American Pad & Paper Co – ‘10-K’ for 12/31/99 – EX-4.23

On:  Friday, 4/14/00   ·   For:  12/31/99   ·   Accession #:  912057-0-18255   ·   File #:  1-11803

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         75    463K 
 2: EX-4.23     Instrument Defining the Rights of Security Holders   195    529K 
 3: EX-4.24     Instrument Defining the Rights of Security Holders     9     21K 
 4: EX-4.25     Instrument Defining the Rights of Security Holders    33     56K 
 5: EX-10.36    Material Contract                                      5     23K 
 6: EX-23.1     Consent of Experts or Counsel                          1      6K 
 7: EX-27.1     Financial Data Schedule (Pre-XBRL)                     2      8K 

EX-4.23   —   Instrument Defining the Rights of Security Holders
Exhibit Table of Contents

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

 DEBTOR-IN-POSSESSION CREDIT AGREEMENT

 among

 AMERICAN PAD & PAPER COMPANY,
as Debtor-in-Possession,

 WR ACQUISITION, INC.,
as Debtor-in-Possession,
 AMERICAN PAD & PAPER COMPANY OF DELAWARE, INC.,
as Debtor-in-Possession,

 THE SUBSIDIARIES OF THE BORROWER,
 each as a Debtor-in-Possession,
 VARIOUS LENDING INSTITUTIONS,
BANKERS TRUST COMPANY,
 as Agent,

FIRST UNION NATIONAL BANK,
as Syndication Agent

 and

DEUTSCHE BANK SECURITIES INC.,
 as Arranger

--------------------------------
January 18, 2000

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

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

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                                                                            Page
                                                                            ----

SECTION 1.     Amount and Terms of Credit....................................2  
    1.1      Commitments...................................................2
    1.2      Minimum Borrowing Amounts, etc................................4
    1.3      Notice of Borrowing...........................................5
    1.4      Disbursement of Funds.........................................6
    1.5      Notes.........................................................6
    1.6      [Intentionally Omitted].......................................8
    1.7      Pro Rata Borrowings...........................................8
    1.8      Interest......................................................8
    1.9      [Intentionally Omitted].......................................9
    1.10     Increased Costs...............................................9
    1.11     [Intentionally Omitted].......................................9
    1.12     Change of Lending Office......................................9
    1.13     [Intentionally Omitted]......................................10
    1.14     Priority and Liens...........................................10
    1.15     Payment of Obligations.......................................12
    1.16     No Discharge; Survival of Claims.............................12

SECTION 2.     Letters of Credit............................................12  
    2.1      Letter of Credit.............................................12
    2.2      Letter of Credit Requests; Notice of Issuance................14
    2.3      Agreement to Repay Letter of Credit Drawings.................14
    2.4      Letter of Credit Participations..............................15
    2.5      Increased Costs..............................................18

SECTION 3.     Fees; Commitments............................................18  
    3.1      Fees.........................................................18
3.2      Voluntary Termination or Reduction of Total Unutilized     
             Revolving Loan Commitment....................................20
    3.3      Mandatory Reduction of Commitments...........................20

SECTION 4.     Payments.....................................................21  
    4.1      Voluntary Prepayments........................................21
    4.2      Mandatory Prepayments; Cash Collateralization................22
    4.3      Method and Place of Payment..................................23
    4.4      Net Payments.................................................24

SECTION 5.     Conditions Precedent.........................................26  
5.1      Conditions Precedent to Credit Events on the Initial       
             Borrowing Date...............................................26
    5.2      Conditions Precedent to All Credit Events....................31
    5.3      Conditions Precedent to Term Loans...........................34
SECTION 6.     Representations, Warranties and Agreements...................34  
    6.1      Corporate Status.............................................35
    6.2      Corporate Power and Authority................................35
    6.3      No Violation.................................................35

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    6.4      Litigation...................................................36
    6.5      Use of Proceeds; Margin Regulations..........................36
    6.6      Governmental Approvals.......................................37
    6.7      Investment Company Act.......................................37
    6.8      Public Utility Holding Company Act...........................37
    6.9      True and Complete Disclosure.................................37
    6.10     Financial Condition; Financial Statements....................37
    6.11     [Intentionally Omitted]......................................38
    6.12     Transaction..................................................38
    6.13     Special Purpose Corporations.................................39
    6.14     Compliance with ERISA........................................39
    6.15     Capitalization...............................................40
    6.16     Subsidiaries.................................................41
    6.17     Intellectual Property........................................41
    6.18     Compliance with Statutes, etc................................42
    6.19     Environmental Matters........................................42
    6.20     Properties...................................................43
    6.21     Labor Relations..............................................43
    6.22     Tax Returns and Payments.....................................43
    6.23     Existing Indebtedness........................................44
    6.24     Senior Subordinated Notes....................................44
    6.25     Year 2000 Compliance.........................................44
    6.26     Common Officers, etc.........................................45
    6.27     Interim and Final Orders.....................................45
    6.28     Accounts Receivable Facility Purchase Agreement..............45

SECTION 7.     Affirmative Covenants........................................45  
    7.1      Information Covenants........................................46
    7.2      Books, Records and Inspections...............................52
    7.3      Insurance....................................................52
    7.4      Payment of Taxes.............................................52
    7.5      Corporate Franchises.........................................53
    7.6      Compliance with Statutes, etc................................53
    7.7      Compliance with Environmental Laws...........................53
    7.8      ERISA........................................................54
    7.9      Good Repair..................................................55
    7.10     End of Fiscal Years; Fiscal Quarters.........................55
    7.11     Additional Security; Further Assurances......................55
    7.12     Register.....................................................57
    7.13     [Intentionally Omitted]......................................57
    7.14     Contributions; Payments......................................57
    7.15     [Intentionally Omitted]......................................57
    7.16     Consultants..................................................58
    7.17     Payment of Obligation........................................58
    7.18     Cash Collateral Account......................................58
    7.19     Operations of Ampad Division.................................59
    7.20     Corporate Overhead Reduction.................................59
    7.21     Operations of Forms and Creative Cards Divisions.............59
    7.22     Crisis Manager...............................................59
    7.23     Appraisal....................................................59
    7.24     Collateral Access Agreements.................................60

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SECTION 8.     Negative Covenants...........................................60  
    8.1      Changes in Business..........................................60
    8.2      Consolidation, Merger, Sale or Purchase of Assets, etc.......61
    8.3      Liens........................................................63
    8.4      Indebtedness.................................................65
    8.5      Designated Senior Debt.......................................66
    8.6      Advances, Investments and Loans..............................66
    8.7      Dividends, etc...............................................68
    8.8      Transactions with Affiliates.................................69
    8.9      Capital Expenditures.........................................70
    8.10     Minimum Consolidated EBITDA..................................70
    8.11     Maximum Inventory Amount.....................................70
    8.12     [Intentionally Omitted]......................................70
8.13     Limitation on Voluntary Payments and Modifications of      
Indebtedness; Modifications of Certificate of     
  Incorporation, By-Laws and Certain Other Agreements;
             Issuances of Capital Stock; etc..............................70
    8.14     Limitation on Certain Restrictions on Subsidiaries...........71
    8.15     Limitation on the Creation of Subsidiaries...................72
    8.16     [Intentionally Omitted]......................................72
    8.17     Additional Bank Accounts.....................................72
    8.18     Securities Accounts..........................................72
    8.19     Chapter 11 Claims............................................72
    8.20     Use of Proceeds..............................................73
    8.21     Prepetition Payments.........................................73
    8.22     Employment Matters...........................................73
    8.23     Leases.......................................................73
    8.24     Reclamation Claims; Bankruptcy Code " 546(g) Agreements......74
    8.25     Excess Cash..................................................74
    8.26     Refinancing of Revolving Loans...............................74

SECTION 9.     Events of Default............................................74  
    9.1      Payments.....................................................74
    9.2      Representations, etc.........................................75
    9.3      Covenants....................................................75
    9.4      Default Under Other Agreements...............................75
    9.5      Bankruptcy, etc..............................................75
    9.6      ERISA........................................................77
    9.7      Security Documents...........................................77
    9.8      Guaranties...................................................78
    9.9      Judgments....................................................78
    9.10     Ownership....................................................78
    9.11     Environmental Violations.....................................78
    9.12     Net Cash Flow Deviation......................................78
    9.13     Disbursements Deviation......................................78
    9.14     Material Adverse Effect......................................78

SECTION 10.    Definitions..................................................81  

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SECTION 11.    The Agent...................................................112  
    11.1     Appointment.................................................112
    11.2     Delegation of Duties........................................113
    11.3     Exculpatory Provisions......................................113
    11.4     Reliance by Agent...........................................114
    11.5     Notice of Default...........................................114
    11.6     Nonreliance on Agent and Other Lenders......................115
    11.7     Indemnification.............................................115
    11.8     Agent in its Individual Capacity............................116
    11.9     Holders.....................................................116
    11.10    Resignation of the Agent; Successor Agent...................116
    11.11    No Duties of Arranger or Syndication Agent..................117

SECTION 12.    Miscellaneous...............................................117  
    12.1     Payment of Expenses, etc....................................117
    12.2     Right of Setoff.............................................118
    12.3     Notices.....................................................119
    12.4     Benefit of Agreement........................................119
    12.5     No Waiver; Remedies Cumulative..............................121
    12.6     Payments Pro Rata...........................................122
    12.7     Calculations; Computations..................................122
    12.8     Governing Law; Submission to Jurisdiction; Venue............123
    12.9     Counterparts, etc...........................................124
    12.10    Effectiveness...............................................124
    12.11    Headings Descriptive........................................124
    12.12    Amendment or Waiver; etc....................................124
    12.13    Survival....................................................126
    12.14    Domicile of Loans...........................................126
    12.15    Confidentiality.............................................126
    12.16    Waiver of Jury Trial........................................127
12.17    Absence of Prejudice to the Existing Lenders with          
             Respect to Matters Before the Bankruptcy Court..............127
    12.18    [Intentionally Omitted].....................................127
12.19    Application of Proceeds; Priority of Revolving Loans and   
             Letter of Credit Outstandings...............................127
    12.20    Remedies Cumulative.........................................128
    12.21    Discontinuance of Proceedings...............................129
    12.22    Existing Credit Agreement...................................129
    12.23    Addition of Term Lenders....................................129

SECTION 13.    Parent's Guaranty...........................................129  
    13.1     The Guaranty................................................129
    13.2     Nature of Liability.........................................130
    13.3     Independent Obligation......................................131
    13.4     Authorization...............................................131
    13.5     Reliance....................................................132
    13.6     Subordination...............................................132
    13.7     Waiver......................................................133

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ANNEX I           List of Lenders and Commitments                               
ANNEX II          Lender Addresses                                              
ANNEX III         Bank Accounts                                                 
ANNEX IV          Real Properties                                               
ANNEX V           Existing Investments                                          
ANNEX VI          Subsidiaries                                                  
ANNEX VII         Existing Indebtedness                                         
ANNEX VIII        Existing Letters of Credit                                    
ANNEX IX          Existing Liens                                                
ANNEX X           Existing Litigation                                           
ANNEX XI          Environmental Matters                                         

EXHIBIT A-1       --    Form of Notice of Borrowing                             
EXHIBIT A-2       --    Form of Letter of Credit Request                        
EXHIBIT B-1       --    Form of Revolving Note                                  
EXHIBIT B-2       --    Form of Swingline Note                                  
EXHIBIT B-3       --    Form of Term Note                                       
EXHIBIT C         --    Form of Section 4.4(b)(ii) Certificate                  
EXHIBIT D         --    Form of Opinion of Gibson, Dunn & Crutcher              
EXHIBIT E         --    Form of Officers' Certificate                           
EXHIBIT F         --    Form of Pledge Agreement                                
EXHIBIT G         --    Form of Security Agreement                              
EXHIBIT H         --    Form of Subsidiary Guaranty                             
EXHIBIT I         --    Form of Collateral Access Agreement                     
EXHIBIT J         --    Form of Subordination Provisions                        
EXHIBIT K         --    Form of Assignment and Assumption Agreement             
EXHIBIT L         --    Form of Intercompany Note                               
EXHIBIT M         --    Form of Shareholder Subordinated Note                   
EXHIBIT N         --    Form of Borrowing Base Certificate                      
EXHIBIT O         --    Form of Blocked Account Agreement                       
EXHIBIT P         --    Form of Concentration Account Agreement                 

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                                                                    EXHIBIT 4.23

           THIS DEBTOR-IN-POSSESSION CREDIT AGREEMENT, dated as of January 18,
2000, among AMERICAN PAD & PAPER COMPANY OF DELAWARE, INC., a Delaware          
corporation and a debtor and debtor-in-possession in a case pending under       
Chapter 11 of the Bankruptcy Code (the "Borrower"), AMERICAN PAD & PAPER        
COMPANY, a Delaware corporation and a debtor and debtor-in-possession in a case 
under Chapter 11 of the Bankruptcy Code ("Holdings"), WR ACQUISITION, INC., a   
Delaware corporation and a debtor and debtor-in-possession in a case under      
Chapter 11 of the Bankruptcy Code ("WR Acquisition"), the Subsidiary Guarantors,
each of which is a debtor and debtor-in-possession in their respective cases    
pending under Chapter 11 of the Bankruptcy Code (the cases of the Borrower and  
the Guarantors, each a "Case" and collectively, the "Cases"), the lenders from  
time to time party hereto (each, a "Lender" and, collectively, the "Lenders"),  
BANKERS TRUST COMPANY, as Agent (in such capacity, the "Agent"), FIRST UNION    
NATIONAL BANK, as Syndication Agent (in such capacity, the "Syndication Agent"),
and DEUTSCHE BANK SECURITIES INC., as Arranger (the "Arranger"). Unless         
otherwise defined herein, all capitalized terms shall have the same meanings    
given to them in Section 10.                                                    

W I T N E S S E T H : 
- - - - - - - - - -   

       WHEREAS, on the Petition Date, involuntary petitions were filed
against the Borrower and each of the Guarantors with the Bankruptcy Court       
commencing the Cases and the Borrower and the Guarantors have continued in      
possession of their assets and in the management of their businesses pursuant to
Sections 1107 and 1108 of the Bankruptcy Code;                                  

     WHEREAS, the Borrower, Holdings, WR Acquisition, the Existing
Lenders and the Prepetition Agent are party to the Credit Agreement, dated as of
July 8, 1996 (as amended, supplemented or otherwise modified prior to the       
Petition Date, the "Existing Credit Agreement");                                

          WHEREAS, under the Existing Credit Agreement, the Existing Lenders
provided the Borrower with revolving credit loans and other financial           
accommodations in an aggregate principal amount (including letters of credit) of
$264,473,176.27 (the "Existing Lender Debt" and, together with all accrued and  
unpaid interest, fees, costs, expenses obligations and other charges related    
thereto, the "Prepetition Obligations");                                        

            WHEREAS, to secure the Prepetition Obligations, the Borrower and the
Guarantors granted the Prepetition Agent, for the benefit of the Existing       
Lenders, security interests in substantially all of their respective assets     
which were properly perfected and are subject to no prior liens or security     
interests except as provided in the Existing Credit Agreement;                  

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          WHEREAS, the Borrower has requested that the Lenders (i) provide a
revolving credit and letter of credit facility (subject to mandatory and        
optional reductions and a limit on advances pending entry of the Final Order)   
and (ii) provide a term loan facility for the purpose of converting the Existing
Lender Debt into term loans (subject to mandatory and optional reductions);     

           WHEREAS, the Lenders are willing to extend such postpetition credit
to the Borrower in accordance with the terms and conditions set forth in this   
Agreement including, without limitation, the requirement that the Obligations be
afforded the treatment, rights and protections set forth in sections 364(c)(1), 
364(c)(3), 364(d)(1) and 364(e) of the Bankruptcy Code; and                     

           WHEREAS, on or about January 18, 2000, the Bankruptcy Court entered
the Interim Order authorizing the Borrower to borrow up to $20,000,000 of Loans 
from the Lenders on an interim basis pending entry of the Final Order on the    
terms and conditions set forth in the Interim Order and this Agreement.         

NOW, THEREFORE, IT IS AGREED:                           

SECTION 1.  Amount and Terms of Credit.                 

1.1  Commitments.                                       

               (a) Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees, at any time and from time to time on and   
after the Initial Borrowing Date and prior to the Final Maturity Date, to make a
revolving loan or loans (each a "Revolving Loan" and, collectively, the         
"Revolving Loans") to the Borrower, which Revolving Loans (i) shall be          
denominated in U.S. Dollars, (ii) shall be incurred and maintained as Base Rate 
Loans, (iii) may be repaid and reborrowed in accordance with the provisions     
hereof; (iv) shall not exceed for any Lender at any time outstanding that       
aggregate principal amount which, when combined with such Lender's Percentage of
all Other Revolving Exposure, equals the Revolving Loan Commitment of such      
Lender at such time; (v) shall not exceed for all Lenders at any time           
outstanding that aggregate principal amount which, when added to all Other      
Revolving Exposure, equals the lesser of (1) the Total Revolving Loan Commitment
and (2) the Borrowing Base at such time; and (vi) in the case of Revolving Loans
made prior to the entry of the Final Order, shall not exceed the lesser of (A)  
$20,000,000 and (B) the aggregate maximum amount authorized pursuant to the     
Interim Order.                                                                  

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               (b) Subject to and upon the terms and conditions herein set
forth, BTCo in its individual capacity agrees to make at any time and from time 
to time on and after the Initial Borrowing Date and prior to the Swingline      
Expiry Date, a loan or loans to the Borrower (each a "Swingline Loan" and,      
collectively, the "Swingline Loans"), which Swingline Loans (i) shall be made   
and maintained as Base Rate Loans, (ii) shall be denominated in U.S. Dollars,   
(iii) may be repaid and reborrowed in accordance with the provisions hereof,    
(iv) shall not exceed in aggregate principal amount at any time outstanding,    
when combined with the aggregate principal amount of all Revolving Loans then   
outstanding and the Letter of Credit Outstandings (exclusive of Unpaid Drawings 
relating to Letters of Credit which are repaid with the proceeds of, and        
simultaneously with the incurrence of, the respective incurrence of Revolving   
Loans) at such time, an amount equal to the lesser of (a) the Total Revolving   
Loan Commitment and (b) the Borrowing Base then in effect; and (v) shall not    
exceed in aggregate principal amount at any time outstanding the Maximum        
Swingline Amount. BTCo shall not be obligated to make any Swingline Loans at a  
time when a Lender Default exists unless BTCo has entered into arrangements     
satisfactory to it and the Borrower to eliminate BTCo's risk with respect to the
Defaulting Lender's or Lenders' participation in such Swingline Loans, including
by cash collateralizing such Defaulting Lender's or Lenders' Percentage of the  
outstanding Swingline Loans. BTCo will not make a Swingline Loan after it has   
received written notice from the Borrower or the Required Lenders stating that a
Default or an Event of Default exists until such time as BTCo shall have        
received a written notice of (i) rescission of such notice from the party or    
parties originally delivering the same or (ii) a waiver of such Default or Event
of Default from the Required Lenders.                                           

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              (c) On any Business Day, BTCo may, in its sole discretion,
give notice to the Lenders that its outstanding Swingline Loans shall be funded 
with a Borrowing of Revolving Loans (provided that each such notice shall be    
deemed to have been automatically given upon the exercise of any of the remedies
provided in the last two paragraphs of Section 9), in which case a Borrowing of 
Revolving Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on 
the immediately succeeding Business Day by all Revolving Lenders pro rata based 
on each Lender's Percentage, and the proceeds thereof shall be applied directly 
to repay BTCo for such outstanding Swingline Loans. Each Lender hereby          
irrevocably agrees to make Revolving Loans upon one Business Day's notice       
pursuant to each Mandatory Borrowing in the amount and in the manner specified  
in the preceding sentence and on the date specified in writing by BTCo          
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply   
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 5 are then satisfied, (iii) whether a Default or
an Event of Default has occurred and is continuing, (iv) the date of such       
Mandatory Borrowing and (v) any reduction in the Total Revolving Loan Commitment
after any such Swingline Loans were made. In the event that any Mandatory       
Borrowing cannot for any reason be made on the date otherwise required above,   
each Lender (other than BTCo) hereby agrees that it shall forthwith purchase    
from BTCo (without recourse or warranty) such assignment of the outstanding     
Swingline Loans as shall be necessary to cause the Lenders to share in such     
Swingline Loans ratably based upon their respective Percentages, provided that  
all interest payable on the Swingline Loans shall be for the account of BTCo    
until the date the respective assignment is purchased and, to the extent        
attributable to the purchased assignment, shall be payable to the Lender        
purchasing the same from and after such date of purchase.                       

               (d) The Agent, at any time in the exercise of its Permitted
Discretion, may (i) establish and increase or decrease reserves against Eligible
Accounts Receivable and Eligible Inventory, (ii) reduce the advance rates       
provided for in the definitions of Accounts Borrowing Base and Inventory        
Borrowing Base, or restore such advance rates to any level equal to or below the
advance rates in effect as of the date of this Agreement, and (iii) impose      
additional restrictions (or eliminate the same) to the standards of eligibility 
set forth in the definitions of Eligible Accounts Receivable and Eligible       
Inventory. The Agent may, but shall not be obligated to, rely solely on each    
Borrowing Base Certificate and any other schedules or reports in determining the
eligibility of Accounts and Inventory.                                          

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              (e) On the Term Loan Effective Date, (i) a portion of each
Lender's Term Loan Commitment shall be deemed to be utilized to irrevocably and 
unconditionally purchase a participation, to the extent of such Lender's Term   
Loan Percentage, in each Existing Letter of Credit and the terms and provisions 
of the Existing Credit Agreement shall be incorporated herein by reference to   
the extent they are applicable to the Existing Letters of Credit and (ii) each  
Lender shall be deemed to have made a term loan (collectively, the "Term Loans")
to the Borrower in an amount equal to the remaining Term Loan Commitment of such
Lender and the Existing Lender Debt (excluding the Existing Letters of Credit)  
shall be deemed to be paid in full with the proceeds of all such Term Loans. All
Term Loans (i) shall be maintained as Base Rate Loans, (ii) shall be subject to 
mandatory prepayment in accordance with the terms hereof, and (iii) shall not   
exceed in aggregate principal amount the Total Term Loan Commitment. Once       
repaid, the Term Loans may not be reborrowed.                                   

          1.2 Minimum Borrowing Amounts, etc. The aggregate principal amount
of each Borrowing of Revolving and Swingline Loans shall not be less than the   
Minimum Borrowing Amount applicable to such Loans.                              

1.3  Notice of Borrowing.                               

              (a) Whenever the Borrower desires to incur Loans hereunder
(excluding Borrowings of Swingline Loans, Revolving Loans incurred pursuant to  
Mandatory Borrowings and Term Loans), it shall give the Agent at its Notice     
Office, prior to 11:00 A.M. (New York time), at least one Business Day's prior  
written notice (or telephonic notice promptly confirmed in writing) of each     
Borrowing of Loans to be made hereunder. Each such notice (each a "Notice of    
Borrowing") shall be irrevocable, and, in the case of each written notice and   
each confirmation of telephonic notice, shall be in the form of Exhibit A-1,    
appropriately completed to specify (i) the aggregate principal amount of the    
Loans to be made pursuant to such Borrowing and (ii) the date of such Borrowing 
(which shall be a Business Day). The Agent shall promptly give each Lender      
written notice (or telephonic notice promptly confirmed in writing) of each     
proposed Borrowing, of such Lender's proportionate share thereof and of the     
other matters covered by the Notice of Borrowing.                               

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                  (b) (i) Whenever the Borrower desires to incur Swingline Loans
         hereunder, it shall give BTCo not later than 12:00 Noon (New York
          time) on the day such Swingline Loan is to be made, written notice
    (or telephonic notice promptly confirmed in writing) of each
      Swingline Loan to be made hereunder. Each such notice shall be
       irrevocable and shall specify in each case (x) the date of such
       Borrowing (which shall be a Business Day) and (y) the aggregate
          principal amount of the Swingline Loan to be made pursuant to such
Borrowing.                                              

                       (ii) Mandatory Borrowings shall be made upon the notice
            specified in Section 1.1(c), with the Borrower irrevocably agreeing,
           by its incurrence of any Swingline Loan, to the making of Mandatory
Borrowings as set forth in such Section 1.1(c).         

                  (c) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or BTCo (in the case of a Borrowing of Swingline Loans) or the Letter of  
Credit Issuer (in the case of the issuance of Letters of Credit), as the case   
may be, may prior to receipt of written confirmation act without liability upon 
the basis of such telephonic notice, believed by the Agent, BTCo or the Letter  
of Credit Issuer, as the case may be, in good faith to be from an Authorized    
Officer of the Borrower. In each such case, the Borrower hereby waives the right
to dispute the Agent's, BTCo's or the Letter of Credit Issuer's record of the   
terms of such telephonic notice.                                                

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1.4  Disbursement of Funds.                             

            (a) Not later than 1:00 P.M. (New York time) on the date
specified in each Notice of Borrowing (or (x) in the case of Swingline Loans,   
not later than 2:00 P.M. (New York time) on the date specified in Section       
1.3(b)(i) or (y) in the case of Mandatory Borrowings, not later than 12:00 Noon 
(New York time) on the date specified in Section 1.1(c)), each Lender will make 
available its pro rata share, if any, of each Borrowing requested to be made on 
such date (or in the case of Swingline Loans, BTCo shall make available the full
amount thereof) in the manner provided below. All amounts shall be made         
available to the Agent in U.S. Dollars and in immediately available funds at the
Payment Office and the Agent promptly will make available to the Borrower by    
depositing to its account at the Payment Office the aggregate of the amounts so 
made available in the type of funds received. Unless the Agent shall have been  
notified by any Lender prior to the date of Borrowing that such Lender does not 
intend to make available to the Agent its portion of the Borrowing or Borrowings
to be made on such date, the Agent may assume that such Lender has made such    
amount available to the Agent on such date of Borrowing, and the Agent, in      
reliance upon such assumption, may (in its sole discretion and without any      
obligation to do so) make available to the Borrower a corresponding amount. If  
such corresponding amount is not in fact made available to the Agent by such    
Lender and the Agent has made available same to the Borrower, the Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender  
does not pay such corresponding amount forthwith upon the Agent's demand        
therefor, the Agent shall promptly notify the Borrower, and the Borrower shall  
immediately pay such corresponding amount to the Agent. The Agent shall also be 
entitled to recover from the Lender or the Borrower, as the case may be,        
interest on such corresponding amount in respect of each day from the date such 
corresponding amount was made available by the Agent to the Borrower to the date
such corresponding amount is recovered by the Agent, at a rate per annum equal  
to (x) if paid by such Lender, the overnight Federal Funds Rate or (y) if paid  
by the Borrower, the then applicable rate of interest, calculated in accordance 
with Section 1.8.                                                               

                 (b) Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Commitments hereunder or to prejudice any rights  
which the Borrower may have against any Lender as a result of any default by    
such Lender hereunder.                                                          

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1.5  Notes.                                             

              (a) The Borrower's obligation to pay the principal of, and
interest on, all the Loans made to it by each Lender shall be evidenced (i) if  
Revolving Loans, by a promissory note substantially in the form of Exhibit B-1  
with blanks appropriately completed in conformity herewith (as amended,         
supplemented or otherwise modified from time to time, each a "Revolving Note"   
and, collectively, the "Revolving Notes"), (ii) if Swingline Loans, by a        
promissory note substantially in the form of Exhibit B-2 with blanks            
appropriately completed in conformity herewith (as amended, supplemented or     
otherwise modified from time to time, the "Swingline Note") and (iii) if Term   
Loans, by a promissory note duly executed and delivered by the Borrower         
substantially in the form of Exhibit B-3, with blanks appropriately completed in
conformity herewith (as amended, supplemented or otherwise modified from time to
time, each a "Term Note" and, collectively, the "Term Notes").                  

                (b) The Revolving Note issued to each Revolving Lender shall
(i) be executed by the Borrower, (ii) be payable to such Lender or its          
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Lender and be   
payable in the principal amount of the outstanding Revolving Loans evidenced    
thereby, (iv) mature on the Final Maturity Date, (v) bear interest as provided  
in Section 1.8, (vi) be subject to voluntary prepayment as provided in Section  
4.1 and mandatory repayment as provided in Section 4.2, and (vii) be entitled to
the benefits of this Agreement, the other Credit Documents and the Orders.      

                  (c) The Swingline Note issued to BTCo shall (i) be executed by
the Borrower, (ii) be payable to BTCo or its registered assigns and be dated the
Initial Borrowing Date, (iii) be in a stated principal amount equal to the      
Maximum Swingline Amount and be payable in the principal amount of the          
outstanding Swingline Loans evidenced thereby, (iv) mature on the Swingline     
Expiry Date, (v) bear interest as provided in Section 1.8, (vi) be subject to   
voluntary prepayment as provided in Section 4.1 and mandatory repayment as      
provided in Section 4.2, and (vii) be entitled to the benefits of this          
Agreement, the other Credit Documents and the Orders.                           

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             (d) The Term Note issued to each Term Lender shall (i) be
executed by the Borrower, (ii) be payable to such Lender or its registered      
assigns and be dated the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, be dated the date of issuance thereof), (iii) be in a stated    
principal amount equal to the difference between the Term Loan Commitment of    
such Lender and such Lender's Term Loan Percentage of the aggregate Stated      
Amount of all Existing Letters of Credit, and be payable in the outstanding     
principal amount of the Term Loans evidenced thereby, (iv) mature on the Final  
Maturity Date, (v) bear interest as provided in the appropriate clause of       
Section 1.8, (vi) be subject to mandatory repayment as provided in Section 4.2, 
and (vii) be entitled to the benefits of this Agreement, the other Credit       
Documents and the Orders.                                                       

                (e) Each Lender will note on its internal records the amount
of each Loan made by it and each payment in respect thereof and will prior to   
any transfer of any of its Notes endorse on the reverse side thereof the        
outstanding principal amount of Loans evidenced thereby. Failure to make any    
such notation shall not affect the Borrower's obligations in respect of such    
Loans.                                                                          

1.6  [Intentionally Omitted].                           

           1.7 Pro Rata Borrowings. All Borrowings of Revolving Loans and Term
Loans under this Agreement shall be made by the Lenders pro rata on the basis of
their Revolving Loan Commitments or Term Loan Commitments, respectively. It is  
understood that no Lender shall be responsible for any default by any other     
Lender of its obligation to make Loans hereunder and that each Lender shall be  
obligated to make the Loans to be made by it hereunder, regardless of the       
failure of any other Lender to fulfill its commitments hereunder.               

1.8  Interest.                                          

           (a) The unpaid principal amount of each Loan shall bear
interest from the date of the Borrowing thereof until the maturity (whether by  
acceleration or otherwise) of such Loan at a rate per annum which shall at all  
times be the Applicable Base Rate Margin plus the Base Rate in effect from time 
to time.                                                                        

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(b)   [Intentionally Omitted]               

                  (c) Upon the occurrence and during the continuance of an Event
of Default, principal and, to the extent permitted by law, overdue interest in  
respect of each Loan shall bear interest at a rate per annum equal to the rate  
which is 2% in excess of the rate otherwise applicable to Base Rate Loans from  
time to time. Interest which accrues under this Section 1.8(c) shall be payable 
on demand.                                                                      

                (d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof. Interest on all   
Loans (other than the Term Loans) shall be payable monthly in arrears on the    
last Business Day of each month, on the Termination Date (whether by            
acceleration or otherwise) and, after the Termination Date, on demand. Interest 
on the Term Loans shall be payable on the Term Loan Interest Payment Date and,  
after the occurrence and during the continuance of an Event of Default, on      
demand.                                                                         

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               (e) All computations of interest hereunder shall be made in
accordance with Section 12.7(b).                                                

1.9  [Intentionally Omitted].                           

            1.10 Increased Costs. If any Lender shall have determined that after
the date hereof, the adoption or effectiveness of any applicable law, rule or   
regulation regarding capital adequacy, or any change therein, or any change in  
the interpretation or administration thereof by any governmental authority,     
central bank or comparable agency charged with the interpretation or            
administration 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) of any such authority, central bank or 
comparable agency, has or would have the effect of reducing the rate of return  
on such Lender's or such other corporation's capital or assets as a consequence 
of such Lender's Commitments or obligations hereunder to a level below that     
which such Lender or such other corporation could have achieved but for such    
adoption, effectiveness, change or compliance (taking into consideration such   
Lender's or such other corporation's policies with respect to capital adequacy),
then from time to time, upon written demand by such Lender (with a copy to the  
Agent), accompanied by the notice referred to in the last sentence of this      
Section 1.10, the Borrower shall pay to such Lender such additional amount or   
amounts as will compensate such Lender or such other corporation for such       
reduction. Each Lender, upon determining in good faith that any additional      
amounts will be payable pursuant to this Section 1.10, will give prompt written 
notice thereof to the Borrower, which notice shall set forth the basis of the   
calculation of such additional amounts, although the failure to give any such   
notice shall not release or diminish the Borrower's obligations to pay          
additional amounts pursuant to this Section 1.10 upon the subsequent receipt of 
such notice.                                                                    

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1.11  [Intentionally Omitted].                          

