[Letterhead of Mellon Corporate Financing]

June 21, 2001

SL Industries, Inc.
520 Fellowship Road, Suite A-114
Mt. Laurel, NJ 08054
Attention: Mr. David R. Nuzzo
Vice President / Treasurer

Re: Waiver and Amendment No. 1 to $40,000,000 Revolving Credit Facility
(the "Facility") for SL Industries, Inc., Agented by Mellon Bank, N.A.
----------------------------------------------------------------------

Dear David:

We refer to the Amended and Restated Credit Agreement dated as of February 9,
2001, and effective as of September 30, 2000 (the "Credit Agreement"), by and
among SL Industries, Inc. (the "Borrower"), Mellon Bank, N.A., Fleet National
Bank, and PNC Bank, National Association (collectively, the "Banks") and Mellon
Bank, N.A. as Agent for the Banks (in such capacity, the "Agent"), and the
Security Agreement dated as of February 9, 2001 (the "Security Agreement"), by
and among the Borrower, the Domestic Guarantors and the Agent. Unless otherwise
defined in this letter, the capitalized terms used herein have the meanings
given to them in, or by reference in, the Credit Agreement.

In connection with the Credit Agreement, you have advised us that the Borrower's
financial statements for the fiscal quarter ending March 31, 2001 will indicate
that the Leverage Ratio described in Section 6.01(b) of the Credit Agreement
(the "Leverage Ratio Covenant") was more than the maximum permitted 3.75 to 1.00
and the Interest Coverage Ratio described in Section 6.01(d) of the Credit
Agreement (the "Interest Coverage Ratio Covenant") was less than the minimum
required of 1.75 to 1.00, and have requested that the Banks waive compliance
with those requirements for the period ending on March 31, 2001.

In consideration of the premises and mutual covenants contained herein and
intending to be legally bound hereby, the Borrower , the undersigned Guarantors
and the Banks hereby agree as follows:

1. The Banks, subject to each of the following provisions of this Waiver and
Amendment No. 1, agree to: (A) waive the Borrower's compliance with the Leverage
Ratio Covenant and Interest Coverage Ratio Covenant for the fiscal quarter
ending March 31, 2001, and (B) for the Measurement Date on June 30, 2001 only,
replace the Financial Maintenance Covenants contained in Section 6.01(a), (b),
(c) and (d) with the following Operating Income (Loss) Test. Maximum Operating
Loss, defined as Net Income + Taxes + Interest Expense + Restructuring Costs and
other non-recurring non-cash charges, for the quarter ended June 30, 2001 shall
not exceed $1,000,000.00. All existing covenants, including the Financial
Maintenance Covenants contained in Section 6.01(a), (b), (c) and (d) of the
Credit Agreement, remain in full force and effect and shall continue to apply
for all measurement periods after June 30, 2001.

2. Borrower agrees that it will not request, and Banks shall not extend,
additional advances under the Facility of more than $1,000,000, in the
aggregate, from the date of this letter until the close of business on June 30,
2001.

3. Borrower and each Domestic Guarantor hereby grants to Agent and Banks a
security interest in all of Borrower's and each Domestic Guarantor's now
existing and hereafter acquired and arising property, except, with respect to
the Borrower the stock of its subsidiaries, but including without limitation,
accounts, chattel paper, documents, instruments, investment property, general
intangibles, goods, inventory, equipment and fixtures, and all cash and non-cash
proceeds (including without limitation, insurance proceeds) of all of the
foregoing property and all additions and accessions thereto, substitutions
therefor and replacements thereof. Borrower agrees that not later than 10
business days after the date of this Waiver and Amendment No. 1, the Borrower
will, and will cause each Domestic Guarantor to, execute such documentation to:
(i) amend the Security Agreement on terms satisfactory to the Agent to confirm
the security interests granted herein, including without limitation, in addition
to the existing liens on accounts receivable and the assignment of life
insurance policies, security interests in (a) the Borrower's and the Domestic
Guarantors' inventory, equipment, goods and general intangibles (including,
without limitation, patents and other intellectual property) as well as such
other personal property as the Agent may reasonably request, and (ii) perfect
and protect all such security interests, including without limitation, UCC-1
financing statements, landlord's waivers, confirmation of hazard insurance
naming Agent (for the benefit of Banks) as loss payee, and such other
documentation as the Agent shall reasonably request.

