8-K

                 SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D. C.  20549

                              FORM  8-K

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

Date of Report  (Date of earliest event reported):  December 10, 1999

                    Checkpoint Systems, Inc.

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     (Exact name of registrant as specified in its charter)

                         Pennsylvania

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(State or other jurisdiction of incorporation or organization)

       1-11257                              22-1895850

- -------------------------          ---------------------------
(Commission File Number)          (I.R.S. Employer Identification No.)

   101 Wolf Drive  P.O. Box 188     Thorofare, New Jersey     08086
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            (Address of principal executive offices)

                             (856) 848-1800

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             (Registrant's telephone number, including area code)

                                 N/A

- ----------------------------------------------------------------------

         (Former name or address, if changed since last report)



Item 2.    Acquisition or Disposition of Assets

- ------     ------------------------------------

           On December 10, 1999, the Registrant  consummated  its acquisition of
98.57% of the outstanding shares of Meto AG pursuant to a cash tender offer. The
purchase price for the shares acquired was approximately

 $260.5 million (SEK 2,161,317,795 and ?3,763,561).

In order to pay the purchase  consideration  on December 9, 1999, the Registrant
borrowed  approximately $273.9 million (US $25 million and ?244 million) under a
new $425 million credit  facility  provided by several  lenders with First Union
National Bank as administrative agent.

There was no material  relationship  between  the  Registrant,  its  affiliates,
officers or directors and any affiliate, officer or director of Meto AG.

Meto AG is a global provider of Barcode  Labeling  Systems,  Electronic  Article
Surveillance  ("EAS"), and Handheld Labeling Systems for customers across a wide
variety of markets and  industries.  The combined entity will be a global supply
chain management  provider offering  customers state of the art security systems
as well as a wide  variety of  products  and  services  to  automatically  mark,
identify  and/or  track an  object  as it passes  along  the  value  chain  from
manufacturing through to the final retail sale.

Copies of the  Registrant's  press release  announcing the closing of the tender
offer and the  completion  of the  acquisition  together with a copy of the $425
million Credit Agreement  (without  schedules or exhibits) are filed as exhibits
hereto.

Item 7.     Financial Statements and Exhibits

- ------      ---------------------------------

           (a), (b) It is impracticable to provide the financial  statements and
pro forma financial  information required by Items 7(a) and 7(b) of Form 8-K for
Meto AG at this time. Accordingly,  no such financial statements are being filed
with this Current  Report on Form 8- K. Rather,  such  financial  statements and
information  will be filed by amendment  hereto as soon as  practicable,  but no
later than sixty (60) days after the date on which this  Current  Report on Form
8-K must be filed.

           (c)   Exhibits.

                 --------

10       Filed  herewith to this Form 8-K is the $425 million  Credit  Agreement
         among the  Registrant,  as Borrower,  the several  lenders from time to
         time parties thereto,  and First Union National Bank, as Administrative
         Agent dated as of October 27, 1999.

99       Filed  herewith to this Form 8-K is the press  release  announcing  the
         acquisition of Meto AG.



                 Pursuant to the requirements of the Securities  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

December 27, 1999

Checkpoint Systems, Inc.
/s/ Jeffrey A. Reinhold
Jeffrey A. Reinhold

Senior Vice President - Finance,
Chief Financial Officer and Treasurer



                  EXHIBIT INDEX

Exhibit No.                                Description

- -----------         ----------------------------------------------------------

  10                Credit Agreement,  dated as of October 27, 1999 By and
                    among the Company, as Borrower,  the Lender Parties named
                    therein, and First Union National Bank, as Administrative
                    Agent.

  99                Press  release  dated  December  10,  1999   announcing  the
                    completion of its  acquisition of 98.57% of the  Outstanding
                    shares of Meto AG. The Company  received  clearance from the
                    German regulatory authority on December 7, 1999.

EX-10

                              $425,000,000

                            CREDIT AGREEMENT

                                among

                        CHECKPOINT SYSTEMS, INC.,
                              as Borrower,

                          The Several Lenders
                    from Time to Time Parties Hereto,

                      FIRST UNION NATIONAL BANK,

                            as Administrative Agent,

                    PNC BANK, NATIONAL ASSOCIATION,
                          as Documentation Agent,

                              BANK ONE, NA,

                           as Syndication Agent

                                  and

                      FIRST UNION SECURITIES INC.,

                               as Arranger

                          Dated as of October 27, 1999

                                     

TABLE OF CONTENTS

        Page

SECTION 1.  DEFINITIONS                                  2
1.1  Defined Terms                                       2
1.2  Other Definitional Provisions                      27

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS             27
2.1  Term Commitments                                   27
2.2  Procedure for Term Loan Borrowing                  28
2.3  Repayment of Term Loans                            28
2.4  Revolving Commitments                              30
2.5  Procedure for Revolving Loan Borrowings            30
2.6  Swingline Commitment                               32
2.7 Procedure for Swingline Borrowing; Refunding of
        Swingline Loans                                 32
2.8  Commitment Fees, etc.                              34
2.8 Termination or Reduction of Revolving
      Commitments                                       35
2.9 Repayment of Revolving Loans; Evidence
            of Debt.                                    35
2.11 Redenomination and Alternative Currencies          36

SECTION 3.  LETTERS OF CREDIT                           36
3.1  L/C Commitment                                     36
3.2  Procedure for Issuance of Letter of Credit         36
3.3  Fees and Other Charges                             37
3.4  L/C Participations                                 37
3.5  Reimbursement Obligation of the Borrower           38
3.6  Obligations Absolute                               38
3.7  Letter of Credit Payments                          39
3.8  Applications                                       39

SECTION 4. GENERAL PROVISIONS APPLICABLE TO
              THE LOANS                                 39

4.1  Interest Rates and Payment Dates                   39
4.2  Computation of Interest and Fees                   40
4.3  Inability to Determine Interest Rate               41
4.4  Optional Prepayments                               41
4.5 Mandatory Prepayments and Commitment
          Reductions                                    42
4.6  Conversion and Continuation Options                45
4.7  Limitations on Tranches                            46
4.8  Pro Rata Treatment and Payments                    46
4.9  Requirements of Law                                49
4.10  Taxes                                             50
4.11  Indemnity                                         51
4.12  Change of Lending Office                          52
4.13  Replacement of Lenders                            52
4.14  Lending Installations                             53
4.15 Reporting Requirements of Swingline Lenders
          and Issuing Lenders                           53
4.16  Conversion of Loans                               53

SECTION 5.  REPRESENTATIONS AND WARRANTIES              54
5.1  Financial Condition                                54
5.2  No Change                                          56
5.3  Corporate Existence; Compliance with Law           56
5.4 Corporate Power; Authorization; Enforceable

          Obligations                                   56
5.5  No Legal Bar                                       57
5.6  Litigation                                         57
5.7  No Default                                         57
5.8  Ownership of Property; Liens                       57
5.9  Intellectual Property                              57
5.10  Taxes                                             58
5.11  Federal Regulations                               58
5.12  Labor Matters                                     58
5.13  ERISA                                             58
5.14  Investment Company Act; Other Regulations         59
5.15  Subsidiaries                                      59
5.16  Use of Proceeds                                   59
5.17  Environmental Matters                             59
5.18  Accuracy of Information, etc                      60
5.19  Security Documents                                61
5.20  Solvency                                          61
5.21  Year 2000 Matters                                 61
5.22  Certain Documents                                 62
5.23  Regulation H.                                     62

SECTION 6.  CONDITIONS PRECEDENT                        62
6.1  Conditions to Initial Extension of Credit          62
6.2  Conditions to Each Extension of Credit             68

SECTION 7.  AFFIRMATIVE COVENANTS                       69
7.1  Financial Statements                               69
7.2  Certificates; Other Information                    70
7.3  Payment of Obligations                             71
7.4  Maintenance of Existence; Compliance.              71
7.5  Maintenance of Property; Insurance                 71
7.6 Inspection of Property; Books and Records;
        Discussions                                     71
7.7  Notices                                            72
7.8  Environmental Laws                                 72
7.9  Interest Rate Protection                           73
7.10  Additional Collateral, etc                        73
7.11  Year 2000 Compliance                              74
7.12  The Acquisition                                   74

SECTION 8.  NEGATIVE COVENANTS                          75
8.1  Financial Condition Covenants                      75
8.2  Indebtedness                                       76
8.3  Liens                                              77
8.4  Fundamental Changes                                78
8.5  Disposition of Property                            78
8.6  Restricted Payments                                79
8.7  Capital Expenditures                               79
8.8  Investments                                        80
8.9 Optional Payments and Modifications of
         Certain        Debt Instruments.               81
8.10  Transactions with Affiliates                      81
8.11  Sales and Leasebacks                              81
8.12  Changes in Fiscal Periods                         81
8.13  Negative Pledge Clauses                           82
8.14 Clauses Restricting Subsidiary
          Distributions                                 82
8.15  Lines of Business                                 82
8.16  Amendments to Acquisition Documents               82

SECTION 9.  EVENTS OF DEFAULT                           82

SECTION 10.  THE AGENTS                                 85
10.1  Appointment                                       85
10.2  Delegation of Duties                              86
10.3  Exculpatory Provisions                            86
10.4  Reliance by Administrative Agent                  86
10.5  Notice of Default                                 87
10.6  Non-Reliance on Agents and Other Lenders          87
10.7  Indemnification                                   88
10.8  Each Agent in Its Individual Capacity             88
10.9  Successor Administrative Agent                    88
10.10  Documentation Agent and Syndication Agent        89

SECTION 11.  MISCELLANEOUS                              89
11.1  Amendments and Waivers                            89
11.2  Notices                                           90
11.3  No Waiver; Cumulative Remedies                    91
11.4  Survival of Representations and Warranties        91
11.5  Payment of Expenses and Taxes                     91
11.6 Successors and Assigns; Participations and
                Assignments                             92
11.7  Adjustments; Set-off                              94
11.8  Counterparts                                      95
11.9  Severability                                      95
11.10  Integration                                      96
11.11  GOVERNING LAW                                    96
11.12  Submission To Jurisdiction; Waivers              96
11.13  Acknowledgments                                  96
11.14  Releases of Guarantees and Liens                 97
11.15  Conversion of Currencies                         97
11.16  Confidentiality                                  98
11.17  Section Headings                                 98
11.18  WAIVERS OF JURY TRIAL                            98


SCHEDULES:

1.1A    Commitments
1.1B    Mortgaged Properties

5.4  Consents,  Authorizations,  Filings and Notices 5.6  Litigation  5.13 ERISA
Termination 5.15 Subsidiaries 5.19(a) UCC Filing Jurisdictions  5.19(b) Mortgage
Filing  Jurisdictions  6.1(b) Terminated Credit Facilities 6.1(e) Approvals 7.12
Target Debt 8.2(d) Existing Indebtedness 8.3(f) Existing Liens

EXHIBITS:

A       Form of Guarantee and Collateral Agreement
B       Form of Compliance Certificate
C       Form of Closing Certificate
D       Form of Mortgage
E       Form of Assignment and Acceptance
F-1     Form of Legal Opinion of Stradley Ronon, counsel to the
Borrower
F-2     Form of Legal Opinion of Neil D. Austin, General Counsel
of the Borrower
G       Form of Exemption Certificate
H-1     Form of Term Note
H-2     Form of Revolving Note
H-3     Form of Swingline Note
I       Form of Acquisition Certificate

CREDIT AGREEMENT,  dated as of October 27, 1999, among CHECKPOINT SYSTEMS, INC.,
a  Pennsylvania  corporation  (the  "Borrower"),  the  several  banks  and other
financial  institutions  or entities from time to time parties to this Agreement
(the  "Lenders"),  FIRST UNION NATIONAL BANK, as  administrative  agent (in such
capacity,  the  "Administrative  Agent"),  PNC BANK, NATIONAL  ASSOCIATION.,  as
documentation agent (in such capacity, the "Documentation Agent"), BANK ONE, NA,
as syndication agent (in such capacity, the "Syndication Agent") and FIRST UNION
SECURITIES INC., as advisor and arranger (in such capacity, the "Arranger").

W I T N E S S E T H:

                WHEREAS, the Borrower intends to acquire, through a newly-formed
wholly-owned   German   subsidiary   organized  as  a  stock   corporation  (the
"Acquiror"),  up to all, and at least 95%, of the issued and outstanding  shares
of stock of Meto AG, a German stock  corporation  (the  "Target")  traded on the
Stockholm  Stock  Exchange,  for  aggregate   consideration,   the  U.S.  Dollar
Equivalent of which is approximately $275,000,000;

                WHEREAS,  such  acquisition  shall be effected under an offer by
the Borrower for all of the issued and outstanding shares of stock of the Target
(all of such common stock  collectively,  the "Shares") at a price of 65 Swedish
Krona per share (the  "Tender  Offer") and the  purchase of the Shares  tendered
pursuant to the Tender Offer and not validly withdrawn (the "Tendered Shares");

                WHEREAS,   as  promptly   as  is   practicable   following   the
consummation  of the  Tender  Offer  and the  acquisition  of 95% or more of the
Tendered  Shares,  the  Acquiror  intends  to  integrate  the  Target,   through
shareholder  resolutions of both the Acquiror and the Target and thereby acquire
the  remaining  Shares  not  acquired  in the  Tender  Offer  at the time of the
registration  of the  integration in the commercial  register at the seat of the
Target  according  to Section  320(a) of the German Stock  Corporation  Act (the
"Integration"; collectively with the Tender Offer, the "Acquisition");

                WHEREAS,  in order to provide for  financing of the Tender Offer
and the related costs and expenses, and to provide financing for working capital
and general corporate  purposes of the Borrower and its Subsidiaries,  including
certain Permitted  Acquisitions,  the Borrower has requested the Lenders to make
available the credit facilities described herein; and

                WHEREAS,  the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;

                NOW, THEREFORE,  in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1.  DEFINITIONS

1.1 Defined Terms. As used in this  Agreement,  the terms listed in this Section
1.1 shall have the respective meanings set forth in this Section 1.1.

                "ABR":  for any  day,  a rate per  annum  (rounded  upwards,  if
necessary,  to the next 1/16 of 1%) equal to the greater of () the Prime Rate in
effect on such day and () the Federal Funds Effective Rate in effect on such day
plus  1/2 of 1%.  For  purposes  hereof:  "Prime  Rate"  shall  mean the rate of
interest per annum publicly  announced from time to time by the Reference Lender
as its prime rate in effect at its principal office in Charlotte, North Carolina
(the Prime Rate not being intended to be the lowest rate of interest  charged by
the Reference  Lender in connection with  extensions of credit to debtors).  Any
change  in the ABR due to a  change  in the  Prime  Rate  or the  Federal  Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such  change in the  Prime  Rate or the  Federal  Funds  Effective  Rate,
respectively.

                "ABR Loans":  Loans the rate of interest applicable to which
is based upon the ABR.

                "Acquired Business":  as defined in the definition of
Permitted Acquisitions.

                "Acquisition":  as defined in the recitals.

                "Acquisition Documentation": collectively, all written materials
describing the Borrower's offer to holders of Shares and all schedules, exhibits
and annexes  thereto and all side  letters and  agreements  affecting  the terms
thereof or entered into in connection  therewith  provided to the holders of the
Shares on or prior to the Closing Date, in each case as amended, supplemented or
otherwise modified from time to time in accordance with Section 8.16.

                "Adjustment Date":  as defined in the Pricing Grid.

                "Administrative Agent": First Union National Bank, together
with its affiliates, as the arranger of the Commitments and as the
administrative agent for the Lenders under this Agreement and the other

Loan Documents, together with any of its successors.

                "Affiliate":  as to any Person, any other Person that,  directly
or  indirectly,  is in control of, is controlled  by, or is under common control
with, such Person. For purposes of this definition,  "control" of a Person means
the  power,  directly  or  indirectly,  either  to (a)  vote  10% or more of the
securities  having  ordinary  voting  power for the  election of  directors  (or
persons  performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person,  whether by contract or
otherwise.

                "Agents":  the collective reference to the Syndication
Agent, the Documentation Agent and the Administrative Agent.

                "Aggregate Available Revolving Commitments":  as at any date
of determination with respect to all Revolving  Lenders, an amount in
Dollars equal to the Available Revolving Commitments of all Revolving

Lenders on such date.

                "Aggregate Committed Outstandings":  as at any date of
determination with respect to any Revolving Lender, an amount in Dollars
equal to the sum of (a) the Aggregate Revolving Outstandings of such
Revolving Lender on such date and (b) the U.S. Dollar Equivalent of the
Aggregate Multicurrency Outstandings of such Revolving Lender on such

date.

                "Aggregate Exposure": with respect to any Lender at any time, an
amount  equal to (a)  until  the  Closing  Date,  the  aggregate  amount of such
Lender's Commitments at such time and (b) thereafter,  the sum of (i) the sum of
the then unpaid  principal  amount of such  Lender's  Dollar Term Loans plus the
U.S.  Dollar  Equivalent  of the then unpaid  principal  amount of such Lender's
Multicurrency  Term  Loans  and  (ii)  the  amount  of such  Lender's  Revolving
Commitment then in effect or, if the Revolving Commitments have been terminated,
the amount of such Lender's Aggregate Committed Outstandings then outstanding.

                "Aggregate Exposure Percentage":  with respect to any Lender
at any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposure of all Lenders

at such time.

                "Aggregate Multicurrency Outstandings":  as at any date of
determination with respect to any Revolving Lender, an amount in the
applicable Available Foreign Currencies equal to the aggregate unpaid
principal amount of such Revolving Lender's Multicurrency Revolving
Loans.

                "Aggregate Revolving Outstandings":  as at any date of
determination with respect to any Revolving Lender, an amount equal to
the sum of () the aggregate unpaid principal amount of such Lender's
Dollar Revolving Loans on such date, () such Lender's Revolving
Percentage of the aggregate unpaid principal amount of all L/C
Obligations on such date and (c) such Lender's Revolving Percentage of
the aggregate principal amount of Swingline Loans then outstanding.

                "Agreement":  this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.

                "Applicable Margin":  for each Type of Loan, the rate per
annum determined pursuant to the Pricing Grid.

                "Application":  an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing

Lender to open a Letter of Credit.

                "Approved Fund":  with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in
commercial loans and is managed or advised by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

                "Asset Sale":  any  Disposition of property or series of related
Dispositions  of property  (excluding any such  Disposition  permitted by clause
(a),  (b),  (c), (d) or (e) of Section  8.5) that yields  gross  proceeds to the
Borrower  or any of its  Subsidiaries  (valued at the initial  principal  amount
thereof  in the case of  non-cash  proceeds  consisting  of notes or other  debt
securities  and  valued  at fair  market  value in the  case of  other  non-cash
proceeds) in excess of $5,000,000.

                "Assignee":  as defined in Section 11.6(c).

                "Assignment and Acceptance":  an Assignment and Acceptance,
substantially in the form of Exhibit E.

                "Assignor":  as defined in Section 11.6(c).

                "Available Foreign Currencies":  () with respect to the Term
Loans, euro, and () with respect to the Revolving Loans or Swingline
Loans, euro, Pounds Sterling, Deutsche Marks, French Francs, Dutch

Guilders and Japanese Yen.

                "Available Revolving Commitment":  as to any Revolving Lender at
any time, an amount equal to the excess,  if any, of () such Lender's  Revolving
Commitment then in effect over () such Lender's Aggregate Committed Outstandings
on such date;  provided,  that in calculating any Lender's  Aggregate  Committed
Outstandings  for the purpose of determining such Lender's  Available  Revolving
Commitment  pursuant  to  Section  2.8(a),  the  aggregate  principal  amount of
Swingline Loans then outstanding shall be deemed to be zero.

        "Benefitted Lender":  as defined in Section 11.7(a).

                "Board":  the Board of Governors of the Federal Reserve
System of the United States (or any successor).

        "Borrower":  as defined in the preamble hereto.

                "Borrowing Date":  any Business Day specified by the
Borrower as a date on which the Borrower requests the relevant Lenders

to make Loans hereunder.

                "Business":  as defined in Section 5.17(b).

                "Business  Day":  (a) when such term is used in  respect  of any
amount denominated or to be denominated in () any Available Foreign Currency,  a
London  Banking Day which is also a day other than a Saturday or Sunday on which
banks  are open  for  general  banking  business  in (x) the  city  which is the
principal  financial center of the country of issuance of such Available Foreign
Currency,  (y) in the case of euro only,  Frankfurt  am Main,  Germany  (or such
other principal  financial center as the  Administrative  Agent may from time to
time  nominate  for this  purpose)  and (z)  Charlotte,  North  Carolina  and ()
Dollars,  a London  Banking  Day which is also a day other  than a  Saturday  or
Sunday on which banks are open for general banking business in Charlotte,  North
Carolina and (b) when such term is used for the purpose of determining  the date
on which the  Eurocurrency  Base Rate is determined under this Agreement for any
Loan denominated in euro for any Interest Period and for purposes of determining
the first and last day of any such Interest Period (but not any Borrowing Date),
references  in this  Agreement to Business Days shall be deemed to be references
to Target Operating Days.

                "Capital  Expenditures":  for any  period,  with  respect to any
Person,  the aggregate of all  expenditures by such Person and its  Subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment  (including  replacements,  capitalized repairs
and improvements  during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.

                "Capital Lease  Obligations":  as to any Person, the obligations
of such  Person  to pay rent or  other  amounts  under  any  lease of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person  under GAAP
and, for the purposes of this Agreement,  the amount of such  obligations at any
time  shall  be the  capitalized  amount  thereof  at such  time  determined  in
accordance with GAAP.

                "Capital Stock":  any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a
Person (other than a corporation) and any and all warrants, rights or

options to purchase any of the foregoing.

                "Cash Equivalents": (a) marketable direct obligations issued by,
or unconditionally  guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,  in
each  case  maturing  within  one  year  from  the  date  of  acquisition;   (b)
certificates  of deposit,  time deposits,  eurodollar time deposits or overnight
bank  deposits  having  maturities  of six  months  or  less  from  the  date of
acquisition  issued by any Lender or by any commercial  bank organized under the
laws of the United  States or any state  thereof  having  combined  capital  and
surplus of not less than  $500,000,000;  (c) commercial paper of an issuer rated
at least A-1 by  Standard & Poor's  Ratings  Services  ("S&P") or P-1 by Moody's
Investors  Service,  Inc.  ("Moody's"),  or carrying an  equivalent  rating by a
nationally  recognized  rating agency,  if both of the two named rating agencies
cease  publishing  ratings of commercial paper issuers  generally,  and maturing
within six months from the date of  acquisition;  (d) repurchase  obligations of
any Lender or of any commercial bank  satisfying the  requirements of clause (b)
of this  definition,  having a term of not more than 30 days,  with  respect  to
securities   issued  or  fully  guaranteed  or  insured  by  the  United  States
government;  (e) securities with maturities of one year or less from the date of
acquisition  issued or fully guaranteed by any state,  commonwealth or territory
of the United States,  by any political  subdivision or taxing  authority of any
such  state,  commonwealth  or  territory  or by  any  foreign  government,  the
securities  of which  state,  commonwealth,  territory,  political  subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's;  (f)  securities  with  maturities of six months or less
from the date of acquisition  backed by standby  letters of credit issued by any
Lender or any commercial bank satisfying the  requirements of clause (b) of this
definition;  or (g) shares of money market  mutual or similar funds which invest
exclusively in assets  satisfying the requirements of clauses (a) through (f) of
this definition.

                "Change  in  Control":  (a) an event  whereby  any  "person"  or
"group"  (as such terms are used in Sections  12(d) and 13(d) of the  Securities
Exchange Act of 1934, as amended (the "Exchange Act")),  shall become, or obtain
rights  (whether by means of  warrants,  options or  otherwise)  to become,  the
"beneficial  owner" (as defined in Rules 13(d)- 3 and 13(d)-5 under the Exchange
Act),  directly or indirectly,  of more than 30% of the outstanding common stock
of the Borrower or (b) the board of  directors  of the  Borrower  shall cease to
consist of a majority of Continuing Directors.

                "Closing Date":  the date on which the conditions  precedent set
forth in  Section  6.1 shall have been  satisfied,  which date shall be no later
than the earlier of (i) December 31, 1999 or (ii) five  Business  Days after the
Borrower's  application  for antitrust  approval has been approved by the German
antitrust authorities.  The Administrative Agent shall notify the Lenders of the
anticipated Closing Date.

                "Code":  the Internal Revenue Code of 1986, as amended from
time to time.

                "Collateral":  all property of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by

any Security Document.

                "Commitment":  as to any Lender, the sum of the Term
Commitment and the Revolving Commitment of such Lender then in effect.

                "Commitment Fee Rate":  at any time, the rate per annum
determined pursuant to the Pricing Grid.

                "Commonly   Controlled  Entity":  an  entity,   whether  or  not
incorporated,  that is under common control with the Borrower within the meaning
of Section  4001 of ERISA or is part of a group that  includes  the Borrower and
that is treated as a single employer under Section 414 of the Code.

                "Compliance Certificate":  a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.

                "Confidential Information Memorandum":  the Confidential
Information Memorandum dated September 1999 and furnished to the

Lenders.

                "Consolidated  Current Assets":  at any date, all amounts (other
than cash and Cash  Equivalents)  that would,  in  conformity  with GAAP, be set
forth  opposite the caption  "total  current  assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.

                "Consolidated  Current  Liabilities":  at any date,  all amounts
that would,  in conformity  with GAAP, be set forth  opposite the caption "total
current  liabilities"  (or any like caption) on a consolidated  balance sheet of
the Borrower and its  Subsidiaries  at such date,  but excluding (a) the current
portion of any Funded Debt of the Borrower and its  Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness  consisting of Revolving Loans
or Swingline Loans to the extent otherwise included therein.

                "Consolidated  EBITDA": for any period,  Consolidated Net Income
for such period  plus,  without  duplication  and to the extent  reflected  as a
charge in the statement of such Consolidated Net Income for such period, the sum
of (a) income tax expense,  (b) interest  expense,  amortization  or writeoff of
debt discount and debt issuance costs and commissions,  discounts and other fees
and charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization  expense, (d) amortization of intangibles  (including,  but not
limited to, goodwill) and organization costs and (e) any extraordinary,  unusual
or  non-recurring  expenses  or  losses  (including,  whether  or not  otherwise
includable as a separate item in the statement of such  Consolidated  Net Income
for such period,  losses on sales of assets  outside of the  ordinary  course of
business),  provided, that the amounts referred to in this clause (e) shall not,
in the aggregate  during the term of this  Agreement,  exceed  $35,000,000,  and
minus, to the extent included in the statement of such  Consolidated  Net Income
for such period, the sum of (a) interest income, (b) any extraordinary,  unusual
or non-recurring income or gains (including, whether or not otherwise includable
as a separate  item in the  statement of such  Consolidated  Net Income for such
period,  gains on the sales of assets outside of the ordinary course of business
and excluding any payment received pursuant to business interruption  insurance)
and (c) any other non-cash  income,  all as determined on a consolidated  basis.
For the purposes of calculating Consolidated EBITDA to determine compliance with
the  covenants  set forth in Section 7.1 for any fiscal  quarter of the Borrower
ending prior to December  31, 2000,  for any such  period,  the  calculation  of
Consolidated  EBITDA for the most recently  completed  four  consecutive  fiscal
quarters of the Borrower shall include  $15,000,000 in respect of the Borrower's
good faith estimate of the value of synergies  associated with the  consummation
of the Acquisition.

                "Consolidated  Fixed Charge Coverage Ratio": for any period, the
ratio of (a)  Consolidated  EBITDA for such  period  less the  aggregate  amount
actually paid by the Borrower and its Subsidiaries during such period on account
of Capital Expenditures (excluding the principal amount of Indebtedness incurred
in connection with such expenditures) to (b) Consolidated Fixed Charges for such
period.

                "Consolidated  Fixed Charges":  for any period, the sum (without
duplication) of (a) Consolidated  Interest  Expense for such period,  (b) income
and  franchise  taxes accrued by the Borrower and its  Subsidiaries  during such
period  and (c)  scheduled  payments  made  during  such  period on  account  of
principal of Indebtedness of the Borrower or any of its Subsidiaries  (including
scheduled principal payments in respect of the Term Loans).

                "Consolidated Interest Coverage Ratio":  for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated

Interest Expense for such period.

                "Consolidated  Interest  Expense":  for any  period,  total cash
interest expense  (including that attributable to Capital Lease  Obligations) of
the  Borrower  and  its  Subsidiaries  for  such  period  with  respect  to  all
outstanding  Indebtedness  of the Borrower and its  Subsidiaries  (including all
commissions,  discounts  and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Hedge Agreements
in respect of interest  rates to the extent such net costs are allocable to such
period in accordance with GAAP).

                "Consolidated Leverage Ratio":  as at any day, the ratio of
(a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for
the most recently completed four fiscal quarters of the Borrower for
which financial statements have been provided to the Lenders.

                "Consolidated Net Income":  for any period, the consolidated net
income  (or  loss)  of  the  Borrower  and  its  Subsidiaries,  determined  on a
consolidated  basis in  accordance  with  GAAP;  provided  that  there  shall be
excluded (a) the income (or deficit) of any Person  accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated  with the
Borrower or any of its  Subsidiaries,  (b) the income (or deficit) of any Person
(other than a  Subsidiary  of the  Borrower) in which the Borrower or any of its
Subsidiaries  has an  ownership  interest,  except to the  extent  that any such
income is actually  received by the Borrower or such  Subsidiary  in the form of
dividends or similar  distributions  and (c) the  undistributed  earnings of any
Subsidiary  of the  Borrower  to the extent that the  declaration  or payment of
dividends  or  similar  distributions  by  such  Subsidiary  is not at the  time
permitted by the terms of any Contractual  Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.

                "Consolidated  Net Worth":  at any date, all amounts that would,
in  conformity  with GAAP,  be included on a  consolidated  balance sheet of the
Borrower and its Subsidiaries under stockholders'  equity at such date; provided
that  Consolidated  Net Worth shall be determined  without  adjustment  (whether
positive or negative) for any foreign currency translation.

                "Consolidated Total Assets":  at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total
assets" (or any like caption) on a consolidated balance sheet of the

Borrower and its Subsidiaries at such date.

                "Consolidated Total Debt":  at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in

accordance with GAAP.

                "Consolidated Total Senior Indebtedness":  at any time,
Consolidated Total Debt less the aggregate outstanding principal amount

of any Subordinated Indebtedness at such time.

                "Consolidated Working Capital":  at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current

Liabilities on such date.

                "Continuing  Directors":  the  directors  of the Borrower on the
Closing Date, after giving effect to the Acquisition and the other  transactions
contemplated  hereby,  and each other  director,  if, in each  case,  such other
director's  nomination for election to the board of directors of the Borrower is
recommended by a majority of the then  Continuing  Directors or by a nominations
committee thereof.

                "Contractual Obligation":  as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any

of its property is bound.

                "Default":  any of the events specified in Section 9,
whether or not any requirement for the giving of notice, the lapse of

time, or both, has been satisfied.

                "Disposition":  with respect to any property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof.  The terms "Dispose" and "Disposed of" shall have

correlative meanings.

                "Documentation Agent":  as defined in the preamble hereto.

                "Dollar Loans":  the collective reference to Dollar Term
Loans, Dollar Revolving Loans and Dollar Swingline Loans.

                "Dollar Revolving Loans":  as defined in Section 2.4(a).

                "Dollar Swingline Loans":  as defined in Section 2.6(a).

                "Dollar Term Loan":  as defined in Section 2.1(a).

                "Dollars" and "$":  dollars in lawful currency of the United
States.

                "Domestic Subsidiary":  any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States,

including Puerto Rico.

                "EMU":  Economic and Monetary Union as contemplated in the
Treaty on European Union.

                "EMU Legislation":  legislative measures of the European
Union for the introduction of, changeover to or operation of the euro in

one or more member states.

                "Environmental Laws": any and all foreign, Federal, state, local
or municipal laws, rules,  orders,  regulations,  statutes,  ordinances,  codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including  common  law)  regulating,  relating  to  or  imposing  liability  or
standards of conduct  concerning  protection of human health or the environment,
as now or may at any time hereafter be in effect.

                "ERISA":  the Employee Retirement Income Security Act of
1974, as amended from time to time.

                "euro":  the single currency of the European Union as
constituted by the Treaty on European Union and as referred to in EMU

Legislation.

                "Eurocurrency  Base  Rate":  () with  respect  to each  Interest
Period pertaining to a Multicurrency Loan denominated in any currency other than
Pounds Sterling, the rate per annum determined by the Administrative Agent to be
the offered rate for deposits in such  currency  with a term  comparable to such
Interest  Period that appears on the  applicable  Reuters Page (or any successor
page) at approximately  11:00 A.M.,  London time, two Business Days prior to the
beginning of such Interest  Period (or, in the case of  Multicurrency  Swingline
Loans, on the same day); provided,  however,  that if at any time for any reason
such  offered rate for any such  currency  does not appear on a Reuters Page (or
any successor page),  "Eurocurrency  Base Rate" shall mean, with respect to each
day during each Interest Period  pertaining to a Multicurrency  Loan denominated
in such currency, the rate per annum equal to the average (rounded upward to the
nearest  1/16th of 1%) of the respective  rates  notified to the  Administrative
Agent  by  the  Multicurrency   Reference  Lender  as  the  rate  at  which  the
Multicurrency  Reference Lender is offered deposits in such currency at or about
11:00 A.M.,  London  time,  two  Business  Days prior to the  beginning  of such
Interest Period in the London  interbank market for delivery on the first day of
such  Interest  Period for the  number of days  comprised  therein;  and () with
respect to each day during each Interest  Period  pertaining to a  Multicurrency
Loan  denominated  in Pounds  Sterling,  the rate per annum equal to the average
(rounded upward to the nearest 1/16th of 1%) of the respective rates notified to
the  Administrative  Agent by the Multicurrency  Reference Lender as the rate at
which the Multicurrency  Reference Lender is offered deposits in Pounds Sterling
at or about 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period (or, in the case of  Multicurrency  Swingline Loans, on the
same day) in the Paris  interbank  market for  delivery on the first day of such
Interest Period for the number of days comprised therein.