        1.12 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10, 2.5 or 4.4
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 or Letters of Credit affected by 
such event; provided, that such designation is made on such terms that, in the  
sole judgment of such Lender, such Lender and its lending office suffer no      
economic, legal or regulatory disadvantage, with the object of avoiding the     
consequences of the event giving rise to the operation of any such Section.     
Nothing in this Section 1.12 shall affect or postpone any of the obligations of 
the Borrower or the right of any Lender provided in Section 1.10, 2.5 or 4.4.   

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1.13  [Intentionally Omitted].                          

1.14  Priority and Liens.                               

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                 (a) The Borrower and each of the Guarantors hereby covenants,
represents and warrants that, upon entry of the Interim Order (and the Final    
Order, as applicable), the Postpetition Obligations of the Borrower and the     
Guarantors hereunder and under the Credit Documents and, on or after the Term   
Loan Effective Date and subject to Section 1.14(c), the Prepetition Obligations,
(i) pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all times    
constitute allowed Super-priority Claims, (ii) pursuant to Section 364(c)(2) of 
the Bankruptcy Code, shall at all times be secured by a perfected first priority
Lien on all Collateral (except property acquired by the Credit Parties pursuant 
to the exercise of their avoiding powers under the Bankruptcy Code), including, 
without limitation, all cash maintained in the Cash Collateral Account, the     
Concentration Account and the Blocked Account, and any direct investment of the 
funds contained therein that is otherwise not encumbered by a valid and         
perfected Lien as of the Petition Date, (iii) pursuant to Section 364(c)(3) of  
the Bankruptcy Code, shall be secured by a perfected junior Lien upon all       
Collateral (other than Collateral that is subject to existing Liens that, prior 
to the Term Loan Effective Date, secure the Prepetition Obligations, as to which
the Lien in favor of the Collateral Agent and the Lenders will be as described  
in clause (iv) of this sentence) that is subject to valid and perfected Liens in
existence on the Petition Date or valid Liens perfected (but not granted)       
thereafter to the extent such post-Petition Date perfection in respect of a     
pre-Petition Date claim is expressly permitted under the Bankruptcy Code, and to
other valid and perfected Liens which are senior (after giving effect to the    
Interim Order and the Final Order, as applicable) to the Liens granted to the   
Collateral Agent and the Lenders pursuant to the Interim Order (and the Final   
Order, as applicable) and (iv) shall be secured by a perfected first priority,  
senior priming Lien on all Prepetition Collateral and any property of the       
Debtors on which a Lien is granted after the Petition Date to provide adequate  
protection in respect of the Prepetition Obligations, subject and subordinate in
each case with respect to subclauses (i) through (iv) above, only to (x)        
following the occurrence and during the continuance of a Default or an Event of 
Default, the payment (as the same may be due and payable) of professional fees  
and disbursements allowed by order of the Bankruptcy Court and incurred by the  
Credit Parties and any statutory committee of unsecured creditors appointed in  
the Cases and any disbursements of any member of such committee in an aggregate 
amount not to exceed $5,000,000 (in addition to compensation previously awarded 
whether or not paid), (y) the unfunded portion of Retention Payments and (z) the
payment of unpaid fees pursuant to 28 U.S.C. " 1930 and any fees payable to the 
Clerk of the Bankruptcy Court (collectively, the "Carve-Out"), provided further 
that following the Termination Date amounts in the Cash Collateral Account shall
not be subject to the Carve-Out. The Lenders agree that so long as no Default or
Event of Default shall have occurred and be                                     

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continuing, the Borrower and the Guarantors shall be permitted to pay           
compensation and reimbursement of expenses allowed and payable under Sections   
330 and 331 of the Bankruptcy Code, as the same may be payable, and the amounts 
so paid shall not reduce the Carve-Out. Nothing herein shall limit the rights of
the Agent and the Prepetition Agent to object to any request to the Bankruptcy  
Court for payment or reimbursement of fees and expenses of professionals. The   
Borrowers and the Guarantors shall not be in default of their representations   
and warranties with respect to the Prepetition Obligations under this Section   
1.14(a) solely by virtue of a successful challenge by a Person (other than a    
Credit Party) to the priority of the Liens securing the Prepetition Obligations,
in accordance with Section 16 of the Interim Order.                             

             (b) The Borrower and the Guarantors acknowledge and agree
that, as adequate protection for the Existing Lenders' interests in the Liens   
that are being primed as set forth in subsection 1.14(a)(iv), the use of the    
Cash Collateral in which the Existing Lenders have an interest and the          
imposition of the automatic stay pursuant to Section 362(a) of the Bankruptcy   
Code, the Existing Lenders shall, pursuant to the Interim Order (and the Final  
Order, as applicable), receive during the period from the Petition Date until   
the Term Loan Effective Date (i) a Super-priority Claim junior only to the      
Super-priority Claim granted to the Collateral Agent and the Lenders hereunder, 
(ii) a replacement Lien on the Collateral having a priority immediately junior  
to the priming and other Liens granted in favor of the Collateral Agent and the 
Lenders hereunder and under the other Credit Documents and the Orders (subject  
and subordinate, in the case of clauses (i) and (ii) above, to the Carve-Out and
valid and perfected Liens which are senior (after giving effect to the Interim  
Order and the Final Order, as applicable) to the Liens granted to the Collateral
Agent and the Lenders pursuant to the Interim Order (and the Final Order, as    
applicable), (iii) the payment on the Effective Date of all other fees, costs   
and charges owing in respect thereof under the Existing Credit Agreement on such
date (including, without limitation, the fees and expenses of attorneys and     
financial consultants of the Prepetition Agent) and (iv) the right to accrue    
interest on the Existing Lender Debt at the non-default rate determined in      
accordance with Section 1.08 of the Existing Credit Agreement.                  

          (c) The Liens and Super-priority Claims granted to the
Revolving Lenders to secure the Revolving Loans, Swingline Loans and Letter of  
Credit Outstandings shall be senior and prior to the Liens and Super-priority   
Claims granted to secure the Prepetition Obligations prior to the Term Loan     
Effective Date and the Term Loans and the Existing Letters of Credit on and     
after the Term Loan Effective Date.                                             

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  1.15 Payment of Obligations. Upon the maturity (whether by
acceleration or otherwise) of any of the Obligations under this Agreement or any
of the other Credit Documents, the Lenders shall be entitled to immediate       
payment of such Obligations without further application to or order of the      
Bankruptcy Court, subject to the remedial provisions in Section 9.              

           1.16 No Discharge; Survival of Claims. Each of the Borrower and the
Guarantors agrees that to the extent its Obligations hereunder are not satisfied
in full, (i) its Obligations arising hereunder shall not be discharged by the   
entry of a Confirmation Order (and each of the Borrower and the Guarantors      
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such   
discharge) and (ii) the Super-priority Claim and Liens granted to the Collateral
Agent and the Lenders pursuant to the Orders and described in Section 1.14 shall
not be affected in any manner by the entry of a Confirmation Order.             

SECTION 2.  Letters of Credit.                          

2.1  Letter of Credit.                                  

               (a) Subject to and upon the terms and conditions herein set
forth, the Borrower may request a Letter of Credit Issuer at any time and from  
time to time on or after the Initial Borrowing Date and prior to the Business   
Day (or the 30th day in the case of trade Letters of Credit) preceding the Final
Maturity Date to issue, for the account of the Borrower and in support of (x)   
trade obligations of the Borrower or any of its Subsidiaries that arise in the  
ordinary course of business and are in respect of purchases of raw materials and
inventory of the Borrower or any of its Subsidiaries, as the case may be, and/or
(y) on a standby basis, L/C Supportable Indebtedness of the Borrower or any of  
its Subsidiaries to any other Person, irrevocable letters of credit in such form
as may be approved by such Letter of Credit Issuer (each such letter of credit, 
a "Letter of Credit" and, collectively, the "Letters of Credit").               
Notwithstanding the foregoing, no Letter of Credit Issuer shall be under any    
obligation to issue any Letter of Credit if at the time of such issuance:       

           (i) any order, judgment or decree of any governmental
       authority or arbitrator shall purport by its terms to enjoin or
         restrain such Letter of Credit Issuer from issuing such Letter of
            Credit or any requirement of law applicable to such Letter of Credit
           Issuer or any request or directive (whether or not having the force
           of law) from any governmental authority with jurisdiction over such
           Letter of Credit Issuer shall prohibit, or request that such Letter

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        of Credit Issuer refrain from, the issuance of letters of credit
        generally or such Letter of Credit in particular or shall impose
        upon such Letter of Credit Issuer with respect to such Letter of
           Credit any restriction or reserve or capital requirement (for which
         such Letter of Credit Issuer is not otherwise compensated) not in
            effect on the date hereof, or any unreimbursed loss, cost or expense
      which was not applicable, in effect or known to such Letter of
           Credit Issuer as of the date hereof and which such Letter of Credit
Issuer in good faith deems material to it; or           

                (ii) such Letter of Credit Issuer shall have received notice
          from the Borrower or the Required Lenders prior to the issuance of
            such Letter of Credit of the type described in clause (v) of Section
2.1(b).                                                 

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              (b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit  
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and 
prior to the issuance of, the respective Letter of Credit) at such time, would  
exceed either (x) the Letter of Credit Sublimit or (y) when added to the        
aggregate principal amount of all Revolving Loans and Swingline Loans then      
outstanding, the lesser of (I) Total Revolving Loan Commitment or (II) the      
Borrowing Base at such time; (ii) no Letter of Credit shall have an expiry date 
occurring later than the Final Maturity Date; provided that if the Final        
Maturity Date occurs prior to the expiration of any Letter of Credit, the       
Borrower, on or prior to the Final Maturity Date shall (A) cause such Letter of 
Credit to be replaced and returned to the Letter of Credit Issuer undrawn and   
marked "cancelled," or (B) to the extent the Borrower is unable to so replace   
and return such Letter of Credit in accordance with clause (A), either (x)      
provide a "back to back" letter of credit to the Letter of Credit Issuer in a   
form satisfactory to the Letter of Credit Issuer, issued by a bank satisfactory 
to the Letter of Credit Issuer, in an amount equal to 105% of the Stated Amount 
of such Letter of Credit or (y) pay to the Agent at the Payment Office an amount
of cash or Cash Equivalents, to be held in the Cash Collateral Account as       
security by the Agent, as is equal to 105% of the Stated Amount of such Letter  
of Credit; (iii) each Letter of Credit shall be denominated in U.S. Dollars;    
(iv) the Stated Amount of each Letter of Credit shall not be less than $100,000 
or such lesser amount as is acceptable to the respective Letter of Credit       
Issuer; (v) no Letter of Credit Issuer will issue any Letter of Credit after it 
has received written notice from the Borrower or the Required Lenders stating   
that a Default or an Event of Default exists until such time as such Letter of  
Credit Issuer shall have received a written notice of (x) rescission of such    
notice from the party or parties originally delivering the same or (y) a waiver 
of such Default or Event of Default by the Required Lenders; and (vi) no Letter 
of Credit Issuer will issue any Letter of Credit unless the need for such Letter
of Credit has been identified in the then effective Budget and such Letter of   
Credit has been approved by the Agent.                                          

            (c) Notwithstanding the foregoing, in the event a Lender
Default exists, no Letter of Credit Issuer shall be required to issue any Letter
of Credit unless the respective Letter of Credit Issuer has entered into        
arrangements satisfactory to it and the Borrower to eliminate such Letter of    
Credit Issuer's risk with respect to the participation in Letters of Credit of  
the Defaulting Lender or Lenders, including by cash collateralizing such        
Defaulting Lender's or Lenders' Percentage of the Letter of Credit Outstandings,
as the case may be.                                                             

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2.2  Letter of Credit Requests; Notice of Issuance.     

                (a) Whenever the Borrower desires that a Letter of Credit be
issued, the Borrower shall give the Agent and the respective Letter of Credit   
Issuer written notice (or telephonic notice confirmed in writing) thereof prior 
to 12:00 Noon (New York time) at least five Business Days (or such shorter      
period as may be acceptable to the respective Letter of Credit Issuer) prior to 
the proposed date of issuance (which shall be a Business Day) which written     
notice shall be in the form of Exhibit A-2 (each, a "Letter of Credit Request").
Each Letter of Credit Request shall include any other documents as such Letter  
of Credit Issuer customarily requires in connection therewith.                  

               (b) Each Letter of Credit Issuer shall, promptly after each
issuance of, or amendment or modification to, a Letter of Credit issued by it,  
give the Agent, each Revolving Lender and the Borrower written notice of the    
issuance of, or amendment or modification to, such Letter of Credit, accompanied
by a copy to the Agent of the Letter of Credit or Letters of Credit issued by it
and each such amendment or modification thereto.                                

2.3  Agreement to Repay Letter of Credit Drawings.      

              (a) The Borrower hereby agrees to reimburse each Letter of
Credit Issuer, by making payment to the Agent in immediately available funds at 
the Payment Office, for any payment or disbursement made by such Letter of      
Credit Issuer under any Letter of Credit issued by it (each such amount so paid 
or disbursed until reimbursed, an "Unpaid Drawing") no later than one Business  
Day following the date of such payment or disbursement, with interest on the    
amount so paid or disbursed by such Letter of Credit Issuer, to the extent not  
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or    
disbursement, from and including the date paid or disbursed to but not including
the date such Letter of Credit Issuer is reimbursed therefor at a rate per annum
which shall be the Applicable Base Rate Margin for Revolving Loans in excess of 
the Base Rate as in effect from time to time (plus an additional 2% per annum if
not reimbursed by the third Business Day after the date of such payment or      
disbursement), such interest also to be payable on demand. Each Letter of Credit
Issuer shall provide the Borrower prompt notice of any payment or disbursement  
made by it under any Letter of Credit issued by it, although the failure of, or 
delay in, giving any such notice shall not release or diminish the obligations  
of the Borrower under this Section 2.3(a) or under any other Section of this    
Agreement.                                                                      

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           (b) The Borrower's obligation under this Section 2.3 to
reimburse the respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional 
under any and all circumstances and irrespective of any setoff, counterclaim or 
defense to payment which the Borrower or any of its Subsidiaries may have or    
have had against such Letter of Credit Issuer, the Agent or any Lender,         
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit issued by it to conform to the terms of the Letter of  
Credit or any nonapplication or misapplication by the beneficiary of the        
proceeds of such drawing; provided, however, that the Borrower shall not be     
obligated to reimburse such Letter of Credit Issuer for any wrongful payment    
made by such Letter of Credit Issuer under a Letter of Credit issued by it as a 
result of acts or omissions constituting willful misconduct or gross negligence 
on the part of such Letter of Credit Issuer.                                    

2.4  Letter of Credit Participations.                   

                  (a) Immediately upon the issuance by a Letter of Credit Issuer
of any Letter of Credit, such Letter of Credit Issuer shall be deemed to have   
sold and transferred to each other Revolving Lender, and each such Revolving    
Lender (each a "Participant") shall be deemed irrevocably and unconditionally to
have purchased and received from such Letter of Credit Issuer, without recourse 
or warranty, an undivided interest and participation, to the extent of such     
Participant's Percentage, in such Letter of Credit, each substitute Letter of   
Credit, each drawing made thereunder and the obligations of the Borrower under  
this Agreement with respect thereto (although Letter of Credit Fees shall be    
payable directly to the Agent for the account of the Revolving Lenders as       
provided in Section 3.1(b) and the Participants shall have no right to receive  
any portion of any Facing Fees with respect to such Letters of Credit) and any  
security therefor or guaranty pertaining thereto. Upon any change in the        
Revolving Loan Commitments of the Lenders pursuant to Section 1.13 or 12.4(b),  
it is hereby agreed that, with respect to all outstanding Letters of Credit and 
Unpaid Drawings with respect thereto, there shall be an automatic adjustment to 
the participations pursuant to this Section 2.4 to reflect the new Percentages  
of the assigning and assignee Lender.                                           

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                 (b) In determining whether to pay under any Letter of Credit,
no Letter of Credit Issuer shall have any obligation relative to the            
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to         
substantially comply on their face with the requirements of such Letter of      
Credit. Any action taken or omitted to be taken by any Letter of Credit Issuer  
under or in connection with any Letter of Credit issued by it if taken or       
omitted in the absence of gross negligence or willful misconduct, shall not     
create for such Letter of Credit Issuer any resulting liability.                

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               (c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit issued by it and the Borrower shall not have 
reimbursed such amount in full to the Letter of Credit Issuer pursuant to       
Section 2.3(a), such Letter of Credit Issuer shall promptly notify the Agent,   
and the Agent shall promptly notify each Participant of such failure, and each  
such Participant shall promptly and unconditionally pay to the Agent for the    
account of such Letter of Credit Issuer, the amount of such Participant's       
Percentage of such payment in U.S. Dollars and in same day funds; provided,     
however, that no Participant shall be obligated to pay to the Agent its         
Percentage of such unreimbursed amount if the Letter of Credit was issued or the
payment was made as a result of acts or omissions constituting willful          
misconduct or gross negligence on the part of the Letter of Credit Issuer. If   
the Agent so notifies any Participant required to fund a payment under a Letter 
of Credit prior to 11:00 A.M. (New York time) on any Business Day, such         
Participant shall make available to the Agent for the account of the respective 
Letter of Credit Issuer such Participant's Percentage of the amount of such     
payment on such Business Day in same day funds (and, to the extent such notice  
is given after 11:00 A.M. (New York time) on any Business Day, such Participant 
shall make such payment on the immediately following Business Day). If and to   
the extent such Participant shall not have so made its Percentage of the amount 
of such payment available to the Agent for the account of the respective Letter 
of Credit Issuer, such Participant agrees to pay to the Agent for the account of
such Letter of Credit Issuer, forthwith on demand such amount, together with    
interest thereon, for each day from such date until the date such amount is paid
to the Agent for the account of the Letter of Credit Issuer at the overnight    
Federal Funds Rate. The failure of any Participant to make available to the     
Agent for the account of the respective Letter of Credit Issuer its Percentage  
of any payment under any Letter of Credit issued by it shall not relieve any    
other Participant of its obligation hereunder to make available to the Agent for
the account of such Letter of Credit Issuer its applicable Percentage of any    
payment under any such Letter of Credit on the date required, as specified      
above, but no Participant shall be responsible for the failure of any other     
Participant to make available to the Agent for the account of such Letter of    
Credit Issuer such other Participant's Percentage of any such payment.          

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                  (d) Whenever any Letter of Credit Issuer receives a payment of
a reimbursement obligation as to which the Agent has received for the account of
such Letter of Credit Issuer any payments from the Participants pursuant to     
clause (c) above, such Letter of Credit Issuer shall pay to the Agent and the   
Agent shall promptly pay to each Participant which has paid its Percentage      
thereof, in U.S. Dollars and in same day funds, an amount equal to such         
Participant's Percentage of the principal amount thereof and interest thereon   
accruing after the purchase of the respective participations.                   

               (e) The obligations of the Participants to make payments to
the Agent for the account of the respective Letter of Credit Issuer with respect
to Letters of Credit issued by it shall be irrevocable and not subject to       
counterclaim, set-off or other defense or any other qualification or exception  
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the    
following circumstances:                                                        

               (i)        any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;         

              (ii) the existence of any claim, set-off, defense or other
           right which the Borrower or any of its Subsidiaries may have at any
   time against a beneficiary named in a Letter of Credit, any
           transferee of any Letter of Credit (or any Person for whom any such
          transferee may be acting), the Agent, any Letter of Credit Issuer,
    any Lender, or other Person, whether in connection with this
      Agreement, any Letter of Credit, the transactions contemplated
      herein or any unrelated transactions (including any underlying
           transaction between the Borrower or any of its Subsidiaries and the
beneficiary named in any such Letter of Credit);        

                  (iii) any draft, certificate or other document presented under
         the Letter of Credit proving to be forged, fraudulent, invalid or
            insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;                              

               (iv)        the surrender or impairment of any security for
       the performance or observance of any of the terms of any of the
Credit Documents; or                                    

          (v)        the occurrence of any Default or Event of
Default.                                                

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       2.5 Increased Costs. If, after the date hereof, the adoption or
effectiveness of any applicable law, rule or regulation, or any change therein, 
or any change in the interpretation or administration thereof by any            
governmental authority, central bank or comparable agency charged with the      
interpretation or administration thereof, or compliance by any Letter of Credit 
Issuer or any Participant with any request or directive (whether or not having  
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital      
adequacy or similar requirement against Letters of Credit issued by such Letter 
of Credit Issuer or such Participant's participation therein, or (ii) impose on 
any Letter of Credit Issuer or any Participant any other conditions affecting   
this Agreement, any Letter of Credit or such Participant's participation        
therein; and the result of any of the foregoing is to increase the cost to such 
Letter of Credit Issuer or such Participant of issuing, maintaining or          
participating in any Letter of Credit, or to reduce the amount of any sum       
received or receivable by such Letter of Credit Issuer or such Participant      
hereunder, then, upon written demand to the Borrower by such Letter of Credit   
Issuer or such Participant (a copy of which notice shall be sent by such Letter 
of Credit Issuer or such Participant to the Agent), accompanied by the          
certificate described in the last sentence of this Section 2.5, the Borrower    
shall pay to such Letter of Credit Issuer or such Participant such additional   
amount or amounts as will compensate such Letter of Credit Issuer or such       
Participant for such increased cost or reduction. A certificate submitted to the
Borrower by such Letter of Credit Issuer or such Participant, as the case may be
(a copy of which certificate shall be sent by such Letter of Credit Issuer or   
such Participant to the Agent), setting forth the basis for the determination of
such additional amount or amounts necessary to compensate such Letter of Credit 
Issuer or such Participant as aforesaid shall be final and conclusive and       
binding on the Borrower absent manifest error, although the failure to deliver  
any such certificate shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 2.5 upon subsequent receipt of  
such certificate.                                                               

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SECTION 3.  Fees; Commitments.                          

3.1  Fees.                                              

               (a) The Borrower shall pay to the Agent for distribution to
each Revolving Lender that is a Non-Defaulting Lender a commitment fee (the     
"Commitment Fee") for the period from the date of the entry of the Interim Order
to but not including the Final Maturity Date (or such earlier date as the Total 
Revolving Loan Commitment shall have been terminated), computed at a rate for   
each day equal to the Applicable Commitment Fee Percentage on the average daily 
Unutilized Revolving Loan Commitment of such Lender. Accrued Commitment Fees    
shall be due and payable monthly in arrears on the last Business Day of each    
month and the date upon which the Total Revolving Loan Commitment is terminated.

                  (b) The Borrower shall pay to the Agent for the account of the
Revolving Lenders pro rata on the basis of their Percentages, a fee in respect  
of each Letter of Credit (the "Letter of Credit Fee") computed at a rate per    
annum equal to 2.50% of the daily Stated Amount of such Letter of Credit.       
Accrued Letter of Credit Fees shall be due and payable monthly in arrears on the
last Business Day of each month and upon the first day on or after the          
termination of the Total Revolving Loan Commitment upon which no Letters of     
Credit remain outstanding.                                                      

              (c) The Borrower shall pay to the Agent for the account of
each Letter of Credit Issuer a facing fee in respect of each Letter of Credit   
issued by such Letter of Credit Issuer (the "Facing Fee") computed at the rate  
of 1/4 of 1% per annum on the daily Stated Amount of such Letter of Credit,     
provided, that in no event shall the annual Facing Fee with respect to each     
Letter of Credit be less than $500; it being agreed that, on the date of        
issuance of any Letter of Credit and on each anniversary thereof prior to the   
termination of such Letter of Credit, if $500 will exceed the amount of Facing  
Fees that will accrue with respect to such Letter of Credit for the immediately 
succeeding 12-month period, the full $500 shall be payable on the date of       
issuance of such Letter of Credit and on each such anniversary thereof prior to 
the termination of such Letter of Credit. Except as provided in the immediately 
preceding sentence, accrued Facing Fees shall be due and payable monthly in     
arrears on the last Business Day of each month and upon the first day on or     
after the termination of the Total Revolving Loan Commitment upon which no      
Letters of Credit remain outstanding.                                           

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                (d) The Borrower shall pay directly to each Letter of Credit
Issuer upon each issuance of, payment under, and/or amendment of, a Letter of   
Credit issued by such Letter of Credit Issuer such amount as shall at the time  
of such issuance, payment or amendment be the administrative charge which such  
Letter of Credit Issuer is customarily charging for issuances of, payments under
or amendments of, letters of credit issued by it.                               

                  (e) On the Effective Date the Borrower shall pay to the Agent,
for the account of the Revolving Lenders pro rata on the basis of their         
Percentages, a closing fee of $1,787,500.                                       

                 (f) On the Effective Date the Borrower shall pay to the Agent
(i) for the Account of the Arranger, an arrangement fee of $162,500 and (ii) for
the account of the Agent, an agent's fee of $75,000.                            

              (g)   All computations of Fees shall be made in accordance
with Section 12.7(b).                                                           

            3.2 Voluntary Termination or Reduction of Total Unutilized Revolving
Loan Commitment. Upon at least two Business Days' prior written notice (or      
telephonic notice promptly confirmed in writing) to the Agent at its Notice     
Office (which notice the Agent shall promptly transmit to each of the Lenders), 
the Borrower shall have the right, without premium or penalty, to terminate or  
partially reduce the Total Unutilized Revolving Loan Commitment, provided that  
(x) any such termination or partial reduction shall apply to proportionately and
permanently reduce the Revolving Loan Commitment of each of the Lenders and (y) 
any partial reduction pursuant to this Section 3.2 shall be in the amount of at 
least $500,000 and in integral multiples of $100,000 in excess thereof.         

3.3  Mandatory Reduction of Commitments.                

(a)   [Intentionally Omitted].              

                (b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.3, (i) on the Term Loan Effective Date, the Total    
Term Loan Commitment shall be reduced by the amount of the Term Loans and (ii)  
the Total Term Loan Commitment (and the Term Loan Commitment of each Lender)    
shall be deemed to be fully drawn and utilized as of the date of entry of the   
Final Order and no further Borrowings constituting Term Loans shall be permitted
hereunder (but nothing herein shall limit the obligations of each Term Lender   
with respect to its participation in each Existing Letter of Credit to the      
extent of its Term Loan Percentage).                                            

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                (c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.3, on each date on or after the Initial Borrowing    
Date on which Holdings or any of its Subsidiaries receives any cash proceeds    
from any incurrence of Indebtedness (other than Indebtedness permitted to be    
incurred pursuant to Section 8.4 as in effect on the Effective Date) by Holdings
or any of its Subsidiaries, the Total Revolving Loan Commitment shall be        
permanently reduced by an amount equal to 100% of the cash proceeds (net of all 
underwriting discounts, fees and commissions and other costs and expenses       
associated therewith) of the respective incurrence of Indebtedness.             

                (d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.3, on each date on or after the Initial Borrowing    
Date on which Holdings or any of its Subsidiaries receives any Cash Proceeds    
from any Asset Sale, the Total Revolving Loan Commitment shall be permanently   
reduced in accordance with Section 4.2(d).                                      

                (e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.3, within 10 days following each date on or after the
Initial Borrowing Date on which Holdings or any of its Subsidiaries receives any
cash proceeds from any Recovery Event, the Total Revolving Loan Commitment shall
be permanently reduced by an amount equal to 100% of such cash proceeds of such 
Recovery Event (net of all costs, expenses and taxes incurred in connection with
such Recovery Event).                                                           

(f)   [Intentionally Omitted]               

                (g) The Total Commitment (and the Commitment of each Lender)
shall terminate in its entirety on the Termination Date.                        

             (h) Each reduction of the Total Revolving Loan Commitment
pursuant to this Section 3.3 shall apply proportionately to reduce the Revolving
Loan Commitment of each Revolving Lender.                                       

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SECTION 4.  Payments.                                   

       4.1 Voluntary Prepayments. The Borrower shall have the right to
prepay the Loans, in whole or in part, without premium or penalty except as     
otherwise provided in this Agreement, from time to time on the following terms  
and conditions: (i) the Borrower shall give the Agent at its Notice Office      
written notice (or telephonic notice promptly confirmed in writing) of its      
intent to prepay the Loans, whether such Loans are Revolving Loans, Term Loans  
or Swingline Loans and the amount of such prepayment, which notice shall be     
given by the Borrower prior to 11:00 A.M. (New York time) (x) at least one      
Business Day prior to the date of such prepayment in the case of Revolving Loans
and Term Loans, and (y) on the date of such prepayment in the case of Swingline 
Loans which notice shall, except in the case of Swingline Loans, promptly be    
transmitted by the Agent to each of the Lenders; (ii) each partial prepayment of
Revolving Loans and Term Loans shall be in an aggregate principal amount of at  
least $500,000 and in integral multiples of $100,000 in excess thereof (or      
$50,000 and in integral multiples of $50,000 in excess thereof in the case of   
Swingline Loans); and (iii) each prepayment in respect of any Revolving Loans   
made pursuant to a Borrowing shall be applied pro rata among such Revolving     
Loans, provided, that at the Borrower's election in connection with any         
prepayment of Loans pursuant to this Section 4.1, such prepayment shall not be  
applied to any Loans of a Defaulting Lender.                                    

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4.2  Mandatory Prepayments; Cash Collateralization.     

               (a) If on any date the sum of (i) the aggregate outstanding
principal amount of Revolving Loans and Swingline Loans (after giving effect to 
all other repayments thereof on such date) plus (ii) the Letter of Credit       
Outstandings on such date exceeds the lesser of (x) the Total Revolving Loan    
Commitment and (y) the Borrowing Base as then in effect, the Borrower shall     
repay on such date the principal of Swingline Loans, and if no Swingline Loans  
are or remain outstanding, Revolving Loans in an aggregate amount equal to such 
excess. If, after giving effect to the prepayment of all outstanding Swingline  
Loans and Revolving Loans, the aggregate amount of Letter of Credit Outstandings
exceeds the lesser of (x) the Total Revolving Loan Commitment and (y) the       
Borrowing Base as then in effect, the Borrower shall pay to the Agent on such   
date an amount in cash and/or Cash Equivalents equal to such excess (up to the  
aggregate amount of Letter of Credit Outstandings at such time) and the Agent   
shall hold such payment in the Cash Collateral Account as security for the      
obligations of the Borrower hereunder pursuant to a cash collateral agreement to
be entered into in form and substance reasonably satisfactory to the Agent      
(which shall permit certain investments in Cash Equivalents reasonably          
satisfactory to the Agent until the proceeds are applied to the secured         
obligations).                                                                   

                  (b) Each repayment of Revolving Loans required by this Section
4.2 shall be applied pro rata among such Revolving Loans.                       

          (c) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all then outstanding Swingline Loans shall be  
repaid in full on the Swingline Expiry Date and (ii) all then outstanding       
Revolving Loans and Term Loans shall be repaid in full on the Final Maturity    
Date, in each case together with all accrued and unpaid interest thereon.       

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                 (d) In addition to any other mandatory repayments pursuant to
this Section 4.2, on any Business Day on or after the Initial Borrowing Date on 
which Holdings or any of its Subsidiaries receives Cash Proceeds from any Asset 
Sale, an amount equal to 100% of the Net Cash Proceeds from such Asset Sale     
shall be applied first, as a mandatory repayment of outstanding Revolving Loans,
second, to the payment in full of any Unpaid Drawings in respect of Letters of  
Credit, third, to deposit in the Cash Collateral Account an amount equal to 105%
of the aggregate Stated Amount of all outstanding Letters of Credit, fourth, if 
the Term Loan Effective Date has occurred, as a mandatory repayment of          
outstanding Term Loans, together with accrued and unpaid interest thereon,      
fifth, if the Term Loan Effective Date has occurred, to the payment in full of  
any reimbursement obligation in respect of Existing Letters of Credit, and      
sixth, if the Term Loan Effective Date has occurred, to deposit in the Cash     
Collateral Account an amount equal to 105% of the aggregate Stated Amount of all
outstanding Existing Letters of Credit; provided, that if Holdings or any of its
Subsidiaries receives Cash Proceeds from any Asset Sale prior to the Term Loan  
Effective Date, then the Net Cash Proceeds from such Asset Sale shall be applied
to the payment in full of the Prepetition Obligations after the application of  
such Net Cash Proceeds to the Postpetition Obligations. Unless otherwise agreed 
by the Required Lenders, the Total Revolving Loan Commitment shall be           
permanently reduced by the aggregate amount applied pursuant to clauses "first,"
"second," and "third" of the immediately preceding sentence. Notwithstanding the
foregoing, the Credit Parties may pay out of such Net Cash Proceeds retention   
bonuses to the key employees of the Credit Parties in an aggregate amount not to
exceed $6,500,000, which have been authorized by the Bankruptcy Court after     
appropriate notice and an opportunity to be heard (the "Retention Payments"); it
being agreed that the aggregate amount of Retention Payments is within the range
of reasonableness.                                                              

                 (e) In addition to any other mandatory repayments pursuant to
this Section 4.2, if, on or before the thirtieth day following the Petition     
Date, the Final Order, in form and substance acceptable to the Agent, the       
Required Lenders and counsel to the Agent, shall not have been entered, not be  
in full force and effect and not otherwise have been stayed, reversed, vacated  
or otherwise modified, all then outstanding Loans (together with all accrued and
unpaid interest thereon) shall be repaid in full on such date.                  