4. The Borrower agrees, in the event of: (i) the sale of any Subsidiary of the
Borrower for any value or (ii) any line of business having a purchase price in
excess of $2,000,000 of the Borrower or any of its Subsidiaries (any of the
foregoing, a "Sale"), to apply 100% of the net proceeds of such sale as a
mandatory payment of any loans outstanding under the Facility and to permanently
reduce the maximum principal amount of the Facility as follows; 75% of the of
the net proceeds up to $25,000,000 plus 25% of net proceeds over $25,000,000
shall be applied as a permanent reduction to the Facility.

5. Effective April 1, 2001, pricing for the Facility as described in Sections
2.04 and 2.05(f)(I) of the Credit Agreement will be amended as set forth in the
grid below. Effective April 1, 2001, and until the actual delivery of the
financial statements for the fiscal quarter ending March 31, 2001, pricing will
be at level five.

- ------------------------- ------------- ------------- ------------- ------------- --------------
4/01/01 SL PRICING GRID LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5
- ------------------------- ------------- ------------- ------------- ------------- --------------

lesser than greater than greater than greater than greater than
CONSOLIDATED = 2.50X 2.50X 3.00X 3.50X 4.00X
LEVERAGE RATIO lesser than lesser than lesser than
= 3.00X = 3.50X = 4.00X
- -----------------------------------------------------------------------------------------------------------------

EURO-RATE MARGIN 150 bp 175 bp 225 bp 275 bp 325 bp
- -----------------------------------------------------------------------------------------------------------------

PRIME RATE MARGIN 0 bp 0 bp 25 bp 50 bp 75 bp
- -----------------------------------------------------------------------------------------------------------------

COMMITMENT FEE 25 bp 37.5 bp 50 bp 50 bp 50 bp
- -----------------------------------------------------------------------------------------------------------------

6. The Borrower shall unconditionally pay to the Agent for the account of the
Banks an Amendment Fee equal to $400,000. This Fee shall be deemed fully earned
upon the execution of this Waiver and Amendment No. 1 by the Borrower and the
Majority Banks. The Amendment Fee shall be due and payable on November 1, 2001,
or the closing of any Sale, if earlier than November 1, 2001.

7. Beginning on October 1, 2001 and on the first day of each calendar month
thereafter, the Borrower shall become obligated to pay to the Agent, for the
ratable account of the Banks, a Monthly Facility Fee equal to 20bp of the
Commitment Amount. While calculated monthly, this fee will be payable quarterly
in arrears, with the first installment due on December 31, 2001. In the event
that on or before November 15, 2001, either: a) a sale of SL Industries, Inc.
occurs, or b) the Commitment Amount is reduced to $20,000,000 or less, the Banks
agree to waive that portion of the Monthly Facility Fee that has accrued after
October 1, 2001.

8. Any breach of the terms of this Waiver and Amendment No. 1 shall be deemed to
be an Event of Default under the Credit Agreement.

9. The Borrower agrees on or before June 29, 2001 to deliver to the Banks a
detailed set of financial projections prepared on a monthly basis through
12/31/2001 and in summary form for FYE 12/31/02 (including without limitation,
income statements, balance sheets and cashflows; including a sensitivity
analysis outlining base case, best case and worst case scenarios) that outline
expected financial performance of the Borrower. These projections will reflect
multiple business models as requested by the Agent.

10. This Waiver and Amendment No. 1 shall be effective when the Borrower and
Banks constituting the Required Banks have indicated their consent to such
waiver and amendment by signing this letter (or a counterpart of this letter) in
the space provided below. Upon the effectiveness of this Waiver and Amendment
No. 1, the Event of Default resulting from the non-compliance with the Leverage
Ratio Covenant and the Interest Coverage Ratio Covenant shall be deemed to be
cured, as provided in the Credit Agreement.