                "Eurocurrency Rate":  with respect to each day during each
Interest Period pertaining to a Multicurrency Loan, a rate per annum
determined for such day in accordance with the following formula

(rounded upward to the nearest 1/100th of 1%):

                                 Eurocurrency Base Rate
                     1.00 - Eurocurrency Reserve Requirements

                "Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan or a Multicurrency Loan, the aggregate (without  duplication) of
the maximum rates (expressed as a decimal  fraction) of reserve  requirements in
effect  on such day  (including  basic,  supplemental,  marginal  and  emergency
reserves  under any  regulations  of the Board or other  Governmental  Authority
having  jurisdiction  with respect  thereto)  dealing with reserve  requirements
prescribed for  eurocurrency  funding  (currently  referred to as  "Eurocurrency
Liabilities" in Regulation D) maintained by a member bank of the Federal Reserve
System.

                "Eurodollar  Base  Rate":  with  respect to each day during each
Interest Period  pertaining to a Eurodollar  Loan, the rate per annum determined
on the basis of the rate for  deposits  in  Dollars  for a period  equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the  Telerate  screen (or any  successor  screen) as of 11:00 A.M.,
London time,  two Business Days prior to the beginning of such Interest  Period.
In the event that such rate does not appear on Page 3750 of the Telerate  screen
(or  otherwise on such screen or any successor  screen),  the  "Eurodollar  Base
Rate"  shall be  determined  by  reference  to such  other  comparable  publicly
available  service  for  displaying  eurodollar  rates as may be selected by the
Administrative  Agent or, in the absence of such  availability,  by reference to
the rate at which the  Administrative  Agent is offered  Dollar  deposits  at or
about 11:00 A.M., Charlotte, North Carolina time, two Business Days prior to the
beginning of such Interest Period in the interbank  eurodollar  market where its
eurodollar and foreign currency and exchange operations are then being conducted
for  delivery  on the first day of such  Interest  Period for the number of days
comprised therein.

                "Eurodollar Loans":  Loans the rate of interest applicable
to which is based upon the Eurodollar Rate.

                "Eurodollar Rate":  with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula

(rounded upward to the nearest 1/100th of 1%):

             Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements

                "Eurodollar  Tranche":  the  collective  reference to Eurodollar
Loans under a particular Facility the then current Interest Periods with respect
to all of which  begin on the same date and end on the same later date  (whether
or not such Loans shall originally have been made on the same day).

                "euro unit":  the currency unit of the euro as defined in
the EMU Legislation.

                "Event of Default":  any of the events specified in Section
9, provided that any requirement for the giving of notice, the lapse of

time, or both, has been satisfied.

                "Excess  Cash Flow":  for any fiscal year of the  Borrower,  the
excess,  if any, of (a) the sum,  without  duplication,  of (i) Consolidated Net
Income for such fiscal year,  (ii) an amount equal to the amount of all non-cash
charges (including  depreciation and amortization)  deducted in arriving at such
Consolidated  Net Income,  (iii) decreases in  Consolidated  Working Capital for
such fiscal year, and (iv) an amount equal to the aggregate net non-cash loss on
the  Disposition  of property by the Borrower and its  Subsidiaries  during such
fiscal year (other than sales of inventory in the ordinary  course of business),
to the extent deducted in arriving at such  Consolidated Net Income over (b) the
sum, without  duplication,  of (i) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the aggregate
amount  actually paid by the Borrower and its  Subsidiaries  in cash during such
fiscal year on account of Capital  Expenditures  (excluding the principal amount
of  Indebtedness  incurred in  connection  with such  expenditures  and any such
expenditures  financed with the proceeds of any Reinvestment  Deferred  Amount),
(iii) the aggregate  amount of all  prepayments of Revolving Loans and Swingline
Loans  during  such fiscal year to the extent  accompanying  permanent  optional
reductions of the Revolving Commitments and all optional prepayments of the Term
Loans  during such  fiscal  year,  (iv) the  aggregate  amount of all  regularly
scheduled  principal  payments of Funded Debt  (including the Term Loans) of the
Borrower  and its  Subsidiaries  made  during  such  fiscal  year (other than in
respect  of  any  revolving  credit  facility  to  the  extent  there  is not an
equivalent  permanent  reduction in  commitments  thereunder),  (v) increases in
Consolidated  Working  Capital for such fiscal year, and (vi) an amount equal to
the aggregate net non-cash gain on the  Disposition  of property by the Borrower
and its  Subsidiaries  during such fiscal year (other than sales of inventory in
the ordinary  course of  business),  to the extent  included in arriving at such
Consolidated Net Income.

                "Excess Cash Flow Application Date":  as defined in Section
4.5(e).

                "Exchange  Rate":  with  respect  to  any  currency  other  than
Dollars, the rate determined by reference to such publicly available service for
displaying exchange rates as may be agreed upon by the Administrative  Agent and
the Borrower or, in the absence of such  agreement,  such "Exchange  Rate" shall
instead be the  Administrative  Agent's  spot rate of exchange in the  interbank
market  where its  foreign  currency  exchange  operations  in  respect  of such
non-Dollar  currency  are then being  conducted,  at or about 11:00 A.M.,  local
time,  on such date for the purchase of Dollars with such  non-Dollar  currency,
for delivery two Business Days later; provided,  that if at the time of any such
determination,  no such spot rate can reasonably be quoted,  the  Administrative
Agent may use any  reasonable  method as it deems  applicable to determine  such
rate, and such determination shall be conclusive absent manifest error.

                "Excluded Foreign Subsidiary":  any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of
such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary
of the Obligations, would, in the good faith judgment of the Borrower,
result in adverse tax consequences to the Borrower.

                "Facility":  each of (a) the  Term  Commitments  (including  the
commitment to make  Multicurrency Term Loans) and the Term Loans made thereunder
(the  "Term  Facility")  and  (b)  the  Revolving  Commitments   (including  the
commitment to make  Multicurrency  Revolving Loans) and the extensions of credit
made thereunder (the "Revolving Facility").

                "Federal  Funds  Effective  Rate":  for any  day,  the  weighted
average of the rates on overnight federal funds transactions with members of the
Federal  Reserve System  arranged by federal funds brokers,  as published on the
next  succeeding  Business Day by the Federal  Reserve Bank of New York,  or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.

                "Foreign Subsidiary":  any Subsidiary of the Borrower that
is not a Domestic Subsidiary.

                "Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures  within
one year from such date but is  renewable or  extendible,  at the option of such
Person,  to a date more than one year from such date or arises under a revolving
credit or  similar  agreement  that  obligates  the  lender or lenders to extend
credit  during a period  of more than one year from  such  date,  including  all
current  maturities  and  current  sinking  fund  payments  in  respect  of such
Indebtedness whether or not required to be paid within one year from the date of
its creation  and, in the case of the Borrower,  Indebtedness  in respect of the
Loans.

                "Funding Office":  the office of the Administrative Agent
specified in Section 11.2 or such other office as may be specified from
time to time by the Administrative Agent as its funding office by

written notice to the Borrower and the Lenders.

                "GAAP":  generally accepted accounting  principles in the United
States as in effect from time to time,  except that for purposes of Section 8.1,
GAAP shall be determined  on the basis of such  principles in effect on the date
hereof and  consistent  with those used in the  preparation  of the most  recent
audited  financial  statements  referred to in Section 5.1(b). In the event that
any  "Accounting  Change" (as defined below) shall occur and such change results
in a change in the method of  calculation of financial  covenants,  standards or
terms in this Agreement, then the Borrower and the Administrative Agent agree to
enter into  negotiations  in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result that the
criteria for  evaluating the Borrower's  financial  condition  shall be the same
after such Accounting  Changes as if such Accounting  Changes had not been made.
Until such time as such an amendment  shall have been  executed and delivered by
the Borrower,  the Administrative  Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or  construed  as if  such  Accounting  Changes  had not  occurred.  "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule,  regulation,  pronouncement or opinion by the Financial  Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.

                "Governmental Authority": any nation or government, any state or
other  political   subdivision  thereof  including,   without  limitation,   the
Commonwealth of Puerto Rico, any agency, authority, instrumentality,  regulatory
body,  court,  central bank or other entity exercising  executive,  legislative,
judicial,  taxing,  regulatory or  administrative  functions of or pertaining to
government,  any  securities  exchange  and  any  self-regulatory   organization
(including the National Association of Insurance Commissioners).

                "Guarantee and Collateral Agreement":  the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time to
time.

                "Guarantee  Obligation":  as to any  Person  (the  "guaranteeing
person"),  any obligation of (a) the  guaranteeing  person or (b) another Person
(including  any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement,  counterindemnity or similar
obligation,   in  either  case  guaranteeing  or  in  effect   guaranteeing  any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other  third  Person  (the  "primary  obligor")  in any  manner,  whether
directly or  indirectly,  including any obligation of the  guaranteeing  person,
whether or not  contingent,  (i) to purchase any such primary  obligation or any
property  constituting direct or indirect security therefor,  (ii) to advance or
supply funds (1) for the purchase or payment of any such primary  obligation  or
(2) to maintain  working  capital or equity  capital of the  primary  obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property,  securities or services primarily for the purpose of assuring
the owner of any such primary  obligation of the ability of the primary  obligor
to make payment of such primary  obligation or (iv)  otherwise to assure or hold
harmless  the  owner of any such  primary  obligation  against  loss in  respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements  of instruments for deposit or collection in the ordinary course of
business.  The amount of any  Guarantee  Obligation of any  guaranteeing  person
shall  be  deemed  to be the  lower of (a) an  amount  equal  to the  stated  or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable  pursuant to the terms of the instrument  embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable,  in which case
the amount of such  Guarantee  Obligation  shall be such  guaranteeing  person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

                "Hedge Agreements":  all interest rate swaps, caps or collar
agreements or similar arrangements dealing with interest rates or
currency exchange rates or the exchange of nominal interest obligations,
either generally or under specific contingencies.

                "Indebtedness":  of any Person at any date, without duplication,
(a) all  indebtedness of such Person for borrowed money,  (b) all obligations of
such Person for the deferred  purchase price of property or services (other than
current  trade  payables  incurred  in the  ordinary  course  of  such  Person's
business),  (c) all  obligations  of such  Person  evidenced  by  notes,  bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional  sale or other title  retention  agreement with respect to
property  acquired by such Person  (even  though the rights and  remedies of the
seller or lender  under such  agreement  in the event of default  are limited to
repossession  or sale of such  property),  (e) all Capital Lease  Obligations of
such  Person and the  obligations  (including  contingent  obligations)  of such
Person under and in respect of  synthetic  lease  transactions  under which such
Person or any  Affiliate of such Person is the lessee,  (f) all  obligations  of
such Person,  contingent or otherwise, as an account party or applicant under or
in  respect  of  acceptances,   letters  of  credit,  surety  bonds  or  similar
arrangements,  (g) the  liquidation  value of all redeemable  preferred  Capital
Stock of such Person, (h) all Guarantee Obligations of such Person in respect of
obligations  of the kind  referred to in clauses (a) through (g) above,  (i) all
obligations  of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise,  to be  secured  by) any Lien on  property  (including  accounts  and
contract rights) owned by such Person, whether or not such Person has assumed or
become  liable for the payment of such  obligation,  and (j) for the purposes of
Sections 8.2 and 9(e) only,  all  obligations of such Person in respect of Hedge
Agreements. The Indebtedness of any Person shall include the Indebtedness of any
other  entity  (including  any  partnership  in which  such  Person is a general
partner)  to the  extent  such  Person  is liable  therefor  as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness  expressly provide that such Person is
not liable  therefor.  From and after the date the Tender Offer is  consummated,
the  definition of  Indebtedness  shall include the  obligation,  if any, of the
Target to Esselte AB, a Swedish  corporation,  or an  affiliate  thereof,  in an
aggregate  amount on the date hereof the U.S.  Dollar  Equivalent of which shall
not exceed $13,500,000.

                "Insolvency":  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245

of ERISA.

                "Insolvent":  pertaining to a condition of Insolvency.

                "Intellectual Property": the collective reference to all rights,
priorities and privileges  relating to  intellectual  property,  whether arising
under  United  States,  multinational  or foreign laws or  otherwise,  including
copyrights,  copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof,  including the right to
receive all proceeds and damages therefrom.

                "Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final  maturity  date of such  Loan,  (b) as to any  Eurodollar  Loan or
Multicurrency  Loan having an Interest  Period of three months or less, the last
day of such Interest Period, (c) as to any Eurodollar Loan or Multicurrency Loan
having an  Interest  Period  longer  than three  months,  each day that is three
months, or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest  Period and (d) as to any Loan (other than any
Revolving  Loan  that is an ABR Loan and any  Swingline  Loan),  the date of any
repayment or prepayment made in respect thereof.

                "Interest   Period":   as  to  (a)   any   Eurodollar   Loan  or
Multicurrency  Loan (other than a Swingline  Loan),  (i)  initially,  the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan or Multicurrency  Loan and ending one, two, three or six
months  thereafter,  as selected by the  Borrower in its notice of  borrowing or
notice of conversion, as the case may be, given with respect thereto (or, in the
case of a  Multicurrency  Swingline  Loan,  such number of days as may be agreed
between the  Borrower  and the  Swingline  Lender or, in the absence of any such
agreement, one day); and (ii) thereafter, each period commencing on the last day
of the next preceding  Interest  Period  applicable to such  Eurodollar  Loan or
Multicurrency  Loan and ending  one,  two,  three or six months  thereafter,  as
selected by the Borrower by irrevocable notice to the  Administrative  Agent not
less than three Business Days prior to the last day of the then current Interest
Period with  respect  thereto and (b) any  Swingline  Loan,  such number of days
commencing  on the  Borrowing  Date  thereof  and  ending  on or up to one month
thereafter as may be agreed upon between the Borrower and the Swingline  Lender,
or in the absence of any such  agreement,  one day;  provided  that,  all of the
foregoing provisions relating to Interest Periods are subject to the following:

                () if any Interest  Period would  otherwise end on a day that is
not a  Business  Day,  such  Interest  Period  shall  be  extended  to the  next
succeeding  Business Day unless the result of such  extension  would be to carry
such Interest  Period into another  calendar  month in which event such Interest
Period shall end on the immediately preceding Business Day;

                ()  the Borrower may not select an Interest Period under a
particular Facility that would extend beyond the Scheduled Revolving
Termination Date or beyond the date final payment is due on the Term
Loans;

                () any Interest Period that 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 Interest  Period) shall end on the last
Business Day of a calendar month; and

                ()  the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan or
Multicurrency Loan during an Interest Period for such Loan.

                "International Accounting Standards":  international
accounting standards as promulgated by the International Accounting

Standards Committee.

                "Investments":  as defined in Section 8.8.

                "Issuing  Lenders":  First Union National Bank and, with respect
to Letters of Credit  denominated  in an Available  Foreign  Currency,  ABN AMRO
Bank, N.V., each in its capacity as issuer of a Letter of Credit.

                "Judgment Currency":  as defined in Section 11.15(b).

                "L/C Commitment":  $25,000,000.

                "L/C Fee Payment Date":  the last day of each March, June,
September and December and the last day of the Revolving Commitment

Period.

                "L/C  Obligations":  at any time,  an amount equal to the sum of
(a) the  aggregate  then undrawn and  unexpired  amount of the then  outstanding
Letters of Credit and (b) the  aggregate  amount of  drawings  under  Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.

                "L/C Participants":  with respect to any Letter of Credit,
the collective reference to all the Revolving Lenders other than the

Issuing Lender that issued such Letter of Credit.

        "Lenders":  as defined in the preamble hereto.

                "Lending Installation":  with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or Affiliate of
such Lender or the Administrative Agent listed on the signature pages
hereof or otherwise selected by such Lender or the Administrative Agent
pursuant to Section 4.14.

                "Letters of Credit":  as defined in Section 3.1(a).

                "Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement,  encumbrance,  lien (statutory or other),  charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever  (including any conditional sale or
other title retention  agreement and any capital lease having  substantially the
same economic effect as any of the foregoing).

                "Loan":  any loan made by any Lender pursuant to this
Agreement.

                "Loan Documents":  this Agreement, the Security Documents
and the Notes.

                "Loan Parties":  the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.

                "London Banking Day":  any day on which banks in London are
open for general banking business, including dealings in foreign

currency and exchange.

                "Majority Facility Lenders":  with respect to any Facility,  the
holders of more than 50% of the aggregate  unpaid  principal  amount of the Term
Loans or the Aggregate Committed  Outstandings,  as the case may be, outstanding
under such  Facility (or, in the case of the  Revolving  Facility,  prior to any
termination  of the Revolving  Commitments,  the holders of more than 50% of the
Total Revolving Commitments).

                "Material Adverse Effect":  a material adverse effect on (a) the
Acquisition,  (b) the business,  property,  operations,  condition (financial or
otherwise) or prospects of the Borrower and its  Subsidiaries  taken as a whole,
(c) the validity or  enforceability  of this  Agreement or any of the other Loan
Documents or the rights and remedies of the Administrative  Agent or the Lenders
hereunder or thereunder or (d) the Borrower's ability to pay the Obligations.

                "Materials of Environmental  Concern": any gasoline or petroleum
(including  crude oil or any  fraction  thereof)  or  petroleum  products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.

                "Mortgaged Properties":  the real properties listed on
Schedule 1.1B, as to which the Administrative Agent for the benefit of
the Lenders shall be granted a Lien pursuant to the Mortgages.

                "Mortgages":  each of the  mortgages  and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative  Agent for
the benefit of the  Lenders,  substantially  in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be  recorded),  as the same may be amended,
supplemented or otherwise modified from time to time.

                "Multicurrency Default Rate": with respect to any due and unpaid
principal  amount  or  interest  of  any  Multicurrency  Loan  or  Reimbursement
Obligation  in an Available  Foreign  Currency,  the rate per annum equal to the
higher of (i) the sum of 2% plus the Applicable Margin for  Multicurrency  Loans
for such  day plus the  Eurocurrency  Rate  applicable  to such  Loan on the day
before such  payment was due and (ii) the sum of 2% plus the  Applicable  Margin
for Multicurrency  Loans for such day plus a rate per annum equal to the average
(rounded  upward,  if  necessary,  to the  next  higher  of  1/16  of 1%) of the
respective  rates per annum at which one day (or,  if such  amount  due  remains
unpaid more than three  Business  Days,  then for such period of time not longer
than  three  months as the  Administrative  Agent may  select)  deposits  in the
relevant currency in an amount  approximately  equal to such overdue payment due
to the Multicurrency Reference Lender are offered to the Multicurrency Reference
Lender in the London  interbank  market for the  applicable  period as  provided
above.

                "Multicurrency Loans":  the collective reference to
Multicurrency Term Loans, Multicurrency Revolving Loans and

Multicurrency Swingline Loans.

                "Multicurrency Reference Lender": First Union National Bank.

                "Multicurrency Revolving Loans":  as defined in Section
2.4(b).

                "Multicurrency Swingline Loan Rate":  with respect to each
day during each Interest Period, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) determined as follows:

(a) for any Multicurrency Swingline Loan with an Interest Period of
one month, the Eurocurrency Rate; or

(b) for any  Multicurrency  Swingline Loan with an Interest  Period of less than
one month,  (i) with respect to any such Loans  denominated in Pounds  Sterling,
the  published  base  rate of HSBC  Bank at its  London  office in effect on the
related  Borrowing Date, and (ii) with respect to any such Loans  denominated in
any other Available  Foreign  Currency,  the unpublished rate per annum at which
the  Swingline  Lender is offered  deposits in the  relevant  Available  Foreign
Currency at or about 11:00 A.M,  London time, on the related  Borrowing Date for
the relevant Interest Period.

                "Multicurrency Swingline Loans":  as defined in Section
2.6(a).

                "Multicurrency Term Loan":  as defined in Section 2.1.

                "Multiemployer Plan":  a Plan that is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.

                "National Currency Unit":  the unit of currency (other than
a euro unit) of a Participating Member State.

                "Net Cash  Proceeds":  (a) in connection  with any Asset Sale or
any  Recovery  Event,  the  proceeds  thereof  in the  form  of  cash  and  Cash
Equivalents  (including any such proceeds received by way of deferred payment of
principal  pursuant  to a note  or  installment  receivable  or  purchase  price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees,  accountants'  fees,  investment
banking fees,  amounts  required to be applied to the repayment of  Indebtedness
secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses  actually incurred in connection
therewith  and net of taxes  paid or  reasonably  estimated  to be  payable as a
result  thereof  (after  taking  into  account  any  available  tax  credits  or
deductions  and any tax sharing  arrangements)  and (b) in  connection  with any
issuance or sale of Capital Stock or any  incurrence of  Indebtedness,  the cash
proceeds  received from such  issuance or  incurrence,  net of attorneys'  fees,
investment  banking  fees,   accountants'  fees,   underwriting   discounts  and
commissions  and  other  customary  fees  and  expenses   actually  incurred  in
connection therewith.

        "Non-Excluded Taxes":  as defined in Section 4.10(a).

                "Non-Guarantor Subsidiary":  any Subsidiary that is not a
Wholly Owned Subsidiary Guarantor.

        "Non-U.S. Lender":  as defined in Section 4.10(d).

                "Notes":  the collective reference to any promissory note
evidencing Loans.

                "Obligations":   the  unpaid   principal   of  and  interest  on
(including  interest  accruing after the maturity of the Loans and Reimbursement
Obligations  and  interest   accruing  after  the  filing  of  any  petition  in
bankruptcy,  or the  commencement  of any  insolvency,  reorganization  or  like
proceeding,  relating to the Borrower, whether or not a claim for post-filing or
post-petition  interest is allowed in such  proceeding)  the Loans and all other
obligations  and liabilities of the Borrower to the  Administrative  Agent or to
any Lender (or, in the case of Hedge  Agreements,  any affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred,  which may arise under, out of, or in connection
with, this Agreement,  any other Loan Document, the Letters of Credit, any Hedge
Agreement  entered  into with any Lender or any  affiliate  of any Lender or any
other  document  made,  delivered or given in connection  herewith or therewith,
whether on account of  principal,  interest,  reimbursement  obligations,  fees,
indemnities,  costs,  expenses (including all fees, charges and disbursements of
counsel to the  Administrative  Agent or to any Lender  that are  required to be
paid by the Borrower pursuant hereto) or otherwise.

                "Other   Taxes":   any  and  all  present  or  future  stamp  or
documentary  taxes or any other  excise or  property  taxes,  charges or similar
levies arising from any payment made  hereunder or from the execution,  delivery
or  enforcement  of, or otherwise  with respect to, this  Agreement or any other
Loan Document.

                "Participating Member State":  any member state of EMU which
has the euro as its lawful currency.

                "Participant":  as defined in Section 11.6(b).

                "PBGC":  the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any

successor).

                "Permitted  Acquisitions":  any  acquisition  of all the Capital
Stock or all or  substantially  all of the  assets of any  Person or any line of
business  or product  line of any Person (any such  Person,  line of business or
product line, an "Acquired  Business") if: (i) the Borrower can  demonstrate pro
forma compliance with all provisions of this Agreement,  before and after giving
effect to such  acquisition,  (ii) such acquisition is not hostile in nature and
(iii) such acquisition is in a similar or complementary line of business to that
of the Borrower.

 .
                "Person":  an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or

other entity of whatever nature.

                "Plan":  at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the  Borrower or a Commonly  Controlled
Entity is (or, if such plan were  terminated  at such time,  would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA.

                "Pricing Grid":

              Applicable Margin      Applicable Margin
Senior        for Eurodollar Loans   for ABR Loans          Commitment
Leverage      and Multicurrency      Dollar Swingline       Fee
Ratio         Loans                  Loans                  Rate

- -----------   --------------------   -------------------    -------------
3.50x             2.500%              1.250%                 0.500%

< 3.50x to

  > 3.125x        2.250%              1.000%                 0.500%

<3.125x to

  > 2.75x         2.000%              0.750%                 0.500%

<2.75x to

> 2.375x          1.750%              0.500%                 0.375%

<2.375x to

> 2.00x           1.500%              0.250%                 0.375%

<2.00x            1.250%              0.000%                 0.250%



                Changes in the  Applicable  Margin or in the Commitment Fee Rate
resulting from changes in the Senior  Leverage  Ratio shall become  effective on
the date (the "Adjustment Date") on which financial  statements are delivered to
the  Lenders  pursuant  to Section 7.1 (but in any event not later than the 45th
day after the end of each of the first  three  quarterly  periods of each fiscal
year or the 90th day after the end of each fiscal year,  as the case may be) and
shall  remain in effect  until the next change to be  effected  pursuant to this
paragraph.  If any  financial  statements  referred  to above are not  delivered
within the time periods specified above,  then, until such financial  statements
are delivered, the Senior Leverage Ratio as at the end of the fiscal period that
would have been covered  thereby  shall for the purposes of this  definition  be
deemed to be greater  than 3.50x.  In  addition,  at all times while an Event of
Default shall have occurred and be continuing,  the Senior  Leverage Ratio shall
for the purposes of this  definition  be deemed to be greater  than 3.50x.  Each
determination  of the Senior  Leverage Ratio pursuant to this pricing grid shall
be  made  with  respect  to  (or,  in the  case  of  Consolidated  Total  Senior
Indebtedness,  as at the end of) the period of four consecutive  fiscal quarters
of the  Borrower  ending  at  the  end of the  period  covered  by the  relevant
financial statements.

                Notwithstanding  the foregoing (unless an Event of Default shall
have  occurred and be  continuing),  until the  Adjustment  Date for the quarter
ending March 31, 2000, the Applicable Margins and Commitment Fee Rate will be as
set forth above opposite the Senior Leverage Ratio of <3.50x to 3.125x.

                "Prime Rate": as defined in the definition of ABR.

                "Pro Forma Balance Sheet":  as defined in Section 5.1(a).

                "Projections":  as defined in Section 7.2(c).

                "Properties":  as defined in Section 5.17(a).

                "Recovery Event":  any settlement of or payment in respect
of any property or casualty insurance claim or any condemnation
proceeding relating to any asset of the Borrower or any of its

Subsidiaries in excess of $5,000,000.

                "Reference Lender": First Union National Bank.

                "Refunded Swingline Loans":  as defined in Section 2.7(c).

                "Refunding Date":  as defined in Section 2.7(d).

                "Register":  as defined in Section 11.6(d).

                "Regulation D":  Regulation D of the Board as in effect from
time to time.

                "Regulation U":  Regulation U of the Board as in effect from
time to time.

                "Regulation X":  Regulation X of the Board as in effect from
time to time.

                "Reimbursement Obligation":  the obligation of the Borrower
to reimburse each Issuing Lender pursuant to Section 3.5 for amounts
drawn under Letters of Credit issued by such Issuing Lender.

                "Reinvestment Deferred Amount": with respect to any Reinvestment
Event,  the aggregate  Net Cash Proceeds  received by the Borrower or any of its
Subsidiaries  in  connection  therewith  that are not applied to prepay the Term
Loans or reduce the Revolving Commitments pursuant to Section 4.5(d) as a result
of the delivery of a Reinvestment Notice.

                "Reinvestment Event":  any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.

                "Reinvestment   Notice":   a  written   notice   executed  by  a
Responsible  Officer  stating  that no  Event of  Default  has  occurred  and is
continuing and that the Borrower  (directly or indirectly  through a Subsidiary)
intends and expects to use all or a specified  portion of the Net Cash  Proceeds
of an Asset Sale or Recovery Event,  (i) with respect to any such Asset Sale, to
replace  the assets in respect of which such Asset Sale  occurred or to purchase
other assets used in the existing  business of the Borrower and its Subsidiaries
or (ii) with respect to any Recovery Event,  to repair,  replace or relocate the
affected  assets  within  180 days  from the  date of  receipt  of such Net Cash
Proceeds,  in each  case,  provided  that if such  affected  assets  constituted
Collateral,  such  restored,  replacement or other  purchased  assets shall also
constitute Collateral.

                "Reinvestment   Prepayment   Amount":   with   respect   to  any
Reinvestment  Event, the Reinvestment  Deferred Amount relating thereto less any
amount  expended prior to the relevant  Reinvestment  Prepayment Date to acquire
assets  useful in the  Borrower's  business or repair,  replace or relocate  any
affected assets.

                "Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such  Reinvestment
Event and (b) the date on which the Borrower  shall have  determined  not to, or
shall have otherwise ceased to, acquire assets useful in the Borrower's business
or repair,  replace or relocate any  affected  assets with all or any portion of
the relevant Reinvestment Deferred Amount.

                "Reorganization":  with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of

Section 4241 of ERISA.

                "Reportable Event":  any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31, .32,
 .34 or .35 of PBGC Reg.  4043.

                "Required Lenders": at any time, the holders of more than 50% of
(a) until the Closing Date, the  Commitments  then in effect and (b) thereafter,
the sum of (i) the aggregate  U.S.  Dollar  Equivalent  of the unpaid  principal
amount  of the  Term  Loans  then  outstanding  and  (ii)  the  Total  Revolving
Commitments  then  in  effect  or,  if  the  Revolving   Commitments  have  been
terminated, the Aggregate Committed Outstandings then outstanding.

                "Requirement  of Law":  as to any  Person,  the  Certificate  of
Incorporation and By-Laws or other organizational or governing documents of such
Person,  and  any  law,  treaty,  rule  or  regulation  or  determination  of an
arbitrator or a court or other Governmental  Authority,  in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

                "Responsible Officer":  the chief executive officer,
president or chief financial officer of the Borrower, but in any event,
with respect to financial matters, the chief financial officer of the

Borrower.

                "Restricted Payments":  as defined in Section 8.6.

                "Revolving Commitment": as to any Lender, the obligation of such
Lender,  if any, to make Revolving  Loans and participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Revolving Commitment" opposite such Lender's
name on Schedule 1.1A or in the Assignment and Acceptance pursuant to which such
Lender  became a party  hereto,  as the same may be  changed  from  time to time
pursuant  to the terms  hereof.  The  original  amount  of the  Total  Revolving
Commitments is $150,000,000.

                "Revolving Commitment Period":  the period from and
including the Closing Date to the Revolving Termination Date.

                "Revolving Facility": as defined in the definition of
Facility.

                "Revolving Lender":  each Lender that has a Revolving
Commitment or that holds Revolving Loans.

                "Revolving Loans":  the collective reference to Dollar
Revolving Loans and Multicurrency Revolving Loans.

                "Revolving Percentage":  as to any Revolving Lender at any time,
the percentage which such Lender's Revolving  Commitment then constitutes of the
Total  Revolving  Commitments  (or, at any time after the Revolving  Commitments
shall have expired or terminated,  the percentage which the sum of (a) aggregate
principal  amount of such Lender's Dollar  Revolving Loans then  outstanding and
(b) the U.S. Dollar  Equivalent of such Lender's  Multicurrency  Revolving Loans
then  outstanding,  constitutes of the aggregate  principal amount of the Dollar
Revolving Loans and the U.S. Dollar  Equivalent of the  Multicurrency  Revolving
Loans then outstanding).

                "Revolving Termination Date":  the earliest of () the
Scheduled Revolving Termination Date, () the date on which the Revolving
Commitments are terminated pursuant to the terms hereof, (c) the date on
which the German antitrust authorities issue a final, non-appealable
determination to decline the Borrower's application for antitrust
approval and (d) if the German antitrust authorities have neither
declined nor approved the Borrower's application for antitrust approval,
December 31, 1999.

                "Scheduled Revolving Termination Date":  March 31, 2006.

                "SEC":  the Securities and Exchange Commission, any
successor thereto and any analogous Governmental Authority.

                "Security Documents":  the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other security
documents hereafter delivered to the Administrative Agent granting a
Lien on any property of any Person to secure the obligations and
liabilities of any Loan Party under any Loan Document.

                "Senior Leverage Ratio":  as at any day, the ratio of (a)
Consolidated Total Senior Indebtedness on such day to (b) Consolidated
EBITDA for the most recently completed four fiscal quarters of the
Borrower for which financial statements have been provided to the
Lenders.

                "Single Employer Plan":  any Plan that is covered by Title
IV of ERISA, but that is not a Multiemployer Plan.

                "Solvent":  when used with respect to any Person, as of any date
of  determination,  (a) the amount of the "present fair  saleable  value" of the
assets  of  such  Person  will,  as of  such  date,  exceed  the  amount  of all
"liabilities of such Person,  contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing  determinations  of the  insolvency  of debtors,  (b) the present fair
saleable  value of the assets of such Person will,  as of such date,  be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured,  (c) such Person will not have,
as of such date, an  unreasonably  small amount of capital with which to conduct
its business,  and (d) such Person will be able to pay its debts as they mature.
For purposes of this  definition,  (i) "debt" means liability on a "claim",  and
(ii)  "claim"  means any (x) right to  payment,  whether  or not such a right is
reduced to  judgment,  liquidated,  unliquidated,  fixed,  contingent,  matured,
unmatured,  disputed,  undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to  payment,  whether  or not such  right to an  equitable  remedy is
reduced  to  judgment,  fixed,  contingent,   matured  or  unmatured,  disputed,
undisputed, secured or unsecured.

                "Specified Change of Control":  a "Change of Control" as
defined in the Subordinated Note Indenture.

                "Subordinated Notes":  the 51/2% Convertible Subordinated
Debentures of the Borrower due 2005.

                "Subordinated Indebtedness":  () Indebtedness of the
Borrower in respect of the Subordinated Notes and () other Indebtedness
of the Borrower which by its terms is subordinated to the Obligations in
a manner and to an extent satisfactory to the Administrative Agent.

                "Subordinated  Note  Indenture":  the  Indenture,  dated  as  of
October 24, 1995, between the Borrower, as issuer, and The Chase Manhattan Bank,
as trustee, as amended by the First Supplemental  Indenture,  dated February 27,
1998 (as the same may be further  amended,  restated or otherwise  modified from
time to time).

                "Subsequent Participant":  any member state of EMU that
becomes a Participating Member State after the date hereof.

                "Subsidiary":  as to any  Person,  a  corporation,  partnership,
limited  liability  company  or other  entity of which  shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership  interests  having  such  power only by reason of the  happening  of a
contingency)  to elect a majority of the board of directors or other managers of
such  corporation,  partnership  or other  entity are at the time owned,  or the
management of which is otherwise controlled,  directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to  "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.