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                 (f) In addition to any other mandatory repayments pursuant to
this Section 4.2, on each Business Day, after giving effect on such Business Day
to anticipated receipts by, and disbursements of, Holdings and its Subsidiaries,
the Borrower shall apply cash on deposit in the Concentration Account in excess 
of $1,000,000 first, to the prepayment in full of the Revolving Loans, second,  
to the payment in full of any Unpaid Drawings in respect of Letters of Credit   
and, third, to deposit in the Cash Collateral Account an amount equal to 105% of
the aggregate Stated Amount of all outstanding Letters of Credit.               

         4.3 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be   
made to the Agent for the ratable account of the Lenders entitled thereto, not  
later than 12:00 Noon (New York time) on the date when due and shall be made in 
immediately available funds and in U.S. Dollars at the Payment Office, it being 
understood that written, telex or facsimile transmission notice by the Borrower 
to the Agent to make a payment from the funds in the Borrower's account at the  
Payment Office shall constitute the making of such payment to the extent of such
funds held in such account. Any payments under this Agreement or under any Note 
which are made later than 12:00 Noon (New York time) shall be deemed to have    
been made on the next succeeding Business Day. Whenever any payment to be made  
hereunder or under any Note shall be stated to be due on a day which is not a   
Business Day, the due date thereof shall be extended to the next succeeding     
Business Day and, with respect to payments of principal, interest shall be      
payable during such extension at the applicable rate in effect immediately prior
to such extension.                                                              

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4.4  Net Payments.                                      

                (a) All payments made by the Borrower hereunder or under any
Note will be made without setoff, counterclaim or other defense. Except as      
provided in Section 4.4(b), all such payments will be made free and clear of,   
and without deduction or withholding for, any present or future taxes, levies,  
imposts, duties, fees, assessments or other charges of whatever nature now or   
hereafter imposed by any jurisdiction or by any political subdivision or taxing 
authority thereof or therein with respect to such payments (but excluding,      
except as provided in the second succeeding sentence, any tax imposed on or     
measured by the net income or net profits of a Lender pursuant to the laws of   
the jurisdiction in which it is organized or the jurisdiction in which the      
principal office or applicable lending office of such Lender is located or any  
subdivision thereof or therein) and all interest, penalties or similar          
liabilities with respect thereto (all such nonexcluded taxes, levies, imposts,  
duties, fees, assessments or other charges being referred to collectively as    
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the 
full amount of such Taxes, and such additional amounts as may be necessary so   
that every payment of all amounts due under this Agreement or under any Note,   
after withholding or deduction for or on account of any Taxes, will not be less 
than the amount provided for herein or in such Note. If any amounts are payable 
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to  
reimburse each Lender, upon the written request of such Lender, for taxes       
imposed on or measured by the net income or net profits of such Lender pursuant 
to the laws of the jurisdiction in which the principal office or applicable     
lending office of such Lender is located or under the laws of any political     
subdivision or taxing authority of any such jurisdiction in which the principal 
office or applicable lending office of such Lender is located and for any       
withholding of taxes as such Lender shall determine are payable by, or withheld 
from, such Lender in respect of such amounts so paid to or on behalf of such    
Lender pursuant to the preceding sentence and in respect of any amounts paid to 
or on behalf of such Lender pursuant to this sentence. The Borrower will furnish
to the Agent within 45 days after the date the payment of any Taxes is due      
pursuant to applicable law certified copies of tax receipts evidencing such     
payment by the Borrower. The Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the amount of   
any Taxes so levied or imposed and paid by such Lender.                         

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               (b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to the    
Borrower and the Agent on or prior to the Effective Date, or in the case of a   
Lender that is an assignee or transferee of an interest under this Agreement    
pursuant to Section 1.13 or 12.4 (unless the respective Lender was already a    
Lender hereunder immediately prior to such assignment or transfer), on the date 
of such assignment or transfer to such Lender, (i) two accurate and complete    
original signed copies of Internal Revenue Service Form 4224 or 1001 (or        
successor forms) certifying to such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under    
this Agreement and under any Note, or (ii) if the Lender is not a "bank" within 
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either       
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a  
certificate substantially in the form of Exhibit C (any such certificate, a     
"Section 4.4(b)(ii) Certificate") and (y) two accurate and complete original    
signed copies of Internal Revenue Service Form W-8 (or successor form)          
certifying to such Lender's entitlement to a complete exemption from United     
States withholding tax with respect to payments of interest to be made under    
this Agreement and under any Note. In addition, each Lender agrees that from    
time to time after the Effective Date, when a lapse in time or change in        
circumstances renders the previous certification obsolete or inaccurate in any  
material respect, it will deliver to the Borrower and the Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or    
1001, or Form W-8 and a Section 4.4(b)(ii) Certificate, as the case may be, and 
such other forms as may be required in order to confirm or establish the        
entitlement of such Lender to a continued exemption from or reduction in United 
States withholding tax with respect to payments under this Agreement and any    
Note, or it shall immediately notify the Borrower and the Agent of its inability
to deliver any such Form or Certificate in which case such Lender shall not be  
required to deliver any such Form or Certificate pursuant to this Section       
4.4(b). Notwithstanding anything to the contrary contained in Section 4.4(a),   
but subject to Section 12.4(b) and the immediately succeeding sentence, (x) the 
Borrower shall be entitled, to the extent it is required to do so by law, to    
deduct or withhold income or similar taxes imposed by the United States (or any 
political subdivision or taxing authority thereof or therein) from interest,    
fees or other amounts payable hereunder for the account of any Lender which is  
not a United States person (as such term is defined in Section 7701(a)(30) of   
the Code) for U.S. Federal income tax purposes to the extent that such Lender   
has not provided to the Borrower U.S. Internal Revenue Service Forms that       
establish a complete exemption from such deduction or withholding and (y) the   
Borrower shall not be obligated pursuant to Section 4.4(a) hereof to gross-up   
payments to be made to a Lender in respect of income or similar taxes imposed by
the                                                                             

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United States if (I) such Lender has not provided to the Borrower the Internal  
Revenue Service Forms required to be provided to the Borrower pursuant to this  
Section 4.4(b) or (II) in the case of a payment, other than interest, to a      
Lender described in clause (ii) above, to the extent that such Forms do not     
establish a complete exemption from withholding of such taxes. Notwithstanding  
anything to the contrary contained in the preceding sentence or elsewhere in    
this Section 4.4 and except as set forth in Section 12.4(b), the Borrower agrees
to pay additional amounts and to indemnify each Lender in the manner set forth  
in Section 4.4(a) (without regard to the identity of the jurisdiction requiring 
the deduction or withholding) in respect of any amounts deducted or withheld by 
it as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,      
regulation, guideline or order, or in the interpretation thereof, relating to   
the deducting or withholding of income or similar Taxes.                        

SECTION 5.  Conditions Precedent.                       

          5.1 Conditions Precedent to Credit Events on the Initial Borrowing
Date. The obligation of each Lender to make Loans, and the obligation of the    
Letter of Credit Issuer to issue Letters of Credit, on the Initial Borrowing    
Date, is subject at the time of the making of such Loans or the issuance of such
Letters of Credit to the satisfaction of the following conditions:              

                 (a) Interim Order. The Agent shall have received, with a copy
to each Lender, a copy of the Interim Order which shall have been entered no    
later than 15 days after the Petition Date and shall, among other things,       
approve the Credit Documents, grant Super-priority Claim status and Liens and   
find that the Lenders are extending credit to the Credit Parties in good faith  
within the meaning of Section 364(e) of the Bankruptcy Code, which shall also   
(i) be in form and substance satisfactory to the Agent, the Required Lenders and
counsel to the Agent, (ii) have been entered upon an application of the Borrower
and the Guarantors reasonably satisfactory in form and substance to the Agent,  
(iii) prior to the entry of the Final Order, be in full force and effect and    
(iv) not have been stayed, reversed, vacated, rescinded, modified or amended in 
any respect without the prior written consent of the Agent and the Required     
Lenders and, if the Interim Order is the subject of a pending appeal in any     
respect, neither the making of such Loan nor the performance by the Borrower or 
any of the Guarantors of any of their respective obligations hereunder or under 
the other Credit Documents or under any other instrument or agreement referred  
to herein shall be the subject of a presently effective stay pending appeal.    

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              (b) First Day Orders. All orders entered by the Bankruptcy
Court (other than the Interim Order which is dealt with in Section 5.1(a)) on   
the date of the conversion of the Cases from involuntary cases to voluntary     
cases shall be in form and substance satisfactory to the Agent, including       
providing for the continuation of the cash management system of the Borrower and
the Guarantors, as modified in accordance with this Agreement.                  

                  (c) Budget. The Agent shall have received, with a copy to each
Lender, a copy of the initial Budget covering the four-week period commencing on
the Petition Date and other cash flow and financial projections which the Agent 
may request that itemize, on a weekly basis, all material expenditures proposed 
to be made (including payments proposed to be made in respect of pre-Petition   
Date trade payables), all in form and substance satisfactory to the Agent and   
the Required Revolving Lenders.                                                 

           (d) Due Diligence. The Agent and the Lenders shall have
received such information (financial or otherwise) as may be reasonably         
requested by the Agent or the Lenders, and the Agent shall have completed, and  
shall be satisfied with the results of, all due diligence deemed reasonably     
necessary by it.                                                                

(e)   Corporate Documents; Proceedings; etc.

             (i) On the Initial Borrowing Date, the Agent shall have
        received a certificate from each Credit Party, dated the Initial
          Borrowing Date, signed by the Chairman of the Board, the President
          or any Vice President of such Credit Party, and attested to by the
         Secretary or any Assistant Secretary of such Credit Party, in the
           form of Exhibit E with appropriate insertions, together with copies
         of the certificate of incorporation (or equivalent organizational
         document) and by-laws of such Credit Party and the resolutions of
            such Credit Party referred to in such certificate, and the foregoing
          shall be in form and substance reasonably acceptable to the Agent.

                (ii) All corporate and legal proceedings and all instruments
        and agreements in connection with the Cases and the transactions
           contemplated by this Agreement and the other Credit Documents shall
         be reasonably satisfactory in form and substance to the Agent and
   the Required Lenders, and the Agent shall have received all
     information and copies of all documents and papers, including
      records of corporate proceedings, governmental approvals, good
        standing certificates and bring-down telegrams or facsimiles, if
any, which the Agent reasonably may have requested in   

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            connection therewith, such documents and papers where appropriate to
     be certified by proper corporate or governmental authorities.

          (f) Tax Sharing Agreements. On or prior to the Initial
Borrowing Date, the Agent shall have received certified copies of all tax       
sharing, tax allocation and other similar agreements entered into by Holdings or
any of its Subsidiaries, including the Holdings Tax Allocation Agreement        
(collectively, the "Tax Agreements"), which shall be in form and substance      
reasonably satisfactory to the Agent and the Required Lenders.                  

            (g) Approvals, Consents, etc. On or prior to the Initial
Borrowing Date, all necessary governmental (domestic and foreign) and third     
party approvals and/or consents in connection with the transactions contemplated
by the Credit Documents and otherwise referred to herein or therein shall have  
been obtained and remain in effect and all applicable waiting periods with      
respect thereto shall have expired without any action being taken by any        
competent authority which restrains, prevents or imposes materially adverse     
conditions upon, the consummation of the transactions contemplated by the Credit
Documents or otherwise referred to herein or therein. Additionally, there shall 
not exist any judgment, order, injunction or other restraint issued or filed or 
a hearing seeking injunctive relief or other restraint pending or notified      
prohibiting or imposing materially adverse conditions upon, or materially       
delaying, or making economically unfeasible, the consummation of the            
transactions contemplated by the Credit Documents or otherwise required to be   
consummated herein or therein.                                                  

                 (h) Litigation. On the Initial Borrowing Date, other than the
commencement of the Cases and any actions commenced in the Cases by Persons     
other than the Credit Parties and except as set forth on Annex X, there shall be
no actions, suits or proceedings pending or threatened (i) with respect to this 
Agreement or any other Credit Document or (ii) which the Agent or the Required  
Lenders shall reasonably determine could reasonably be expected to have a       
material adverse effect on (a) the business, operations, property, assets,      
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole, (b) the rights or remedies of the Lenders or 
the Agent hereunder or under any other Credit Document or (c) the ability of any
Credit Party to perform its respective obligations to the Lenders or the Agent  
hereunder or under any other Credit Document.                                   

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                (i) Financial Statements and Projections. On or prior to the
Initial Borrowing Date, the Agent shall have received projected balance sheets  
and cash flow statements of the Borrower and its Subsidiaries on a consolidated 
basis and projected income statements of the Borrower and its Subsidiaries on a 
consolidating basis by division (including corporate, Williamhouse, Ampad, Forms
and Creative Card), prepared by or under the supervision of the Crisis Manager  
(following the Borrower's retention of the Crisis Manager) or an Authorized     
Officer (prior to the Borrower's retention of the Crisis Manager) in accordance 
with GAAP consistently applied, for the three-month period commencing on the    
date of such projections (the "Projections"), which shall be in form and        
substance reasonably satisfactory to the Agent and the Required Lenders.        

             (j) Pledge Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered the Pledge      
Agreement in the form of Exhibit F (as amended, modified or supplemented from   
time to time, the "Pledge Agreement") and shall have delivered to the Collateral
Agent, as pledgee thereunder, all of the Pledged Securities referred to therein 
and owned by such Credit Party, (x) endorsed in blank in the case of promissory 
notes constituting Pledged Securities and (y) together with executed and undated
stock powers in the case of capital stock constituting Pledged Securities.      

               (k) Security Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered the Security    
Agreement in the form of Exhibit G (as modified, supplemented or amended from   
time to time, the "Security Agreement") covering all of such Credit Party's     
present and future Security Agreement Collateral, together with proper Financing
Statements (Form UCC-1 or the equivalent) fully executed for filing under the   
UCC or other appropriate filing offices as may be necessary or, in the          
reasonable opinion of the Collateral Agent, desirable to perfect the security   
interests purported to be created by the Security Agreement.                    

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                (l) Execution of Agreement; Revolving Notes and Other Credit
Documents. On or prior to the Initial Borrowing Date, (i) the Effective Date    
shall have occurred and (ii) there shall have been delivered to the Agent (A)   
for the account of each of the Revolving Lenders the appropriate Revolving      
Notes, duly executed by the Borrower and to the Swingline Lender, the Swingline 
Note executed by the Borrower, in each case, in the amount, maturity and as     
otherwise provided herein, (B) the Subsidiary Guaranty, in the form of Exhibit H
(as amended, supplemented or otherwise modified from time to time, the          
"Subsidiary Guaranty"), duly executed by the Subsidiary Guarantors, (C) the     
Blocked Account Agreement, duly executed by all parties thereto, (D) the        
Concentration Account Agreement, duly executed by all parties thereto and (E) a 
Borrowing Base Certificate, duly executed by an Authorized Officer of the       
Borrower.                                                                       

            (m) Opinion of Counsel. The Agent shall have received an
opinion from Gibson, Dunn & Crutcher LLP, special counsel to the Credit Parties,
covering the matters set forth in Exhibit D and such other matters incident to  
the transaction contemplated herein as the Agent may reasonably request.        

             (n) Insurance Certificates. The Agent shall have received
certificates of insurance complying with the requirements of Section 7.3 for the
business and properties of Holdings and its Subsidiaries, in form and substance 
reasonably satisfactory to the Agent and naming the Collateral Agent as an      
additional insured and as loss payee, and stating that such insurance shall not 
be cancelled without at least 30 days prior written notice by the insurer to the
Collateral Agent (or such shorter period of time as a particular insurance      
company generally provides).                                                    

(o)   [Intentionally Omitted.]              

                 (p) Adequate Protection Payment. The Borrower shall have paid
to the Prepetition Agent for the benefit of the Existing Lenders and the issuer 
of the Existing Letters of Credit all accrued and unpaid fees, costs and charges
owing to the Prepetition Agent, such issuer and the Existing Lenders under the  
Existing Credit Agreement.                                                      

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             (q) Lien Searches. The Agent shall have received UCC lien
searches (dated as of a date reasonably satisfactory to the Agent) conducted in 
the jurisdictions in which the Credit Parties conduct business or maintain      
assets and reflecting the absence of Liens on the assets of each of the Credit  
Parties that are senior in priority to the Liens securing the Obligations (other
than such Liens as may be permitted under the Existing Credit Agreement or      
otherwise acceptable to the Agent), all in form and substance satisfactory to   
the Agent.                                                                      

                  (r) Year 2000 Program. The Agent shall have received a copy of
the Y2K Compliance Plan, in form and substance reasonably acceptable to the     
Agent.                                                                          

             (s)   Consultants.  The Credit Parties shall have engaged
Lazard Freres & Co. LLC pursuant to a retention letter in form and substance    
acceptable to the Agent.                                                        

                (t) Fees. The Borrower shall have paid to the Agent and each
Lender all costs, fees and expenses and other amounts (including, without       
limitation fees payable in accordance with Section 3 and all reasonable fees and
expenses of professionals engaged by the Agent and the Lenders) incurred through
the Petition Date, that are then due and payable and authorized by the          
Bankruptcy Court in the Interim Order.                                          

            (u) Termination or Amendment of Receivables Program. The
Accounts Receivable Facility Purchase Agreement shall have been terminated or   
amended, on terms and conditions satisfactory to the Agent and the Required     
Lenders.                                                                        

             (v) Cash Management System. The Agent shall have received
satisfactory evidence that (i) all cash of the Credit Parties shall have been   
transferred to the Concentration Account, except for cash on deposit in the     
Blocked Account and payroll accounts and disbursement accounts that are         
permitted under Section 8.17 and (ii) the Credit Parties shall have irrevocably 
directed Manufacturers and Traders Trust Company to transfer all amounts        
otherwise payable to the Receivables Entity to the Concentration Account.       

          (w) Williamhouse Sale Plan. The Agent and the Required
Revolving Lenders shall (i) be satisfied with the Borrower's plan to consummate 
the Williamhouse Sale during the pendency of the Cases (the "Sale Proposal"),   
and (ii) the Agent and the Lenders shall have received a copy of the book or    
other materials prepared by Lazard Freres & Co. that will be circulated to      
potential purchasers of the assets of the Williamhouse division.                

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        5.2 Conditions Precedent to All Credit Events. The obligation of
each Lender to make Loans (including Loans made on the Initial Borrowing Date), 
and the obligation of the Letter of Credit Issuer to issue Letters of Credit, is
subject, at the time of each such Credit Event (except as hereinafter           
indicated), to the satisfaction of the following conditions:                    

                  (a) No Default; Representations and Warranties. At the time of
each such Credit Event and also after giving effect thereto (i) there shall     
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in 
all material respects with the same effect as though such representations and   
warranties had been made on the date of such Credit Event (it being understood  
and agreed that any representation or warranty which by its terms is made as of 
a specified date shall be required to be true and correct in all material       
respects only as of such specified date).                                       

        (b)   Notice of Borrowing; Letter of Credit Request.

                   (i) Prior to the making of each Loan (other than a Term Loan,
          a Swingline Loan and a Revolving Loan made pursuant to a Mandatory
       Borrowing), the Agent shall have received a Notice of Borrowing
          meeting the requirements of Section 1.3(a). Prior to the making of
         each Swingline Loan, the Swingline Lender shall have received the
notice referred to in Section 1.3(b)(i).                

                  (ii) Prior to the issuance of each Letter of Credit, the Agent
       and the Letter of Credit Issuer shall have received a Letter of
  Credit Request meeting the requirements of Section 2.2(a).

                (c) Bankruptcy Court Approval. The Interim Order shall be in
full force and effect or, if the date of the requested Loan is more than 30 days
after the Initial Borrowing Date, or the amount of such requested Loan, together
with the amount of all Loans outstanding as of such date, shall exceed the      
maximum amount authorized pursuant to the Interim Order, the Final Order shall  
have been entered in form and substance satisfactory to the Agent, the Required 
Revolving Lenders and counsel to the Agent, and shall be in full force and      
effect and shall not have been stayed, reversed, vacated or otherwise modified  
without the prior written consent of the Agent and the Required Revolving       
Lenders. The Bankruptcy Court shall have converted the Cases from involuntary   
cases to voluntary cases under chapter 11 of the Bankruptcy Code.               

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              (d) Borrowing Certificate. The Agent shall have received a
certificate, in form and substance satisfactory to the Agent and executed by the
Crisis Manager (after the Borrower's retention of the Crisis Manager) or an     
Authorized Officer (before the Borrower's retention of the Crisis Manager) of   
the Borrower, certifying that (i) the requested Loan or Letter of Credit and the
intended use of proceeds thereof are consistent with the terms of this Agreement
and will be used solely for expenditures, and in the approximate amounts, set   
forth in the then applicable Budget, (ii) the proceeds thereof are necessary,   
after utilization and application of the Borrower's and the Guarantors'         
available Cash Collateral, in order for the Borrower and the Guarantors to      
satisfy their obligations with respect to the items set forth in the then       
applicable Budget, (iii) all of the representations and warranties contained in 
Section 6 are true and correct in all material respects (except for those that  
expressly relate to a specific date, in which case they shall be true and       
correct in all material respects as of such date), (iv) the Borrower and the    
Guarantors have observed and performed all applicable covenants and agreements  
contained herein, in the other Credit Documents and the Interim Order or the    
Final Order (as applicable) and satisfied in all material respects each         
condition to the making of such Loan or the issuance of such Letter of Credit   
contained herein, in the other Credit Documents or in the Interim Order or the  
Final Order (as applicable) to be observed, performed or satisfied by the Credit
Parties, (v) the making of any requested Revolving Loan or the issuance of any  
requested Letter of Credit would not cause the aggregate principal amount of all
Revolving Loans, when added to all Other Revolving Exposure, to exceed the      
lesser of (x) the Total Revolving Loan Commitment, (y) the Borrowing Base then  
in effect and (z) the amount of loans and letters of credit set forth in the    
Budget for the period in which such Revolving Loan is to be borrowed or such    
Letter of Credit is to be issued, (vi) such officer or the Crisis Manager, as   
the case may be, has no knowledge of the existence of any Default or Event of   
Default, (vii) the information provided in the then applicable Budget continues 
to be true and correct in all material respects and (viii) the requested Loan or
Letter of Credit will not result in the Credit Parties exceeding any amounts in 
the then applicable Budget.                                                     

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                  (e) Adverse Change, etc. Nothing shall have occurred since the
date of the most recent Credit Event with respect to the Borrower or the        
Guarantors (and neither any Lender nor the Agent shall have become aware of any 
facts or conditions not previously known) which either the Agent or the Required
Lenders shall determine has had, or is reasonably likely to have, in each case  
as of the date of the requested Credit Event, (i) a Material Adverse Effect or  
(ii) a material adverse effect on the rights or remedies of the Lenders or the  
Agent hereunder or under any other Credit Documents, or on the ability of the   
Borrower of any of the Guarantors to perform their obligations to the Lenders   
and the Agent (in any event, other than any change occurring as a direct result 
of the commencement of the Cases).                                              

           (f) Pleadings. No pleading shall have been filed in the
Bankruptcy Court by or on behalf of any Credit Party or its Affiliates which is 
not withdrawn, dismissed or denied within 15 days after filing, and no pleading 
shall have been filed in the Bankruptcy Court by any Person if any of the       
following relief is granted, in either case seeking (i) to dismiss or convert   
any of the Cases to a Chapter 7 case, (ii) the appointment of a Chapter 11      
trustee in any of the Cases, (iii) the appointment of an examiner having        
enlarged powers relating to the operation of the business of the Borrower or any
of the Guarantors (beyond those set forth under Section 1106(a)(3) and (4) of   
the Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code, (iv) the     
allowance of a Super-priority Claim or a Lien pari passu or senior to that of   
the Agent, the Prepetition Agent, the Lenders or the Existing Lenders granted   
pursuant to any Security Document, (v) to stay, reverse, vacate, or otherwise   
modify the Interim Order or the Final Order without the prior written consent of
the Agent and the Required Lenders or, if required by Section 12.12(a), all of  
the Lenders, or (vi) relief from the automatic stay so as to allow a third party
to proceed against any material property or assets of the Borrower or any       
Guarantor.                                                                      

                (g) Fees. The Borrower shall have paid to the Agent and each
Lender all costs, fees and expenses and other amounts (including, without       
limitation, all reasonable fees and expenses of professionals engaged by the    
Agent and the Lenders) payable to the Agent and such Lender to the extent then  
due and authorized by the Bankruptcy Court.                                     

                (h) Cash Management System. Unless otherwise consented to by
the Agent and Required Lenders, there shall have been no change to the          
Borrower's cash management system (including the requirement to maintain the    
Concentration Account with BTCo).                                               

            The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by each Credit                                    

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Party to the Agent and each of the Lenders that all of the applicable conditions
specified above exist as of the date of such Credit Event. All of the           
certificates, legal opinions and other documents and papers referred to in this 
Section 5, unless otherwise specified, shall be delivered to the Agent at its   
Notice Office for the account of each of the Lenders and, except for the Notes, 
in sufficient counterparts for each of the Lenders and shall be reasonably      
satisfactory in form and substance to the Agent and the Required Lenders.       

        5.3  Conditions Precedent to Term Loans.  The utilization of the
Term Loan Commitments in accordance with Section 1.1(e) is subject to the       
satisfaction of the following conditions:                                       

              (a) Execution of Agreement; Term Notes. On or prior to the
date of the entry of the Final Order, there shall have been delivered to the    
Agent (i) counterparts of this Agreement executed by each Existing Lender in its
capacity as a Term Lender and (ii) for the account of each Term Lender, the Term
Notes executed by the Borrower.                                                 

           (b)   Bankruptcy Court Approval.  The Final Order shall
have been entered.                                                              

          SECTION 6. Representations, Warranties and Agreements. In order to
induce the Lenders to enter into this Agreement and to make the Loans and issue 
and/or participate in the Letters of Credit provided for herein, each of        
Holdings, WR Acquisition and the Borrower makes the following representations,  
warranties and agreements with the Lenders in each case after giving effect to  
the transactions contemplated hereby, all of which shall survive the execution  
and delivery of this Agreement, the making of the Loans and the issuance of the 
Letters of Credit (with the occurrence of each Credit Event being deemed to     
constitute a representation and warranty that the matters specified in this     
Section 6 are true and correct in all material respects on and as of the date of
each such Credit Event, unless stated to relate to a specific earlier date in   
which case such representations and warranties shall be true and correct in all 
material respects as of such earlier date):                                     

           6.1 Corporate Status. Each of Holdings and each of its Subsidiaries
(i) is a duly organized and validly existing corporation in good standing under 
the laws of the jurisdiction of its organization, (ii) has the corporate power  
and authority to own its property and assets and to transact the business in    
which it is engaged and presently proposes to engage and (iii) is duly qualified
and is authorized to do business and is in good standing in all jurisdictions   
where it is required to be so qualified and where the failure to be so qualified
would have a Material Adverse Effect.                                           

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      6.2 Corporate Power and Authority. Subject to the entry by the
Bankruptcy Court of the Interim Order or the Final Order (when applicable), each
Credit Party has the corporate power and authority to execute, deliver and carry
out the terms and provisions of the Documents to which it is a party and has    
taken all necessary corporate action to authorize the execution, delivery and   
performance of the Credit Documents to which it is a party. Each Credit Party   
has duly executed and delivered each Credit Document to which it is a party and 
each such Credit Document constitutes the legal, valid and binding obligation of
such Credit Party enforceable in accordance with its terms.                     

         6.3 No Violation. Subject to the entry by the Bankruptcy Court of
the Interim Order or the Final Order (when applicable), neither the execution,  
delivery or performance by any Credit Party of the Credit Documents to which it 
is a party nor compliance by any Credit Party with the terms and provisions     
thereof, nor the consummation of the transactions contemplated herein or        
therein, (i) will contravene any applicable provision of any law, statute, rule 
or regulation, or any order, writ, injunction or decree of any court or         
governmental instrumentality, (ii) will conflict or be inconsistent with or     
result in any breach of, any of the terms, covenants, conditions or provisions  
of, or constitute a default under, or (other than pursuant to the Security      
Documents and the Accounts Receivable Facility Documents) result in the creation
or imposition of (or the obligation to create or impose) any Lien upon any of   
the property or assets of Holdings or any of its Subsidiaries pursuant to the   
terms of any indenture, mortgage, deed of trust, loan agreement, credit         
agreement or any other material agreement or instrument to which Holdings or any
of its Subsidiaries is a party or by which it or any of its property or assets  
are bound or to which it may be subject or (iii) will violate any provision of  
the Certificate of Incorporation or By-Laws of Holdings or any of its           
Subsidiaries.                                                                   

        6.4 Litigation. Other than the commencement of the Cases and any
actions commenced in the Cases by Persons other than the Credit Parties and     
except as set forth in Annex X, there are no actions, suits or proceedings      
pending or, to the knowledge of Holdings or any of its Subsidiaries, threatened,
with respect to Holdings or any of its Subsidiaries (i) that are likely to have 
a Material Adverse Effect or (ii) that could reasonably be expected to have a   
material adverse effect on the rights or remedies of the Agent or the Lenders or
on the ability of any Credit Party to perform its respective obligations to the 
Agent or the Lenders hereunder and under the other Credit Documents to which it 
is, or will be, a party. Additionally, there does not exist any judgment, order 
or injunction prohibiting or imposing material adverse conditions upon the      
occurrence of any Credit Event.                                                 

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6.5  Use of Proceeds; Margin Regulations.               

               (a) The proceeds of all Revolving Loans and Swingline Loans
(and in the case of (ii) below, Term Loans) shall be used, all in accordance    
with this Agreement and the then applicable Budget, (i) to fund general         
corporate purposes relating to post-Petition Date operations, to make payments  
to critical prepetition vendors (which have been approved by the Bankruptcy     
Court) and to make Retention Payments (which have been approved by the          
Bankruptcy Court) in accordance with, and limited by, those items set forth in  
the then applicable Budget, (ii) to repay the Existing Lender Debt in accordance
with Section 1.1(e) and the Obligations, (iii) to pay all reasonable legal fees 
and expenses incurred in connection with the preparation, negotiation and       
documentation of this Agreement by the Prepetition Agent and each Existing      
Lender, (iv) to pay all legal and other professional fees and expenses of the   
Agent and the Lenders incurred in connection with the preparation, negotiation, 
documentation and enforcement of this Agreement and (v) to repay the emergency  
loan of $3,000,000 made by BTCo and authorized by the Emergency Order on January
14, 2000, together with accrued and unpaid interest thereon (the "Emergency     
Loan"); it being agreed that the proceeds of the initial Loan made hereunder    
shall be used to repay the Emergency Loan.                                      

          (b) Neither the making of any Loan, nor the use of the
proceeds thereof, will violate the provisions of Regulation T, U or X of the    
Board of Governors of the Federal Reserve System and no part of the proceeds of 
any Loan will be used to purchase or carry any Margin Stock or to extend credit 
for the purpose of purchasing or carrying any Margin Stock.                     

          6.6 Governmental Approvals. Except for the entry by the Bankruptcy
Court of the Interim Order and the Final Order (when applicable), no order,     
consent, approval, license, authorization, or validation of, or filing,         
recording or registration with, or exemption by, any foreign or domestic        
governmental or public body or authority, or any subdivision thereof, is        
required to authorize or is required in connection with (i) the execution,      
delivery and performance of any Credit Document or (ii) the legality, validity, 
binding effect or enforceability of any Credit Document.                        

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     6.7  Investment Company Act.  Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an         
"investment company," within the meaning of the Investment Company Act of       
1940, as amended.                                                               

           6.8 Public Utility Holding Company Act. Neither Holdings nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company" 
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.                                                        

           6.9 True and Complete Disclosure. All factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of Holdings  
or any of its Subsidiaries in writing to the Agent, any Lender or the Bankruptcy
Court (including, without limitation, all information contained in the          
Documents) for purposes of or in connection with this Agreement or any          
transaction contemplated herein is, and all other such factual information      
(taken as a whole) hereafter furnished by or on behalf of any such Persons in   
writing to the Agent, any Lender or the Bankruptcy Court will be, true and      
accurate in all material respects on the date as of which such information is   
dated or certified and not incomplete by omitting to state any material fact    
necessary to make such information (taken as a whole) not misleading at such    
time in light of the circumstances under which such information was provided.   

6.10  Financial Condition; Financial Statements.        

                 (a) The statements of financial condition of Holdings and its
Subsidiaries at December 31, 1998 and September 30, 1999 and the related        
statements of income and cash flows and changes in shareholders' equity of      
Holdings and its Subsidiaries for the fiscal year or nine-month period, as the  
case may be, ended as of said dates, copies of which have heretofore been       
furnished to each Lender, present fairly in all material respects the           
consolidated financial condition of Holdings and its Subsidiaries at the dates  
of said statements and the results for the periods covered thereby. All such    
financial statements have been prepared in accordance with GAAP consistently    
applied except to the extent provided in the notes to said financial statements 
and subject, in the case of the September 30, 1999 statements, to normal        
year-end audit adjustments and the absence of footnotes.                        

