consent. Whenever Agent's or Lenders' consent is
required to be obtained under this Agreement, any of the Other Agreements or any
of the Security Documents as a condition to any action, inaction, condition or
event, Agent or Lenders shall be authorized to give or withhold such consent in
its sole and absolute discretion.

     12.11 Credit Inquiries. Each Borrower hereby authorizes and permits Agent
and each Lender (but neither Agent nor any Lender shall have any obligation) to
respond to usual and customary credit inquiries from third parties concerning
such Borrower or any of its Subsidiaries.

     12.12 Time of Essence. Time is of the essence of this Agreement, the Other
Agreements and the Security Documents.

     12.13 Entire Agreement; Appendix A and Exhibits and Schedules. This
Agreement and the other Loan Documents, together with all other instruments,
agreements and certificates executed by the parties in connection therewith or
with reference thereto, embody the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and inducements,

<PAGE>

whether express or implied, oral or written. Appendix A and each of the Exhibits
and Schedules attached hereto are incorporated into this Agreement and by this
reference made a part hereof.

     12.14 Interpretation. No provision of this Agreement or any of the other
Loan Documents shall be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or dictated such
provision.

     12.15 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN NEGOTIATED,
EXECUTED AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN DALLAS,
DALLAS COUNTY, TEXAS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS: PROVIDED, HOWEVER, THAT IF ANY
OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN TEXAS, THE
LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR
FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF AGENT'S
OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF TEXAS. AS PART
OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR
FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER, AGENT OR ANY LENDER,
BORROWER HEREBY CONSENTS AND AGREES THAT THE DISTRICT COURT OF DALLAS COUNTY,
TEXAS, OR, AT AGENT'S OPTION, THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION, SHALL HAVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND AGENT AND/OR LENDERS
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND
OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT
THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW,
OR TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT

<PAGE>

OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT
TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

     12.16 WAIVERS BY BORROWER. BORROWER WAIVES (I) THE RIGHT TO TRIAL BY JURY
(WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING
OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN
DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (II) PRESENTMENT, DEMAND AND
PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY,
RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL
PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND
GUARANTIES AT ANY TIME HELD BY AGENT OR LENDERS ON WHICH BORROWER MAY IN ANY WAY
BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER AGENT OR LENDERS MAY DO IN
THIS REGARD; (III) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE
COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO
ALLOWING AGENT OR ANY LENDER TO EXERCISE ANY OF SUCH LENDER'S REMEDIES; (IV) THE
BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (V) NOTICE OF
ACCEPTANCE HEREOF. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A
MATERIAL INDUCEMENT TO LENDERS' ENTERING INTO THIS AGREEMENT AND THAT AGENT AND
EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH
BORROWER. BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING
WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

     12.17 WAIVER OF CONSUMER RIGHTS. BORROWER HEREBY WAIVES ITS RIGHTS UNDER
THE DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT SECTION 17.41 ET. SEQ.
BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF BORROWER'S OWN SELECTION,
BORROWER VOLUNTARILY CONSENTS TO THIS WAIVER. BORROWER EXPRESSLY WARRANTS AND
REPRESENTS THAT BORROWER (I) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION RELATIVE TO AGENT OR ANY LENDER, AND (II) HAS BEEN REPRESENTED BY LEGAL
COUNSEL IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.


<PAGE>

                  BORROWER HAS READ AND UNDERSTANDS

                  SECTION 12:17:    __________ (INITIALS OF ATP)
                                    __________ (INITIALS OF ALCORE)
                                    __________ (INITIALS OF TECHNICAL PRODUCTS)
                                    __________ (INITIALS OF MARION)
                                    __________ (INITIALS OF DELAND)
                                    __________ (INITIALS OF LINCOLN)

     12.18 ORAL AGREEMENTS INEFFECTIVE. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, AND THE SAME MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

     12.19 Nonapplicability of Chapter 346 of the Texas Finance Code. Borrower
and Agent and each Lender hereby agree that, except for Section 346.004 thereof,
the provisions of Chapter 346 of the Texas Finance Code (regulating certain
revolving credit loans and revolving tri-party accounts) shall not apply to this
Agreement or any of the other Loan Documents.

     12.20 Certain Matters of Construction. All references to statutes and
related regulations in this Agreement, the Other Agreements and the Security
Agreements shall include any amendments of same and any successor statutes and
regulations. All references in this Agreement, the Other Agreements and the
Security Agreements to any of the Loan Documents shall include any and all
modifications thereto and any and all extensions or renewals thereof.

     12.21 RELEASE. EACH BORROWER ACKNOWLEDGES AND AGREES THAT (A) IT HAS NO
CLAIMS, COUNTERCLAIMS, OFFSETS, CREDITS OR DEFENSES TO THE RESTATED LOAN
DOCUMENTS AND THE PERFORMANCE OF ITS OBLIGATIONS THEREUNDER, OR (B) IF IT HAS
ANY SUCH CLAIMS, COUNTERCLAIMS, OFFSETS, CREDITS OR DEFENSES TO THE RESTATED
LOAN DOCUMENTS AND/OR ANY TRANSACTION RELATED TO THE RESTATED LOAN DOCUMENTS,
SAME ARE HEREBY WAIVED, RELINQUISHED AND RELEASED IN CONSIDERATION OF LENDER'S
EXECUTION AND DELIVERY OF THIS AGREEMENT.

     12.22 Confidentiality. Agent and Lenders shall hold all nonpublic
information obtained pursuant to the requirements hereof and identified as such
by Borrower in accordance with such Person's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
business practices and in any event may make disclosure to such of its
respective Affiliates, officers, directors, employees, agents and
representatives as need to know such information in connection with the Loans.
If any Lender is otherwise a creditor of a Borrower, such Lender may use the
information in connection with its other credits. Agent and Lenders may also
make disclosures reasonably required by a bona fide offeree or assignee (or
participation), or as required or requested by any governmental authority or
representative thereof, or pursuant to legal process, or to its accountants,
lawyers and other advisors, and shall

<PAGE>

require any such offeree or assignee (or participant) to agree (and require any
of its offerees, assignees or participants to agree) to comply with this Section
12.22. In no event shall Agent or any Lender be obligated or required to return
any materials furnished by Borrower; provided, however, that each offeree shall
be required to agree that if it does not become a assignee (or participant) it
shall return all materials furnished to it by Borrower in connection herewith.

     12.23 Amendment and Restatement. This Agreement is given in amendment,
restatement, renewal and extension (and not in extinguishment or satisfaction)
of the Restated Loan Agreement and, to the extent applicable, the Restated Loan
Documents. With respect to matters relating to the period prior to the date
hereof, all the provisions of the Restated Loan Agreement and, to the extent
applicable, the Restated Loan Documents are hereby ratified and confirmed and
shall remain in full force and effect.

     12.24 Intercreditor Agreement. This Agreement is subject to the terms of an
Intercreditor Agreement dated as of the date hereof, by and between Agent and
Back Bay, as such agreement may be amended from time to time.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>




     IN WITNESS WHEREOF, this Agreement has been duly executed in Dallas, Texas,
on the day and year specified at the beginning of this Agreement.

                                       BORROWER:

                                       ADVANCED TECHNICAL PRODUCTS, INC.

                                       By:______________________________________
                                                 Garrett L. Dominy
                                                 President

                                       ALCORE, INC.

                                       By:______________________________________
                                                 Garrett L. Dominy
                                                 President

                                       TECHNICAL PRODUCTS GROUP, INC.

                                       By:______________________________________
                                                 Garrett L. Dominy
                                                 President

                                       MARION PROPERTIES, INC.

                                       By:______________________________________
                                                 Garrett L. Dominy
                                                 President

                                       DELAND PROPERTIES, INC.

                                       By:______________________________________
                                                 Garrett L. Dominy
                                                 President


<PAGE>


                                       LINCOLN PROPERTIES, INC.

                                       By:______________________________________
                                                 Garrett L. Dominy
                                                 President

                                       Accepted in Dallas, Dallas County, Texas:

                                       AGENT:

                                       FLEET CAPITAL CORPORATION

                                       By:______________________________________
                                                 Hance G. VanBeber
                                                 Senior Vice President

                                       LENDERS:

                                       FLEET CAPITAL CORPORATION

                                       By:______________________________________
                                                 Hance G. VanBeber
                                                 Senior Vice President


<PAGE>



                                   APPENDIX A

                               GENERAL DEFINITIONS

     When used in the Second Amended and Restated Loan and Security Agreement
dated as of October 10, 2000, by and among Advanced Technical Products, Inc.,
Alcore, Inc., Technical Products Group, Inc., Marion Properties, Inc., DeLand
Properties, Inc., Lincoln Properties, Inc., Fleet Capital Corporation, as Agent,
and the other financial institution(s) from time to time a party thereto, the
following terms shall have the following meanings (terms defined in the singular
to have the same meaning when used in the plural and vice versa):

          Account Debtor - any Person who is or may become obligated under or on
     account of an Account.

          Accounts - all accounts, contract rights, chattel paper, instruments
     and documents, whether now owned or hereafter created or acquired by
     Borrower or in which Borrower now has or hereafter acquires any interest.

          Adjusted Tangible Assets - all assets except: (a) any surplus
     resulting from any write-up of assets subsequent to April 28, 1995; (b)
     deferred assets, other than prepaid insurance and prepaid taxes; (c)
     patents, copyrights, trademarks, trade names, non-compete agreements,
     franchises and other similar intangibles; (d) goodwill, including any
     amounts, however designated on a Consolidated balance sheet of a Person or
     its Subsidiaries, representing the excess of the purchase price paid for
     assets or stock over the value assigned thereto on the books of such
     Person; (e) Restricted Investments; (f) unamortized debt discount and
     expense; (g) assets located and notes and receivables due from obligors
     outside of the United States of America; and (h) Accounts, notes and other
     receivables due from Affiliates or employees.

          Adjusted Tangible Net Worth - at any date means a sum equal to:

               (a) the net book value (after deducting related depreciation,
          obsolescence, amortization, valuation, and other proper reserves) at
          which the Adjusted Tangible Assets of a Person would be shown on a
          balance sheet at such date in accordance with GAAP, minus

               (b) the amount at which such Person's liabilities (other than
          capital stock and surplus) would be shown on such balance sheet in
          accordance with GAAP, and including as liabilities all reserves for
          contingencies and other potential liabilities.

          Affected Lender - as defined in Section 3.1.5.

          Affiliate - a Person (other than a Subsidiary): (a) which directly or
     indirectly through one or more intermediaries controls, or is controlled
     by, or is under common control with, a Person; (b) which beneficially owns
     or holds 5% or more of any class of

<PAGE>

     the Voting Stock of a Person; or (c) 5% or more of the Voting Stock (or in
     the case of a Person which is not a corporation, 5% or more of the equity
     interest) of which is beneficially owned or held by a Person or a
     Subsidiary of a Person.

          Agreement - the Second Amended and Restated Loan and Security
     Agreement referred to in the first sentence of this Appendix A, all
     Exhibits and Schedules thereto and this Appendix A, as amended, renewed,
     extended and restated from time to time.

          Alcore Investment Account - shall mean Investment Account No. 10676542
     established with First Union Brokerage Services, Inc. in the name of
     Alcore, which account has been established and the contents of which secure
     that certain letter of credit issued by First Union National Bank, for the
     account of Alcore, in the face amount of $700,000.

          Alcore Sale - means Borrower's proposed sale of all or substantially
     all of the assets of Alcore.

          Applicable Annual Rate - as defined in Section 2.1.1 of the Agreement.

          Applicable Margin - means the following percentages determined as a
     function of the Applicable Margin Ratio as set forth on the most recent and
     timely Compliance Certificate delivered to Agent by Borrower:

<TABLE>
<CAPTION>
============================== =================== ================= =================== ===================
                                                     LIBOR margin
      Applicable Margin         LIBOR margin for       for Term       Base Rate margin    Base Rate margin
            Ratio               Revolving Credit       Loan and        for Revolving     for Term Loan and
                                     Loans          Equipment Loan      Credit Loans       Equipment Loan
============================== =================== ================= =================== ===================
<S>                                  <C>                <C>                <C>                 <C>
Greater than 3.75 to 1.00            2.75%              3.25%              0.50%               0.75%
- ------------------------------ ------------------- ----------------- ------------------- -------------------
Greater than 3.50 to 1.00            2.25%              2.75%              0.25%               0.50%
but equal to or less than
3.75 to 1.00
- ------------------------------ ------------------- ----------------- ------------------- -------------------
Greater than 3.25 to 1.00            2.00%              2.50%              0.25%               0.50%
but equal to or less than
3.50 to 1.00
- ------------------------------ ------------------- ----------------- ------------------- -------------------
Greater than 3.00 to 1.00            1.75%              2.25%              0.25%               0.50%
but equal to or less than
3.25 to 1.00
- ------------------------------ ------------------- ----------------- ------------------- -------------------
Greater than 2.75 to 1.00            1.50%              2.00%              0.25%               0.50%
but equal to or less than
3.00 to 1.00
- ------------------------------ ------------------- ----------------- ------------------- -------------------
Greater than 2.50 to 1.00            1.25%              1.75%              0.25%               0.50%
but equal to or less than
2.75 to 1.00
- ------------------------------ ------------------- ----------------- ------------------- -------------------
Less than 2.50 to 1.00               1.00%              1.50%              0.25%               0.50%
============================== =================== ================= =================== ===================
</TABLE>

     The Applicable Margin Ratio shall be determined as of the end of each
     fiscal quarter of Borrower, for the twelve-month period ending on such
     date, from the monthly financial

<PAGE>

     statements of Borrower most recently delivered to Agent together with a
     Compliance Certificate in accordance with Section 8.1.3(b) hereof. Any
     change in the Applicable Margin after the date that the Borrower delivers
     its quarter-end monthly financial statements and related Compliance
     Certificate to Agent pursuant to Section 8.1.3(b) shall be effective upon
     the date of receipt of such by Agent. If Borrower fails to deliver a
     Compliance Certificate by the date required pursuant to Section 8.1.3(b)
     hereof, each applicable LIBOR margin or Base Rate margin shall be
     conclusively presumed to equal to the highest applicable LIBOR margin or
     Base Rate margin, as applicable, specified in the pricing table set forth
     above until the date of delivery of the Compliance Certificate.

          Applicable Margin Ratio - at any date of determination, means the
     ratio of (a) the total Funded Indebtedness of Borrower at such date of
     determination to (b) the sum of (i) Borrower's EBITDA for the twelve-month
     period ending on such date of determination, minus (ii) Borrower's Capital
     Expenditures during the twelve-month period ending on such date of
     determination (but only to the extent such Capital Expenditures are not
     financed by Equipment Loans hereunder or borrowings under any other
     financing arrangement otherwise permitted hereunder).

          Availability - the amount of money which Borrower is entitled to
     borrow from time to time as Revolving Credit Loans, such amount being the
     difference derived when the sum of the principal amount of Revolving Credit
     Loans then outstanding (including any amounts which Agent and/or any Lender
     may have paid for the account of Borrower pursuant to any of the Loan
     Documents and which have not been reimbursed by Borrower) and the LC Amount
     is subtracted from the Borrowing Base. If the amount outstanding is equal
     to or greater than the Borrowing Base, Availability is zero (0).

          Average Monthly Revolving Credit Loan Balance - the amount obtained by
     adding the aggregate unpaid balance of Revolving Credit Loans and the LC
     Amount at the end of each day during the month in question and by dividing
     such sum by the number of days in such month.

          Back Bay - shall mean Back Bay Capital Funding, LLC, a Delaware
     limited liability company.

          Back Bay Loan Agreement - that certain Loan and Security Agreement,
     dated as of the date hereof, by and among Back Bay and Borrowers.

          Back Bay Term Loan - the "Term Loan", as defined in the Back Bay Loan
     Agreement.

          Bank - Fleet National Bank, and its successors or assigns.

          Base Rate - the rate of interest announced or quoted by Bank from time
     to time as its prime rate for commercial loans, whether or not such rate is
     the lowest rate charged by Bank to its most preferred borrowers; and, if
     such prime rate for commercial loans is

<PAGE>

     discontinued by Bank as a standard, a comparable reference rate designated
     by Bank as a substitute therefor shall be the Base Rate.

          Base Rate Loan - a Loan which bears interest based upon the Base Rate.

          Borrowing Base - as at any date of determination thereof, an amount
     equal to the lesser of:

               (a) Total Revolving Credit Facility; or

               (b) an amount equal to:

                    (i) up to 85% of the net amount of Eligible Accounts
               outstanding at such date;

                                      PLUS

                    (ii) the lesser of (A) $3,000,000 or (B) up to 85% of the
               net amount of Eligible Foreign Accounts outstanding at such date;

PLUS

                    (iii) the lesser of (A) $11,000,000 or (B) up to 50% of the
               value of Eligible Inventory at such date;

                         MINUS (subtract from the sum of
                           clauses (a) and (b) above)

                    (c) the sum of (i) the LC Amount, plus (ii) the amount of
               any reserves established by Agent pursuant to Section 1.1.1 at
               such date.

          For purposes of clauses (b)(i) and (ii) hereof, the net amount of
     Eligible Accounts at any time shall be the face amount of such Eligible
     Accounts less any and all returns, rebates, discounts (which may, at
     Agent's option, be calculated on shortest terms), credits, allowances or
     sales, excise or withholding taxes of any nature at any time issued, owing,
     claimed by Account Debtors, granted, outstanding or payable in connection
     with such Accounts at such time.

          For purposes of clause (b)(ii) above, the value of Eligible Inventory
     on a date shall be calculated on the basis of the lower of cost or market.
     Cost shall be calculated on a first-in, first-out basis.

          Brigantine - means Alcore Brigantine SA, a company organized under the
     laws of France.


<PAGE>

          Business Day - any day excluding Saturday, Sunday and any day which is
     a legal holiday under the laws of the state of Texas or is a day on which
     banking institutions located in such state are closed.

          Capital Expenditures - expenditures made or liabilities incurred for
     the acquisition of any fixed assets or improvements, replacements,
     substitutions or additions thereto which have a useful life of more than
     one year, including the total principal portion of Capitalized Lease
     Obligations.

          Capital Lease - Any lease which may be capitalized in accordance with
     GAAP.

          Capitalized Lease Obligation - any Indebtedness represented by
     obligations under a lease that is required to be capitalized for financial
     reporting purposes in accordance with GAAP.

          Closing Date - the date on which all of the conditions precedent in
     Section 9 of the Agreement are satisfied and the initial Loan is made or
     the initial Letter of Credit or LC Guaranty is issued under the Agreement.

          Code - the Uniform Commercial Code as adopted and in force in the
     state of Texas, as from time to time in effect.

          Collateral - all of the Property and interests in Property described
     in Section 5 of the Agreement, and all other Property and interests in
     Property that now or hereafter secure the payment and performance of any of
     the Obligations; provided, however, that the "Collateral" shall not include
     the Alcore Investment Account or any monies and/or investment property
     deposited and/or held therein as of the date hereof.

          Collateral Assignment of Leases - each respective collateral
     assignment of lease executed by Technical Products, in favor of Agent and
     by which Technical Products grants and conveys to Agent, for the benefit of
     Lenders, as security for the Obligations, an assignment of Technical
     Products' leasehold interest in all the real Property covered by the
     Mortgages, which collateral assignment shall be consented to by the fee
     owner of such real Property.

          Commitment or Commitments - means the commitment or commitments of
     Lenders to make Loans as set forth in Sections 1.1 and/or 1.2 and to
     participate in any Letters of Credit issued by Agent as set forth in
     Section 1.5.

          Consolidated - the consolidation in accordance with GAAP of the
     accounts or other items as to which such term applies.

          Current Assets - at any date means the amount at which all of the
     current assets of a Person would be properly classified as current assets
     shown on a balance sheet at such date in accordance with GAAP except that
     amounts due from Affiliates and investments in Affiliates shall be excluded
     therefrom.


<PAGE>

          Dated Assets - as defined in Section 1.7 of the Agreement.

          Dated Liabilities - as defined in Section 1.7 of the Agreement.

          Default - an event or condition the occurrence of which would, with
     the lapse of time or the giving of notice, or both, become an Event of
     Default.

          Default Rate - as defined in Section 2.1.2 of the Agreement.

          Distribution - in respect of any corporation means and includes: (a)
     the payment of any dividends or other distributions on capital stock of the
     corporation (except distributions in such stock) and (b) the redemption or
     acquisition of Securities unless made contemporaneously from the net
     proceeds of the sale of Securities.

          Dollars and the sign "$" - lawful money of the United States of
     America.

          Dominion Account - a special account of Agent established by Borrower
     pursuant to the Agreement at a bank selected by Borrower, but acceptable to
     Agent in its reasonable discretion, and over which Agent shall have sole
     and exclusive access and control for withdrawal purposes.

          EBITDA - Borrower's Consolidated earnings before interest, taxes,
     depreciation and amortization, each as determined in accordance with GAAP,
     inclusive of discontinued operations, but excluding the amount by which the
     carrying value of the net assets of Alcore exceeds the amount of cash or
     other consideration received upon the consummation of the Alcore Sale. For
     purposes of the calculation of the Fixed Charge Ratio and Interest Coverage
     Ratio from the Closing Date through the period ending March 31, 2001, the
     following expenses of Borrower reflected in their 10-Q report for the
     fiscal quarter ended June 30, 2000, shall be added to EBITDA: (a) up to
     $750,000 of expenses related to the termination of Borrower's proposed
     merger agreement with Veritas; and (b) up to $525,000 of expenses related
     to severance payments owed to the former chairman of Borrowers' board of
     directors identified therein.