                "Subsidiary Guarantor":  each Subsidiary of the Borrower
other than any Excluded Foreign Subsidiary.

                "Swingline Commitment":  the obligation of the Swingline
Lender to make Swingline Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $30,000,000.

                "Swingline Lender":  First Union National Bank, in its
capacity as the lender of Swingline Loans.

                "Swingline Loans":  the collective reference to Dollar
Swingline Loans and Multicurrency Swingline Loans.

                "Swingline Participation Amount":  as defined in Section
2.7(d).

                "Syndication Agent":  as defined in the preamble hereto.
                "Target Operating Day":  any day that is not (a) a Saturday

or Sunday, (b) Christmas Day or New Year's Day or (c) any other day on which the
Trans-European  Real-time Gross  Settlement  Operating  System (or any successor
settlement system) is not operating (as determined by the Administrative Agent).

                "Term  Commitment":  as to any Lender,  the  obligation  of such
Lender,  if any, to make a Term Loan to the  Borrower  hereunder  in a principal
amount not to exceed the amount set forth  under the heading  "Term  Commitment"
opposite such Lender's name on Schedule 1.1A. The original  aggregate  amount of
the Term Commitments is $275,000,000.

                "Term Lender": each Lender that has a Term Commitment or is
the holder of a Term Loan.

                "Term Loans": the collective reference to Dollar Term Loans
and Multicurrency Term Loans.

                "Term  Percentage":  as to any  Term  Lender  at any  time,  the
percentage which such Lender's Term Commitment then constitutes of the aggregate
Term  Commitments  (or, at any time after the Closing Date, the percentage which
the sum of (a) the aggregate principal amount of such Lender's Dollar Term Loans
then  outstanding  and  (b  )  the  U.S.  Dollar  Equivalent  of  such  Lender's
Multicurrency  Term  Loans  then  outstanding,   constitutes  of  the  aggregate
principal amount of the Dollar Term Loans and the U.S. Dollar  Equivalent of the
Multicurrency Term Loans then outstanding).

                "Total Aggregate Committed Outstandings": at any time, the
aggregate amount of the Aggregate Committed Outstandings of the

Revolving Lenders outstanding at such time.

                "Total Revolving Commitments":  at any time, the aggregate
amount of the Revolving Commitments then in effect.

                "Tranche":  the  collective  reference  to  Eurodollar  Loans or
Multicurrency  Loans of any  Facility  the then  current  Interest  Periods with
respect  to all of which  begin on the same date and end on the same  later date
(whether or not such Loans shall originally have been made on the same day).

                "Transferee":  any Assignee or Participant.

                "Treaty  on  European  Union":  the  Treaty of Rome of March 25,
1957,  as amended  by the Single  European  Act 1986 and the  Maastricht  Treaty
(which was signed at  Maastricht  on  February  7, 1992,  and came into force on
November 1, 1993), as amended from time to time.

                "Type":  as to any Term Loan or Revolving Loan, its nature
as an ABR Loan, a Eurodollar Loan or a Multicurrency Loan.

                "United States":  the United States of America.
                "U.S. Dollar Equivalent":  with respect to an amount

denominated  in any currency  other than Dollars,  the  equivalent in Dollars of
such amount determined at the Exchange Rate on the date of determination of such
equivalent.  In making  any  determination  of the U.S.  Dollar  Equivalent  for
purposes of  calculating  the amount of Loans to be borrowed from the respective
Lenders on any Borrowing Date, the  Administrative  Agent shall use the relevant
Exchange Rate in effect on the date on which the interest rate for such Loans is
determined  pursuant  to the  provisions  of this  Agreement  and the other Loan
Documents.

                "Wholly Owned Subsidiary":  as to any Person, any other
Person all of the Capital Stock of which (other than directors'
qualifying shares required by law) is owned by such Person directly

and/or through other Wholly Owned Subsidiaries.

                "Wholly Owned Subsidiary Guarantor":  any Subsidiary
Guarantor that is a Wholly Owned Subsidiary of the Borrower.

                1.2 Other Definitional Provisions. () Unless otherwise specified
therein,  all terms defined in this  Agreement  shall have the defined  meanings
when used in the other Loan Documents or any  certificate or other document made
or delivered pursuant hereto or thereto.

              (b) As  used  herein  and in the  other  Loan  Documents,  and any
certificate or other document made or delivered  pursuant hereto or thereto,  ()
accounting  terms relating to the Borrower and its  Subsidiaries  not defined in
Section 1.1 and  accounting  terms partly  defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, () the
words  "include",  "includes" and "including"  shall be deemed to be followed by
the phrase "without limitation",  () the word "incur" shall be construed to mean
incur,  create,  issue,  assume,  become liable in respect of or suffer to exist
(and the words "incurred" and "incurrence" shall have correlative meanings), and
() the words "asset" and "property"  shall be construed to have the same meaning
and  effect  and to refer to any and all  tangible  and  intangible  assets  and
properties,  including  cash,  Capital Stock,  securities,  revenues,  accounts,
leasehold interests and contract rights.

              (c) The words  "hereof",  "herein"  and  "hereunder"  and words of
similar  import when used in this  Agreement  shall refer to this Agreement as a
whole  and not to any  particular  provision  of this  Agreement,  and  Section,
Schedule  and  Exhibit   references  are  to  this  Agreement  unless  otherwise
specified.

               (d) The meanings  given to terms defined  herein shall be equally
applicable to both the singular and plural forms of such terms.

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS

              2.1 Term Commitments.  Subject to the terms and conditions hereof,
each Term Lender  severally agrees to make a term loan (a "Dollar Term Loan") in
Dollars and a term loan (a  "Multicurrency  Term Loan") in an Available  Foreign
Currency  to the  Borrower  on the Closing  Date in an  aggregate  amount not to
exceed the amount of the Term  Commitment of such Lender.  The Dollar Term Loans
may from time to time be  Eurodollar  Loans or ABR Loans,  as  determined by the
Borrower and notified to the  Administrative  Agent in accordance  with Sections
2.2 and 4.6.

              2.2 Procedure for Term Loan Borrowing.  () The Borrower shall give
the  Administrative  Agent irrevocable  notice (which notice must be received by
the  Administrative  Agent () with respect to Dollar Term Loans,  prior to 10:00
A.M., Charlotte,  North Carolina time, one Business Day prior to the anticipated
Borrowing Date or () with respect to  Multicurrency  Term Loans,  prior to 10:00
A.M.  Charlotte,   North  Carolina  time,  three  Business  Days  prior  to  the
anticipated Borrowing Date) requesting that the Term Lenders make the Term Loans
on the  anticipated  Closing Date and specifying  the  respective  amounts to be
borrowed in Dollars and an Available  Foreign  Currency.  The Term Loans made on
the Closing Date in Dollars shall initially be ABR Loans and,  unless  otherwise
agreed by the Administrative  Agent in its sole discretion,  no Term Loan may be
converted  into or continued as a Eurodollar  Loan having an Interest  Period in
excess of one month  prior to the date that is 60 days after the  Closing  Date.
Upon receipt of such notice the Administrative  Agent shall promptly notify each
Term Lender thereof.

               (b) Not later than 12:00 Noon, Charlotte, North Carolina time, on
the Closing  Date each Term Lender shall make  available  to the  Administrative
Agent at the Funding  Office an amount in immediately  available  funds equal to
the Term Loan or Term Loans to be made by such Lender in Dollars or an Available
Foreign  Currency.  The  Administrative  Agent  shall  credit an  account of the
Borrower  on the  books of such  office  of the  Administrative  Agent  with the
aggregate of the amounts made available to the Administrative  Agent by the Term
Lenders in immediately available funds.

              2.3  Repayment of Term Loans.  () Each Term Loan of each Term Loan
Lender shall mature in 25  consecutive  quarterly  installments,  commencing  on
March 31, 2000,  each of which shall be in an amount equal to such Lender's Term
Percentage  multiplied by an amount  determined by  multiplying () the aggregate
principal  amount of Term Loans in the relevant  currency as of the Closing Date
and () the percentage set forth below:

Installment                        Principal Amount
March 31, 2000                        1.10%
June 30, 2000                         3.30%
September 30, 2000                    3.30%
December 31, 2000                     3.30%
March 31, 2001                        1.30%
June 30, 2001                         3.80%
September 30, 2001                    3.80%
December 31, 2001                     3.80%
March 31, 2002                        1.60%
June 30, 2002                         4.30%
September 30, 2002                    4.30%
December 31, 2002                     4.30%
March 31, 2003                        1.60%
June 30, 2003                         4.30%
September 30, 2003                    4.30%
December 31, 2003                     4.30%
March 31, 2004                        1.80%
June 30, 2004                         5.50%
September 30, 2004                    5.50%
December 31, 2004                     5.50%
March 31, 2005                        2.20%
June 30, 2005                         6.50%
September 30, 2005                    6.50%
December 31, 2005                     6.50%
March 31, 2006                        7.30%

             (b) The  Borrower  hereby  unconditionally  promises  to pay to the
Administrative  Agent  for  the  account  of the  appropriate  Term  Lender  the
principal amount of each Term Loan of such Term Lender in installments according
to the  amortization  schedule  set  forth in  paragraph  (a)  above (or on such
earlier date on which the Loans  become due and payable  pursuant to Section 9).
The  Borrower  hereby  further  agrees to pay  interest on the unpaid  principal
amount of the Term  Loans  from time to time  outstanding  from the date  hereof
until  payment in full  thereof at the rates per  annum,  and on the dates,  set
forth in Section 4.1.

             (c) Each Term Lender shall  maintain in  accordance  with its usual
practice an account or accounts evidencing  indebtedness of the Borrower to such
Term Lender resulting from each Term Loan of such Term Lender from time to time,
including  the amounts of principal  and interest  payable and paid to such Term
Lender from time to time in respect of such Term Loans under this Agreement.

             (d) The  Administrative  Agent,  on behalf of the  Borrower,  shall
maintain the Register pursuant to Section 11.6(d),  and a subaccount therein for
each Term  Lender,  in which  shall be  recorded () the amount of each Term Loan
made hereunder and any Note evidencing such Term Loan, the Type thereof and each
Interest Period (if any) applicable  thereto,  () the amount of any principal or
interest  due and payable or to become due and payable from the Borrower to each
Term  Lender  hereunder  and ()  both  the  amount  of any sum  received  by the
Administrative  Agent  hereunder  from the Borrower and each Term Lender's share
thereof.

             (e) The entries  made in the Register and the accounts of each Term
Lender  maintained  pursuant to Section 2.3(d) shall, to the extent permitted by
applicable  law, be prima facie  evidence  of the  existence  and amounts of the
obligations  of the  Borrower  therein  recorded;  provided,  however,  that the
failure of any Term Lender or the Administrative  Agent to maintain the Register
or any such account,  or any error  therein,  shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Term Loans by
such Term Lender in accordance with the terms of this Agreement. Any discrepancy
between the  Register  and the account of any Lender with respect to any amounts
owed by the Borrower to such Lender or paid by the Borrower to such Lender shall
be settled between the Administrative Agent and such Lender.

             (f)  The   Borrower   agrees   that,   upon  the   request  to  the
Administrative  Agent by any Term Lender,  the Borrower will execute and deliver
to such Term Lender a promissory note of the Borrower  evidencing any Term Loans
of such  Lender,  substantially  in the form of Exhibit  H-1,  with  appropriate
insertions as to date and principal amount.

           2.4  Revolving  Commitments.  () Subject to the terms and  conditions
hereof,  each Revolving  Lender  severally agrees to make revolving credit loans
("Dollar  Revolving  Loans") in Dollars to the Borrower from time to time during
the Revolving  Commitment  Period so long as after giving effect  thereto and to
any  concurrent  repayment or  prepayment  of Loans () the  Available  Revolving
Commitment of each Revolving  Lender is greater than or equal to zero and () the
Total  Aggregate  Committed  Outstandings  do not  exceed  the  Total  Revolving
Commitments.  During the  Revolving  Commitment  Period the Borrower may use the
Revolving  Commitments  by borrowing,  prepaying the Dollar  Revolving  Loans in
whole or in  part,  and  reborrowing,  all in  accordance  with  the  terms  and
conditions  hereof.  The  Dollar  Revolving  Loans  may  from  time  to  time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 4.6.

             (b)  Subject to the terms and  conditions  hereof,  each  Revolving
Lender severally agrees to make revolving credit loans ("Multicurrency Revolving
Loans") in any  Available  Foreign  Currency to the  Borrower  from time to time
during the Revolving  Commitment  Period so long as after giving effect  thereto
and  to any  concurrent  repayment  or  prepayment  of  Loans  () the  Available
Revolving  Commitment of each Revolving Lender is greater than or equal to zero,
() the aggregate outstanding  principal amount of Multicurrency  Revolving Loans
does not exceed an amount of which the U.S. Dollar Equivalent is $75,000,000 and
() the Total Aggregate Committed  Outstandings do not exceed the Total Revolving
Commitments.  During the Revolving  Commitment  Period,  the Borrower may borrow
Multicurrency  Revolving  Loans under the  Revolving  Commitments  by borrowing,
repaying the Multicurrency Revolving Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof.

             (c) The Borrower may borrow  Revolving Loans on the Closing Date in
an aggregate amount of up to $50,000,000.

             (d) The Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.

            2.5  Procedure for Revolving  Loan  Borrowings.  () The Borrower may
borrow  Dollar  Revolving  Loans  under the  Revolving  Commitments  during  the
Revolving  Commitment  Period on any Business  Day,  provided  that the Borrower
shall give the  Administrative  Agent  irrevocable  notice (which notice must be
received  by the  Administrative  Agent prior to 12:00  Noon,  Charlotte,  North
Carolina time, (x) three Business Days prior to the requested Borrowing Date, in
the case of  Eurodollar  Loans,  or (y) one Business Day prior to the  requested
Borrowing Date, in the case of ABR Loans),  specifying () the amount and Type of
Dollar Revolving Loans to be borrowed, () the requested Borrowing Date and () in
the case of Eurodollar  Loans,  the respective  amounts of such Type of Loan and
the  respective  lengths of the initial  Interest  Period  therefor.  Any Dollar
Revolving  Loans  made on the  Closing  Date shall  initially  be ABR Loans and,
unless otherwise agreed by the Administrative  Agent in its sole discretion,  no
Revolving Loan may be converted into or continued as a Eurodollar Loan having an
Interest  Period in excess of one month  prior to the date that is 60 days after
the Closing Date.  Each borrowing of Dollar  Revolving Loans under the Revolving
Commitments  shall  be in an  amount  equal  to (x) in the  case  of ABR  Loans,
$1,000,000  or a whole  multiple  thereof (or, if the then  Aggregate  Available
Revolving  Commitments are less than $1,000,000,  such lesser amount) and (y) in
the case of Eurodollar  Loans,  $5,000,000 or a whole  multiple of $1,000,000 in
excess thereof;  provided, that the Swingline Lender may make, at the request of
the Borrower,  Dollar  Swingline Loans in other amounts pursuant to Section 2.6.
Upon  receipt of any such notice from the  Borrower,  the  Administrative  Agent
shall promptly notify each Revolving Lender thereof.  Each Revolving Lender will
make the amount of its pro rata share of each Dollar  Revolving  Loan  borrowing
available  to the  Administrative  Agent for the account of the  Borrower at the
Funding  Office prior to 12:00 Noon,  Charlotte,  North  Carolina  time,  on the
Borrowing Date requested by the Borrower in funds  immediately  available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the  Administrative  Agent crediting the account of the Borrower on the books
of  such  office  with  the  aggregate  of the  amounts  made  available  to the
Administrative  Agent by the Revolving  Lenders and in like funds as received by
the Administrative Agent.

             (b)  The  Borrower  may  request  the  Revolving  Lenders  to  make
Multicurrency  Revolving  Loans during the  Revolving  Commitment  Period on any
Business Day,  provided that the Borrower  shall give the  Administrative  Agent
irrevocable  notice (which notice must be received by the  Administrative  Agent
prior to 10:00 A.M.,  Charlotte,  North Carolina time, three Business Days prior
to the  requested  Borrowing  Date),  specifying  in each case () the amount and
currency to be borrowed,  () the requested  Borrowing  Date and () the length of
the initial Interest Period therefor.  Each borrowing of Multicurrency Revolving
Loans under the Revolving Commitments shall be in an amount in Dollars equal to,
or an  amount  in an  Available  Foreign  Currency  of  which  the  U.S.  Dollar
Equivalent is equal to, at least $2,500,000 (or, if the then Aggregate Available
Revolving  Commitments are less than $2,500,000,  such lesser amount;  provided,
that  the   Swingline   Lender  may  make,  at  the  request  of  the  Borrower,
Multicurrency  Swingline  Loans in other amounts  pursuant to Section 2.6). Upon
receipt of any such notice from the  Borrower,  the  Administrative  Agent shall
promptly notify each Revolving Lender thereof. Not later than 12:00 Noon, London
time, on the  requested  Borrowing  Date,  each  Revolving  Lender shall make an
amount  equal  to  its  Revolving   Percentage   of  the  principal   amount  of
Multicurrency  Revolving  Loans  requested  to be made on  such  Borrowing  Date
available to the  Administrative  Agent at the  Administrative  Agent's  funding
office for the applicable  currency specified by the  Administrative  Agent from
time to time by notice to the  Revolving  Lenders and in  immediately  available
funds.  The amounts made  available by each  Revolving  Lender will then be made
available  to the  Borrower at the  funding  office for the  relevant  Available
Foreign  Currency  specified  from time to time by the  Administrative  Agent by
notice  to  the  Revolving  Lenders  and  in  like  funds  as  received  by  the
Administrative Agent.

            2.6  Swingline  Commitment.  () Subject to the terms and  conditions
hereof,  the Swingline  Lender agrees to make a portion of the credit  otherwise
available  to the Borrower  under the  Revolving  Commitments  from time to time
during the  Revolving  Commitment  Period by making  swingline  loans in Dollars
("Dollar  Swingline  Loans") or any Available  Foreign Currency  ("Multicurrency
Swingline  Loans") to the Borrower;  provided  that () the  aggregate  principal
amount of  Swingline  Loans  outstanding  to the  Borrower at any time shall not
exceed the  Swingline  Commitment,  () the Borrower  shall not request,  and the
Swingline  Lender shall not make,  any Swingline  Loan in any Available  Foreign
Currency if () after giving  effect to the making of such  Swingline  Loan,  the
aggregate amount of the Total Aggregate  Committed  Outstandings  denominated in
Available  Foreign  Currencies  would exceed an amount of which the U.S.  Dollar
Equivalent is $30,000,000 or () the aggregate amount of the Available  Revolving
Commitments  would be less than zero and () the Borrower shall not request,  and
the  Swingline  Lender shall not make,  any  Swingline  Loan in Dollars if after
giving  effect  thereto  the  aggregate  principal  amount  of  Swingline  Loans
denominated in Dollars would exceed $10,000,000. During the Revolving Commitment
Period, the Borrower may use the Swingline Commitment by borrowing, repaying and
reborrowing,  all in accordance  with the terms and  conditions  hereof.  Dollar
Swingline Loans shall be ABR Loans and Multicurrency  Swingline Loans shall bear
interest at the applicable Multicurrency Swingline Loan Rate.

              (b) The Borrower shall repay all  outstanding  Swingline  Loans on
the Revolving Termination Date.

               2.7  Procedure for  Swingline  Borrowing;  Refunding of Swingline
Loans. () The Borrower may borrow Dollar Swingline Loans by giving the Swingline
Lender  irrevocable  telephonic notice (which telephonic notice must be received
by the  Swingline  Lender not later than 1:00 P.M.,  Charlotte,  North  Carolina
time, on the proposed Borrowing Date) confirmed promptly in writing (with a copy
to the Administrative  Agent),  specifying () the amount to be borrowed,  () the
requested  Borrowing  Date (which shall be a Business  Day during the  Revolving
Commitment  Period)  and () the length of the  Interest  Period  therefor.  Each
borrowing  by the  Borrower  of  Dollar  Swingline  Loans  under  the  Swingline
Commitment  shall be in an  amount  equal to  $500,000  or a whole  multiple  of
$100,000 in excess thereof, but not exceeding  $10,000,000.  Not later than 3:00
P.M.,  Charlotte,  North  Carolina  time, on the requested  Borrowing  Date, the
Swingline Lender shall make available to the Borrower,  in immediately available
funds, the proceeds of such requested Swingline Loan.

             (b) The Borrower may borrow Multicurrency Swingline Loans by giving
the Swingline Lender irrevocable telephonic notice (which telephonic notice must
be received by such  Swingline  Lender not later than () 2:00 P.M.,  London time
(or such other time as the  Administrative  Agent and the  Swingline  Lender may
consent),  on the  anticipated  Borrowing  Date, with respect to Swingline Loans
denominated in Pounds  Sterling,  or () 11:00 A.M. London time, three days prior
to the anticipated  Borrowing Date, with respect to Swingline Loans  denominated
in any other Available Foreign Currency)  confirmed  promptly in writing (with a
copy to the  Administrative  Agent),  specifying  () the  amount  and  Available
Foreign Currency to be borrowed, () the requested Borrowing Date (which shall be
a Business Day during the  Revolving  Commitment  Period),  () the length of the
Interest Period therefor and () any other information requested by the Swingline
Lender in accordance with its particular borrowing procedures. Each borrowing by
the Borrower of  Multicurrency  Swingline  Loans under the Swingline  Commitment
shall  be in an  amount  the U.  S.  Dollar  Equivalent  of  which  is at  least
approximately  $500,000. Not later than 3:00 P.M., London time, on the requested
Borrowing  Date, the Swingline  Lender shall make available to the Borrower,  in
immediately available funds, the proceeds of such requested Swingline Loan.

             (c) The Swingline  Lender, at any time and from time to time in its
sole and  absolute  discretion  may,  on behalf of the  Borrower  (which  hereby
irrevocably  directs  the  Swingline  Lender to act on its  behalf),  on (x) one
Business  Day's notice,  in the case of Dollar  Swingline  Loans,  no later than
12:00 Noon, Charlotte,  North Carolina time, or (y) three Business Days' notice,
in the  case of  Multicurrency  Swingline  Loans,  no  later  than  10:00  A.M.,
Charlotte,  North Carolina time, request each Revolving Lender to make, and each
Revolving  Lender hereby agrees to make, a Revolving Loan, in an amount equal to
such  Revolving  Lender's  Revolving  Percentage of the aggregate  amount of the
outstanding  Swingline  Loans (the "Refunded  Swingline  Loans") with respect to
which such notice has been given, to repay the Swingline Lender.  Each Revolving
Lender  shall  make  the  amount  of  such   Revolving  Loan  available  to  the
Administrative  Agent at the Funding Office in immediately  available funds, not
later than 1:00 P.M.,  Charlotte,  North  Carolina  time,  in the case of Dollar
Revolving  Loans,  and 1:00  P.M.,  London  time,  in the case of  Multicurrency
Revolving  Loans, in each case, one Business Day (or three Business Days, as the
case may be) after the date of such notice. Dollar Revolving Loans made pursuant
to this Section 2.7(c) shall be ABR Loans and Multicurrency Revolving Loans made
pursuant  to this  Section  2.7(c)  shall have an  Interest  Period of one month
(unless  an  Interest  Period of two,  three or six months is  requested  by the
Borrower).  The proceeds of such Revolving Loans shall be immediately applied by
the  Swingline  Lender to repay  the  Refunded  Swingline  Loans.  The  Borrower
irrevocably  authorizes  the  Administrative  Agent  to  charge  the  Borrower's
accounts with the Administrative  Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded Swingline Loans
to the extent amounts received from the Revolving  Lenders are not sufficient to
repay in full such Refunded Swingline Loans.

             (d) If prior to the time a Revolving Loan would have otherwise been
made  pursuant to Section  2.7(c),  one of the events  described in Section 9(f)
shall have occurred and be continuing with respect to the Borrower or if for any
other reason,  as determined  by the  Swingline  Lender in its sole  discretion,
Revolving  Loans  may  not be made  as  contemplated  by  Section  2.7(c),  each
Revolving  Lender shall,  on the date such  Revolving Loan was to have been made
pursuant to the notice  referred to in Section  2.7(c) (the  "Refunding  Date"),
purchase for cash an undivided  participating  interest in an amount equal to ()
its Revolving  Percentage  times () the aggregate  principal amount of Swingline
Loans then outstanding  which were to have been repaid with such Revolving Loans
(the "Swingline Participation Amount").

             (e) Whenever,  at any time after the Swingline  Lender has received
from any Revolving  Lender such Lender's  Swingline  Participation  Amount,  the
Swingline  Lender  receives any payment on account of the Swingline  Loans,  the
Swingline Lender will distribute to the Administrative Agent for distribution to
such Lender its Swingline  Participation Amount (appropriately  adjusted, in the
case of  interest  payments,  to reflect  the period of time  during  which such
Lender's  participating  interest was outstanding and funded and, in the case of
principal  and interest  payments,  to reflect such Lender's pro rata portion of
such  payment if such  payment is not  sufficient  to pay the  principal  of and
interest on all Swingline Loans then due); provided,  however, that in the event
that such payment  received by the Swingline  Lender is required to be returned,
such Revolving Lender will return to the  Administrative  Agent for distribution
to the Swingline Lender any portion thereof previously  distributed to it by the
Swingline Lender.

             (f) Each Revolving  Lender's  obligation to make the Loans referred
to in Section 2.7(c) and to purchase participating interests pursuant to Section
2.7(d)  shall be  absolute  and  unconditional  and shall not be affected by any
circumstance,  including,  without  limitation,  ()  any  setoff,  counterclaim,
recoupment,  defense or other right which such Revolving  Lender or the Borrower
may have against the Swingline Lender,  the Borrower or any other Person for any
reason whatsoever;  () the occurrence or continuance of a Default or an Event of
Default or the  failure  to satisfy  any of the other  conditions  specified  in
Section 6; () any adverse  change in the  condition  (financial or otherwise) of
the Borrower;  () any breach of this Agreement or any other Loan Document by the
Borrower,  any other Loan Party or any other Revolving  Lender;  or () any other
circumstance,  happening or event  whatsoever,  whether or not similar to any of
the foregoing.

             (g)  Notwithstanding  anything to the contrary contained herein, no
Revolving  Lender shall be required to make a Revolving Loan pursuant to Section
2.7(c) or acquire a participation pursuant to Section 2.7(d) in a Swingline Loan
if an Event of Default  shall have  occurred and be  continuing at the time such
Swingline  Loan was made and such  Revolving  Lender  shall  have  notified  the
Swingline Lender and the Administrative  Agent in writing, at least one Business
Day prior to the time such Swingline  Loan was made,  that such Event of Default
has occurred and that such Revolving Lender will not acquire  participations  in
Swingline Loans made while such Event of Default is continuing.

             2.8  Commitment  Fees,  etc. () The  Borrower  agrees to pay to the
Administrative  Agent for the account of each Revolving  Lender a commitment fee
for the  period  from  and  including  the  Closing  Date to the last day of the
Revolving Commitment Period,  computed at the Commitment Fee Rate on the average
daily amount of the  Available  Revolving  Commitment  of such Lender during the
period for which payment is made,  payable  quarterly in arrears on the last day
of each March,  June,  September and December and on the  Revolving  Termination
Date, commencing on the first of such dates to occur after the date hereof.

             (b) The Borrower agrees to pay to the Administrative  Agent for the
account of each Lender a fee equal to 0.25% per annum of the  Commitment of such
Lender for the period from and including  November 1, 1999 to the earlier of (i)
the Closing Date and (ii) the Revolving Termination Date, payable on such date.

             (c) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates previously  agreed to in writing by the Borrower
and the Administrative Agent.

            2.9 Termination or Reduction of Revolving Commitments.  The Borrower
shall have the  right,  upon not less than three  Business  Days'  notice to the
Administrative  Agent  (which  shall  promptly  notify  each  of  the  Revolving
Lenders),  to terminate  the  Revolving  Commitments  or, from time to time,  to
reduce  the  amount  of  the  Revolving  Commitments;   provided  that  no  such
termination or reduction of Revolving  Commitments  shall be permitted if, after
giving  effect  thereto  and  to any  prepayments  of the  Revolving  Loans  and
Swingline  Loans  made  on the  effective  date  thereof,  the  Total  Aggregate
Committed  Outstandings would exceed the Total Revolving  Commitments.  Any such
reduction  shall  be in an  amount  equal  to  $1,000,000,  or a whole  multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.

            2.10 Repayment of Revolving Loans; Evidence of Debt. () The Borrower
hereby  unconditionally  promises  to pay to the  Administrative  Agent  for the
account of the appropriate  Revolving Lender the then unpaid principal amount of
its Revolving  Loans on the Revolving  Termination  Date and on such other dates
and in such other  amounts as may be required from time to time pursuant to this
Agreement.  The  Borrower  hereby  further  agrees to pay interest on the unpaid
principal  amount of the  Revolving  Loans from time to time  outstanding  until
payment thereof in full at the rates per annum,  and on the dates,  set forth in
Section 4.1.

             (b) Each  Revolving  Lender shall  maintain in accordance  with its
usual practice an account or accounts  evidencing  indebtedness  of the Borrower
resulting from each  Revolving Loan made by it from time to time,  including the
amounts of  principal  and interest  payable  thereon and paid from time to time
under this Agreement.

             (c) The  Administrative  Agent shall maintain the Register pursuant
to Section 11.6(d), and a subaccount therein for each Revolving Lender, in which
shall be recorded () the date and amount of each Revolving Loan made  hereunder,
() the date and amount of any principal or interest due and payable or to become
due and payable from the Borrower  hereunder in respect of the  Revolving  Loans
and () both the date and amount of any sum received by the Administrative  Agent
hereunder from the Borrower in respect of the Revolving Loans and each Revolving
Lender's share thereof.

             (d) The  entries  made in the  Register  and the  accounts  of each
Revolving Lender  maintained  pursuant to this Section 2.10 shall, to the extent
permitted  by  applicable  law, be prima facie  evidence  of the  existence  and
amounts of the obligations of the Borrower therein recorded;  provided, however,
that the failure of any Revolving Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein,  shall not in any manner
affect the  obligation of the Borrower to repay (with  applicable  interest) the
Revolving Loans made to the Borrower by each Revolving Lender in accordance with
the terms of this  Agreement.  Any  discrepancy  between  the  Register  and the
account of any Lender with  respect to any amounts  owed by the Borrower to such
Lender or paid by the  Borrower  to such  Lender  shall be settled  between  the
Administrative Agent and such Lender.

             (e)  The   Borrower   agrees   that,   upon  the   request  to  the
Administrative  Agent by any  Revolving  Lender,  the Borrower  will execute and
deliver to such Revolving  Lender a promissory  note of the Borrower  evidencing
any Revolving  Loans of such Lender,  substantially  in the form of Exhibit H-2,
with appropriate insertions as to date and principal amount.

            2.11 Redenomination and Alternative Currencies Each obligation under
this  Agreement of a party to this Agreement  which has been  denominated in the
National Currency Unit of a Subsequent  Participant shall be redenominated  into
the  euro  unit  in  accordance  with  EMU  legislation  immediately  upon  such
Subsequent  Participant  becoming a Participating Member State (but otherwise in
accordance with EMU Legislation).

SECTION 3.  LETTERS OF CREDIT

             3.1 L/C Commitment.  () Subject to the terms and conditions hereof,
each  Issuing  Lender,  in reliance  on the  agreements  of the other  Revolving
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("Letters
of Credit")  for the  account of the  Borrower  on any  Business  Day during the
Revolving Commitment Period in such form as may be approved from time to time by
such Issuing  Lender;  provided that no Issuing Lender shall issue any Letter of
Credit if, after giving effect to such issuance,  () the L/C  Obligations  would
exceed the L/C Commitment or () the aggregate amount of the Available  Revolving
Commitments  would  be less  than  zero.  Each  Letter  of  Credit  shall  () be
denominated in Dollars or an Available Foreign  Currency,  () have a face amount
in  Dollars  or of the  U.S.  Dollar  Equivalent  of at  least  $50,000  (unless
otherwise agreed by such Issuing Lender) and () expire no later than the earlier
of (x) the first  anniversary  of its date of issuance  and (y) the date that is
five Business Days prior to the Revolving  Termination  Date,  provided that any
Letter of Credit with a one-year  term may  provide for the renewal  thereof for
additional  one-year  periods  (which shall in no event  extend  beyond the date
referred to in clause (y) above).

             (b) No Issuing  Lender  shall at any time be obligated to issue any
Letter of Credit  hereunder if such issuance  would conflict with, or cause such
Issuing  Lender or any L/C  Participant  to exceed  any limits  imposed  by, any
applicable Requirement of Law.

             3.2  Procedure  for Issuance of Letter of Credit.  The Borrower may
from time to time  request  that an Issuing  Lender  issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor,  completed to the satisfaction of such Issuing Lender, and
such other  certificates,  documents  and other papers and  information  as such
Issuing  Lender may  reasonably  request.  Upon receipt of any  Application,  an
Issuing Lender will process such Application and the certificates, documents and
other  papers  and  information  delivered  to it  in  connection  therewith  in
accordance with its customary  procedures and shall promptly issue the Letter of
Credit  requested  thereby (but in no event shall any Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information  relating thereto) by issuing the original of such Letter
of Credit to the  beneficiary  thereof or as otherwise  may be agreed to by such
Issuing  Lender and the Borrower.  The relevant  Issuing  Lender shall furnish a
copy of such Letter of Credit to the Borrower  promptly  following  the issuance
thereof.   The  relevant   Issuing   Lender  shall   promptly   furnish  to  the
Administrative  Agent,  which  shall in turn  promptly  furnish to the  Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).

             3.3 Fees and Other  Charges.  () The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar  Loans or  Eurocurrency  Loans, as the
case may be, under the Revolving  Facility,  shared  ratably among the Revolving
Lenders and payable  quarterly in arrears on each L/C Fee Payment Date after the
issuance  date.  In  addition,  the Borrower  shall pay to the relevant  Issuing
Lender for its own account a fronting  fee of 0.25% per annum on the undrawn and
unexpired amount of each Letter of Credit,  payable quarterly in arrears on each
L/C Fee Payment Date after the Issuance Date of any such Letter of Credit.