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             (b) Except as fully reflected in the financial statements
described in Section 6.10(a) and the Indebtedness incurred under this Agreement,
(i) there were as of the Initial Borrowing Date (and after giving effect to any 
Loans made on such date), no liabilities or obligations (excluding current      
obligations incurred in the ordinary course of business) with respect to        
Holdings or any of its Subsidiaries of any nature whatsoever (whether absolute, 
accrued, contingent or otherwise and whether or not due), and (ii) neither      
Holdings nor the Borrower knows of any basis for the assertion against Holdings 
or any of its Subsidiaries of any such liability or obligation which, either    
individually or in the aggregate, are or would be reasonably likely to have, a  
Material Adverse Effect.                                                        

             (c) The Projections are based on good faith estimates and
assumptions made by the management of Holdings, and on the Initial Borrowing    
Date such management believed that the Projections were reasonable and          
attainable, it being recognized by the Lenders, however, that projections as to 
future events are not to be viewed as facts and that the actual results during  
the period or periods covered by the Projections probably will differ from the  
projected results and that the differences may be material. There is no fact    
known to Holdings or any of its Subsidiaries which would have a Material Adverse
Effect, which has not been disclosed herein or in such other documents,         
certificates and statements furnished to the Lenders for use in connection with 
the transactions contemplated hereby.                                           

6.11  [Intentionally Omitted].                          

  6.12 Transaction. At the time of consummation thereof, the
transactions contemplated by this Agreement have been or will be consummated in 
accordance with all applicable laws. At the time of consummation thereof, all   
consents and approvals of, and filings and registrations with, and all other    
actions in respect of, all governmental agencies, authorities or                
instrumentalities required to make or consummate the transactions contemplated  
by this Agreement have been obtained, given, filed or taken or waived and are or
will be in full force and effect (or effective judicial relief with respect     
thereto has been obtained) except where the failure to obtain, give, file, or   
take would not reasonably be expected to have a Material Adverse Effect.        
Additionally, there does not exist any judgment, order or injunction prohibiting
or imposing material adverse conditions upon the transactions contemplated by   
this Agreement, or the occurrence of any Credit Event or the performance by     
Holdings and its Subsidiaries of their obligations under the Documents and all  
applicable laws.                                                                

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6.13  Special Purpose Corporations.                     

                  (a) Holdings has no assets (other than the capital stock of WR
Acquisition and Foreign Sales and immaterial assets used for the performance of 
those activities permitted to be performed by Holdings pursuant to Section      
8.1(b) and any obligations held by it to the extent permitted by Section 8.6(e))
or liabilities (other than those liabilities under this Agreement, the other    
Documents to which it is a party and the Shareholder Subordinated Notes).       

                  (b) WR Acquisition has no assets (other than the capital stock
of the Borrower and immaterial assets used for the performance of those         
activities permitted to be performed by WR Acquisition pursuant to Section      
8.1(c)) or liabilities (other than those liabilities under this Agreement and   
the other Documents to which it is a party).                                    

                 (c) Foreign Sales has no assets (other than immaterial assets
used for the performance of those activities permitted to be performed by       
Foreign Sales pursuant to Section 8.1(e)) or liabilities (other than those      
liabilities under this Agreement and the other Documents to which it is a       
party).                                                                         

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6.14  Compliance with ERISA.                            

                 (a) Each Plan is in substantial compliance with ERISA and the
Code; no Reportable Event has occurred with respect to a Plan; no Plan is       
insolvent or in reorganization; no Plan has an Unfunded Current Liability; no   
Plan has an accumulated or waived funding deficiency, has permitted decreases in
its funding standard account or has applied for a waiver of the minimum funding 
standard or an extension of any amortization period within the meaning of       
Section 412 of the Code; all contributions required to be made with respect to a
Plan and a Foreign Pension Plan have been timely made; neither Holdings nor any 
Subsidiary of Holdings nor any ERISA Affiliate has incurred any material        
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l),   
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 
4971, 4975 or 4980 of the Code or reasonably expects to incur any material      
liability (including any indirect, contingent or secondary liability) under any 
of the foregoing Sections with respect to any Plan (other than liabilities of   
any ERISA Affiliate which could not, by operation of law or otherwise, become a 
liability of Holdings or any of its Subsidiaries); no proceedings have been     
instituted to terminate, or to appoint a trustee to administer, any Plan; no    
condition exists which presents a material risk to Holdings or any Subsidiary of
Holdings or any ERISA Affiliate of incurring a liability to or on account of a  
Plan pursuant to the foregoing provisions of ERISA and the Code; using actuarial
assumptions and computation methods consistent with subpart 1 of subtitle E of  
Title IV of ERISA, the aggregate liabilities of Holdings and its Subsidiaries   
and its ERISA Affiliates to all Plans which are multiemployer plans (as defined 
in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom,
as of the close of the most recent fiscal year of each such Plan ended prior to 
the date of the most recent Credit Event, would not result in a Material Adverse
Effect; no lien imposed under the Code or ERISA on the assets of Holdings or any
Subsidiary of Holdings or any ERISA Affiliate exists or is likely to arise on   
account of any Plan; and Holdings and its Subsidiaries do not maintain or       
contribute to any employee welfare benefit plan (as defined in Section 3(1) of  
ERISA) which provides benefits to retired employees or other former employees   
(other than as required by Section 601 of ERISA) or any employee pension benefit
plan (as defined in Section 3(2) of ERISA) the obligations with respect to which
could reasonably be expected to have a Material Adverse Effect.                 

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        (b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all  
applicable laws, statutes, rules, regulations and orders and has been           
maintained, where required, in good standing with applicable regulatory         
authorities. Neither Holdings nor any of its Subsidiaries has incurred any      
material obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued benefit liabilities      
(whether or not vested) under each Foreign Pension Plan which is funded,        
determined as of the end of the most recently ended fiscal year of the Borrower 
on the basis of actuarial assumptions, each of which is reasonable, did not     
exceed the current value of the assets of such Foreign Pension Plan, and for    
each Foreign Pension Plan which is not funded, the obligations of such Foreign  
Pension Plan are properly accrued.                                              

6.15  Capitalization.                                   

             (a) On the Initial Borrowing Date, the authorized capital
stock of Holdings shall consist of (i) 75,000,000 shares of common stock, $.01  
par value per share (the "Holdings Common Stock") and (ii) 150,000 shares of    
preferred stock, $.01 par value per share, none of which shares of preferred    
stock shall be issued and outstanding. All outstanding shares of Holdings Common
Stock have been duly and validly issued, and are fully paid and nonassessable.  
Holdings does not have outstanding any securities convertible into or           
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for 
the issuance (contingent or otherwise) of, or any calls, commitments or claims  
of any character relating to, its capital stock except for options to purchase  
Holdings Common Stock issued or to be issued to management of Holdings and its  
Subsidiaries.                                                                   

             (b) On the Initial Borrowing Date, the authorized capital
stock of WR Acquisition shall consist of 1,000 shares of common stock, $.01 par 
value per share, all of which shares shall be issued and outstanding and owned  
by Holdings. All such outstanding shares have been duly and validly issued, and 
are fully paid and nonassessable. WR Acquisition does not have outstanding any  
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of, 
or any agreements providing for the issuance (contingent or otherwise) of, or   
any calls, commitments or claims of any character relating to, its capital      
stock.                                                                          

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             (c) On the Initial Borrowing Date, the authorized capital
stock of the Borrower shall consist of 200 shares of common stock, $.01 par     
value per share, all of which shares shall be issued and outstanding and owned  
by WR Acquisition. All such outstanding shares have been duly and validly       
issued, and are fully paid and nonassessable. The Borrower does not have        
outstanding any securities convertible into or exchangeable for its capital     
stock or outstanding any rights to subscribe for or to purchase, or any options 
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.                                                              

            6.16 Subsidiaries. On and as of the Initial Borrowing Date, Holdings
has no Subsidiaries other than Foreign Sales and WR Acquisition and its         
Subsidiaries, WR Acquisition has no Subsidiaries other than the Borrower and its
Subsidiaries, Foreign Sales has no Subsidiaries, the Borrower has no            
Subsidiaries other than those Subsidiaries listed on Annex VI and the Borrower  
has no Foreign Subsidiaries other than Foreign Sales. Annex VI correctly sets   
forth, as of the Initial Borrowing Date, a list of all Persons that own 5% or   
more of any class of any shares of capital stock of any Credit Party, the       
percentage ownership (direct and indirect) of Holdings in each class of capital 
stock of each of its Subsidiaries and also identifies the direct owner thereof. 

    6.17 Intellectual Property. Each of Holdings and each of its
Subsidiaries owns or holds a valid license to use all the material patents,     
trademarks, permits, service marks, trade names, technology, know-how and       
formulas or other rights with respect to the foregoing, free from restrictions  
that are materially adverse to the use thereof, that are used in the operation  
of the business of Holdings and each of its Subsidiaries as presently conducted.

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            6.18 Compliance with Statutes, etc. Each of Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and     
orders of, and all applicable restrictions imposed by, all governmental bodies, 
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including compliance with all applicable Environmental Laws    
with respect to any Real Property or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such    
Real Property or the operations of Holdings or any of its Subsidiaries), except 
such non-compliance as is not likely to, individually or in the aggregate, have 
a Material Adverse Effect.                                                      

6.19  Environmental Matters.                            

                  (a) Except as set forth on Annex XI, each of Holdings and each
of its Subsidiaries has complied with, and on the date of each Credit Event is  
in compliance with, all applicable Environmental Laws and the requirements of   
any permits issued under such Environmental Laws. There are no pending or, to   
the best knowledge of Holdings and the Borrower, past or threatened             
Environmental Claims against Holdings or any of its Subsidiaries or any Real    
Property owned or operated by Holdings or any of its Subsidiaries. There are no 
facts, circumstances, conditions or occurrences on any Real Property owned or   
operated by Holdings or any of its Subsidiaries or, to the best knowledge of    
Holdings and the Borrower, on any property adjoining or in the vicinity of any  
such Real Property that would reasonably be expected (i) to form the basis of an
Environmental Claim against Holdings or any of its Subsidiaries or any such Real
Property or (ii) to cause any such Real Property to be subject to any           
restrictions on the ownership, occupancy, use or transferability of such Real   
Property by Holdings or any of its Subsidiaries under any applicable            
Environmental Law.                                                              

                 (b) Except as set forth on Annex XI, Hazardous Materials have
not at any time been generated, used, treated or stored on, or transported to or
from, any Real Property owned or operated by Holdings or any of its Subsidiaries
where such generation, use, treatment or storage has violated or would          
reasonably be expected to violate any Environmental Law. Hazardous Materials    
have not at any time been Released on or from any Real Property owned or        
operated by Holdings or any of its Subsidiaries. There are not now any          
underground storage tanks located on any Real Property owned or operated by     
Holdings or any of its Subsidiaries.                                            

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                (c) Notwithstanding anything to the contrary in this Section
6.19, the representations made in this Section 6.19 shall only be untrue if the 
aggregate effect of all conditions, failures, noncompliances, Environmental     
Claims, Releases and presence of underground storage tanks, in each case of the 
types described above, would reasonably be expected to have a Material Adverse  
Effect.                                                                         

          6.20 Properties. All Real Property owned by Holdings or any of its
Subsidiaries and all material Leaseholds leased by Holdings or any of its       
Subsidiaries, in each case as of the Initial Borrowing Date, and the nature of  
the interest therein, is correctly set forth in Annex IV. Each of Holdings and  
each of its Subsidiaries has good and marketable title to, or a validly         
subsisting leasehold interest in, all material properties owned or leased by it,
including all Real Property reflected in Annex IV or in the financial statements
referred to in Section 6.10(a), free and clear of all Liens, other than         
Permitted Liens.                                                                

          6.21 Labor Relations. Neither Holdings nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to    
have a Material Adverse Effect. There is (i) no unfair labor practice complaint 
pending against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings and the Borrower, threatened against any of them, before the National  
Labor Relations Board, and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against Holdings or  
any of its Subsidiaries or, to the best knowledge of Holdings and the Borrower, 
threatened against any of them, (ii) no strike, labor dispute, slowdown or      
stoppage pending against Holdings or any of its Subsidiaries or, to the best    
knowledge of Holdings and the Borrower, threatened against Holdings or any of   
its Subsidiaries and (iii) to the best knowledge of Holdings and the Borrower,  
no union representation question existing with respect to the employees of      
Holdings or any of its Subsidiaries and, to the best knowledge of Holdings and  
the Borrower, no union organizing activities are taking place, except (with     
respect to any matter specified in clause (i), (ii) or (iii) above, either      
individually or in the aggregate) such as is not reasonably likely to have a    
Material Adverse Effect.                                                        

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            6.22 Tax Returns and Payments. All Federal, material state and other
material returns, statements, forms and reports for taxes (the "Returns")       
required to be filed by or with respect to the income, properties or operations 
of Holdings and/or any of its Subsidiaries have been timely filed with the      
appropriate taxing authority. The Returns accurately reflect all liability for  
taxes of Holdings and its Subsidiaries for the periods covered thereby. Holdings
and each of its Subsidiaries have paid all taxes payable by them other than     
immaterial taxes and other taxes which are not yet due and payable, and other   
than taxes contested in good faith and for which adequate reserves have been    
established in accordance with GAAP. Except as disclosed in the financial       
statements referred to in Section 6.10(a), there is no material action, suit,   
proceeding, investigation, audit, or claim now pending or, to the knowledge of  
Holdings and the Borrower, threatened by any authority regarding any taxes      
relating to Holdings or any of its Subsidiaries. As of the Initial Borrowing    
Date, neither Holdings nor any of its Subsidiaries has entered into an agreement
or waiver or been requested to enter into an agreement or waiver extending any  
statute of limitations relating to the payment or collection of taxes of        
Holdings or any of its Subsidiaries, or is aware of any circumstances that would
cause the taxable years or other taxable periods of Holdings or any of its      
Subsidiaries not to be subject to the normally applicable statute of            
limitations. Neither Holdings nor any of its Subsidiaries has provided, with    
respect to themselves or property held by them, any consent under Section 341 of
the Code. Neither Holdings nor any of its Subsidiaries has incurred, or will    
incur, any material tax liability in connection with the transactions           
contemplated hereby.                                                            

            6.23 Existing Indebtedness. Annex VII sets forth a true and complete
list of all Indebtedness of Holdings and its Subsidiaries (other than           
Indebtedness which in the aggregate does not exceed $100,000) as of the Initial 
Borrowing Date and which is to remain outstanding after giving effect to the    
incurrence of Loans on such date (excluding the Loans, the Letters of Credit,   
the Accounts Receivable Facility, the Existing Credit Agreement and the Senior  
Subordinated Notes, the "Existing Indebtedness"), in each case showing the      
aggregate principal amount thereof and the name of the respective borrower and  
any other entity which directly or indirectly guaranteed such debt.             

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    6.24 Senior Subordinated Notes. The subordination provisions
contained in the Senior Subordinated Note Indenture, the Senior Subordinated    
Note Guarantees and the Senior Subordinated Notes are enforceable against the   
Borrower, the respective Guarantors and the holders thereof, and all Obligations
and Guaranteed Obligations (as defined herein and in the Subsidiary Guaranty)   
are within the definition of "Senior Debt" or "Guarantor Senior Debt," as the   
case may be, included in such subordination provisions. This Agreement          
constitutes the "Bank Credit Agreement" under (and as defined in) the Senior    
Subordinated Note Indenture.                                                    

           6.25 Year 2000 Compliance. Any reprogramming required to permit the
proper functioning in and following the year 2000 of (i) the computer systems of
the Credit Parties and (ii) equipment containing embedded microchips (including 
systems and equipment supplied by others or with which the systems of the Credit
Parties interface) and the testing of all such systems and equipment, as so     
reprogrammed, has been completed in accordance with the Y2K Compliance Plan. The
cost to the Credit Parties of such reprogramming and testing and of the         
reasonably foreseeable consequences of year 2000 to the Credit Parties          
(including, without limitation, reprogramming errors and the failure of others' 
systems or equipment) has not resulted and will not result in a Material Adverse
Effect. Except for such of the reprogramming referred to in the preceding       
sentence as may be necessary, the computer and management information systems of
the Credit Parties are and, with ordinary course upgrading and maintenance, will
continue to be, sufficient to permit the Credit Parties to conduct business     
without the occurrence of a Material Adverse Effect.                            

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   6.26 Common Officers, etc. (a) Holdings issues consolidated
financial statements that include each of the Credit Parties (including, without
limitation, the Additional Subsidiaries) in the consolidation, and each of the  
Credit Parties (including, without limitation, the Additional Subsidiaries) are 
fully consolidated by virtue of Holdings' direct or indirect 100% ownership of  
the capital stock of each of the other Credit Parties (including, without       
limitation, the Additional Subsidiaries); (b) the Credit Parties (including,    
without limitation, the Additional Subsidiaries) have common officers and       
directors; (c) the Credit Parties (including, without limitation, the Additional
Subsidiaries) share office space and do not maintain separate books and records 
in all instances; (d) a significant portion of the assets of Borrower, Holdings,
WR Acquisition and the Additional Subsidiaries are commingled and would be      
difficult to segregate; and (e) the businesses of the Credit Parties (including,
without limitation, the Additional Subsidiaries) are managed along divisional   
reporting lines without giving effect to the separate legal entities whose      
assets comprise such divisions, and the Ampad and Williamhouse divisions are    
divisions of more than one Credit Party.                                        

        6.27 Interim and Final Orders. As of the Initial Borrowing Date,
each of the Emergency Order and the Interim Order has been entered and has not  
been stayed, amended, vacated, reversed, rescinded or otherwise modified in any 
respect. As of the date of the making of a subsequent Loan hereunder, the       
Interim Order and/or the Final Order, as the case may be, have been entered and 
have not been stayed, amended (except in accordance with the terms hereof),     
reversed, vacated, rescinded or otherwise modified (except in accordance with   
the terms hereof) in any respect.                                               

   6.28  Accounts Receivable Facility Purchase Agreement.  The
Accounts Receivable Facility Purchase Agreement was terminated.                 

          SECTION 7. Affirmative Covenants. Holdings, WR Acquisition and the
Borrower hereby covenant and agree that as of the Effective Date and thereafter 
for so long as this Agreement is in effect and until the Total Commitment has   
terminated, no Letters of Credit (other than Letters of Credit, together with   
all Fees that have accrued and will accrue thereon through the stated           
termination date of such Letters of Credit, which have been supported in a      
manner satisfactory to the Letter of Credit Issuer in its sole and absolute     
discretion) or Notes are outstanding and the Loans and Unpaid Drawings, together
with interest, Fees and all other Obligations (other than any indemnities       
described in Section 12.13 which are not then due and payable) incurred         
hereunder, are paid in full:                                                    

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          7.1  Information Covenants.  Holdings will furnish to each Lender:

             (a) Monthly Reports. Within 30 days after the end of each
fiscal month of Holdings, the consolidated balance sheet of Holdings and its    
Subsidiaries as at the end of such fiscal month and the related consolidated    
statements of income and retained earnings of cash flows for such fiscal month  
and for the elapsed portion of the fiscal year ended with the last day of such  
fiscal month, in each case setting forth comparative figures for the            
corresponding fiscal month in the prior fiscal year and comparable budgeted     
figures for such fiscal month as reflected in the Bankruptcy Forecast dated as  
of December 30, 1999, all of which shall be certified by the Crisis Manager     
(following the Borrower's retention of the Crisis Manager) or an Authorized     
Officer of Holdings (prior to the Borrower's retention of the Crisis Manager),  
subject to normal year-end audit adjustments and the absence of footnotes. Each 
monthly report delivered pursuant to this Section 7.1(a) shall include a        
management discussion and summary of operating results for such month, which    
shall be prepared in a form substantially similar to the form provided under the
Existing Credit Agreement and shall describe in reasonable detail the results of
operations of Holdings and its Subsidiaries on a consolidated basis and of each 
division (including corporate, Williamhouse, Ampad, Forms and Creative Card) on 
a consolidating basis.                                                          

(b)   Quarterly Financial Statements.       

           (i) Within 45 days after the close of the first three
         quarterly accounting periods in each fiscal year of Holdings, the
         consolidated balance sheet of Holdings and its Subsidiaries as at
   the end of such quarterly accounting period and the related
           consolidated statements of income and retained earnings and of cash
      flows for such quarterly accounting period and for the elapsed
            portion of the fiscal year ended with the last day of such quarterly
         accounting period; all of which shall be in reasonable detail and
           certified by the Crisis Manager (following the Borrower's retention
          of the Crisis Manager) or an Authorized Officer of Holdings (prior
           to the Borrower's retention of the Crisis Manager) that they fairly
            present in all material respects the financial condition of Holdings
         and its Subsidiaries as of the dates indicated and the results of
        their operations and changes in their cash flows for the periods
       indicated, subject to normal year-end audit adjustments and the
absence of footnotes.                                   

(ii) Within 45 days after the close of the  

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       first three quarterly accounting periods in each fiscal year of
            Holdings, the sales and operating income (before corporate overhead)
     for each division of Holdings and its Subsidiaries (including
         corporate, Williamhouse, Ampad, Forms and Creative Card) for such
      quarterly accounting period and for the elapsed portion of the
        fiscal year ended with the last day of such quarterly accounting
           period; all of which shall be in reasonable detail and certified by
            the Crisis Manager (following the Borrower's retention of the Crisis
   Manager) or an Authorized Officer of Holdings (prior to the
    Borrower's retention of the Crisis Manager) that they fairly
            represent in all material respects the information contained therein
   for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes.               

(c)   Annual Financial Statements.          

               (i) Within 90 days after the close of each fiscal year of
    Holdings, the consolidated balance sheet of Holdings and its
      Subsidiaries as at the end of such fiscal year and the related
           consolidated statements of income and retained earnings and of cash
flows for such fiscal year and setting forth comparative
         consolidated figures for the preceding fiscal year and comparable
  budgeted figures for such fiscal year and (except for such
           comparable budgeted figures) certified by PriceWaterhouseCoopers or
         such other independent certified public accountants of recognized
            national standing as shall be reasonably acceptable to the Agent, in
          each case to the effect that such statements fairly present in all
     material respects the financial condition of Holdings and its
       Subsidiaries as of the dates indicated and the results of their
   operations and changes, together with a certificate of such
          accounting firm stating that in the course of its regular audit of
      the business of Holdings and its Subsidiaries, which audit was
         conducted in accordance with GAAP, no Default or Event of Default
        which has occurred and is continuing has come to their attention
            insofar as such Default or Event of Default relates to financial and
           accounting matters or, if such a Default or an Event of Default has
      come to their attention, a statement as to the nature thereof.

              (ii) Within 90 days after the close of each fiscal year of
            Holdings, the sales and operating income (before corporate overhead)
         for each division of the Holdings and its Subsidiaries (including
         corporate, Williamhouse, Ampad, Forms and Creative Card) for such
fiscal year; all of which shall be in reasonable detail 

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     and certified by the Crisis Manager (following the Borrower's
    retention of the Crisis Manager) or an Authorized Officer of
          Holdings (prior to the Borrower's retention of the Crisis Manager)
         that they fairly present in all material respects the information
contained therein for the periods indicated.            

    (d)   Budgets, Projections and Variance Reports.

             (i) Within 15 days after the end of each month, updated
          Projections for the three-month period commencing on the first day
            of the succeeding month, which shall be prepared on a monthly basis;

                 (ii) Within 15 days after the end of each month, a comparison
            of the financial statements of the Borrower and its Subsidiaries for
         the three-month period ended on the last day of such month to the
            Projections for such three-month period, which in each case shall be
in form and substance satisfactory to the Agent;        

                (iii) Not later than 5:00 P.M. (New York time) on Tuesday of
           each week, (A) a Budget covering the four-week period commencing on
      the first Business Day of the next week, in form and substance
   satisfactory to the Agent reflecting (on a line-item basis)
            anticipated weekly cash receipts and expenditures for the succeeding
          four weeks, which shall be itemized in sufficient detail including
       line items for vendor payments, payroll, interest, professional
    fees, capital expenditures, rationalization costs, retention
  payments and payments of prepetition and "involuntary gap"
           liabilities to critical vendors, it being understood that each such
           Budget shall take into consideration reduced cash needs and reduced
       expenses resulting from the sale of assets, and (B) a copy of a
         Variance Report reflecting (on a line-item basis) the actual cash
           receipts and disbursement for the preceding week and the percentage
          variance of such actual results from those reflected in the Budget
for the preceding week;                                 

                (iv) Weekly, before 12:00 noon on the second Business Day of
           each week (except the last week of each month); monthly, within two
           (2) Business Days after the last Business Day of each month, and at
         any other time requested by the Agent during the continuance of a
  Default or Event of Default, a borrowing base certificate,
   substantially in the form of Exhibit N (the "Borrowing Base
           Certificate"), which shall: (A) detail the Credit Parties' Eligible
      Accounts Receivable and the Credit Parties' Eligible Inventory

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           as of each Saturday of the immediately preceding week and as of the
          last day of each month, as applicable (or as of such other date as
  the Agent may request); (B) prepared by the Crisis Manager
        (following the Borrower's retention of the Crisis Manager) or an
   Authorized Officer of the Borrower (prior to the Borrower's
      retention of the Crisis Manager) and certified by such officer
         subject only to adjustment upon completion of the normal year-end
           audit of physical inventory; and (C) attach thereto such additional
           schedules and other information as the Agent may reasonably request
     (including, without limitation, a monthly aging of Accounts);

            (v) Not later than the last day of each week, a report
 describing the then current status of the Credit Parties'
         relationships with their vendors, which description shall be on a
vendor-by-vendor basis; and                             

           (vi) Not later than the last Business Day of each week,
       Holdings shall deliver to the Agent a certificate of the Crisis
          Manager (following the Borrower's retention of the Crisis Manager)
     or an Authorized Officer of Holdings (prior to the Borrower's
      retention of the Crisis Manager) to the effect that the Credit
      Parties (i) are keeping separate records of post-Petition Date
        Accounts and payments thereon, (ii) are not applying payments on
           post-Petition Date Accounts to pre-Petition Date Accounts and (iii)
       are not allowing offsets against post-Petition Date Accounts on
   account of pre-Petition Date rebates, allowances or offsets
           (excluding certain pre-Petition Date and post-Petition Date rebates
     and volume discounts which are payable to customers after the
   Petition Date and which are described in such certificate).

                  (e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.1(b) and (c), a certificate of   
the Crisis Manager (following the Borrower's retention of the Crisis Manager) or
an Authorized Officer of Holdings (prior to the Borrower's retention of the     
Crisis Manager) to the effect that no Default or Event of Default exists or, if 
any Default or Event of Default does exist, specifying the nature and extent    
thereof, which certificate shall set forth the calculations required to         
establish whether Holdings and its Subsidiaries were in compliance with the     
provisions of Sections 8.5, 8.6 and 8.9, as at the end of such fiscal quarter or
year, as the case may be.                                                       

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             (f) Notice of Default or Litigation. Promptly, and in any
event within five Business Days (or 10 Business Days in the case of clause (y)  
below) after any executive or senior officer of Holdings, WR Acquisition or the 
Borrower obtains knowledge thereof, notice of (x) the occurrence of any event   
which constitutes a Default or an Event of Default, which notice shall specify  
the nature thereof, the period of existence thereof and what action Holdings, WR
Acquisition or the Borrower proposes to take with respect thereto and (y) the   
commencement of, or threat of, or any significant development in, any litigation
or governmental proceeding pending against Holdings or any of its Subsidiaries  
which is likely to have a Material Adverse Effect, or a material adverse effect 
on the ability of any Credit Party to perform its respective obligations        
hereunder or under any other Credit Document.                                   

                (g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each report or "management letter" submitted to Holdings or any of its       
Subsidiaries by its independent accountants in connection with any annual,      
interim or special audit made by them of the books of Holdings or any of its    
Subsidiaries.                                                                   

                 (h) Environmental Matters. Promptly after obtaining knowledge
of any of the following (but only to the extent that any of the following,      
either individually or in the aggregate, could reasonably be expected to have a 
Material Adverse Effect), written notice of:                                    

              (i)        any pending or threatened Environmental Claim
        against Holdings or any of its Subsidiaries or any Real Property
 owned or operated by Holdings or any of its Subsidiaries;

                  (ii) any condition or occurrence on any Real Property owned or
           operated by Holdings or any of its Subsidiaries that (x) results in
          material noncompliance by Holdings or any of its Subsidiaries with
   any applicable Environmental Law or (y) could reasonably be
       anticipated to form the basis of an Environmental Claim against
      Holdings or any of its Subsidiaries or any such Real Property;

                (iii) any condition or occurrence on any Real Property owned
     or operated by Holdings or any of its Subsidiaries that could
           reasonably be anticipated to cause such Real Property to be subject
        to any material restrictions on the ownership, occupancy, use or
          transferability by Holdings or its Subsidiary, as the case may be,
          of its interest in such Real Property under any Environmental Law;
and                                                     

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                 (iv) the taking of any material removal or remedial action in
            response to the actual or alleged presence of any Hazardous Material
        on any Real Property owned or operated by Holdings or any of its
Subsidiaries.                                           

All such notices shall describe in reasonable detail the nature of the claim,   
investigation, condition, occurrence or removal or remedial action and Holdings'
or the Borrower's response thereto. In addition, Holdings agrees to provide the 
Lenders with copies of all material written communications by Holdings or any of
its Subsidiaries with any Person, government or governmental agency relating to 
any of the matters set forth in clauses (i)-(iv) above, and such detailed       
reports relating to any of the matters set forth in clauses (i)-(iv) above as   
may reasonably be requested by the Agent or the Required Lenders.               

                  (i) Sale Proposal. On or before the first Business Day of each
week, a written report from the Consultants, in form and substance satisfactory 
to the Agent, summarizing the status of the Borrower's efforts to consummate the
Sale Proposal; provided that Holdings shall promptly deliver a written report   
summarizing all material developments relating to the Sale Proposal. In         
addition, if requested by the Agent, the Borrower shall conduct bi-weekly       
conference calls with the Lenders to report on the status of the Sale Proposal. 

              (j) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the SEC by        
Holdings or any of its Subsidiaries and copies of all financial statements,     
proxy statements, notices and reports as Holdings or any of its Subsidiaries    
shall send generally to analysts, the holders of their capital stock or of the  
Senior Subordinated Notes in their capacity as such holders or the purchasers   
under the Accounts Receivable Facility in their capacity as such purchasers (in 
each case to the extent not theretofore delivered to the Lenders pursuant to    
this Agreement) and, with reasonable promptness, such other information or      
documents (financial or otherwise) as the Agent on its own behalf or on behalf  
of the Required Lenders may reasonably request from time to time.               

          (k) Bankruptcy Information. Promptly after the same is
available, the Borrower shall furnish to counsel for the Agent all pleadings,   
motions, applications, judicial information, financial information and other    
documents filed by or on behalf of any Credit Party with the Bankruptcy Court or
the United States Trustee in the Cases, or distributed by or on behalf of any   
Credit Party to any official committee appointed in the Cases.                  

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      (l) Bankruptcy Schedules. Holdings and each of its
Subsidiaries shall file their respective bankruptcy schedules and statements of 
financial affairs no later than the date set forth in the Federal Rules of      
Bankruptcy Procedure or in any order entered by the Bankruptcy Court with       
respect to an extension of time to file such schedules and statements and shall 
promptly deliver a copy thereof to the Agent and its counsel.                   

               (m) Accounts Collection Report. Within two Business Days of
the receipt of any check or other remittance payable to any Credit Party, such  
Credit Party shall deliver to the Agent a report describing whether such check  
or remittance is in respect of the payment of Accounts arising before the       
Petition Date or arising on or after the Petition Date.                         

         7.2 Books, Records and Inspections. Holdings will, and will cause
each of its Subsidiaries to, permit officers and designated representatives of  
the Agent or the Required Lenders to visit and inspect any of the properties or 
assets of Holdings and any of its Subsidiaries in whomsoever's possession, and  
to examine the books and records and books of account of Holdings and any of its
Subsidiaries and discuss the affairs, finances and accounts of Holdings and of  
any of its Subsidiaries with, and be advised as to the same by, their officers, 
advisors and independent accountants, all at such times during normal business  
hours as the Agent or the Required Lenders may desire.                          

7.3 Insurance. Holdings will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with  
reputable and solvent insurance carriers in such amounts, covering such risks   
and liabilities and with such deductibles or self-insured retentions as are in  
accordance with normal industry practice. Holdings will furnish to the Agent on 
the Initial Borrowing Date and on each such later date as the Agent or the      
Required Lenders may reasonably request a summary of the insurance carried in   
respect of Holdings and its Subsidiaries and the assets of Holdings and its     
Subsidiaries together with certificates of insurance and other evidence of such 
insurance, if any, naming the Collateral Agent as an additional insured and/or  
loss payee.                                                                     

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       7.4 Payment of Taxes. Holdings will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and 
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material        
penalties attach thereto, and all lawful claims for sums that have become due   
and payable which, if unpaid, might become a Lien not otherwise permitted under 
Section 8.3(a) or charge upon any properties of Holdings or any of its          
Subsidiaries; provided, that neither Holdings nor any of its Subsidiaries shall 
be required to pay any such tax, assessment, charge, levy or claim (i) which is 
being contested in good faith and by proper proceedings if it has maintained    
adequate reserves with respect thereto in accordance with GAAP or (ii) the      
payment of which is excused or stayed as a result of Holdings' or its           
Subsidiaries' status as a debtor-in-possession in the Cases.                    