          Eligible Account - an Account arising in the ordinary course of any
     Revolving Credit Borrower's business from the sale of goods or rendition of
     services which is payable in Dollars and which Agent, in its reasonable
     credit judgment, deems to be an Eligible Account. Without limiting the
     generality of the foregoing, no Account shall be an Eligible Account if:
     (a) it arises out of a sale made by any Revolving Credit Borrower to a
     Subsidiary or an Affiliate of such Revolving Credit Borrower or to a Person
     controlled by an Affiliate of such Revolving Credit Borrower; (b) it is due
     or unpaid more than ninety (90) days after the original invoice date; (c)
     with respect to any contract between any Revolving Credit Borrower and any
     Account Debtor, 20% or more of the Accounts owing under such Contract are
     not deemed Eligible Accounts hereunder; (d) (i) with respect to any Account
     Debtor other than McDonnell Douglas Corp., Lockheed Martin Corp., Boeing
     Co. or the United States of America (or any department, agency or

<PAGE>

     instrumentality thereof), the total unpaid Accounts of the Account Debtor
     exceed 20% of the net amount of all Eligible Accounts, to the extent of
     such excess or (ii) with respect to any contract between any Revolving
     Credit Borrower and McDonnell Douglas Corp., Lockheed Martin Corp., Boeing
     Co. or the United States of America (or any department, agency or
     instrumentality thereof), the total unpaid Accounts owing under any such
     contract exceeds 20% of the net amount of all Eligible Accounts, to the
     extent of such excess; (e) any covenant, representation or warranty
     contained in the Agreement with respect to such Account has been breached;
     (f) the Account Debtor is also a Revolving Credit Borrower's creditor or
     supplier, or the Account Debtor has disputed liability with respect to such
     Account, or the Account Debtor has made any claim with respect to any other
     Account due from such Account Debtor to a Revolving Credit Borrower, or the
     Account otherwise is or may become subject to any right of setoff,
     counterclaim, reserve or chargeback, provided that, in any event, the
     Accounts of such Account Debtor shall be ineligible only to the extent of
     the amount owing by Borrower to such creditor or supplier or to the extent
     of such offset, counterclaim, disputed amount, reserve or chargeback; (g)
     the Account Debtor has commenced a voluntary case under the federal
     bankruptcy laws or made an assignment for the benefit of creditors, or a
     decree or order for relief has been entered by a court having jurisdiction
     in the proceedings in respect of the Account Debtor in an involuntary case
     under the federal bankruptcy laws or any other petition or other
     application for relief under the federal bankruptcy laws has been filed
     against the Account Debtor, or if the Account Debtor has failed, suspended
     business, ceased to be Solvent, or consented to or suffered a receiver,
     trustee, liquidator or custodian to be appointed for it or for all or a
     significant portion of its assets or affairs; (h) it arises from a sale to
     an Account Debtor with its principal office, assets or place of business
     outside the United States or Canada, unless the sale is backed by an
     irrevocable letter of credit issued or confirmed by Bank and is in form and
     substance acceptable to Agent, payable in the full amount of the Account in
     freely convertible Dollars at a place of payment within the United States;
     (i) it arises from a sale to the Account Debtor on a bill-and-hold,
     guaranteed sale, sale-or-return, sale-on-approval, consignment or any other
     repurchase or return basis (unless such sale is a Government Bill-and-Hold
     Sale); (j) (i) a Default has occurred hereunder and the Account Debtor is
     the United States of America or any department, agency or instrumentality
     thereof, unless the applicable Revolving Credit Borrower assigns its right
     to payment of such Account to Agent, in a manner satisfactory to Agent, so
     as to comply with the Assignment of Claims Act of 1940 (31 U.S.C. ss.203 et
     seq.) or (ii) the Account Debtor is a state, county or municipality, or a
     political subdivision or agency thereof, which is subject to any Applicable
     Law that would disallow an assignment of Accounts on which it is the
     Account Debtor; (k) the Account Debtor is located in New Jersey, Minnesota,
     Indiana, West Virginia or any other state imposing similar conditions on
     the right of a creditor to collect accounts receivable unless the
     applicable Revolving Credit Borrower has either qualified to transact
     business in such state as a foreign corporation or filed a Notice of
     Business Activities Report or other required report with the appropriate
     officials in those states for the then current year; (l) the Account is
     subject to a Lien other than a Permitted Lien; (m) the goods giving rise to
     such Account have not been delivered to and accepted by the Account Debtor
     or the services giving rise to such Account have not been performed by the
     applicable Revolving Credit Borrower and accepted by the Account Debtor or
     the Account

<PAGE>

     otherwise does not represent a final sale (unless such sale is a Government
     Bill-and-Hold Sale); (n) the Account is evidenced by chattel paper or an
     instrument of any kind, or has been reduced to judgment; (o) any Revolving
     Credit Borrower has made any agreement with the Account Debtor for any
     deduction therefrom, except for discounts or allowances which are made in
     the ordinary course of business for prompt payment and which discounts or
     allowances are reflected in the calculation of the face value of each
     invoice related to such Account; (p) any Revolving Credit Borrower has made
     an agreement with the Account Debtor to extend the time of payment thereof;
     (q) the Account is billed on a progress basis or on the basis of the stage
     of completion (unless such Account is a "Milestone Billing"); or (r) that
     portion of an Account which is an incurred costs billing account governed
     by the Federal Acquisition Regulations.

          Eligible Foreign Account -an Account arising from a sale to an Account
     Debtor with its principal office, assets or place of business outside the
     United States or Canada that (a) does not comply with clause (h) of the
     definition of Eligible Account and (b) but for clause (h) of the definition
     of Eligible Account would otherwise constitute an Eligible Account;
     provided, however, that in no event shall the total Eligible Foreign
     Accounts owing from any Account Debtor exceed $300,000.

          Eligible Inventory - such Inventory of Revolving Credit Borrowers
     (other than packaging materials and supplies) which Agent, in its
     reasonable credit judgment, deems to be Eligible Inventory. Without
     limiting the generality of the foregoing, no Inventory shall be Eligible
     Inventory unless: (a) it is raw materials or finished goods; (b) it is in
     good, new and salable condition; (c) it is not slow-moving, obsolete or
     unmerchantable; (d) it meets all standards imposed by any governmental
     agency or authority; (e) it conforms in all respects to the warranties and
     representations set forth in this Agreement; (f) it is at all times subject
     to Agent's duly perfected, first priority Lien and no other Lien except a
     Permitted Lien; (g) it is situated at a location in compliance with this
     Agreement and is not in transit or outside the continental United States;
     and (h) it is not subject to progress payment offsets. For purposes hereof,
     in no event shall Eligible Inventory include raw materials that have been
     entered into work in process or to which any manufacturing, improvement or
     value adding process has occurred or raw materials associated with incurred
     costs billing programs.

          Environmental Laws - all federal, state and local laws, rules,
     regulations, ordinances, programs, permits, guidances, orders and consent
     decrees relating to health, safety or environmental matters.

          Equipment - all machinery, apparatus, equipment, fittings, furniture,
     fixtures, motor vehicles and other tangible personal Property (other than
     Inventory) of every kind and description used in Borrower's operations or
     owned by Borrower or in which Borrower has an interest, whether now owned
     or hereafter acquired by Borrower and wherever located, and all parts,
     accessories and special tools and all increases and accessions thereto and
     substitutions and replacements therefor.

          Equipment Loan - the Loan described in Section 1.2.2 of the Agreement.


<PAGE>

          Equipment Loan Commitment - means (a) as to any Lender, such Lender's
     Pro Rata Share of the Equipment Loan, as set forth on Schedule 1 and (b) as
     to all Lenders, the aggregate commitment of all Lenders to make the
     Equipment Loan.

          Equipment Notes - The Secured Promissory Note(s) (Equipment Note)
     executed by Borrower as of the date of this Agreement, each of which shall
     be in the form of Exhibit A-3 to this Agreement.

          ERISA - the Employee Retirement Income Security Act of 1974, as
     amended, and all rules and regulations from time to time promulgated
     thereunder.

          Eurodollar Loan - a Loan which bears interest based upon LIBOR.

          Event of Default - as defined in Section 10.1 of the Agreement.

          Excess Cash Flow - with respect to any fiscal period of Borrower, the
     amount derived by subtracting (a) the sum of (i) regularly scheduled
     payments of principal on Indebtedness for Money Borrowed, (ii) Interest
     Expense, (iii) Taxes and (iv) Capital Expenditures which are not financed
     for such fiscal period from (b) Borrower's EBITDA.

          Excess Interest - as defined in Section 2.1.3(b) of the Agreement.

          Existing Equipment Loan - means the "Equipment Loan" as defined in and
     held by Fleet pursuant to the Restated Loan Agreement.

          Existing Term Loan - means the "Term Loan" as defined in and held by
     Fleet pursuant to the Restated Loan Agreement.

          Fixed Charge Ratio - for any period of calculation, the ratio of (a)
     EBITDA less Capital Expenditures to (b) Fixed Charges.

          Fixed Charges - For any period of calculation, with respect to the
     Borrower and its Subsidiaries, the sum of (a) permanent reductions of
     principal, and interest, on account of Indebtedness for borrowed money
     actually paid in cash during such period, plus (b) payments paid in cash
     during such period in respect of Capitalized Lease Obligations, plus (c)
     income taxes paid in cash during such period, each as determined in
     accordance with GAAP, plus (d) payments paid in cash during such period in
     respect of the purchase price payable upon exercise of the Registration Put
     Right or the Put Option, as the case may be (including, without limitation
     (but without duplication), any such payments made during such period in
     respect of any debt instruments issued by ATP to Back Bay upon exercise of
     the Registration Put Right or the Put Option, as the case may be), plus (e)
     payments paid in cash during such period in respect of Distributions
     permitted by clause (a) of the first proviso in Section 8.2.7 of the
     Agreement.

          Foreign Lender - as defined in Section 3.9(c) of the Agreement.


<PAGE>

          Funded Indebtedness - as of the date of determination of Funded
     Indebtedness: (a) all Obligations of Borrower (without duplication); (b)
     all outstanding Subordinated Debt; and (c) all Capitalized Lease
     Obligations.

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

          General Intangibles - all general intangibles of Borrower, whether now
     owned or hereafter created or acquired by Borrower, including all choses in
     action, causes of action, corporate or other business records, deposit
     accounts, inventions, blueprints, designs, patents, patent applications,
     trademarks, trademark applications, trade names, trade secrets, service
     marks, goodwill, brand names, copyrights, registrations, licenses,
     franchises, customer lists, tax refund claims, computer programs,
     operational manuals, all claims under guaranties, security interests or
     other security held by or granted to Borrower to secure payment of any of
     the Accounts by an Account Debtor, all rights to indemnification and all
     other intangible property of every kind and nature (other than Accounts).

          Government Bill-and-Hold Goods - As defined in Section 8.2.10 of the
     Agreement.

          Guarantor - Any Person who may hereafter guarantee payment or
     performance of the whole or any part of the Obligations.

          Guaranty Agreement - collectively, any and all of the Continuing
     Guaranty Agreements which are to be executed by a Guarantor in form and
     substance satisfactory to Agent, including, without limitation, the
     Guaranty Agreements to be executed on or before the Closing Date by each of
     ATP and Alcore in favor of Agent.

          Indebtedness - as applied to a Person means, without duplication: (a)
     Total Liabilities as shown on the liability side of a balance sheet of such
     Person as of the date as of which Indebtedness is to be determined,
     including Capitalized Lease Obligations; (b) all obligations of other
     Persons which such Person has guaranteed; (c) all reimbursement obligations
     in connection with letters of credit or letter of credit guaranties issued
     for the account of such Person; and (d) in the case of Borrower (without
     duplication), the Obligations.

          Indemnified Persons - as defined in Section 11.3 of the Agreement.

          Interest Coverage Ratio - for any period of calculation, the ratio of
     EBITDA to Interest Expense.

          Interest Expense - with respect to any fiscal period, the interest
     expense incurred for such period as determined in accordance with GAAP
     (excluding any PIK Interest that is capitalized and added to the
     outstanding principal amount of the Back Bay Term Loan

<PAGE>

     in accordance with Section 2-4(a)(ii)(A) of the Back Bay Loan Agreement)
     plus letter of credit and guaranty fees owing for such period.

          Inventory - all of Borrower's inventory, whether now owned or
     hereafter acquired, including, but not limited to, all goods intended for
     sale or lease by Borrower, or for display or demonstration; all work in
     process; all raw materials and other materials and supplies of every nature
     and description used or which might be used in connection with the
     manufacture, printing, packing, shipping, advertising, selling, leasing or
     furnishing of such goods or otherwise used or consumed in Borrower's
     business; and all documents evidencing and General Intangibles relating to
     any of the foregoing, whether now owned or hereafter acquired by Borrower.

          LC Amount - at any time, the aggregate undrawn face amount of all
     Letters of Credit and LC Guaranties then outstanding.

          LC Guaranty - any guaranty pursuant to which Agent or any Affiliate of
     Agent shall guaranty the payment or performance by Borrower of its
     reimbursement obligation under any letter of credit.

          Lenders - means the financial institution(s), from time to time named
     on Schedule 1 and, subject to this Agreement, their respective successors
     and permitted assigns (but not any Participant that is not otherwise a
     party to this Agreement).

          Lender Addition Agreement - means an agreement among Agent, a Lender
     and such Lender's assignee regarding their respective rights and
     obligations with respect to assignments of the Loans, the Commitments and
     other interests under this Agreement and the other Loan Documents
     substantially in the form of Exhibit R hereto.

          Letter of Credit - any letter of credit issued by Agent or any of
     Agent's Affiliates for the account of Borrower.

          Letter of Non-Exemption - as defined in Section 3.9 of the Agreement.

          LIBOR - with respect to a Eurodollar Loan for the relevant LIBOR
     Interest Period, a rate per annum equal to the quotient of the following:
     (a) the rate at which deposits in U.S. dollars in immediately available
     funds are offered to Fleet or Bank to first-class banks in the London
     interbank market at approximately 11:00 a.m. (London time) two (2) Business
     Days prior to the first day of such LIBOR Interest Period, in the
     approximate amount of the Eurodollar Loan and having a maturity
     approximately equal to the LIBOR Interest Period, divided by (b) the
     difference of one (1) minus the Reserve Requirement.

          LIBOR Interest Period - with respect to a Eurodollar Loan, a period of
     one (1), two (2), or three (3) months commencing on a Business Day selected
     by Borrower pursuant to this Agreement; provided, that (a) any LIBOR
     Interest Period which would otherwise end on a day which is not a Business
     Day shall be extended to the next

<PAGE>

     succeeding Business Day unless such Business Day falls in another calendar
     month, in which case such LIBOR Interest Period shall end on the next
     preceding Business Day; and (b) any LIBOR Interest Period which begins on
     the last Business Day of a calendar month (or on a day for which there is
     no numerically corresponding day in the calendar month at the end of such
     LIBOR Interest Period) shall, subject to clauses (c) below and (a) above,
     end on the last Business Day of a calendar month; and (c) any LIBOR
     Interest Period which would otherwise end after the termination of the
     Agreement, shall end on the termination of the Agreement. No LIBOR Interest
     Period for the Term Loan or Equipment Loan shall extend beyond a date on
     which Borrower is required to make a scheduled payment of principal on the
     Term Notes or the Equipment Notes, as the case may be, unless the sum of
     the aggregate Revolving Credit Loans consisting of Base Rate Loans equals
     or exceeds the principal amount required to be paid on the Term Notes or
     the Equipment Notes, as the case may be, on such date.

          Lien - any interest in Property securing an obligation owed to, or a
     claim by, a Person other than the owner of the Property, whether such
     interest is based on common law, statute or contract. The term "Lien" shall
     also include reservations, exceptions, encroachments, easements,
     rights-of-way, covenants, conditions, restrictions, leases and other title
     exceptions and encumbrances affecting Property. For the purpose of the
     Agreement, Borrower shall be deemed to be the owner of any Property which
     it has acquired or holds subject to a conditional sale agreement or other
     arrangement pursuant to which title to the Property has been retained by or
     vested in some other Person for security purposes.

          Loan Account - the loan account established on the books of Agent
     pursuant to Section 3.5 of the Agreement.

          Loan Agreement - is defined in the recitals of the Agreement.

          Loan Documents - the Agreement, the Other Agreements and the Security
     Documents.

          Loan Party - Borrower, each Guarantor and each other Person (other
     than Lenders) who is at any time a party to any Loan Document.

          Loans - all loans and advances of any kind made by Lenders pursuant to
     the Agreement.

          Losses - as defined in Section 11.3 of the Agreement.

          Material Adverse Effect - the effect of any event or condition which,
     alone or when taken together with other events or conditions occurring or
     existing concurrently therewith, (a) has a material adverse effect upon the
     business, operations, Properties, condition (financial or otherwise) or
     business prospects of Borrower, or any Subsidiary of Borrower; (b) has any
     material adverse effect whatsoever upon the validity or enforceability of
     the Agreement or any of the other Loan Documents; (c) has or may be

<PAGE>

     reasonably expected to have any material adverse effect upon the value of
     the whole or any material part of the Collateral, the Liens of Agent with
     respect to the Collateral or any material part thereof or the priority of
     such Liens; (d) materially impairs the ability of Borrower or any other
     Loan Party to perform its obligations under this Agreement or any of the
     other Loan Documents, including repayment of the Obligations when due; or
     (e) materially impairs the ability of Agent or any Lender to enforce or
     collect the Obligations or realize upon any of the Collateral in accordance
     with the Loan Documents and Applicable Law.

          Maximum Legal Rate - as defined in Section 2.1.3(a) of the Agreement.

          Modified EBITDA - means, (a) for the fiscal quarter of Borrower ended
     June 30, 2000, the sum of (i) EBITDA for such fiscal quarter plus (ii)
     EBITDA for the fiscal quarter of Borrower ended March 31, 2000, multiplied
     by 2, (b) for the fiscal quarter of Borrower ended September 30, 2000, the
     sum of (i) EBITDA for such fiscal quarter plus (ii) EBITDA for the fiscal
     quarter of Borrower ended June 30, 2000 plus (iii) EBITDA for the fiscal
     quarter of Borrower ended March 31, 2000, multiplied by the fraction 4/3
     and (c) for each fiscal quarter of Borrower ended on or after December 31,
     2000, EBITDA for the four fiscal quarters then most recently ended.

          Money Borrowed - means (a) Indebtedness arising from the lending of
     money by any Person to Borrower; (b) Indebtedness, whether or not in any
     such case arising from the lending by any Person of money to Borrower, (i)
     which is represented by notes payable or drafts accepted that evidence
     extensions of credit, (ii) which constitutes obligations evidenced by
     bonds, debentures, notes or similar instruments, or (iii) upon which
     interest charges are customarily paid (other than accounts payable) or that
     was issued or assumed as full or partial payment for Property; (c)
     Indebtedness that constitutes a Capitalized Lease Obligation; (d)
     reimbursement obligations with respect to letters of credit or guaranties
     of letters of credit and (e) Indebtedness of Borrower under any guaranty of
     obligations that would constitute Indebtedness for Money Borrowed under
     clauses (a) through (c) hereof, if owed directly by Borrower.

          Mortgages - each respective mortgage or deed of trust executed by
     Borrower, in favor of Agent, by which Borrower granted and conveyed to
     Agent, as security for the Obligations, a Lien upon all the real Property
     owned in fee by Borrower, including, without limitation, the real Property
     owned in fee (a) by Marion and located at (i) 325 Brunswick Lane, Marion,
     Virginia, (ii) 1400 Industrial Road, Marion, Virginia and (iii) 101 and 150
     Johnston Road, Marion, Virginia, (b) by DeLand and located at 2000
     Brunswick Lane, DeLand, Florida, and (c) by Lincoln and located at (i) 4300
     Industrial Avenue, Lincoln, Nebraska and (ii) 4131 N. 48th Street, Lincoln,
     Nebraska.

          Multiemployer Plan - has the meaning set forth in Section 4001(a)(3)
     of ERISA.

          Notes - means, collectively, the Revolving Credit Notes, Term Notes
     and Equipment Notes.


<PAGE>

          Obligations - all Loans, and all other advances, debts, liabilities,
     obligations, covenants and duties, together with all interest, fees and
     other charges thereon, owing, arising, due or payable from Borrower to
     Agent or Lenders of any kind or nature, present or future, whether or not
     evidenced by any note, guaranty or other instrument, whether arising under
     the Agreement or any of the other Loan Documents or otherwise, and whether
     direct or indirect (including those acquired by assignment), absolute or
     contingent, primary or secondary, due or to become due, now existing or
     hereafter arising and however acquired.

          Other Agreements - any and all agreements, instruments and documents
     (other than the Agreement and the Security Documents), heretofore, now or
     hereafter executed by Borrower, any Subsidiary of Borrower or any other
     third party and delivered to Agent or any Lender in respect of the
     transactions contemplated by the Agreement.

          Out-of-Formula Condition - at any date of determination thereof, a
     condition such that the outstanding principal amount of Revolving Credit
     Loans plus the LC Amount on such date exceeds the Borrowing Base on such
     date.

          Participant - each Person who shall be granted the right by any Lender
     to participate in any of the Loans described in the Agreement and who shall
     have entered into a participation agreement in form and substance
     satisfactory to Agent.

          Permitted Lien - a Lien of a kind specified in Section 8.2.5 of the
     Agreement.

          Permitted Purchase Money Indebtedness - Purchase Money Indebtedness of
     Borrower incurred after the date hereof which is secured by a Purchase
     Money Lien and which, when aggregated with the principal amount of all
     other such Indebtedness and Capitalized Lease Obligations of Borrower at
     the time outstanding, does not exceed $500,000. For the purposes of this
     definition, the principal amount of any Purchase Money Indebtedness
     consisting of capitalized leases shall be computed as a Capitalized Lease
     Obligation.

          Person - an individual, partnership, corporation, limited liability
     company, joint stock company, land trust, business trust, or unincorporated
     organization, or a government or agency or political subdivision thereof.

          PIK Interest - as defined in the Back Bay Loan Agreement, as in effect
     on the Closing Date.

          Plan - an employee benefit plan now or hereafter maintained for
     employees of Borrower that is covered by Title IV of ERISA.

          Properly Contested - in the case of any Indebtedness of a Loan Party
     (including any Taxes) that is not paid as and when due or payable by reason
     of such Loan Party's bona fide dispute concerning its liability to pay same
     or concerning the amount thereof, that (a) such Indebtedness and any Liens
     securing same are being properly contested in

<PAGE>

     good faith by appropriate proceedings promptly instituted and diligently
     conducted, (b) such Loan Party has established appropriate reserves as
     shall be required in conformity with GAAP, (c) the non-payment of such
     Indebtedness will not have a Material Adverse Effect and will not result in
     a forfeiture of any assets of such Loan Party; (d) no Lien is imposed upon
     any of such Loan Party's assets with respect to such Indebtedness unless
     such Lien is at all times junior and subordinate in priority to the Liens
     in favor of Lender (except only with respect to property taxes that have
     priority as a matter of applicable state law); (e) if the Indebtedness
     results from the entry, rendition or issuance against a Loan Party or any
     of its assets of a judgment, writ, order or decree, such judgment, writ,
     order or decree is stayed or bonded pending a timely appeal or other
     judicial review; and (f) if such contest is abandoned, settled or
     determined adversely to such Loan Party, such Loan Party forthwith pays
     such Indebtedness and all penalties and interest in connection therewith.

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

          Proposed Sales - mean, individually and/or collectively, as the
     context may require, the Alcore Sale and the Specialty Vehicle Sale.

          Pro Rata Share - means (a) with respect to matters relating to a
     particular Commitment of a Lender, the percentage obtained by dividing (i)
     such Commitment of that Lender by (ii) all such Commitments of all Lenders
     and (b) with respect to all other matters, the percentage obtained by
     dividing (i) the Total Loan Commitment of a Lender by (ii) the Total Loan
     Commitments of all Lenders, in either case as such percentage may be
     adjusted by assignments permitted pursuant to Section 11.1; provided,
     however, that if any Commitment is terminated pursuant to the terms hereof,
     then "Pro Rata Share" means the percentage obtained by dividing (x) the
     aggregate amount of such Lender's outstanding Loans related to such
     Commitment by (y) the aggregate amount of all outstanding Loans related to
     such Commitment.

          Purchase Money Indebtedness - means and includes (a) Indebtedness
     (other than the Obligations) for the payment of all or any part of the
     purchase price of any fixed assets, (b) any Indebtedness (other than the
     Obligations) incurred at the time of or within ten (10) days prior to or
     after the acquisition of any fixed assets for the purpose of financing all
     or any part of the purchase price thereof, and (c) any renewals, extensions
     or refinancings thereof, but not any increases in the principal amounts
     thereof outstanding at the time.

          Purchase Money Lien - a Lien upon fixed assets which secures Purchase
     Money Indebtedness, but only if such Lien shall at all times be confined
     solely to the fixed assets the purchase price of which was financed through
     the incurrence of the Purchase Money Indebtedness secured by such Lien.

          Put Note - as defined in Section 7.16 of the Warrant Purchase
     Agreement.


<PAGE>

          Put Option - as defined in Section 7.16 of the Warrant Purchase
     Agreement.

          Rentals - as defined in Section 8.2.12 of the Agreement.

          Registration Put Right - as defined in Section 7.13(b) of the Warrant
     Purchase Agreement.