             (b) In addition to the foregoing  fees,  the Borrower  shall pay or
reimburse each Issuing  Lender for such normal and customary  costs and expenses
as are  incurred  or charged by such  Issuing  Lender in  issuing,  negotiating,
effecting  payment  under,  amending or  otherwise  administering  any Letter of
Credit.

            3.4 L/C Participations. () Each Issuing Lender irrevocably agrees to
grant and hereby  grants to each L/C  Participant,  and, to induce each  Issuing
Lender to issue Letters of Credit  hereunder,  each L/C Participant  irrevocably
agrees to accept and purchase and hereby accepts and purchases from each Issuing
Lender,  on  the  terms  and  conditions   hereinafter   stated,  for  such  L/C
Participant's  own  account  and risk an  undivided  interest  equal to such L/C
Participant's  Revolving  Percentage in each Issuing  Lender's  obligations  and
rights  under and in respect  of each  Letter of Credit  issued by such  Issuing
Lender  hereunder  and the  amount of each  draft  paid by such  Issuing  Lender
thereunder.  Each L/C Participant  unconditionally  and irrevocably  agrees with
each Issuing  Lender that,  if a draft is paid under any Letter of Credit issued
by such Issuing  Lender for which such Issuing  Lender is not reimbursed in full
by the  Borrower  in  accordance  with  the  terms of this  Agreement,  such L/C
Participant  shall  pay to such  Issuing  Lender  upon  demand  at such  Issuing
Lender's address for notices  specified herein an amount in the currency of such
Letter of Credit equal to such L/C  Participant's  Revolving  Percentage  of the
amount of such draft, or any part thereof, that is not so reimbursed.

            (b) If any amount  required to be paid by any L/C  Participant to an
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Lender under any Letter of Credit is paid to
such Issuing  Lender  within three  Business Days after the date such payment is
due, such L/C  Participant  shall pay to such Issuing Lender on demand an amount
equal to the product of () such amount, times () the daily average Federal Funds
Effective  Rate (or, if such payment is in an Available  Foreign  Currency,  the
then  current  rate in such  Available  Foreign  Currency  as is used to  settle
short-term  obligations  between  banks,  as determined  by the Issuing  Lender)
during the period from and  including  the date such  payment is required to the
date on which such payment is  immediately  available  to such  Issuing  Lender,
times () a fraction  the  numerator  of which is the number of days that  elapse
during  such  period and the  denominator  of which is 360.  If any such  amount
required to be paid by any L/C  Participant  pursuant  to Section  3.4(a) is not
made  available  to such  Issuing  Lender by such L/C  Participant  within three
Business Days after the date such payment is due,  such Issuing  Lender shall be
entitled  to recover  from such L/C  Participant,  on demand,  such  amount with
interest thereon  calculated from such due date at the rate per annum applicable
to ABR  Loans  under  the  Revolving  Facility  (or,  if such  payment  is in an
Available  Foreign  Currency,  the then current rate in such  Available  Foreign
Currency  as  is  used  to  settle  short-term  obligations  between  banks,  as
determined by the Issuing  Lender) plus 2%. A certificate of such Issuing Lender
submitted to any L/C  Participant  with respect to any amounts  owing under this
Section shall be conclusive in the absence of manifest error.

             (c) Whenever,  at any time after an Issuing Lender has made payment
under any Letter of Credit and has  received  from any L/C  Participant  its pro
rata share of such  payment in  accordance  with  Section  3.4(a),  such Issuing
Lender receives any payment  related to such Letter of Credit (whether  directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing  Lender),  or any payment of interest on account  thereof,  such
Issuing  Lender  will  distribute  to such L/C  Participant  its pro rata  share
thereof; provided,  however, that in the event that any such payment received by
such Issuing  Lender  shall be required to be returned by such  Issuing  Lender,
such L/C  Participant  shall  return to the Issuing  Lender the portion  thereof
previously distributed by such Issuing Lender to it.

            3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse each Issuing Lender on each date on which such Issuing Lender notifies
the  Borrower  of the date and amount of a draft  presented  under any Letter of
Credit and paid by such  Issuing  Lender for the amount of () such draft so paid
and () any taxes,  fees,  charges or other  costs or  expenses  incurred by such
Issuing Lender in connection with such payment.  Each such payment shall be made
to such Issuing Lender at its relevant  Lending  Installation in the currency in
which  the  relevant  Letter  of  Credit  was  issued  in  lawful  money  and in
immediately  available  funds.  Interest shall be payable on any and all amounts
remaining  unpaid by the Borrower  under this Section from the date such amounts
become payable (whether at stated maturity,  by acceleration or otherwise) until
payment  in full at the rate  set  forth in () until  the  second  Business  Day
following the date of the applicable drawing, Section 4.1(b) (or, in the case of
any such amount  outstanding in an Available  Foreign  Currency,  Section 4.1(d)
minus 2%) and () thereafter, Section 4.1(d).

              3.6 Obligations  Absolute.  The Borrower's  obligations under this
Section 3 shall be absolute and  unconditional  under any and all  circumstances
and  irrespective  of any setoff,  counterclaim  or defense to payment  that the
Borrower may have or have had against an Issuing  Lender,  any  beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with each Issuing
Lender that such Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement  Obligations  under  Section 3.5 shall not be affected  by,  among
other things,  the validity or genuineness  of documents or of any  endorsements
thereon,  even  though  such  documents  shall  in  fact  prove  to be  invalid,
fraudulent  or forged,  or any  dispute  between or among the  Borrower  and any
beneficiary  of any Letter of Credit or any other  party to which such Letter of
Credit may be transferred or any claims  whatsoever of the Borrower  against any
beneficiary of such Letter of Credit or any such  transferee.  No Issuing Lender
shall be liable for any error, omission,  interruption or delay in transmission,
dispatch  or  delivery  of  any  message  or  advice,  however  transmitted,  in
connection with any Letter of Credit,  except for errors or omissions found by a
final and  nonappealable  decision of a court of competent  jurisdiction to have
resulted from the gross negligence or willful misconduct of such Issuing Lender.
The Borrower  agrees that any action taken or omitted by an Issuing Lender under
or in connection  with any Letter of Credit or the related  drafts or documents,
if  done in the  absence  of  gross  negligence  or  willful  misconduct  and in
accordance  with the standards of care specified in the Uniform  Commercial Code
of the State of New York,  shall be binding on the Borrower and shall not result
in any liability of such Issuing Lender to the Borrower.

            3.7 Letter of Credit  Payments.  If any draft shall be presented for
payment under any Letter of Credit,  the relevant  Issuing Lender shall promptly
notify the Borrower of the date and amount thereof.  The  responsibility  of the
relevant  Issuing Lender to the Borrower in connection  with any draft presented
for  payment  under any  Letter of Credit  shall,  in  addition  to any  payment
obligation  expressly  provided  for in such  Letter of  Credit,  be  limited to
determining  that the  documents  (including  each draft)  delivered  under such
Letter of Credit  in  connection  with such  presentment  are  substantially  in
conformity with such Letter of Credit.

             3.8  Applications.   To  the  extent  that  any  provision  of  any
Application  related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.

SECTION 4. GENERAL PROVISIONS APPLICABLE TO THE LOANS

             4.1 Interest Rates and Payment Dates. () Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the  Eurodollar  Rate  determined  for such day plus the
Applicable Margin.

             (b) Each ABR Loan shall bear  interest at a rate per annum equal to
the ABR plus the Applicable Margin.

             (c) Each  Multicurrency  Loan shall bear  interest  (payable in the
Available Foreign Currency in which such  Multicurrency Loan is denominated) for
each day during each  Interest  Period with respect  thereto at a rate per annum
equal to the applicable  Eurocurrency Rate or the  Multicurrency  Swingline Loan
Rate,  as the  case  may be,  determined  for  such  Interest  Period  plus  the
Applicable Margin in effect for such day.

             (d) (i) If all or a portion of the principal  amount of any Loan or
Reimbursement  Obligation  shall not be paid  when due  (whether  at the  stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations  (whether or not  overdue)  shall bear  interest at a rate per annum
equal to (x) in the case of the Loans in Dollars,  the rate that would otherwise
be applicable thereto pursuant to the foregoing  provisions of this Section plus
2%, (y) in the case of Reimbursement Obligations in Dollars, the rate applicable
to ABR  Loans  plus  2% or  (z)  in the  case  of  any  Loans  or  Reimbursement
Obligations in an Available  Foreign Currency,  the Multicurrency  Default Rate,
and () if  all or a  portion  of  any  interest  payable  on  (x)  any  Loan  or
Reimbursement  Obligation  or any  commitment  fee or other  amount  payable  in
Dollars hereunder shall not be paid when due (whether at the stated maturity, by
acceleration  or  otherwise),  such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to ABR Loans plus 2% or (y) any Loan
or Reimbursement  Obligation  payable in an Available Foreign Currency shall not
be paid when due, such overdue  amount shall bear interest at the  Multicurrency
Default Rate (or, in the case of any such other  amounts that do not relate to a
particular  Facility,  the rate then applicable to ABR Loans under the Revolving
Facility  plus 2%),  in each case,  with  respect to clauses (i) and (ii) above,
from the date of such  non-payment  until  such  amount is paid in full (as well
after as before judgment).

             (e) Interest  shall be payable in arrears on each Interest  Payment
Date,  provided that interest accruing pursuant to paragraph (d) of this Section
shall be payable from time to time on demand.

             4.2  Computation of Interest and Fees. () Interest and fees payable
pursuant  hereto  shall be  calculated  on the basis of a  360-day  year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate and Loans  denominated  in
Pounds Sterling, the interest thereon shall be calculated on the basis of a 365-
(or  366-,  as the  case  may be) day  year for the  actual  days  elapsed.  The
Administrative  Agent shall as soon as  practicable  notify the Borrower and the
relevant  Lenders of each  determination  of a Eurodollar  Rate or  Eurocurrency
Rate.  Any change in the interest rate on a Loan  resulting from a change in the
ABR or the Eurocurrency  Reserve  Requirements  shall become effective as of the
opening of  business  on the day on which such  change  becomes  effective.  The
Administrative  Agent shall as soon as  practicable  notify the Borrower and the
relevant  Lenders of the  effective  date and the amount of each such  change in
interest rate.

             (b) Each  determination  of an interest rate by the  Administrative
Agent  pursuant to any  provision  of this  Agreement  shall be  conclusive  and
binding on the  Borrower and the Lenders in the absence of manifest  error.  The
Administrative  Agent  shall,  at the  request of the  Borrower,  deliver to the
Borrower a statement showing the quotations used by the Administrative  Agent in
determining any interest rate pursuant to Sections 4.1(a) and (c).

             (c) (i) If the Multicurrency  Reference Lender shall for any reason
no  longer  have  a  Revolving   Commitment  or  any  Multicurrency  Loans,  the
Multicurrency  Reference  Lender shall thereupon  cease to be the  Multicurrency
Reference  Lender and the  Administrative  Agent  (after  consultation  with the
Borrower and the  Revolving  Lenders)  shall,  by notice to the Borrower and the
Lenders,  designate  another  Revolving  Lender as the  Multicurrency  Reference
Lender.

              (ii) The Multicurrency Reference Lender shall use its best efforts
to  furnish  quotations  of rates to the  Administrative  Agent as  contemplated
hereby. If the Multicurrency Reference Lender shall be unable or shall otherwise
fail to supply such rates to the Administrative Agent upon its request, the rate
of interest  shall,  subject to the  provisions of Section 4.3, be determined by
the Administrative Agent in consultation with the Borrower.

             4.3  Inability to Determine Interest Rate.  If prior to the
first day of any Interest Period:

     (a) the  Administrative  Agent shall have determined  (which  determination
shall  be  conclusive  and  binding  upon  the  Borrower)  that,  by  reason  of
circumstances  affecting the relevant  market,  adequate and reasonable means do
not exist for  ascertaining  the Eurodollar Rate or the  Eurocurrency  Rate with
respect to the currency in which a Loan or a requested Loan is denominated  (the
"Affected Currency"), as the case may be, for such Interest Period, or

     (b) the  Administrative  Agent shall have received notice from the Majority
Facility Lenders in respect of the relevant Facility that the Eurodollar Rate or
the Eurocurrency  Rate, as the case may be,  determined or to be determined with
respect to any Affected  Currency for such Interest  Period will not  adequately
and fairly reflect the cost to such Lenders (as  conclusively  certified by such
Lenders) of making or  maintaining  their  affected  Loans during such  Interest
Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant  Lenders as soon as  practicable  thereafter.  If such
notice is given (w) any Eurodollar Loans or Multicurrency Loans, as the case may
be,  under the relevant  Facility  requested to be made on the first day of such
Interest  Period shall be made as ABR Loans in Dollars,  (x) any Loans under the
relevant  Facility  that  were to have been  converted  on the first day of such
Interest Period to Eurodollar  Loans shall be converted into or continued as ABR
Loans, (y) any outstanding Eurodollar Loans under the relevant Facility shall be
converted, on the last day of the then-current Interest Period, to ABR Loans and
(z) () any  Multicurrency  Revolving Loans to which such Interest Period relates
shall be repaid on the last day of the then current  Interest  Period and () any
Multicurrency  Term  Loans  shall  bear  interest  at a rate  determined  by the
Administrative  Agent as the rate at which the Lenders can  reasonably  fund the
Multicurrency  Term Loans for such Interest  Period plus the Applicable  Margin.
Until such notice has been  withdrawn by the  Administrative  Agent,  no further
Eurodollar  Loans or  Multicurrency  Loans under the relevant  Facility shall be
made or  continued  as such,  nor shall the  Borrower  have the right to convert
Loans under the  relevant  Facility  to  Eurodollar  Loans,  as the case may be,
provided that Loans may continue to be made, converted or continued, as the case
may be, in Dollars  or  Available  Foreign  Currencies  other than the  Affected
Currency.

             4.4 Optional Prepayments.  () The Borrower may at any time and from
time to time prepay the Dollar Loans,  in whole or in part,  without  premium or
penalty,  upon irrevocable notice delivered to the Administrative Agent at least
three  Business Days prior thereto in the case of Eurodollar  Loans and at least
one  Business  Day prior  thereto in the case of ABR Loans  (or,  in the case of
Dollar  Swingline  Loans,  on the date of such  prepayment),  which notice shall
specify  the date and amount of  prepayment  and whether  the  prepayment  is of
Eurodollar Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable  thereto,  the
Borrower shall also pay any amounts owing pursuant to Section 4.11. Upon receipt
of any such notice the Administrative  Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Dollar  Revolving Loans that are ABR Loans) accrued interest to such
date on the amount prepaid.  Partial prepayments of Dollar Term Loans and Dollar
Revolving  Loans shall be in an aggregate  principal  amount of  $1,000,000 or a
whole multiple  thereof and partial  prepayments of Dollar Swingline Loans shall
be in an aggregate principal amount of $100,000 or a whole multiple thereof.

             (b) The  Borrower  may at any time and  from  time to time  prepay,
without premium or penalty,  the Multicurrency  Loans, in whole or in part, upon
at least three Business Days'  irrevocable  notice to the  Administrative  Agent
(or,  in the  case  of  Multicurrency  Swingline  Loans,  on the  date  of  such
prepayment)  specifying the date and amount of prepayment;  provided,  that if a
Multicurrency Loan is prepaid on any day other than the last day of the Interest
Period  applicable  thereto,  the  Borrower  shall  also pay any  amounts  owing
pursuant  to  Section   4.11.   Upon  the  receipt  of  any  such  notice,   the
Administrative Agent shall promptly notify each Revolving Lender or Term Lender,
as the case may be, thereof.  If any such notice is given,  the amount specified
in such notice shall be due and payable on the date specified  therein.  Partial
prepayments of Multicurrency Term Loans and Multicurrency  Revolving Loans shall
be in an aggregate  principal  amount of which the U.S. Dollar  Equivalent is at
least $1,000,000 and partial prepayments of Multicurrency  Swingline Loans shall
be in an  aggregate  principal  amount of which the U.S.  Dollar  Equivalent  is
$100,000 or a whole multiple thereof.

            4.5 Mandatory Prepayments and Commitment  Reductions.  () If, at any
time  during the  Revolving  Commitment  Period,  for any  reason the  Aggregate
Committed  Outstandings  of all  Revolving  Lenders  exceed the Total  Revolving
Commitments  then in  effect,  the  Borrower  shall,  without  notice or demand,
immediately prepay the Revolving Loans such that the aggregate  principal amount
of the Revolving  Loans so prepaid  equals or exceeds the amount of such excess.
The  Borrower  will  implement  and  maintain  internal  controls to monitor the
borrowings and repayments of Revolving Loans by the Borrower and the issuance of
and drawings under Letters of Credit,  with the object of preventing any request
for an  extension  of  credit  that  would  result  in the  Aggregate  Committed
Outstandings being in excess of the Total Revolving  Commitments then in effect,
and of promptly  identifying and remedying any circumstance  where, by reason of
changes in exchange rates, the Aggregate Committed Outstandings (made in Dollars
or in any  Available  Foreign  Currency)  with  respect  to  all of the  Lenders
(including the Swingline Lender) exceeds the Total Revolving Commitments then in
effect.  The  Administrative   Agent  will  calculate  the  Aggregate  Committed
Outstandings  (including any portion made in an Available Foreign Currency) with
respect to all of the Lenders (including the Swingline Lender) from time to time
and, in any event,  not less frequently than at the end of each Interest Period.
In  making  such  calculations,  the  Administrative  Agent  will  rely  on  the
information most recently received by it from the Swingline Lender in respect of
outstanding  Swingline  Loans and from each of the Issuing Lenders in respect of
the outstanding L/C Obligations.

              (b) If  any  Indebtedness  shall  be  issued  or  incurred  by the
Borrower or any of its  Subsidiaries  (excluding  any  Indebtedness  incurred in
accordance  with Section 8.2 as in effect on the date hereof) and the Borrower's
Consolidated  Leverage  Ratio after giving effect to such  incurrence is greater
than 3.00 to 1.00,  an  amount  equal to 100% of the Net Cash  Proceeds  thereof
shall be applied on the date of such  incurrence  toward the  prepayment  of the
Term  Loans  and the  reduction  of the  Revolving  Commitments  as set forth in
Section 4.5(h).

             (c) If any Capital Stock of the Borrower shall be sold or issued by
the Borrower (other than in connection with (x) any Permitted  Acquisition,  (y)
options  exercisable  for the  purchase  of Capital  Stock  issued to  officers,
employees,  directors or  consultants  of the Borrower and (z) conversion of the
Subordinated  Notes into common stock of the Borrower in  accordance  with their
terms) and the  Borrower's  Consolidated  Leverage  Ratio after giving effect to
such issuance and the use of proceeds therefrom is greater than 3.00 to 1.00, an
amount equal to 100% of the Net Cash  Proceeds  thereof  shall be applied on the
date of such sale or issuance  toward the  prepayment  of the Term Loans and the
reduction of the Revolving Commitments as set forth in Section 4.5(h).

             (d) If on any date the  Borrower or any of its  Subsidiaries  shall
receive  Net Cash  Proceeds  from  any  Asset  Sale or  Recovery  Event  and the
Borrower's  Consolidated  Leverage  Ratio after giving effect thereto and to the
use of  proceeds  therefrom  is  greater  than  3.00  to  1.00  then,  unless  a
Reinvestment  Notice  shall  be  delivered  in  respect  thereof,  such Net Cash
Proceeds  shall be applied on such date toward the  prepayment of the Term Loans
and the reduction of the Revolving  Commitments as set forth in Section  4.5(h);
provided,  that,  notwithstanding  the  foregoing,  () the  aggregate  Net  Cash
Proceeds  of Asset  Sales and  Recovery  Events  that may be  excluded  from the
foregoing  requirement  pursuant  to a  Reinvestment  Notice  shall  not  exceed
$15,000,000  in any  fiscal  year of the  Borrower  and () on each  Reinvestment
Prepayment  Date,  an amount equal to the  Reinvestment  Prepayment  Amount with
respect  to  the  relevant  Reinvestment  Event  shall  be  applied  toward  the
prepayment of the Term Loans and the reduction of the Revolving  Commitments  as
set forth in Section 4.5(h).

             (e) If, for any fiscal year of the Borrower,  there shall be Excess
Cash Flow and the Borrower's Consolidated Leverage Ratio is greater than 3.00 to
1.00, the Borrower  shall, on the relevant  Excess Cash Flow  Application  Date,
apply 50% of such Excess Cash Flow toward the  prepayment  of the Term Loans and
the reduction of the Revolving  Commitments as set forth in Section 4.5(h). Each
such  prepayment  and commitment  reduction  shall be made on a date (an "Excess
Cash Flow Application Date") no later than five days after the earlier of () the
date on which the financial  statements  of the Borrower  referred to in Section
7.1(a),  for the fiscal year with respect to which such  prepayment is made, are
required  to be  delivered  to  the  Lenders  and  () the  date  such  financial
statements are actually delivered.

             (f)  Notwithstanding  anything to the contrary contained herein, in
the event that at least  $108,000,000  of the  Subordinated  Notes have not been
converted into shares of the Borrower's  common stock pursuant to their terms by
June 30,  2005,  then,  on such  date,  the Loans  (including  accrued  interest
thereon) of each Lender and all other amounts owing under this Agreement and the
other Loan Documents  (including all amounts of L/C Obligations,  whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required  thereunder) shall  automatically  become immediately due
and payable and the Revolving  Commitments  shall  immediately  terminate.  With
respect to all Letters of Credit  with  respect to which  presentment  for honor
shall  not  have  occurred  at the  time  of an  acceleration  pursuant  to this
paragraph,  the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and  unexpired  amount of such  Letters  of  Credit.  Amounts  held in such cash
collateral account shall be applied by the Administrative Agent to reimburse the
relevant  Issuing  Lender for the payment of drafts  drawn under such Letters of
Credit,  and the unused  portion  thereof after all such Letters of Credit shall
have expired or been fully drawn upon,  if any,  shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents.  After
all such  Letters of Credit  shall have  expired or been fully drawn  upon,  all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower  hereunder and under the other Loan Documents  shall have been paid
in full, the balance,  if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).

             (g)  Notwithstanding  the  foregoing,   mandatory   prepayments  of
Multicurrency  Loans that would  otherwise be required  pursuant to this Section
4.5 solely as a result of fluctuations in Exchange Rates from time to time shall
only be required to be made  pursuant to this  Section 4.5 on the last  Business
Day of each month on the basis of the Exchange  Rate in effect on such  Business
Day.

             (h) Subject to Section 4.5(a),  amounts to be applied in connection
with  prepayments  and  Revolving  Commitment  reductions  made pursuant to this
Section 4.5 shall be applied,  first,  to the  prepayment of the Term Loans and,
second, to reduce permanently the Revolving  Commitments.  Any such reduction of
the  Revolving  Commitments  shall be  accompanied  by  prepayment of the Dollar
Revolving Loans and/or Dollar Swingline  Loans, or, if the Borrower elects,  the
Multicurrency  Revolving  Loans to the extent,  if any, that the Total Aggregate
Committed  Outstandings exceed the amount of the Total Revolving  Commitments as
so reduced,  provided that if the aggregate  principal amount of Revolving Loans
and  Swingline  Loans then  outstanding  is less than the amount of such  excess
(because L/C Obligations  constitute a portion thereof),  the Borrower shall, to
the extent of the balance of such excess,  replace outstanding Letters of Credit
and/or deposit an amount in cash in a cash collateral  account  established with
the Administrative  Agent for the benefit of the Lenders on terms and conditions
satisfactory to the Administrative  Agent. Any such prepayment of the Term Loans
shall  be made to the  Dollar  Term  Loans,  or,  if the  Borrower  elects,  the
Multicurrency Term Loans. The application of any prepayment of Dollar Term Loans
or Dollar  Revolving Loans pursuant to Section 4.5 shall be made,  first, to ABR
Loans and,  second,  to  Eurodollar  Loans.  Each  prepayment of the Loans under
Section 4.5 (except in the case of Dollar Revolving Loans that are ABR Loans and
Swingline  Loans) shall be accompanied  by accrued  interest to the date of such
prepayment on the amount prepaid.

             (i)  Notwithstanding  anything  to  the  contrary  herein,  if  the
information  with  respect to the Target and its  Subsidiaries  contained in the
financial  statements  delivered to the Administrative Agent pursuant to Section
7.1(c) is materially  adversely different from the information  contained in the
financial  statements  delivered  pursuant to Section  6.1(c) as  specified in a
notice from the  Administrative  Agent to the Borrower to such effect,  then the
Term  Loans  automatically  become  immediately  due and  payable  and the  Term
Commitments shall immediately terminate.

             4.6 Conversion and Continuation  Options. () The Borrower may elect
from  time to time to  convert  Eurodollar  Loans  to ABR  Loans by  giving  the
Administrative  Agent at least two Business  Days' prior  irrevocable  notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest  Period with respect  thereto.  The Borrower
may elect from time to time to convert ABR Loans to  Eurodollar  Loans by giving
the Administrative  Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial  Interest
Period therefor),  provided that no ABR Loan under a particular  Facility may be
converted  into a Eurodollar  Loan when any Event of Default has occurred and is
continuing and the Administrative  Agent has or the Majority Facility Lenders in
respect of such Facility have  determined in its or their sole discretion not to
permit such  conversions.  Upon  receipt of any such  notice the  Administrative
Agent shall promptly notify each relevant Lender thereof.

             (b)  Any  Eurodollar  Loan  may  be  continued  as  such  upon  the
expiration  of the then  current  Interest  Period with  respect  thereto by the
Borrower  giving no less than three Business Days' prior  irrevocable  notice to
the  Administrative  Agent, in accordance with the applicable  provisions of the
term  "Interest  Period"  set forth in  Section  1.1,  of the length of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
under a  particular  Facility may be continued as such when any Event of Default
has occurred and is continuing and the Administrative  Agent has or the Majority
Facility  Lenders in respect of such  Facility  have  determined in its or their
sole discretion not to permit such continuations, and provided, further, that if
the Borrower shall fail to give any required  notice as described  above in this
paragraph or if such  continuation  is not  permitted  pursuant to the preceding
proviso such Loans shall be automatically converted to ABR Loans on the last day
of such then  expiring  Interest  Period.  Upon  receipt of any such  notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

             (c) Any  Multicurrency  Loan  may be  continued  as such  upon  the
expiration  of the then  current  Interest  Period with  respect  thereto by the
Borrower  giving the  Administrative  Agent at least three  Business Days' prior
irrevocable notice of such election,  provided,  that if the Borrower shall fail
to give such notice or if any Event of Default has  occurred  and is  continuing
and the  Administrative  Agent has or the Required  Lenders have determined that
such  continuation  would not be  appropriate,  such  Multicurrency  Loans shall
automatically be continued for an Interest Period of one month.  Upon receipt of
any such notice the  Administrative  Agent shall  promptly  notify each relevant
Lender thereof.

            4.7  Limitations  on  Tranches.   Notwithstanding  anything  to  the
contrary in this Agreement,  all borrowings,  conversions and  continuations  of
Loans  hereunder and all selections of Interest  Periods  hereunder  shall be in
such amounts and be made pursuant to such  elections so that, () () after giving
effect  thereto,   the  aggregate  principal  amount  of  the  Eurodollar  Loans
comprising  each  Eurodollar  Tranche  shall be equal to  $5,000,000  or a whole
multiple of  $1,000,000  in excess  thereof  and () no more than ten  Eurodollar
Tranches  shall be  outstanding  at any one time and () the aggregate  principal
amount of the Multicurrency  Loans comprising each Tranche shall be in an amount
of which the U.S. Dollar Equivalent is at least $2,500,000.

            4.8 Pro  Rata  Treatment  and  Payments.  () Each  borrowing  by the
Borrower from the Lenders hereunder (other than in the case of Swingline Loans),
each payment by the Borrower on account of any  commitment fee and any reduction
of the  Commitments  of the  Lenders  shall be made pro  rata  according  to the
respective Term Percentages or Revolving Percentages, as the case may be, of the
relevant Lenders.

             (b) Each payment  (including  each  prepayment)  by the Borrower on
account of  principal  of and  interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders.  The amount of each  principal  prepayment of the Term
Loans  shall be applied to reduce the then  remaining  installments  of the Term
Loans pro rata based upon the then remaining  principal amount thereof.  Amounts
prepaid on account of the Term Loans may not be reborrowed.

             (c) Each payment  (including  each  prepayment)  by the Borrower on
account of principal of and  interest on the  Revolving  Loans shall be made pro
rata according to the respective  outstanding principal amounts of the Revolving
Loans  then  held  by  the  Revolving  Lenders.   Each  payment  in  respect  of
Reimbursement  Obligations  in respect of any Letter of Credit  shall be made to
the Issuing Lender that issued such Letter of Credit.

             (d) All payments (including prepayments) to be made by the Borrower
hereunder in respect of amounts  denominated  in Dollars,  whether on account of
principal,  interest,  fees or  otherwise,  shall  be  made  without  setoff  or
counterclaim  and shall be made prior to 12:00 Noon,  Charlotte,  North Carolina
time, on the due date thereof to the  Administrative  Agent,  for the account of
the Lenders,  at the Funding  Office,  in Dollars and in  immediately  available
funds.  The  Administrative  Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received.

             (e) All payments (including prepayments) to be made by the Borrower
on account of Multicurrency  Loans  hereunder,  whether on account of principal,
interest,  fees or otherwise,  shall be made without setoff or counterclaim  and
shall be made prior to 12:00  Noon,  London time (or, in the case of payments in
euro  units,  12:00  Noon,  Frankfurt  time),  on the due  date  thereof  to the
Administrative  Agent, for the account of the Lenders, at the payment office for
the  currency of such  Multicurrency  Loans  specified  from time to time by the
Administrative  Agent  by  notice  to the  Borrower,  in the  currency  of  such
Multicurrency Loans and in immediately available funds. The Administrative Agent
shall  distribute  such  payments  to the  Lenders  entitled to receive the same
promptly upon receipt in like funds as received.

             (f) If any payment hereunder (other than payments on the Eurodollar
Loans or  Multicurrency  Loans)  becomes  due and  payable on a day other than a
Business  Day, such payment  shall be extended to the next  succeeding  Business
Day. If any payment on a Eurodollar Loan or a Multicurrency Loan becomes due and
payable  on a day other than a  Business  Day,  the  maturity  thereof  shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately  preceding Business Day. In the case of
any  extension  of any  payment  of  principal  pursuant  to the  preceding  two
sentences,  interest thereon shall be payable at the then applicable rate during
such extension.

             (g)  A   payment   shall  be  deemed  to  have  been  made  by  the
Administrative  Agent on the date on which it is  required to be made under this
Agreement  if the  Administrative  Agent has, on or before that date,  taken all
relevant  steps to make that payment.  With respect to the payment of any amount
denominated  in euro,  the  Administrative  Agent  shall  not be  liable  to the
Borrower  or any of the  Lenders in any way  whatsoever  for any  delay,  or the
consequences  of any  delay,  in the  crediting  to any  account  of any  amount
required  by  this  Agreement  to be  paid by the  Administrative  Agent  if the
Administrative Agent shall have taken all relevant steps to achieve, on the date
required by this Agreement, the payment of such amount in immediately available,
freely transferable, cleared funds in the euro unit to the account with the bank
in the principal  financial center in the  Participating  Member State which the
Borrower  or, as the case may be,  any  Lender  shall  have  specified  for such
purpose. In this paragraph (g), "all relevant steps" means all such steps as may
be prescribed  from time to time by the  regulations or operating  procedures of
such clearing or settlement system as the Administrative  Agent may from time to
time determine for the purpose of clearing or settling payments of euro.

             (h) Unless the  Administrative  Agent  shall have been  notified in
writing by any Lender  prior to a  borrowing  that such Lender will not make the
amount  that  would  constitute  its share of such  borrowing  available  to the
Administrative  Agent, the  Administrative  Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such  assumption,  make  available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative  Agent, on demand,  such amount with interest thereon at a
rate equal to () the daily average  Federal Funds Effective Rate (in the case of
a  borrowing  of Dollar  Revolving  Loans or Dollar  Term Loans) and () the then
current  rate  in  the  relevant  currency  as  is  used  to  settle  short-term
obligations  between banks,  as determined by the  Administrative  Agent (in the
case of a borrowing of Multicurrency  Loans),  in each case for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the  Administrative  Agent submitted to any Lender with respect
to any amounts owing under this paragraph  shall be conclusive in the absence of
manifest  error.  If such Lender's share of such borrowing is not made available
to the  Administrative  Agent by such Lender within three  Business Days of such
Borrowing Date, the Administrative  Agent shall also be entitled to recover such
amount  (together  with  interest  thereon  from the date such  amount  was made
available  to the  Borrower  () at the rate per  annum  applicable  to ABR Loans
hereunder (in the case of a borrowing of Dollar  Revolving  Loans or Dollar Term
Loans) or () the Administrative Agent's reasonable estimate of its average daily
cost of funds plus the Applicable Margin  applicable to Multicurrency  Loans (in
the case of a borrowing of Multicurrency Loans)), on demand, from the Borrower.

             (i) Unless the  Administrative  Agent  shall have been  notified in
writing by the Borrower  prior to the date of any payment  being made  hereunder
that the Borrower will not make such payment to the  Administrative  Agent,  the
Administrative  Agent may assume that the Borrower is making such  payment,  and
the  Administrative  Agent may, but shall not be required  to, in reliance  upon
such assumption,  make available to the Lenders their respective pro rata shares
of a  corresponding  amount.  If such payment is not made to the  Administrative
Agent by the Borrower  within three  Business  Days of such required  date,  the
Administrative  Agent shall be entitled to recover,  on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such  amount with  interest  thereon () at the rate per annum equal to the daily
average Federal Funds Effective Rate (in the case of amounts payable in Dollars)
and () the then  current  rate in the  relevant  currency  as is used to  settle
short-term  obligations between banks, as determined by the Administrative Agent
(in the case of  amounts  payable in an  Available  Foreign  Currency).  Nothing
herein  shall be deemed to limit the rights of the  Administrative  Agent or any
Lender against the Borrower.