          7.5 Corporate Franchises. Holdings will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve   
and keep in full force and effect its existence and its material rights,        
franchises and authority to do business; provided, however, that any transaction
permitted by Section 8.2 will not constitute a breach of this Section 7.5.      

        7.6 Compliance with Statutes, etc. Holdings will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations   
and orders of, and all applicable restrictions imposed by, all governmental     
bodies, domestic or foreign, in respect of the conduct of its business and the  
ownership of its property (including applicable statutes, regulations, orders   
and restrictions relating to environmental standards and controls) except for   
such noncompliance as (a) is excused or stayed as a result of Holdings' or its  
Subsidiaries' status as a debtor-in-possession in the Cases or (b) would not    
have a Material Adverse Effect or a material adverse effect on the ability of   
any Credit Party to perform its obligations under any Credit Document to which  
it is a party.                                                                  

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7.7  Compliance with Environmental Laws.                

                  (a) Holdings will pay, and will cause each of its Subsidiaries
to pay, all costs and expenses incurred by it in keeping in compliance with all 
Environmental Laws, and will keep or cause to be kept all Real Properties owned 
or operated by Holdings or any of its Subsidiaries free and clear of any Liens  
imposed pursuant to such Environmental Laws; and (b) neither Holdings nor any of
its Subsidiaries will generate, use, treat, store, release or dispose of, or    
permit the generation, use, treatment, storage, release or disposal of,         
Hazardous Materials on any Real Property owned or operated by Holdings or any of
its Subsidiaries, or transport or permit the transportation of Hazardous        
Materials to or from any such Real Property, unless the failure to comply with  
the requirements specified in clause (a) or (b) above, either individually or in
the aggregate, would not reasonably be expected to have a Material Adverse      
Effect. If Holdings or any of its Subsidiaries, or any tenant or occupant of any
Real Property owned or operated by Holdings or any of its Subsidiaries, cause or
permit any intentional or unintentional act or omission resulting in the        
presence or Release of any Hazardous Material (except in compliance with        
applicable Environmental Laws), each of Holdings, WR Acquisition and the        
Borrower agrees to undertake, and/or to cause any of its Subsidiaries, tenants  
or occupants to undertake, at their sole expense, any clean up, removal,        
remedial or other action required pursuant to Environmental Laws to remove and  
clean up any Hazardous Materials from any Real Property except where the failure
to do so would not reasonably be expected to have a Material Adverse Effect;    
provided that neither Holdings nor any of its Subsidiaries shall be required to 
comply with any such order or directive which is being contested in good faith  
and by proper proceedings so long as it has maintained adequate reserves with   
respect to such compliance to the extent required in accordance with GAAP.      

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        7.8 ERISA. As soon as possible and, in any event, within 10 days
after Holdings or any Subsidiary of Holdings or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following events to the extent   
that one or more of such events is reasonably likely to result in a material    
liability to Holdings or any Subsidiary of Holdings, Holdings will deliver to   
each of the Lenders a certificate of the Crisis Manager (following the          
Borrower's retention of the Crisis Manager) or an Authorized Officer of Holdings
(prior to the Borrower's retention of the Crisis Manager) setting forth details 
as to such occurrence and the action, if any, which Holdings, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any notices 
required or proposed to be given to or filed with or by Holdings, the           
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan       
administrator with respect thereto: that a Reportable Event has occurred, that  
an accumulated funding deficiency has been incurred or an application may be or 
has been made to the Secretary of the Treasury for a waiver or modification of  
the minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code with respect 
to a Plan; that a contribution required to be made to a Plan or Foreign Pension 
Plan has not been timely made; that a Plan has been or may be terminated,       
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a  
Plan has an Unfunded Current Liability giving rise to a lien under ERISA or the 
Code; that proceedings may be or have been instituted to terminate or appoint a 
trustee to administer a Plan; that a proceeding has been instituted pursuant to 
Section 515 of ERISA to collect a delinquent contribution to a Plan; that       
Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or may incur   
any material liability (including any contingent or secondary liability) to or  
on account of the termination of or withdrawal from a Plan under Section 4062,  
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under   
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or    
502(l) of ERISA; or that Holdings or any Subsidiary of Holdings has or may incur
any material liability under any employee welfare benefit plan (within the      
meaning of Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or any  
employee pension benefit plan (as defined in Section 3(2) of ERISA). At the     
request of any Lender, Holdings will deliver to such Lender a complete copy of  
the annual report (Form 5500) of each Plan required to be filed with the        
Internal Revenue Service. In addition to any certificates or notices delivered  
to the Lenders pursuant to the first sentence hereof, at the request of the     
Agent or any Lender, copies of annual reports and any notices received by       
Holdings or any Subsidiary of Holdings or any ERISA Affiliate with respect to   
any Plan or Foreign Pension Plan shall be delivered to the Lenders no later than
10 days after the date such report has been filed with                          

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the Internal Revenue Service or received by Holdings or the Subsidiary or the   
ERISA Affiliate.                                                                

  7.9 Good Repair. Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used in its  
business are kept in good repair, working order and condition, normal wear and  
tear and damage by casualty excepted, and, subject to Section 8.9, that from    
time to time there are made in such properties and equipment all needful and    
proper repairs, renewals, replacements, extensions, additions, betterments and  
improvements thereto, to the extent and in the manner useful or customary for   
companies in similar businesses.                                                

     7.10 End of Fiscal Years; Fiscal Quarters. Holdings will, for
financial reporting purposes, cause (i) each of its, and each of its            
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of 
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.                                      

7.11  Additional Security; Further Assurances.          

              (a) Holdings will, and will cause each of its Subsidiaries
(other than the Receivables Entity) to, grant to the Collateral Agent security  
interests and mortgages in such assets and real property of Holdings and its    
Subsidiaries as are not covered by the original Security Documents, and as may  
be requested from time to time by the Agent or the Required Lenders             
(collectively, the "Additional Security Documents"). All such security interests
and mortgages shall be granted pursuant to documentation reasonably satisfactory
in form and substance to the Agent and shall constitute valid and enforceable   
perfected security interests and mortgages superior to and prior to the rights  
of all third Persons and subject to no other Liens except for Permitted Liens.  
The Credit Parties acknowledge that, pursuant to the Orders, the Liens granted  
from time to time pursuant to the Additional Security Documents shall be        
perfected without recordation of any financing statements, notices of security  
interest or other similar instruments. In addition, the Additional Security     
Documents or instruments related thereto shall have been duly recorded or filed 
in such manner and in such places as the Agent deems necessary or desirable to  
establish, perfect, preserve and protect the Liens in favor of the Collateral   
Agent required to be granted pursuant to the Additional Security Documents and  
all taxes, fees and other charges payable in connection therewith shall have    
been paid in full.                                                              

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              (b) Holdings will, and will cause each of its Subsidiaries
(other than the Receivables Entity) to, at the expense of Holdings, WR          
Acquisition and the Borrower, make, execute, endorse, acknowledge, file and/or  
deliver to the Collateral Agent from time to time such vouchers, invoices,      
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports  
and other assurances or instruments and take such further steps relating to the 
Collateral covered by any of the Security Documents as the Collateral Agent may 
reasonably require. Furthermore, Holdings shall cause to be delivered to the    
Collateral Agent such opinions of counsel, title insurance and other related    
documents as may be reasonably requested by the Agent to assure themselves that 
this Section 7.11 has been complied with.                                       

                (c) If the Agent or the Required Lenders determine that they
are required by law or regulation to have appraisals prepared in respect of the 
Real Property of Holdings and its Subsidiaries constituting Collateral, the     
Borrower shall provide to the Agent appraisals which satisfy the applicable     
requirements of the Real Estate Appraisal Reform Amendments of the Financial    
Institution Reform, Recovery and Enforcement Act of 1989 and which shall be in  
form and substance reasonably satisfactory to the Agent.                        

                 (d) Holdings, WR Acquisition and the Borrower agree that each
action required above by this Section 7.11 shall be completed within 30 days    
after such action is either requested to be taken by the Agent or the Required  
Lenders or required to be taken by Holdings and its Subsidiaries pursuant to the
terms of this Section 7.11; provided that in no event shall Holdings, WR        
Acquisition or the Borrower be required to take any action, other than using its
best efforts, to obtain consents from third parties with respect to its         
compliance with this Section 7.11.                                              

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           7.12 Register. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 7.12, to maintain a   
register (the "Register") on which it will record the Commitments from time to  
time of each of the Lenders, the Loans made by each of the Lenders and each     
repayment in respect of the principal amount of the Loans of each Lender.       
Failure to make any such recordation, or any error in such recordation shall not
affect the Borrower's obligations in respect of such Loans. With respect to any 
Lender, the transfer of the Commitments of such Lender and the rights to the    
principal of, and interest on, any Loan made pursuant to such Commitment shall  
not be effective until such transfer is recorded on the Register maintained by  
the Agent with respect to ownership of such Commitment and Loans and prior to   
such recordation all amounts owing to the transferor with respect to such       
Commitment and Loans shall remain owing to the transferor. The registration of  
assignment or transfer of all or part of any Commitment and Loans shall be      
recorded by the Agent on the Register only upon the acceptance by the Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to 
Section 12.4(b). Coincident with the delivery of such an Assignment and         
Assumption Agreement to the Agent for acceptance and registration of assignment 
or transfer of all or part of a Loan, or as soon thereafter as practicable, the 
assigning or transferor Lender shall surrender the Note evidencing such Loan,   
and thereupon one or more new Notes in the same aggregate principal amount shall
be issued to the assigning or transferor Lender and/or the new Lender. The      
Borrower agrees to indemnify the Agent from and against any and all losses,     
claims, damages and liabilities of whatsoever nature which may be imposed on,   
asserted against or incurred by the Agent in performing its duties under this   
Section 7.12.                                                                   

7.13  [Intentionally Omitted].                          

           7.14 Contributions; Payments. Holdings will contribute as an equity
contribution to the capital of WR Acquisition, and WR Acquisition will          
contribute as an equity contribution to the capital of the Borrower, in each    
case upon its receipt thereof, any cash proceeds (net of reasonable costs       
associated with any sale or issuance) received by Holdings and/or WR Acquisition
from any asset sale, any incurrence of Indebtedness, any Recovery Event, any    
sale or issuance of its preferred or common equity or any cash capital          
contributions received by Holdings and/or WR Acquisition.                       

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7.15  [Intentionally Omitted].                          

         7.16 Consultants. Holdings and its Subsidiaries shall continue to
retain the Consultants pursuant to engagement letters approved by the Bankruptcy
Court after the Agent and the Lenders have received notice and an opportunity to
be heard; provided, that this Section 7.16 shall not apply to the Crisis Manager
until 10 days after the entry of the Interim Order and provided further, that   
nothing herein shall be deemed to be a waiver of the right of the Agent or any  
Lender to object to the terms of either of the engagement letters.              

        7.17 Payment of Obligation. Except as provided in the Bankruptcy
Code or an applicable order of the Bankruptcy Court, each Credit Party shall    
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 
that constitute administrative expenses under Section 503(b) of the Bankruptcy  
Code in the Cases, except, so long as no material property or assets (other than
money for such obligation and the interest or penalty accruing thereon) of the  
Credit Parties is in danger of being lost or forfeited as a result thereof, no  
such obligation need be paid if 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    
each Credit Party.                                                              

7.18  Cash Collateral Account.                          

           (a) Each Credit Party hereby reaffirms its grant to the
Collateral Agent for the benefit of the Lenders of a security interest in the   
Cash Collateral Account. Each of the Credit Parties agrees that it will continue
to maintain the Cash Collateral Account which is under the sole dominion and    
control of the Collateral Agent. None of the Credit Parties nor any             
representative of any Credit Party will have any right to withdraw, transfer or 
give any directions with respect to any amounts on deposit in the Cash          
Collateral Account. No Credit Party will deposit any amounts into the Cash      
Collateral Account other than tax refunds, proceeds of the Collateral and other 
amounts required to be deposited therein in accordance with the terms of this   
Agreement and the other Credit Documents. The Collateral Agent will apply       
amounts on deposit in the Cash Collateral Account from time to time to the      
repayment of the Obligations in accordance with the provisions of this Agreement
and the other Credit Documents.                                                 

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                 (b) Each Credit Party will (i) take all such action as may be
required or advisable, in the reasonable opinion of the Agent or the Required   
Lenders, to have the proceeds of any United States federal tax refunds to any   
Credit Party may be entitled deposited directly by the payor of such refunds    
into the Cash Collateral Account and (ii) immediately deposit in the Cash       
Collateral Account on the date of receipt, any United States federal tax refunds
received by any Credit Party.                                                   

            7.19 Operations of Ampad Division. Within 45 days after the entry of
the Interim Order, the Borrower shall advise the Agent as to its plan for the   
interim maintenance of operations of the Ampad division, which shall be         
satisfactory to the Agent and the Required Revolving Lenders or, if the Borrower
shall have determined to cease operations of the Ampad division, the Borrower   
shall advise the Agent as to its plan for the sale of the assets of such        
division, which shall be satisfactory to the Agent and the Required Revolving   
Lenders. After the Borrower's retention of the Crisis Manager, any such plan    
shall be prepared by or under the supervision of the Crisis Manager.            

            7.20 Corporate Overhead Reduction. Within 45 days after the entry of
the Interim Order, the Borrower shall advise the Agent as to its plan for the   
permanent reduction of unallocated corporate overhead expenses, which shall be  
reasonably satisfactory to the Agent and the Required Revolving Lenders. After  
the Borrower's retention of the Crisis Manager, such plan shall be prepared by  
or under the supervision of the Crisis Manager.                                 

     7.21 Operations of Forms and Creative Cards Divisions. Within
twenty-one days after the entry of the Interim Order, the Borrower shall advise 
the Agent as to its plan for the interim maintenance of the operations of the   
Forms division or the Creative Cards divisions, which shall be satisfactory to  
the Agent and the Required Revolving Lenders or, if the Borrower shall have     
determined to cease operations of any such division, the Borrower shall advise  
the Agent as to its plan for the sale of the assets of such division, which     
shall be satisfactory to the Agent and the Required Revolving Lenders. After the
Borrower's retention of the Crisis Manager, any such plan shall be prepared by  
or under the supervision of the Crisis Manager.                                 

          7.22 Crisis Manager. Within 10 days after the entry of the Interim
Order, the Borrower shall retain a crisis manager acceptable to the Agent and   
the Required Revolving Lenders (the "Crisis Manager") to advise and assist the  
Credit Parties in connection with the bankruptcy process and creditor relations,
pursuant to a retention letter satisfactory to the Agent and the Required       
Revolving Lenders.                                                              

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       7.23 Appraisal. Holdings shall deliver to the Agent, as soon as
available and in any event within 15 days after the Effective Date, copies of   
the interim report and final report prepared by Norman Levy & Associates with   
respect to the appraisal of the assets (excluding real estate) of Holdings and  
its Subsidiaries. Each of the Credit Parties hereby irrevocably authorizes      
Norman Levy & Associates to discuss such reports and give the Agent and the     
Lenders access to the records of Norman Levy & Associates relating to such      
reports.                                                                        

   7.24 Collateral Access Agreements. With respect to Eligible
Inventory that is located on property that is either leased by a Borrowing Base 
Party or leased or owned by a warehousemen, such Borrowing Base Party shall use 
commercially reasonable efforts to deliver to the Agent a Collateral Access     
Agreement executed by the lessor or the warehousemen, as the case may be, of    
such property.                                                                  

       SECTION 8. Negative Covenants. Holdings, WR Acquisition and the
Borrower hereby covenant and agree that as of the Effective Date and thereafter 
for so long as this Agreement is in effect and until the Total Commitment has   
terminated, no Letters of Credit (other than Letters of Credit, together with   
all Fees that have accrued and will accrue thereon through the stated           
termination date of such Letters of Credit, which have been supported in a      
manner satisfactory to the Letter of Credit Issuer in its sole and absolute     
discretion) or Notes are outstanding and the Loans, together with interest, Fees
and all other Obligations (other than any indemnities described in Section 12.13
which are not then due and payable) incurred hereunder, are paid in full:       

8.1  Changes in Business.                               

                  (a) Holdings and its Subsidiaries will not, and will not apply
to the Bankruptcy Court for authority to, engage in any business other than the 
businesses in which Holdings and its Subsidiaries are engaged in as of the      
Petition Date and activities directly related thereto, and similar or related   
businesses.                                                                     

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               (b) Holdings will not engage in any business other than its
ownership of the capital stock of WR Acquisition and Foreign Sales and those    
obligations of officers and employees of Holdings permitted by Section 8.6(e)   
and having those liabilities which it is responsible for under this Agreement,  
the other Documents to which it is a party and under any Permitted Holdings PIK 
Securities issued by it, provided that Holdings may engage in those activities  
that are incidental to (x) the maintenance of its corporate existence in        
compliance with applicable law, (y) legal, tax and accounting matters in        
connection with any of the foregoing activities and (z) the entering into, and  
performing its obligations under, this Agreement and the other Documents to     
which it is a party.                                                            

                 (c) WR Acquisition will not engage in any business other than
its ownership of the capital stock of the Borrower and having those liabilities 
which it is responsible for under this Agreement and the other Documents to     
which it is a party, provided that WR Acquisition may engage in those activities
that are incidental to (x) the maintenance of its corporate existence in        
compliance with applicable law and (y) the entering into, and performing its    
obligations under, this Agreement and the other Documents to which it is a      
party.                                                                          

               (d) The Receivables Entity will not engage in any business.

                (e) Foreign Sales will not engage in any business other than
having those liabilities which it is responsible for under this Agreement and   
the other Documents to which it is a party, provided that Foreign Sales may     
engage in those activities that are incidental to (x) the maintenance of its    
corporate existence in compliance with applicable law and (y) entering into, and
performing its obligations under, this Agreement and the other Documents to     
which it is a party.                                                            

            8.2 Consolidation, Merger, Sale or Purchase of Assets, etc. Holdings
will not, will not permit any of its Subsidiaries to, and will not apply to the 
Bankruptcy Court for authority to, wind up, liquidate or dissolve its affairs or
enter into any transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future time)   
all or any part of its property or assets (other than inventory in the ordinary 
course of business), or enter into any partnerships, joint ventures or          
sale-leaseback transactions, or purchase or otherwise acquire (in one or a      
series of related transactions) any part of the property or assets (other than  
purchases or other acquisitions of inventory, materials and equipment in the    
ordinary course of business) of any Person, except that the following shall be  
permitted:                                                                      

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           (a) the Borrower and its Subsidiaries may, as lessee or
lessor, enter into operating leases in the ordinary course of business with     
respect to real or personal property;                                           

    (b) Capital Expenditures by the Borrower and its
Subsidiaries to the extent not in violation of Section 8.9 or the Budget then   
in effect;                                                                      

                 (c) the advances, investments and loans permitted pursuant to
Section 8.6;                                                                    

                  (d) each of the Credit Parties may sell assets pursuant to the
Sale Proposal and other assets with the prior written consent of the Required   
Lenders so long as the Net Cash Proceeds therefrom are applied in accordance    
with Sections 3.3(d) and 4.2(d);                                                

                  (e) the Borrower and its Subsidiaries may sell or discount, in
each case without recourse, accounts receivable arising in the ordinary course  
of business, but only in connection with the compromise or collection thereof;  

              (f) the Borrower and its Subsidiaries may sell or exchange
specific items of equipment, so long as the purpose of each such sale or        
exchange is to acquire (and results within 90 days of such sale or exchange in  
the acquisition of) replacement items of equipment which are the functional     
equivalent of the item of equipment so sold or exchanged;                       

              (g) the Borrower and its Subsidiaries may, in the ordinary
course of business, license, as licensor or licensee, patents, trademarks,      
copyrights and know-how to third Persons and to one another, so long as any such
license by the Borrower or its Subsidiaries in its capacity as licensor is      
permitted to be assigned pursuant to the Security Agreement (to the extent that 
a security interest in such patents, trademarks, copyrights and know-how is     
granted thereunder) and does not otherwise prohibit the granting of a Lien by   
the Borrower or any of its Subsidiaries pursuant to the Security Agreement in   
the intellectual property covered by such license;                              

           (h) the Borrower and its Domestic Subsidiaries that are
Subsidiary Guarantors may sell or otherwise transfer inventory between or among 
themselves in the ordinary course of business for resale by the Borrower or such
Domestic Subsidiaries, as the case may be, so long as the security interest     
granted to the Collateral Agent for the benefit of the Secured Creditors        
pursuant to the Security Agreement in the inventory so transferred shall remain 
in full force and effect and perfected (to at least the same extent as in effect
immediately prior to such transfer);                                            

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           (i) the Borrower and its Domestic Subsidiaries that are
Subsidiary Guarantors may sell or otherwise transfer accounts receivable between
or among themselves in the ordinary course of business so long as the security  
interest granted to the Collateral Agent for the benefit of the Secured         
Creditors pursuant to the Security Agreement in the accounts receivable so      
transferred shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such transfer);                   

         (j) any Domestic Subsidiary of the Borrower that is a
Subsidiary Guarantor may transfer assets (other than accounts receivable and    
inventory) to the Borrower or to any other Domestic Subsidiary of the Borrower  
that is a Subsidiary Guarantor so long as the security interests granted to the 
Collateral Agent for the benefit of the Secured Creditors pursuant to the       
Security Documents in the assets so transferred shall remain in full force and  
effect and perfected (to at least the same extent as in effect immediately prior
to such transfer);                                                              

                  (k) any Domestic Subsidiary of the Borrower may merge with and
into, or be dissolved or liquidated into, the Borrower so long as (i) the       
Borrower is the surviving corporation of any such merger, dissolution or        
liquidation and (ii) the security interests granted to the Collateral Agent for 
the benefit of the Secured Creditors pursuant to the Security Documents in the  
assets of such Domestic Subsidiary shall remain in full force and effect and    
perfected (to at least the same extent as in effect immediately prior to such   
merger, dissolution or liquidation);                                            

         (l) any Domestic Subsidiary of the Borrower that is a
Subsidiary Guarantor may merge with and into, or be dissolved or liquidated     
into, any Wholly-Owned Domestic Subsidiary of the Borrower that is a Subsidiary 
Guarantor (other than the Receivables Entity) so long as (i) such Wholly-Owned  
Domestic Subsidiary is the surviving corporation of any such merger, dissolution
or liquidation and (ii) the security interests granted to the Collateral Agent  
for the benefit of the Secured Creditors pursuant to the Security Documents in  
the assets of such Domestic Subsidiary shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to such   
merger, dissolution or liquidation);                                            

                 (m) leases or subleases granted by the Borrower or any of its
Subsidiaries to third Persons in the ordinary course or business and not        
interfering in any material respect with the business of the Borrower or any of 
its Subsidiaries; and                                                           

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                  (n) WR Acquisition may merge with and into, or be dissolved or
liquidated into, the Borrower so long as (i) the Borrower is the surviving      
corporation of any such merger, dissolution or liquidation and (ii) the security
interests granted to the Collateral Agent for the benefit of the Secured        
Creditors pursuant to the Security Documents in the assets of WR Acquisition    
shall remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such merger, dissolution or liquidation).     

    8.3 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with 
respect to any property or assets of any kind (real or personal, tangible or    
intangible) of Holdings or any of its Subsidiaries, whether now owned or        
hereafter acquired, or sell any such property or assets subject to an           
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to     
Holdings or any of its Subsidiaries) or assign any right to receive income, or  
apply to the Bankruptcy Court for authority to do the foregoing, except for the 
following (collectively, the "Permitted Liens"):                                

             (a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or governmental   
charges or levies being contested in good faith and by appropriate proceedings  
for which adequate reserves have been established in accordance with GAAP;      

                 (b) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law which were incurred in the ordinary      
course of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', warehousemen's and mechanics' Liens, statutory        
landlord's Liens, and other similar Liens arising in the ordinary course of     
business, and which either (x) do not in the aggregate materially detract from  
the value of such property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any of its Subsidiaries or (y) are 
being contested in good faith by appropriate proceedings which proceedings have 
the effect of preventing the forfeiture or sale of the property or asset subject
to such Lien;                                                                   

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            (c)   Liens created by or pursuant to this Agreement and
the Security Documents;                                                         

            (d) (i) Liens in favor of the Prepetition Agent securing
Indebtedness permitted under Section 8.4(i) and (ii) other Liens in existence on
the Initial Borrowing Date which are listed, and the property subject thereto   
described, in Annex IX, without giving effect to any extensions or renewals     
thereof;                                                                        

               (e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.9;           

                  (f) Liens incurred or deposits made (x) in the ordinary course
of business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,        
statutory obligations, surety and appeal bonds, bids, government contracts,     
performance and return-of-money bonds and other similar obligations incurred in 
the ordinary course of business (exclusive of obligations in respect of the     
payment for borrowed money); and (y) to secure the performance of leases of Real
Property, to the extent incurred or made in the ordinary course of business     
consistent with past practices;                                                 

                  (g) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Borrower or any of 
its Subsidiaries;                                                               

                (h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not           
interfering in any material respect with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries;                                        

                 (i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;                         

                (j) any interest or title of a licensor, lessor or sublessor
under any license or lease permitted by this Agreement;                         

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             (k) Liens (i) granted by the Designated Credit Parties in
favor of the Receivables Entity consisting of UCC-1 financing statements filed  
to effect the sale of accounts receivable and related assets pursuant to the    
Accounts Receivable Facility Documents, (ii) granted by the Receivables Entity  
on those accounts receivable and related assets acquired by it pursuant to the  
Accounts Receivable Facility Documents to the extent that such Liens are created
by the Accounts Receivable Facility Documents and (iii) consisting of the right 
of setoff granted to any financial institution acting as a lockbox bank in      
connection with the Accounts Receivable Facility; provided, that the Liens      
described in this clause (n) shall only attach to accounts receivable arising   
before the Accounts Receivable Facility Purchase Agreement was terminated.      

           8.4 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any         
Indebtedness or apply to the Bankruptcy Court for authority to do so, except:   

                (a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;                                                         

                  (b) Existing Indebtedness outstanding on the Initial Borrowing
Date and listed on Annex VII, without giving effect to any subsequent extension,
renewal or refinancing thereof;                                                 

                  (c) Indebtedness of the Borrower and the Subsidiary Guarantors
incurred under the Senior Subordinated Notes and the other Senior Subordinated  
Note Documents in an aggregate principal amount not to exceed $130,000,000;     

                  (d) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.6(g);                                                    

      (e) Indebtedness of Holdings under the Shareholder
Subordinated Notes;                                                             

                 (f) Indebtedness consisting of guaranties (x) by the Borrower
of Indebtedness, leases and other contractual obligations permitted to be       
incurred by Domestic Subsidiaries of the Borrower that are Subsidiary Guarantors
and (y) by Domestic Subsidiaries of the Borrower (other than the Receivables    
Entity) of Indebtedness, leases and other contractual obligations permitted to  
be incurred by the Borrower or other Domestic Subsidiaries of the Borrower that 
are Subsidiary Guarantors;                                                      

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                 (g) Indebtedness of the Receivables Entity under the Accounts
Receivable Facility Documents that was incurred prior to the termination of the 
Accounts Receivable Facility Purchase Agreement;                                

                (h) Indebtedness consisting of a guaranty by the Borrower of
the obligations of the other Designated Credit Parties under the Accounts       
Receivable Facility Documents that was incurred prior to the termination of the 
Accounts Receivable Facility Purchase Agreement; and                            

                  (i) Indebtedness of the Borrower and its Subsidiaries incurred
under the Existing Credit Agreement and outstanding on the date hereof.         

          8.5 Designated Senior Debt. Holdings will not, will not permit any
of its Subsidiaries to, and will not apply to the Bankruptcy Court for authority
to, designate any Indebtedness (other than the Obligations and the Existing     
Credit Agreement Debt) as "Designated Senior Debt" for purposes of, and as      
defined in, the Senior Subordinated Note Indenture.                             

            8.6 Advances, Investments and Loans. Holdings will not, and will not
permit any of its Subsidiaries to, lend money or credit or make advances to any 
Person, or purchase or acquire any stock, obligations or securities of, or any  
other interest in, or make any capital contribution to, any Person, or purchase 
or own a futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures       
contract, or hold any cash, Cash Equivalents or Foreign Cash Equivalents or     
apply to the Bankruptcy Court for authority to do any of the foregoing, except: 

                (a) the Borrower and its Subsidiaries may invest in cash and
Cash Equivalents, and Foreign Subsidiaries of the Borrower also may invest in   
Foreign Cash Equivalents ; provided that 100% of all cash and Cash Equivalents  
held by the Borrower and its Subsidiaries (other than the Receivables Entity) at
any time, including without limitation cash and Cash Equivalents pledged or     
deposited in accordance with Section 8.3(f), must be held in one or more        
accounts maintained with the Agent or a Lender;                                 

              (b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of       
business and payable or dischargeable in accordance with customary trade terms  
(including the dating of receivables) of the Borrower or such Subsidiary;       

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             (c) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with the        
bankruptcy or reorganization of suppliers and customers and in settlement of    
delinquent obligations of, and other disputes with, customers and suppliers     
arising in the ordinary course of business;                                     

           (d) advances, loans and investments in existence on the
Petition Date and listed on Annex V shall be permitted, without giving effect to
any additions thereto or replacements thereof (except those additions or        
replacements which are existing obligations as of the Petition Date but only to 
the extent such further obligations are described on such Annex V);             

                (e) Holdings may acquire and hold obligations of one or more
officers or other employees of Holdings or its Subsidiaries in connection with  
such officers' or employees' acquisition of shares of Holdings Common Stock so  
long as no cash is paid by Holdings or any of its Subsidiaries in connection    
with the acquisition of any such obligations;                                   

        (f) deposits made in the ordinary course of business
consistent with past practices to secure the performance of leases shall be     
permitted;                                                                      

                (g) the Borrower may make intercompany loans and advances to
any of its Domestic Subsidiaries (other than the Receivables Entity) that are   
Subsidiary Guarantors and any Subsidiary of the Borrower (other than the        
Receivables Entity) may make intercompany loans and advances to the Borrower or 
any Domestic Subsidiary of the Borrower (other than the Receivables Entity) that
is a Subsidiary Guarantor (collectively, "Intercompany Loans"), provided, that  
(x) each Intercompany Loan made by a Foreign Subsidiary to the Borrower or a    
Domestic Subsidiary of the Borrower shall contain the subordination provisions  
set forth on Exhibit J, (y) each Intercompany Loan shall be evidenced by an     
Intercompany Note and (z) each such Intercompany Note (other than Intercompany  
Notes held by Foreign Subsidiaries of the Borrower) shall be pledged to the     
Collateral Agent pursuant to the Pledge Agreement;                              

              (h) the Borrower and its Subsidiaries may acquire and hold
promissory notes and/or equity securities issued by the purchaser or purchasers 
in connection with the sale of assets to the extent permitted under Section     
8.2(d);                                                                         

               (i)   Holdings may make equity contributions to the capital
of WR Acquisition, and WR Acquisition may make equity contributions to the      
capital of the Borrower;                                                        

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              (j)   the Borrower and its Subsidiaries may make transfers
of assets to their respective Subsidiaries in accordance with Sections          
8.2(h), (i) and (j);                                                            

                (k) the Borrower and the other Designated Credit Parties may
hold one or more Receivables Purchase Money Notes issued by the Receivables     
Entity in respect of purchases of accounts receivable prior to the termination  
of the Accounts Receivable Facility Purchase Agreement so long as such          
Receivables Purchase Money Notes have been duly pledged and delivered to the    
Collateral Agent pursuant to the Pledge Agreement;                              

        (l) the Receivables Entity may invest those accounts
receivable purchased from the Designated Credit Parties prior to the termination
of the Accounts Receivable Facility Purchase Agreement in the master trust for  
the Accounts Receivable Facility pursuant to, and in accordance with the terms  
of, the Accounts Receivable Facility Documents.                                 