          Replacement Lender - as defined in Section 3.14 of the Agreement.

          Reportable Event - any of the events set forth in Section 4043(b) of
     ERISA.

          Requisite Lenders - means Lenders holding or being responsible for
     fifty-one percent (51%) or more of the sum of (a) all outstanding Loans (b)
     the outstanding LC Amount and (c) all unutilized Commitments.

          Reserve Requirement - at any date of determination, that percentage
     (expressed as a decimal fraction) which is in effect on such day, as
     provided by the Board of Governors of the Federal Reserve System (or any
     successor governmental body) applied for determining the maximum reserve
     requirements (including without limitation, basic, supplemental, marginal
     and emergency reserves) under Regulation D with respect to "eurocurrency
     liabilities" as currently defined in Regulation D, or under any similar or
     successor regulation with respect to eurocurrency liabilities or
     eurocurrency funding. Each determination by Agent of the Reserve
     Requirement shall be provided to Borrower and, in the absence of manifest
     error, be conclusive and binding. Any Reserve Requirement shall be
     determined in accordance with Agent's customary practice and applied on a
     consistent basis.

          Restated Loan Documents - the Restated Loan Agreement and all other
     documents evidencing, governing, securing or otherwise pertaining to the
     Loans advanced under the Restated Loan Agreement.

          Restricted Investment - any investment made in cash or by delivery of
     Property to any Person, whether by acquisition of stock, Indebtedness or
     other obligation or Security, or by loan, advance or capital contribution,
     or otherwise, or in any Property except the following:

               (a) investments in one or more Subsidiaries of Borrower to the
          extent existing on the Closing Date;

               (b) Property to be used in the ordinary course of business;

               (c) Current Assets arising from the sale of goods and services in
          the ordinary course of business of Borrower and its Subsidiaries;

               (d) investments in direct obligations of the United States of
          America, or any agency thereof or obligations guaranteed by the United
          States of America,

<PAGE>

          provided that such obligations mature within one year from the date of
          acquisition thereof;

               (e) investments in certificates of deposit maturing within one
          year from the date of acquisition issued by a bank or trust company
          organized under the laws of the United States or any state thereof
          having capital surplus and undivided profits aggregating at least
          $100,000,000;

               (f) investments in commercial paper given the highest rating by a
          national credit rating agency and maturing not more than 270 days from
          the date of creation thereof; and

               (g) up to $700,000 of cash and/or investment securities deposited
          and/or contained in the Alcore Investment Account as of the Closing
          Date (plus any accretions thereon).

          Revolving Credit Borrowers - individually, collectively, and joint and
     severally, ATP, Alcore and Technical Products.

          Revolving Credit Loan - a Loan made by Lenders as provided in Section
     1.1 of the Agreement.

          Revolving Credit Note - the Secured Promissory Note(s) (Revolving
     Credit Loan) to be executed by Borrower on or about the Closing Date in
     favor of Lenders to evidence the Revolving Credit Loans, which shall be in
     the form of Exhibit A-1 to the Agreement.

          Revolving Loan Commitment - means (a) as to any Lender, the commitment
     of such Lender to make Revolving Credit Loans pursuant to Section 1.1, and
     to purchase participations in Letters of Credit pursuant to Section 1.5 in
     the aggregate amount set forth on Schedule 1 of this Agreement and (b) as
     to all Lenders, the aggregate commitment of all Lenders to make Revolving
     Credit Loans and to purchase participations in Letters of Credit.

          Schedule of Accounts - as defined in Section 6.2.1 of the Agreement.

          Security - shall have the same meaning as in Section 2(1) of the
     Securities Act of 1933, as amended.

          Security Documents - the Guaranty Agreement, the Mortgages, the
     Collateral Assignments of Leases, the Stock Pledge Agreements, and all
     other instruments and agreements now or at any time hereafter securing the
     whole or any part of the Obligations.

          Senior Indebtedness - means all Indebtedness of Borrower other than
     Subordinated Debt.


<PAGE>

          Solvent - as to any Person, such Person (a) owns Property whose fair
     salable value is greater than the amount required to pay all of such
     Person's Indebtedness (including contingent debts), (b) is able to pay all
     of its Indebtedness as such Indebtedness matures and (c) has capital
     sufficient to carry on its business and transactions and all business and
     transactions in which it is about to engage.

          Specialty Vehicle Sale - means Borrower's proposed sale of its assets
     owned in respect of its Specialty Vehicle Electronics/Intellitech division.

          Stated-Termination Date - means October 31, 2003.

          Stock Pledge Agreements - that certain Second Amended and Restated
     Stock Pledge Agreement, executed by ATP on or before the Closing Date,
     whereby ATP grants to Lender a first priority Lien in all the issued and
     outstanding capital stock of each Alcore, Technical Products, Marion,
     DeLand and Lincoln, to be in form and substance satisfactory to Lender.

          Subordinated Debt - Indebtedness of Borrower that is subordinated to
     the Obligations in a manner satisfactory to Lender.

          Subsidiary - any corporation of which a Person owns, directly or
     indirectly through one or more intermediaries, more than 50% of the Voting
     Stock at the time of determination.

          Tax Liabilities - as defined in Section 3.9(a) of this Agreement.

          Taxes - any present or future taxes, levies, imposts, duties, fees,
     assessments, deductions, withholdings or other charges of whatever nature,
     including, without limitation, income, receipts, excise, property, sales,
     transfer, license, payroll, withholding, social security and franchise
     taxes now or hereafter imposed or levied by the United States, or any
     state, local or foreign government or by any department, agency or other
     political subdivision or taxing authority thereof or therein and all
     interest, penalties, additions to tax and similar liabilities with respect
     thereto.

          Term Loan - the Loan described in Section 1.2.1 of the Agreement.

          Term Loan Commitment - means (a) as to any Lender, the commitment of
     such Lender to make its Pro Rata Share of the Term Loan in the maximum
     aggregate amount set forth on Schedule 1 and (b) as to all Lenders, the
     aggregate commitment of all Lenders to make the Term Loan.

          Term Notes - the Secured Promissory Note(s) (Term Note) executed by
     Borrower, each of which shall be in the form of Exhibit A-2 to this
     Agreement.

          Termination Date - means the earlier of either (a) the
     Stated-Termination Date or (b) the effective day on which the Lenders'
     commitments to lend under this Agreement are fully cancelled or terminated.


<PAGE>

          Total Credit Facility - $46,223,645.25.

          Total Liabilities - at any date means all amounts properly classified
     as liabilities on a balance sheet at such date in accordance with GAAP,
     plus all reserves for contingencies and all other potential liabilities for
     which no reserves have previously been established on such balance sheet,
     to the extent such amounts are not already classified as liabilities in
     accordance with GAAP.

          Total Loan Commitment - means, as to any Lender, the aggregate
     Commitments of such Lender with respect to its Revolving Loan Commitment,
     Term Loan Commitment and Equipment Loan Commitment.

          Total Revolving Credit Facility - $27,000,000.

          Voting Stock - Securities of any class or classes of a corporation the
     holders of which are ordinarily, in the absence of contingencies, entitled
     to elect a majority of the corporate directors (or Persons performing
     similar functions).

          Warrant Purchase Agreement - means that certain Warrant Purchase
     Agreement dated as of the Closing Date by and among ATP and the
     "Participants" listed on the "Schedule of Participants" attached thereto,
     as in effect on the Closing Date.

          Other Terms. All other terms contained in the Agreement shall have,
     when the context so indicates, the meanings provided for by the Code to the
     extent the same are used or defined therein.

          Certain Matters of Construction. The terms "herein", "hereof" and
     "hereunder" and other words of similar import refer to the Agreement as a
     whole and not to any particular section, paragraph or subdivision. Any
     pronoun used shall be deemed to cover all genders. In the computation of
     periods of time from a specified date to a later specified date, the word
     "from" means "from and including" and the words "to" and "until" each means
     "to but excluding." The section titles, table of contents and list of
     exhibits appear as a matter of convenience only and shall not affect the
     interpretation of the Agreement. All references to statutes and related
     regulations shall include any amendments of same and any successor statutes
     and regulations. All references to any of the Loan Documents shall include
     any and all modifications thereto and any and all extensions or renewals
     thereof. Wherever the phrase "including" shall appear in the Agreement,
     such word shall be understood to mean "including, without limitation."

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


<PAGE>



     IN WITNESS WHEREOF, this Appendix has been duly executed in Dallas, Dallas
County, Texas, as of the date first written above.

                                   BORROWER:

                                   ADVANCED TECHNICAL PRODUCTS, INC.

                                   By:   _______________________________________
                                            Garrett L. Dominy
                                            President

                                   ALCORE, INC.

                                   By:   _______________________________________
                                            Garrett L. Dominy
                                            President

                                   TECHNICAL PRODUCTS GROUP, INC.

                                   By:   _______________________________________
                                            Garrett L. Dominy
                                            President

                                   MARION PROPERTIES, INC.

                                   By:   _______________________________________
                                            Garrett L. Dominy
                                            President

                                   DELAND PROPERTIES, INC.

                                   By:   _______________________________________
                                            Garrett L. Dominy
                                            President


<PAGE>



                                   LINCOLN PROPERTIES, INC.

                                   By:   _______________________________________
                                            Garrett L. Dominy
                                            President

                                   Accepted in Dallas, Dallas County, Texas:

                                   AGENT:

                                   FLEET CAPITAL CORPORATION

                                   By:   _______________________________________
                                            Hance G. VanBeber
                                            Senior Vice President

                                   LENDERS:

                                   FLEET CAPITAL CORPORATION

                                   By:   _______________________________________
                                            Hance G. VanBeber
                                            Senior Vice President


<PAGE>



                                   SCHEDULE 1

                             LENDERS AND COMMITMENTS

<TABLE>
<CAPTION>
  =================================== =================== ==================== ==================== ===================

                Lender                    Term Loan         Equipment Loan       Revolving Loan         Total Loan
                                          Commitment          Commitment           Commitment          Commitments

  =================================== =================== ==================== ==================== ===================
<S>                                     <C>                  <C>                   <C>                <C>
  Fleet Capital Corporation             $16,635,428.56       $2,588,216.69         $27,000,000        $46,223,645.25
  5950 Sherry Lane
  Suite 300
  Dallas, Texas 75225
  Attn: Loan Administration  Manager
  Fax: (214) 706-7066

  =================================== =================== ==================== ==================== ===================

  Total                                 $16,635,428.56       $2,588,216.69         $27,000,000        $46,223,645.25

  =================================== =================== ==================== ==================== ===================
</TABLE>




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>5
<FILENAME>d70442_ex10-46.txt
<DESCRIPTION>LOAN AND SECURITY AGREEMENT
<TEXT>

                                                                   Exhibit 10.46


================================================================================
                           LOAN AND SECURITY AGREEMENT
================================================================================


================================================================================
                          BACK BAY CAPITAL FUNDING, LLC
                                   The Lender









                        ADVANCED TECHNICAL PRODUCTS, INC.
                                The Lead Borrower
                                      For:
                        ADVANCED TECHNICAL PRODUCTS, INC.
                                  ALCORE, INC.,
                         TECHNICAL PRODUCTS GROUP, INC.,
                            MARION PROPERTIES, INC.,
                             DELAND PROPERTIES, INC.
                            LINCOLN PROPERTIES, INC.
                                  The Borrowers
================================================================================



                                October 10, 2000
================================================================================



<PAGE>


                                TABLE OF CONTENTS


Article 1: - Definitions:.....................................................8


Article 2: - The Term Loan:..................................................27

         21.      -Commitment To Make Term Loan..............................27
         22.      -The Term Note.............................................27
         23.      -Payment of Principal of the Term Loan.....................27
         24.      -Interest On The Term Loan.................................28
         25.      -Fees......................................................29
         26.      -Lender's Discretion.......................................29
         27.      -Joint and Several Liability of the Borrowers..............30
         28.      -..........................................................31

Designation of Lead Borrower as Borrowers' Agent.............................31


Article 3: - Conditions Precedent:...........................................32

         31.      -Corporate Due Diligence...................................32
         32.      -Opinion...................................................32
         33.      -Additional Documents......................................33
         34.      -Officers' Certificates....................................33
         35.      -Representations and Warranties............................33
         36.      -All Fees and Expenses Paid................................33
         37.      -No Borrower In Default....................................34
         38.      -No Adverse Change.........................................34
         39.      -Minimum Day One Availability..............................34

Article 4: - General Representations, Covenants and Warranties:..............34

         41.      -Payment and Performance of Liabilities....................34
         42.      -Due Organization. Authorization. No Conflicts.............35
         43.      -Trade Names...............................................36
         44.      -Infrastructure............................................36
         45.      -Locations.................................................37
         46.      -Title to Assets...........................................38
         47.      -Indebtedness..............................................38
         48.      -Insurance.................................................39
         49.      -Licenses..................................................40
         410.     -Leases....................................................40
         411.     -Requirements of Law.......................................41
         412.     -Labor Relations...........................................41
         413.     -Maintain Properties.......................................42
         414.     -Taxes.....................................................43
         415.     -No Margin Stock...........................................44
         416.     -ERISA.....................................................44
         417.     -Hazardous Materials.......................................45
         418.     -Litigation................................................45
         419.     -Dividends. Investments. Corporate Action..................45
         420.     -Loans.....................................................46
         421.     -Protection of Assets......................................46
         422.     -Line of Business..........................................46
         423.     -Affiliate Transactions....................................47
         424.     -Further Assurances........................................47
         425.     -Adequacy of Disclosure....................................48
         426.     -No Restrictions on Liabilities............................48
         427.     -Other Covenants...........................................49


<PAGE>


Article 5: Financial Reporting and Performance Covenants:....................49

         51.      -Maintain Records..........................................49
         52.      -Access to Records.........................................49
         53.      -Immediate Notice to Lender................................50
         54.      -Financial Statements......................................51
         55.      -Officers' Certificates....................................53
         56.      -Inventories, Appraisals, and Audits.......................53
         57.      -Additional Financial Information..........................54
         58.      -Financial Performance Covenants...........................55

Article 6: - Use of Collateral:..............................................57

         61.      -Use of Collateral.........................................57
         62.      -Adjustments and Allowances................................58
         63.      -Validity of Accounts......................................58
         64.      -Notification to Account Debtors...........................58

Article 7: - Grant of Security Interest:.....................................59

         71.      -Grant of Security Interest................................59
         72.      -Extent and Duration of Security Interest..................60

Article 8: - Lender As Borrower's Attorney-In-Fact:..........................60
         81.      -Appointment as Attorney-In-Fact...........................60
         82.      -No Obligation to Act......................................61

Article 9: - Events of Default:..............................................61

         91.      -Failure to Pay the Term Loan..............................62
         92.      -Failure To Make Other Payments............................62
         93.      -Failure to Perform Covenant or Liability (No Grace Period)62
         94.      -Failure to Perform Covenant or Liability (Grace Period)...62
         95.      -Misrepresentation.........................................63
         96.      -Acceleration of Other Debt. Breach of Lease...............63
         97.      -Default Under Other Agreements............................63
         98.      -Uninsured Casualty Loss...................................63
         99.      -Attachment. Judgment. Restraint of Business...............63
         910.     -Business Failure..........................................64
         911.     -Bankruptcy................................................64
         912.     -Default by Guarantor......................................64
         913.     -Indictment - Forfeiture...................................65
         914.     -Termination of Guaranty...................................65
         915.     -Challenge to Loan Documents...............................65
         11.      -Change in Control.........................................65

Article 1: - Rights and Remedies Upon Default:...............................65

         11.      -Acceleration..............................................65
         12.      -Rights of Enforcement.....................................66
         13.      -Sale of Collateral........................................66
         14.      -Occupation of Business Location...........................67
         15.      -Grant of Nonexclusive License.............................67
         16.      -Assembly of Collateral....................................67
         17.      -Rights and Remedies.......................................68

Article 2: - Notices:........................................................68

         21.      -Notice Addresses..........................................68
         22.      -Notice Given..............................................69

Article 3: - Term:...........................................................70

         31.      -Actions on Termination Date...............................70


<PAGE>



Article 4: - General:........................................................70

         41.      -Protection of Collateral..................................70
         42.      -Publicity.................................................71
         43.      -Successors and Assigns....................................71
         44.      -Severability..............................................71
         45.      -Amendments.  Course of Dealing............................71
         46.      -Power of Attorney.........................................72
         47.      -Application of Proceeds...................................72
         48.      -Increased Costs...........................................72
         49.      -Costs and Expenses of the Lender..........................73
         410.     -Copies and Facsimiles.....................................74
         411.     -Massachusetts Law.........................................74
         412.     -Consent to Jurisdiction...................................74
         413.     -Indemnification...........................................75
         414.     -Rules of Construction.....................................75
         415.     -Intent....................................................77
         416.     -Participations:...........................................78
         417.     -Right of Set-Off..........................................78
         418.     -Pledges To Federal Reserve Banks:.........................78
         419.     -Maximum Interest Rate.....................................78
         420.     -Waivers...................................................80


<PAGE>


                                    EXHIBITS

0                          :        Term Note
0                          :        Affiliates
0                          :        Trade Names
0                          :        Locations, Leases, and Landlords
0                          :        Encumbrances
0                          :        Indebtedness
0                          :        Insurance Policies
0                          :        Capital Leases
         4:4-12            :        Labor Relations
0                          :        Taxes
         4:4-16(vii)       :        ERISA Plans
         4:4-17            :        Hazardous Materials
0                          :        Litigation
         4:4-26            :        Restrictions on Indebtedness
         7:7-2             :        Exclusions from Security


<PAGE>



================================================================================
LOAN AND SECURITY AGREEMENT                        Back Bay Capital Funding, LLC
                                                                      The Lender

================================================================================

                                                                October 10, 2000

          THIS AGREEMENT is made between

          Back Bay Capital Funding, LLC (the "Lender"), a Delaware limited
     liability company with offices at 40 Broad Street, Boston, Massachusetts
     02109

          and

          Advanced Technical Products, Inc. ( in such capacity, the " Lead
     Borrower"), a Delaware corporation with its principal executive offices at
     200 Mansell Ct. East, Suite 505, Roswell, Georgia, as agent for the
     following:


          Advanced Technical Products, Inc. ("ATP"), a Delaware corporation,
     Alcore, Inc. ("Alcore"), a Delaware corporation, Technical Products Group,
     Inc. ("Technical Products"), a Delaware corporation, Marion Properties,
     Inc. ("Marion"), a Delaware corporation, DeLand Properties, Inc.
     ("DeLand"), a Delaware corporation, and Lincoln Properties, Inc.
     ("Lincoln"), a Delaware corporation (ATP, Alcore, Technical Products,
     Marion, DeLand and Lincoln being referred to individually, collectively,
     and jointly and severally, as "Borrower" or "Borrowers"), each Borrower
     having an office at 200 Mansell Ct., East, Suite 505, Roswell, GA 30076.

in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,



<PAGE>

                                   WITNESSETH:
- - Definitions:

     As used herein, the following terms have the following meanings or are
defined in the section of this Agreement so indicated:

     "Account Debtor": Has the meaning given that term in the UCC.

     "Accounts" and "Accounts Receivable" include, without limitation,
"accounts" as defined in the UCC, and also all: accounts, accounts receivable,
receivables, and rights to payment (whether or not earned by performance) for:
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of; services rendered or to be rendered; a policy of
insurance issued or to be issued; a secondary obligation incurred or to be
incurred; energy provided or to be provided; for the use or hire of a vessel;
arising out of the use of a credit or charge card or information contained on or
used with that card; winnings in a lottery or other game of chance; and also all
Inventory which gave rise thereto, and all rights associated with such
Inventory, including the right of stoppage in transit; all reclaimed, returned,
rejected or repossessed Inventory (if any) the sale of which gave rise to any
Account.

     "AdjustedTangible Assets": all assets except: (a) any surplus resulting
from any write-up of assets subsequent to April 28, 1995; (b) deferred assets,
other than prepaid insurance and prepaid taxes; (c) patents, copyrights,
trademarks, trade names, non-compete agreements, franchises and other similar
intangibles; (d) goodwill, including any amounts, however designated on a
Consolidated balance sheet of a Person or its Subsidiaries, representing the
excess of the purchase price paid for assets or stock over the value assigned
thereto on the books of such Person; (e) Restricted Investments; (f) unamortized
debt discount and expense; (g) assets located and notes and receivables due from
obligors outside of the United States of America; and (h) Accounts, notes and
other receivables due from Affiliates or employees.

     "Adjusted Tangible Net Worth": at any date means a sum equal to: (a) the
net book value (after deducting related depreciation, obsolescence,
amortization, valuation, and other proper reserves) at which the Adjusted
Tangible Assets of a Person would be shown on a balance sheet at such date in
accordance with GAAP, minus (b) the amount at which such Person's liabilities
(other than capital stock and surplus) would be shown on such balance sheet in
accordance with GAAP, and including as liabilities all reserves for
contingencies and other potential liabilities.

<PAGE>


     "Affiliate": The following:

          (a) With respect to any two Persons, a relationship in which (i) one
     holds, directly or indirectly, not less than Twenty Five Percent (25%) of
     the capital stock, beneficial interests, partnership interests, or other
     equity interests of the other; or (ii) one has, directly or indirectly, the
     right, under ordinary circumstances, to vote for the election of a majority
     of the directors (or other body or Person who has those powers customarily
     vested in a board of directors of a corporation); or (iii) not less than
     Twenty Five Percent (25%) of their respective ownership is directly or
     indirectly held by the same third Person.

          (b) Any Person which: is a parent, brother-sister, subsidiary, or
     affiliate, of a Borrower; could have such enterprise's tax returns or
     financial statements consolidated with that Borrower's; could be a member
     of the same controlled group of corporations (within the meaning of Section
     1563(a)(1), (2) and (3) of the Internal Revenue Code of 1986, as amended
     from time to time) of which any Borrower is a member; controls or is
     controlled by any Borrower.

     "Alcore Sale": means Borrower's proposed sale of all or substantially all
of the assets of Alcore.


<PAGE>

     "Applicable Law": As to any Person:(i) All statutes, rules, regulations,
orders, or other requirements having the force of law and (ii) all court orders
and injunctions, arbitrator's decisions, and/or similar rulings, in each
instance ((i) and (ii)) of or by any federal, state, municipal, and other
governmental authority, or court, tribunal, panel, or other body which has or
claims jurisdiction over such Person, or any property of such Person, or of any
other Person for whose conduct such Person would be responsible.

     "Bankruptcy Code": Title 11, U.S.C., as amended from time to time.

     "Borrower" and "Borrowers": Is defined in the Preamble.

     "BusinessDay": Any day other than (a) a Saturday or Sunday; (b) any day on
which banks in Boston, Massachusetts or in Atlanta, Georgia, generally are not
open to the general public for the purpose of conducting commercial banking
business; or (c) a day on which the principal office of the Lender is not open
to the general public to conduct business.

     "Capital Expenditures": Expenditures made or liabilities incurred for the
acquisition of any fixed assets or improvements, replacements, substitutions or
additions thereto which have a useful life of more than one year, including the
total principal portion of Capitalized Lease Obligations

     "Capitalized Lease Obligation": any Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

     "Capital Lease": Any lease which is required to be capitalized in
accordance with GAAP.

<PAGE>


     "Change in Control": The occurrence of any of the following:

          (a) The acquisition, by any group of persons (within the meaning of
     the Securities Exchange Act of 1934, as amended) or by any Person, of
     beneficial ownership (within the meaning of Rule 13d-3 of the Securities
     and Exchange Commission) of 35% or more of the issued and outstanding
     capital stock of the Lead Borrower having the right, under ordinary
     circumstances, to vote for the election of directors of the Lead Borrower.