             (j) Any amount payable by the  Administrative  Agent to the Lenders
under this  Agreement in the currency of a  Participating  Member State shall be
paid in the euro unit.

             (k) If, in relation to the currency of any Subsequent  Participant,
the basis of  accrual of  interest  or fees  expressed  in this  Agreement  with
respect to such currency shall be  inconsistent  with any convention or practice
in the  London  Interbank  Market  or, as the case may be,  the Paris  Interbank
Market for the basis of accrual of interest or fees in respect of the euro, such
convention or practice  shall replace such expressed  basis  effective as of and
from the date on which  such  Subsequent  Participant  becomes  a  Participating
Member  State;  provided,  that if any Loan in the  currency of such  Subsequent
Participant  is outstanding  immediately  prior to such date,  such  replacement
shall take  effect,  with  respect to such Loan,  at the end of the then current
Interest Period.

             (l) Without  prejudice  and in addition to any method of conversion
or rounding  prescribed by any EMU legislation and (i) without  prejudice to the
respective  liabilities for  Indebtedness of the Borrower to the Lenders and the
Lenders to the  Borrower  under or pursuant to this  Agreement  and (ii) without
increasing the Revolving Commitment of any Lender:

     (i) the  Multicurrency  Loans and each  reference  in this  Agreement  to a
minimum  amount  (or  an  integral  multiple  thereof)  in a  national  currency
denomination of a Subsequent  Participant to be paid to or by the Administrative
Agent  shall,   immediately   upon  such  Subsequent   Participant   becoming  a
Participating  Member  State,  be  replaced by a  reference  to such  reasonably
comparable and convenient  amount (or an integral  multiple thereof) in the euro
unit as the Administrative Agent may from time to time specify; and

      (ii) except as expressly  provided in this Section 4.8, each  provision of
this Agreement  shall be subject to such  reasonable  changes of construction as
the  Administrative  Agent  may from time to time  specify  to be  necessary  or
appropriate  to reflect  the  adoption of the euro in any  Participating  Member
State and any relevant market conventions or practices relating to the euro.

             4.9 Requirements of Law. () If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive  (whether or not having the force of
law) from any central bank or other  Governmental  Authority made  subsequent to
the date hereof:

             (i) shall subject any Lender to any tax of any kind whatsoever with
respect  to this  Agreement,  any  Letter  of  Credit,  any  Application  or any
Eurodollar  Loan or  Multicurrency  Loan  made by it,  or  change  the  basis of
taxation of payments to such Lender in respect thereof (except for  Non-Excluded
Taxes and Other Taxes  covered by Section 4.10 and changes in the rate of tax on
the overall net income of such Lender);

             (ii) shall impose,  modify or hold applicable any reserve,  special
deposit, compulsory loan or similar requirement against assets held by, deposits
or  other  liabilities  in or for the  account  of,  advances,  loans  or  other
extensions  of credit  by, or any other  acquisition  of funds by, any office of
such  Lender  that  is  not  otherwise  included  in  the  determination  of the
Eurodollar  Rate  or  the  Eurocurrency  Rate  hereunder,   including,   without
limitation,  the  imposition  of  any  reserves  with  respect  to  Eurocurrency
Liabilities under Regulation D of the Board; or

                (i)  shall impose on such Lender any other condition;

and the result of any of the  foregoing  is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making,  converting into,
continuing or maintaining  Eurodollar Loans or Multicurrency Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender,  upon its demand,  any additional  amounts  necessary to compensate such
Lender for such  increased  cost or  reduced  amount  receivable.  If any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph,  it
shall promptly notify the Borrower (with a copy to the Administrative  Agent) of
the event by reason of which it has become so entitled.

             (ii) If any Lender  shall have  determined  that the adoption of or
any  change in any  Requirement  of Law  regarding  capital  adequacy  or in the
interpretation  or  application  thereof  or  compliance  by such  Lender or any
corporation  controlling  such Lender with any  request or  directive  regarding
capital adequacy  (whether or not having the force of law) from any Governmental
Authority  made  subsequent to the date hereof shall have the effect of reducing
the  rate  of  return  on  such  Lender's  or such  corporation's  capital  as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level  below that which such Lender or such  corporation  could have
achieved but for such adoption,  change or compliance (taking into consideration
such Lender's or such  corporation's  policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission  by such Lender to the  Borrower  (with a copy to the  Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional  amount or amounts as will compensate such Lender or such corporation
for such  reduction;  provided  that  the  Borrower  shall  not be  required  to
compensate a Lender  pursuant to this  paragraph  for any amounts  incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor; and provided further that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month  period  shall be extended  to include the period of such  retroactive
effect.

             (c) A certificate as to any additional  amounts payable pursuant to
this  Section  submitted  by any  Lender  to the  Borrower  (with  a copy to the
Administrative  Agent) shall be conclusive in the absence of manifest error. The
obligations  of  the  Borrower  pursuant  to  this  Section  shall  survive  the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

             4.10  Taxes.  (a) All  payments  made by the  Borrower  under  this
Agreement shall be made free and clear of, and without  deduction or withholding
for or on  account  of,  any  present or future  income,  stamp or other  taxes,
levies,  imposts,  duties,  charges,  fees,  deductions or withholdings,  now or
hereafter imposed, levied,  collected,  withheld or assessed by any Governmental
Authority,  excluding net income taxes and franchise  taxes  (imposed in lieu of
net income taxes) imposed on the Administrative  Agent or any Lender as a result
of a present  or former  connection  between  the  Administrative  Agent or such
Lender and the jurisdiction of the Governmental  Authority  imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such  connection  arising  solely from the  Administrative  Agent or such Lender
having  executed,  delivered or performed its  obligations or received a payment
under,  or enforced,  this  Agreement or any other Loan  Document).  If any such
non-excluded  taxes,  levies,  imposts,  duties,  charges,  fees,  deductions or
withholdings  ("Non-Excluded  Taxes") or Other Taxes are required to be withheld
from any amounts payable to the  Administrative  Agent or any Lender  hereunder,
the  amounts so  payable to the  Administrative  Agent or such  Lender  shall be
increased to the extent necessary to yield to the  Administrative  Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement,  provided,  however,  that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply(if  required)
with the  requirements  of paragraph  (d) of this  Section,(ii)  that are United
States  withholding  taxes imposed on amounts payable to such Lender at the time
such Lender  becomes a party to this  Agreement  or(iii) that are United  States
withholding  taxes imposed other than as a result of a change in any Requirement
of Law or the application or interpretation  thereof, except in the case of (ii)
or (iii) to the extent that such Lender's assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with respect
to such Non-Excluded Taxes pursuant to this paragraph .

             (b) In  addition,  the  Borrower  shall pay any Other  Taxes to the
relevant Governmental Authority in accordance with applicable law.

             (c) Whenever any  Non-Excluded  Taxes or Other Taxes are payable by
the Borrower,  as promptly as possible thereafter the Borrower shall send to the
Administrative  Agent for its own  account or for the  account  of the  relevant
Lender,  as the case may be, a certified  copy of an original  official  receipt
received by the Borrower showing payment  thereof.  If the Borrower fails to pay
any  Non-Excluded  Taxes  or Other  Taxes  when  due to the  appropriate  taxing
authority or fails to remit to the Administrative Agent the required receipts or
other  required   documentary   evidence,   the  Borrower  shall  indemnify  the
Administrative  Agent and the Lenders  for any  incremental  taxes,  interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.

             (d)  Each  Lender  (or  Transferee)  that is not a U.S.  Person  as
defined in Section  7701(a)(30) of the Code (a "Non-U.S.  Lender") shall deliver
to the Borrower and the Administrative  Agent (or, in the case of a Participant,
to the Lender from which the related  participation  shall have been  purchased)
two copies of either U.S.  Internal  Revenue Service Form W-8BEN or Form W-8EC1,
or, in the case of a  Non-U.S.  Lender  claiming  exemption  from  U.S.  federal
withholding  tax under  Section  871(h) or  881(c) of the Code with  respect  to
payments  of  "portfolio  interest",  a statement  substantially  in the form of
Exhibit G and a Form W-8BEN,  or any subsequent  versions  thereof or successors
thereto,  properly completed and duly executed by such Non-U.S.  Lender claiming
complete  exemption from, or a reduced rate of, U.S. federal  withholding tax on
all payments by the Borrower under this Agreement and the other Loan  Documents.
Such forms shall be delivered by each  Non-U.S.  Lender on or before the date it
becomes a party to this  Agreement  (or, in the case of any  Participant,  on or
before  the date such  Participant  purchases  the  related  participation).  In
addition,  each  Non-U.S.  Lender  shall  deliver such forms  promptly  upon the
obsolescence  or  invalidity of any form  previously  delivered by such Non-U.S.
Lender.  Each Non-U.S.  Lender shall promptly notify the Borrower at any time it
determines  that  it is no  longer  in a  position  to  provide  any  previously
delivered  certificate  to the  Borrower  (or any  other  form of  certification
adopted by the U.S. taxing  authorities for such purpose).  Notwithstanding  any
other  provision of this paragraph,  a Non-U.S.  Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S.

Lender is not legally able to deliver.

             (e) The agreements in this Section shall survive the termination of
this  Agreement  and the  payment  of the Loans and all  other  amounts  payable
hereunder.

             4.11 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender  harmless from any loss or expense that such Lender may sustain
or incur as a  consequence  of (a) default by the Borrower in making a borrowing
of,  conversion into or continuation of Eurodollar Loans or Multicurrency  Loans
after the Borrower has given a notice requesting the same in accordance with the
provisions  of this  Agreement,  (b)  default  by the  Borrower  in  making  any
prepayment of or conversion from Eurodollar Loans or  Multicurrency  Loans after
the Borrower has given a notice  thereof in  accordance  with the  provisions of
this  Agreement  or (c) the  making  of a  prepayment  of  Eurodollar  Loans  or
Multicurrency Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (d) the amount of interest  that would have  accrued on the amount so
prepaid,  or not so borrowed,  converted or  continued,  for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such  Interest  Period  (or,  in the case of a  failure  to  borrow,
convert or continue,  the Interest  Period that would have commenced on the date
of such failure) in each case at the applicable  rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over () the amount of interest (as reasonably determined by such Lender)
that would have  accrued to such Lender on such amount by placing such amount on
deposit for a comparable  period with leading banks in the interbank  eurodollar
market.  A  certificate  as to any  amounts  payable  pursuant  to this  Section
submitted to the Borrower by any Lender  shall be  conclusive  in the absence of
manifest  error.  This covenant shall survive the  termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

            4.12 Change of Lending  Office.  Each Lender  agrees that,  upon the
occurrence  of any event giving rise to the  operation of Section 4.9 or 4.10(a)
with  respect  to such  Lender,  it will,  if  requested  by the  Borrower,  use
reasonable efforts (subject to overall policy  considerations of such Lender) to
designate  another  lending office for any Loans affected by such event with the
object  of  avoiding  the  consequences  of  such  event;  provided,  that  such
designation  is made on terms that, in the sole  judgment of such Lender,  cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage,  and provided,  further, that nothing in this Section shall affect
or postpone any of the  obligations  of the Borrower or the rights of any Lender
pursuant to Section 4.9 or 4.10(a).

             4.13  Replacement  of Lenders.  The Borrower  shall be permitted to
replace any Lender that(a) requests  reimbursement for amounts owing pursuant to
Section 4.9 or 4.10(a) or(b) defaults in its obligation to make Loans hereunder,
with a replacement financial institution;  provided that() such replacement does
not  conflict  with any  Requirement  of  Law,()no  Event of Default  shall have
occurred and be continuing at the time of such replacement, () prior to any such
replacement,  such Lender shall have taken no action under Section 4.12 so as to
eliminate  the continued  need for payment of amounts owing  pursuant to Section
4.9 or 4.10(a), () the replacement financial institution shall purchase, at par,
all Loans and other  amounts  owing to such  replaced  Lender on or prior to the
date of  replacement,  () the Borrower  shall be liable to such replaced  Lender
under Section 4.11 if any Eurodollar  Loan or  Multicurrency  Loan owing to such
replaced  Lender shall be  purchased  other than on the last day of the Interest
Period  relating  thereto,  () the  replacement  financial  institution,  if not
already a Lender, shall be reasonably  satisfactory to the Administrative Agent,
() the replaced Lender shall be obligated to make such replacement in accordance
with the  provisions  of  Section  11.6  (provided  that the  Borrower  shall be
obligated to pay the  registration  and processing fee referred to therein),  ()
until such time as such replacement shall be consummated, the Borrower shall pay
all  additional  amounts (if any) required  pursuant to Section 4.9,  4.10(a) or
11.5, as the case may be, and () any such replacement  shall not be deemed to be
a waiver of any rights that the Borrower,  the Administrative Agent or any other
Lender shall have against the replaced Lender.

            4.14  Lending  Installations.  Each Lender may book its Loans at any
Lending   Installation   selected  by  such   Lender  and  may  change   Lending
Installations  from  time to time;  provided  that such  Lender  shall be solely
responsible  with  respect  to any Loans so  booked,  and the  Borrower  and the
Administrative  Agent  shall be  entitled  to deal  solely with such Lender with
respect  to such  Loans.  All terms of this  Agreement  shall  apply to any such
Lending  Installation  and the  Loans and any Notes  issued  hereunder  shall be
deemed  held by each Lender for the  benefit of any such  Lending  Installation.
Each Lender may, by written notice to the Administrative  Agent and the Borrower
in accordance  with Section 11.2,  designate  replacement or additional  Lending
Installations  through which Loans will be made by it and for whose account Loan
payments are to be made.

             4.15  Reporting  Requirements  of  Swingline  Lenders  and  Issuing
Lenders.  () Within two Business  Days  following  the last day of each calendar
month,  the  Swingline  Lender  shall  deliver  to the  Administrative  Agent  a
statement  showing the average daily  principal  amount of the  Swingline  Loans
outstanding in each currency during the calendar month most recently ended.

             (b)  Within  two  Business  Days  following  the  last  day of each
calendar month, each Issuing Lender shall deliver to the Administrative  Agent a
report  detailing all activity  during the  preceding  month with respect to any
Letters of Credit issued by any such Issuing Lender,  including the face amount,
the account party,  the  beneficiary  and the expiration date of such Letters of
Credit and any other information with respect thereto as may be requested by the
Administrative Agent.

             4.16  Conversion  of  Loans.  Upon  the  occurrence  of  any of the
following events:

     (a)  an Event of Default specified in clause (i) or (ii) of Section

9(f); or

     (b) at the request of the  Administrative  Agent in its  discretion or upon
the direction of the Required  Lenders,  in each case, upon the occurrence of an
Event  of  Default  specified  in  Section  9(a)  with  respect  to any  Loan or
Reimbursement  Obligation  or interest  or other  amount  payable  thereon in an
Available Foreign Currency; then,

     (i) if such  event  is an event  specified  in  clause  (a)  above,  () all
outstanding  Multicurrency Loans and Reimbursement Obligations denominated in an
Available  Foreign  Currency  shall  promptly be  converted  into Dollars at the
actual  exchange  rate at which  each  Lender is able to obtain  the  applicable
amount  of the  relevant  Available  Foreign  Currency  for  Dollars  and () all
outstanding Letters of Credit denominated in any Available Foreign Currency with
respect to which  presentment  for honor shall not have  occurred at the time of
the  occurrence of such event shall  automatically  be converted by the relevant
Issuing Lender thereof into Dollars in the manner provided in clause (A) of this
paragraph  (i)  immediately  after the time, if any, at which a draft shall have
been  presented  under any such Letter of Credit and shall have been paid by the
relevant Issuing Lender; and

     (ii) if such event is an event specified in clause (b) above,  with respect
to the affected  Available  Foreign  Currency () all  outstanding  Multicurrency
Loans  and  Reimbursement  Obligations  denominated  in such  Available  Foreign
Currency shall promptly be converted into Dollars at the actual exchange rate at
which each  Lender is able to obtain  the  applicable  amount of such  Available
Foreign  Currency  for  Dollars  and  ()  all  outstanding   Letters  of  Credit
denominated in such Available Foreign Currency with respect to which presentment
for honor shall not have  occurred at the time of the  occurrence  of such event
shall be  automatically  converted into Dollars in the manner provided in clause
(A) of this paragraph (ii) immediately  after the time, if any, at which a draft
shall have been  presented  under any such  Letter of Credit and shall have been
paid by the relevant Issuing Lender.

                Promptly following any such conversion, each Lender shall notify
the  Administrative  Agent of the  exchange  rate  utilized  by it in making its
conversion (which rate shall be deemed to be correct, in the absence of manifest
error) and the amount in Dollars of its relevant  converted  Loans (after giving
effect to such conversion).  The Administrative Agent promptly shall notify each
Lender  and the  Borrower  of the  aggregate  outstanding  principal  amount (in
Dollars)  of such  converted  Loan  and  shall  provide  the  Borrower  with the
conversion data provided to the  Administrative  Agent by each Lender.  From and
after  such  conversion,  () all such  specified  Loans  shall be  deemed  to be
outstanding  in Dollars as ABR Loans  (with such  conversion  constituting,  for
purposes of Section  4.11, a prepayment of such Loans before the last day of the
Interest  Period with  respect  thereto)  and () all  amounts  from time to time
accruing,  and all  amounts  from  time  to time  payable,  on  account  of such
converted Loans (including,  without limitation,  any interest and other amounts
which were accrued but unpaid on the date of such  conversion)  shall be payable
in Dollars as if such Loan originally had been made in Dollars. Any such request
specified in clause (b) of this Section 4.16 shall be made by  delivering to the
relevant Lenders and the Borrower a notice to such effect (an "Acquisition  Loan
Conversion Notice"), which Acquisition Loan Conversion Notice shall, in the case
of the event  specified  in clause (a) of this Section  4.16,  be deemed to have
been  delivered  automatically,  without  actual  delivery  thereof or any other
action by any Person, immediately prior to the occurrence of such event.

SECTION 5.  REPRESENTATIONS AND WARRANTIES

                To induce the Administrative Agent and the Lenders to enter into
this  Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative  Agent
and each Lender that:

            5.1 Financial  Condition.  () The  unaudited pro forma  consolidated
balance sheet of the Borrower and its consolidated  Subsidiaries as at September
26, 1999 (including the notes thereto) (the "Pro Forma Balance  Sheet"),  copies
of which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to () the  consummation  of
the  Acquisition,  () the  Loans to be made on the  Closing  Date and the use of
proceeds  thereof and () the payment of fees and expenses in connection with the
foregoing.  The Pro  Forma  Balance  Sheet has been  prepared  based on the best
information  available to the Borrower as of the date of delivery  thereof,  and
presents  fairly  on a pro forma  basis  the  estimated  financial  position  of
Borrower and its  consolidated  Subsidiaries as at September 26, 1999,  assuming
that the events  specified in the  preceding  sentence had actually  occurred at
such date.

             (b) The audited consolidated balance sheets of the Borrower and its
Subsidiaries  as at December 29, 1996,  December 28, 1997 and December 27, 1998,
and the  related  consolidated  statements  of income  and of cash flows for the
fiscal  years  ended  on  such  dates,  reported  on by  and  accompanied  by an
unqualified   report  from   PricewaterhouseCoopers   LLP,  present  fairly  the
consolidated financial condition of the Borrower and its Subsidiaries as at each
such date,  and the  consolidated  results of operations and  consolidated  cash
flows for the  respective  fiscal years then ended.  The unaudited  consolidated
balance sheet of the Borrower and its  Subsidiaries as at June 27, 1999, and the
related  unaudited  consolidated  statements  of income  and cash  flows for the
six-month period ended on such date,  present fairly the consolidated  financial
condition  of the  Borrower  and  its  Subsidiaries  as at  such  date,  and the
consolidated results of operations and consolidated cash flows for the six-month
period  then ended  (subject to normal  year-end  audit  adjustments).  All such
financial  statements,  including the related schedules and notes thereto,  have
been  prepared in  accordance  with GAAP  applied  consistently  throughout  the
periods involved (except as approved by the  aforementioned  firm of accountants
and  disclosed  therein).  The  Borrower  and its  Subsidiaries  do not have any
material  Guarantee  Obligations,  contingent  liabilities  and  liabilities for
taxes,  or any  long-term  leases or unusual  forward or long-term  commitments,
including any interest rate or foreign currency swap or exchange  transaction or
other  obligation in respect of derivatives,  that are not reflected in the most
recent  financial  statements  referred to in this paragraph.  During the period
from  December  27,  1998 to and  including  the date  hereof  there has been no
Disposition by the Borrower and its  Subsidiaries  of any material part of their
business or property.

             (c) The audited statutory  consolidated balance sheet of the Target
as at December 31, 1998,  and the related  audited  consolidated  statements  of
income and cash flows for the fiscal year ended on such date, reported on by and
accompanied by an unqualified  report from Arthur  Andersen,  present fairly the
consolidated  financial  condition  of the  Target  as at  such  date,  and  the
consolidated  results of its operations and its consolidated  cash flows for the
respective fiscal years then ended. All such financial statements, including the
related  schedules and notes  thereto,  have been  prepared in  accordance  with
generally  accepted  accounting   principles  in  Germany  applied  consistently
throughout the periods involved (except as approved by the  aforementioned  firm
of accountants and disclosed therein).

             (d) The audited legal consolidated  balance sheet of the Target and
its  Subsidiaries as at December 31, 1998, and the related audited  consolidated
statements  of income  and cash  flows for the  fiscal  year ended on such date,
reported on by and accompanied by a qualified  report from Arthur Andersen (such
qualification  concerning  the fact that  comparative  figures for 1997 were not
presented),  present fairly the consolidated  financial  condition of the Target
and its Subsidiaries as at such date, and the consolidated results of operations
and consolidated cash flows for the respective fiscal years then ended. All such
financial  statements,  including the related schedules and notes thereto,  have
been prepared in accordance  with  International  Accounting  Standards  applied
consistently  throughout  the  periods  involved  (except  as  approved  by  the
aforementioned firm of accountants and disclosed therein).

             (e) The  unaudited  pro forma  consolidated  balance  sheets of the
Target as at December 31, 1996, December 31, 1997 and December 31, 1998, and the
related  unaudited  consolidated  statements of income and of cash flows for the
fiscal years ended on such dates, reviewed by Arthur Andersen AB, present fairly
the  consolidated  financial  condition  of the Target as at such date,  and the
consolidated  results of its operations and its consolidated  cash flows for the
respective fiscal years then ended. The unaudited  consolidated balance sheet of
the  Target  as at  June  30,  1999,  and  the  related  unaudited  consolidated
statements of income and cash flows for the six-month period ended on such date,
present  fairly the  consolidated  financial  condition of the Target as at such
date, and the consolidated  results of its operations and its consolidated  cash
flows for the  six-month  period then ended  (subject to normal  year-end  audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with generally accepted auditing
standards in Sweden applied consistently throughout the periods involved (except
as approved by the  aforementioned  firm of accountants and disclosed  therein).
The  Target  does  not  have  any  material  Guarantee  Obligations,  contingent
liabilities  and  liabilities  for  taxes,  or any  long-term  leases or unusual
forward  or  long-term  commitments,  including  any  interest  rate or  foreign
currency  swap or  exchange  transaction  or  other  obligation  in  respect  of
derivatives,  that are not  reflected  in the most recent  financial  statements
referred to in this  paragraph.  During the period from December 31, 1998 to and
including  the date hereof  there has been no  Disposition  by the Target of any
material part of its business or property.

            5.2 No Change.  Since June 27, 1999 there has been no development or
event involving or relating to, or affecting, the Borrower and its Subsidiaries,
taken  as a  whole,  that  has had or could  reasonably  be  expected  to have a
Material Adverse Effect.

            5.3 Corporate  Existence;  Compliance with Law. Each of the Borrower
and its Subsidiaries () is duly organized, validly existing and in good standing
under the laws of the  jurisdiction  of its  organization,  () has the corporate
power and authority,  and the legal right,  to own and operate its property,  to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged,  () is duly qualified as a foreign corporation and in good
standing  under  the laws of each  jurisdiction  where its  ownership,  lease or
operation of property or the conduct of its business requires such qualification
and () is in compliance  with all  Requirements of Law except to the extent that
the failure to comply  therewith  could not,  in the  aggregate,  reasonably  be
expected to have a Material Adverse Effect.

              5.4 Corporate Power; Authorization;  Enforceable Obligations. Each
Loan Party has the corporate power and authority,  and the legal right, to make,
deliver and perform the Loan  Documents  to which it is a party and, in the case
of the Borrower, to borrow and obtain other extensions of credit hereunder. Each
Loan Party has taken all necessary  corporate action to authorize the execution,
delivery and  performance  of the Loan  Documents to which it is a party and, in
the case of the Borrower,  to authorize the borrowings  and other  extensions of
credit  on  the  terms  and  conditions  of  this   Agreement.   No  consent  or
authorization  of, filing with,  notice to or other act by or in respect of, any
Governmental  Authority or any other Person is required in  connection  with the
Acquisition and the borrowings and other  extensions of credit hereunder or with
the  execution,  delivery,  performance,  validity  or  enforceability  of  this
Agreement   or  any  of  the  other   Loan   Documents,   except  ()   consents,
authorizations,  filings and notices  described in Schedule 5.4, which consents,
authorizations,  filings and notices have (except as set forth on Schedule  5.4)
been  obtained  or made and are in full  force  and  effect  and () the  filings
referred to in Section  5.19.  Each Loan  Document  has been duly  executed  and
delivered  on  behalf  of  each  Loan  Party  party   thereto.   This  Agreement
constitutes,  and each other Loan Document upon  execution  will  constitute,  a
legal,   valid  and  binding  obligation  of  each  Loan  Party  party  thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,   moratorium  or  similar  laws  affecting  the  enforcement  of
creditors'  rights  generally  and  by  general  equitable  principles  (whether
enforcement is sought by proceedings in equity or at law).

            5.5 No Legal Bar. The  execution,  delivery and  performance of this
Agreement and the other Loan Documents,  the issuance of Letters of Credit,  the
borrowings  hereunder  and the use of the proceeds  thereof will not violate any
Requirement of Law or any  Contractual  Obligation of the Borrower or any of its
Subsidiaries  and will not result in, or require,  the creation or imposition of
any Lien on any of their  respective  properties  or  revenues  pursuant  to any
Requirement  of Law or any such  Contractual  Obligation  (other  than the Liens
created  by the  Security  Documents).  No  Requirement  of  Law or  Contractual
Obligation  applicable  to  the  Borrower  or  any  of  its  Subsidiaries  could
reasonably be expected to have a Material Adverse Effect.

             5.6  Litigation.  Except as set forth on Schedule  5.6, no material
litigation,  bankruptcy,  insolvency, injunction, order, claim, investigation or
proceeding of or before any arbitrator or Governmental  Authority is pending or,
to the knowledge of the  Borrower,  threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues ()
with  respect  to  any  of  the  Loan  Documents  or  any  of  the  transactions
contemplated  hereby or thereby, or () that could reasonably be expected to have
a Material Adverse Effect.

             5.7  No Default.  Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect.  No Default or Event of

Default has occurred and is continuing.

             5.8  Ownership  of  Property;  Liens.  Each of the Borrower and its
Subsidiaries  has title in fee simple to, or a valid leasehold  interest in, all
its real property,  and good title to, or a valid leasehold interest in, all its
other  property,  and none of such  property  is subject  to any Lien  except as
permitted by Section 8.3.

             5.9   Intellectual   Property.   The   Borrower  and  each  of  its
Subsidiaries  owns, or is licensed to use, all Intellectual  Property  necessary
for the  conduct of its  business  as  currently  conducted  and the use of such
Intellectual  Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person such that any claim for any infringement,  if adversely
determined,  could reasonably be expected to have a Material Adverse Effect.  No
material  claim has been  asserted  in  writing  and is  pending  by any  Person
challenging or questioning the use of any Intellectual  Property or the validity
or effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim.

              5.10 Taxes.  Each of the Borrower and each of its Subsidiaries has
filed or caused to be filed all  Federal,  state and other  material tax returns
that are required to be filed and has paid all taxes shown to be due and payable
on said returns or on any assessments made against it or any of its property and
all other taxes,  fees or other charges  imposed on it or any of its property by
any  Governmental  Authority (other than any the amount or validity of which are
currently  being  contested in good faith by  appropriate  proceedings  and with
respect to which  reserves  in  conformity  with GAAP have been  provided on the
books of the Borrower or its Subsidiaries,  as the case may be); no tax Lien has
been filed,  and, to the knowledge of the Borrower,  no claim is being asserted,
with respect to any such tax, fee or other charge.

             5.11 Federal  Regulations.  The extensions of credit hereunder will
not be used for "buying" or "carrying"  any "margin stock" within the respective
meanings of each of the quoted terms under  Regulation U as now and from time to
time  hereafter in effect or for any purpose that violates the provisions of the
Regulations  of the Board.  If  requested  by any  Lender or the  Administrative
Agent, the Borrower will furnish to the  Administrative  Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U.

             5.12  Labor  Matters.  Except  as,  in  the  aggregate,  could  not
reasonably  be  expected  to have a  Material  Adverse  Effect:  () there are no
strikes or other labor disputes  against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened; () hours worked by and
payment made to employees of the Borrower and its Subsidiaries  have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters;  and () all payments due from the Borrower or any
of its  Subsidiaries  on account of employee  health and welfare  insurance have
been paid or accrued as a liability on the books of the Borrower or the relevant
Subsidiary.

             5.13 ERISA.  Neither a Reportable Event nor an "accumulated funding
deficiency"  (within  the  meaning of Section  412 of the Code or Section 302 of
ERISA) has occurred during the five-year  period prior to the date on which this
representation  is made or deemed made with  respect to any Plan,  and each Plan
has complied in all material  respects with the  applicable  provisions of ERISA
and the Code.  Except as described on Schedule  5.13, no termination of a Single
Employer  Plan  has  occurred,  and no Lien in  favor  of the PBGC or a Plan has
arisen,  during such five-year period. The present value of all accrued benefits
under each Single  Employer Plan (based on those  assumptions  used to fund such
Plan) did not, as of the last annual  valuation  date prior to the date on which
this  representation  is made or deemed made,  exceed the value of the assets of
such Plan allocable to such accrued benefits by a material  amount.  Neither the
Borrower  nor any  Commonly  Controlled  Entity  has had a  complete  or partial
withdrawal from any Multiemployer  Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and neither the Borrower
nor  any  Commonly  Controlled  Entity  would  become  subject  to any  material
liability  under ERISA if the Borrower or any such  Commonly  Controlled  Entity
were to withdraw  completely  from all  Multiemployer  Plans as of the valuation
date most closely  preceding  the date on which this  representation  is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

             5.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment  company",  or a company  "controlled"  by an "investment  company",
within the meaning of the  Investment  Company Act of 1940, as amended.  No Loan
Party is  subject  to  regulation  under  any  Requirement  of Law  (other  than
Regulation X of the Board) that limits its ability to incur Indebtedness.

             5.15 Subsidiaries.  Except as disclosed to the Administrative Agent
by the Borrower in writing from time to time after the Closing Date, () Schedule
5.15 sets forth the name and  jurisdiction of  incorporation  of each Subsidiary
and, as to each Subsidiary,  the percentage of each class of Capital Stock owned
by any  Loan  Party  and () there  are no  outstanding  subscriptions,  options,
warrants,  calls,  rights or other  agreements or commitments  (other than stock
options  granted to employees or  directors,  directors'  qualifying  shares and
conversion rights with respect to the Subordinated Notes) of any nature relating
to any Capital Stock of the Borrower or any Subsidiary, except as created by the
Loan Documents.

             5.16 Use of Proceeds.  The proceeds of the Term Loans shall be used
to finance a portion of the  Acquisition  and to pay related fees and  expenses.
The  proceeds  of the  Revolving  Loans and  Swingline  Loans and the Letters of
Credit,  shall be used  for  general  corporate  purposes,  including  Permitted
Acquisitions.

             5.17  Environmental Matters.  Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:

     (a) the facilities and properties owned, leased or operated by the Borrower
or any of its  Subsidiaries  (the  "Properties")  do not  contain,  and have not
previously  contained,  any  Materials  of  Environmental  Concern in amounts or
concentrations or under circumstances that constitute or constituted a violation
of, or could  reasonably  be  expected  to give  rise to  liability  under,  any
Environmental Law;

     (b) neither the Borrower nor any of its  Subsidiaries  has received  actual
notice of violation, alleged violation,  non-compliance,  liability or potential
liability regarding  environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the business operated by the Borrower or
any of its Subsidiaries (the  "Business"),  nor does the Borrower have knowledge
that any such notice will be received or is being threatened;

     (c)  Materials  of  Environmental  Concern  have  not been  transported  or
disposed of from the Properties in violation of, or in a manner or to a location
that  could  reasonably  be  expected  to give  rise  to  liability  under,  any
Environmental  Law,  nor  have  any  Materials  of  Environmental  Concern  been
generated,  treated, stored or disposed of at, on or under any of the Properties
in violation  of, or in a manner that could  reasonably be expected to give rise
to liability under, any applicable Environmental Law;

     (d) no judicial  proceeding or  governmental  or  administrative  action is
pending  or,  to  the   knowledge  of  the  Borrower,   threatened,   under  any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party  with  respect  to the  Properties  or the  Business,  nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial  requirements  outstanding under any
Environmental Law with respect to the Properties or the Business;

     (e) during the period of the Borrower's use or occupancy, there has been no
release or threat of release of  Materials of  Environmental  Concern at or from
the Properties,  or arising from or related to the operations of the Borrower or
any Subsidiary in connection with the Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that could reasonably
be expected to give rise to liability under Environmental Laws;

     (f) the  Properties and all operations at the Properties are in compliance,
and  have in the  last  five  years  been in  compliance,  with  all  applicable
Environmental  Laws,  and  there is no  contamination  at,  under  or about  the
Properties or violation of any  Environmental Law with respect to the Properties
or the Business; and

     (g)  neither  the  Borrower  nor any of its  Subsidiaries  has  assumed any
liability of any other Person under Environmental Laws.