         8.7 Dividends, etc. Holdings will not, and will not permit any of
its Subsidiaries to, declare or pay any dividends (other than dividends payable 
solely in common stock of Holdings or any such Subsidiary, as the case may be)  
or return any capital to, its stockholders or authorize or make any other       
distribution, payment or delivery of property or cash to its stockholders as    
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, 
for a consideration, any shares of any class of its capital stock, now or       
hereafter outstanding (or any warrants for or options or stock appreciation     
rights in respect of any of such shares), or set aside any funds for any of the 
foregoing purposes, and Holdings will not permit any of its Subsidiaries to     
purchase or otherwise acquire for consideration any shares of any class of the  
capital stock of Holdings or any other Subsidiary, as the case may be, now or   
hereafter outstanding (or any options or warrants or stock appreciation rights  
issued by such Person with respect to its capital stock) (all of the foregoing  
"Dividends") or apply to the Bankruptcy Court for authority to do so, except    
that:                                                                           

                 (i) any Subsidiary of the Borrower may pay Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower;

(ii)  [Intentionally Omitted];              

(iii) [Intentionally Omitted];              

               (iv) the Borrower may pay cash Dividends to WR Acquisition,
          which in turn shall immediately use such cash proceeds to pay cash
Dividends to Holdings so                                

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          long as the cash proceeds thereof are promptly used by Holdings to
 pay operating expenses in the ordinary course of business
           (including, without limitation, professional fees and expenses) and
          other similar corporate overhead costs and expenses, provided that
           such costs and expenses shall be as set forth in the Budget and the
            aggregate amount of cash Dividends paid pursuant to this clause (iv)
      shall at no time during any fiscal year of the Borrower exceed
$100,000; and                                           

                (v) the Borrower may pay cash Dividends to WR Acquisition,
          which in turn shall immediately use such cash proceeds to pay cash
            Dividends to Holdings in the amounts and at the times of any payment
        by Holdings in respect of taxes, provided that (x) the amount of
          cash Dividends paid pursuant to this clause (v) to enable Holdings
            to pay federal income taxes at any time shall not exceed, when added
   to the amount of payments made pursuant to the Holdings Tax
            Allocation Agreement for such purposes, the lesser of (A) the amount
           of such federal income taxes owing by Holdings at such time for the
         respective period and (B) the amount of such federal income taxes
     that would be owing by the Borrower and its Subsidiaries on a
          consolidated basis for such period if determined without regard to
     Holdings' ownership of the Borrower and (y) any refunds shall
promptly be delivered to the Collateral Agent.          

            8.8 Transactions with Affiliates. Holdings will not, will not permit
any of its Subsidiaries to, and will not apply to the Bankruptcy Court for      
authority to, enter into any transaction or series of transactions with any     
Affiliate other than in the ordinary course of business and on terms and        
conditions substantially as favorable to Holdings or such Subsidiary as would be
reasonably expected to be obtainable by Holdings or such Subsidiary at the time 
in a comparable arm's-length transaction with a Person other than an Affiliate; 
provided, that the following shall in any event be permitted: (i) Holdings and  
its Domestic Subsidiaries may enter into the Holdings Tax Allocation Agreement  
and may make payments thereunder (subject to the limitations set forth in       
Section 8.7(v)); and (ii) transactions between or among the Borrower and its    
Subsidiaries to the extent that such transactions are otherwise permitted under 
this Agreement.                                                                 

           8.9 Capital Expenditures. Holdings will not, will not permit any of
its Subsidiaries to, and will not apply to the Bankruptcy Court for authority   
to, make any Capital Expenditures, except for Capital Expenditures contemplated 
by the Budget then in effect and which are necessary to maintain the assets of  
the Credit Parties in good working order and repair.                            

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      8.10 Minimum Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA for any period set forth below to be less than the amount   
set forth opposite such period below:                                           

                  Period                           Minimum
                        ------                     Consolidated EBITDA
                                                   -------------------
          1/1/00-2/29/00                                       $ (4,802,000)
          1/1/00-3/31/00                                         (6,032,000)
          1/1/00-4/30/00                                         (6,079,000)
          1/1/00-5/31/00                                         (6,635,000)
          1/1/00-6/30/00                                         (5,760,000)

     8.11  Maximum Inventory Amount.  Holdings will not permit the
book value of all Inventory on the last day of any fiscal quarter to be         
greater than the amount set forth opposite such period below:                   

         Fiscal Quarter Ended                      Maximum
             --------------------                 Inventory Amount
                                                  ----------------
          1/31/00                                              $ 115,627,000
          2/29/00                                                112,517,000
          3/31/00                                                101,520,000
          4/30/00                                                 99,208,000
          5/31/00                                                100,100,000
          6/30/00                                                 97,421,421

8.12  [Intentionally Omitted].                          

  8.13 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; Issuances of Capital Stock; etc. Holdings will not, will not  
permit any of its Subsidiaries to, and will not apply to the Bankruptcy Court   
for authority to:                                                               

                  (i) make (or give any notice in respect of) any voluntary or
          optional payment or prepayment on or redemption or acquisition for
          value of (including, without limitation, by way of depositing with
     the trustee with respect thereto or any other Person money or
securities before due for the purpose of paying         

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            when due) any Senior Subordinated Note or any Permitted Holdings PIK
Security;                                               

                  (ii) make (or give any notice in respect of) any prepayment or
           redemption of any Senior Subordinated Note as a result of any asset
    sale, change of control or similar event (including, without
      limitation, by way of depositing with the trustee with respect
          thereto or any other Person money or securities before due for the
 purpose of paying when due any Senior Subordinated Note);

                  (iii) make (or give any notice in respect of) any principal or
           interest payment on, or any redemption or acquisition for value of,
any Shareholder Subordinated Note;                      

                 (iv) amend or modify, or permit the amendment or modification
   of, any provision of any Senior Subordinated Note Document;

           (v) amend, modify or change in any way adverse to the
       interests of the Lenders, any Tax Agreement, its Certificate of
      Incorporation (including, without limitation, by the filing or
   modification of any certificate of designation) or By-Laws;

                 (vi) amend or modify, or permit the amendment or modification
           of, any provision of any Accounts Receivable Facility Document in a
manner adverse to the interests of the Lenders;         

     (vii) issue any class of capital stock other than
non-redeemable common stock; and                        

      (viii) amend or modify, or permit the amendment or
    modification of, any provision of any Permitted Holdings PIK
            Security in any manner inconsistent with the definition of Permitted
Holdings PIK Security.                                  

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         8.14 Limitation on Certain Restrictions on Subsidiaries. Holdings
will not, will not permit any of its Subsidiaries to, and will not apply to the 
Bankruptcy Court for authority to, directly or indirectly, create or otherwise  
cause or suffer to exist or become effective any encumbrance or restriction on  
the ability of any such Subsidiary to (a) pay dividends or make any other       
distributions on its capital stock or any other interest or participation in its
profits owned by Holdings or any Subsidiary of Holdings, or pay any Indebtedness
owed to Holdings or a Subsidiary of Holdings, (b) make loans or advances to     
Holdings or any of Holdings' Subsidiaries or (c) transfer any of its properties 
or assets to Holdings or any of its Subsidiaries, except for such encumbrances  
or restrictions existing under or by reason of (i) applicable law, (ii) this    
Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of the     
Borrower or a Subsidiary of the Borrower, (iv) customary provisions restricting 
assignment of any licensing agreement entered into by the Borrower or a         
Subsidiary of the Borrower in the ordinary course of business, (v) the Senior   
Subordinated Note Documents, (vi) the agreements evidencing the Existing        
Indebtedness that remain outstanding after the Petition Date, (vii) customary   
provisions restricting the transfer of assets subject to Liens permitted under  
Section 8.3(k), and (viii) the Existing Credit Documents.                       

        8.15 Limitation on the Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, Holdings will not, will   
not permit any of its Subsidiaries to, and will not apply to the Bankruptcy     
Court for authority to, establish, create or acquire after the Initial Borrowing
Date any Subsidiary.                                                            

8.16  [Intentionally Omitted].                          

         8.17 Additional Bank Accounts. Holdings will not, will not permit
any of its Subsidiaries to, and will not apply to the Bankruptcy Court for      
authority to, at any time open, maintain or otherwise have any checking, savings
or other accounts at any bank or other financial institution, or any other      
account where money is or may be deposited or maintained with any Person, other 
than the accounts listed on Annex III, Securities Accounts that comply with the 
terms of Section 8.18 or as otherwise agreed to in writing by the Agent.        

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           8.18 Securities Accounts. Holdings will not, will not permit any of
its Subsidiaries to, and will not apply to the Bankruptcy Court for authority   
to, establish or maintain any Securities Account unless the Agent shall have    
received a Control Agreement in respect of such Securities Account, duly        
executed by the Credit Party and the securities intermediary parties thereto    
that is in full force and effect.                                               

        8.19 Chapter 11 Claims. Except for the Carve-Out or as otherwise
provided in the Security Documents, Holdings will not, will not permit any of   
its Subsidiaries to, and will not apply to the Bankruptcy Court for the         
authority to, incur, create, assume, suffer to exist or permit any other        
Super-priority Claim or Lien which is pari passu with or senior to (a) the      
claims of the Collateral Agent and the Lenders granted pursuant to the Security 
Documents or (b) other than for claims referenced in clause (a), the claims of  
the Prepetition Agent and the Existing Lenders granted pursuant to the Security 
Documents.                                                                      

           8.20 Use of Proceeds. Holdings will not, will not permit any of its
Subsidiaries to, and will not apply to the Bankruptcy Court for the authority to
(a) use the proceeds of the Loans or any Letter of Credit for purposes other    
than those detailed in Section 6.5 and the Budget in effect, or (b) use the     
proceeds of the Loans, any Letter of Credit, the Existing Lenders' Cash         
Collateral, or the Carve-Out or the Collateral to investigate, commence or      
prosecute any action or objection with respect to (i) the claims of the         
Prepetition Agent or the Existing Lenders against the Borrower or the Guarantors
or the Prepetition Agent's or the Existing Lenders' Liens which secure the      
Prepetition Obligations or (ii) the Super-priority Claim or Liens granted to the
Agent and the Lenders pursuant to the Security Documents and the Orders;        
provided, that Holdings and its Subsidiaries may use up to $75,000 of proceeds  
of the Loans in the aggregate to investigate any such action or objection.      

            8.21 Prepetition Payments. Holdings will not, will not permit any of
its Subsidiaries to, and will not apply to the Bankruptcy Court for authority to
(a) make any payment in respect of pre-Petition Date Indebtedness including     
payments to pre-Petition Date vendors (other than as permitted by the Orders),  
(b) amend, modify or change any agreement or document relating to any           
pre-Petition Date Indebtedness, and (c) make any payment on any post-Petition   
Date Indebtedness outside the Borrower's ordinary course of business; provided, 
however, that the Credit Parties may make the payments specifically contemplated
in the first day orders referred to in Section 5.1(b) so long as such payments  
are consistent with the applicable Budget and the terms of this Agreement.      

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          8.22 Employment Matters. Holdings will not, will not permit any of
its Subsidiaries to, and will not apply to the Bankruptcy Court for authority to
(a) make any material adverse change to the severance arrangements currently in 
effect for their respective employees, and (b) pay, or enter into any agreement 
to pay, any retention, stay or similar payment to its employees other than      
payments constituting the Retention Payments in accordance with any agreements  
or plans approved by the Agent and the Required Lenders.                        

  8.23 Leases. Holdings will not, will not permit any of its
Subsidiaries to, and will not apply to the Bankruptcy Court for authority to,   
enter into any agreements to rent or lease any real property, or assume the     
obligations under any such agreements entered into prior to the Petition Date,  
in either case without the prior written consent of the Agent and the Required  
Lenders (other than the assumption of any existing lease in respect of property 
described on Annex IV hereto) on material terms no less favorable to such Credit
Party, as the case may be, than the terms of such lease on the Effective Date,  
taken as a whole.                                                               

      8.24  Reclamation Claims; Bankruptcy Code " 546(g) Agreements.

                 (a) Unless otherwise agreed by the Required Lenders, Holdings
will not, will not permit any of its Subsidiaries to, and will not apply to the 
Bankruptcy Court for authority to, make any payments or transfer any property on
account of claims asserted by any vendors of Holdings or any Subsidiary for     
reclamation in accordance with UCC Section 2-702 and Section 546(c) of the      
Bankruptcy Code.                                                                

                 (b) Unless otherwise agreed by the Required Lenders, Holdings
will not, will not permit any of its Subsidiaries to, and will not apply to the 
Bankruptcy Court for authority to, enter into any agreements or file any motion 
seeking a Bankruptcy Court order for the return of Inventory to any vendor      
pursuant to Section 546(g) of the Bankruptcy Code.                              

       8.25 Excess Cash. Holdings will not, will not permit any of its
Subsidiaries to, and will not apply to the Bankruptcy Court for authority to,   
maintain in the aggregate in all deposit or similar accounts (other than the    
Blocked Account, the Concentration Account, disbursement accounts and payroll   
accounts) total cash balances in excess of $1,000,000 at any time during which  
any Revolving Loans are outstanding, except for amounts which are required to be
applied to repay amounts owing under the Accounts Receivable Facility Purchase  
Agreement provided that such amounts are promptly so applied.                   

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        8.26 Refinancing of Revolving Loans. Holdings will not, will not
permit any of its Subsidiaries to and will not apply to the Bankruptcy Court for
authority to, refinance any or all of the Revolving Loans unless all of the Term
Loans are simultaneously refinanced.                                            

         SECTION 9.  Events of Default.  Upon the occurrence of any of the
following specified events (each an "Event of Default"):                        

            9.1 Payments. The Borrower shall (i) default in the payment when due
of any principal of the Loans or (ii) default, and such default shall continue  
for two or more Business Days, in the payment when due of any Unpaid Drawing,   
any interest on the Loans or any Fees or any other amounts owing hereunder or   
under any other Credit Document;                                                

           9.2 Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any       
statement or certificate delivered pursuant hereto or thereto shall prove to be 
untrue in any material respect on the date as of which made or deemed made; or  

    9.3 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in 
Sections 7.1(d), (e), (f), (m) or (i), 7.3, 7.11, 7.14, 7.16 or 8, or (b)       
default in the due performance or observance by it of any term, covenant or     
agreement (other than those referred to in Section 9.1, 9.2 or clause (a) of    
this Section 9.3) contained in this Agreement and such default shall continue   
unremedied for a period of at least 10 days after notice to the defaulting party
by the Agent or the Required Lenders; or                                        

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9.4  Default Under Other Agreements.                    

            (a) Holdings or any of its Subsidiaries shall, after the
Petition Date, (i) default in any payment with respect to any Indebtedness      
(other than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which Indebtedness was created or (ii) default in 
the observance or performance of any 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 holders of such Indebtedness (or a trustee or agent on behalf of such 
holder or holders) to cause any such Indebtedness to become due prior to its    
stated maturity; or (b) any Indebtedness (other than the Obligations) of        
Holdings or any of its Subsidiaries shall, other than as a result of the        
commencement of the Cases, be declared to be due and payable, or shall be       
required to be prepaid other than by a regularly scheduled required prepayment  
or as a mandatory prepayment (unless such required prepayment or mandatory      
prepayment results from a default thereunder or an event of the type that       
constitutes an Event of Default), prior to the stated maturity thereof; or      

9.5  Bankruptcy, etc.                                   

                 (a) (i) Any of the Cases shall be dismissed or converted to a
case under Chapter 7 of the Bankruptcy Code or (ii) a trustee under Chapter 11  
of the Bankruptcy Code shall be appointed in any of the Cases;                  

             (b) (i) An order of the Bankruptcy Court shall be entered
granting another Super-priority Claim or Lien pari passu with or senior to that 
granted (x) to the Collateral Agent and the Lenders pursuant to this Agreement  
and the Orders, or (y) to the Existing Lenders pursuant to the Interim Order    
(other than pursuant to clause (x) above), (ii) unless the Agent and the        
Required Revolving Lenders otherwise agree, an order of a court of competent    
jurisdiction shall be entered amending, supplementing or otherwise modifying    
either of the Orders (x) in respect of the Total Revolving Outstandings, the    
Total Revolving Loan Commitment, the Total Term Loan Commitment or the Term     
Loans, or (y) in respect of the grant of adequate protection pursuant to Section
1.14(b) or the Interim Order, without the Prepetition Agent's and the Required  
Lenders' consent, or (iii) the Existing Lenders' Cash Collateral shall be used  
in a manner inconsistent with either of the Orders;                             

                (c) Unless all of the Lenders otherwise agree, an order of a
court of competent jurisdiction shall be entered reversing, staying, vacating or
rescinding either of the Orders;                                                

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                (d) An order of the Bankruptcy Court shall be entered in any
of the Cases appointing an examiner having enlarged powers relating to the      
operation of the business of Holdings or any of its Subsidiaries (powers beyond 
those set forth under Sections 1106(a)(3) and (4) of the Bankruptcy Code) under 
Section 1106(b) of the Bankruptcy Code;                                         

          (e) Holdings or any of its Subsidiaries shall make any
payments of Indebtedness relating to Prepetition Date obligations other than (i)
as permitted under the Orders or the orders entered in accordance with Section  
5.1(b), (ii) pre-Petition Date wages and benefits which are payable with the    
approval of the Bankruptcy Court and sales tax and employee withholding taxes   
which have been collected by the Borrower but not yet paid, (iii) as otherwise  
permitted under this Agreement or (iv) in connection with the assumption of any 
contract or lease approved by the Bankruptcy Court;                             

                (f) The entry of an order granting relief from the automatic
stay so as to allow a third party to proceed against any asset or assets of     
Holdings or any of its Subsidiaries which have a value in excess of $3,000,000  
in the aggregate, but only if concomitantly therewith such relief shall not have
also been granted to the Agent and the Lenders;                                 

            (g) The filing of any pleading by Holdings or any of its
Subsidiaries seeking, or otherwise consenting to, any of the matters set forth  
in paragraphs (a) through (f) of this Section 9.5;                              

               (h)   Holdings or any of its Subsidiaries shall file a Plan
of Reorganization not supported by the Agent and the Required Lenders;          

              (i)   The entry of the Final Order shall not have occurred
within 30 days after the Petition Date; or                                      

          (j) Holdings or any of its Subsidiaries shall file any
pleading seeking, or otherwise consenting to, (i) the invalidation,             
subordination or other challenging of the claims asserted by the Existing Agent 
or the Existing Lenders with respect to the Prepetition Obligations or the Liens
granted to secure the Prepetition Obligations or (ii) any relief under Section  
506(c) of the Bankruptcy Code with respect to any property which secures the    
Prepetition Obligations.                                                        

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9.6  ERISA.                                             

          (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412  
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or the subject of termination proceedings under ERISA, any Plan shall have an   
Unfunded Current Liability, a contribution required to be made to a Plan or a   
Foreign Pension Plan has not been timely made, Holdings or any Subsidiary of    
Holdings or any ERISA Affiliate has incurred or is likely to incur a liability  
to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,  
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or    
4980 of the Code, or Holdings or any Subsidiary of Holdings has incurred or is  
likely to incur liabilities pursuant to one or more employee welfare benefit    
plans (as defined in Section 3(1) of ERISA) which provide benefits to retired   
employees and other former employees (other than as required by Section 601 of  
ERISA) or employee pension benefit plans (as defined in Section 3(2) of ERISA)  
or Foreign Pension Plans; (b) there shall result from any such event or events  
the imposition of a lien, the granting of a security interest, or a liability or
a material risk of incurring a liability; and (c) which lien, security interest 
or liability which arises from such event or events will have a Material Adverse
Effect; or                                                                      

     9.7 Security Documents. (a) Except in each case to the extent
resulting from the failure of the Collateral Agent to retain possession of the  
applicable Pledged Securities, any Security Document shall cease to be in full  
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby in favor of the Collateral
Agent, or (b) any Credit Party shall default in the due performance or          
observance of any term, covenant or agreement on its part to be performed or    
observed pursuant to any such Security Document and such default shall continue 
beyond any cure or grace period specifically applicable thereto pursuant to the 
terms of any such Security Document; or                                         

           9.8 Guaranties. The Guaranties or any provision thereof shall cease
to be in full force and effect, or any Guarantor or any Person acting by or on  
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations   
under any Guaranty or any Guarantor shall default in the due performance or     
observance of any term, covenant or agreement on its part to be performed or    
observed pursuant to any Guaranty; or                                           

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        9.9 Judgments. One or more judgments or decrees shall be entered
after the Petition Date against Holdings or any of its Subsidiaries involving a 
liability (to the extent not paid or not fully covered by insurance) in excess  
of $2,000,000 for all such judgments and decrees and all such judgments or      
decrees shall not have been vacated, discharged or stayed or bonded pending     
appeal within 60 days from the entry thereof; or                                

        9.10  Ownership.  A Change of Control Event shall have occurred;
or                                                                              

         9.11 Environmental Violations. It shall be determined (whether by
the Bankruptcy Court or by any other judicial or administrative forum) that     
Holdings or any of its Subsidiaries is liable for the payment of claims arising 
out of any failure to comply (or to have complied) with applicable Environmental
Laws or regulations the payment of which could have a Material Adverse Effect;  
or                                                                              

         9.12  Net Cash Flow Deviation.  Holdings and its Subsidiaries (on
a consolidated basis) shall have unfavorably deviated, as of any date of        
determination, by more than 10% (on a cumulative basis) from the projected      
net cash flow as set forth in the Budget in effect on such date; or             

         9.13  Disbursements Deviation.  Holdings and its Subsidiaries (on
a consolidated basis) shall have unfavorably deviated, as of any date of        
determination, by more than 10% (on a cumulative basis) from the projected      
disbursements as set forth in the Budget in effect on such date; or             

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    9.14  Material Adverse Effect.  There shall have occurred an
event or condition that has had a Material Adverse Effect;                      

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then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, and without further order of or application to the    
Bankruptcy Court: the Agent shall, upon the written request of the Required     
Revolving Lenders, by written notice to the Borrower (with a copy to counsel for
any statutory committee of unsecured creditors appointed in the Cases and to the
United States Trustee), take any or all of the following actions, without       
prejudice to the rights of the Agent or any Lender to enforce its claims against
any Guarantor or the Borrower, except as otherwise specifically provided for in 
this Agreement (provided, that with respect to clause (vi) below and the        
enforcement of Liens or other remedies with respect to the Collateral under     
clause (iii) below, the Agent shall provide the Credit Parties (with a copy to  
counsel for any statutory committee of unsecured creditors appointed in the     
Cases and to the United States Trustee) with five Business Days' written notice 
prior to taking the action contemplated thereby): (i) declare the Total         
Revolving Loan Commitment terminated, whereupon the Revolving Loan Commitment of
each Lender shall forthwith terminate immediately and any Commitment Fees shall 
forthwith become due and payable without any other notice of any kind; (ii)     
declare the principal of and any accrued interest in respect of all Revolving   
Loans and all Obligations in respect of Revolving Loans owing hereunder         
(including Unpaid Drawings) to be, whereupon the same shall become, forthwith   
due and payable without presentment, demand, protest or other notice of any     
kind, all of which are hereby waived by the Borrower; (iii) enforce, as         
Collateral Agent (or direct the Collateral Agent to enforce), upon five Business
Days' notice to the Borrower (with a copy to counsel for any statutory committee
of unsecured creditors appointed in the Cases), any or all of the Liens and     
security interests created pursuant to the Security Documents and the Orders;   
(iv) terminate any Letter of Credit which may be terminated in accordance with  
its terms; and (v) direct the Borrower to pay (and the Borrower hereby agrees   
upon receipt of such notice, to pay) into the Cash Collateral Account such      
additional amounts of cash, to be held as security for the Borrower's           
reimbursement obligations in respect of Letters of Credit then outstanding,     
equal to 105% of the aggregate Stated Amount of all Letters of Credit then      
outstanding and, to the extent the Borrower shall fail to furnish such funds as 
demanded by the Agent, the Agent shall be authorized to debit the accounts of   
the Credit Parties maintained with the Agent in such amount for the deposit of  
such amounts in the Cash Collateral Account; and (vi) set-off amounts in the    
Cash Collateral Account, the Concentration Account or any other accounts of the 
Credit Parties and apply such amounts to the Obligations of the Credit Parties  
hereunder and under the other Credit Documents; provided, however, that any     
proceeds of Collateral or other amounts received by any Lender or the Agent     
shall be applied in accordance with the Super-priority Claim and the Lien       
priorities set forth in Section 1.14 and 12.19.                                 

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On or after the Termination Date (or upon the occurrence of an Event of Default 
if the Maturity Date occurs before the Termination Date) and without further    
order of or application to the Bankruptcy Court: the Agent shall, upon the      
written request of the Required Term Lenders, by written notice to the Borrower 
(with a copy to counsel for any statutory committee of unsecured creditors      
appointed in the Cases and to the United States Trustee), take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender to
enforce its claims against any Guarantor or the Borrower, except as otherwise   
specifically provided for in this Agreement (provided, that with respect to     
clause (iv) below and the enforcement of Liens or other remedies with respect to
the Collateral under clause (iii) below, the Agent shall provide the Credit     
Parties (with a copy to counsel for any statutory committee of unsecured        
creditors appointed in the Cases and to the United States Trustee) with five    
Business Days' written notice prior to taking the action contemplated thereby): 
(i) declare the Total Term Loan Commitment terminated, whereupon the Term Loan  
Commitment of each Lender shall forthwith terminate immediately without any     
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Term Loans and all Obligations in respect of Term Loans and   
Existing Letters of Credit owing hereunder to be, whereupon the same shall      
become, forthwith due and payable without presentment, demand, protest or other 
notice of any kind, all of which are hereby waived by the Borrower; (iii)       
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), upon  
five Business Days' notice to the Borrower (with a copy to counsel for any      
statutory committee of unsecured creditors appointed in the Cases), any or all  
of the Liens and security interests created pursuant to the Security Documents  
and the Orders; (iv) set-off amounts in the Cash Collateral Account, the        
Concentration Account or any other accounts of the Credit Parties and apply such
amounts to the Obligations of the Credit Parties hereunder and under the other  
Credit Documents; (v) terminate any Existing Letter of Credit which may be      
terminated in accordance with its terms; and (vi) direct the Borrower to pay    
(and the Borrower hereby agrees upon receipt of such notice, to pay) into the   
Cash Collateral Account such additional amounts of cash, to be held as security 
for the Borrower's reimbursement obligations in respect of Existing Letters of  
Credit then outstanding, equal to 105% of the aggregate Stated Amount of all    
Existing Letters of Credit then outstanding and, to the extent the Borrower     
shall fail to furnish such funds as demanded by the Agent, the Agent shall be   
authorized to debit the accounts of the Credit Parties maintained with the Agent
in such amount for the deposit of such amounts in the Cash Collateral Account;  
provided, however, that any proceeds of Collateral or other amounts received by 
any Lender or the Agent shall be applied in accordance with the Super-priority  
Claim and the Lien priorities set forth in Sections 1.14 and                    

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12.19.                                                                          

          SECTION 10. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.       
Defined terms in this Agreement shall include in the singular number the plural 
and in the plural the singular:                                                 

          "Accounts" shall mean, with respect to any Person, all present and
future accounts, contract rights and other rights to payment for property sold  
or leased (whether or not delivered) or for services rendered, whether or not   
they have been earned by performance, and any letter of credit, guarantee,      
security interest or other security held by or granted to secure payment by an  
account debtor.                                                                 

         "Accounts Borrowing Base" shall mean, on any day, an amount up to
85% of the outstanding Eligible Accounts Receivable of the Borrower and the     
Subsidiary Guarantors on such day.                                              

   "Accounts Receivable Facility" shall mean the Series 1996-1
Supplement to Pooling and Servicing Agreement, dated as of May 24, 1996, among  
the Receivables Entity, as transferor, the Borrower, as servicer, and           
Manufacturers and Traders Trust Company, as trustee, as the same may be amended,
modified, supplemented, increased, refinanced or replaced from time to time.    

        "Accounts Receivable Facility Documents" shall mean the Accounts
Receivable Facility Purchase Agreement, the Certificate Purchase Agreement      
(Series 1996-1 Class A), the Certificate Purchase Agreement (Series 1996-1 Class
B), the Accounts Receivable Facility Pooling and Servicing Agreement and each of
the other documents and agreements entered into in connection therewith,        
including all documents and agreements relating to the issuance, funding and/or 
purchase of Investor Certificates and Purchased Interests, in each case as such 
documents and agreements may be amended, modified, supplemented, refinanced or  
replaced from time to time.                                                     

            "Accounts Receivable Facility Pooling and Servicing Agreement" shall
mean the Pooling and Servicing Agreement, dated as of May 24, 1996, among the   
Receivables Entity, as transferor, the Borrower, as servicer, and Manufacturers 
and Traders Trust Company, as trustee, as the same may be amended, modified,    
supplemented, refinanced or replaced from                                       

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time to time.                                                                   

        "Accounts Receivable Facility Purchase Agreement" shall mean the
Receivables Purchase Agreement, dated as of May 24, 1996, among the Borrower and
the other Designated Credit Parties, as sellers, and the Receivables Entity, as 
buyer, as the same may be amended, modified, supplemented, refinanced or        
replaced from time to time.                                                     

          "Additional Security Documents" shall have the meaning provided in
Section 7.11.                                                                   

       "Additional Subsidiaries" shall mean American Pad & Paper Sales
Company, Inc., AP&P Financing Company, Inc., AP&P Manufacturing, Inc. and       
American Pad and Paper Foreign Sales Corporation.                               

          "Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing   
(x) the most recent weekly average dealer offering rate for negotiable          
certificates of deposit with a three-month maturity in the secondary market as  
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not 
be published by the Federal Reserve System for any week, the weekly average     
offering rate determined by the Agent on the basis of quotations for such       
certificates received by it from three certificate of deposit dealers in New    
York of recognized standing or, if such quotations are unavailable, then on the 
basis of other sources reasonably selected by the Agent, by (y) a percentage    
equal to 100% minus the stated maximum rate of all reserve requirements as      
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000    
(including, without limitation, any marginal, emergency, supplemental, special  
or other reserves), plus (2) the then daily net annual assessment rate as       
estimated by the Agent for determining the current annual assessment payable by 
BTCo to the Federal Deposit Insurance Corporation for insuring three month      
certificates of deposit.                                                        

            "Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors  
and officers of such Person), controlled by, or under direct or indirect common 
control with such Person. A Person shall be deemed to control a corporation if  
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of 
such corporation or (ii) to direct or cause the direction of the management and 
policies of such corporation, whether through the ownership of voting           
securities, by contract or otherwise, it being understood that the Receivables  
Entity shall not be an Affiliate of Holdings or any of its Subsidiaries until   
such time as the Borrower and its Subsidiaries own 100% of the capital stock of 
the Receivables Entity.                                                         

"Agent" shall have the meaning provided in the first    

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paragraph of this Agreement and shall include any successor to the Agent        
appointed pursuant to Section 11.10.                                            

          "Agreement" shall mean this Debtor-in-Possession Credit Agreement,
as the same may be from time to time modified, amended and/or supplemented.     

       "Applicable Base Rate Margin" shall mean a percentage per annum
equal to (i) 3% with respect to the Term Loans and (ii) 2.50% with respect to   
all other Loans.                                                                

          "Applicable Commitment Fee Percentage" shall mean a percentage per
annum equal to .50%.                                                            

          "Asset Sale" shall mean any sale, transfer or other disposition by
Holdings or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without        
limitation, any capital stock or other securities of another Person, but        
excluding the sale by such Person of its own capital stock) of Holdings or such 
Subsidiary other than (i) sales, transfers or other dispositions of inventory   
made in the ordinary course of business and (ii) sales of assets pursuant to    
Sections 8.2 (e), (f), (g) and (i).                                             

           "Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately      
completed).                                                                     

          "Authorized Officer" shall mean the Chief Executive Officer or the
Chief Financial Officer of Holdings or the Borrower.                            

            "Bain Affiliates" shall mean any Affiliate of Bain Capital, provided
that for purposes of the definition of "Change of Control Event", the term Bain 
Affiliate shall not include (x) any portfolio company of either Bain Capital or 
any Affiliate of Bain Capital or (y) any officer or director of Holdings or any 
of its Subsidiaries that is not also a partner or stockholder of Bain Capital on
the Effective Date.                                                             

"Bain Capital" shall mean Bain Capital, Inc., a Delaware
corporation.                                                                    

       "Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto. 

            "Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Delaware or any other court having jurisdiction over the Cases  
from time to time.                                                              

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           "Base Rate" at any time shall mean the higher of (x) the rate which
is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate and (y) the  
Prime Lending Rate.                                                             

           "Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.8(a).                                                     

        "Blocked Account" shall have the meaning provided in the Blocked
Account Agreement.                                                              

            "Blocked Account Agreement" shall mean the Blocked Account Agreement
in the form of Exhibit O, as amended, supplemented or otherwise modified from   
time to time.                                                                   

            "Borrower" shall have the meaning provided in the first paragraph of
this Agreement.                                                                 

         "Borrowing" shall mean and include (i) the borrowing of Swingline
Loans from BTCo on a given date, (ii) the borrowing of Revolving Loans from all 
of the Revolving Lenders on a given date and (iii) the borrowing of Term Loans  
from all of the Term Lenders on a given date.                                   

           "Borrowing Base" shall mean, on any day, subject to Section 1.1(d),
an amount equal to the sum of (a) the Accounts Borrowing Base on such day and   
(b) the Inventory Borrowing Base on such day.                                   

         "Borrowing Base Certificate" shall have the meaning given to such
term in Section 7.1(d).                                                         

"Borrowing Base Parties" shall mean the Borrower and the
Subsidiary Guarantors.                                                          

            "BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.    