11. For the sake of clarity, the Agent, the Banks and the Borrower acknowledge
that, for purposes of Section 7.03 of the Credit Agreement, reimbursement
obligations for draws made under any letters of credit issued by any Bank for
the account of the Borrower or any Subsidiary and interest rate hedge agreements
between the Borrower and any Bank will be treated as Loans.

12. This Waiver and Amendment No. 1 does not affect any obligation of the
Borrower or Guarantors under the Credit Agreement, the Security Agreement or any
other document that has not been expressly waived or amended by the Banks. This
Waiver and Amendment No. 1 is limited to its terms and shall not imply any other
or future waivers, including, without limitation, any waivers of financial
covenant compliance for any period prior to the fiscal quarter ending March 31,
2001 or after the fiscal quarter ending June 30, 2001. By executing this letter,
you hereby acknowledge that, except for the waivers specifically set forth in
paragraph 1 above, neither this letter nor any actions taken by any Bank or the
Agent (including, without limitation, any Loan made by any Bank) shall be deemed
or construed as a waiver of any Potential Default or Event of Default, whether
now existing or occurring after the date of this letter, known or unknown, under
the Credit Agreement, or as a waiver or forbearance of any Bank's or the Agent's
rights, remedies and powers against you, any Subsidiary or any Collateral under
the Credit Agreement, any Security Document or any Guaranty.

13. Except as expressly modified above, the Credit Agreement and each other Loan
Document is hereby ratified and remains unchanged and in full force and effect
on the date hereof.

14. In consideration for the modifications set forth herein, Borrower and the
undersigned Domestic Guarantors hereby waive and release and forever discharge
Agent, the Banks and their respective officers, directors, attorneys, agents,
and employees from any liability, damage, claim, loss or expense of any kind
that they may have now or hereafter against the Agent or any Bank arising out of
or relating to the Facility. Borrower and the undersigned Domestic Guarantors
hereby further agree to indemnify and hold Agent, the Banks and their respective
officers, directors, attorneys, agents and employees harmless from any loss,
damage, judgment, liability or expense (including counsel fees) suffered by or
rendered against the Agent or any Bank on account of any claims arising out of
or relating to the Facility. Borrower and the undersigned Domestic Guarantors
further state that they have carefully read the foregoing release, know the
contents thereof and grant the same as their own free act and deed.

Please evidence your agreement to the terms and conditions of this letter by
signing below where indicated.

Sincerely,

Mellon Bank, N.A., as Agent

by: /s/ Liam M. Brickley
--------------------------------------------
Liam M. Brickley
Vice President

Agreed and accepted this 21 day of June, 2001.

SL Industries, Inc.

by: /s/ David R. Nuzzo
--------------------------------------------
David R. Nuzzo
Vice President / Treasurer

GUARANTORS:
Cedar Corporation
Cedro de Mexico
Condor D.C. Power Supplies, Inc.
Industrias SL, S.A. de C.V.
SL Ameritech Plastics, Inc.
SL Auburn, Inc.
SL Delaware, Inc.
SL International (FSC), Inc.
SL Montevideo Technology, Inc.
RFL Electronics, Inc.
SL Surface Technologies, Inc.
SL Waber, Inc.
Teal Electronics Corporation
Waber de Mexico, S.A. de C.V.
Waber Power Ltd.

by: /s/ David R. Nuzzo
--------------------------------------------
David R. Nuzzo
as Secretary and Treasurer of each Guarantor

THE FOLLOWING BANKS, IN THEIR CAPACITIES AS BANKS UNDER THE CREDIT AGREEMENT
REFERENCED ABOVE, CONSENT TO THE WAIVER AND AMENDMENT DESCRIBED ABOVE AND TO THE
AGENT'S EXECUTION AND DELIVERY OF THE FOREGOING WAIVER AND AMENDMENT NO. 1.

FLEET NATIONAL BANK

by:____________________________
Dilcia P. Hill,
Vice President

PNC BANK, NATIONAL ASSOCIATION

by:____________________________
Denise Killen,
Managing Director