          (B) Any failure of the Lead Borrower to own, beneficially and of
     record, 100% of the capital stock of all other Borrowers.

     "Chattel Paper": Has the meaning given that term in the UCC.

     "Closing Date": The date on which the conditions specified in Article 3 are
satisfied or waived and the Term Loan is to be made hereunder.

     "Collateral": Is defined in Section 0.

     "Collateral Interest": Any interest in property to secure an obligation,
including, without limitation, a security interest, mortgage, and deed of trust.

     "Consolidated": When used to modify a financial term, test, statement, or
report, refers to the application or preparation of such term, test, statement
or report (as applicable) based upon the consolidation, in accordance with GAAP,
of the financial condition or operating results of the Borrowers.

     "Costs of Collection": Includes, without limitation, all reasonable fees
and reasonable out-of-pocket expenses incurred by the Lender's attorneys, and
all reasonable out-of-pocket costs incurred by the Lender in the administration
of the Liabilities and/or the Loan Documents, including, without limitation,
reasonable costs and expenses associated with travel on behalf of the Lender,
where such costs and expenses are directly or indirectly related to or in
respect of the Lender's: administration and management of the Liabilities;
negotiation, documentation, and amendment of any Loan Document; or efforts to
preserve, protect, collect, or enforce the Collateral, the Liabilities, and/or
the Lender's Rights and Remedies and/or any of the rights and remedies of the
Lender against or in respect of any guarantor or other person liable in respect
of the Liabilities (whether or not suit is instituted in connection with such
efforts). The Costs of Collection are Liabilities, and at the Lender's option
may bear interest at the then effective rate of interest applicable to loans and
advances under the Term Loan.

<PAGE>


     "Current Assets": at any date means the amount at which all of the current
assets of a Person would be properly classified as current assets shown on a
balance sheet at such date in accordance with GAAP except that amounts due from
Affiliates and investments in Affiliates shall be excluded therefrom.

     "Current Pay Interest": Is defined in Section 0.

     "Default Rate": Is defined in Section 2:2-4(b).

     "Documents": Has the meaning given that term in the UCC.

     "Documents of Title": Has the meaning given that term in the UCC.

     "Early Termination Fee: Is defined in Section 2:2-3(b).

<PAGE>


     "EBITDA":The Borrowers' Consolidated earnings before interest, taxes,
depreciation, and amortization, each as determined in accordance with GAAP
[inclusive of discontinued operations]. For the purposes of the calculation of
the Fixed Charge Ratio and Interest Coverage Ratio through the period ending
March 31, 2001, the following expenses taken by the Borrower, in their 10-Q
report for the fiscal quarter ended June 30, 1999, shall be added to EBITDA: (i)
expenses related to the terminated merger agreement with Veritas up$750,000, and
(ii) expenses related to severance payments due the Borrowers' former chairman.

     "Employee Benefit Plan": As defined in ERISA.

     "Encumbrance": Each of the following:

          (a) A Collateral Interest or agreement to create or grant a Collateral
     Interest); the interest of a lessor under a Capital Lease; conditional sale
     or other title retention agreement; sale of accounts receivable or chattel
     paper; or other arrangement pursuant to which any Person is entitled to any
     preference or priority with respect to the property or assets of another
     Person or the income or profits of such other Person; each of the foregoing
     whether consensual or non-consensual and whether arising by way of
     agreement, operation of law, legal process or otherwise. (b) The filing of
     any financing statement under the UCC or comparable law of any
     jurisdiction.

     "Environmental Laws": All of the following:

          (a) Applicable Law which regulates or relates to, or imposes any
     standard of conduct or liability on account of or in respect to,
     environmental protection matters, including, without limitation, Hazardous
     Materials, as are now or hereafter in effect.

          (b) The common law relating to damage to Persons or property from
     Hazardous Materials.

     "Equipment": Includes, without limitation, "equipment" as defined in the
UCC, and also all furniture, store fixtures, motor vehicles, rolling stock,
machinery, office equipment, plant equipment, tools, dies, molds, and other
goods, property, and assets which are used and/or were purchased for use in the
operation or furtherance of a Borrower's business, and any and all accessions or
additions thereto, and substitutions therefor.

<PAGE>


     "ERISA": The Employee Retirement Income Security Act of 1974, as amended.

     "ERISA Affiliate": Any Person which is under common control with a Borrower
within the meaning of Section 4001 of ERISA or is part of a group which includes
any Borrower and which would be treated as a single employer under Section 414
of the Internal Revenue Code of 1986, as amended.

     "Events of Default": Is defined in Article 0. An "Event of Default" shall
be deemed to have occurred and to be continuing unless and until that Event of
Default has been duly waived by the Lender.

     "Excess Cash Flow": EBITDA less the sum of permitted capital expenditures,
cash taxes, cash principal payments, cash interest payments and cash payments
made under capital leases (without duplication).

     "Excess Interest": Is defined in Section 13:13-19(b).

     "Farm Products": Has the meaning given that term in the UCC.

     "Fee Letter": That Fee Letter dated as of the Closing Date and styled "Fee
Letter" between the Lead Borrower and the Lender, as such letter may be amended
from time to time.

     "Fiscal":When followed by "month" or "quarter", the relevant fiscal period
based on the Borrowers' fiscal year and accounting conventions. When followed by
reference to a specific year, the fiscal year which ends in a month of the year
to which reference is being made (e.g. if the Borrowers' fiscal year ends in
January 2001 reference to that year would be to the Borrowers' "Fiscal 2001").


<PAGE>


     "Fixed Charge Ratio": for any period of calculation, the ratio of EBITDA
less Capital Expenditures to Fixed Charges.

     "Fixed Charges": For any period of calculation, with respect to the
Borrower and its Subsidiaries, the sum of (i) permanent reductions of principal,
and interest, on account of Indebtedness for borrowed money actually paid in
cash during such period, plus (ii) Capital Lease payments paid in cash during
such period, plus (iii) income taxes paid in cash during such period, each as
determined in accordance with GAAP, plus (iv) Permitted Dividends.

     "Fixtures": Has the meaning given that term in the UCC.

     "GAAP": Principles which are consistent with those promulgated or adopted
by the Financial Accounting Standards Board and its predecessors (or successors)
in effect and applicable to that accounting period in respect of which reference
to GAAP is being made.

     "General Intangibles": Includes, without limitation, "general intangibles"
as defined in the UCC; and also all: rights to payment for credit extended;
deposits; amounts due to any Borrower; credit memoranda in favor of any
Borrower; warranty claims; tax refunds and abatements; insurance refunds and
premium rebates; all means and vehicles of investment or hedging, including,
without limitation, options, warrants, and futures contracts; records; customer
lists; telephone numbers; goodwill; causes of action; judgments; payments under
any settlement or other agreement; literary rights; rights to performance;
royalties; license and/or franchise fees; rights of admission; licenses;
franchises; license agreements, including all rights of any Borrower to enforce
same; permits, certificates of convenience and necessity, and similar rights
granted by any governmental authority; patents, patent applications, patents
pending, and other intellectual property; internet addresses and domain names;
developmental ideas and concepts; proprietary processes; blueprints, drawings,
designs, diagrams, plans, reports, and charts; catalogs; manuals; technical
data; computer software programs (including the source and object codes
therefor), computer records, computer software, rights of access to computer
record service bureaus, service bureau computer contracts, and computer data;
tapes, disks, semi-conductors chips and printouts; trade secrets rights,
copyrights, mask work rights and interests, and derivative works and interests;
user, technical reference, and other manuals and materials; trade names,
trademarks, service marks, and all goodwill relating thereto; applications for
registration of the foregoing; and all other general intangible property of any
Borrower in the nature of intellectual property; proposals; cost estimates, and
reproductions on paper, or otherwise, of any and all concepts or ideas, and any
matter related to, or connected with, the design, development, manufacture,
sale, marketing, leasing, or use of any or all property produced, sold, or
leased, by any or credit extended or services performed, by any Borrower,
whether intended for an individual customer or the general business of any
Borrower, or used or useful in connection with research by any Borrower.

<PAGE>


     "Goods": Has the meaning given that term in the UCC, and also includes all
things movable when a security interest therein attaches and also all computer
programs embedded in goods and any supporting information provided in connection
with a transaction relating to the program if (i) the program is associated with
the goods in such manner that it customarily is considered part of the goods or
(ii) by becoming the owner of the goods, a Person acquires a right to use the
program in connection with the goods.

     "Hazardous Materials": Any (a) substance which is defined or regulated as a
hazardous material in or under any Environmental Law and (b) oil in any physical
state.

     "Indebtedness": All indebtedness and obligations of or assumed by any
Person on account of or in respect to any of the following:

          (a) In respect of money borrowed (including any indebtedness which is
     non-recourse to the credit of such Person but which is secured by an
     Encumbrance on any asset of such Person) whether or not evidenced by a
     promissory note, bond, debenture or other written obligation to pay money.

          (b) In connection with any letter of credit or acceptance transaction
     (including, without limitation, the face amount of all letters of credit
     and acceptances issued for the account of such Person or reimbursement on
     account of which such Person would be obligated).

          (c) In connection with the sale or discount of accounts receivable or
     chattel paper of such Person.

          (d) On account of deposits or advances.

          (e) As lessee under Capital Leases.

          (f) In connection with any sale and leaseback transaction.
     "Indebtedness" also includes:

               (x) Indebtedness of others secured by an Encumbrance on any asset
          of such Person, whether or not such Indebtedness is assumed by such
          Person.

               (y) Any guaranty, endorsement, suretyship or other undertaking
          pursuant to which that Person may be liable on account of any
          obligation of any third party.


<PAGE>


               (z) The Indebtedness of a partnership or joint venture for which
          such Person is liable as a general partner or joint venturer.

     "In Default": Any occurrence, circumstance, or state of facts with respect
to a Borrower which (a) is an Event of Default; or (b) would become an Event of
Default if any requisite notice were given and/or any requisite period of time
were to run and such occurrence, circumstance, or state of facts were not
absolutely cured within any applicable grace period.

     "Indemnified Person": Is defined in Section 513.

     "Instruments": Has the meaning given that term in the UCC.

     "Interest Coverage Ratio": for any period of calculation, the ratio of
EBITDA to Interest Expense.

     "InterestExpense": with respect to any fiscal period, the interest expense
incurred for such period as determined in accordance with GAAP (excluding any
PIK Interest that is capitalized and added to the outstanding principal amount
of the Term Loan in accordance with Section 2-4(a)(ii)(A) of the Agreement) plus
letter of credit and guaranty fees owing for such period.

     "Inventory": Includes, without limitation, "inventory" as defined in the
UCC and also all: (a) Goods which are leased by a Person as lessor; are held by
a Person for sale or lease or to be furnished under a contract of service; are
furnished by a Person under a contract of service; or consist of raw materials,
work in process, or materials used or consumed in a business; (b) Goods of said
description in transit; (c) Goods of said description which all returned,
repossessed and rejected; (d) packaging, advertising, and shipping materials
related to any of the foregoing; (e) all names, marks, and General Intangibles
affixed or to be affixed or associated thereto; and (f) Documents and Documents
of Title which represent any of the foregoing.

<PAGE>


     "Investment Property": Has the meaning given that term in the UCC.

     "Lease": Any lease or other agreement, no matter how styled or structured,
pursuant to which a Borrower is entitled to the use or occupancy of any space.

     "Leasehold Interest": Any interest of a Borrower as lessee under any Lease.

     "Lender": Is defined in the Preamble to this Agreement.

     "Lender's Rights and Remedies": Is defined in Section 27.

     "Letter-of-Credit Right": Has the meaning given that term in UCC 9'99 and
also refers to any right to payment or performance under an L/C, whether or not
the beneficiary has demanded or is at the time entitled to demand payment or
performance.

     "Liabilities": Includes, without limitation, the following:

          (i) Any and all direct and indirect liabilities, debts, and
     obligations of each Borrower to the Lender, each of every kind, nature, and
     description.

          (ii) Each obligation to repay any loan, advance, indebtedness, note,
     obligation, overdraft, or amount now or hereafter owing by any Borrower to
     the Lender (including all future advances whether or not made pursuant to a
     commitment by the Lender), whether or not any of such are liquidated,



<PAGE>


     unliquidated, primary, secondary, secured, unsecured, direct, indirect,
     absolute, contingent, or of any other type, nature, or description, or by
     reason of any cause of action which the Lender may hold against any
     Borrower.

          (iii) All notes and other obligations of each Borrower now or
     hereafter assigned to or held by the Lender, each of every kind, nature,
     and description.

          (iv) All interest, fees, and charges and other amounts which may be
     charged by the Lender to any Borrower and/or which may be due from any
     Borrower to the Lender from time to time.

          (v) All costs and expenses incurred or paid by the Lender in respect
     of any agreement between any Borrower and the Lender or instrument
     furnished by any Borrower to the Lender (including, without limitation,
     Costs of Collection, attorneys' reasonable fees, and all court and
     litigation costs and expenses).

          (vi) Any and all covenants of each Borrower to or with the Lender and
     any and all obligations of each Borrower to act or to refrain from acting
     in accordance with any agreement between that Borrower and the Lender or
     instrument furnished by that Borrower to the Lender. (vii) All obligations
     under the Warrant Purchase Agreement dated October 10, 2000 between ATP and
     the Lender.

          (viii) Each of the foregoing as if each reference to the " the Lender"
     were to each Affiliate of the Lender, provided, in no event shall
     "Obligations" arising under the Tranche A Loan Agreement be included as
     Liabilities hereunder.

     "Lien": any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on common law, statute or contract. The term "Lien" shall also include
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of the Agreement, Borrower shall be deemed
to be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.

<PAGE>


     "Loan Documents": This Agreement, each instrument and document executed
and/or delivered as contemplated by Article 0, below, and each other instrument
or document from time to time executed and/or delivered in connection with the
arrangements contemplated hereby or in connection with any transaction with the
Lender or any Affiliate of the Lender, including, without limitation, any
transaction which arises out of any cash management, depository, investment,
letter of credit, interest rate protection, or equipment leasing services
provided by the Lender or any Affiliate of the Lender, as each may be amended
from time to time.

     "MaterialAccounting Change": Any change in GAAP applicable to accounting
periods subsequent to the Borrowers' fiscal year most recently completed prior
to the execution of this Agreement, which change has a material effect on the
Borrowers' Consolidated financial condition or operating results, as reflected
on financial statements and reports prepared by or for the Borrowers, when
compared with such condition or results as if such change had not taken place or
where preparation of the Borrowers' statements and reports in compliance with
such change results in the breach of a financial performance covenant imposed
pursuant to Section 0 where such a breach would not have occurred if such change
had not taken place or visa versa.

     "Maturity Date": October 30, 2003.

     "Maximum Legal Rate": Is defined in Section 13:13-19.

<PAGE>


     "Money Borrowed": means (a) Indebtedness arising from the lending of money
by any Person to Borrower; (b) Indebtedness, whether or not in any such case
arising from the lending by any Person of money to Borrower, (i) which is
represented by notes payable or drafts accepted that evidence extensions of
credit, (ii) which constitutes obligations evidenced by bonds, debentures, notes
or similar instruments, or (iii) upon which interest charges are customarily
paid (other than accounts payable) or that was issued or assumed as full or
partial payment for Property; (c) Indebtedness that constitutes a Capitalized
Lease Obligation; (d) reimbursement obligations with respect to letters of
credit or guaranties of letters of credit and (e) Indebtedness of Borrower under
any guaranty of obligations that would constitute Indebtedness for Money
Borrowed under clauses (a) through (c) hereof, if owed directly by Borrower.

     "Participant": Is defined in Section 516, hereof.

     "Payment Intangible": Has the meaning given that term in UCC 9'99 and also
refers to any general intangible under which the Account Debtor's primary
obligation is a monetary obligation.

     "Permitted Encumbrances": Those Encumbrances permitted as provided in
Section 0 hereof.

     "Permitted Dividends": Those dividends permitted pursuant to Section
4:4-19(a), below.

     "Permitted Purchase Money Indebtedness": Purchase Money Indebtedness of
Borrower incurred after the date hereof which is secured by a Purchase Money
Lien and which, when aggregated with the principal amount of all other such
Indebtedness and Capitalized Lease Obligations of Borrower at the time
outstanding, does not exceed $1,000,000.00. For the purposes of this definition,
the principal amount of any Purchase Money Indebtedness consisting of
capitalized leases shall be computed as a Capitalized Lease Obligation.


<PAGE>


     "Person": Any natural person, and any corporation, limited liability
company, trust, partnership, joint venture, or other enterprise or entity.

     "PIK Interest": Defined in Section 0.

     "Proceeds": Includes, without limitation, "Proceeds" as defined in the UCC
and each type of property described in Section 0 hereof.

     "Properly Contested": In the case of any Indebtedness of a Borrower
(including any Taxes) that is not paid as and when due or payable by reason of
such Borrower's bona fide dispute concerning its liability to pay same or
concerning the amount thereof, that (a) such Indebtedness and any Liens securing
same are being properly contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, (b) such Borrower has established
appropriate reserves as shall be required in conformity with GAAP, (c) the
non-payment of such Indebtedness will not have a material adverse effect and
will not result in a forfeiture of any assets of such Borrower; (d) no Lien is
imposed upon any of such Borrower's assets with respect to such Indebtedness
unless such Lien is at all times junior and subordinate in priority to the Liens
in favor of Lender (except only with respect to property taxes that have
priority as a matter of applicable state law); (e) if the Indebtedness results
from the entry, rendition or issuance against a Borrower or any of its assets of
a judgment, writ, order or decree, such judgment, writ, order or decree is
stayed or bonded pending a timely appeal or other judicial review; and (f) if
such contest is abandoned, settled or determined adversely to such Borrower,
such Borrower forthwith pays such Indebtedness and all penalties and interest in
connection therewith.


<PAGE>


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

     "Proposed Sales": mean, individually and/or collectively, as the context
may require, the Alcore Sale and the Specialty Vehicle Sale.

     "PurchaseMoney Indebtedness": means and includes (a) Indebtedness (other
than the Liabilities) for the payment of all or any part of the purchase price
of any fixed assets, (b) any Indebtedness (other than the Liabilities) incurred
at the time of or within ten (10) days prior to or after the acquisition of any
fixed assets for the purpose of financing all or any part of the purchase price
thereof, and (c) any renewals, extensions or refinancings thereof, but not any
increases in the principal amounts thereof outstanding at the time.

     "PurchaseMoney Lien": a Lien upon fixed assets which secures Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
fixed assets the purchase price of which was financed through the incurrence of
the Purchase Money Indebtedness secured by such Lien.

     "Receivables Collateral": That portion of the Collateral which consists of
Accounts, Accounts Receivable, General Intangibles, Chattel Paper, Instruments,
Documents of Title, Documents, Investment Property, Payment Rights,
Letter-of-Credit Rights, bankers' acceptances, and all other rights to payment.

     "Rentals": as defined in Section 4-10.

<PAGE>


     "Requirements of Law": As to any Person:

          (a) Applicable Law.

          (b) That Person's organizational documents.

          (c) That Person's by-laws and/or other instruments which deal with
     corporate or similar governance, as applicable.

     "Restricted Investment": any investment made in cash or by delivery of
Property to any Person, whether by acquisition of stock, Indebtedness or other
obligation or Security, or by loan, advance or capital contribution, or
otherwise, or in any Property except the following:

          (a) investments in one or more Subsidiaries of Borrower to the extent
     existing on the Closing Date;

          (b) Property to be used in the ordinary course of business;

          (c) Current Assets arising from the sale of goods and services in the
     ordinary course of business of Borrower and its Subsidiaries;


          (d) investments in direct obligations of the United States of America,
     or any agency thereof or obligations guaranteed by the United States of
     America, provided that such obligations mature within one year from the
     date of acquisition thereof;

          (e) investments in certificates of deposit maturing within one year
     from the date of acquisition issued by a bank or trust company organized
     under the laws of the United States or any state thereof having capital
     surplus and undivided profits aggregating at least $100,000,000; and

          (f) investments in commercial paper given the highest rating by a
     national credit rating agency and maturing not more than 270 days from the
     date of creation thereof.

     "Senior Indebtedness": means all Indebtedness of Borrower.


<PAGE>


     "Specialty Vehicle Sale": means Borrower's proposed sale of its assets
owned in respect of its Specialty Vehicle Electronics/Intellitech division.

     "Subsidiary": any corporation of which a Person owns, directly or
indirectly through one or more intermediaries, more than fifty percent (50%) of
the Voting Stock at the time of determination.

     "Supporting Obligation": Has the meaning given that term in UCC 9'99 and
also refers to a Letter-of-Credit Right or secondary obligation which supports
the payment or performance of an Account, Chattel Paper, a Document, a General
Intangible, an Instrument, or Investment Property.

     "Term Loan": Defined in Section 2:2-1.

     "Term Loan A Loans": The Term Notes and the Equipment Notes, as defined in
the Tranche A Loan Agreement.

     "Term Loan Interest Payment Date": Defined in Section 0.

     "Term Loan Interest Rate": Defined in Section 0.

     "Term Loan Early Termination Fee": Defined in Section ?.

     "Term Note": Defined in Section 0.

     "Termination Date": The earliest of (a) the Maturity Date; or (b) the
occurrence of any event described in Section 0, below; or (c) the Lender's
notice to the Lead Borrower setting the Termination Date on account of the
occurrence of any Event of Default other than as described in Section 0, below;
or (d) that date, sixty (60) days irrevocable written notice of which is
provided by the Lead Borrower to the Lender.


<PAGE>


     "Tranche A Agent": Fleet Capital Corporation, a Rhode Island corporation
with an office at 5950 Sherry Lane, Suite 300, Dallas, Texas 75225

     "Tranche A Loan Agreement": That certain Second Amended and Restated Loan
and Security Agreement dated October 10, 2000 by and among the Borrowers, the
Tranche A Agent and the Lenders party thereto, as amended and in effect from
time to time.

     "UCC": The Uniform Commercial Code as in effect from time to time in
Massachusetts.

     "UCC9'99": The Uniform Commercial Code, Article 9, 1999 Official Text,
except that following the effectiveness, in Massachusetts, of the revision of
Article 9 of the Uniform Commercial Code contemplated by UCC9'99 (with such
nonuniform variations as may be adopted as part of the enactment of that
revision), each reference to "UCC9'99" shall be to the UCC.

- - The Term Loan:

- -Commitment To Make Term Loan.

Subject to satisfaction of the Conditions Precedent (Article 0) by on or prior
to the date of this Agreement, the Borrowers shall borrow from the Lender and
the Lender shall lend to the Borrowers the sum of $7,000,000.00 (the "Term
Loan"), repayable with interest as provided herein. The proceeds of the Term
Loan shall be used solely for general working capital purposes.

- -The Term Note. The obligation to repay the Term Loan, with interest as provided
herein, shall be evidenced by a Note (the "Term Note") in the form of EXHIBIT 0,
annexed hereto, executed by the Borrowers. Neither the original nor a copy of
the Term Note shall be required, however, to establish or prove any Liability.
In the event that the Term Note is ever lost, mutilated, or destroyed, the
Borrowers shall execute a replacement thereof and deliver such replacement to
the Lender.

<PAGE>


- -Payment of Principal of the Term Loan.