          "Budget" shall mean the cash flow projections prepared by or under
the supervision of the Crisis Manager (following the Borrower's retention of the
Crisis Manager) or an Authorized Officer of Holdings (prior to the Borrower's   
retention of the Crisis Manager) on a consolidated basis, showing (on a         
line-item basis) weekly anticipated cash receipts and expenditures of Holdings  
and its Subsidiaries for the four-week period commencing on the date of such    
projections which shall be itemized in sufficient detail including line items   
for Post-Petition Date vendor payments, payroll, interest, professional fees,   
capital expenditures, rationalization costs, retention payments and payments of 
prepetition and "involuntary gap" liabilities to critical vendors; provided,    
however that Holdings shall submit an amended Budget for approval by the Agent  
no later than 5:00 P.M.                                                         

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(New York time) on Tuesday of each week pursuant to Section 7.1(d)(iii). If     
there is no objection to such amended Budget from the Agent within two Business 
Days, such amended Budget shall be deemed to be the Budget in effect after such 
time. If the Agent objects to such amended Budget within two Business Days the  
previous Budget shall, until there is an agreement between the Borrower and the 
Agent on an amended Budget, be deemed to be in force and effect as the Budget.  

            "Business Day" shall mean any day excluding Saturday, Sunday and any
day which shall be in the City of New York a legal holiday or a day on which    
banking institutions are authorized by law or other governmental actions to     
close.                                                                          

          "Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with GAAP,
including all such expenditures with respect to fixed or capital assets         
(including, without limitation, expenditures for maintenance and repairs which  
should be capitalized in accordance with GAAP) and the amount of all Capitalized
Lease Obligations incurred by such Person.                                      

          "Capital Lease," as applied to any Person, shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee which,  
in conformity with GAAP, is accounted for as a capital lease on the balance     
sheet of that Person.                                                           

        "Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at 
the amount thereof accounted for as liabilities in accordance with GAAP.        

       "Carve-Out" shall have the meaning provided in Section 1.14(a);
provided, that the amount of the Carve-Out shall be set forth in the Orders.    

    "Cases" shall have the meaning set forth in the introductory
paragraph of this Agreement.                                                    

           "Cash Collateral" shall have the meaning provided in Section 363(a)
of the Bankruptcy Code, excluding cash actually applied to repay amounts owing  
under the Accounts Receivable Facility Purchase Agreement.                      

         "Cash Collateral Account" shall mean the account established with
Bankers Trust Company which is in the name (and under the sole dominion and     
control) of the Collateral Agent, and any other cash collateral account         
maintained with, and under the sole dominion and control of, the Collateral     
Agent.                                                                          

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           "Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or    
instrumentality thereof (provided, that the full faith and credit of the United 
States of America is pledged in support thereof) having maturities of not more  
than twelve months from the date of acquisition, (ii) U.S. dollar denominated   
time deposits, certificates of deposit and bankers acceptances of (x) any Lender
or (y) any bank whose short-term commercial paper rating from S&P is at least   
A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent 
thereof (any such bank or Lender, an "Approved Lender"), in each case with      
maturities of not more than twelve months from the date of acquisition, (iii)   
commercial paper issued by any Approved Lender or by the parent company of any  
Approved Lender and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1  
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by   
Moody's, or guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or      
Moody's, as the case may be, and in each case maturing within twelve months     
after the date of acquisition, (iv) marketable direct obligations issued by any 
state of the United States of America or any political subdivision of any such  
state or any public instrumentality thereof maturing within twelve months from  
the date of acquisition thereof and, at the time of acquisition, having one of  
the two highest ratings obtainable from either S&P or Moody's and (v)           
investments in money market funds substantially all the assets of which are     
comprised of securities of the types described in clauses (i) through (iv)      
above.                                                                          

       "Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment 
pursuant to a note receivable issued in connection with such Asset Sale, other  
than the portion of such deferred payment constituting interest, but only as and
when so received) received by Holdings and/or any of its Subsidiaries from such 
Asset Sale.                                                                     

           "Certificate Purchase Agreement (Series 1996-1 Class A)" shall mean
the Revolving Certificate Purchase Agreement (Series 1996-1 Class A), dated as  
of May 24, 1996, among the Receivables Entity, the Borrower, as the initial     
servicer, the purchasers party thereto, and BTCo, as Agent, as the same may be  
amended, modified, supplemented, refinanced or replaced from time to time.      

           "Certificate Purchase Agreement (Series 1996-1 Class B)" shall mean
the Revolving Certificate Purchase Agreement (Series 1996-1 Class B), dated as  
of May 24, 1996, among the Receivables Entity, the Borrower, as the initial     
servicer, the purchasers party thereto, and BTCo, as Agent, as the same may be  

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amended, modified, supplemented, refinanced or replaced from time to time.      

            "Change of Control Event" shall mean (a) Holdings shall cease to own
directly 100% on a fully diluted basis of the economic and voting interest in WR
Acquisition's capital stock or (b) WR Acquisition shall cease to own directly   
100% on a fully diluted basis of the economic and voting interest in the        
Borrower's capital stock or (c) any Person or "group" (within the meaning of    
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect on
the (Effective Date), other than Bain Capital and/or the Bain Affiliates, shall 
(A) have acquired beneficial ownership of 30% or more on a fully diluted basis  
of the voting and/or economic interest in Holdings' capital stock or (B)        
obtained the power (whether or not exercised) to elect a majority of Holdings'  
directors or (d) the Board of Directors of Holdings shall cease to consist of a 
majority of Continuing Directors or (e) a "change of control" or similar event  
shall occur as provided in the Senior Subordinated Note Indenture.              

            "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.    
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,         
supplemental thereto or substituted therefor.                                   

            "Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be   
granted) pursuant to any Security Document, including, without limitation, all  
Pledge Agreement Collateral, all Security Agreement Collateral, the Mortgaged   
Properties and all cash and Cash Equivalents delivered as collateral.           

       "Collateral Access Agreements" shall mean any landlord waivers,
mortgagee waivers, bailee letters or any similar acknowledgment agreements of   
any warehouseman or processor in possession of Inventory, in each case          
substantially in the form of Exhibit I with such changes thereto as are         
acceptable to the Agent.                                                        

          "Collateral Agent" shall mean the Agent acting as collateral agent
for the Secured Creditors.                                                      

     "Commitment" shall mean any of the commitments of any Lender,
whether a Revolving Loan Commitment or a Term Loan Commitment.                  

           "Commitment Fee" shall have the meaning provided in Section 3.1(a).

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      "Concentration Account" shall have the meaning provided in the
Concentration Account Agreement.                                                

      "Concentration Account Agreement" shall mean the Concentration
Account Agreement in the form of Exhibit P, as amended, supplemented or         
otherwise modified from time to time.                                           

        "Confirmation Order" shall mean an order of the Bankruptcy Court
confirming a Reorganization Plan.                                               

        "Consolidated EBIT" shall mean, for any period, Consolidated Net
Income, before total interest expense (inclusive of amortization of deferred    
financing fees and any original issue discount) of the Borrower and its         
Subsidiaries determined on a consolidated basis and provisions for taxes based  
on income, and determined (i) without giving effect to any extraordinary gains  
or losses from sales of assets sold outside the ordinary course of business but 
with giving effect to gains or losses from sales of assets sold in the ordinary 
course of business, (ii) without giving effect to any impact from the LIFO      
method of inventory accounting, (iii) without giving effect to any noncash      
charge deducted in determining Consolidated Net Income for such period and      
related to the issuance by Holdings or any of its Subsidiaries of stock,        
warrants or options to management (or any exercise of any such warrants or      
options) and (iv) without giving effect to any charges deducted in determining  
Consolidated Net Income for such period and related to the employee retention   
program of Holdings and its Subsidiaries and post-Petition Date professional    
fees.                                                                           

            "Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation expense and           
amortization expense that were deducted in determining Consolidated EBIT for    
such period, it being understood and agreed, however, that Consolidated EBITDA  
shall be determined without giving effect to any Restructuring Charges otherwise
deducted in determining Consolidated EBITDA for such period.                    

            "Consolidated Net Income" shall mean, for any period, the net income
(or loss), after provision for taxes, of the Borrower and its Subsidiaries      
(including as a Subsidiary for this purpose the Receivables Entity although the 
definition of Subsidiary might require otherwise) on a consolidated basis for   
such period taken as a single accounting period.                                

            "Consultants" shall mean Lazard Freres & Co. LLC, the Crisis Manager
or such other advisors as the Borrower may select and as may be acceptable to   
the Agent and the Required Lenders.                                             

           "Contingent Obligations" shall mean as to any Person any obligation
of such Person guaranteeing or intended to                                      

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guarantee any Indebtedness, leases, dividends or other obligations ("primary    
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such   
Person, whether or not contingent, (a) to purchase any such primary obligation  
or any property constituting direct or indirect security therefor, (b) to       
advance or supply funds (x) for the purchase or payment of any such primary     
obligation or (y) to maintain working capital or equity capital of the primary  
obligor or otherwise to maintain the net worth or solvency of the primary       
obligor, (c) 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 (d) otherwise 
to assure or hold harmless the owner of such primary obligation against loss in 
respect thereof; provided, however, that the term Contingent Obligation shall   
not include endorsements of instruments for deposit or collection or standard   
contractual indemnities entered into, in each case in the ordinary course of    
business. The amount of any Contingent Obligation shall be deemed to be an      
amount equal to the stated or determinable amount of the primary obligation in  
respect of which such Contingent Obligation is made or, if not stated or        
determinable, the maximum reasonably anticipated liability in respect thereof   
(assuming such Person is required to perform thereunder) as determined by such  
Person in good faith.                                                           

          "Continuing Directors" shall mean the directors of Holdings on the
Effective Date and each other director if such director's nomination for the    
election to the Board of Directors of Holdings is recommended by a majority of  
the then Continuing Directors.                                                  

       "Control Agreement" shall mean a control agreement, in form and
substance satisfactory to the Agent, among Holdings or one of its Subsidiaries, 
the Agent and the applicable securities intermediary with respect to the        
applicable Securities Account and the investment property maintained in such    
Account.                                                                        

    "Credit Documents" shall mean this Agreement, the Notes, the
Guaranties, each Security Document and all other documents and instruments      
executed in connection therewith, as such documents and instruments may be      
amended, supplemented or otherwise modified from time to time.                  

    "Credit Event" shall mean the making of a Loan (other than a
Revolving Loan made pursuant to a Mandatory Borrowing) or the issuance of a     
Letter of Credit.                                                               

            "Credit Party" shall mean Holdings, WR Acquisition, the Borrower and
each Subsidiary Guarantor.                                                      

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         "Crisis Manager" shall have the meaning provided in Section 7.22.

          "Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.                

         "Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.                                                    

     "Designated Credit Parties" shall mean the Borrower and those
Subsidiary Guarantors that are from time to time party to the Accounts          
Receivable Facility Documents.                                                  

   "Dividends" shall have the meaning provided in Section 8.7.

    "Documents" shall mean the Credit Documents and the Existing
Credit Documents.                                                               

        "Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory        
thereof.                                                                        

          "Effective Date" shall have the meaning provided in Section 12.10.

           "Eligible Accounts Receivable" shall mean Accounts of the Borrowing
Base Parties payable in Dollars and deemed by the Agent in its Permitted        
Discretion to be eligible for inclusion in the calculation of the Borrowing     
Base. In determining the amount to be so included, the face amount of such      
Accounts shall be reduced by the amount of all returns, discounts, claims,      
credits, charges, chargebacks, or other allowances (including accrued but       
unapplied customer rebates or other customer offsets) and by the aggregate      
amount of all reserves, limits and deductions provided for in this definition   
and elsewhere in this Agreement. Unless otherwise approved in writing by the    
Agent, no Account shall be deemed to be an Eligible Account Receivable if:      

       (a)   it arises out of a sale made by a Borrowing Base Party to
an Affiliate; or                                                                

        (b)   the Account is unpaid more than 60 days after the original
payment due date; or                                                            

         (c) the Account is unpaid more than 90 days after the date of the
original invoice, other than an Account with standard terms, consistent with    
past practice, that permit such Account to be paid beyond 90 days after the date
of the original invoice, in which case such Account shall not be deemed to be an
Eligible Account Receivable if it is unpaid beyond such longer period           

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after the date of the original invoice; or                                      

         (d) it is from the same account debtor (or any Affiliate thereof)
and 25% or more, in face amount, of all Accounts from such account debtor (or   
any Affiliate thereof) are ineligible pursuant to (b) or (c) above; or          

        (e) (i) the account debtor has disputed its liability on, or the
account debtor has made any claim with respect to, such Account or any other    
Account due from such account debtor to a Borrowing Base Party, which has not   
been resolved, to the extent of the amount of such dispute or claim, or (iii)   
the Account otherwise is or may become subject to any legal right of setoff by  
the account debtor, to the extent of the amount of such setoff; provided, that  
up to $1,250,000 of Accounts owing by each of Unisource and XPEDX (each, a      
"Specified Account Debtor") shall not be deemed to be ineligible under clause   
(ii) above unless such Specified Account Debtor exercises any setoff or similar 
rights against a Borrowing Base Party in which case all of the Accounts owing by
such Specified Account Debtor shall be deemed to be ineligible; or              

       (f) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made an    
assignment for the benefit of creditors, or if a decree or order for relief has 
been entered by a court having jurisdiction over the account debtor in an       
involuntary case under the federal bankruptcy laws, as now constituted or       
hereafter amended, or if any other petition or other application for relief     
under the federal bankruptcy laws has been filed by or against the account      
debtor, or if the account debtor has filed a certificate of dissolution under   
applicable state law or shall be liquidated, dissolved or wound-up, or shall    
authorize or commence any action or proceeding for dissolution, winding-up or   
liquidation, or if the account debtor has failed, suspended business, declared  
itself to be insolvent, is generally not paying its debts as they become due or 
has consented to or suffered a receiver, trustee, liquidator or custodian to be 
appointed for it or for all or a significant portion of its assets or affairs,  
unless the payment of Accounts from such account debtor is secured in a manner  
satisfactory to the Agent or, if the Account from such account debtor arises    
subsequent to a decree or order for relief with respect to such account debtor  
under the federal bankruptcy laws, as now or hereafter in effect, the Agent     
shall have determined that the timely payment and collection of such Account    
will not be impaired; or                                                        

       (g) the sale is to an account debtor outside of the continental
United States, unless either (i) the Account is denominated in United States    
dollars and the account debtor is an Affiliate of a domestic account debtor of a
Borrowing Base Party                                                            

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or (ii) the account debtor thereon has supplied the applicable Borrowing Base   
Party with an irrevocable letter of credit in form and substance satisfactory to
the Agent, issued by a financial institution satisfactory to the Agent and which
has been duly pledged to the Agent (together with sufficient documentation to   
permit direct draws by the Agent); or                                           

            (h) the sale to the account debtor is on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval or consignment basis or made pursuant to
any other written agreement providing for repurchase or return; or              

            (i) the Agent determines in its Permitted Discretion that collection
of such Account is insecure or that such Account may not be paid by reason of   
the account debtor's financial inability to pay; or                             

       (j)   the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower duly         
assigns its rights to payment of such Account to the Agent pursuant to the      
Assignment of Claims Act of 1940, as amended (31 U.S.C. " 3727 et seq.); or     

           (k) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving rise to  
such Account have not been performed by the applicable Borrowing Base Party and 
accepted by the account debtor or the Account otherwise does not represent a    
final sale; or                                                                  

 (l) the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit          
Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board  
of Governors of the Federal Reserve System, in each case as amended; or         

          (m) the Collateral Agent does not have a valid and perfected first
priority security interest in such Account or the Account does not otherwise    
conform to the representations and warranties contained in this Agreement or the
other Credit Documents.                                                         

       "Eligible Inventory" shall mean Inventory of the Borrowing Base
Parties (other than Excluded Inventory) deemed by the Agent in its Permitted    
Discretion to be eligible for inclusion in the calculation of the Borrowing     
Base. In determining the amount to be so included, the amount of such Inventory 
shall be valued at the lower of cost or market on a basis consistent with the   
applicable Borrowing Base Party's current and historical accounting practice,   
less any goods returned or rejected by such Borrowing Base Party's customers and
goods in transit to third parties (other than to such Borrowing                 

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Base Party's agents and warehouses that are not excluded pursuant to clause (b) 
below), less any reserves otherwise required by the Agent pursuant to Section   
1.1(d), and less any Inventory that the Agent determines to be ineligible       
pursuant to Section 1.1(d). Unless otherwise approved in writing by the Agent,  
no Inventory shall be deemed Eligible Inventory if:                             

           (a) the Inventory is not owned solely by a Borrowing Base Party and
with respect to which such Borrowing Base Party does not have good, valid and   
marketable title; or                                                            

(b) [Intentionally Omitted]; or                         

           (c) the Inventory is not subject to a perfected first priority Lien
in favor of the Collateral Agent except, with respect to Eligible Inventory     
stored at sites described in clause (b) above, for Liens for normal and         
customary warehouseman charges; or                                              

 (d) the Inventory is not located in the United States; or

           (e) the Inventory is on consignment, is demonstration inventory, is
obsolete or slow moving or the Inventory does not otherwise conform to the      
representations and warranties contained in this Agreement or the other Credit  
Documents.                                                                      

       "Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).                                                         

     "Emergency Order" shall mean an order of the Bankruptcy Court
entered in the Cases Authorizing Emergency Borrowing Secured By Liens on        
Property of the Debtor's Estates Pursuant to Section 364(c) of the Bankruptcy   
Code dated January 14, 2000.                                                    

     "Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,  
notices of non-compliance or violation, investigations or proceedings relating  
in any way to any violation (or alleged violation) by Holdings or any of its    
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit     
issued to Holdings or any of its Subsidiaries under any such law, including,    
without limitation, (a) any and all Claims by governmental or regulatory        
authorities for enforcement, cleanup, removal, response, remedial or other      
actions or damages pursuant to any applicable Environmental Law, and (b) any and
all Claims by any third party seeking damages, contribution, indemnification,   
cost recovery, compensation or injunctive relief resulting from Hazardous       
Materials or arising from alleged injury or threat of injury to health, safety  
or the environment.                                                             

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          "Environmental Law" shall mean any federal, state or local policy,
statute, law, rule, regulation, ordinance, code or rule of common law now or    
hereafter in effect and in each case as amended, and any judicial or            
administrative interpretation thereof, including any judicial or administrative 
order, consent, decree or judgment (for purposes of this definition             
("collectively, Laws")), relating to the environment, or Hazardous Materials or 
health and safety to the extent such health and safety issues arise under the   
Occupational Safety and Health Act of 1970, as amended, or any such similar     
Laws.                                                                           

         "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the     
rulings issued thereunder. Section references to ERISA are to ERISA as in effect
at the date of this Agreement and any subsequent provisions of ERISA amendatory 
thereof, supplemental thereto or substituted therefor.                          

            "ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be   
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m) 
or (o) of the Code.                                                             

        "Event of Default" shall have the meaning provided in Section 9.

         "Excluded Inventory" shall mean (a) sub-assembly Inventory of the
Ampad division, (b) Inventory of the Creative Card division, (c)                
work-in-process, (d) packaging and supplies, (e) Inventory in-transit, (f)      
temporary stock keeping items made to customer specifications, (g) discontinued 
raw materials and finished goods, (h) steel coils, (i) Inventory located at     
subcontractors and (j) Inventory rejected by customers.                         

          "Existing Credit Agreement" shall have the meaning provided in the
recitals to this Agreement.                                                     

            "Existing Credit Agreement Debt" shall mean the "Obligations" of the
"Credit Parties" under the "Credit Documents" as such terms are defined in the  
Existing Credit Agreement as in effect on the date hereof.                      

            "Existing Credit Documents" shall mean the Existing Credit Agreement
and all documents and instruments executed or delivered in connection therewith,
as amended, supplemented or otherwise modified from time to time.               

          "Existing Indebtedness" shall have the meaning provided in Section
6.23.                                                                           

"Existing Lender Debt" shall have the meaning provided  

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in the recitals to this Agreement.                                              

         "Existing Lenders" shall mean the financial institutions party as
lenders to the Existing Credit Agreement on the Petition Date.                  

          "Existing Letters of Credit Outstandings" shall mean, at any time,
the sum of, without duplication, (i) the aggregate Stated Amount of all Existing
Letters of Credit and (ii) the aggregate amount of all unpaid obligations in    
respect of all Existing Letters of Credit.                                      

      "Existing Letters of Credit" shall mean each of the letters of
credit listed on Annex VIII and which were issued under the Existing Credit     
Agreement and are outstanding on the Effective Date, including any renewals of  
any of the foregoing.                                                           

       "Facing Fee" shall have the meaning provided in Section 3.1(c).

      "Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to 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 for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the  
Federal Reserve Bank of New York, or, if such rate is not so published for any  
day which is a Business Day, the average of the quotations for such day on such 
transactions received by the Agent from three Federal Funds brokers of          
recognized standing selected by the Agent.                                      

         "Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.1.                                                                

         "Final Maturity Date" shall mean the earliest to occur of (i) the
Maturity Date, as the same may be extended in accordance with the terms hereof, 
(ii) the Termination Date and (iii) the effective date of the Reorganization    
Plan.                                                                           

            "Final Order" shall mean an order of the Bankruptcy Court entered in
the Cases after a final hearing under Bankruptcy Rule 4001(c)(2) granting final 
approval of this Agreement (including, without limitation, Section 1.1(e)) and  
the other Credit Documents and granting the Liens and Super-priority Claims     
described in the Security Documents in favor of the Agent and the Lenders,      
substantially in the form of, and containing substantially similar provisions   
as, the Interim Order and otherwise in form and substance satisfactory to the   
Agent and the Required Lenders.                                                 

"Foreign Cash Equivalents" shall mean certificates of   

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deposit or bankers acceptances of any bank organized under the laws of Canada,  
Japan or any country that is a member of the European Economic Community whose  
short-term commercial paper rating from S&P is at least A-1 or the equivalent   
thereof or from Moody's is at least P-1 or the equivalent thereof, in each case 
with maturities of not more than twelve months from the date of acquisition.    

            "Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or    
maintained outside the United States of America by Holdings or any one or more  
of its Subsidiaries primarily for the benefit of employees of Holdings or such  
Subsidiaries residing outside the United States of America, which plan, fund or 
other similar program provides, or results in, retirement income, a deferral of 
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.                 

       "Foreign Sales" shall mean American Pad and Paper Foreign Sales
Corporation, a Barbados corporation.                                            

       "Foreign Subsidiary" shall mean each Subsidiary of the Borrower
other than a Domestic Subsidiary.                                               

         "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.                        

            "Guaranteed Creditors" shall mean and include each of the Agent, the
Collateral Agent, the Lenders and each Letter of Credit Issuer.                 

            "Guaranteed Obligations" shall mean the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of the       
principal and interest on each Note issued by the Borrower to each Lender, and  
Loans made under this Agreement and all reimbursement obligations and Unpaid    
Drawings with respect to Letters of Credit, together with all the other         
obligations (including obligations which, but for the automatic stay under      
Section 362(a) of the Bankruptcy Code, would become due) and liabilities        
(including, without limitation, indemnities, fees and interest thereon) of the  
Borrower to such Lender, the Agent and the Collateral Agent now existing or     
hereafter incurred under, arising out of or in connection with this Agreement or
any other Credit Document and the due performance and compliance with all the   
terms, conditions and agreements contained in the Credit Documents by the       
Borrower.                                                                       

        "Guarantor" shall mean each Parent Guarantor and each Subsidiary
Guarantor.                                                                      

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          "Guaranty" shall mean and include each of the Parents Guaranty and
the Subsidiary Guaranty.                                                        

           "Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become   
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and    
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous     
materials," "restricted hazardous materials," "extremely hazardous wastes,"     
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"         
"contaminants" or "pollutants," or words of similar meaning and regulatory      
effect.                                                                         

            "Holdings" shall have the meaning provided in the first paragraph of
this Agreement.                                                                 

          "Holdings Common Stock" shall have the meaning provided in Section
6.15.                                                                           

      "Holdings Tax Allocation Agreement" shall mean the Tax Sharing
Agreement, dated as of October 31, 1995, among Holdings and its Domestic        
Subsidiaries.                                                                   

         "Indebtedness" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money, (ii) the deferred purchase  
price of assets or services payable to the sellers thereof or any of such       
seller's assignees which in accordance with GAAP would be shown on the liability
side of the balance sheet of such Person but excluding deferred rent as         
determined in accordance with GAAP, (iii) the face amount of all letters of     
credit issued for the account of such Person and, without duplication, all      
drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by any
Lien on any property owned by such first Person, whether or not such            
Indebtedness has been assumed, (v) all Capitalized Lease Obligations of such    
Person, (vi) all obligations of such Person to pay a specified purchase price   
for goods or services whether or not delivered or accepted, i.e., take-or-pay   
and similar obligations, and (vii) all Contingent Obligations of such Person,   
provided, that Indebtedness shall not include trade payables and accrued        
expenses, in each case arising in the ordinary course of business.              

           "Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.                                                      

      "Intercompany Loan" shall have the meaning provided in Section
8.6(g).                                                                         

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        "Intercompany Notes" shall mean promissory notes, in the form of
Exhibit L, evidencing Intercompany Loans.                                       

           "Interim Order" shall mean an order of the Bankruptcy Court entered
in the Cases after the conclusion of the preliminary hearing under Bankruptcy   
Rule 4001(c) (I) Authorizing Secured Postpetition Financing on a Superpriority  
Basis Pursuant to 11 U.S.C. " 364, (II) Authorizing Use of Cash Collateral      
Pursuant to 11 U.S.C. " 3636, (III) Granting Adequate Protection Pursuant to 11 
U.S.C. "" 363 and 364, and (IV) Scheduling a Final Hearing Pursuant to          
Bankruptcy Rule 4001(c) and otherwise in form and substance satisfactory to the 
Agent and the Required Lenders.                                                 

  "Inventory" shall mean all of the Borrowing Base Parties',
inventory, including without limitation: (i) all raw materials, work in process,
parts, components, assemblies, supplies and materials used or consumed in the   
businesses of the Borrowing Base Parties; (ii) all goods, wares and merchandise,
finished or unfinished, held for sale or lease or leased or furnished or to be  
furnished under contracts of service; and (iii) all goods returned or           
repossessed by the Borrowing Base Parties.                                      

          "Inventory Borrowing Base" shall mean, on any day, an amount up to
50% of the amount of the Eligible Inventory on such day.                        

     "Investor Certificate" shall have the meaning provided in the
Accounts Receivable Pooling and Servicing Agreement.                            

        "L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business with   
respect to insurance obligations and workers' compensation, surety bonds and    
other similar statutory obligations and (ii) such other obligations of the      
Borrower or any of its Subsidiaries as are reasonably acceptable to the Agent   
and the Letter of Credit Issuer and otherwise permitted to exist pursuant to the
terms of this Agreement.                                                        

        "Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or        
licenses of land, improvements and/or fixtures.                                 

          "Lender" shall have the meaning provided in the first paragraph of
this Agreement.                                                                 

       "Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of                         

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any Borrowing (including any Mandatory Borrowing) or to fund its portion of any 
unreimbursed payment under Section 2.4(c) or (ii) a Lender having notified the  
Agent and/or the Borrower that it does not intend to comply with the obligations
under Section 1.1(a), 1.1(c) or 2.4(c), whether or not as a result of the       
appointment of a receiver or conservator with respect to such Lender at the     
direction or request of any regulatory agency or authority.                     

     "Letter of Credit" shall have the meaning provided in Section
2.1(a).                                                                         

          "Letter of Credit Fees" shall have the meaning provided in Section
3.1(b).                                                                         

      "Letter of Credit Issuer" shall mean BTCo and any other Lender
which, at the request of the Borrower and with the consent of the Agent, agrees 
in such Lender's sole discretion to become a Letter of Credit Issuer for        
purposes of issuing Letters of Credit pursuant to Section 2.                    

            "Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters 
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.                                                              

     "Letter of Credit Request" shall have the meaning provided in
Section 2.2(a).                                                                 

"Letter of Credit Sublimit" shall mean $2,000,000.      

  "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of 
the foregoing, any conditional sale or other title retention agreement, any     
financing or similar statement or notice filed under the UCC or any similar     
recording or notice statute, and any lease having substantially the same effect 
as the foregoing).                                                              

      "Loan" shall mean each Revolving Loan, each Term Loan and each
Swingline Loan.                                                                 

        "Mandatory Borrowing" shall have the meaning provided in Section
1.1(c).                                                                         

       "Margin Stock" shall have the meaning provided in Regulation U.

         "Material Adverse Effect" shall mean a material adverse effect on
the business, properties, assets, liabilities, condition (financial or          
otherwise) or prospects of Holdings,                                            

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WR Acquisition, the Borrower, Holdings and its Subsidiaries taken as a whole or 
the Borrower and its Subsidiaries taken as a whole.                             

            "Maturity Date" shall mean July 17, 2000; provided that the Borrower
shall have the option to extend the Maturity Date for one three-month period if 
(A) at least 30 days prior to the then effective Maturity Date, the Borrower    
delivers to the Agent, with a copy for each Lender, a revised budget covering   
the three-month period commencing on the then effective Maturity Date, in form  
and substance reasonably satisfactory to the Agent and the Required Revolving   
Lenders, (B) on the then effective Maturity Date, no Default or Event of Default
shall have occurred and be continuing, (C) the Borrower shall have filed a      
motion in the Cases pursuant to Section 363 of the Bankruptcy Code seeking      
approval of the process for the Williamhouse Sale, which motion shall be in form
and substance reasonably satisfactory to the Agent and the Required Revolving   
Lenders and (D) at least five days prior to the then effective Maturity Date,   
Sections 8.10 and 8.11 of this Agreement shall have been amended in a manner    
reasonably satisfactory to the Agent and the Required Revolving Lenders;        
provided, further that the Borrower shall have the option to extend the Maturity
date for one additional three-month period if (A) at least 30 days prior to the 
then effective Maturity Date, the Borrower delivers to the Agent, with a copy   
for each Lender, a revised budget covering the three-month period commencing on 
the then effective Maturity Date, in form and substance reasonably satisfactory 
to the Agent and the Required Revolving Lenders, (B) on or before the then      
effective Maturity Date, either (i) the Borrower delivers to the Agent, with a  
copy for each Lender, a disclosure statement and a Reorganization Plan for the  
Credit Parties which has been filed with the Bankruptcy Court, reflects the     
agreement of the Credit Parties with their creditors and is in form and         
substance reasonably satisfactory to the Agent and the Required Revolving       
Lenders or (ii) the Agent and the Required Revolving Lenders shall be satisfied,
in their sole discretion, with the progress of the Borrower's efforts to        
consummate the Williamhouse Sale, (C) on or before the then effective Maturity  
Date, the Agent and the Required Revolving Lenders are satisfied with the       
progress of the Cases, (D) on the then effective Maturity Date, no Default or   
Event of Default shall have occurred and be continuing and (E) at least five    
days prior to the then effective Maturity Date, Sections 8.10 and 8.11 of this  
Agreement shall have been amended in a manner reasonably satisfactory to the    
Agent and the Required Revolving Lenders. If the Borrower notifies the Agent in 
writing that it desires to extend the Maturity Date for a second three-month    
period as provided above, the Agent shall, not later than ten days prior to the 
then effective Maturity Date, notify the Borrower if such additional three month
extension will be granted.                                                      

      "Maximum Swingline Amount" shall mean (i) $20,000,000 from the
Effective Date through and including January 29, 2000                           

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and (ii) $5,000,000 thereafter.                                                 

      "Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000 and (ii) for Swingline Loans, $250,000.                              

"Moody's" shall mean Moody's Investors Service, Inc.    

           "Mortgage" shall mean each mortgage, deed to secure debt or deed of
trust pursuant to which any Credit Party shall have granted to the Collateral   
Agent a mortgage lien on such Credit Party's Mortgaged Property, each as        
amended, supplemented or otherwise modified from time to time.                  

          "Mortgaged Property" shall mean each parcel of Real Property owned
or leased by any Credit Party which is encumbered by a Mortgage.                

           "Mortgage Policies" shall have the meaning provided in the Existing
Credit Agreement as in effect on the date hereof.                               

     "Mortgaged Properties" shall have the meaning provided in the
Existing Credit Agreement as in effect on the date hereof.                      

           "Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (a) cash expenses of sale (including   
brokerage fees, if any, transfer taxes and payment of principal, premium and    
interest of Indebtedness other than the Loans and the Existing Credit Agreement 
Debt required to be repaid as a result of such Asset Sale) and (b) incremental  
income taxes paid or payable as a result thereof.                               

   "Non-Defaulting Lender" shall mean each Lender other than a
Defaulting Lender.                                                              

     "Note" shall mean each Revolving Note, each Term Note and the
Swingline Note.                                                                 

        "Notice of Borrowing" shall have the meaning provided in Section
1.3(a).                                                                         

         "Notice Office" shall mean the office of the Agent located at 130
Liberty Street, New York, New York 10006 or such other office as the Agent may  
designate to Holdings, the Borrower and the Lenders from time to time.          

            "Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to   
the Agent, the Collateral Agent or any Lender pursuant to the terms of the      
Existing Credit Agreement, this Agreement or any other Credit Document and all  
obligations and liabilities of the Credit Parties to BTCo in                    

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connection with the bank accounts and cash management system of the Credit      
Parties.                                                                        

  "Orders" shall mean the Interim Order and the Final Order.