             5.18  Accuracy of  Information,  etc. No statement  or  information
contained  in  this  Agreement,   any  other  Loan  Document,  the  Confidential
Information Memorandum or any other document, certificate or statement furnished
by, or reviewed by the  Borrower  and  furnished on behalf of, any Loan Party to
the Administrative  Agent or the Lenders,  or any of them, for use in connection
with  the  transactions  contemplated  by  this  Agreement  or  the  other  Loan
Documents,  contained as of the date such  statement,  information,  document or
certificate  was so furnished (or, in the case of the  Confidential  Information
Memorandum,  as of the  date of  this  Agreement),  any  untrue  statement  of a
material  fact or  omitted  to  state a  material  fact  necessary  to make  the
statements  contained herein or therein not misleading.  The projections and pro
forma  financial  information  contained in the materials  referenced  above are
based upon good faith  estimates and  assumptions  believed by management of the
Borrower to be reasonable  at the time made, it being  recognized by the Lenders
that such  financial  information  as it relates  to future  events is not to be
viewed as fact and that actual results  during the period or periods  covered by
such  financial  information  may differ  from the  projected  results set forth
therein by a material amount.  As of the date hereof,  the statements  regarding
the Borrower and the Target contained in the Acquisition  Documentation are true
and correct in all material  respects.  There is no fact known to any Loan Party
that could reasonably be expected to have a Material Adverse Effect that has not
been  expressly   disclosed  herein,  in  the  other  Loan  Documents,   in  the
Confidential Information Memorandum or in any other documents,  certificates and
statements  furnished  to the  Administrative  Agent and the  Lenders for use in
connection  with the  transactions  contemplated  hereby  and by the other  Loan
Documents.

             5.19 Security Documents.  () The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative  Agent, for the benefit of
the Lenders, a legal, valid and enforceable  security interest in the Collateral
described  therein  and  proceeds  thereof.  In the  case of the  Pledged  Stock
described in the Guarantee and  Collateral  Agreement,  when stock  certificates
representing such Pledged Stock are delivered to the  Administrative  Agent, and
in the case of the other  Collateral  described in the Guarantee and  Collateral
Agreement,  when financing  statements  and other filings  specified on Schedule
5.19(a) in  appropriate  form are filed in the  offices  specified  on  Schedule
5.19(a),  the  Guarantee  and  Collateral  Agreement  shall  constitute  a fully
perfected  Lien on, and security  interest in, all right,  title and interest of
the Loan Parties in such  Collateral and the proceeds  thereof,  as security for
the Obligations (as defined in the Guarantee and Collateral Agreement),  in each
case prior and  superior in right to any other  Person  (except,  in the case of
Collateral other than Pledged Stock, Liens permitted by Section 8.3).

             (b) Each of the  Mortgages  is  effective to create in favor of the
Administrative  Agent,  for the  benefit  of the  Lenders,  a legal,  valid  and
enforceable  Lien on the  Mortgaged  Properties  described  therein and proceeds
thereof,  and when the Mortgages are filed in the offices  specified on Schedule
5.19(b),  each such Mortgage  shall  constitute a fully  perfected  Lien on, and
security  interest in, all right,  title and interest of the Loan Parties in the
Mortgaged  Properties and the proceeds thereof,  as security for the Obligations
(as defined in the relevant Mortgage),  in each case prior and superior in right
to any other  Person.  As of the Closing  Date,  Schedule 1.1B lists each of the
real  properties in the United States owned in fee simple by the Borrower or any
of its Subsidiaries  having a value, in the reasonable  opinion of the Borrower,
in excess of $1,000,000.

             5.20  Solvency.  The Borrower  is, and after  giving  effect to the
Acquisition  and  the  incurrence  of all  Indebtedness  and  obligations  being
incurred in connection herewith and therewith will

be and will continue to be, Solvent.

             5.21 Year 2000 Matters. () Any reprogramming required to permit the
proper  functioning (but only to the extent that such proper  functioning  would
otherwise be impaired by the  occurrence  of the year 2000) in and following the
year  2000  of  computer  systems  and  other  equipment   containing   embedded
microchips,   in  either  case  owned  or  operated  by  the  Borrower  and  its
Subsidiaries,  taken as a whole,  or used or relied upon in the conduct of their
business  (including any such systems and other equipment  supplied by others or
with which the  computer  systems  of the  Borrower  or any of its  Subsidiaries
interface),  and the  testing  of all such  systems  and other  equipment  as so
reprogrammed,  is  substantially  complete.  The costs to the  Borrower  and its
Subsidiaries  that  have  not  been  incurred  as of the  date  hereof  for such
reprogramming and testing and for the other reasonably foreseeable  consequences
to them of any improper  functioning  of other  computer  systems and  equipment
containing  embedded microchips due to the occurrence of the year 2000 could not
reasonably  be  expected to result in a Default or Event of Default or to have a
Material  Adverse Effect.  Except for any  reprogramming  referred to above, the
computer  systems of the Borrower and its  Subsidiaries  are and,  with ordinary
course upgrading and  maintenance,  will continue for the term of this Agreement
to be, sufficient for the conduct of their business as currently conducted.

             (b) To the  best of the  Borrower's  knowledge,  any  reprogramming
required  to permit the  proper  functioning  (but only to the extent  that such
proper  functioning  would  otherwise be impaired by the  occurrence of the year
2000) in and  following  the year 2000 of computer  systems and other  equipment
containing embedded  microchips,  in either case owned or operated by the Target
or used or  relied  upon in the  conduct  of its  business  (including  any such
systems  and other  equipment  supplied  by others  or with  which the  computer
systems of the Target interface),  and the testing of all such systems and other
equipment as so reprogrammed, is substantially complete. The costs to the Target
that have not been  incurred  as of the date hereof for such  reprogramming  and
testing and for the other  reasonably  foreseeable  consequences  to them of any
improper functioning of other computer systems and equipment containing embedded
microchips due to the occurrence of the year 2000, after the consummation of the
Tender Offer,  could not  reasonably be expected to result in a Default or Event
of Default or to have a Material  Adverse Effect.  Except for any  reprogramming
referred to above,  the computer  systems of the Target are and,  with  ordinary
course upgrading and  maintenance,  will continue for the term of this Agreement
to be, sufficient for the conduct of their business as currently conducted.

            5.22  Certain Documents.  The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Acquisition
Documentation, including any amendments, supplements or

modifications with respect thereto.

             5.23  Regulation  H.  Subject to Section  6.1(q)(iv),  no  Mortgage
encumbers  improved  real  property  that is  located  in an area  that has been
identified by the Secretary of Housing and Urban  Development  as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968.

SECTION 6.  CONDITIONS PRECEDENT

             6.1  Conditions  to Initial  Extension of Credit.  The agreement of
each Lender to make the initial  extension of credit  requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date (but in any event no later than December
31, 1999), of the following conditions precedent:

        (a)  Credit   Agreement;   Guarantee  and  Collateral   Agreement.   The
Administrative  Agent  shall  have  received  () this  Agreement,  executed  and
delivered by the  Administrative  Agent,  the Borrower and each Person listed on
Schedule 1.1A, () the Guarantee and Collateral Agreement, executed and delivered
by the Borrower  and each  Subsidiary  Guarantor  and () an  Acknowledgment  and
Consent in the form attached to the Guarantee and Collateral Agreement, executed
and  delivered by each Issuer (as defined  therein),  if any, that is not a Loan
Party.

        In the  event  that  this  Agreement  has not  been  duly  executed  and
delivered by each Person listed on Schedule 1.1A on the date scheduled to be the
Closing Date, the condition  referred to in clause (i) above shall  nevertheless
be deemed  satisfied if on such date the Borrower and the  Administrative  Agent
shall have designated one or more Persons (the "Designated  Lenders") to assume,
in the  aggregate,  all of the  Commitments  that  would  have  been held by the
Persons listed on Schedule 1.1A (the "Non-Executing  Persons") which have not so
executed and delivered this Agreement (subject to each such Designated  Lender's
consent and its execution and delivery of this  Agreement).  Schedule 1.1A shall
automatically  be deemed to be amended to reflect the respective  Commitments of
the Designated Lenders and the omission of the Non-Executing  Persons as Lenders
hereunder.

       (b) Existing  Indebtedness.  The Administrative Agent shall have received
satisfactory  evidence that () the Borrower's  existing credit facilities listed
on Schedule 6.1(b) shall have been terminated and all amounts  thereunder  shall
have been paid in full (excluding the  Subordinated  Notes and the  Indebtedness
described on Schedule 8.2(d)), and () satisfactory  arrangements shall have been
made for the termination of all Liens granted in connection therewith.

        (c) Pro Forma Balance  Sheet;  Financial  Statements.  The Lenders shall
have received () the Pro Forma Balance Sheet, () audited consolidated  financial
statements  described  in  Section  5.1 and ()  unaudited  interim  consolidated
financial  statements of the Borrower for each quarterly period ended subsequent
to the date of the latest applicable  financial statements delivered pursuant to
clause  (ii) of  this  paragraph  as to  which  such  financial  statements  are
available,  and such financial  statements shall not, in the reasonable judgment
of the  Lenders,  reflect  any  material  adverse  change  in  the  consolidated
financial  condition of the Borrower and its  Subsidiaries,  as reflected in the
financial  statements or projections  contained in the Confidential  Information
Memorandum.

       (d)  Business  Plan.  The  Lenders  shall have  received  a  satisfactory
business plan for the Borrower and its  Subsidiaries  (including the Target) for
the 1999 fiscal year and a written analysis of the business and prospects of the
Borrower and its  Subsidiaries  (including  the Target) for the six-year  period
from the Closing Date through the final maturity of the Term Loans.

       (e) Approvals.  All  governmental  and third party approvals  (including,
without  limitation,  landlords'  and other consents and all such approvals with
respect to antitrust  matters,  other than as  described in on Schedule  6.1(e))
necessary in connection with the Acquisition,  the continuing  operations of the
Borrower and its  Subsidiaries and the  transactions  contemplated  hereby shall
have been obtained and be in full force and effect,  and all applicable  waiting
periods (other than as described on Schedule  6.1(e)) shall have expired without
any action  being taken or  threatened  by any  competent  authority  that would
restrain,  prevent or otherwise impose adverse  conditions on the Acquisition or
the financing contemplated hereby.

       (f) Lien  Searches.  The  Lenders  shall have  received  the results of a
recent lien search in each of the  jurisdictions  (including  Puerto Rico) where
assets of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Borrower or its Subsidiaries except for liens permitted
by  Section  8.3 or  discharged  on or prior to the  Closing  Date  pursuant  to
documentation satisfactory to the Administrative Agent.

       (g) Environmental Audit. The Lenders shall have received an environmental
audit with respect to the real  properties of the Borrower and its  Subsidiaries
specified  by  the  Administrative   Agent  from  a  firm  satisfactory  to  the
Administrative Agent.

       (h) Fees.  The Lenders and the  Administrative  Agent shall have received
all fees  required to be paid,  and all  expenses for which  invoices  have been
presented  (including the reasonable fees and expenses of legal counsel),  on or
before the Closing  Date.  All such amounts will be paid with  proceeds of Loans
made on the Closing Date and will be reflected in the funding instructions given
by the Borrower to the Administrative Agent on or before the Closing Date.

       (i) Closing  Certificate.  The Administrative  Agent shall have received,
with a counterpart for each Lender, a certificate of each Loan Party,  dated the
Closing  Date,  substantially  in  the  form  of  Exhibit  C,  with  appropriate
insertions and attachments.

       (j) Good  Standing  Certificates.  The  Administrative  Agent  shall have
received a good standing  certificate  for the Borrower and each of its Domestic
Subsidiaries  from the Secretary of State (or similar,  applicable  Governmental
Authority) of their respective  states of incorporation and each state where the
Borrower or any of its  Domestic  Subsidiaries  is qualified to do business as a
foreign corporation as of a recent date, together with a bring-down  certificate
by facsimile dated the Closing Date.

        (k) Legal  Opinions.  The  Lenders  shall have  received  the  following
executed legal opinions:

        (i) the legal  opinion of Stradley  Ronon,  Philadelphia,  Pennsylvania,
counsel  to the  Borrower  and its  Subsidiaries,  substantially  in the form of
Exhibit F-1;

        (ii)  the  legal  opinion  of Neil D.  Austin,  general  counsel  of the
Borrower and its Subsidiaries, substantially in the form of Exhibit F-2;

        (iii) the legal opinion of Simpson,  Thacher & Bartlett,  counsel to the
Lenders, with respect to matters of New York law;

        (iv) to the extent consented to by the relevant  counsel,  each executed
legal opinion, if any, delivered in connection with the Acquisition, accompanied
by a reliance letter in favor of the Lenders; and

        (v) the legal opinion of local counsel in Puerto Rico and Germany and of
such other  special and local  counsel as may be required by the  Administrative
Agent.

Each  such  legal  opinion  shall  cover  such  other  matters  incident  to the
transactions  contemplated  by this  Agreement as the  Administrative  Agent may
reasonably require.

       (l) Pledged Stock; Stock Powers;  Pledged Notes. The Administrative Agent
shall have received () the certificates representing the shares of Capital Stock
pledged  pursuant  to the  Guarantee  and  Collateral  Agreement  (the  "Pledged
Stock"), together with an undated stock power for each such certificate executed
in blank by a duly authorized  officer of the pledgor thereof or, in the case of
any uncertificated securities, evidence satisfactory to the Administrative Agent
that a notation  evidencing the Lenders'  security interest in the Pledged Stock
has been entered into the books and stock registry of the issuer of such Pledged
Stock and () each promissory note (if any) pledged to the  Administrative  Agent
pursuant to the Guarantee and Collateral  Agreement  endorsed (without recourse)
in blank (or  accompanied by an executed  transfer form in blank) by the pledgor
thereof.

       (m) Filings,  Registrations and Recordings.  Each document (including any
Uniform Commercial Code financing  statement) required by the Security Documents
or under law or reasonably  requested by the  Administrative  Agent to be filed,
registered or recorded in order to create in favor of the Administrative  Agent,
for the benefit of the Lenders,  a perfected  Lien on the  Collateral  described
therein,  prior and  superior  in right to any  other  Person  (other  than with
respect to Liens  expressly  permitted by Section 8.3),  shall be in proper form
for filing, registration or recordation.

        (n) Insurance.  The  Administrative  Agent shall have received insurance
certificates  satisfying the requirements of Section 5.2(a) of the Guarantee and
Collateral Agreement.

        (o) Current Asset Audit.  The Lenders shall have received a satisfactory
audit prepared by the Administrative  Agent's asset-based  evaluating group with
respect  to the  accounts  receivable  and  inventory  of the  Borrower  and its
Subsidiaries.

        (p) Designated  Senior  Indebtedness.  The Lenders shall have received a
certificate  of the  Borrower  specifying  that the  Indebtedness  hereunder  is
"Designated   Senior   Indebtedness"   as  contemplated  by  the  definition  of
"Designated Senior Indebtedness" in the Subordinated Note Indenture.

        (q) Mortgages,  etc. () The  Administrative  Agent shall have received a
Mortgage with respect to each  Mortgaged  Property,  executed and delivered by a
duly authorized officer of each party thereto.

      (ii) If requested by the Administrative  Agent, the  Administrative  Agent
shall have received, and the title insurance company issuing the policy referred
to in clause (iii) below (the "Title  Insurance  Company")  shall have received,
maps or plats of an  as-built  survey of the sites of the  Mortgaged  Properties
certified  to the  Administrative  Agent and the Title  Insurance  Company  in a
manner  satisfactory to them,  dated a date  satisfactory to the  Administrative
Agent and the Title Insurance  Company by an independent  professional  licensed
land surveyor  satisfactory to the Administrative  Agent and the Title Insurance
Company,  which maps or plats and the  surveys on which they are based  shall be
made in accordance with the Minimum Standard Detail  Requirements for Land Title
Surveys jointly  established and adopted by the American Land Title  Association
and the  American  Congress  on  Surveying  and  Mapping in 1992,  and,  without
limiting the generality of the  foregoing,  there shall be surveyed and shown on
such maps, plats or surveys the following: () the locations on such sites of all
the buildings,  structures and other  improvements and the established  building
setback lines; () the lines of streets abutting the sites and the width thereof;
() all access and other  easements  appurtenant  to the sites;  () all roadways,
paths,  driveways,  easements,  encroachments  and  overhanging  projections and
similar  encumbrances  affecting  the site,  whether  recorded,  apparent from a
physical  inspection  of the sites or otherwise  known to the  surveyor;  () any
encroachments  on  any  adjoining  property  by  the  building   structures  and
improvements  on the sites; () if the site is described as being on a filed map,
a legend relating the survey to said map; and () the flood zone designations, if
any, in which the Mortgaged Properties are located.

     (iii) The  Administrative  Agent  shall  have  received  in respect of each
Mortgaged  Property a mortgagee's title insurance policy (or policies) or marked
up unconditional  binder for such insurance.  Each such policy shall () be in an
amount satisfactory to the Administrative Agent; () be issued at ordinary rates;
() insure that the Mortgage  insured  thereby creates a valid first Lien on such
Mortgaged  Property  free and clear of all defects and  encumbrances,  except as
disclosed  therein;  () name the  Administrative  Agent for the  benefit  of the
Lenders as the insured thereunder;  () be in the form of ALTA Loan Policy - 1970
(Amended  10/17/70  and  10/17/84)  (or  equivalent  policies);  () contain such
endorsements and affirmative coverage as the Administrative Agent may reasonably
request and () be issued by title companies  satisfactory to the  Administrative
Agent  (including any such title companies  acting as co-insurers or reinsurers,
at the option of the Administrative  Agent). The Administrative Agent shall have
received  evidence  satisfactory to it that all premiums in respect of each such
policy,  all charges for mortgage  recording tax, and all related  expenses,  if
any, have been paid.

     (iv) If requested by the  Administrative  Agent, the  Administrative  Agent
shall have received () a policy of flood  insurance that () covers any parcel of
improved real  property that is encumbered by any Mortgage,  () is written in an
amount  not less  than the  outstanding  principal  amount  of the  indebtedness
secured by such Mortgage  that is reasonably  allocable to such real property or
the maximum limit of coverage made available with respect to the particular type
of property under the National Flood  Insurance Act of 1968,  whichever is less,
and () has a term ending not later than the maturity of the Indebtedness secured
by such Mortgage and ()  confirmation  that the Borrower has received the notice
required pursuant to Section 208(e)(3) of Regulation H of the Board.

     (v) The  Administrative  Agent shall have  received a copy of all  recorded
documents  referred to, or listed as exceptions to title in, the title policy or
policies  referred  to in clause  (iii)  above and a copy of all other  material
documents affecting the Mortgaged Properties.

      (r)  Acquisition,   etc.  The  following   transactions  shall  have  been
consummated (and the  Administrative  Agent shall have received a certificate of
the Borrower to such effect, substantially in the form of Exhibit I, accompanied
by  copies of any  documentary  evidence  thereof  reasonably  requested  by the
Administrative   Agent),  in  each  case  on  terms  and  conditions  reasonably
satisfactory to the Administrative Agent:

     (i) the Borrower  shall have the right to acquire,  directly or indirectly,
95% of the Shares of the Target for an aggregate  purchase price the U.S. Dollar
Equivalent of which does not exceed $275,000,000,  and arrangements satisfactory
to the  Administrative  Agent  shall  have  been  made  for the  application  of
approximately $312,600,000 of the proceeds of the Loans made on the Closing Date
to the  purchase of such Shares and the  repayment  of the  Indebtedness  of the
Target and its  Subsidiaries  described in Schedule 7.12 promptly  following the
making of such Loans on a basis that assures that such proceeds can be used only
for such purposes;

     (ii)  the  Tender  Offer,  in the  opinion  of the  Borrower,  prior to the
announcement  that the Tender Offer will be completed,  is not wholly or in part
made  impossible  or  significantly  difficult  to  implement  as  a  result  of
legislation,  court decision,  action of public  authority,  or similar event in
Sweden,  Germany,  the U.S. or another country which has occurred or is expected
to occur,  or as a consequence of any other  circumstance  beyond the Borrower's
control;

        (iii) to the extent  received by the Borrower,  the Borrower  shall have
delivered to the Administrative Agent copies of the executed resignation letters
of  the  four  members  of  the  Target's  Supervisory  Board  representing  the
shareholders, which letters shall be () effective upon the closing of the Tender
Offer and () in form and substance reasonably satisfactory to the Administrative
Agent;

          (iv)  the  Borrower  shall  have  used its best  efforts  to  commence
discussions with the Commercial Register Judge in Bensheim, Germany, responsible
for the review and approval of the Integration, regarding the replacement of the
four  members of the  Target's  Supervisory  Board  referred to in clause  (iii)
above,  pursuant  to  Section  104 of the  German  Stock  Corporation  Act to be
effective upon or promptly following the closing of the Tender Offer.

      (v) since the date of this Agreement,  the terms of the Tender Offer shall
not  have  been  amended,  waived  or  modified  as  to  price,   consideration,
conditions,  termination or expiration or in any other material respects without
the prior approval of the Administrative Agent;

     (vi) neither the Target nor any of its Subsidiaries shall have taken, or be
taking,  any action  (including  reorganization,  recapitalization,  asset sale,
stock  purchase or  distribution  to its  stockholders)  that, in the good faith
judgment of the  Administrative  Agent,  could  reasonably be expected to have a
material  adverse effect on the condition  (financial or  otherwise),  business,
operations,  assets or  properties of the Target or its  Subsidiaries  or on the
consummation of the Tender Offer and the Acquisition;

     (vii) the Administrative  Agent shall have received  satisfactory  evidence
that the fees and expenses to be incurred in connection with the Acquisition and
the financing thereof shall not exceed $17,000,000; and

    (viii) the  Borrower  and its  Subsidiaries,  on a combined pro forma basis,
after giving effect to the Acquisition, shall have a minimum Consolidated EBITDA
for the most recently  completed four fiscal  quarters of the Borrower for which
financial statements are available of $90,000,000.

             6.2 Conditions to Each  Extension of Credit.  The agreement of each
Lender to make any  extension  of credit  requested to be made by it on any date
(including its initial  extension of credit) is subject to the  satisfaction  of
the following conditions precedent:

        ()  Representations  and  Warranties.  Each of the  representations  and
warranties  made by any Loan Party in or pursuant to the Loan Documents shall be
true  and  correct  on and as of such  date  as if made on and as of such  date,
provided, however, that the representations and warranties contained in Sections
5.1(c),  (d) and (e)  shall  survive  only  until the  Administrative  Agent has
received the first  audited  consolidated  financial  statements of the Borrower
which  include the Target,  to be delivered by the Borrower  pursuant to Section
7.1(a) and such  Sections  shall no longer be applicable to extensions of credit
thereafter,  provided,  further,  that  the  information  in  such  consolidated
financial  statements  with  respect  to the  Target  shall  not  be  materially
adversely different than the information  presented in the financial  statements
referred to in Sections 5.1(c), (d) and (e).

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

Each  borrowing  by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a  representation  and warranty by the Borrower as of
the date of such  extension  of credit  that the  conditions  contained  in this
Section 6.2 have been satisfied.

SECTION .  AFFIRMATIVE COVENANTS

                The  Borrower  hereby  agrees that,  so long as the  Commitments
remain in effect, any Letter of Credit remains  outstanding or any Loan or other
amount  is  owing to any  Lender  or the  Administrative  Agent  hereunder,  the
Borrower shall and shall cause each of its Subsidiaries to:

                .  Financial Statements.  Furnish to the Administrative
Agent and each Lender:

        () as soon as  available,  but in any event within 90 days after the end
of each fiscal year of the Borrower,  a copy of the audited consolidated balance
sheet of the Borrower and its  consolidated  Subsidiaries  as at the end of such
year and the related audited consolidated and consolidating statements of income
and of cash flows for such year,  setting forth in each case in comparative form
the figures as at the end of and for the  corresponding  periods in the previous
year,  reported on without a "going concern" or like qualification or exception,
or    qualification    arising   out   of   the   scope   of   the   audit,   by
PricewaterhouseCoopers  LLP or other independent certified public accountants of
nationally recognized standing;

        () as soon as  available,  but in any event not later than 45 days after
the end of each of the first three quarterly  periods of each fiscal year of the
Borrower,  the  unaudited  consolidated  balance  sheet of the  Borrower and its
consolidated  Subsidiaries  as at the  end  of  such  quarter  and  the  related
unaudited  consolidated  statements of income and of cash flows for such quarter
and the portion of the fiscal  year  through  the end of such  quarter,  setting
forth in each case in comparative  form the figures as at the end of and for the
corresponding  periods in the previous year,  certified by a Responsible Officer
as being fairly  stated in all  material  respects  (subject to normal  year-end
audit adjustments); and

        () as soon as  available,  but in any event not later than 75 days after
the consummation of the Tender Offer, copies of the audited consolidated balance
sheets of the Target and its Subsidiaries as at December 31, 1996,  December 31,
1997 and December 31, 1998, and the related audited  consolidated  statements of
income and cash  flows for the  respective  fiscal  years  ended on such  dates,
reported on without a "going  concern" or like  qualification  or exception,  or
qualification  arising out of the scope of the audit, by  PricewaterhouseCoopers
LLP or other independent  certified public accountants of nationally  recognized
standing.

All such  financial  statements  shall be complete  and correct in all  material
respects and shall be prepared in reasonable  detail and in accordance with GAAP
applied  consistently  throughout the periods  reflected  therein and with prior
periods (except as approved by such accountants or officer,  as the case may be,
and disclosed therein).

                .  Certificates; Other Information.  Furnish to the
Administrative Agent and each Lender (or, in the case of clause (f),

to the relevant Lender):

        () concurrently with the delivery of the financial  statements  referred
to in  Section  7.1(a),  a  certificate  of  the  independent  certified  public
accountants  reporting on such financial  statements  stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;

        () concurrently with the delivery of any financial  statements  pursuant
to Section 7.1, () a certificate of a Responsible  Officer  stating that, to the
best of such Responsible Officer's knowledge, each Loan Party during such period
has  observed  or  performed  all of its  covenants  and other  agreements,  and
satisfied  every  condition,  contained  in this  Agreement  and the other  Loan
Documents to which it is a party to be  observed,  performed or satisfied by it,
and that such  Responsible  Officer has  obtained no knowledge of any Default or
Event of Default except as specified in such  certificate  and () in the case of
quarterly  or  annual  financial  statements,   (x)  a  Compliance   Certificate
containing all information and calculations necessary for determining compliance
by the Borrower  and its  Subsidiaries  with the  provisions  of this  Agreement
referred  to therein as of the last day of the fiscal  quarter or fiscal year of
the Borrower, as the case may be, and (y) to the extent not previously disclosed
to the Administrative  Agent, a listing of any county or state within the United
States where any Loan Party keeps inventory or equipment and of any Intellectual
Property  acquired  by any Loan  Party  since the date of the most  recent  list
delivered pursuant to this clause (y) (or, in the case of the first such list so
delivered, since the Closing Date);

        () as soon as  available,  and in any event no later  than 45 days after
the end of each fiscal year of the Borrower, a detailed  consolidated budget for
the following fiscal year (including a projected  consolidated  balance sheet of
the Borrower and its  Subsidiaries  as of the end of the following  fiscal year,
the related  consolidated and  consolidating  statements of projected cash flow,
projected  changes in financial  position and projected income and a description
of the underlying  assumptions  applicable thereto),  and, as soon as available,
significant  revisions,  if any, of such budget and projections  with respect to
such fiscal year (collectively,  the "Projections"),  which Projections shall in
each case be accompanied by a certificate of a Responsible  Officer stating that
such Projections are based on reasonable estimates,  information and assumptions
and that such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;

        () no later than 10 Business  Days prior to the  effectiveness  thereof,
copies of  substantially  final  drafts of any proposed  amendment,  supplement,
waiver or other  modification with respect to the Subordinated Note Indenture or
the Acquisition Documentation;

        () within  five days  after the same are sent,  copies of all  financial
statements  and reports that the  Borrower  sends to the holders of any class of
its debt securities or public equity  securities and, within five days after the
same are filed, copies of all financial statements and reports that the Borrower
may make to, or file with, the SEC; and

        ()  promptly, such additional financial and other information as
any Lender may from time to time reasonably request.

                . Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material  obligations of whatever  nature  (including  taxes),  except where the
amount or  validity  thereof  is  currently  being  contested  in good  faith by
appropriate  proceedings  and  reserves  in  conformity  with GAAP with  respect
thereto have been provided on the books of the Borrower or its Subsidiaries,  as
the case may be.

                . Maintenance of Existence;  Compliance.  () () Preserve,  renew
and keep in full  force  and  effect  its  corporate  existence  and () take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable  in the  normal  conduct of its  business,  except,  in each case,  as
otherwise permitted by Section 8.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not  reasonably  be expected to have a
Material  Adverse  Effect;  and () comply with all  Contractual  Obligations and
Requirements of Law except to the extent that failure to comply  therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

                .  Maintenance  of  Property;  Insurance.  () Keep all  property
useful and  necessary  in its  business  in good  working  order and  condition,
ordinary  wear and tear  excepted  and () maintain  with  financially  sound and
reputable  insurance  companies  insurance  on all its property in at least such
amounts  and  against at least such risks  (but  including  in any event  public
liability,  product liability and business  interruption) as are usually insured
against in the same general  area by companies  engaged in the same or a similar
business.

                . Inspection  of Property;  Books and Records;  Discussions.  ()
Keep proper books of records and account in which full, true and correct entries
in  conformity  with  GAAP  and all  Requirements  of Law  shall  be made of all
dealings and  transactions  in relation to its business  and  activities  and ()
permit  representatives of any Lender,  upon reasonable notice and during normal
business  hours, to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable  time and as often
as may reasonably be desired and to discuss the business, operations, properties
and  financial  and other  condition of the Borrower and its  Subsidiaries  with
officers  and  employees  of the  Borrower  and its  Subsidiaries  and  with its
independent certified public accountants.

                .  Notices.  Promptly give notice to the Administrative
Agent and each Lender of:

        ()  the occurrence of any Default or Event of Default;

        ()  any () default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or ()
litigation, investigation or proceeding that may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority (including, without limitation, environmental
proceedings), that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have
a Material Adverse Effect;

        () any  litigation  or  proceeding  affecting the Borrower or any of its
Subsidiaries  in which the amount involved is $5,000,000 or more and not covered
by  insurance  (as to which the  relevant  insurance  company  has  acknowledged
coverage) or in which injunctive or similar relief is sought or which relates to
any Loan Document;

        () the following  events, as soon as possible and in any event within 30
days after the Borrower  knows or has reason to know thereof:  () the occurrence
of any Reportable Event with respect to any Plan, a failure to make any required
contribution  to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer  Plan or () the  institution  of  proceedings or the taking of any
other action by the PBGC or the Borrower or any  Commonly  Controlled  Entity or
any Multiemployer  Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and

        ()  any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.

Each notice  pursuant to this Section 7.7 shall be accompanied by a statement of
a  Responsible  Officer  setting  forth  details of the  occurrence  referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.

                .  Environmental Laws.  ()  Comply in all material respects
with, and ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all material respects with and maintain, and
ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by
applicable Environmental Laws.

                () Conduct and complete all  investigations,  studies,  sampling
and  testing,  and all  remedial,  removal  and  other  actions  required  under
Environmental  Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental  Authorities  regarding  Environmental
Laws.

                . Interest Rate Protection.  In the case of the Borrower, within
30 days  after the  Closing  Date,  enter  into and  thereafter  maintain  Hedge
Agreements to the extent necessary to provide that at least 50% of the aggregate
principal amount of the Term Loans is subject to either a fixed interest rate or
interest rate protection for a period of not less than three years,  which Hedge
Agreements  shall  have  terms and  conditions  reasonably  satisfactory  to the
Administrative Agent.

                .  Additional  Collateral,  etc. () With respect to any property
acquired  after the  Closing  Date by the  Borrower  or any of its  Subsidiaries
(other than (x) any property  described in paragraph  (b) or (c) below,  (y) any
property  subject  to a Lien  expressly  permitted  by  Section  8.3(g)  and (z)
property  acquired  by  any  Excluded  Foreign   Subsidiary)  as  to  which  the
Administrative  Agent, for the benefit of the Lenders, does not have a perfected
Lien,  promptly  ()  execute  and  deliver  to  the  Administrative  Agent  such
amendments to the Guarantee and Collateral  Agreement or such other documents as
the  Administrative   Agent  deems  necessary  or  advisable  to  grant  to  the
Administrative  Agent,  for the benefit of the Lenders,  a security  interest in
such  property  and () take all actions  necessary  or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property,  including the filing of Uniform  Commercial
Code  financing  statements  in such  jurisdictions  as may be  required  by the
Guarantee  and  Collateral  Agreement  or by law or as may be  requested  by the
Administrative Agent.

                () With  respect to any new  Subsidiary  (other than an Excluded
Foreign  Subsidiary)  created or acquired after the Closing Date by the Borrower
(which,  for the  purposes of this  paragraph  (b),  shall  include any existing
Subsidiary  that  ceases to be an  Excluded  Foreign  Subsidiary)  or any of its
Subsidiaries,  promptly () execute and deliver to the Administrative  Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems  necessary  or  advisable to grant to the  Administrative  Agent,  for the
benefit of the Lenders,  a perfected  first  priority  security  interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries,   ()  deliver  to  the   Administrative   Agent  the  certificates
representing  such Capital Stock,  together with undated stock powers, in blank,
executed  and  delivered  by a duly  authorized  officer of the Borrower or such
Subsidiary,  as the case may be,  () cause  such new  Subsidiary  () to become a
party  to the  Guarantee  and  Collateral  Agreement,  () to take  such  actions
necessary or advisable to grant to the  Administrative  Agent for the benefit of
the Lenders a  perfected  first  priority  security  interest in the  Collateral
described in the Guarantee  and  Collateral  Agreement  with respect to such new
Subsidiary, including the filing of Uniform Commercial Code financing statements
in  such  jurisdictions  as may be  required  by the  Guarantee  and  Collateral
Agreement or by law or as may be requested by the Administrative Agent and () to
deliver  to  the   Administrative   Agent  a  certificate  of  such  Subsidiary,
substantially  in the  form  of  Exhibit  C,  with  appropriate  insertions  and
attachments,  and (iv) if requested by the Administrative  Agent, deliver to the
Administrative  Agent legal opinions  relating to the matters  described  above,
which  opinions  shall be in form and  substance,  and from counsel,  reasonably
satisfactory to the Administrative Agent.