Except as provided in Sections ?, the Borrowers may not repay all or any portion
of the principal balance of the Term Loan prior to the Termination Date. No
prepayments shall be made towards the unpaid principal balance of the Term Loan
prior to twelve (12) months from the date of this Agreement. Thereafter, if,
other than as provided in Subsection (c), below, the Liabilities are accelerated
as a result of the occurrence of an Event of Default, or the Borrower prepays
the Term Loan at any time, in whole or in part, the Borrower shall pay to the
Lender an "Term Loan Early Termination Fee" equal to two (2%) percent of any
amount prepaid. Any prepayments shall be in minimum increments of $2,000,000.00,
except that no Term Loan Early Termination Fee shall be due and payable on
account of a prepayment in accordance with the mandatory prepayment provisions
included in Section 2:2-3(c) below. In addition to regularly scheduled principal
payments, upon payment in full of the Term Loan A Loans, the Borrowers, at the
Lender's option and request, shall prepay the Term Loan in an amount up to forty
percent (40%) of the amount of Excess Cash Flow with respect to each fiscal year
of Borrower during the term hereof, commencing with the fiscal year ending
December 31, 2001, with such payment being made, with respect to any fiscal
year, within two (2) Business Days following the earlier to occur of (a) the due
date of delivery by Borrower to the Lender of its annual audited financial
statements as required by Section 5-6 hereof, or (b) the Lender's receipt of
such financial statements and the compliance certificate related thereto.
Amounts prepaid thereunder shall be applied ratably in inverse order of
maturity. The Borrowers shall repay the then entire unpaid balance of the Term
Loan and all accrued and unpaid interest thereon on the Termination Date.

- -Interest On The Term Loan.

     Subject to Section 0, the unpaid principal balance of the Term Loan shall
bear interest, until repaid, at the fixed rate of 15% per annum (the "Term Loan
Interest Rate"), payable as follows: Accrued interest on the unpaid principal
balance of the Term Loan equal to twelve and one-half percent (12.5%) per annum
("Current Pay Interest") shall be payable monthly in arrears, on the first
Business Day of each month (the "Term Loan Interest Payment Date"), and on the
Maturity Date.

     Subject to Section 2-4(b), accrued interest on the unpaid principal balance
of the Term Loan in excess of Current Pay Interest (which excess is referred to
herein as "PIK Interest") shall be payable as follows:

     The Borrowers shall have the option, exercisable by irrevocable written
notice by the Lead Borrower to the Lender made at least three (3) Business Days
prior to relevant Term Loan Interest Payment Date, to pay all or any part of
such PIK Interest by adding the same to the principal balance of the Term Note
on that Term Loan Interest Payment Date. At the Lender's option and request, the
Borrowers shall execute notes from time to time in form acceptable to the Lender
to evidence such addition of accrued interest to the principal balance of the
Term Note. PIK Interest as to which the option provided in Section 0 is not
exercised shall be paid on the then next Term Loan Interest Payment Date.

     At the direction of the Lender, following the occurrence of any Event of
Default (and whether or not Acceleration has taken place), the option provided
in Section 0 shall terminate and accrued interest to which such option otherwise
could have been exercised shall be paid on each Term Loan Interest Payment Date.

Following the occurrence of any Event of Default (and whether or not
Acceleration has taken place), at the direction of the Lender, interest shall
accrue and shall be payable on the unpaid principal balance of the Term Loan on
demand, at the aggregate of the Term Loan Interest Rate plus three percent (3%)
per annum (the "Default Rate").

<PAGE>


- -Fees.            Payable as provided in the Fee Letter.

- -Lender's Discretion.

Each reference in the Loan Documents to the exercise of discretion or the like
by the Lender shall be to the Lender's exercise of its judgment, in good faith
(which shall be presumed), based upon the Lender's consideration of any such
factors as the Lender, taking into account information of which that Person then
has actual knowledge, believes:

     Will or reasonably could be expected to affect the value of the Collateral,
     the enforceability of the Lender's Collateral Interests therein, or the
     amount which the Lender would likely realize therefrom (taking into account
     delays which may possibly be encountered in the Lender's realizing upon the
     Collateral and likely Costs of Collection). Indicates that any report or
     financial information delivered to the Lender by or on behalf of any
     Borrower is incomplete, inaccurate, or misleading in any material manner or
     was not prepared in accordance with the requirements of this Agreement.
     Suggests an increase in the likelihood that any Borrower will become the
     subject of a bankruptcy or insolvency proceeding. Suggests that any
     Borrower is In Default.

     The burden of establishing the failure of the Lender to have acted in a
     reasonable manner in the Lender's exercise of such discretion shall be the
     Borrowers' and may be made only by clear and convincing evidence.

<PAGE>


- -Joint and Several Liability of the Borrowers.

Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender under this Agreement and the other
Loan Documents, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of the other Borrower to
accept joint and several liability for the Loan and the other Liabilities
hereunder. Each of the Borrowers, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrower, with respect to the payment and
performance of all of the Liabilities (including, without limitation, any
Liabilities arising under this Section 2-7), it being the intention of the
parties hereto that all the Liabilities shall be the joint and several
obligations of each of the Borrowers without preferences or distinction among
them. If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of the Liabilities as and when due or to perform any
of the Liabilities in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Liability. Subject to the terms and conditions hereof, the Liabilities of each
of the Borrowers under the provisions of this Section 2-7 constitute the
absolute and unconditional, full recourse Liabilities of each of the Borrowers
enforceable against each such Person to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement, the other Loan Documents or any other circumstances whatsoever. The
provisions of this Section 2-7 are made for the benefit of the Lender and its
successors and assigns, and may be enforced by them from time to time against
any or all of the Borrowers as often as occasion therefor may arise and without
requirement on the part of the Lender or such successors or assigns first to
marshall any of its or their claims or to exercise any of its or their rights
against any other Borrower or to exhaust any remedies available to it or them
against any other Borrower or to resort to any other source or means of
obtaining payment of any of the Liabilities hereunder or to elect any other
remedy. The provisions of this Section 2-7 shall remain in effect until all of
the Liabilities shall have been paid in full or otherwise fully satisfied. Each
of the Borrowers hereby agrees that it will not enforce any of its rights of
contribution or subrogation against the other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to the Lender with respect to any of the Liabilities or any
Collateral until such time as all of the Liabilities have been paid in full in
cash. Any claim which any Borrower may have against the other Borrower with
respect to any payments to the Lender hereunder or under any other Loan
Documents are hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Liabilities arising hereunder or
thereunder, to the prior payment in full in cash of the Liabilities and, in the
event of any insolvency, bankruptcy, receivership, liquidation, reorganization
or other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
Liabilities shall be paid in full in cash before any payment or distribution of
any character, whether in cash, securities or other property, shall be made to
the other Borrower therefor.

<PAGE>

- -
         Designation of Lead Borrower as Borrowers' Agent.

     Each Borrower hereby designates the Lead Borrower as that Borrower's agent
to obtain the Loan hereunder, the proceeds of which shall be available to each
Borrower for those uses as those set forth in Section 2-1(b). As the disclosed
principal for its agent, each Borrower shall be obligated to the Lender on
account of the Loan so made hereunder as if made directly by the Lenders to that
Borrower, notwithstanding the manner by which the Loan is recorded on the books
and records of the Lead Borrower and of any Borrower. Each Borrower recognizes
that credit available to it hereunder is in excess of and on better terms than
it otherwise could obtain on and for its own account and that one of the reasons
therefor is its joining in the credit facility contemplated herein with all
other Borrowers. Consequently, each Borrower hereby assumes and agrees to
discharge all Liabilities of all other Borrowers as if the Borrower so assuming
were each other Borrower. The Lead Borrower shall act as a conduit for each
Borrower (including itself, as a "Borrower") on whose behalf the Lead Borrower
has requested the Loan. The proceeds of the Loan shall be deposited into an
account as designated by the Lead Borrower. The Lead Borrower shall cause the
transfer of the proceeds thereof to the (those) Borrower(s) on whose behalf the
Loan was obtained. The Lender shall not have any obligation to see to the
application of such proceeds.

- - Conditions Precedent:

     As a condition to the effectiveness of this Agreement and the making of the
Term Loan, each of the documents respectively described in Sections 0 through
and including 0, (each in form and substance satisfactory to the Lender) shall
have been delivered to the Lender, and the conditions respectively described in
Sections 0 through and including 0, shall have been satisfied:

- -Corporate Due Diligence.

Certificates of corporate good standing for each Borrower, respectively issued
by the Secretary of State for the state in which that Borrower is incorporated.
Certificates of due qualification, in good standing, issued by the
Secretary(ies) of State of each State in which the nature a Borrower's business
conducted or assets owned could require such qualification.

Certificates of each Borrower's Secretaries of the due adoption, continued
effectiveness, and setting forth the texts of, each corporate resolution adopted
in connection with the establishment of the loan arrangement contemplated by the
Loan Documents and attesting to the true signatures of each Person authorized as
a signatory to any of the Loan Documents.

- -Opinion. An opinion of counsel to the Borrowers in form and substance
satisfactory to the Lender.


<PAGE>


- -Additional Documents. Such additional instruments and documents as the Lender
or its counsel reasonably may require or request including, without limitation,
the following:

Term Note
Stock Pledge Agreement
ATP Trademark Security Agreement
ATP Patent Security Agreement
Alcore Trademark Security Agreement
Intercreditor Agreement
Deeds of Trust/Mortgages
          Marion, Virginia
         Lincoln, Nebraska
         DeLand, Florida
Collateral Assignments of Lease and Mortgage
          Marion, Virginia
          Lincoln, Nebraska
         DeLand, Florida

- -Officers' Certificates. Certificates executed by the President and the Chief
Financial Officer of the Lead Borrower and stating that the representations and
warranties made by the Borrowers to the Lender in the Loan Documents are true
and complete as of the date of such Certificate, and that no event has occurred
which is or which, solely with the giving of notice or passage of time (or both)
would be an Event of Default.

- -Representations and Warranties. Each of the representations made by or on
behalf of each Borrower in this Agreement or in any of the other Loan Documents
or in any other report, statement, document, or paper provided by or on behalf
of each Borrower shall be true and complete as of the date as of which such
representation or warranty was made.

- -All Fees and Expenses Paid. All fees due at funding under the Term Loan and all
costs and expenses incurred by the Lender in connection with the establishment
of the credit facility contemplated hereby (including the fees and expenses of
counsel to the Lender) shall have been paid in full. Such fees, expenses and
costs may be netted out of the funding of the Term Loan.

- -No Borrower In Default.   No Borrower is In Default.

<PAGE>


- -No Adverse Change. No event shall have occurred or failed to occur, which
occurrence or failure is or could have a materially adverse effect upon any
Borrower's financial condition when compared with such financial condition at
July 31, 2000.

- -Minimum Day One Availability. Availability (as defined in the Tranche A Loan
Agreement), after giving effect to the funding of the Term Loan, less all then
held checks (if any); accounts payable which are beyond credit terms then
accorded the Borrower; overdrafts; any past due accounts payable, or accounts
payable not within terms as permitted in the ordinary course, shall be equal to
or greater than $3,000,000.00.

No document shall be deemed delivered to the Lender until received and accepted
by the Lender at its offices in Boston, Massachusetts. Under no circumstances
shall this Agreement take effect until executed and accepted by the Lender at
said offices.

- - General Representations, Covenants and Warranties:

     To induce the Lender to make the Term Loan, the Borrowers, in addition to
all other representations, warranties, and covenants made by any Borrower in any
other Loan Document, make those representations, warranties, and covenants
included in this Agreement.

- -Payment and Performance of Liabilities. The Borrowers shall pay each payment
Liability when due (or when demanded, if payable on demand) and shall promptly,
punctually, and faithfully perform each other Liability.


<PAGE>

- -Due Organization. Authorization. No Conflicts.

Each Borrower presently is and hereafter shall remain in good standing as a
corporation under the laws of the State in which it is organized, as set forth
in the Preamble to this Agreement and is and shall hereafter remain duly
qualified and in good standing in every other State in which, by reason of the
nature or location of each Borrower's assets or operation of each Borrower's
business, such qualification may be necessary, except where the failure to so
qualify would have no more than a de minimis adverse effect on the business or a
assets of any Borrower. Each Borrower's respective organizational identification
number assigned to it by the State of its incorporation and its respective
federal employer identification number is as follows:

          Borrower                                    Federal Tax Id. No.
          --------                                    -------------------
          Advanced Technical Products, Inc.  -        11-1581582
          Alcore, Inc.                                -        52-1762126
          Technical Products Group, Inc.     -        76-0467373
          Marion Properties, Inc.            -        76-0467375
          DeLand Properties, Inc.            -        76-0467374
          Lincoln Properties, Inc.           -        76-0467376

No Borrower shall not change its State of organization; any organizational
identification number assigned to that Borrower by that State; or that
Borrower's federal taxpayer identification number. Each Affiliate is listed on
EXHIBIT 0, annexed hereto. The Lead Borrower shall provide the Lender with prior
written notice of any entity's becoming or ceasing to be an Affiliate. Each
Borrower has all requisite power and authority to execute and deliver all Loan
Documents to which that Borrower is a party and has and will hereafter retain
all requisite power to perform all Liabilities.

The execution and delivery by each Borrower of each Loan Document to which it is
a party; each Borrower's consummation of the transactions contemplated by such
Loan Documents (including, without limitation, the creation of Collateral
Interests by that Borrower to secure the Liabilities); each Borrower's
performance under those of the Loan Documents to which it is a party; the
borrowings hereunder; and the use of the proceeds thereof:

     Have been duly authorized by all necessary action. Do not, and will not,
     contravene in any material respect any provision of any Requirement of Law
     or obligation of that Borrower. Will not result in the creation or
     imposition of, or the obligation to create or impose, any Encumbrance upon
     any assets of that Borrower pursuant to any Requirement of Law or
     obligation, except pursuant to the Loan Documents.

The Loan Documents have been duly executed and delivered by each Borrower and
are the legal, valid and binding obligations of each Borrower, enforceable
against each Borrower in accordance with their respective terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally or by principles of equity
pertaining to the availability of equitable remedies.


<PAGE>


- -Trade Names.

EXHIBIT 0, annexed hereto, is a listing of:


     All names under which any Borrower ever conducted its business.

     All Persons with whom any Borrower ever consolidated or merged, or from
     whom any Borrower ever acquired in a single transaction or in a series of
     related transactions substantially all of such Person's assets.

The Lead Borrower will provide the Lender with not less than twenty-one (21)
days prior written notice (with reasonable particularity) of any change to any
Borrower's name from that under which that Borrower is conducting its business
at the execution of this Agreement and will not effect such change unless each
Borrower is then in compliance with all provisions of this Agreement.

- -Infrastructure.

Each Borrower has and will maintain a sufficient infrastructure to conduct its
business as presently conducted and as contemplated to be conducted following
its execution of this Agreement. Each Borrower owns and possesses, or has the
right to use (and will hereafter own, possess, or have such right to use) all
patents, industrial designs, trademarks, trade names, trade styles, brand names,
service marks, logos, copyrights, trade secrets, know-how, confidential
information, and other intellectual or proprietary property of any third Person
necessary for that Borrower's conduct of that Borrower's business.


The conduct by each Borrower of that Borrower's business does not presently
infringe (nor will any Borrower conduct its business in the future so as to
infringe) the patents, industrial designs, trademarks, trade names, trade
styles, brand names, service marks, logos, copyrights, trade secrets, know-how,
confidential information, or other intellectual or proprietary property of any
third Person.

- -Locations.

The Collateral, and the books, records, and papers of Borrowers' pertaining
thereto, are kept and maintained solely at the following locations:

     The Lead Borrower's chief executive offices which are at 200 Mansell Ct.
     East, Suite 505, Roswell, Georgia.

     Those locations which are listed on EXHIBIT 0, annexed hereto, which
     EXHIBIT includes, with respect to each such location, the name and address
     of the landlord on the Lease which covers such location (or an indication
     that a Borrower owns the subject location) and of all service bureaus with
     which any such records are maintained and the names and addresses of each
     of then Borrowers' landlords.

     2. No Borrower shall remove any of the Collateral from said chief executive
office or those locations listed on EXHIBIT 0 except for the following purposes:
To accomplish sales in the ordinary course of business. To utilize such of the
Collateral as is removed from such locations in the ordinary course of business
(such as motor vehicles).

 No Borrower will:

     Execute, alter, modify, or amend any Lease, except for any lease
     terminations in connection with the Alcore Sale or the Specialty Vehicle
     Sale. Commit to, or open or close any location at which any Borrower
     maintains manufacturing or sales facilities.

Except as otherwise disclosed pursuant to, or permitted by, this Section 0, no
tangible personal property of any Borrower is in the care or custody of any
third party or stored or entrusted with a bailee or other third party and none
shall hereafter be placed under such care, custody, storage, or entrustment.

- -Title to Assets.

The Borrowers are, and shall hereafter remain, the owners of the Collateral free
and clear of all Encumbrances with the exceptions of the following (the
"Permitted Encumbrances"): Encumbrances in favor of the Lender.

     Encumbrances granted pursuant to the Tranche A Loan Agreement. Those
     Encumbrances (if any) listed on EXHIBIT 0, annexed hereto. Liens for taxes
     (excluding any Lien imposed pursuant to any of the provisions of ERISA) not
     yet due or being Properly Contested; Liens arising in the ordinary course
     of its business by operation of law or regulation, but only if (i) payment
     in respect of any such Lien is not at the time required or (ii) the
     Indebtedness secured by such Lien is being Properly Contested and such Lien
     does not materially detract from the value of its Property or materially
     impair the use thereof in the operation of its business; Purchase Money
     Liens securing Permitted Purchase Money Indebtedness; Rights of lessors
     under Capital Leases; Rights of the United States of America or any
     department, agency or instrumentality thereof pursuant to the "Government
     Property Clause" and "Progress Payment Clause", if any, in any contract
     with the Borrowers; and such other Liens as the Lender may hereafter
     approve in writing.

No Borrower has, and none shall have, possession of any property on consignment
to that Borrower.

<PAGE>


- -Indebtedness. The Borrowers do not and shall not hereafter have any
Indebtedness with the exceptions of:


Any Indebtedness on account of the Term Loan. The Indebtedness incurred pursuant
to the Tranche A Loan Agreement. The Indebtedness (if any) listed on EXHIBIT 0,
annexed hereto. Accounts payable to trade creditors and current operating
expenses (other than for Money Borrowed) which are not aged more than 45 days
from the due date, in each case incurred in the ordinary course of business and
paid within such time period, unless the same are being Properly Contested.
Obligations to pay Rentals permitted by Section 4-10. Permitted Purchase Money
Indebtedness. Contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course of
business. Indebtedness not included in paragraphs (a) through (g) above, which,
as to Borrower, does not exceed at any time, in the aggregate, the sum of
$500,000.

- -Insurance.

EXHIBIT 0, annexed hereto, is a schedule of all insurance policies owned by the
Borrowers or under which any Borrower is the named insured. Each of such
policies is in full force and effect. Neither the issuer of any such policy nor
any Borrower is in default or violation of any such policy. The Borrowers shall
have and maintain at all times insurance covering such risks, in such amounts,
containing such terms, in such form, for such periods, and written by such
companies as may be satisfactory to the Lender. All insurance carried by the
Borrowers shall provide for a minimum of thirty (30) days' written notice of
cancellation to the Lender and all such insurance which covers the Collateral
shall include an endorsement in favor of the Lender, which endorsement shall
provide that the insurance, to the extent of the Lender's interest therein,
shall not be impaired or invalidated, in whole or in part, by reason of any act
or neglect of any Borrower or by the failure of any Borrower to comply with any
warranty or condition of the policy. The coverage reflected on EXHIBIT 0
presently satisfies the foregoing requirements, it being recognized by each
Borrower, however, that such requirements may change hereafter to reflect
changing circumstances.

The Lead Borrower shall furnish the Lender from time to time with certificates
or other evidence satisfactory to the Lender regarding compliance by the
Borrowers with the foregoing requirements. In the event of the failure by the
Borrowers to maintain insurance as required herein, the Lender, at its option,
may obtain such insurance, provided, however, the Lender's obtaining of such
insurance shall not constitute a cure or waiver of any Event of Default
occasioned by the Borrowers' failure to have maintained such insurance.

- -Licenses. Each license, distributorship, franchise, and similar agreement
issued to, or to which any Borrower is a party is in full force and effect. No
party to any such license or agreement is in default or violation thereof. No
Borrower has received any notice or threat of cancellation of any such license
or agreement.

<PAGE>


- -Leases. EXHIBIT 0, annexed hereto, is a schedule of all presently effective
Capital Leases. (Exhibit 0 includes a list of all other presently effective
Leases). Each of such Leases and Capital Leases is in full force and effect. No
party to any such Lease or Capital Lease is in default or violation of any such
Lease or Capital Lease. No Borrower has received any notice or threat of
cancellation of any such Lease or Capital Lease. Each Borrower hereby authorizes
the Lender at any time and from time to time to contact any of the Borrowers'
respective landlords in order to confirm the Borrowers' continued compliance
with the terms and conditions of the Lease(s) between the subject Borrower and
that landlord and to discuss such issues, concerning the subject Borrower's
occupancy under such Lease(s), as the Lender may determine. The Borrower shall
not become, or permit any of its Subsidiaries to become, a lessee under any
operating lease (other than a lease under which Borrower or any of its
Subsidiaries is lessor) of Property if the aggregate Rentals payable during any
current or future period of twelve (12) consecutive months under the lease in
question and all other leases under which Borrower or any of its Subsidiaries is
then lessee would exceed $2,000,000. The term "Rentals" means, as of the date of
determination, all payments which the lessee is required to make by the terms of
any lease.

- -Requirements of Law. Each Borrower is in compliance with, and shall hereafter
comply with and use its assets in compliance with, all Requirements of Law
except where the failure of such compliance will not have more than a de minimis
adverse effect on the Borrowers' business or assets. No Borrower has received
any notice of any violation of any Requirement of Law (other than of a violation
which has no more than a de minimis adverse effect on the Borrowers' business or
assets), which violation has not been cured or otherwise remedied.

<PAGE>


- -Labor Relations.

Except as described on EXHIBIT 4:4-12, annexed hereto, no Borrower has been, and
none is presently a party to any collective bargaining or other labor contract.
There is not presently pending and, to any Borrower's knowledge, there is not
threatened any of the following:

     Any strike, slowdown, picketing, work stoppage, or employee grievance
     process. Any proceeding against or affecting any Borrower relating to the
     alleged violation of any Applicable Law pertaining to labor relations or
     before National Labor Relations Board, the Equal Employment Opportunity
     Commission, or any comparable governmental body, organizational activity,
     or other labor or employment dispute against or affecting any Borrower,
     which, if determined adversely to that Borrower could have more than a de
     minimis adverse effect on that Borrower. Any lockout of any employees by
     any Borrower (and no such action is contemplated by any Borrower). Any
     application for the certification of a collective bargaining agent.

No event has occurred or circumstance exists which could provide the basis for
any work stoppage or other labor dispute. Each Borrower:

     Has complied in all material respects with all Applicable Law relating to
     employment, equal employment opportunity, nondiscrimination, immigration,
     wages, hours, benefits, collective bargaining, the payment of social
     security and similar taxes, occupational safety and health, and plant
     closing. Is not liable for the payment of more than a de minimius amount of
     compensation, damages, taxes, fines, penalties, or other amounts, however
     designated, for that Borrower's failure to comply with any Applicable Law
     referenced in Section 0.

