Earn Out Note

THIS INSTRUMENT AND THE INDEBTEDNESS EVIDENCED HEREBY IS SUBORDINATE
TO THE INDEBTEDNESS OF THE MAKER TO SHAWMUT BANK
CONNECTICUT, N.A., IN THE MANNER AND TO THE EXTENT
SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED
THE DATE HEREOF MADE BY THE MAKER,
PAYEE AND SHAWMUT BANK CONNECTICUT, N.A.


EARNOUT NOTE


$ 600,000 HANOVER, PENNSYLVANIA
JANUARY 23, 1995


FOR VALUE RECEIVED, DeVlieg-Bullard, Inc., a Delaware corporation (the "Maker"), promises to pay to Mideastern, Inc., a Pennsylvania corporation (the "Payee"), the principal sum of Six Hundred Thousand Dollars and No/100ths ($600,000), subject to adjustment as described below, together with interest on the outstanding principal balance from date hereof at an annual rate of eight percent (8%); provided that in no event shall the rate of interest payable in respect of the indebtedness evidenced hereby exceed the maximum rate of interest from time to time allowed to be charged by applicable law.


Interest on the outstanding principal balance hereof shall be due and payable monthly in arrears, with the first installment payable on February 15, 1995 and subsequent installments payable on the 15th day of each succeeding month until the indebtedness evidenced hereby has been paid in full; provided, however, that no monthly installments of interest shall be payable following any January 31 in which an installment of principal is not due and payable. In such event, interest shall not be due and payable until January 31, 1998, at which time interest shall be due and payable in an aggregate amount equal to the interest Payee would have received if Payee had received monthly installments of interest during the term of this Note on the principal amount actually due and payable hereunder.


Principal shall be due and payable in installments as follows:


1. Two Hundred Thousand and No/100ths Dollars ($200,000) on
January 31, 1996, if the earnings before interest income,
interest expense, taxes and employee incentive compensation
payable pursuant to employment agreements ("EBIT") directly
attributable to the business presently conducted by Payee at
the facility located ...