                () With respect to any new Excluded Foreign  Subsidiary  created
or acquired  after the Closing Date by the Borrower or any of its  Subsidiaries,
promptly () execute and deliver to the  Administrative  Agent such amendments to
the  Guarantee  and  Collateral  Agreement  as the  Administrative  Agent  deems
necessary or advisable to grant to the Administrative  Agent, for the benefit of
the Lenders,  a perfected first priority  security interest in the Capital Stock
of such new Subsidiary that is owned by the Borrower or any of its  Subsidiaries
(provided that in no event shall more than 65% of the total outstanding  Capital
Stock of any such new  Subsidiary  be required to be so pledged),  () deliver to
the  Administrative  Agent the  certificates  representing  such Capital  Stock,
together with undated stock powers,  in blank,  executed and delivered by a duly
authorized  officer of the Borrower or such Subsidiary,  as the case may be, and
take  such  other  action  as  may  be  necessary  or,  in  the  opinion  of the
Administrative Agent,  desirable to perfect the Administrative  Agent's security
interest therein for the ratable benefit of the Lenders,  and () if requested by
the Administrative  Agent,  deliver to the  Administrative  Agent legal opinions
relating to the matters  described  above,  which  opinions shall be in form and
substance,  and from  counsel,  reasonably  satisfactory  to the  Administrative
Agent.

                . Year 2000 Compliance. Each Loan Party will promptly notify the
Administrative  Agent in the event such Loan Party  discovers or determines that
any  computer  application  that is material to its or any of its  Subsidiaries'
businesses  and  operations  (including  those  of its  suppliers,  vendors  and
customers)  will not be Year  2000  compliant,  except to the  extent  that such
failure could not reasonably be expected to have a Material Adverse Effect. Upon
receipt of such  notice the  Administrative  Agent  shall  promptly  notify each
Lender thereof.

                .  The Acquisition.  () Upon the closing of the Tender
Offer, the Borrower shall repay the outstanding net funded debt of
the Target listed on Schedule 7.12 in an aggregate amount the U.S.
Dollar Equivalent of which does not exceed approximately
$24,100,000.

                ()  The Borrower shall use its best efforts to complete as
promptly as reasonably practicable the following:

        () The  Acquisition  of  the  Target  through  the  registration  of the
Integration  by the  Commercial  Register  Judge in the  commercial  register in
Bensheim,  Germany by May 31, 2000,  in  accordance  with Section  320(a) of the
German Stock  Corporation  Act;  provided that the  Integration  is necessary in
order for the Borrower to acquire 100% of the Shares of the Target.

        () The sale of the shares of Target to a direct or indirect Wholly-Owned
German  Subsidiary of the Borrower (the "Merger  Vehicle") for  consideration in
the form of an intercompany note and the liquidation of the Acquiror.

        () The merger of the Target with and into the Merger  Vehicle by May 31,
2000,  in  accordance  with  Sections  19 and 20 of the German  Stock  Corporate
Conversion Act.

SECTION .  NEGATIVE COVENANTS

                The  Borrower  hereby  agrees that,  so long as the  Commitments
remain in effect, any Letter of Credit remains  outstanding or any Loan or other
amount  is  owing to any  Lender  or the  Administrative  Agent  hereunder,  the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:

                .  Financial Condition Covenants.

                () Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four  consecutive  fiscal  quarters of
the Borrower (or, if less, the number of full fiscal quarters  subsequent to the
Closing Date) ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:

Consolidated

Fiscal Quarter Ending                         Leverage Ratio

- ---------------------                         ---------------
December 31, 1999                              4.50 to 1.00
March 31, 2000                                 4.50 to 1.00
June 30, 2000                                  4.25 to 1.00
September 30, 2000                             3.75 to 1.00
December 31, 2000 to
September 30, 2001                             3.50 to 1.00
December 31, 2001 to

September 30, 2002                             3.00 to 1.00
December 31, 2002 and thereafter               2.50 to 1.00

                () Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest  Coverage Ratio for any period of four  consecutive  fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters  subsequent to the
Closing Date) ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:

                                           Consolidated Interest

Fiscal Quarter Ending                         Coverage Ratio

- ---------------------                         ---------------
December 31, 1999                              2.50 to 1.00
March 31, 2000                                 2.50 to 1.00
June 30, 2000                                  2.50 to 1.00
September 30, 2000                             2.75 to 1.00
December 31, 2000 and thereafter               3.00 to 1.00

                ()  Consolidated   Fixed  Charge  Coverage  Ratio.   Permit  the
Consolidated  Fixed  Charge  Coverage  Ratio for any period of four  consecutive
fiscal quarters of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Closing  Date) ending with any fiscal  quarter to be less than
1.05 to 1.00.

                ()  Consolidated Net Worth.  Permit Consolidated Net Worth
at any time to be less than the sum of () $200,000,000, () 50% of
cumulative Consolidated Net Income for each fiscal quarter of the
Borrower (beginning with the fiscal quarter ending September 30,
1999) for which Consolidated Net Income is positive and () 100% of
the Net Cash Proceeds of any issuance by the Borrower of any equity
included within shareholders' equity of the Borrower consummated
after the Closing Date.

                .  Indebtedness.  Create, issue, incur, assume, become
liable in respect of or suffer to exist any Indebtedness, except:

        ()  Indebtedness of any Loan Party pursuant to any Loan Document;

        ()  ()  Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary or () Indebtedness of any Non-Guarantor Subsidiary to any
other Non-Guarantor Subsidiary;

        ()  Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations

of any Wholly Owned Subsidiary Guarantor;

        ()  Indebtedness outstanding on the date hereof and listed on
Schedule 8.2(d) and any refinancings, refundings, renewals or
extensions thereof (without increasing, or shortening the maturity
of, the principal amount thereof);

        ()  Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 8.3(g) in an
aggregate principal amount not to exceed $10,000,000 at any one time
outstanding;

        ()  Indebtedness of the Borrower in respect of the Subordinated
Notes in an aggregate principal amount not to exceed $120,000,000;

        ()  Hedge Agreements in respect of () Indebtedness otherwise
permitted hereby that bears interest at a floating rate, ()
intercompany accounts payable or receivable and () trade payables to
third parties for products purchased in the ordinary course of
business, in each case, so long as such agreements are not entered
into for speculative purposes;

        ()  Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations
of any Wholly Owned Subsidiary with respect to:  () real estate
lease payments, () payments to vendors for products for resale and
() any other payments to third parties on account of the
Indebtedness of any Wholly Owned Subsidiary; provided that the
aggregate amount of such payments guaranteed shall not exceed
$1,000,000 in any fiscal year of the Borrower;

        () from and after the date the Tender Offer is consummated, Indebtedness
of the Target to Esselte AB, a Swedish  corporation,  or an  affiliate  thereof;
provided that the principal amount of such Indebtedness shall be in an aggregate
amount on the date hereof the U.S.  Dollar  Equivalent of which shall not exceed
$13,500,000 and such principal amount shall not increase thereafter; and

        ()  additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and
all Subsidiaries) not to exceed $10,000,000 at any one time
outstanding.

                .  Liens.  Create, incur, assume or suffer to exist any Lien
upon any of its property, whether now owned or hereafter acquired,

except for:

        () Liens for taxes not yet due or that are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;

        () carriers', warehousemen's,  mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business that are not overdue
for a period of more than 30 days or that are being  contested  in good faith by
appropriate proceedings;

        ()  pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;

        () deposits to secure the performance of bids,  trade  contracts  (other
than for  borrowed  money),  leases,  statutory  obligations,  surety and appeal
bonds,  performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

        () easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary  course of business  that,  in the  aggregate,  are not
substantial  in amount and that do not in any case  materially  detract from the
value of the property subject thereto or materially  interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;

        () Liens in  existence  on the date hereof  listed on  Schedule  8.3(f),
securing Indebtedness permitted by Section 8.2(d), provided that no such Lien is
spread to cover any  additional  property  after the  Closing  Date and that the
amount of Indebtedness secured thereby is not increased;

        () Liens securing  Indebtedness of the Borrower or any other  Subsidiary
incurred  pursuant  to Section  8.2(e) to finance  the  acquisition  of fixed or
capital  assets,  provided  that () such Liens  shall be  created  substantially
simultaneously  with the  acquisition of such fixed or capital  assets,  () such
Liens do not at any time encumber any property other than the property  financed
by such  Indebtedness  and () the amount of Indebtedness  secured thereby is not
increased;

        ()  Liens created pursuant to the Security Documents;

        ()  any interest or title of a lessor under any lease entered into
by the Borrower or any Subsidiary in the ordinary course of its

business and covering only the assets so leased; and

        () Liens not  otherwise  permitted by this Section so long as neither ()
the aggregate  outstanding  principal amount of the obligations  secured thereby
nor () the aggregate  fair market value  (determined as of the date such Lien is
incurred)  of the assets  subject  thereto  exceeds (as to the  Borrower and all
Subsidiaries) $10,000,000 at any one time.

                .  Fundamental Changes.  Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or Dispose of,
all or substantially all of its property or business, except that:

        () any Subsidiary of the Borrower may be merged or consolidated  with or
into the  Borrower  (provided  that the  Borrower  shall  be the  continuing  or
surviving  corporation)  or with or into any Wholly Owned  Subsidiary  Guarantor
(provided that the continuing or surviving  corporation  shall be a Wholly Owned
Subsidiary Guarantor);

        ()  any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Wholly Owned Subsidiary Guarantor;

        ()  any Non-Guarantor Subsidiary may merge or consolidate with or
into any other Non-Guarantor Subsidiary;

        ()  any Non-Guarantor Subsidiary may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to any other
Subsidiary; and

        ()  any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to the Borrower

or any Wholly Owned Subsidiary Guarantor.

                .  Disposition of Property.  Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital
Stock to any Person, except:

        ()  the Disposition of obsolete or worn out property in the
ordinary course of business;

        ()  the sale of inventory in the ordinary course of business;

        ()  the sale of discontinued or remanufactured products in the
ordinary course of business;

        ()  Dispositions permitted by Section 8.4(b);

        ()  ()  the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Wholly Owned Subsidiary Guarantor or () the sale
or issuance of the Capital Stock of any Non-Guarantor Subsidiary to
any other Non-Guarantor Subsidiary; and

        ()  the Disposition of other property having a fair market value
not to exceed $10,000,000 in the aggregate for any fiscal year of
the Borrower.

                . Restricted  Payments.  Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any  payment on account  of, or set apart  assets for a sinking or other
analogous fund for, the purchase,  redemption,  defeasance,  retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether now
or hereafter  outstanding,  or make any other  distribution in respect  thereof,
either directly or indirectly,  whether in cash or property or in obligations of
the Borrower or any  Subsidiary  on any payments on account of the  Subordinated
Notes (collectively, "Restricted Payments"), except that:

        ()  any Subsidiary may make Restricted Payments to the Borrower or
any Wholly Owned Subsidiary Guarantor;

        ()  any Non-Guarantor Subsidiary may make Restricted Payments to
any other Subsidiary; and

        () so long as any such payment is not prohibited or otherwise  "blocked"
under the Subordinated Note Indenture, the Borrower may make a scheduled payment
of principal or interest when and as due on account of the Subordinated Notes.

                .  Capital Expenditures.  Make or commit to make any Capital
Expenditure, except:

        () Capital  Expenditures  of the  Borrower and its  Subsidiaries  in the
ordinary course of business not exceeding in the aggregate, for each fiscal year
of the Borrower, the amount set forth below opposite such fiscal year:

Fiscal Year                          Capital Expenditures

- -----------                           --------------------
  1999                                  $35,000,000
  2000                                  $35,000,000
  2001                                  $40,000,000
  2002                                  $40,000,000
  2003                                  $40,000,000
  2004                                  $45,000,000
  2005                                  $45,000,000
  2006                                  $45,000,000

provided, that () up to any such amount referred to above, if not so expended in
the fiscal year for which it is permitted,  may be carried over for  expenditure
in the next  succeeding  fiscal  year  only  and ()  Capital  Expenditures  made
pursuant to this clause (a) during any fiscal year shall be deemed made,  first,
in respect of amounts  permitted  for such fiscal  year as  provided  above and,
second,  in respect of amounts  carried over from the prior fiscal year pursuant
to subclause (i) above; and

        () Capital Expenditures made with the proceeds of any Reinvestment
Deferred Amount.

                . Investments.  Make any advance,  loan, extension of credit (by
way of guaranty  or  otherwise)  or capital  contribution  to, or  purchase  any
Capital  Stock,  bonds,  notes,  debentures or other debt  securities of, or any
assets  constituting  a business unit of, or make any other  investment  in, any
Person (all of the foregoing, "Investments"), except:

        ()  extensions of trade credit in the ordinary course of business;

        ()  investments in Cash Equivalents;

        ()  Guarantee Obligations permitted by Section 8.2;

        () loans and advances to employees of the Borrower or any  Subsidiary of
the  Borrower  in  the  ordinary  course  of  business  (including  for  travel,
entertainment  and relocation  expenses) in an aggregate amount for the Borrower
or any  Subsidiary  of the  Borrower  not to exceed  $1,000,000  at any one time
outstanding;

        ()  the Acquisition;

        ()  Investments in assets useful in the business of the Borrower
and its Subsidiaries made by the Borrower or any of its Subsidiaries
with the proceeds of any Reinvestment Deferred Amount;

        ()  intercompany Investments by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such
investment, is a Wholly Owned Subsidiary Guarantor;

        () a Permitted Acquisition, provided that () the purchase price for such
acquisition (including assumed liabilities) does not exceed $25,000,000,  () the
aggregate  purchase  price  for  all  Permitted  Acquisitions   (including  such
Permitted Acquisition) consummated during the immediately preceding twelve-month
period does not exceed  $50,000,000,  () Consolidated EBITDA (or the equivalent)
of the  Acquired  Business  being  acquired  in such  acquisition  for the  most
recently  completed four  consecutive  fiscal  quarters is greater than zero and
(iv) 30 days  prior  to the  proposed  closing  date  of such  acquisition,  the
Borrower  has  delivered  to the  Administrative  Agent  a  description  of such
acquisition  in a  format  and  such  detail  as  reasonably  requested  by  the
Administrative Agent (copies of which information the Administrative Agent shall
provide to the Lenders); and

        () in addition to  Investments  otherwise  expressly  permitted  by this
Section,  Investments by the Borrower or any of its Subsidiaries in an aggregate
amount  (valued  at cost)  not to  exceed  $10,000,000  during  the term of this
Agreement.

                .  Optional   Payments   and   Modifications   of  Certain  Debt
Instruments.  () Make or  offer  to make  any  optional  or  voluntary  payment,
prepayment,  repurchase or redemption of or otherwise  optionally or voluntarily
defease or segregate  funds with respect to the  Subordinated  Notes,  () amend,
modify,  waive or  otherwise  change,  or  consent  or  agree to any  amendment,
modification,  waiver or other  change to, any of the terms of the  Subordinated
Notes (other than any such amendment,  modification, waiver or other change that
() would  extend the  maturity or reduce the amount of any payment of  principal
thereof or reduce the rate or extend any date for  payment of  interest  thereon
and () does not involve  the  payment of a consent  fee),  or ()  designate  any
Indebtedness  (other than  obligations of the Loan Parties  pursuant to the Loan
Documents)  as  "Designated  Senior   Indebtedness"  for  the  purposes  of  the
Subordinated Note Indenture.

                .  Transactions  with  Affiliates.  Enter  into any  transaction
(other than such transactions between Non-Guarantor Subsidiaries), including any
purchase,  sale, lease or exchange of property,  the rendering of any service or
the payment of any  management,  advisory or similar  fees,  with any  Affiliate
(other  than the  Borrower or any  Subsidiary)  unless  such  transaction  is ()
otherwise permitted under this Agreement,  () in the ordinary course of business
of the  Borrower  or such  Subsidiary,  as the case may be, and () upon fair and
reasonable  terms no less favorable to the Borrower or such  Subsidiary,  as the
case may be, than it would obtain in a comparable arm's length  transaction with
a Person that is not an Affiliate.

                . Sales and  Leasebacks.  Enter  into any  arrangement  with any
Person  providing  for the leasing by the Borrower or any  Subsidiary of real or
personal  property that has been or is to be sold or transferred by the Borrower
or such Subsidiary to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such  property or rental
obligations of the Borrower or such Subsidiary.

                .  Changes in Fiscal Periods.  Permit the fiscal year of the
Borrower to end on a day other than the last Sunday in December or
change the Borrower's method of determining fiscal quarters.

                .  Negative  Pledge  Clauses.  Enter  into or suffer to exist or
become  effective  any  agreement  that  prohibits  or limits the ability of the
Borrower or any of its Subsidiaries to create,  incur, assume or suffer to exist
any Lien upon any of its  property or  revenues,  whether now owned or hereafter
acquired,  to secure its  obligations  under the Loan Documents to which it is a
party  other  than () this  Agreement  and the other Loan  Documents  and () any
agreements  governing  any  purchase  money Liens or Capital  Lease  Obligations
otherwise  permitted  hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).

                . Clauses Restricting  Subsidiary  Distributions.  Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to () make Restricted  Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower,  () make loans or
advances to, or other  Investments  in, the Borrower or any other  Subsidiary of
the  Borrower  or ()  transfer  any of its assets to the  Borrower  or any other
Subsidiary  of the  Borrower,  except  for  such  encumbrances  or  restrictions
existing  under or by  reason  of () any  restrictions  existing  under the Loan
Documents and () any restrictions with respect to a Subsidiary  imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary.

                . Lines of Business. Enter into any business, either directly or
through any  Subsidiary,  except for those  businesses in which the Borrower and
its  Subsidiaries are engaged on the date of this Agreement (after giving effect
to the Acquisition) or that are reasonably related thereto.

                .  Amendments to Acquisition Documents.  Amend, supplement
or otherwise modify terms and conditions of the Acquisition
Documentation or any such other documents except for any such
amendment, supplement or modification that () becomes effective
after the Closing Date and () could not reasonably be expected to
have a Material Adverse Effect.

SECTION .  EVENTS OF DEFAULT

                If any of the following events shall occur and be continuing:

        () the  Borrower  shall  fail  to pay  any  principal  of  any  Loan  or
Reimbursement  Obligation when due in accordance  with the terms hereof;  or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable  hereunder or under any other Loan Document,  within
five days after any such interest or other amount becomes due in accordance with
the terms hereof; or

        () any  representation or warranty made or deemed made by any Loan Party
herein or in any other Loan  Document or that is contained  in any  certificate,
document or financial or other statement furnished by it at any time under or in
connection  with this  Agreement or any such other Loan Document  shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made; or

        ()  () any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of
Section 7.4(a) (with respect to the Borrower only), Section 7.7(a)
or Section 8 of this Agreement or Sections 5.5 and 5.7(b) of the
Guarantee and Collateral Agreement or () an "Event of Default" under
and as defined in any Mortgage shall have occurred and be
continuing; or

        () any Loan Party shall default in the  observance or performance of any
other  agreement  contained in this Agreement or any other Loan Document  (other
than as  provided in  paragraphs  (a)  through  (c) of this  Section),  and such
default shall continue  unremedied for a period of 30 days after notice thereof;
or

        () the  Borrower or any of its  Subsidiaries  shall () default in making
any  payment of any  principal  of any  Indebtedness  (including  any  Guarantee
Obligation,  but excluding the Loans) on the scheduled or original due date with
respect thereto; or () default in making any payment of any interest on any such
Indebtedness  beyond the period of grace, if any,  provided in the instrument or
agreement  under  which  such  Indebtedness  was  created;  or () default in the
observance or  performance of any other  agreement or condition  relating to any
such  Indebtedness  or contained  in any  instrument  or  agreement  evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the  effect of which  default or other  event or  condition  is to cause,  or to
permit the holder or beneficiary of such  Indebtedness (or a trustee or agent on
behalf of such  holder or  beneficiary)  to cause,  with the giving of notice if
required,  such  Indebtedness  to become due prior to its stated maturity or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to become
payable;  provided,  that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of
Default unless, at such time, one or more defaults,  events or conditions of the
type  described in clauses (i), (ii) and (iii) of this  paragraph (e) shall have
occurred  and  be  continuing  with  respect  to  Indebtedness  the  outstanding
principal amount of which exceeds in the aggregate an amount equal to $5,000,000
(or an  amount  in  another  currency  of which the U.S.  Dollar  Equivalent  is
$5,000,000); or

        () () the Borrower or any of its  Subsidiaries  shall commence any case,
proceeding  or  other  action  ()  under  any  existing  or  future  law  of any
jurisdiction,   domestic  or  foreign,   relating  to  bankruptcy,   insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with  respect to it, or seeking to  adjudicate  it a bankrupt or  insolvent,  or
seeking  reorganization,   arrangement,   adjustment,  winding-up,  liquidation,
dissolution,  composition or other relief with respect to it or its debts, or ()
seeking  appointment  of a receiver,  trustee,  custodian,  conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower  or any of its  Subsidiaries  shall make a general  assignment  for the
benefit of its creditors; or () there shall be commenced against the Borrower or
any of its  Subsidiaries  any  case,  proceeding  or  other  action  of a nature
referred  to in clause  (i) above  that ()  results in the entry of an order for
relief  or any such  adjudication  or  appointment  or ()  remains  undismissed,
undischarged or unbonded for a period of 60 days; or () there shall be commenced
against the Borrower or any of its  Subsidiaries  any case,  proceeding or other
action  seeking  issuance of a warrant of  attachment,  execution,  distraint or
similar process  against all or any substantial  part of its assets that results
in the entry of an order for any such relief  that shall not have been  vacated,
discharged,  or stayed or bonded  pending  appeal  within 60 days from the entry
thereof;  or () the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to,  approval of, or acquiescence  in,
any of the acts  set  forth in  clause  (i),  (ii),  or (iii)  above;  or () the
Borrower or any of its Subsidiaries  shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or

        () () any  Person  shall  engage  in any  "prohibited  transaction"  (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
() any  "accumulated  funding  deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the  Borrower or any Commonly
Controlled  Entity,  () a  Reportable  Event  shall  occur with  respect  to, or
proceedings  shall commence to have a trustee  appointed,  or a trustee shall be
appointed,  to administer  or to  terminate,  any Single  Employer  Plan,  which
Reportable  Event or commencement of proceedings or appointment of a trustee is,
in the  reasonable  opinion  of the  Required  Lenders,  likely to result in the
termination  of such  Plan for  purposes  of Title IV of  ERISA,  () any  Single
Employer Plan shall terminate for purposes of Title IV of ERISA, () the Borrower
or any Commonly  Controlled  Entity shall,  or in the reasonable  opinion of the
Required  Lenders  is  likely  to,  incur any  liability  in  connection  with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
() any other event or condition shall occur or exist with respect to a Plan; and
in each case in  clauses  (i)  through  (vi)  above,  such  event or  condition,
together with all other such events or conditions,  if any,  could,  in the sole
judgment  of the  Required  Lenders,  reasonably  be expected to have a Material
Adverse Effect; or

        () one or more  judgments  or  decrees  shall  be  entered  against  the
Borrower or any of its Subsidiaries  involving in the aggregate a liability (not
paid or fully  covered by insurance as to which the relevant  insurance  company
has  acknowledged  coverage) in an amount equal to  $5,000,000  (or an amount in
another currency of which the U.S. Dollar Equivalent is $5,000,000) or more, and
all such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or

        () any of the Security  Documents shall cease, for any reason other than
by the action of the Lenders,  to be in full force and effect, or any Loan Party
or any  Affiliate of any Loan Party shall so assert,  or any Lien created by any
of the Security  Documents  shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or

        ()  the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full
force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert; or

        ()  a Change of Control or a Specified Change of Control shall
occur; or

        () the  Subordinated  Notes shall cease,  for any reason,  to be validly
subordinated to the Obligations, as provided in the Subordinated Note Indenture,
or any Loan Party,  any  Affiliate of any Loan Party,  the trustee in respect of
the  Subordinated  Notes or the holders of at least 25% in  aggregate  principal
amount of the Subordinated Notes shall so assert;

then, and in any such event,  () if such event is an Event of Default  specified
in clause  (i) or (ii) of  paragraph  (f) above with  respect  to the  Borrower,
automatically  the  Commitments  shall  immediately   terminate  and  the  Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement  and  the  other  Loan   Documents   (including  all  amounts  of  L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become  due and  payable,  and () if such event is any other  Event of  Default,
either or both of the following actions may be taken: () with the consent of the
Required  Lenders,  the  Administrative  Agent may,  or upon the  request of the
Required  Lenders,  the  Administrative  Agent shall,  by notice to the Borrower
declare the  Revolving  Commitments  to be terminated  forthwith,  whereupon the
Revolving  Commitments shall immediately  terminate;  and () with the consent of
the Required Lenders,  the Administrative  Agent may, or upon the request of the
Required  Lenders,  the  Administrative  Agent shall, by notice to the Borrower,
declare  the Loans  hereunder  (with  accrued  interest  thereon)  and all other
amounts owing under this Agreement and the other Loan  Documents  (including all
amounts  of L/C  Obligations,  whether  or not  the  beneficiaries  of the  then
outstanding  Letters  of Credit  shall have  presented  the  documents  required
thereunder)  to  be  due  and  payable  forthwith,   whereupon  the  same  shall
immediately  become due and payable.  With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative  Agent an amount equal
to the aggregate  then undrawn and  unexpired  amount of such Letters of Credit.
Amounts  held  in  such  cash  collateral   account  shall  be  applied  by  the
Administrative  Agent to the  payment  of drafts  drawn  under  such  Letters of
Credit,  and the unused  portion  thereof after all such Letters of Credit shall
have expired or been fully drawn upon,  if any,  shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents.  After
all such  Letters of Credit  shall have  expired or been fully drawn  upon,  all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower  hereunder and under the other Loan Documents  shall have been paid
in full, the balance,  if any, in such cash collateral account shall be returned
to the  Borrower  (or such other  Person as may be lawfully  entitled  thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.

SECTION .  THE AGENTS

                .  Appointment.  Each Lender hereby  irrevocably  designates and
appoints  the  Administrative  Agent as the  agent  of such  Lender  under  this
Agreement and the other Loan Documents,  and each Lender irrevocably  authorizes
the  Administrative  Agent, in such capacity,  to take such action on its behalf
under the  provisions  of this  Agreement  and the other Loan  Documents  and to
exercise such powers and perform such duties as are  expressly  delegated to the
Administrative  Agent  by the  terms  of  this  Agreement  and  the  other  Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding  any provision to the contrary elsewhere in this Agreement,  the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary  relationship with any Lender,  and
no  implied  covenants,  functions,  responsibilities,  duties,  obligations  or
liabilities  shall be read into this  Agreement  or any other Loan  Document  or
otherwise exist against the Administrative Agent.

                . Delegation of Duties. The Administrative Agent may execute any
of its duties under this  Agreement  and the other Loan  Documents by or through
agents  or  attorneys-in-fact  and  shall  be  entitled  to  advice  of  counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be  responsible  for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

                .  Exculpatory  Provisions.  Neither  any Agent nor any of their
respective  officers,   directors,   employees,  agents,   attorneys-in-fact  or
affiliates  shall be () liable  for any action  lawfully  taken or omitted to be
taken by it or such Person  under or in  connection  with this  Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable  decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross  negligence or willful  misconduct)
or ()  responsible  in  any  manner  to any of the  Lenders  for  any  recitals,
statements,  representations or warranties made by any Loan Party or any officer
thereof  contained  in this  Agreement  or any  other  Loan  Document  or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in  connection  with,  this  Agreement or any
other Loan  Document  or for the value,  validity,  effectiveness,  genuineness,
enforceability  or  sufficiency  of this Agreement or any other Loan Document or
for any  failure of any Loan Party a party  thereto to perform  its  obligations
hereunder or  thereunder.  The Agents shall not be under any  obligation  to any
Lender to ascertain or to inquire as to the  observance or performance of any of
the agreements  contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

                . Reliance by  Administrative  Agent. The  Administrative  Agent
shall be entitled to rely,  and shall be fully  protected  in relying,  upon any
instrument,  writing,  resolution,  notice,  consent,  certificate,   affidavit,
letter, telecopy, telex or teletype message,  statement, order or other document
or  conversation  believed  by it to be  genuine  and  correct  and to have been
signed,  sent or made by the  proper  Person  or  Persons  and upon  advice  and
statements of legal counsel  (including  counsel to the  Borrower),  independent
accountants  and  other  experts  selected  by  the  Administrative  Agent.  The
Administrative  Agent  may deem and  treat  the  payee of any Note as the  owner
thereof for all purposes  unless a written notice of assignment,  negotiation or
transfer  thereof  shall  have been  filed with the  Administrative  Agent.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action  under this  Agreement or any other Loan  Document  unless it shall first
receive such advice or concurrence of the Required  Lenders (or, if so specified
by this  Agreement,  all Lenders) as it deems  appropriate  or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The  Administrative  Agent shall in all cases be fully protected in
acting,  or in refraining  from acting,  under this Agreement and the other Loan
Documents  in  accordance  with a request of the  Required  Lenders  (or,  if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

                . Notice  of  Default.  The  Administrative  Agent  shall not be
deemed to have  knowledge or notice of the occurrence of any Default or Event of
Default  (other  than a  Default  or an Event of  Default  under  Section  9(a))
hereunder unless the  Administrative  Agent has received notice from a Lender or
the Borrower  referring to this  Agreement,  describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative  Agent receives such a notice, the Administrative Agent shall
give notice  thereof to the Lenders.  The  Administrative  Agent shall take such
action with respect to such  Default or Event of Default as shall be  reasonably
directed by the Required  Lenders (or, if so  specified by this  Agreement,  all
Lenders);  provided  that unless and until the  Administrative  Agent shall have
received  such  directions,  the  Administrative  Agent  may (but  shall  not be
obligated to) take such action, or refrain from taking such action, with respect
to such  Default  or Event of Default  as it shall  deem  advisable  in the best
interests of the Lenders.

                .  Non-Reliance  on  Agents  and  Other  Lenders.   Each  Lender
expressly  acknowledges  that  neither  the Agents  nor any of their  respective
officers,  directors,  employees,  agents,  attorneys-in-fact or affiliates have
made  any  representations  or  warranties  to it and  that no act by any  Agent
hereafter  taken,  including  any  review of the  affairs of a Loan Party or any
affiliate of a Loan Party,  shall be deemed to constitute any  representation or
warranty  by any Agent to any  Lender.  Each  Lender  represents  to each of the
Agents that it has,  independently  and without  reliance  upon any Agent or any
other  Lender,  and based on such  documents  and  information  as it has deemed
appropriate,  made its own  appraisal of and  investigation  into the  business,
operations,  property, financial and other condition and creditworthiness of the
Loan  Parties and their  affiliates  and made its own decision to make its Loans
hereunder and enter into this  Agreement.  Each Lender also  represents  that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such  documents and  information  as it shall deem  appropriate  at the
time,  continue to make its own credit  analysis,  appraisals  and  decisions in
taking or not taking action under this  Agreement and the other Loan  Documents,
and to make such  investigation as it deems necessary to inform itself as to the
business,   operations,    property,   financial   and   other   condition   and
creditworthiness  of the Loan Parties and their affiliates.  Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder,  the Administrative Agent shall not have any
duty  or  responsibility  to  provide  any  Lender  with  any  credit  or  other
information concerning the business, operations,  property, condition (financial
or otherwise),  prospects or creditworthiness of any Loan Party or any affiliate
of a Loan Party that may come into the possession of the Administrative Agent or
any  of  its  officers,  directors,  employees,  agents,   attorneys-in-fact  or
affiliates.

                .   Indemnification.   The  Lenders   agree  to  indemnify   the
Administrative  Agent in its capacity as such (to the extent not  reimbursed  by
the Borrower  and without  limiting  the  obligation  of the Borrower to do so),
ratably according to their respective  Aggregate Exposure  Percentages in effect
on the date on which  indemnification  is sought  under  this  Section  (or,  if
indemnification  is sought after the date upon which the Commitments  shall have
terminated  and the Loans  shall have been paid in full,  ratably in  accordance
with such Aggregate Exposure  Percentages  immediately prior to such date), from
and against any and all liabilities,  obligations,  losses, damages,  penalties,
actions,  judgments,  suits,  costs,  expenses  or  disbursements  of  any  kind
whatsoever  that may at any time  (whether  before or after the  payment  of the
Loans) be imposed on, incurred by or asserted against the  Administrative  Agent
in any way relating to or arising out of, the Commitments,  this Agreement,  any
of the other Loan  Documents  or any  documents  contemplated  by or referred to
herein or  therein  or the  transactions  contemplated  hereby or thereby or any
action taken or omitted by the Administrative  Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any  portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments, suits, costs, expenses or disbursements that are found by a
final and  nonappealable  decision of a court of competent  jurisdiction to have
resulted from the Administrative Agent's gross negligence or willful misconduct.
The  agreements  in this Section  shall survive the payment of the Loans and all
other amounts payable hereunder.

                . Each  Agent in Its  Individual  Capacity.  Each  Agent and its
respective  affiliates  may make loans to,  accept  deposits  from and generally
engage in any kind of business with any Loan Party as though such Agent were not
an Agent.  With  respect to its Loans made or renewed by it and with  respect to
any Letter of Credit issued or  participated in by it, each Agent shall have the
same rights and powers under this  Agreement and the other Loan Documents as any
Lender and may exercise  the same as though it were not an Agent,  and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.