- -Maintain Properties. The Borrowers shall:

Keep the Collateral in good order and repair (ordinary reasonable wear and tear
and insured casualty excepted). Not suffer or cause the waste or destruction of
any material part of the Collateral. Not use any of the Collateral in violation
of any policy of insurance thereon. Not sell, lease, or otherwise dispose of any
of the Collateral, other than the following:

     The sale of products and services in compliance with this Agreement. The
     disposal of Equipment which is obsolete, worn out, or damaged beyond
     repair, which Equipment is replaced to the extent necessary to preserve or
     improve the operating efficiency of any Borrower.

     Dispositions in connection with the Alcore Sale (provided, however, that
     prior to the consummation of the Alcore Sale, Lender shall have been
     provided with definitive documentation related to the Alcore Sale, such
     documentation and the terms thereof, (including, without limitation, the
     purchase/sales price) shall be satisfactory to Lender in its sole
     discretion), and a minimum of $1,300,000.00 from the proceeds of the Alcore
     Sale shall be applied in permanent reduction of the Term Loan A Loans, and
     the balance of such proceeds shall be applied to the Revolving Credit Loans
     (as defined in the Tranche A Loan Agreement), which shall be in amount
     necessary to maintain sufficient Availability (as defined in the Tranche A
     Loan Agreement), after giving effect to the Alcore Sale.


<PAGE>


     Dispositions in connection with the Specialty Vehicle Sale (provided,
     however, that prior to the consummation of the Specialty Vehicle Sale,
     Lender shall have been provided with definitive documentation related to
     the Specialty Vehicle Sale, such documentation and the terms thereof
     (including, without limitation, the purchase/sales price) shall be
     satisfactory to Lender in its sole discretion), and a minimum of
     $2,000,000.00 from the proceeds of the Specialty Vehicle Sale shall be
     applied in permanent reduction of the Term Loan A Loans, and the balance of
     such proceeds shall be applied to the Revolving Credit Loans (as defined in
     the Tranche A Loan Agreement), which shall be in amount necessary to
     maintain sufficient Availability (as defined in the Tranche A Loan
     Agreement), after giving effect to the Specialty Vehicle Sale.

- -Taxes.

With respect to the Borrowers' federal, state, and local tax liability and
obligations:

     The Lead Borrower, in compliance with all Applicable Law, has properly
     filed all returns due to be filed up to the date of this Agreement. Except
     as described on EXHIBIT 0:

At no time has any Borrower received from any taxing authority any request to
perform any examination of or with respect to any Borrower nor any other written
or verbal notice in any way relating to any claimed failure by any Borrower to
comply with all Applicable Law concerning payment of any taxes or other amounts
in the nature of taxes.

No agreement is extant which waives or extends any statute of limitations
applicable to the right of any taxing authority to assert a deficiency or make
any other claim for or in respect to federal income taxes. No issue has been
raised in any tax examination of any Borrower which, by application of similar
principles, reasonably could be expected to result in the assertion of a
deficiency for any fiscal year open for examination, assessment, or claim by any
taxing authority. The Borrowers have, and hereafter shall: pay, as they become
due and payable, all taxes and unemployment contributions and other charges of
any kind or nature levied, assessed or claimed against any Borrower or the
Collateral by any person or entity whose claim could result in an Encumbrance
upon any asset of any Borrower or by any governmental authority; properly
exercise any trust responsibilities imposed upon any Borrower by reason of
withholding from employees' pay or by reason of any Borrower's receipt of sales
tax or other funds for the account of any third party; timely make all
contributions and other payments as may be required pursuant to any Employee
Benefit Plan now or hereafter established by any Borrower; and timely file all
tax and other returns and other reports with each governmental authority to whom
any Borrower is obligated to so file.

- -No Margin Stock. No Borrower is engaged in the business of extending credit for
the purpose of purchasing or carrying any margin stock (within the meaning of
Regulations U, T, and X of the Board of Governors of the Federal Reserve System
of the United States). No part of the proceeds of any borrowing hereunder will
be used at any time 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.

<PAGE>


- -ERISA.

Neither any Borrower nor any ERISA Affiliate has ever:

     Violated or failed to be in full compliance with any Borrower's Employee
     Benefit Plan. Failed timely to file all reports and filings required by
     ERISA to be filed by any Borrower. Engaged in any nonexempt "prohibited
     transactions" or "reportable events" (respectively as described in ERISA).
     Engaged in, or committed, any act such that a tax or penalty reasonably
     could be imposed upon any Borrower on account thereof pursuant to ERISA.
     Accumulate any material cumulative funding deficiency within the meaning of
     ERISA. Terminated any Employee Benefit Plan such that a lien could be
     asserted against any assets of any Borrower on account thereof pursuant to
     ERISA. Except as described on EXHIBIT 4:4-16(vii), annexed hereto, been a
     member of, contributed to, or have any obligation under any Employee
     Benefit Plan which is a multiemployer plan within the meaning of Section
     4001(a) of ERISA.

Neither any Borrower nor any ERISA Affiliate shall ever engage in any action of
the type described in Section 0.

- -Hazardous Materials.

Except as described in EXHIBIT 4:4-17, no Borrower has ever: (i) been legally
responsible for any release or threat of release of any Hazardous Material or
(ii) received notification of the incurrence of any expense in connection with
the assessment, containment, or removal of any Hazardous Material for which that
Borrower would be responsible. Each Borrower shall: (i) dispose of any Hazardous
Material only in compliance with all Environmental Laws and (ii) have possession
of any Hazardous Material only in the ordinary course of that Borrower's
business and in compliance with all Environmental Laws.

- -Litigation. Except as described in EXHIBIT 0, annexed hereto, there is not
presently pending or threatened by or against any Borrower any suit, action,
proceeding, or investigation which, if determined adversely to any Borrower,
would have more than a de minimis adverse effect upon a Borrower's financial
condition or ability to conduct its business as such business is presently
conducted or is contemplated to be conducted in the foreseeable future.


<PAGE>


- -Dividends. Investments. Corporate Action. No Borrower shall:

Pay any cash dividend or make any other distribution in respect of any class of
that Borrower's capital stock, provided, however, that so long as no Event of
Default then exists or would arise therefrom, any Borrower (other than ATP) may
(a) pay dividends on its common stock for the purpose of permitting ATP to pay
dividends on its preferred stock (provided, however, that the aggregate amount
of all such dividends paid by all such Borrowers during any calendar year shall
not exceed $80,000), and (b) pay cash taxes imposed or levied upon ATP, as and
when due.

Own, redeem, retire, purchase, or acquire any of any Borrower's capital stock.
Invest in or purchase any stock or securities or rights to purchase any such
stock or securities, of any Person. Merge or consolidate or be merged or
consolidated with or into any other corporation or other entity. Consolidate any
of that Borrower's operations with those of any other Person other than of
another Borrower. Organize or create any Affiliate.

Subordinate any debts or obligations owed to that Borrower by any third party to
any other debts owed by such third party to any other Person. Acquire any assets
other than in the ordinary course and conduct of that Borrower's business as
conducted at the execution of this Agreement.

- -Loans. No Borrower shall make any loans or advances to, nor acquire the
Indebtedness of, any Person, provided, however, the foregoing does not prohibit
any of the following: Advance payments made to that Borrower's suppliers in the
ordinary course. Advances to that Borrower's officers, employees, and
salespersons with respect to reasonable expenses to be incurred by such
officers, employees, and salespersons for the benefit of that Borrower, which
expenses are properly substantiated by the person seeking such advance and
properly reimbursable by that Borrower.

- -Protection of Assets. The Lender, in the Lender's discretion, and from time to
time, may discharge any tax or Encumbrance on any of the Collateral, or take any
other action which the Lender may deem necessary or desirable to repair, insure,
maintain, preserve, collect, or realize upon any of the Collateral. The Lender
shall not have any obligation to undertake any of the foregoing and shall have
no liability on account of any action so undertaken except where there is a
specific finding in a judicial proceeding (in which the Lender has had an
opportunity to be heard), from which finding no further appeal is available,
that the Lender had acted in actual bad faith or in a grossly negligent manner.
The Borrowers shall pay to the Lender, on demand, all amounts paid or incurred
by the Lender pursuant to this section 0.

- -Line of Business. No Borrower shall engage in any business other than the
business in which it is currently engaged or a business reasonably related
thereto.


<PAGE>


- -Affiliate Transactions. No Borrower shall make any payment, nor give any value
to any Affiliate except for goods and services actually purchased by that
Borrower from, or sold by that Borrower to, such Affiliate for a price and on
terms which shall be competitive and fully deductible as an "ordinary and
necessary business expense" and/or fully depreciable under the Internal Revenue
Code of 1986 and the Treasury Regulations, each as amended; and be no less
favorable to that Borrower than those which would have been charged and imposed
in an arms length transaction.

- -Further Assurances.

No Borrower is the owner of, nor has it any interest in, any property or asset
which, immediately upon the satisfaction of the conditions precedent to the
effectiveness of the credit facility contemplated hereby (Article 0) will not be
subject to a perfected Collateral Interest in favor of the Lender (subject only
to Permitted Encumbrances) to secure the Liabilities. No Borrower will hereafter
acquire any asset or any interest in property which is not, immediately upon
such acquisition, subject to such a perfected Collateral Interest in favor of
the Lender to secure the Liabilities (subject only to Permitted Encumbrances).
Each Borrower shall execute and deliver to the Lender such instruments,
documents, and papers, and shall do all such things from time to time hereafter
as the Lender may request to carry into effect the provisions and intent of this
Agreement; to protect and perfect the Lender's Collateral Interests in the
Collateral; and to comply with all applicable statutes and laws, and facilitate
the collection of the Receivables Collateral. Each Borrower shall execute all
such instruments as may be required by the Lender with respect to the
recordation and/or perfection of the Collateral Interests created or
contemplated herein.

Each Borrower hereby designates the Lender as and for that Borrower's true and
lawful attorney, with full power of substitution, to sign and file any financing
statements or any other assignments, pledges, or other documents necessary in
order to perfect or protect the Lender's Collateral Interests in the Collateral.

A carbon, photographic, or other reproduction of this Agreement or of any
financing statement or other instrument executed pursuant to this Section 0
shall be sufficient for filing to perfect the security interests granted herein.


<PAGE>


- -Adequacy of Disclosure.

All financial statements furnished to the Lender by each Borrower have been
prepared in accordance with GAAP consistently applied and present fairly the
condition of the Borrowers at the date(s) thereof and the results of operations
and cash flows for the period(s) covered (provided however, that unaudited
financial statements are subject to normal year end adjustments and to the
absence of footnotes). There has been no change in the Consolidated financial
condition, results of operations, or cash flows of the Borrowers since the
date(s) of such financial statements, other than changes in the ordinary course
of business, which changes have not been materially adverse, either singularly
or in the aggregate.

No Borrower has any contingent obligations or obligation under any Lease or
Capital Lease which is not noted in the Borrowers' Consolidated financial
statements furnished to the Lender prior to the execution of this Agreement. No
document, instrument, agreement, or paper now or hereafter given the Lender by
or on behalf of each Borrower or any guarantor of the Liabilities in connection
with the execution of this Agreement by the Lender contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements therein not misleading. There is
no fact known to any Borrower which has, or which, in the foreseeable future
could have, a material adverse effect on the financial condition of any Borrower
or any such guarantor which has not been disclosed in writing to the Lender.

- -No Restrictions on Liabilities. Except as described on EXHIBIT 4:4-26, annexed
hereto, no Borrower shall enter into or directly or indirectly become subject to
any agreement which prohibits or restricts, in any manner, any Borrower's:

Creation of, and granting of Collateral Interests in favor of the Lender, except
for any restrictions imposed in connection with any Purchase Money Indebtedness,
provided that such restrictions are limited to the fixed asset financed by such
Purchase Money Indebtedness.
Incurrence of Liabilities.

- -Other Covenants. No Borrower shall indirectly do or cause to be done any act
which, if done directly by that Borrower, would breach any covenant contained in
this Agreement.

<PAGE>

Financial Reporting and Performance Covenants:

- -Maintain Records. The Borrowers shall:

At all times, keep proper books of account, in which full, true, and accurate
entries shall be made of all of the Borrowers' financial transactions, all in
accordance with GAAP applied consistently with prior periods to fairly reflect
the Consolidated financial condition of the Borrowers at the close of, and its
results of operations for, the periods in question. Timely provide the Lender
with those financial reports, statements, and schedules required by this Article
0 or otherwise, each of which reports, statements and schedules shall be
prepared, to the extent applicable, in accordance with GAAP applied consistently
with prior periods to fairly reflect the Consolidated financial condition of the
Borrowers at the close of, and the results of operations for, the period(s)
covered therein.

At all times, keep accurate current records of the Collateral including, without
limitation, accurate current stock, cost, and sales records of its Inventory,
accurately and sufficiently itemizing and describing the kinds, types, and
quantities of Inventory and the cost and selling prices thereof.

At all times, retain independent certified public accountants who are reasonably
satisfactory to the Lender and instruct such accountants to fully cooperate
with, and be available to, the Lender to discuss the Borrowers' financial
performance, financial condition, operating results, controls, and such other
matters, within the scope of the retention of such accountants, as may be raised
by the Lender. Not change any Borrower's fiscal year.

- -Access to Records.

Each Borrower shall accord the Lender with access from time to time as the
Lender may require to all properties owned by or over which any Borrower has
control. The Lender shall have the right, and each Borrower will permit the
Lender from time to time as Lender may request, to examine, inspect, copy, and
make extracts from any and all of the Borrowers' books, records, electronically
stored data, papers, and files. Each Borrower shall make all of that Borrower's
copying facilities available to the Lender.

Each Borrower hereby authorizes the Lender to:

     Inspect, copy, duplicate, review, cause to be reduced to hard copy, run
     off, draw off, and otherwise use any and all computer or electronically
     stored information or data which relates to any Borrower, or any service
     bureau, contractor, accountant, or other person, and directs any such
     service bureau, contractor, accountant, or other person fully to cooperate
     with the Lender with respect thereto. Verify at any time the Collateral or
     any portion thereof, including verification with Account Debtors, and/or
     with each Borrower's computer billing companies, collection agencies, and
     accountants and to sign the name of each Borrower on any notice to each
     Borrower's Account Debtors or verification of the Collateral.

The Lender from time to time may designate one or more representatives to
exercise the Lender's rights under this Section 0 as fully as if the Lender were
doing so.

<PAGE>

- -Immediate Notice to Lender.

The Lead Borrower shall provide the Lender with written notice promptly upon the
occurrence of any of the following events, which written notice shall be with
reasonable particularity as to the facts and circumstances in respect of which
such notice is being given:

     Any change in any Borrower's President, chief executive officer, chief
     operating officer, and chief financial officer (without regard to the
     title(s) actually given to the Persons discharging the duties customarily
     discharged by officers with those titles). Any ceasing of any Borrower's
     making of payment, in the ordinary course, to any of its creditors (other
     than its ceasing of making of such payments on account of a de minimis
     dispute). Any failure by any Borrower to pay rent at any of that Borrower's
     locations, which failure continues for more than Three (3) days following
     the last day on which such rent was payable without more than a de minimis
     adverse effect to that Borrower. Any material adverse change in the
     business, operations, or financial affairs of any Borrower. Any Borrower's
     becoming In Default.

     Any intention on the part of any Borrower to discharge that Borrower's
     present independent accountants or any withdrawal or resignation by such
     independent accountants from their acting in such capacity (as to which,
     see Subsection 0). Any litigation which, if determined adversely to any
     Borrower, might have a material adverse effect on the financial condition
     of that Borrower.

The Lead Borrower shall:

     Provide the Lender, when so distributed, with copies of any materials
     distributed to the shareholders of the Lead Borrower (qua such
     shareholders). Provide the Lender, when received by any Borrower, with a
     copy of any management letter or similar communications from any accountant
     of any Borrower.

- -Financial Statements. During the term of this Agreement, and thereafter for so
long as there are any Liabilities to Lender, each Borrower covenants that,
unless otherwise consented to by the Lender in writing, it shall:

keep, and cause each Subsidiary to keep, adequate records and books of account
with respect to its business activities in which proper entries are made in
accordance with GAAP reflecting all its financial transactions; and cause to be
prepared and furnished to Lender the following (all to be prepared in accordance
with GAAP applied on a consistent basis, unless Borrower's certified public
accountants concur in any change therein and such change is disclosed to Lender
and is consistent with GAAP):

<PAGE>


     not later than ninety (90) days after the close of each fiscal year of
     Borrower, unqualified audited financial statements of Borrower, as of the
     end of such year, on a Consolidated basis (with a footnote exhibiting the
     consolidating information used in preparing such audited financial
     statements), certified by a firm of independent certified public
     accountants of recognized standing selected by Borrower, but acceptable to
     Lender (except for a qualification for a change in accounting principles
     with which the accountant concurs); not later than thirty (30) days after
     the end of each month hereafter, including the last month of Borrower's
     fiscal year, (i) unaudited interim financial statements of Borrower, as of
     the end of such month and of the portion of Borrower's financial year then
     elapsed, on a Consolidated basis, certified by the principal financial
     officer of ATP as prepared in accordance with GAAP (excluding incentive
     compensation accrual) and fairly presenting the financial position and
     results of Borrower on a combined basis, for such month and period subject
     only to changes from audit and year-end adjustments and except that such
     statements need not contain notes, and (ii) a detailed backlog report; not
     later than twenty (20) days after the end of each month hereafter, an aging
     of each Borrower's accounts payable and an aging of the Borrower's
     Accounts; Inventory reports in form and detail satisfactory to Agent at
     such times as Agent may request, but at least once each month, not later
     than the twentieth (20th) day of such month. promptly after the sending or
     filing thereof, as the case may be, copies of any proxy statements,
     financial statements or reports which ATP or any other Borrower has made
     available to its shareholders and copies of any regular, periodic and
     special reports or registration statements which ATP or any other Borrower
     files with the Securities and Exchange Commission or any governmental
     authority which may be substituted therefor, or any national securities
     exchange; promptly after the filing thereof, copies of any annual report to
     be filed in accordance with ERISA in connection with each Plan; and such
     other data and information (financial and otherwise) as Lender, from time
     to time, may reasonably request, bearing upon or related to the Collateral
     or any Borrower's and each of its Subsidiaries' financial condition or
     results of operations.

     Concurrently with the delivery of the financial statements described in
clause (a) of this Section 5-4, Borrower shall forward to Lender a copy of the
accountants' letter to ATP's management that is prepared in connection with such
financial statements and also shall cause to be prepared and shall furnish to
Lender a certificate of the aforesaid certified public accountants certifying to
Lender that, based upon their examination of the financial statements of
Borrower performed in connection with their examination of said financial
statements, they are not aware of any Event of Default, or, if they are aware of
such Event of Default, specifying the nature thereof, and acknowledging, in a
manner satisfactory to Lender, that they are aware that Lender is relying on
such financial statements in making its decisions with respect to its Loan.

<PAGE>


- -Officers' Certificates. The Lead Borrower shall cause either the Lead
Borrower's President or its Chief Financial Officer, in each instance, to
provide such Person's Certificate with those monthly statements required
pursuant to Section ?, and annual statements to be furnished pursuant to this
Agreement, which Certificate shall:

Indicate that the subject statement was prepared in accordance with GAAP
consistently applied and presents fairly the Consolidated financial condition of
the Borrowers at the close of, and the results of the Borrowers' operations and
cash flows for, the period(s) covered, subject, however to the following:

     Usual year end adjustments (this exception shall not be included in the
     Certificate which accompanies such annual statement). Material Accounting
     Changes (in which event, such Certificate shall include a schedule (in
     reasonable detail) of the effect of each such Material Accounting Change)
     not previously specifically taken into account in the determination of the
     financial performance covenant imposed pursuant to Section 5:5-8.

Indicate either that (i) no Borrower is In Default, or (ii) if such an event has
occurred, its nature (in reasonable detail) and the steps (if any) being taken
or contemplated by the Borrowers to be taken on account thereof. Include
calculations concerning the Borrowers' compliance (or failure to comply) at the
date of the subject statement with each of the financial performance covenants
included in Section 5:5-8 hereof.

- -Inventories, Appraisals, and Audits.

The Lender may obtain appraisals of the Collateral, from time to time conducted
by such appraisers as are satisfactory to the Lender. Provided that no Event of
Default has occurred the Borrower shall only be required to pay for a maximum of
one (1) appraisal on any item of Collateral at each location in any twelve (12)
month period, with the first such appraisal no earlier than September 30, 2001.
After the occurrence of an Event of Default all appraisals shall be at the
expense of the Borrower.


<PAGE>


The Lender contemplates conducting three (3) commercial finance field
examinations (in each event, at the Borrowers' expense) of the Borrowers' books
and records during any Twelve (12) month period during which this Agreement is
in effect, but in its discretion, may undertake additional such audits during
such period.

- -Additional Financial Information.

In addition to all other information required to be provided pursuant to this
Article 0, the Lead Borrower promptly shall provide the Lender (and any
guarantor of the Liabilities), with such other and additional information
concerning the Borrowers, the Collateral, the operation of the Borrowers'
business, and the Borrowers' financial condition, including original
counterparts of financial reports and statements, as the Lender may from time to
time request from the Lead Borrower.

The Lead Borrower may provide the Lender, from time to time hereafter, with
updated forecasts of the Borrowers' anticipated performance and operating
results.

In all events, the Lead Borrower, no sooner than Ninety (90) nor later than
Thirty (30) days prior to the end of each of the Borrowers' fiscal years, shall
provide the Lender with an updated and extended forecast which shall go out at
least through the end of the then next fiscal year and shall include an income
statement, balance sheet, and statement of cash flow, by month, each
Consolidated (with consolidating schedules) and each prepared in conformity with
GAAP and consistent with the Borrowers' then current practices.

Each Borrower recognizes that all appraisals, analysis, financial information,
and other materials which the Lender may obtain, develop, or receive with
respect to the Borrowers are confidential to the Lender and that, except as
otherwise provided herein, no Borrower is entitled to receipt of any of such
appraisals, analysis, financial information, and other materials, nor copies or
extracts thereof or therefrom.

- -Financial Performance Covenants. During the term of this Agreement and
thereafter for so long as there are any Liabilities to the Lender, Borrower
covenants that, unless otherwise consented to by Lender in writing: Fixed Charge
Ratio. Borrower shall maintain, on a Consolidated basis, as of the end of each
fiscal quarter set forth below, a Fixed Charge Ratio of not less than the ratio
set forth below for each period corresponding thereto:

<TABLE>
<CAPTION>
                               Period                                      Ratio
<S>                                                       <C>             <C>   <C>
       (a)      Nine month  period  ending on  September  30,    (a)      .9 to 1.0
       2000,  and twelve month period  ending on December 31,
       2000 and December 31, 2000

       (b)      Twelve month period  ending  respectively  on    (b)      1.00 to 1.0
       each of March 31, 2001,  June 30, 2001,  September 30,
       2001, and December 31, 2001
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
<S>                                                       <C>             <C>   <C>
       (c)      Twelve month period  ending  respectively  on    (c)      1.10 to 1.0
       each of March 31, 2002,  June 30, 2002,  September 30,
       2002,  December 31, 2002, March 31, 2003, and June 30,
       2003
</TABLE>

Interest Coverage Ratio. Borrower shall maintain, on a Consolidated basis, as of
the end of each fiscal quarter set forth below, an Interest Coverage Ratio of
not less than the ratio set forth below for each period corresponding thereto:

<TABLE>
<CAPTION>
                               Period                                      Ratio
<S>                                                       <C>             <C>   <C>
       (a)       Nine month period  ending on  September  30,    (a)      1.60 to 1.0
       2000,  and twelve month period  ending on December 31,
       2000 and December 31, 2000

       (b)      Twelve month period  ending  respectively  on    (b)      2.30 to 1.0
       each of March 31, 2001,  June 30, 2001,  September 30,
       2001, and December 31, 2001
       (c)      Twelve month period  ending  respectively  on    (c)      2.70 to 1.0
       each of March 31, 2002,  June 30, 2002,  September 30,
       2000,  December 31, 2002, March 31, 2003, and June 30,
       2003
</TABLE>

Adjusted Tangible Net Worth. Borrower shall maintain, on a Consolidated basis,
as of the end of each fiscal quarter set forth below, an Adjusted Tangible Net
Worth of not less than the amount set forth below for each period corresponding
thereto:

<TABLE>
<CAPTION>
                                Date                                       Amount

<S>                                                       <C>             <C>   <C>
       (a)      September 30, 2000                               (a)      $18,000,000

       (b)      December 31, 2000                                (b)      $20,000,000

       (c)      March 31, 2001, June 30, 2001,  September 30,    (c)      $22,000,000
       2001, and December 31, 2001
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
<S>    <C>                                                       <C>      <C>
       (d)      March 31, 2002, June 30, 2002,  September 30,    (d)      $25,000,000
       2002, and December 31, 2002

       (e)      March 31, 2003 and  June 30, 2003                (e)        $28,000,000
</TABLE>

Senior Indebtedness to EBITDA. Borrower shall maintain, on a Consolidated basis,
as of the end of each fiscal quarter set forth below, a ratio of (a) Senior
Indebtedness on such date to (b) EBITDA of not greater than the ratio set forth
below for each period corresponding thereto:

<TABLE>
<CAPTION>
                                Date                                       Ratio

<S>                                                       <C>             <C>   <C>
       (a)      September 30, 2000                               (a)      4.0 to 1.0

       (b)      December 31, 2000                                (b)      3.80 to 1.0

       (c)      March 31, 2001, June 30, 2001,  September 30,    (c)      3.30 to 1.0
       2001, December 31, 2001, March 31, 2002, June 30, 2002,
       September 30, 2002, and December 31, 2002

       (d)      March 31, 2003 and June 30, 2003                 (d)       3.10 to 1.0
</TABLE>

Capital Expenditures. The Borrower shall not make Capital Expenditures
(including, by way of capitalized leases) which, in the aggregate, as to
Borrower and its Subsidiaries, exceed the amount set forth below for each period
corresponding thereto:

<TABLE>
<CAPTION>
                         Fiscal year ending                                Amount
<S>                                                       <C>             <C>   <C>
       (a)      December 31, 2000                                (a)      $2,500,000

       (b)      December 31, 2001                                (b)      $4,000,000

       (c)      December 31, 2002                                (c)      $4,500,000

       (d)      December 31, 2003                                (d)      $5,000,000
</TABLE>

<PAGE>


- - Use of Collateral:

- -Use of Collateral.

No Borrower shall engage

     In any sale of the Collateral other than for fair consideration in the
     conduct of the Borrowers' business in the ordinary course. Sales or other
     dispositions to creditors. Sales or other dispositions in bulk. Sales of
     any Collateral in breach of any provision of this Agreement.

No sale of Inventory shall be on consignment, approval, or under any other
circumstances such that, such Inventory may be returned to a Borrower without
the consent of the Lender.

Borrower shall not return any of its Inventory to a supplier or vendor thereof,
or any other Person, whether for cash, credit against future purchases or then
existing payables, or otherwise, unless (a) such return is in the ordinary
course of business of Borrower and such Person, (b) no Event of Default exists
or would result therefrom, (c) if the value of all Inventory returned in any
month exceeds $250,000, Borrower promptly notifies Lender thereof, and (d) any
payments received by Borrower in connection with any such return is promptly
turned over to the Tranche A Lender, or to the Lender if all Obligations under
the Tranche A Loan Agreement have been paid in full.

- -Adjustments and Allowances. Each Borrower may grant such allowances or other
adjustments to that Borrower's Account Debtors (exclusive of extending the time
for payment of any Account or Account Receivable, which shall not be done
without first obtaining the Lender's prior written consent in each instance) as
that Borrower may reasonably deem to accord with sound business practice,
provided, however, the authority granted the Borrowers pursuant to this Section
0 may be limited or terminated by the Lender at any time in the Lender's
discretion.

- -Validity of Accounts.

The amount of each Account shown on the books, records, and invoices of the
Borrowers represented as owing by each Account Debtor is and will be the correct
amount actually owing by such Account Debtor and shall have been fully earned by
performance by the Borrowers.

No Borrower has any knowledge of any impairment of the validity or
collectibility of any of the Accounts. The Lead Borrower shall notify the Lender
of any such impairment immediately after any Borrower becomes aware of any such
impairment. Except for any letters of credit issued by Fleet Capital Corporation
pursuant to the Tranche A Loan Agreement, no Borrower shall post any bond to
secure any Borrower's performance under any agreement to which any Borrower is a
party nor cause any surety, guarantor, or other third party obligee to become
liable to perform any obligation of any Borrower (other than to the Lender) in
the event of any Borrower's failure so to perform.

- -Notification to Account Debtors. The Lender shall have the right (whether or
not an Event of Default has occurred) to notify any of the Borrowers' Account
Debtors to make payment directly to the Lender and to collect all amounts due on
account of the Collateral.

<PAGE>


- - Grant of Security Interest:

- -Grant of Security Interest. To secure the Borrowers' prompt, punctual, and
faithful performance of all and each of the Liabilities, each Borrower hereby
grants to the Lender a continuing security interest in and to, and assigns to
the Lender the following, and each item thereof, whether now owned or now due,
or in which that Borrower has an interest, or hereafter acquired, arising, or to
become due, or in which that Borrower obtains an interest, and all products,
Proceeds, substitutions, and accessions of or to any of the following (all of
which, together with any other property in which the Lender may in the future be
granted a security interest, is referred to herein as the "Collateral"):

All Accounts and accounts receivable.
All Inventory.
All General Intangibles.
All Equipment.
All Goods.
All Farm Products.
All Fixtures.
All Chattel Paper.
All Letter-of-Credit Rights.
All Payment Intangibles.
All Supporting Obligations.

All books, records, and information relating to the Collateral and/or to the
operation of each Borrower's business, and all rights of access to such books,
records, and information, and all property in which such books, records, and
information are stored, recorded, and maintained.

All Leasehold Interests.

All Investment Property, Instruments, Documents, Deposit Accounts, money,
policies and certificates of insurance, deposits, impressed accounts,
compensating balances, cash, or other property.

All insurance proceeds, refunds, and premium rebates, including, without
limitation, proceeds of fire and credit insurance, whether any of such proceeds,
refunds, and premium rebates arise out of any of the foregoing. (0 through 0) or
otherwise.

All liens, guaranties, rights, remedies, and privileges pertaining to any of the
foregoing (0 through 0), including the right of stoppage in transit.

<PAGE>


- -Extent and Duration of Security Interest.

The security interest created and granted herein is in addition to, and
supplemental of, any security interest previously granted by any Borrower to the
Lender and shall continue in full force and effect applicable to all Liabilities
until both (a) all Liabilities have been paid and/or satisfied in full and (b)
the security interest created herein is specifically terminated in writing by a
duly authorized officer of the Lender.

It is intended that the Collateral Interests created herein extend to and cover
all assets of each Borrower, except for those assets described on EXHIBIT 7:7-2,
annexed hereto.

It is further intended that, with respect to any term used herein to describe
Collateral which term is defined in either (or both) the UCC as in effect on the
date when this Agreement was executed by the Borrowers or in UCC9'99, the
meaning given that term shall be the more encompassing of the two definitions.

- - Lender As Borrower's Attorney-In-Fact:

- -Appointment as Attorney-In-Fact. Each Borrower hereby irrevocably constitutes
and appoints the Lender as that Borrower's true and lawful attorney, with full
power of substitution, following the occurrence of an Event of Default, to
convert the Collateral into cash at the sole risk, cost, and expense of that
Borrower, but for the sole benefit of the Lender. The rights and powers granted
the Lender by this appointment include but are not limited to the right and
power to:

Prosecute, defend, compromise, or release any action relating to the Collateral.
Sign change of address forms to change the address to which each Borrower's mail
is to be sent to such address as the Lender shall designate; receive and open
each Borrower's mail; remove any Receivables Collateral and Proceeds of
Collateral therefrom and turn over the balance of such mail either to the Lead
Borrower or to any trustee in bankruptcy or receiver of the Lead Borrower, or
other legal representative of a Borrower whom the Lender determines to be the
appropriate person to whom to so turn over such mail.
Endorse the name of the relevant Borrower in favor of the Lender upon any and
all checks, drafts, notes, acceptances, or other items or instruments; sign and
endorse the name of the relevant Borrower on, and receive as secured party, any
of the Collateral, any invoices, schedules of Collateral, freight or express
receipts, or bills of lading, storage receipts, warehouse receipts, or other
documents of title respectively relating to the Collateral.
Sign the name of the relevant Borrower on any notice to that Borrower's Account
Debtors or verification of the Receivables Collateral; sign the relevant
Borrower's name on any Proof of Claim in Bankruptcy against Account Debtors, and
on notices of lien, claims of mechanic's liens, or assignments or releases of
mechanic's liens securing the Accounts. Take all such action as may be necessary
to obtain the payment of any letter of credit and/or banker's acceptance of
which any Borrower is a beneficiary. Repair, manufacture, assemble, complete,
package, deliver, alter or supply goods, if any, necessary to fulfill in whole
or in part the purchase order of any customer of each Borrower. Use, license or
transfer any or all General Intangibles of each Borrower.


<PAGE>


- -No Obligation to Act. The Lender shall not be obligated to do any of the acts
or to exercise any of the powers authorized by Section 0 herein, but if the
Lender elects to do any such act or to exercise any of such powers, it shall not
be accountable for more than it actually receives as a result of such exercise
of power, and shall not be responsible to any Borrower for any act or omission
to act except for any act or omission to act as to which there is a final
determination made in a judicial proceeding (in which proceeding the Lender has
had an opportunity to be heard) which determination includes a specific finding
that the subject act or omission to act had been grossly negligent or in actual
bad faith.


- - Events of Default:

     The occurrence of any event described in this Article 0 respectively shall
constitute an "Event of Default" herein. Upon the occurrence of any Event of
Default described in Section 0, any and all Liabilities shall become due and
payable without any further act on the part of the Lender. Upon the occurrence
of any other Event of Default, the Lender may declare any and all Liabilities
shall become immediately due and payable. The occurrence of any Event of Default
shall also constitute, without notice or demand, a default under all other
agreements between the Lender and any Borrower and instruments and papers
heretofore, now, or hereafter given the Lender by any Borrower.

- -Failure to Pay the Term Loan. The failure by any Borrower to pay when due any
principal of, interest on, or fees in respect of, the Term Loan.

- -Failure To Make Other Payments. The failure by any Borrower to pay when due (or
upon demand, if payable on demand) any payment Liability other than any payment
liability on account of the principal of, or interest on, or fees in respect of,
the Term Loan.

- -Failure to Perform Covenant or Liability (No Grace Period). The failure by any
Borrower to promptly, punctually, faithfully and timely perform, discharge, or
comply with any covenant or Liability included in any of the following
provisions hereof:


<PAGE>

                              Section Relates to:

0                             Indebtedness
0                             Pay taxes
0                             Dividends. Investments. Other  Corporate Actions
0                             Affiliate Transactions
              Article 0       Reporting Requirements and Financial Performance
                              Covenants

- -Failure to Perform Covenant or Liability (Grace Period). The failure by any,
Borrower. within ten (10) days following the earlier of any Borrower's knowledge
of a breach of any covenant or Liability not described in any of Sections 0, 0,
or 0 or of its receipt of written notice from the Lender of the breach of any of
any of such covenants or Liabilities.

- -Misrepresentation. The determination by the Lender that any representation or
warranty at any time made by any Borrower to the Lender was not true or complete
in all material respects when given.

- -Acceleration of Other Debt. Breach of Lease. The occurrence of any event such
that any Indebtedness of any Borrower to any creditor other than the Lender
could be accelerated or, without the consent of any Borrower, including, without
limitation, the Tranche A Loan Agreement, or any Lease could be terminated
(whether or not the subject creditor or lessor takes any action on account of
such occurrence).

- -Default Under Other Agreements. The occurrence of any breach of any covenant or
Liability imposed by, or of any default under, any agreement (including any Loan
Document) between the Lender and any Borrower or instrument given by any
Borrower to the Lender and the expiry, without cure, of any applicable grace
period (notwithstanding that the Lender may not have exercised all or any of its
rights on account of such breach or default).

- -Uninsured Casualty Loss. The occurrence of any uninsured loss, theft, damage,
or destruction of or to any material portion of the Collateral.


<PAGE>

- -Attachment. Judgment. Restraint of Business.

The service of process upon the Lender or any Participant seeking to attach, by
trustee, mesne, or other process, any funds of any Borrower on deposit with, or
assets of any Borrower in the possession of, the Lender or such Participant. The
entry of any judgment against any Borrower, which judgment is not satisfied (if
a money judgment) or appealed from (with execution or similar process stayed)
within fifteen (15) days of its entry.

The entry of any order or the imposition of any other process having the force
of law, the effect of which is to restrain in any material way the conduct by
any Borrower of its business in the ordinary course.

- -Business Failure. Any act by, against, or relating to any Borrower, or its
property or assets, which act constitutes the determination, by any Borrower, to
initiate a program of partial or total self-liquidation; application for,
consent to, or sufferance of the appointment of a receiver, trustee, or other
person, pursuant to court action or otherwise, over all, or any part of any
Borrower's property; the granting of any trust mortgage or execution of an
assignment for the benefit of the creditors of any Borrower, or the occurrence
of any other voluntary or involuntary liquidation or extension of debt agreement
for any Borrower; the offering by or entering into by any Borrower of any
composition, extension, or any other arrangement seeking relief from or
extension of the debts of any Borrower; or the initiation of any judicial or
non-judicial proceeding or agreement by, against, or including any Borrower
which seeks or intends to accomplish a reorganization or arrangement with
creditors; and/or the initiation by or on behalf of any Borrower of the
liquidation or winding up of all or any part of any Borrower's business or
operations.


<PAGE>

- -Bankruptcy. The failure by any Borrower to generally pay the debts of that
Borrower as they mature; adjudication of bankruptcy or insolvency relative to
any Borrower; the entry of an order for relief or similar order with respect to
any Borrower in any proceeding pursuant to the Bankruptcy Code or any other
federal bankruptcy law; the filing of any complaint, application, or petition by
any Borrower initiating any matter in which any Borrower is or may be granted
any relief from the debts of that Borrower pursuant to the Bankruptcy Code or
any other insolvency statute or procedure; the filing of any complaint,
application, or petition against any Borrower initiating any matter in which
that Borrower is or may be granted any relief from the debts of that Borrower
pursuant to the Bankruptcy Code or any other insolvency statute or procedure,
which complaint, application, or petition is not timely contested in good faith
by that Borrower by appropriate proceedings or, if so contested, is not
dismissed within thirty (30) days of when filed.

- -Default by Guarantor. The occurrence of any of the foregoing Events of Default
with respect to any guarantor or endorser of the Liabilities, or the occurrence
of any of the foregoing Events of Default with respect to any parent,
subsidiary, or Affiliate of any Borrower, as if such guarantor, endorser,
parent, or Affiliate were a "Borrower" described therein.

- -Indictment - Forfeiture. The indictment of, or institution of any legal process
or proceeding against, any Borrower, under any Applicable Law where the relief,
penalties, or remedies sought or available include the forfeiture of any
property of any Borrower and/or the imposition of any stay or other order, the
effect of which could be to restrain in any material way the conduct by any
Borrower of its business in the ordinary course.

- -Termination of Guaranty. The termination or attempted termination of any
guaranty by any guarantor of the Liabilities.

- -Challenge to Loan Documents.

Any challenge by or on behalf of any Borrower or any guarantor of the
Liabilities to the validity of any Loan Document or the applicability or
enforceability of any Loan Document strictly in accordance with the subject Loan
Document's terms or which seeks to void, avoid, limit, or otherwise adversely
affect any security interest created by or in any Loan Document or any payment
made pursuant thereto.

<PAGE>

     11 -Any determination by any court or any other judicial or government
authority that any Loan Document is not enforceable strictly in accordance with
the subject Loan Document's terms or which voids, avoids, limits, or otherwise
adversely affects any security interest created by any Loan Document or any
payment made pursuant thereto.

     11. -Change in Control. Any Change in Control.


Article 2: - Rights and Remedies Upon Default:

     21. -Acceleration. Upon the occurrence of any Event of Default as described
in Section 0, all Indebtedness of the Borrower to the Lender shall be
immediately due and payable. Upon the occurrence of any Event of Default other
than as described in Section 0, the Lender may declare all Indebtedness of the
Borrower to the Lender to be immediately due and payable and may exercise all of
the Lender's Rights and Remedies as the Lender from time to time thereafter
determines as appropriate.

     22. -Rights of Enforcement. The Lender shall have all of the rights and
remedies of a secured party upon default under the UCC, in addition to which the
Lender shall have all and each of the following rights and remedies:

          (a) To collect the Receivables Collateral with or without the taking
     of possession of any of the Collateral.

          (b) To take possession of all or any portion of the Collateral.

          (c) To sell, lease, or otherwise dispose of any or all of the
     Collateral, in its then condition or following such preparation or
     processing as the Lender deems advisable and with or without the taking of
     possession of any of the Collateral.

          (d) To conduct one or more going out of business sales which include
     the sale or other disposition of the Collateral.

          (e) To apply the Receivables Collateral or the Proceeds of the
     Collateral towards (but not necessarily in complete satisfaction of) the
     Liabilities.

          (f) To exercise all or any of the rights, remedies, powers,
     privileges, and discretions under all or any of the Loan Documents.


<PAGE>

     23. -Sale of Collateral.

          (a) Any sale or other disposition of the Collateral may be at public
     or private sale upon such terms and in such manner as the Lender deems
     advisable, having due regard to compliance with any statute or regulation
     which might affect, limit, or apply to the Lender's disposition of the
     Collateral.

          (b) Unless the Collateral is perishable or threatens to decline
     speedily in value, or is of a type customarily sold on a recognized market
     (in which event the Lender shall provide the Lead Borrower such notice as
     may be practicable under the circumstances), the Lender shall give the Lead
     Borrower at least ten (10) days prior written notice of the date, time, and
     place of any proposed public sale, and of the date after which any private
     sale or other disposition of the Collateral may be made. Each Borrower
     agrees that such written notice shall satisfy all requirements for notice
     to that Borrower which are imposed under the UCC or other applicable law
     with respect to the exercise of the Lender's rights and remedies upon
     default.

          (c) The Lender may purchase the Collateral, or any portion of it at
     any sale held under this Article.

          (d) If any of the Collateral is sold, leased, or otherwise disposed of
     by the Lender on credit, the Liabilities shall not be deemed to have been
     reduced as a result thereof unless and until payment is finally received
     thereon by the Lender.

          (e) The Lender shall apply the proceeds of the Lender's exercise of
     its rights and remedies upon default pursuant to this Article 2: in such
     manner, and with such frequency, as the Lender determines.

     24. -Occupation of Business Location. In connection with the Lender's
exercise of the Lender's rights under this Article 2:, the Lender may enter
upon, occupy, and use any premises owned or occupied by each Borrower, and may
exclude each Borrower from such premises or portion thereof as may have been so
entered upon, occupied, or used by the Lender. The Lender shall not be required
to remove any of the Collateral from any such premises upon the Lender's taking
possession thereof, and may render any Collateral unusable to the Borrowers. In
no event shall the Lender be liable to any Borrower for use or occupancy by the
Lender of any premises pursuant to this Article 2:, nor for any charge (such as
wages for any Borrower's

<PAGE>

employees and utilities) incurred in connection with the Lender's exercise of
the Lender's Rights and Remedies.

     25. -Grant of Nonexclusive License. Each Borrower hereby grants to the
Lender a royalty free nonexclusive irrevocable license to use, apply, and affix
any trademark, trade name, logo, or the like in which any Borrower now or
hereafter has rights, such license being with respect to the Lender's exercise
of the rights hereunder including, without limitation, in connection with any
completion of the manufacture of Inventory or sale or other disposition of
Inventory.

     26. -Assembly of Collateral. The Lender may require any Borrower to
assemble the Collateral and make it available to the Lender at the Borrowers'
sole risk and expense at a place or places which are reasonably convenient to
both the Lender and the Lead Borrower.

     27. -Rights and Remedies. The rights, remedies, powers, privileges, and
discretions of the Lender hereunder (herein, the Lender's Rights and Remedies")
shall be cumulative and not exclusive of any rights or remedies which it would
otherwise have. No delay or omission by the Lender in exercising or enforcing
any of the Lender's Rights and Remedies shall operate as, or constitute, a
waiver thereof. No waiver by the Lender of any Event of Default or of any
default under any other agreement shall operate as a waiver of any other default
hereunder or under any other agreement. No single or partial exercise of any of
the Lender's Rights or Remedies, and no express or implied agreement or
transaction of whatever nature entered into between the Lender and any person,
at any time, shall preclude the other or further exercise of the Lender's Rights
and Remedies. No waiver by the Lender of any of the Lender's Rights and Remedies
on any one occasion shall be deemed a waiver on any subsequent occasion, nor
shall it be deemed a continuing waiver. The Lender's Rights and Remedies may be
exercised at such time or times and in such order of preference as the Lender
may determine. The Lender's Rights and Remedies may be exercised without resort
or regard to any other source of satisfaction of the Liabilities.


<PAGE>

Article 3:        - Notices:

     31. -Notice Addresses. All notices, demands, and other communications made
in respect of any Loan Document (other than a request for a loan or advance or
other financial accommodation under the Revolving Credit) shall be made to the
following addresses, each of which may be changed upon seven (7) days written
notice to all others given by certified mail, return receipt requested:

If to the Lender:
                             Back Bay Capital Funding, LLC
                             40 Broad Street
                             Boston, Massachusetts 02109
                             Attention    :  Michael Pizette

                                          : Managing Director
                             Fax     :    617 434-4312



         With a copy to:
                             Riemer & Braunstein LLP
                             Three Center Plaza
                             Boston, Massachusetts  02108

                             Attention     :  Robert E. Paul, Esquire
                             Fax           :  617 880 3456

If to the Lead Borrower
And All Borrowers:

                             Advanced Technical Products, Inc.
                             200 Mansell Court
                             Rosewell, Georgia 30076
                             Attention     : James Hobt, Chief Financial Officer
                             Fax           : 770 993-1986

         With a copy to:
                             Gardere & Wynne, L.L.P.
                             Thanksgiving Tower
                             1601 Elm Street, Suite 3000
                             Dallas, Texas 75201
                             Attention     : Barry D. Drees, Esquire
                             Fax:          : 214 999-3567

     32. -Notice Given.

          (a) Except as otherwise specifically provided herein, notices shall be
     deemed made and correspondence received, as follows (all times being local
     to the place of delivery or receipt):


<PAGE>

               (ii) By mail: the sooner of when actually received or Three (3)
          days following deposit in the United States mail, postage prepaid.

               (iii) By recognized overnight express delivery: the Business Day
          following the day when sent.

               (iv) By Hand: If delivered on a Business Day after 9:00 AM and no
          later than Three (3) hours prior to the close of customary business
          hours of the recipient, when delivered. Otherwise, at the opening of
          the then next Business Day.