                . Successor  Administrative  Agent. The Administrative Agent may
resign as  Administrative  Agent  upon 30 days'  notice to the  Lenders  and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this  Agreement and the other Loan  Documents,  then the Required  Lenders shall
appoint  from  among  the  Lenders a  successor  agent  for the  Lenders,  which
successor  agent shall (unless an Event of Default under Section 9(a) or Section
9(f) with respect to the Borrower  shall have  occurred  and be  continuing)  be
subject to approval by the Borrower  (which  approval shall not be  unreasonably
withheld or  delayed),  whereupon  such  successor  agent  shall  succeed to the
rights,   powers  and  duties  of  the   Administrative   Agent,  and  the  term
"Administrative  Agent"  shall mean such  successor  agent  effective  upon such
appointment and approval,  and the former Administrative  Agent's rights, powers
and duties as  Administrative  Agent shall be  terminated,  without any other or
further  act or deed on the part of such former  Administrative  Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted  appointment  as  Administrative  Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation,  the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent  hereunder  until such time,  if any, as the  Required  Lenders  appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation  as  Administrative  Agent,  the provisions of this Section 10 shall
inure to its benefit as to any actions  taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.

                .  Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any duties
or responsibilities hereunder in its capacity as such.

SECTION .  MISCELLANEOUS

                . Amendments and Waivers. Neither this Agreement, any other Loan
Document,  nor any terms  hereof or  thereof  may be  amended,  supplemented  or
modified  except in accordance  with the  provisions  of this Section 11.1.  The
Required  Lenders and each Loan Party party to the relevant  Loan  Document may,
or, with the written consent of the Required Lenders,  the Administrative  Agent
and each Loan Party party to the relevant  Loan Document may, from time to time,
() enter into written amendments, supplements or modifications hereto and to the
other Loan  Documents for the purpose of adding any provisions to this Agreement
or the other Loan  Documents or changing in any manner the rights of the Lenders
or of the Loan Parties  hereunder or thereunder  or () waive,  on such terms and
conditions as the Required Lenders or the Administrative  Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the  other  Loan   Documents  or  any  Default  or  Event  of  Default  and  its
consequences;  provided,  however,  that no such  waiver and no such  amendment,
supplement or modification  shall () eliminate or reduce any voting rights under
this Section 11.1,  forgive or reduce the  principal  amount or extend the final
scheduled date of maturity of any Loan,  extend the scheduled date or reduce the
amount of any  amortization  payment in  respect  of any Term  Loan,  extend the
expiration date of any Letter of Credit beyond the Revolving  Termination  Date,
reduce the stated rate of any  interest or fee payable  hereunder  or extend the
scheduled  date of any payment  thereof,  or  increase  the amount or extend the
expiration date of any Lender's Revolving Commitment or Term Commitment, in each
case without the consent of each Lender directly affected thereby; () reduce any
percentage  specified  in the  definition  of Required  Lenders,  consent to the
assignment  or  transfer by the  Borrower  of any of its rights and  obligations
under this Agreement and the other Loan Documents,  amend any other provision of
any  Loan  Document  that  by its  terms,  requires  the  consent,  approval  or
satisfaction  of  all  the  Lenders,  release  all or  substantially  all or any
material  part of the  Collateral  or release  all or  substantially  all of the
Subsidiary  Guarantors from their obligations under the Guarantee and Collateral
Agreement or subordinate the Loans to any other Indebtedness of the Borrower, in
each case  without the  consent of all  Lenders;  () amend,  modify or waive any
condition  precedent to any extension of credit under the Revolving Facility set
forth in Section 6.1  (including  in  connection  with any waiver of an existing
Default  or Event of  Default)  without  the  consent of the  Majority  Facility
Lenders in  respect of the  Revolving  Facility;  () amend,  modify or waive any
provision of Section 4.8 without the consent of the Majority Facility Lenders in
respect of each Facility adversely affected thereby; () reduce the amount of Net
Cash  Proceeds or Excess Cash Flow  required to be applied to prepay Loans under
this Agreement  without the consent of the Majority  Facility Lenders under each
Facility;  () reduce the  percentage  specified  in the  definition  of Majority
Facility Lenders with respect to any Facility without the consent of all Lenders
under  such  Facility;  () amend,  modify or waive any  provision  of Section 10
without the consent of the Agents;  () amend,  modify or waive any  provision of
Section 2.7 without the written  consent of the Swingline  Lender;  or () amend,
modify or waive any  provision  of Section 3 without the consent of each Issuing
Lender. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders,  the  Administrative  Agent and all future holders of the Loans. In
the case of any waiver,  the Loan  Parties,  the Lenders and the  Administrative
Agent shall be restored to their former position and rights  hereunder and under
the other Loan  Documents,  and any Default or Event of Default  waived shall be
deemed to be cured and not  continuing;  but no such waiver  shall extend to any
subsequent or other Default or Event of Default,  or impair any right consequent
thereon.

                .  Notices.  All  notices,  requests  and demands to or upon the
respective  parties  hereto to be effective  shall be in writing  (including  by
telecopy),  and, unless otherwise expressly provided herein,  shall be deemed to
have been duly given or made when delivered,  or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received,   addressed   as  follows  in  the  case  of  the   Borrower  and  the
Administrative  Agent,  and  as set  forth  in an  administrative  questionnaire
delivered to the  Administrative  Agent in the case of the  Lenders,  or to such
other address as may be hereafter notified by the respective parties hereto:

The Borrower:                  Checkpoint Systems, Inc.

                                 101 Wolf Drive

                               Thorofare, NJ 08086
                         Attention: Jeffrey A. Reinhold,

                                          SVP and Chief Financial Officer
                                Telecopy:    (609) 848-2042
                                Telephone:  (609) 384-2457

                                and

                                Attention:    Neil D. Austin, Vice
                                President, General Counsel and Secretary
                                Telecopy:   (609) 848-2042
                                Telephone:  (609) 384-2412

with a copy to:                 Stradley Ronon Stevens & Young LLP
                                2600 One Commerce Square
                                Philadelphia, PA  19103-7098
                                Attention:  William R. Sasso, Esq.
                                Telecopy:   (215) 564-8120
                                Telephone:  (215) 564-8045

The Administrative Agent:       First Union National Bank
                                301 South College Street
                                Charlotte, NC 28288
                                Attention:  Syndication Agency Services
                                Telecopy:   (704) 383-0288
                                Telephone: (704) 374-2698

provided that any notice,  request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

                . No Waiver;  Cumulative Remedies. No failure to exercise and no
delay in exercising,  on the part of the Administrative Agent or any Lender, any
right,  remedy,  power or privilege  hereunder or under the other Loan Documents
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any right,  remedy,  power or privilege  hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights,  remedies,  powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

                .   Survival   of    Representations    and   Warranties.    All
representations  and warranties made hereunder,  in the other Loan Documents and
in any  document,  certificate  or  statement  delivered  pursuant  hereto or in
connection  herewith  shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.

                . Payment of Expenses and Taxes.  The Borrower  agrees () to pay
or  reimburse  the  Administrative  Agent  for all its  out-of-pocket  costs and
expenses incurred in connection with the development,  preparation and execution
of, and any  amendment,  supplement or  modification  to, this Agreement and the
other Loan Documents and any other documents prepared in connection  herewith or
therewith,   and  the  consummation  and   administration  of  the  transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of  counsel  to the  Administrative  Agent and  filing  and  recording  fees and
expenses,  with  statements with respect to the foregoing to be submitted to the
Borrower  prior to the  Closing  Date (in the case of  amounts to be paid on the
Closing  Date) and from time to time  thereafter  on a  quarterly  basis or such
other periodic basis as the Administrative  Agent shall deem appropriate,  () to
pay or  reimburse  each  Lender  and the  Administrative  Agent  for  all  their
respective  costs and expenses  incurred in connection  with the  enforcement or
preservation  of any rights under this  Agreement,  the other Loan Documents and
any such  other  documents,  including  the fees and  disbursements  of  counsel
(including the allocated  fees and expenses of in-house  counsel) to each Lender
and of counsel to the Administrative Agent, () to pay, indemnify,  and hold each
Lender and the  Administrative  Agent  harmless  from, any and all recording and
filing fees and any and all  liabilities  with respect to, or resulting from any
delay in paying,  stamp,  excise and other taxes, if any, that may be payable or
determined  to be payable in  connection  with the execution and delivery of, or
consummation or  administration  of any of the transactions  contemplated by, or
any amendment,  supplement or modification of, or any waiver or consent under or
in respect  of,  this  Agreement,  the other Loan  Documents  and any such other
documents, and () to pay, indemnify, and hold each Lender and the Administrative
Agent and their respective officers,  directors,  employees,  affiliates, agents
and controlling  persons (each, an  "Indemnitee")  harmless from and against any
and all other liabilities,  obligations,  losses, damages,  penalties,  actions,
judgments,  suits,  costs,  expenses  or  disbursements  of any  kind or  nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration  of this  Agreement,  the other Loan Documents and any such other
documents, including any of the foregoing relating to the use of proceeds of the
Loans  or  the  violation  of,   noncompliance  with  or  liability  under,  any
Environmental  Law  applicable to the  operations  of the  Borrower,  any of its
Subsidiaries  or any of the Properties  and the reasonable  fees and expenses of
legal  counsel  in  connection  with  claims,  actions  or  proceedings  by  any
Indemnitee  against any Loan Party under any Loan Document (all the foregoing in
this clause (d), collectively,  the "Indemnified  Liabilities"),  provided, that
the Borrower shall have no obligation  hereunder to any Indemnitee  with respect
to Indemnified  Liabilities to the extent such Indemnified Liabilities are found
by a final and  nonappealable  decision of a court of competent  jurisdiction to
have  resulted  from  the  gross  negligence  or  willful   misconduct  of  such
Indemnitee.  Without  limiting  the  foregoing,  and to the extent  permitted by
applicable law, the Borrower agrees not to assert and to cause its  Subsidiaries
not to assert,  and hereby waives and agrees to cause its Subsidiaries to waive,
all rights for  contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities,  settlements, damages, costs and
expenses of whatever  kind or nature,  under or related to  Environmental  Laws,
that any of them might have by statute or otherwise against any Indemnitee.  All
amounts  due under this  Section  11.5 shall be payable not later than five days
after written demand therefor.  Statements  payable by the Borrower  pursuant to
this Section 11.5 shall be submitted  to First Union  National  Bank,  301 South
College  Street,   Charlotte,  NC  28288,  Attn:  Syndication  Agency  Services,
(Telephone No. (704) 374-2698)  (Telecopy No. (704) 383-0288 and to the Borrower
at the  address  of the  Borrower  set forth in Section  11.2,  or to such other
Person or address as may be  hereafter  designated  by the Borrower in a written
notice to the  Administrative  Agent.  The agreements in this Section 11.5 shall
survive repayment of the Loans and all other amounts payable hereunder.

                . Successors and Assigns;  Participations  and  Assignments.  ()
This  Agreement  shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Administrative Agent, all future holders of the Loans and their
respective  successors  and assigns,  except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.

                () Any Lender  may,  without  the  consent of the  Borrower,  in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant")  participating  interests
in any Loan owing to such  Lender,  any  Commitment  of such Lender or any other
interest of such Lender  hereunder  and under the other Loan  Documents.  In the
event of any such sale by a Lender of a participating interest to a Participant,
such  Lender's  obligations  under this  Agreement to the other  parties to this
Agreement shall remain  unchanged,  such Lender shall remain solely  responsible
for the  performance  thereof,  such Lender  shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's  rights and obligations  under
this Agreement and the other Loan  Documents.  In no event shall any Participant
under any such  participation  have any right to approve any amendment or waiver
of any  provision of any Loan  Document,  or any consent to any departure by any
Loan  Party  therefrom,  except to the  extent  that such  amendment,  waiver or
consent would reduce the principal of, or interest on, the Loans,  Reimbursement
Obligations  or any fees  payable  hereunder,  or postpone the date of the final
maturity  of the Loans or extend  the  expiration  date of any  Letter of Credit
beyond the  Scheduled  Revolving  Termination  Date,  in each case to the extent
subject to such  participation.  The Borrower agrees that if amounts outstanding
under  this  Agreement  and the  Loans  are due or  unpaid,  or shall  have been
declared or shall have become due and payable upon the occurrence of an Event of
Default,  each Participant  shall, to the maximum extent permitted by applicable
law,  be deemed to have the right of  setoff  in  respect  of its  participating
interest  in amounts  owing  under this  Agreement  to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement,  provided that, in purchasing such participating  interest, such
Participant  shall be  deemed  to have  agreed  to share  with the  Lenders  the
proceeds  thereof as provided in Section 11.7(a) as fully as if it were a Lender
hereunder.  The Borrower also agrees that each Participant  shall be entitled to
the benefits of Sections 4.9, 4.10 and 4.11 with respect to its participation in
the  Commitments  and the  Loans  outstanding  from time to time as if it were a
Lender;  provided that, in the case of Section 4.10, such Participant shall have
complied with the  requirements of said Section and provided,  further,  that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section  than the  transferor  Lender  would  have been  entitled  to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.

                () Any Lender (an "Assignor") may, in accordance with applicable
law, at any time and from time to time assign to any Lender,  any  affiliate  of
any Lender or any  Approved  Fund or, with the consent of the  Borrower  and the
Administrative Agent (which, in each case, shall not be unreasonably withheld or
delayed),  to an  additional  bank,  financial  institution  or other entity (an
"Assignee") all or any part of its rights and  obligations  under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,  executed
by such  Assignee,  such Assignor and any other Person whose consent is required
pursuant to this paragraph,  and delivered to the  Administrative  Agent for its
acceptance and recording in the Register; provided that () no such assignment to
an Assignee (other than any Lender,  any affiliate of any Lender or any Approved
Fund) shall be in an aggregate  principal amount of less than $5,000,000  (other
than in the case of an  assignment  of all of a  Lender's  interests  under this
Agreement),  and () the Assignor shall have commitments and Loans aggregating at
least  $5,000,000  (other than in the case of an assignment of all of a Lender's
interests under this Agreement)  unless otherwise agreed by the Borrower and the
Administrative  Agent.  For purposes of the proviso  contained in the  preceding
sentence,  the amount  described  therein shall be aggregated in respect of each
Lender and its related  Approved  Funds, if any. Any such assignment need not be
ratable as among the Facilities. Upon such execution,  delivery,  acceptance and
recording,  from and  after  the  effective  date  determined  pursuant  to such
Assignment and Acceptance,  (x) the Assignee  thereunder shall be a party hereto
and, to the extent provided in such  Assignment and Acceptance,  have the rights
and  obligations  of a Lender  hereunder  with a Commitment  and/or Loans as set
forth therein,  and (y) the Assignor thereunder shall, to the extent provided in
such  Assignment and  Acceptance,  be released from its  obligations  under this
Agreement  (and, in the case of an Assignment and Acceptance  covering all of an
Assignor's  rights and  obligations  under this  Agreement,  such Assignor shall
cease to be a party hereto, except in respect of Sections 4.9, 4.10 and 11.5 for
the period prior to the effective date thereof).  Notwithstanding  any provision
of this Section 11.6,  the consent of the Borrower shall not be required for any
assignment  that  occurs  when an Event of Default  shall have  occurred  and be
continuing with respect to the Borrower.

                () The  Administrative  Agent shall,  on behalf of the Borrower,
maintain at its address  referred to in Section  11.2 a copy of each  Assignment
and  Acceptance  delivered  to it  and  a  register  (the  "Register")  for  the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal  amount of the Loans owing to, each Lender from time to time.  The
entries in the Register shall be conclusive,  in the absence of manifest  error,
and the  Borrower,  each  other Loan  Party,  the  Administrative  Agent and the
Lenders  shall treat each Person  whose name is recorded in the  Register as the
owner of the Loans and any Notes  evidencing the Loans recorded  therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the  Register  (and each Note shall  expressly  so  provide).  Any
assignment  or  transfer of all or part of a Loan  evidenced  by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer  of the Note  evidencing  such  Loan,  accompanied  by a duly  executed
Assignment and  Acceptance,  and thereupon one or more new Notes shall be issued
to the designated Assignee.

                () Upon its receipt of an Assignment and Acceptance  executed by
an  Assignor,  an Assignee  and any other  Person  whose  consent is required by
Section  11.6(c),  together  with  payment  to  the  Administrative  Agent  of a
registration  and processing fee of $4,000,  the  Administrative  Agent shall ()
promptly  accept such  Assignment and  Acceptance and () record the  information
contained  therein in the Register on the  effective  date  determined  pursuant
thereto; provided that such fee shall not be paid in the event a Lender executes
an Assignment and Acceptance in favor of an Affiliate of such Lender.

                () For  avoidance  of  doubt,  the  parties  to  this  Agreement
acknowledge  that the provisions of this Section 11.6 concerning  assignments of
Loans and Notes relate only to absolute  assignments and that such provisions do
not prohibit  assignments  creating security interests,  including any pledge or
assignment  by a  Lender  of any  Loan or Note to any  Federal  Reserve  Bank in
accordance with applicable law.

                () The  Borrower,  upon  receipt  of  written  notice  from  the
relevant  Lender,  agrees  to  issue  Notes  to any  Lender  requiring  Notes to
facilitate transactions of the type described in paragraph (f) above.

                .  Adjustments; Set-off.  ()  Except to the extent that this
Agreement expressly provides for payments to be allocated to a
particular Lender or to the Lenders under a particular Facility, if
any Lender (a "Benefitted Lender") shall receive any payment of all
or part of the Obligations owing to it, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in
Section 9(f), or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender, such
Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of the Obligations owing to
each such other Lender (with such participating interest to be
ratabale in the Obligations of each such other Lender), or shall
provide such other Lenders with the benefits of any such collateral,
as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of
the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest (other than any interest required to
be paid by such Benefitted Lender to the recovering party).

                () In  addition  to any  rights  and  remedies  of  the  Lenders
provided by law,  each Lender shall have the right,  without prior notice to the
Borrower,  any such notice being expressly  waived by the Borrower to the extent
permitted by  applicable  law,  upon any amount  becoming due and payable by the
Borrower  hereunder  (whether  at  the  stated  maturity,   by  acceleration  or
otherwise), to set off and appropriate and apply against such amount any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  and any other credits,  indebtedness or claims,  in any currency,  in
each case  whether  direct or  indirect,  absolute  or  contingent,  matured  or
unmatured, at any time held or owing by such Lender or any branch,  affiliate or
agency thereof to or for the credit or the account of the Borrower,  as the case
may  be.  Each  Lender   agrees   promptly  to  notify  the   Borrower  and  the
Administrative Agent after any such set-off and application made by such Lender,
provided  that the failure to give such notice  shall not affect the validity of
such setoff and application.

                () Any amounts to be adjusted,  purchased or set-off pursuant to
paragraphs  (a) or (b) above  shall be  denominated  in  Dollars  and any amount
denominated  in a currency other than Dollars shall be in an amount equal to the
U.S. Dollar Equivalent of such amount determined at the  Administrative  Agent's
spot  rate of  exchange  in the  interbank  market  where its  foreign  currency
exchange  operations  in  respect  of such  non-Dollar  currency  are then being
conducted,  at or about 11:00 A.M., local time, on such date for the purchase of
Dollars with such  non-Dollar  currency,  for delivery two Business  Days later;
provided,  that if at the time of any such determination,  no such spot rate can
reasonably be quoted, the Administrative  Agent may use any reasonable method as
it deems  applicable to determine  such rate,  and such  determination  shall be
conclusive absent manifest error.

                . Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts  taken together shall be deemed to constitute one and the same
instrument.  Delivery  of an  executed  signature  page  of  this  Agreement  by
facsimile  transmission  shall be effective  as delivery of a manually  executed
counterpart  hereof.  A set of the  copies of this  Agreement  signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

                .  Severability.   Any  provision  of  this  Agreement  that  is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

                .  Integration.  This  Agreement  and the other  Loan  Documents
represent the entire agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof,  and there are no
promises,  undertakings,  representations  or warranties  by the  Administrative
Agent or any Lender  relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.

                .  GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE

STATE OF NEW YORK.

                .  Submission To Jurisdiction; Waivers.  The Borrower hereby
irrevocably and unconditionally:

        () submits for itself and its property in any legal action or proceeding
relating to this  Agreement and the other Loan Documents to which it is a party,
or for recognition and  enforcement of any judgment in respect  thereof,  to the
non-exclusive  general  jurisdiction of the courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;

        () consents  that any such action or  proceeding  may be brought in such
courts and waives any objection  that it may now or hereafter  have to the venue
of any such  action  or  proceeding  in any such  court or that  such  action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

        () agrees that service of process in any such action or  proceeding  may
be effected by mailing a copy thereof by  registered  or certified  mail (or any
substantially  similar form of mail),  postage prepaid, to the Borrower,  at its
address  set  forth in  Section  11.2 or at such  other  address  of  which  the
Administrative Agent shall have been notified pursuant thereto;

        ()  agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and

        () waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or  proceeding  referred to in this
Section any special, exemplary, punitive or consequential damages.

                .  Acknowledgments.  The Borrower hereby acknowledges that:

        ()  it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;

        () neither  the  Administrative  Agent nor any Lender has any  fiduciary
relationship  with or duty to the Borrower  arising out of or in connection with
this Agreement or any of the other Loan Documents,  and the relationship between
Administrative  Agent and Lenders,  on one hand, and the Borrower,  on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and

        ()  no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.

                . Releases of Guarantees and Liens. () Notwithstanding  anything
to  the  contrary   contained  herein  or  in  any  other  Loan  Document,   the
Administrative  Agent is hereby  irrevocably  authorized by each Lender (without
requirement  of notice to or consent of any Lender except as expressly  required
by Section 11.1) to take any action  requested by the Borrower having the effect
of releasing any Collateral or guarantee  obligations () to the extent necessary
to permit consummation of any transaction not prohibited by any Loan Document or
that has been  consented  to in  accordance  with  Section  11.1 or () under the
circumstances described in paragraph (b) below.

                () At such time as the Loans, the Reimbursement  Obligations and
the other  obligations under the Loan Documents (other than obligations under or
in respect of Hedge  Agreements)  shall have been paid in full, the  Commitments
have  been  terminated  and no  Letters  of  Credit  shall be  outstanding,  the
Collateral  shall be released from the Liens created by the Security  Documents,
and the  Security  Documents  and all  obligations  (other than those  expressly
stated to survive such  termination) of the  Administrative  Agent and each Loan
Party under the Security Documents shall terminate,  all without delivery of any
instrument or performance of any act by any Person.

                .  Conversion of Currencies.  ()  If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum
owing hereunder in one currency into another currency, each party
hereto agrees, to the fullest extent that it may effectively do so,
that the rate of exchange used shall be that at which in accordance
with normal banking procedures in the relevant jurisdiction the
first currency could be purchased with such other currency on the
Business Day immediately preceding the day on which final judgment
is given.

                () The  obligations of the Borrower in respect of any sum due to
any  party  hereto  or  any  holder  of the  obligations  owing  hereunder  (the
"Applicable  Creditor") shall,  notwithstanding  any judgment in a currency (the
"Judgment  Currency")  other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the  Business Day  following  receipt by the  Applicable  Creditor of any sum
adjudged to be so due in the Judgment Currency,  the Applicable  Creditor may in
accordance with normal banking procedures in the relevant  jurisdiction purchase
the  Agreement  Currency  with  the  Judgment  Currency;  if the  amount  of the
Agreement  Currency  so  purchased  is less than the sum  originally  due to the
Applicable  Creditor  in the  Agreement  Currency,  the  Borrower  agrees,  as a
separate  obligation and  notwithstanding  any such  judgment,  to indemnify the
Applicable Creditor against such loss. The obligations of the Borrower contained
in this Section 11.15 shall survive the  termination  of this  Agreement and the
payment of all other amounts owing hereunder.

                .  Confidentiality.  Each of the  Administrative  Agent and each
Lender agrees to keep confidential all non-public  information provided to it by
any Loan Party  pursuant to this Agreement that is designated by such Loan Party
as confidential;  provided that nothing herein shall prevent the  Administrative
Agent  or  any  Lender  from   disclosing   any  such   information  ()  to  the
Administrative  Agent,  any other  Lender,  any  affiliate  of any Lender or any
Approved  Fund,  () to  any  Transferee  or  swap  counterparty  or  prospective
Transferee  or swap  counterparty  that agrees to comply with the  provisions of
this Section, () to its employees, directors, agents, attorneys, accountants and
other  professional  advisors  or  those of any of its  affiliates,  () upon the
request or demand of any Governmental  Authority, () in response to any order of
any  court or other  Governmental  Authority  or as may  otherwise  be  required
pursuant to any  Requirement  of Law, () in  connection  with any  litigation or
similar  proceeding  to which such Lender is a party,  () that has been publicly
disclosed,  () to the National  Association  of Insurance  Commissioners  or any
similar  organization or any nationally  recognized  rating agency that requires
access to information about a Lender's  investment  portfolio in connection with
ratings  issued  with  respect  to such  Lender,  or () in  connection  with the
exercise of any remedy hereunder or under any other Loan Document.

                .  Section Headings.  The Section headings used in and the
Table of Contents of this Agreement are for convenience of reference
only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

                .  WAIVERS OF JURY TRIAL.  THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN

                IN  WITNESS  WHEREOF,   the  parties  hereto  have  caused  this
Agreement to be duly executed and delivered by their proper and duly  authorized
officers as of the day and year first above written.

CHECKPOINT SYSTEMS, INC.

By:/S/  Jeffrey A. Reinhold
   Name:  Jeffrey A. Reinhold
   Title:  Senior Vice President,

             Chief Financial Officer
           and Treasurer

FIRST UNION NATIONAL BANK, as

  Administrative Agent and as a Lender

By: /S/  T.M. Molitor
   Name:  T.M. Molitor
   Title: Senior Vice President

PNC BANK, NATIONAL ASSOCIATION, as

   Documentation Agent and as a Lender

By:  /S/ Robert J. Giannone
      Name:Robert J. Giannone
      Title: Assistant Vice President

BANK ONE, NA (MAIN OFFICE, CHICAGO), as

   Syndication Agent and as a Lender

By: /S/ CLT Turner III
      Name: CLT Turner III
      Title: Vice President

FIRST UNION SECURITIES INC., as   Arranger

By:  /S/  T.M. Molitor
   Name: T.M. Molitor
   Title: Director

BANKBOSTON, N.A.

By:  /S/ Joseph L. Massimo
       Name: Joseph L. Massimo
       Title: Director

SUMMIT BANK

By:  /S/ Peter J. Cahill
       Name: Peter J. Cahill
       Title: Managing Director

ABN AMRO BANK, N.V.

By:  Donald Sutton
       Name: Donald Sutton
       Title: Vice President

By:  /S/ Dean P. Giglio
       Name: Dean P. Giglio
       Title: Vice President

DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES

By:  /S/ A. Richard Morris
   Name: A. Richard Morris
   Title: First Vice President

By: /S/ Vincent Carotenuto
   Name: Vincent Carotenuto
   Title: Assistant Treasurer

THE BANK OF NEW YORK

By:   /S/ Linda Mae Coppa
       Name: Linda Mae Coppa
       Title: Vice President

THE BANK OF TOKYO-MITSUBISHI TRUST

COMPANY

By:   /S/ W.A. DiNicola
       Name: W.A. DiNicola
       Title: Vice President

CREDIT AGRICOLE INDOSUEZ

By:   /S/ Craig Welch
       Name: Craig Welch

       Title: First Vice President

By:   /S/ John McCloskey
       Name: John McCloskey
       Title: Vice President

COMERICA BANK

By:   /S/ Kimberly S. Kersten
       Name: Kimberly S. Kersten
       Title: Vice President

BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.

By:  /S/ Clifford L. Wells
     Name: Clifford L. Wells
     Title: Vice President

By:  /S/ William W. Hunter
     Name: William W. Hunter
     Title:Vice President

CREDIT LYONNAIS NEW YORK BRANCH

By:  /S/ Scott R. Chappelka
       Name: Scott R. Chappelka
       Title: Vice President

ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN, AG

By: /S/ Anca Trifan
       Name: Anca Trifan
       Title: Vice President

By:  /S/ John S. Runnion
       Name: John S. Runnion
       Title: First Vice President

THE FUJI BANK, LIMITED

By:  /S/ Raymond Ventura
       Name: Raymond Ventura
       Title: Vice President & Manager

HARRIS TRUST AND SAVINGS BANK

By:  /S/ M. James Barry III
       Name: M. James Barry III
       Title: Vice President

SOVEREIGN BANK

By:  /S/ Joseph Becker
       Name: Joseph Becker
       Title:Vice President

USTRUST

By:  /S/ David G. Eastman
       Name: David G. Eastman
       Title: Vice President

BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH

By:  /S/ Leonardo Valentini
       Name: Leonado Valentini
       Title: First Vice President

By:  /S/ Miguel J. Medida
       Name: Miguel J. Medida
       Title: Vice President

BANK HAPOALIM B.M.

By:  /S/ Laura Anne Raffa
       Name: Laura Anne Raffa

       Title: First Vice President and Corporate Manager

By:  /S/ Conrad Wagner
       Name: Conrad Wagner

       Title: First Vice President

BANK LEUMI USA

By: /S/ Joung Hee Hong
       Name: Joung Hee Hong
       Title: Vice President

EX-99

COMPANY CONTACT:                   INVESTOR RELATIONS CONTACTS:
Checkpoint Systems, Inc.           Donna Stein, Stephanie Carrington,
Jeff Reinhold                      Jill Meleski
Chief Financial Officer            Morgen-Walke Associates, Inc.
(856) 848-1800                     (212) 850-5600

                                   MEDIA RELATIONS CONTACTS:

                                   Brian Maddox, Jennifer Gery
                                   Morgen-Walke Associates, Inc.
                                   (212) 850-5600

FOR IMMEDIATE RELEASE

CHECKPOINT SYSTEMS COMPLETES ACQUISITION OF METO AG;
ACQUISITION CREATES LEADING RETAIL SUPPLY CHAIN

MANAGEMENT PROVIDER

Thorofare, NJ, December 10, 1999 - Checkpoint Systems, Inc. (NYSE:CKP) announced
today that it has  completed  the  acquisition  of Meto AG,  receiving  98.6% of
outstanding  shares in  response to a cash tender  offer.  The Company  received
clearance  from the  German  regulatory  authority  on  December  7,  1999.  The
acquisition is valued at approximately $265 million (C260 million).

Checkpoint,  a leading  provider of integrated  security  solutions to retailers
worldwide and a pioneer in radio  frequency  identification  (RFID)  technology,
combined with Meto, a global provider of barcode  labeling  systems,  electronic
article surveillance (EAS), and handheld labeling systems for customers across a
wide variety of markets and industries, creates a global supply chain management
provider.  The combined  entity will offer  customers  state of the art security
systems as well as a wide variety of product and services to automatically mark,
identify  and/or  track an  object  as it passes  along  the  value  chain  from
manufacturing  through  to the final  retail  sale.  The  acquisition  more than
doubles the Company's  estimated  2000 revenues to $750 million (C735  million),
with  over  40%  representing  recurring  revenues.  The new  Company  has  4500
employees and will operate in 27 countries worldwide. -more-

Checkpoint/Meto
Page 2

As  a  result  of  the  acquisition,  Checkpoint  has  increased  its  worldwide
electronic article surveillance (EAS) market share to 33% and its European share
to 43%.  Checkpoint  provides source tagging  leadership to the worldwide retail
community  with a volume of more  than 800  million  source  tagged  units.  The
Company offers both radio frequency (RF) and electro-magnetic (EM) technologies,
enabling it to dramatically enhance its U.S. and European customer base.

"Checkpoint's  market position and product  offerings have been  strengthened by
our strategic  acquisition of Meto which will be accretive to Checkpoint's  2000
earnings," said Kevin Dowd,  President and Chief Executive Officer of Checkpoint
Systems,  Inc. "In addition to our increased  worldwide  EAS market  share,  the
acquisition   of  Meto   provides  a  portal  to  the  $10   billion   automatic
identification  market.  This market  represents the convergence of the security
and  tracking  businesses  which  coincides  with the  increased  need for asset
management  solutions by  industry.  With the  addition of Meto,  Checkpoint  is
uniquely  positioned  to provide  barcode,  EAS,  and RFID  technologies  to its
customers.   Moreover,   we  believe   there  are   considerable   consolidation
opportunities  within  the  larger,  faster  growing  automatic   identification
industry  and our  strategy  will focus on both  internal  and  external  growth
prospects."

Checkpoint's  product offerings now include thermal printing  systems,  security
systems,  handheld labelers,  merchandising systems, security labels and thermal
labels.  In addition,  the  acquisition  includes a global  service  bureau that
integrates retail and manufacturing  requirements for product identification and
branding.  These  capabilities with RFID technology allows for the creation of a
new line of smart labels by combining conventional barcodes with radio frequency
identification.   Checkpoint  Systems,   Inc.  offers   communication   labeling
technology for identification,  branding,  and security solutions for retail and
industrial supply chain applications. Comprehensive tagging and security systems
offer customers  increased  productivity  and management of their assets.  These
fully integrated  auto-ID  capabilities,  including RFID, are provided through a
world -class network of manufacturing, sales, and service operations worldwide.

Checkpoint Systems, Inc. is a $750 million (C735 million)  multinational company
that  manufactures and markets labeling systems designed to improve  efficiency,
reduce costs and provide  value-added  label solutions for customers across many
markets and industries.  Checkpoint is a leading  provider of RF source tagging,
barcode  labeling  systems,   EAS,   handheld   labeling  systems,   and  retail
merchandising  systems.  Applications include automatic  identification,  retail
security,  and  pricing  and  promotional  labels.  Operating  in 27  countries,
Checkpoint  has a global  network  of  subsidiaries  and  provides  professional
customer  service and technical  support around the world.  Checkpoint  Systems,
Inc.'s wed site is located at www.checkpointsystems.com

Safe harbor Statement for Checkpoint Systems, Inc.

- --------------------------------------------------
This press release may include information that could constitute forward-looking
statements made within the meaning of the safe harbor  provisions of the Private
Securities  Litigation Reform Act of 1995. Any such  forward-looking  statements
may involve risk and  uncertainties  that could cause  actual  results to differ
materially  from any  future  results  encompassed  within  the  forward-looking
statements.  Factors that could cause or contribute to such differences  include
those  matters  disclosed in the  Company's  Security  and  Exchange  Commission
filings.

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