               (v) By Facsimile transmission (which must include a header on
          which the party sending such transmission is indicated): If sent on a
          Business Day after 9:00 AM and no later than Three (3) hours prior to
          the close of customary business hours of the recipient, one (1) hour
          after being sent. Otherwise, at the opening of the then next Business
          Day.

          (a) Rejection or refusal to accept delivery and inability to deliver
     because of a changed address or Facsimile Number for which no due notice
     was given shall each be deemed receipt of the notice sent.

Article 4: - Term:

     41. -Actions on Termination Date.

          (a) On the Termination Date, the Borrowers shall pay the Lender
     (whether or not then due), in immediately available funds, all then
     Liabilities including, without limitation, the following:

               (ii) All principal of the Term Loan.

               (iii) All accrued and unpaid interest (including all accrued and
          unpaid Current Pay Interest and all accrued and unpaid PIK Interest)
          on the Term Loan.

               (iv) Any then remaining installments of any Fees due pursuant to
          the Fee Letter.

               (v) Any Term Loan Early Termination Fee.

               (vi) All amounts payable under the Warrant Purchase Agreement.

               (vii) All unreimbursed costs and expenses of the Lender for which
          any Borrower is responsible.


<PAGE>

          (a) Until all of such payments have been made, all provisions of this
     Agreement, other than those included in Article 0 which place any
     obligation on the Term Lender to make any loan or advance or to provide any
     financial accommodation to any Borrower shall remain in full force and
     effect until all Liabilities shall have been paid in full.

          (b) The release by the Lender of the Collateral Interests granted the
     Lender by the Borrowers hereunder may be upon such conditions and
     indemnifications as the Lender may require.

Article 5: - General:

     51. -Protection of Collateral. The Lender has no duty as to the collection
or protection of the Collateral beyond the safe custody of such of the
Collateral as may come into the possession of the Lender.

     52. -Publicity. The Lender may issue a "tombstone" notice of the
establishment of the credit facility contemplated by this Agreement and may make
reference to each Borrower (and may utilize any logo or other distinctive symbol
associated with each Borrower) in connection with any advertising, promotion, or
marketing undertaken by the Lender.

     53. -Successors and Assigns. This Agreement shall be binding upon the
Borrowers and their respective representatives, successors, and assigns and
shall enure to the benefit of the Lender and its successors and assigns,
provided, however, no trustee or other fiduciary appointed with respect to any
Borrower shall have any rights hereunder. In the event that the Lender assigns
or transfers its rights under this Agreement, the assignee shall thereupon
succeed to and become vested with all rights, powers, privileges, and duties of
the Lender hereunder and the Lender shall thereupon be discharged and relieved
from its duties and obligations hereunder.

     54. -Severability. Any determination that any provision of this Agreement
or any application thereof is invalid, illegal, or unenforceable in any respect
in any instance shall not affect

<PAGE>

the validity, legality, or enforceability of such provision in any other
instance, or the validity, legality, or enforceability of any other provision of
this Agreement.

     55. -Amendments. Course of Dealing.

          (a) This Agreement and the other Loan Documents incorporate all
     discussions and negotiations between each Borrower and the Lender, either
     express or implied, concerning the matters included herein and in such
     other instruments, any custom, usage, or course of dealings to the contrary
     notwithstanding. No such discussions, negotiations, custom, usage, or
     course of dealings shall limit, modify, or otherwise affect the provisions
     thereof. No failure by the Lender to give notice to the Lead Borrower of
     any Borrower's having failed to observe and comply with any warranty or
     covenant included in any Loan Document shall constitute a waiver of such
     warranty or covenant or the amendment of the subject Loan Document.

          (b) Each Borrower may undertake any action otherwise prohibited
     hereby, and may omit to take any action otherwise required hereby, upon and
     with the express prior written consent of the Lender. No consent,
     modification, amendment, or waiver of any provision of any Loan Document
     shall be effective unless executed in writing by or on behalf of the party
     to be charged with such modification, amendment, or waiver (and if such
     party is the Lender then by a duly authorized officer thereof). Any
     modification, amendment, or waiver provided by the Lender shall be in
     reliance upon all representations and warranties theretofore made to the
     Lender by or on behalf of the Borrowers (and any guarantor, endorser, or
     surety of the Liabilities) and consequently may be rescinded in the event
     that any of such representations or warranties was not true and complete in
     all material respects when given.

     56. -Power of Attorney. In connection with all powers of attorney included
in this Agreement, each Borrower hereby grants unto the Lender full power to do
any and all things necessary or appropriate in connection with the exercise of
such powers as fully and effectually as that Borrower might or could do, hereby
ratifying all that said attorney shall do or cause to be done by virtue of this
Agreement. No power of attorney set forth in this Agreement shall be affected by
any disability or incapacity suffered by any Borrower and each shall survive the
same. All powers conferred upon the Lender by this Agreement, being coupled with
an interest, shall be irrevocable until this Agreement is terminated by a
written instrument executed by a duly authorized officer of the Lender.

<PAGE>

     57. -Application of Proceeds. The proceeds of any collection, sale, or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied towards the Liabilities in such order and manner as the Lender
determines in its sole discretion, consistent, however, with all applicable
provisions of this Agreement. The Borrowers shall remain liable for any
deficiency remaining following such application.

     58. -Increased Costs. If, as a result of any requirement of law, or of the
interpretation or application thereof by any court or by any governmental or
other authority or entity charged with the administration thereof, whether or
not having the force of law, which:

          (a) subjects the Lender to any taxes or changes the basis of taxation,
     or increases any existing taxes, on payments of principal, interest or
     other amounts payable by any Borrower to the Lender under this Agreement
     (except for taxes on the Lender based on net income or capital imposed by
     the jurisdiction in which the principal or lending offices of the Lender
     are located);

          (b) imposes, modifies or deems applicable any reserve, cash margin,
     special deposit or similar requirements against assets held by, or deposits
     in or for the account of or loans by or any other acquisition of funds by
     the relevant funding office of the Lender;

          (c) imposes on the Lender any other condition with respect to any Loan
     Document; or

          (d) imposes on the Lender a requirement to maintain or allocate
     capital in relation to the Liabilities; and the result of any of the
     foregoing, in the Lender's reasonable opinion, is to increase the cost to
     the Lender of making or maintaining any loan, advance or financial
     accommodation or to reduce the income receivable by the Lender in respect
     of any loan, advance or financial accommodation by an amount which the
     Lender deems to be material, then upon written notice from the Lender, from
     time to time, to the Lead Borrower (such notice to set out in reasonable
     detail the facts giving rise to and a summary calculation of such increased
     cost or reduced income), the Borrowers shall

<PAGE>

     forthwith pay to the Lender, upon receipt of such notice, that amount which
     shall compensate the Lender for such additional cost or reduction in
     income.

     59. -Costs and Expenses of the Lender .

          (a) The Borrowers shall pay from time to time on demand all Costs of
     Collection and all reasonable costs, expenses, and disbursements (including
     attorneys' reasonable fees and expenses) which are incurred by the Lender
     in connection with the preparation, negotiation, execution, and delivery of
     this Agreement and of any other Loan Documents, and all other reasonable
     costs, expenses, and disbursements which may be incurred connection with or
     in respect to the credit facility contemplated hereby or which otherwise
     are incurred with respect to the Liabilities.

          (b) Each Borrower authorizes the Lender to pay all such fees and
     expenses and in the Lender's discretion, to add such fees and expenses to
     the Loan Account.

          (c) The undertaking on the part of each Borrower in this Section 59
     shall survive payment of the Liabilities and/or any termination, release,
     or discharge executed by the Lender in favor of any Borrower, other than a
     termination, release, or discharge which makes specific reference to this
     Section 59.

     510. -Copies and Facsimiles. Each Loan Document and all documents and
papers which relates thereto which have been or may be hereinafter furnished the
Lender may be reproduced by the Lender by any photographic, microfilm,
xerographic, digital imaging, or other process, and the Lender may destroy any
document so reproduced. Any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made in
the regular course of business). Any facsimile which bears proof of transmission
shall be binding on the party which or on whose behalf such transmission was
initiated and likewise shall be so admissible in evidence as if the original of
such facsimile had been delivered to the party which or on whose behalf such
transmission was received.

     511. -Massachusetts Law. This Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the law of The Commonwealth of Massachusetts.


<PAGE>

     512. -Consent to Jurisdiction.

          (a) Each Borrower agrees that any legal action, proceeding, case, or
     controversy against any Borrower with respect to any Loan Document may be
     brought in the Superior Court of Suffolk County Massachusetts or in the
     United States District Court, District of Massachusetts, sitting in Boston,
     Massachusetts, as the Lender may elect in the Lender's sole discretion. By
     execution and delivery of this Agreement, each Borrower, for itself and in
     respect of its property, accepts, submits, and consents generally and
     unconditionally, to the jurisdiction of the aforesaid courts.

          (b) Each Borrower WAIVES personal service of any and all process upon
     it, and irrevocably consents to the service of process out of any of the
     aforementioned courts in any such action or proceeding by the mailing of
     copies thereof by certified mail, postage prepaid, to the Lead Borrower at
     the Lead Borrower's address for notices as specified herein, such service
     to become effective five (5) Business Days after such mailing.

          (c) Each Borrower WAIVES any objection based on forum non conveniens
     and any objection to venue of any action or proceeding instituted under any
     of the Loan Documents and consents to the granting of such legal or
     equitable remedy as is deemed appropriate by the Court.

          (d) Nothing herein shall affect the right of the Lender to bring legal
     actions or proceedings in any other competent jurisdiction.

          (e) Each Borrower agrees that any action commenced by any Borrower
     asserting any claim arising under or in connection with this Agreement or
     any other Loan Document shall be brought solely in the Superior Court of
     Suffolk County Massachusetts or in the United States District Court,
     District of Massachusetts, sitting in Boston, Massachusetts, and that such
     Courts shall have exclusive jurisdiction with respect to any such action.

     513. -Indemnification. Each Borrower shall indemnify, defend, and hold the
Lender and any Participant and any of their respective employees, officers, or
agents (each, an "Indemnified Person") harmless of and from any claim brought or
threatened against any Indemnified Person by any Borrower, any guarantor or
endorser of the Liabilities, or any other

<PAGE>

     Person (as well as from attorneys' reasonable fees, expenses, and
disbursements in connection therewith) on account of the relationship of the
Borrowers or of any other guarantor or endorser of the Liabilities (each of
claims which may be defended, compromised, settled, or pursued by the
Indemnified Person with counsel of the Lender's selection, but at the expense of
the Borrowers) other than any claim as to which a final determination is made in
a judicial proceeding (in which the Lender and any other Indemnified Person has
had an opportunity to be heard), which determination includes a specific finding
that the Indemnified Person seeking indemnification had acted in a grossly
negligent manner or in actual bad faith. This indemnification shall survive
payment of the Liabilities and/or any termination, release, or discharge
executed by the Lender in favor of the Borrowers, other than a termination,
release, or discharge duly executed on behalf of the Lender which makes specific
reference to this Section 513.

     514. -Rules of Construction. The following rules of construction shall be
applied in the interpretation, construction, and enforcement of this Agreement
and of the other Loan Documents:

          (a) Unless otherwise specifically provided for herein, interest and
     any fee or charge which is stated as a per annum percentage shall be
     calculated based on a 360 day year and actual days elapsed.

          (b) Any term used herein to describe Collateral or a Person, which
     term is defined in either (or both) the UCC as in effect on the date when
     this Agreement was executed by the Borrowers or in UCC9'99, shall be given
     the meaning which is the more encompassing of the two definitions.

          (c) Words in the singular include the plural and words in the plural
     include the singular.

          (d) Cross references to Sections in this Agreement begin with the
     Article in which that Section appears, followed by a colon, and then the
     Section to which reference is made. (For example, a reference to "Section
     5:5-6" is to Section 5-6, which appears in Article 5 of this Agreement).

          (e) Titles, headings (indicated by being underlined or shown in
     Initial Capitals) and any Table of Contents are solely for convenience of
     reference; do not constitute a part of the instrument in which included;
     and do not affect such instrument's meaning, construction, or effect.


<PAGE>

          (f) The words "includes" and "including" are not limiting.

          (g) Text which follows the words "including, without limitation" (or
     similar words) is illustrative and not limitational.

          (h) Text which is shown in italics, shown in bold, shown IN ALL
     CAPITAL LETTERS, or in any combination of the foregoing, shall be deemed to
     be conspicuous.

          (i) The words "may not" are prohibitive and not permissive.

          (j) Any reference to a Person's "knowledge" (or words of similar
     import) are to such Person's knowledge assuming that such Person has
     undertaken reasonable and diligent investigation with respect to the
     subject of such "knowledge" (whether or not such investigation has actually
     been undertaken).

          (k) Terms which are defined in one section of any Loan Document are
     used with such definition throughout the instrument in which so defined.

          (l) The symbol "$" refers to United States Dollars.

          (m) Unless limited by reference to a particular Section or provision,
     any reference to "herein", "hereof", or "within" is to the entire Loan
     Document in which such reference is made.

          (n) References to "this Agreement" or to any other Loan Document is to
     the subject instrument as amended to the date on which application of such
     reference is being made.

          (o) Except as otherwise specifically provided, all references to time
     are to Boston time.

          (p) In the determination of any notice, grace, or other period of time
     prescribed or allowed hereunder:

               (ii) Unless otherwise provided (I) the day of the act, event, or
          default from which the designated period of time begins to run shall
          not be included and the last day of the period so computed shall be
          included unless such last day is not a Business Day, in which event
          the last day of the relevant period shall be the then next Business
          Day and (II) the period so computed shall end at 5:00 PM on the
          relevant Business Day.

               (iii) The word "from" means "from and including".

               (iv) The words "to" and "until" each mean "to, but excluding".

               (v) The word "through" means "to and including".


<PAGE>

          (a) The Loan Documents shall be construed and interpreted in a
     harmonious manner and in keeping with the intentions set forth in Section
     515 hereof, provided, however, in the event of any inconsistency between
     the provisions of this Agreement and any other Loan Document, the
     provisions of this Agreement shall govern and control.

     515. -Intent. It is intended that:

          (a) This Agreement take effect as a sealed instrument.

          (b) The scope of all Collateral Interests created by any Borrower to
     secure the Liabilities be broadly construed in favor of the Lender and that
     they cover all assets of each Borrower.

          (c) All Collateral Interests created in favor of the Lender at any
     time and from time to time secure all Liabilities, whether now existing or
     contemplated or hereafter arising.

          (d) All reasonable costs, expenses, and disbursements incurred by the
     Lender in connection with the Lender's relationship(s) with any Borrower
     shall be borne by the Borrowers.

          (e) Unless otherwise explicitly provided herein, the Lender's consent
     to any action of any Borrower which is prohibited unless such consent is
     given may be given or refused by the Lender in its sole discretion and
     without reference to Section 0 hereof.

     516. -Participations: The Lender may sell participations in the Lender's
interests herein to one or more financial institutions (each, a "Participant").

     517. -Right of Set-Off. Any and all deposits or other sums at any time
credited by or due to any Borrower from the Lender or any Participant or from
any Affiliate of any of the foregoing, and any cash, securities, instruments or
other property of any Borrower in the possession of any of the foregoing,
whether for safekeeping or otherwise (regardless of the reason such Person had
received the same) shall at all times constitute security for all Liabilities
and for any and all obligations of each Borrower to the Lender or any
Participant or such Affiliate and may be applied or set off against the
Liabilities and against such obligations at any time, whether or not such are
then due and whether or not other collateral is then available to the Lender.


<PAGE>

     518. -Pledges To Federal Reserve Banks: Nothing included in this Agreement
shall prevent or limit the Lender, to the extent that the Lender is subject to
any of the twelve Federal Reserve Banks organized under ss.4 of the Federal
Reserve Act (12 U.S.C. ss.341) from pledging all or any portion of that Lender's
interest and rights under this Agreement, provided, however, neither such pledge
nor the enforcement thereof shall release the Lender from any of its obligations
hereunder or under any of the Loan Documents.

     519. -Maximum Interest Rate.

          (a) Notwithstanding anything to the contrary in this Agreement or
     otherwise, (i) if at any time the amount of interest hereunder would exceed
     the amount of such interest computed upon the basis of the maximum rate of
     interest permitted by applicable state or federal law in effect from time
     to time hereafter (the "Maximum Legal Rate"), the interest payable under
     this Agreement shall be computed upon the basis of the Maximum Legal Rate,
     but any subsequent reduction in the Term Loan Interest Rate or Default
     Rate, as applicable, shall not reduce such interest thereafter payable
     hereunder below the amount computed on the basis of the Maximum Legal Rate
     until the aggregate amount of such interest accrued and payable under this
     Agreement equals the total amount of interest which would have accrued if
     such interest had been at all times computed solely on the basis of the
     Term Loan Interest Rate or Default Rate, as applicable; and (ii) unless
     preempted by federal law, the Term Loan Interest Rate or Default Rate, as
     applicable, from time to time in effect hereunder may not exceed the
     "weekly ceiling" from time to time in effect under Chapter 303 of the Texas
     Finance Code. If the applicable state or federal law is amended in the
     future to allow a greater rate of interest to be charged under this
     Agreement than is presently allowed by applicable state or federal law,
     then the limitation of interest hereunder shall be increased to the maximum
     rate of interest allowed by applicable state or federal law as amended,
     which increase shall be effective hereunder on the effective date of such
     amendment, and all interest charges owing to the Lender by reason thereof
     shall be payable in accordance with Section 2:2-4(a)(i) hereof.

          (b) Excess Interest. No agreements, conditions, provisions or
     stipulations contained in this Agreement or any other instrument, document
     or agreement between Borrower and Lender or Event of Default of Borrower,
     or the exercise by Lender of the right to accelerate the payment of the
     maturity of principal and interest, or to exercise any option whatsoever
     contained in this Agreement or any other Loan Document, or the arising of
     any contingency whatsoever, shall

<PAGE>

     entitle the Lender to contract for, charge, or receive, in any event,
     interest exceeding the Maximum Legal Rate. In no event shall Borrower be
     obligated to pay interest exceeding such Maximum Legal Rate and all
     agreements, conditions or stipulations, if any, which may in any event or
     contingency whatsoever operate to bind, obligate or compel Borrower to pay
     a rate of interest exceeding the Maximum Legal Rate, shall be without
     binding force or effect, at law or in equity, to the extent only of the
     excess of interest over such Maximum Legal Rate. In the event any interest
     is contracted for, charged or received in excess of the Maximum Legal Rate
     ("Excess Interest"), Borrower acknowledges and stipulates that any such
     contract, charge, or receipt shall be the result of an accident and bona
     fide error, and that any Excess received by the Lender shall be applied,
     first, to reduce the principal then unpaid hereunder; second, to reduce the
     other Liabilities; and third, returned to Borrower, it being the intention
     of the parties hereto not to enter at any time into a usurious or otherwise
     illegal relationship. Borrower recognizes that, with fluctuations in the
     Maximum Legal Rate, such a result could inadvertently occur. By the
     execution of this Agreement, Borrower covenants that (i) the credit or
     return of any Excess Interest shall constitute the acceptance by Borrower
     of such Excess Interest, and (ii) Borrower shall not seek or pursue any
     other remedy, legal or equitable, against Lender, based in whole or in part
     upon contracting for, charging or receiving of any interest in excess of
     the maximum authorized by applicable law. For the purpose of determining
     whether or not any Excess Interest has been contracted for, charged or
     received by Lender, all interest at any time contracted for, charged or
     received by Lender in connection with this Agreement shall be amortized,
     prorated, allocated and spread in equal parts during the entire term of
     this Agreement.

          (c) Incorporation by this Reference. The provisions of Section
     13:13-19(b) shall be deemed to be incorporated into every document or
     communication relating to the Liabilities which sets forth or prescribes
     any account, right or claim or alleged account, right or claim of Lender
     with respect to Borrower (or any other obligor in respect of Liabilities),
     whether or not any provision of Section 13:13-19(b) is referred to therein.
     All such documents and communications and all figures set forth therein
     shall, for the sole purpose of computing the extent of the Liabilities and
     obligations of the Borrowers (or any other obligor) asserted by Lender
     thereunder, be automatically re-computed by the Borrowers or any obligor,
     and by any court considering the same, to give effect to the adjustments or
     credits required by Section 13:13-19(b).


<PAGE>

     520. -Waivers.

          (a) Each Borrower (and all guarantors, endorsers, and sureties of the
     Liabilities) make each of the waivers included in Section (b), below,
     knowingly, voluntarily, and intentionally, and understands that the Lender,
     in establishing the facilities contemplated hereby and in providing loans
     and other financial accommodations to or for the account of the Borrowers
     as provided herein, whether not or in the future, is relying on such
     waivers.

          (b) EACH BORROWER, AND EACH SUCH GUARANTOR, ENDORSER, AND SURETY
     RESPECTIVELY WAIVES THE FOLLOWING:

               (ii) Except as otherwise specifically required hereby, notice of
          non-payment, demand, presentment, protest and all forms of demand and
          notice, both with respect to the Liabilities and the Collateral.

               (iii) Except as otherwise specifically required hereby, the right
          to notice and/or hearing prior to the Lender's exercising of the
          Lender's rights upon default.

               (iv) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY
          IN WHICH THE LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR
          CONTROVERSY IS INITIATED BY OR AGAINST THE LENDER OR IN WHICH THE
          LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY
          ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN
          ANY BORROWER OR ANY OTHER PERSON AND THE LENDER LIKEWISE WAIVES THE
          RIGHT TO A JURY IN ANY TRIAL OF ANY SUCH CASE OR CONTROVERSY).

               (v) The benefits or availability of any stay, limitation,
          hindrance, delay, or restriction (including, without limitation, any
          automatic stay which otherwise might be imposed pursuant to Section
          362 of the Bankruptcy Code) with respect to any action which the
          Lender may or may become entitled to take hereunder.

               (vi) Any defense, counterclaim, set-off, recoupment, or other
          basis on which the amount of any Liability, as stated on the books and
          records of the Lender, could be reduced or claimed to be paid
          otherwise than in accordance with the tenor of and written terms of
          such Liability.

               (vii) Any claim to consequential, special, or punitive damages.



<PAGE>





                                               ADVANCED TECHNICAL PRODUCTS, INC.
                                                              (" Lead Borrower")

                                        By_________________________________
                                             Name: Garrett L. Dominy
                                             Title: President

                                                                    "Borrowers":

                                               ADVANCED TECHNICAL PRODUCTS, INC.

                                        By_________________________________
                                             Name: Garrett L. Dominy
                                             Title: President

                                                                    ALCORE, INC.

                                        By_________________________________
                                             Name: Garrett L. Dominy
                                             Title: President

                                                  TECHNICAL PRODUCTS GROUP, INC.

                                        By_________________________________
                                             Name: Garrett L. Dominy
                                             Title: President

<PAGE>

                                                         MARION PROPERTIES, INC.

                                        By_________________________________
                                             Name: Garrett L. Dominy
                                             Title: President

                                                         DELAND PROPERTIES, INC.

                                        By_________________________________
                                             Name: Garrett L. Dominy
                                             Title: President

                                                        LINCOLN PROPERTIES, INC.

                                        By_________________________________
                                             Name: Garrett L. Dominy
                                             Title: President

                                                   BACK BAY CAPITAL FUNDING, LLC
                                                                      ("Lender")

                                        By_________________________________
                                             Name: Michael Pizette
                                             Title: Managing Director
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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