      "Other Revolving Exposure" shall mean all Swingline Loans then
outstanding and the Letter of Credit Outstandings (exclusive of Unpaid Drawings 
relating to Letters of Credit or Swingline Loans which are repaid with the      
proceeds of, and simultaneously with the incurrence of, the respective          
incurrence of Revolving Loans) at such time.                                    

         "Parent Guarantor" shall mean and include each of Holdings and WR
Acquisition.                                                                    

           "Parents Guaranty" shall mean the guaranty of the Parent Guarantors
pursuant to Section 13.                                                         

        "Participant" shall have the meaning provided in Section 2.4(a).

          "Payment Office" shall mean the office of the Agent located at One
Bankers Trust Plaza, New York, New York 10006 or such other office as the Agent 
may designate to Holdings, the Borrower and the Lenders from time to time.      

  "PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.        

            "Percentage" shall mean, at any time for each Lender, the percentage
obtained by dividing such Lender's Revolving Loan Commitment at such time by the
Total Revolving Loan Commitment then in effect, provided, that if the Total     
Revolving Loan Commitment has been terminated, the Percentage of each Lender    
shall be determined by dividing such Lender's Revolving Loan Commitment as in   
effect immediately prior to such termination by the Total Revolving Loan        
Commitment as in effect immediately prior to such termination.                  

            "Permitted Covenant" shall mean (i) any periodic reporting covenant,
(ii) any covenant restricting payments by Holdings with respect to any          
securities of Holdings which are junior to the Permitted Holdings PIK           
Securities, (iii) any covenant the default of which can only result in an       
increase in the amount of any redemption price, repayment amount, dividend rate 
or interest rate, (iv) any covenant the default of which gives rise only to     
rights or remedies which are subject to subordination terms reasonably          
acceptable to the Agent, (v) any covenant providing board observance rights with
respect to Holdings' board of directors and (vi) any other covenant that        

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does not adversely affect the interests of the Lenders (as reasonably determined
by the Agent).                                                                  

           "Permitted Discretion" shall mean the Agent's judgment exercised in
good faith based upon its consideration of any factor which the Agent believes  
in good faith: (i) will or could adversely affect the value of any Collateral,  
the enforceability or priority of the Collateral Agent's Liens thereon or the   
amount which the Agent and the Lenders would be likely to receive (after giving 
consideration to delays in payment and costs of enforcement) in the liquidation 
of such Collateral; (ii) suggests that any collateral report or financial       
information delivered to the Agent or the Collateral Agent by any Person on     
behalf of the Credit Parties is incomplete, inaccurate or misleading in any     
material respect; or (iii) creates or reasonably could be expected to create a  
Default or Event of Default. In exercising such judgment, the Agent may rely on 
independent advisors and professionals retained by the Agent to verify whether  
the assumptions made prior to the Effective Date relating to the value of       
Accounts and Inventory are supported by the current information and data. In    
exercising such judgment, the Agent may consider such factors already included  
in or tested by the definition of Eligible Accounts Receivable or Eligible      
Inventory, as well as any of the following: (i) the financial and business      
climate of the Credit Parties' industry and general macroeconomic conditions,   
(ii) changes in collection history and dilution with respect to the Accounts,   
(iii) changes in demand for, and pricing of, Inventory, (iv) changes in any     
concentration of risk with respect to Accounts and Inventory, and (v) any other 
factors that change the credit risk of lending to the Credit Parties on the     
security of the Accounts and Inventory. The burden of establishing lack of good 
faith hereunder shall be on the Credit Parties.                                 

         "Permitted Encumbrances" shall mean (i) those liens, encumbrances
and other matters affecting title to any Mortgaged Property listed in the       
Mortgage Policies in respect thereof and found reasonably acceptable by the     
Agent, (ii) as to any particular Mortgaged Property at any time, such easements,
encroachments, covenants, rights of way, minor defects, irregularities or       
encumbrances on title which do not, in the reasonable opinion of the Agent,     
materially impair such Mortgaged Property for the purpose for which it is held  
by the mortgagor thereof, or the lien held by the Collateral Agent, (iii) zoning
and other municipal ordinances which are not violated in any material respect by
the existing improvements and the present use made by the mortgagor thereof of  
the Premises (as defined in the respective Mortgage), (iv) general real estate  
taxes and assessments not yet delinquent, and (v) such other similar items as   
the Agent may consent to (such consent not to be unreasonably withheld).        

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          "Permitted Holdings PIK Securities" shall mean any preferred stock
or subordinated promissory note of Holdings (or any security of Holdings that is
convertible or exchangeable into any preferred stock or subordinated promissory 
note of Holdings), so long as the terms of any such preferred stock,            
subordinated promissory note or security of Holdings (i) do not provide any     
collateral security, (ii) do not provide any guaranty or other support by any   
Subsidiary of Holdings, (iii) do not contain any mandatory put, redemption,     
repayment, sinking fund or other similar provision occurring before the sixth   
anniversary of the Initial Borrowing Date, (iv) do not require the cash payment 
of dividends or interest before the sixth anniversary of the Initial Borrowing  
Date, (v) do not contain any covenants other than any Permitted Covenant, (vi)  
do not grant the holders thereof any voting rights except for (x) voting rights 
required to be granted to such holders under applicable law and (y) limited     
customary voting rights on fundamental matters such as mergers, consolidations, 
sales of substantial assets, or liquidations involving Holdings and (vii) are   
otherwise reasonably satisfactory to the Agent.                                 

         "Permitted Liens" shall have the meaning provided in Section 8.3.

       "Person" shall mean any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or other       
enterprise or any government or political subdivision or any agency, department 
or instrumentality thereof.                                                     

"Petition Date" shall mean January 10, 2000.            

      "Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or  
to which there is an obligation to contribute of) Holdings, any of its          
Subsidiaries or any ERISA Affiliate and each such plan for the five calendar    
year period immediately following the latest date on which Holdings, any of its 
Subsidiaries or any ERISA Affiliate maintained, contributed to or had an        
obligation to contribute to such plan.                                          

     "Pledge Agreement" shall have the meaning provided in Section
5.1(j).                                                                         

            "Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.                                                        

     "Pledged Securities" shall mean all the Pledged Securities as
defined the Pledge Agreement.                                                   

            "Postpetition Obligations" shall mean all Obligations other than the
Prepetition Obligations.                                                        

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            "Prepetition Agent" shall mean Bankers Trust Company in its capacity
as agent under the Existing Credit Agreement.                                   

          "Prepetition Collateral" shall mean all property and assets of the
Credit Parties securing the Prepetition Obligations.                            

        "Prepetition Obligations" shall have the meaning provided in the
recitals hereto.                                                                

          "Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when   
and as such prime lending rate changes. The Prime Lending Rate is a reference   
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of      
interest at, above or below the Prime Lending Rate.                             

        "Projections" shall have the meaning provided in Section 5.1(i).

            "Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including    
Leaseholds.                                                                     

      "Receivables Entity" shall mean Notepad Funding Corporation, a
Delaware corporation.                                                           

         "Receivables Purchase Money Note" shall mean those purchase money
notes issued by the Receivables Entity to the Designated Credit Parties pursuant
to the terms of the Accounts Receivable Facility Documents.                     

         "Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of 
theft, physical destruction or damage or any other similar event with respect to
any properties or assets of Holdings or any of its Subsidiaries, (ii) by reason 
any condemnation, taking, seizing or similar event with respect to any          
properties or assets of Holdings or any of its Subsidiaries and (iii) under any 
policy of insurance required to be maintained under Section 7.3.                

   "Register" shall have the meaning provided in Section 7.12.

           "Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to  
all or a portion thereof establishing reserve requirements.                     

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           "Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from to time in effect and any successor to all or
any portion thereof.                                                            

           "Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to  
all or a portion thereof.                                                       

           "Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to  
all or any portion thereof.                                                     

    "Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,     
placing, pouring and the like, into or upon any land or water or air, or        
otherwise entering into the environment.                                        

        "Reorganization Plan" shall mean a plan of reorganization in the
Cases.                                                                          

           "Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan as to which the 30-day notice requirement has   
not been waived by the PBGC.                                                    

         "Required Lenders" shall mean collectively (and not individually)
Non-Defaulting Lenders the sum of whose Revolving Loan Commitments and Term Loan
Commitments (or, if after the Total Revolving Loan Commitment and the Total Term
Loan Commitment have been terminated, outstanding Revolving Loans, Term Loans,  
Term Loan Percentages of Existing Letter of Credit Outstandings and Percentages 
of outstanding Swingline Loans and Letter of Credit Outstandings) constitute    
greater than 50% of the Total Revolving Loan Commitment and the Total Term Loan 
Commitment less the aggregate Revolving Loan Commitments and Term Loan          
Commitments of Defaulting Lenders (or, if after the Total Revolving Loan        
Commitment and the Total Term Loan Commitment have been terminated, the total   
outstanding Revolving Loans and Term Loans of Non-Defaulting Lenders, the       
aggregate Term Loan Percentages of all Non-Defaulting Lenders of the Existing   
Letter of Credit Outstandings at such time and the aggregate Percentages of all 
Non-Defaulting Lenders of the total outstanding Swingline Loans and Letter of   
Credit Outstandings at such time). Prior to the Term Loan Effective Date, the   
determination of Required Lenders shall include each Lender's interest in the   
Prepetition Indebtedness instead of each Lender's interest in the Term Loan     
Commitments, Term Loans and Existing Letters of Credit.                         

     "Required Revolving Lenders" shall mean collectively (and not
individually) Non-Defaulting Lenders the sum of whose Revolving Loan Commitments
(or, if after the Total Revolving Loan Commitment has been terminated,          
outstanding Revolving Loans and                                                 

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Percentages of outstanding Swingline Loans and Letter of Credit Outstandings)   
constitute greater than 50% of the Total Revolving Loan Commitment less the     
aggregate Revolving Loan Commitments of Defaulting Lenders (or, if after the    
Total Revolving Loan Commitment has been terminated, the total outstanding      
Revolving Loans of Non-Defaulting Lenders and the aggregate Percentages of all  
Non-Defaulting Lenders of the total outstanding Swingline Loans and Letter of   
Credit Outstandings at such time).                                              

"Required Term Lenders" shall mean collectively (and not
individually) Non-Defaulting Lenders the sum of whose Term Loan Commitments (or,
if after the Total Term Loan Commitment has been terminated, outstanding Term   
Loans and Term Loan Percentages of Existing Letter of Credit Outstandings)      
constitute greater than 50% of the Total Term Loan Commitment less the aggregate
Term Loan Commitments of Defaulting Lenders (or, if after the Total Term Loan   
Commitment has been terminated, the total outstanding Term Loans of             
Non-Defaulting Lenders and the aggregate Term Loan Percentages of all           
Non-Defaulting Lenders of the Existing Letter of Credit Outstandings at such    
time).                                                                          

         "Restructuring Charges" shall mean restructuring charges taken by
Holdings and its Subsidiaries relating to plant rationalization, provided that  
such restructuring charges shall only constitute Restructuring Charges hereunder
if taken on or after January 15, 2000 and on or before June 30, 2000, and the   
aggregate amount of Restructuring Charges shall not exceed $8,000,000.          

       "Retention Payments" shall have the meaning provided in Section
4.2(d).                                                                         

  "Returns" shall have the meaning provided in Section 6.22.

        "Revolving Lender" shall mean a Lender that has a Revolving Loan
Commitment or has made Revolving Loans.                                         

           "Revolving Loan" shall have the meaning provided in Section 1.1(a).

            "Revolving Loan Commitment" shall mean, with respect to each Lender,
the amount set forth opposite such Lender's name in Annex I directly below the  
column entitled "Revolving Loan Commitment," as the same may be reduced from    
time to time pursuant to Section 3.2, Section 3.3 and/or Section 9.             

           "Revolving Note" shall have the meaning provided in Section 1.5(a).

            "Revolving Obligations" shall mean all Obligations in respect of the
Revolving Loans and the Letters of Credit.                                      

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          "Sale Proposal" shall have the meaning provided in Section 5.1(w).

      "SEC" shall mean the Securities and Exchange Commission or any
successor thereto.                                                              

           "Section 4.4(b)(ii) Certificate" shall have the meaning provided in
Section 4.4(b)(ii).                                                             

           "Secured Creditors" shall have the meaning provided in the Security
Documents.                                                                      

       "Securities Account" shall have the meaning provided in Section
8-501 of the New York UCC.                                                      

       "Security Agreement" shall have the meaning provided in Section
5.1(k).                                                                         

      "Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.                                              

           "Security Documents" shall mean and include the Security Agreement,
the Pledge Agreement, the Blocked Account Agreement, the Concentration Account  
Agreement, each Mortgage and each Additional Security Document, if any.         

       "Senior Subordinated Note Documents" shall mean and include the
Senior Subordinated Note Indenture, the Senior Subordinated Notes and the Senior
Subordinated Note Guarantees, as in effect on the Initial Borrowing Date, and as
the same may be modified, supplemented or amended from time to time pursuant to 
the terms hereof and thereof.                                                   

       "Senior Subordinated Note Guarantees" shall mean the guarantees
issued by the Subsidiaries of the Borrower pursuant to (or contained in) the    
Senior Subordinated Note Indenture.                                             

            "Senior Subordinated Note Indenture" shall mean the Indenture, dated
as of December 1, 1995, by and between the Borrower and IBJ Schroder Bank &     
Trust Company, as trustee thereunder, as in effect on the Initial Borrowing     
Date, and as the same may be modified, amended or supplemented from time to time
in accordance with the terms hereof and thereof.                                

        "Senior Subordinated Notes" shall mean the Borrower's 13% Senior
Subordinated Notes due 2005, as in effect on the Initial Borrowing Date, and as 
the same may be modified, supplemented or amended from time to time pursuant to 
the terms hereof and thereof (it being understood that all references herein to 
the Senior Subordinated Notes shall be a reference to the Senior Subordinated   
Notes issued under the Senior                                                   

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Subordinated Note Indenture and outstanding on the Initial Borrowing Date as the
same may be exchanged into the Series B Senior Subordinated Notes pursuant to,  
and in accordance with the provisions of, the Senior Subordinated Note          
Indenture).                                                                     

      "Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in any way
by WR Acquisition or any of its Subsidiaries) in the form of Exhibit M.         

          "S&P" shall mean Standard & Poor's Ratings Services, a division of
McGraw Hill, Inc.                                                               

       "Stated Amount" of each Letter of Credit and Existing Letter of
Credit shall mean the maximum amount available to be drawn thereunder           
(regardless of whether any conditions for drawing could then be met).           

 "Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the  
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or   
classes of such corporation shall have or might have voting power by reason of  
the happening of any contingency) is at the time owned by such Person directly  
or indirectly through Subsidiaries and (ii) any partnership, association, joint 
venture or other entity (other than a corporation) in which such Person directly
or indirectly through Subsidiaries, has more than a 50% equity interest at the  
time.                                                                           

         "Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
listed on Annex VI, including without limitation, the Additional Subsidiaries.  

        "Subsidiary Guaranty" shall have the meaning provided in Section
5.1(l).                                                                         

         "Super-priority Claim" shall mean a claim against the Borrower or
any Guarantor in any of the Cases which is an administrative expense having     
priority over any and all administrative expenses of the kind specified in      
Sections 503(b) or 507(b) of the Bankruptcy Code.                               

          "Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Final Maturity Date.                                          

           "Swingline Loan" shall have the meaning provided in Section 1.1(b).

           "Swingline Note" shall have the meaning provided in Section 1.5(a).

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           "Tax Agreements" shall have the meaning provided in Section 5.1(f).

"Taxes" shall have the meaning provided in Section 4.4. 

      "Termination Date" shall mean the earliest to occur of (i) the
Maturity Date, (ii) the effective date of a Reorganization Plan confirmed by the
Bankruptcy Court pursuant to the Confirmation Order, or (iii) the termination of
the Total Revolving Loan Commitment upon the occurrence of an Event of Default  
or otherwise in accordance with the terms hereof.                               

            "Term Lender" shall mean a Lender that has a Term Loan Commitment or
has made Term Loans. Prior to the Term Loan Effective Date, there shall be      
deemed to be no Term Lenders.                                                   

      "Term Loan" shall have the meaning provided in Section 1.1(e).

     "Term Loan Commitment" shall mean, on and after the Term Loan
Effective Date, with respect to each Lender, the amount set forth opposite such 
Lender's name in Annex I directly below the column entitled "Term Loan          
Commitment." Prior to the Term Loan Effective Date, no Lender shall have a Term 
Loan Commitment.                                                                

   "Term Loan Effective Date" shall mean the date on which the
conditions precedent in Section 5.3 are satisfied.                              

          "Term Loan Interest Payment Date" shall mean the earliest to occur
of (i) the effective date of a Reorganization Plan confirmed by the Bankruptcy  
Court pursuant to the Confirmation Order, (ii) the consummation of the          
Williamhouse Sale and (iii) the Maturity Date.                                  

           "Term Loan Percentage" shall mean, at any time for each Lender, the
percentage obtained by dividing such Lender's Term Loan Commitment at such time 
by the Total Term Loan Commitment then in effect, provided, that if the Total   
Term Loan Commitment has been terminated, the Term Loan Percentage of each      
Lender shall be determined by dividing such Lender's Term Loan Commitment as in 
effect immediately prior to such termination by the Total Term Loan Commitment  
as in effect immediately prior to such termination.                             

      "Term Note" shall have the meaning provided in Section 1.5(a).

      "Termination Date" shall mean the earliest to occur of (i) the
Maturity Date, (ii) the effective date of a Reorganization Plan confirmed by the
Bankruptcy Court pursuant to the Confirmation Order, or (iii) the termination of
the Total                                                                       

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Revolving Loan Commitment upon the occurrence of an Event of Default or         
otherwise in accordance with the terms hereof.                                  

        "Total Commitment" shall mean, at any time, the sum of the Total
Revolving Loan Commitment and the Total Term Loan Commitment at such time.      

   "Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitments of each of the Lenders.                              

          "Total Revolving Outstandings" shall mean, at any time, the sum of
(i) the aggregate principal amount of all Revolving Loans outstanding at such   
time, (ii) the aggregate principal amount of all Swingline Loans outstanding at 
such time and (iii) the aggregate amount of all Letter of Credit Outstandings at
such time.                                                                      

           "Total Term Loan Commitment" shall mean, on and after the Term Loan
Effective Date, the sum of the Term Loan Commitments of each of the Lenders.    
Prior to the Term Loan Effective Date, the Total Term Loan Commitment shall be  
zero.                                                                           

       "Total Unutilized Revolving Loan Commitment" shall mean, at any
time, (i) the Total Revolving Loan Commitment at such time less (ii) the sum of 
the aggregate principal amount of all Revolving Loans and Swingline Loans       
outstanding at such time plus the Letter of Credit Outstandings at such time.   

           "UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the relevant jurisdiction.                                           

          "Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market   
value of the assets allocable thereto, each determined in accordance with       
Statement of Financial Accounting Standards No. 35, based upon the actuarial    
assumptions used by the Plan's actuary in the most recent annual valuation of   
the Plan.                                                                       

           "Unpaid Drawing" shall have the meaning provided in Section 2.3(a).

            "Unutilized Revolving Loan Commitment" with respect to any Lender at
any time shall mean such Lender's Revolving Loan Commitment at such time less   
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such Lender and (ii) such Lender's Percentage of the Letter of Credit   
Outstandings at such time.                                                      

           "U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.                                   

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           "Variance Report" shall mean the report to be delivered by Holdings
to the Agent on a weekly basis (commencing one week after the Effective Date)   
reflecting the actual cash receipts and disbursements (on a line item basis) for
the preceding week (and on a cumulative basis since the Effective Date) and the 
percentage variance of such amounts from those set forth on the Budget for the  
preceding week (and cumulatively).                                              

            "Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.          

           "Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.           

       "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such   
Person under applicable law) is at the time owned by such Person and/or one or  
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,         
association, joint venture or other entity in which such Person and/or one or   
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.                                                                           

           "Williamhouse Sale" shall mean the sale of all or substantially all
of the assets of the Williamhouse division of the Credit Parties.               

     "WR Acquisition" shall have the meaning provided in the first
paragraph of this Agreement.                                                    

          "Written" (whether lower or upper case) or "in writing" shall mean
any form of written communication or a communication by means of telex,         
facsimile device, telegraph or cable.                                           

       "Y2K Compliance Plan" shall mean the Y2K compliance plan of the
Borrower delivered to the Agent pursuant to Section 5.1(r).                     

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SECTION 11.  The Agent.                                 

       11.1 Appointment. Each Lender hereby irrevocably designates and
appoints BTCo as Agent of such Lender (such term to include for purposes of this
Section 11, BTCo acting as Collateral Agent) to act as specified herein, in the 
other Credit Documents and in the Orders, and each such Lender hereby           
irrevocably authorizes BTCo as the Agent to take such action on its behalf under
the provisions of this Agreement, the other Credit Documents and the Orders and 
to exercise such powers and perform such duties as are expressly delegated to   
the Agent by the terms of this Agreement, the other Credit Documents and the    
Orders, together with such other powers as are reasonably incidental thereto.   
The Agent agrees to act as such upon the express conditions contained in this   
Section 11. Notwithstanding any provision to the contrary elsewhere in this     
Agreement, in any other Credit Document or in the Orders, the Agent shall not   
have any duties or responsibilities, except those expressly set forth herein, in
the other Credit Documents, or in the Orders or any fiduciary relationship with 
any Lender, and no implied covenants, functions, responsibilities, duties,      
obligations or liabilities shall be read into this Agreement, the other Credit  
Documents or the Orders or otherwise exist against the Agent. The provisions of 
this Section 11 are solely for the benefit of the Agent and the Lenders, and    
none of Holdings nor any of its Subsidiaries shall have any rights as a third   
party beneficiary of any of the provisions hereof. In performing its functions  
and duties under this Agreement, the Agent shall act solely as agent of the     
Lenders and the Agent does not assume and shall not be deemed to have assumed   
any obligation or relationship of agency or trust with or for Holdings or any of
its Subsidiaries.                                                               

          11.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement, any other Credit Document or the Orders by or through     
agents or attorneys-in-fact and shall be entitled to advice of counsel          
concerning all matters pertaining to such duties. The Agent shall not be        
responsible for the negligence or misconduct of any agents or attorneys-in-fact 
selected by it with reasonable care except to the extent otherwise required by  
Section 11.3.                                                                   

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     11.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such   
Person in its capacity as Agent under or in connection with this Agreement, the 
other Credit Documents or the Orders (except for its or such Person's own gross 
negligence or willful misconduct) or (ii) responsible in any manner to any of   
the Lenders for any recitals, statements, representations or warranties made by 
Holdings, any of its Subsidiaries or any of their respective officers contained 
in this Agreement or the other Credit Documents, any other Document or in any   
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any     
other Document or for any failure of Holdings or any of its Subsidiaries or any 
of their respective officers to perform its obligations hereunder or thereunder.
The Agent 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 the other Documents, or to inspect the  
properties, books or records of Holdings or any of its Subsidiaries. The Agent  
shall not be responsible to any Lender for the effectiveness, genuineness,      
validity, enforceability, collectability or sufficiency of this Agreement or any
other Document or for any representations, warranties, recitals or statements   
made herein or therein or made in any written or oral statement or in any       
financial or other statements, instruments, reports, certificates or any other  
documents in connection herewith or therewith furnished or made by the Agent to 
the Lenders or by or on behalf of Holdings or any of its Subsidiaries to the    
Agent or any Lender or be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or         
agreements contained herein or therein or as to the use of the proceeds of the  
Loans or of the existence or possible existence of any Default or Event of      
Default.                                                                        

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        11.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex  
or teletype message, statement, order or other document or conversation         
reasonably 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, without limitation, counsel to Holdings or any of its 
Subsidiaries), independent accountants and other experts selected by the Agent. 
The Agent shall be fully justified in failing or refusing to take any action    
under this Agreement, any other Credit Document or the Orders unless it shall   
first receive such advice or concurrence of the Required Lenders as it deems    
appropriate or it shall first be indemnified to its satisfaction by the Lenders 
against any and all liability and expense which may be incurred by it by reason 
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement,  
the other Credit Documents and the Orders in accordance with a request of the   
Required Lenders, and such request and any action taken or failure to act       
pursuant thereto shall be binding upon all the Lenders.                         

     11.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless 
the Agent has actually received notice from a Lender, Holdings, WR Acquisition  
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 Agent receives such a notice, the Agent shall give prompt notice thereof to 
the Lenders. The Agent shall take such action with respect to such Default or   
Event of Default as shall be reasonably directed by the Required Lenders;       
provided, that, unless and until the Agent shall have received such directions, 
the 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.                            

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          11.6 Nonreliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its respective officers,         
directors, employees, agents, attorneys-in-fact or affiliates have made any     
representations or warranties to it and that no act by the Agent hereinafter    
taken, including any review of the affairs of Holdings or any of its            
Subsidiaries, shall be deemed to constitute any representation or warranty by   
the Agent to any Lender. Each Lender represents to the Agent that it has,       
independently and without reliance upon the 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, assets, operations, property, 
financial and other condition, prospects and creditworthiness of Holdings and   
its Subsidiaries 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 the 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 to make such investigation as it deems necessary to   
inform itself as to the business, assets, operations, property, financial and   
other condition, prospects and creditworthiness of Holdings and its             
Subsidiaries. The Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
assets, property, financial and other condition, prospects or creditworthiness  
of Holdings or any of its Subsidiaries which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.                                                                     

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         11.7 Indemnification. The Lenders agree to indemnify the Agent in
its capacity as such ratably according to their respective "percentages" as used
in determining the Required Lenders at such time (with such "percentages" to be 
determined as if there are no Defaulting Lenders), from and against any and all 
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at 
any time (including, without limitation, at any time following the payment of   
the Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement, any   
other Credit Document, the Orders, or any documents contemplated by or referred 
to herein or the transactions contemplated hereby or any action taken or omitted
to be taken by the Agent under or in connection with any of the foregoing, but  
only to the extent that any of the foregoing is not paid by Holdings or any of  
its Subsidiaries; provided, that no Lender shall be liable to the Agent for the 
payment of any portion of such liabilities, obligations, losses, damages,       
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful misconduct of the Agent. To the     
extent any Lender would be required to indemnify the Agent pursuant to the      
immediately preceding sentence but for the fact that it is a Defaulting Lender, 
such Defaulting Lender shall not be entitled to receive any portion of any      
payment or other distribution hereunder until each other Lender shall have been 
reimbursed for the excess, if any, of the aggregate amount paid by such Lender  
under this Section 11.7 over the aggregate amount such Lender would have been   
obligated to pay had such first Lender not been a Defaulting Lender. If any     
indemnity furnished to the Agent for any purpose shall, in the opinion of the   
Agent be insufficient or become impaired, the Agent may call for additional     
indemnity and cease, or not commence, to do the acts indemnified against until  
such additional indemnity is furnished. The agreements in this Section 11.7     
shall survive the payment of all Obligations.                                   

           11.8 Agent in its Individual Capacity. The Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of     
business with Holdings and its Subsidiaries as though the Agent were not the    
Agent hereunder. With respect to the Loans made by it and all Obligations owing 
to it, the Agent shall have the same rights and powers under this Agreement as  
any Lender and may exercise the same as though it were not the Agent and the    
terms "Lender" and "Lenders" shall include the Agent in its individual capacity.
The parties hereto acknowledge that BTCo is the agent under the Existing Credit 
Agreement. In acting under this Agreement and the other Credit Documents, the   
Agent may consider the interests of the Existing Lenders with respect to the    
Existing Credit Agreement.                                                      

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           11.9 Holders. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of  
the assignment, transfer or endorsement thereof, as the case may be, shall have 
been filed with the Agent. Any request, authority or consent of any Person or   
entity who, at the time of making such request or giving such authority or      
consent, is the holder of any Note shall be conclusive and binding on any       
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.                       

      11.10 Resignation of the Agent; Successor Agent. The Agent may
resign as the Agent upon 30 days' notice to the Lenders. Upon the resignation of
the Agent, the Required Lenders shall appoint from among the Lenders a successor
Agent which is a bank or a trust company for the Lenders subject to prior       
approval by the Borrower (such approval not to be unreasonably withheld,        
provided that such approval shall not be required if an Event of Default then   
exists), whereupon such successor agent shall succeed to the rights, powers and 
duties of the Agent, and the term "Agent" shall include such successor agent    
effective upon its appointment, and the resigning Agent's rights, powers and    
duties as the Agent shall be terminated, without any other or further act or    
deed on the part of such former Agent or any of the parties to this Agreement.  
After the resignation of the Agent hereunder, the provisions of this Section 11 
shall inure to its benefit as to any actions taken or omitted to be taken by it 
while it was Agent under this Agreement.                                        

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       11.11  No Duties of Arranger or Syndication Agent.  Neither the
Arranger nor the Syndication Agent shall have any duties, obligations or        
liabilities hereunder or under any other Credit Document.                       

SECTION 12.  Miscellaneous.                             

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          12.1 Payment of Expenses, etc. The Borrower agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable 
out-of-pocket costs and expenses of the Agent and the Lenders (including,       
without limitation, the reasonable fees and disbursements of counsel to the     
Agent and each Lender and professionals engaged by the Agent and the Lenders) in
connection with the negotiation, preparation, execution and delivery of the     
Credit Documents and the documents and instruments referred to therein, the     
consummation and administration of the transactions contemplated hereby and     
thereby and any amendment, waiver or consent relating thereto and in connection 
with the Agent's syndication efforts with respect to this Agreement; (ii) pay   
all reasonable out-of-pocket costs and expenses of the Agent, each Letter of    
Credit Issuer and each of the Lenders in connection with the enforcement of the 
Credit Documents and the documents and instruments referred to therein and,     
after an Event of Default shall have occurred and be continuing, the protection 
of the rights of the Agent, each Letter of Credit Issuer and each of the Lenders
thereunder (including, without limitation, the reasonable fees and disbursements
of counsel (including in-house counsel) for the Agent, for each Letter of Credit
Issuer and for each of the Lenders); (iii) pay and hold each of the Lenders     
harmless from and against any and all present and future stamp and other similar
taxes with respect to the foregoing matters and save each of the Lenders        
harmless from and against any and all liabilities with respect to or resulting  
from any delay or omission (other than to the extent attributable to such       
Lender) to pay such taxes; (iv) pay all reasonable expenses of the Agent and    
each Lender related to this Agreement and the other Credit Documents in         
connection with the Cases (including, without limitation, the ongoing monitoring
by the Agent and each Lender of the Cases, including attendance by the Agent,   
each Lender and their respective counsel at hearings or other proceedings and   
the ongoing review of documents filed with the Bankruptcy Court); and (v)       
indemnify the Agent, the Collateral Agent, each Letter of Credit Issuer and each
Lender, their respective officers, directors, employees, representatives and    
agents from and hold each of them harmless against any and all losses,          
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, (a) any           
investigation, litigation or other proceeding (whether or not the Agent, the    
Collateral Agent, any Letter of Credit Issuer or any Lender is a party thereto  
and whether or not any such investigation, litigation or other proceeding is    
between or among the Agent, the Collateral Agent, any Letter of Credit Issuer,  
any Lender, any Credit Party or any third Person or otherwise) related to the   
entering into and/or performance of this Agreement or any other Document or the 
use of the proceeds of any Loans hereunder or the consummation of any           
transactions contemplated in any Document (but excluding any such losses,       
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross                                                                           

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negligence or willful misconduct of the Person to be indemnified), or (b) the   
actual or alleged presence of Hazardous Materials in the air, surface water or  
groundwater or on the surface or subsurface of any Real Property or any         
Environmental Claim, in each case, including, without limitation, the reasonable
fees and disbursements of counsel and independent consultants incurred in       
connection with any such investigation, litigation or other proceeding.         

        12.2 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any  
such rights, upon the occurrence of an Event of Default, the Agent, each Letter 
of Credit Issuer and each Lender is hereby authorized at any time or from time  
to time, without presentment, demand, protest or other notice of any kind to    
Holdings or any of its Subsidiaries or to any other Person, any such notice     
being hereby expressly waived, and without further order of or application to   
the Bankruptcy Court, to set off and to appropriate and apply any and all       
deposits (general or special) and any other Indebtedness at any time held or    
owing by the Agent, such Letter of Credit Issuer or such Lender (including,     
without limitation, by branches and agencies of the Agent, such Letter of Credit
Issuer and such Lender wherever located) to or for the credit or the account of 
Holdings or any of its Subsidiaries against and on account of the Obligations of
Holdings or any of its Subsidiaries to the Agent, such Letter of Credit Issuer  
or such Lender under this Agreement or under any of the other Credit Documents, 
including, without limitation, all interests in Obligations of Holdings or any  
of its Subsidiaries purchased by such Lender pursuant to Section 12.6(b), and   
all other claims of any nature or description arising out of or connected with  
this Agreement or any other Credit Document, irrespective of whether or not the 
Agent, such Letter of Credit Issuer or such Lender shall have made any demand   
hereunder and although said Obligations shall be contingent or unmatured;       
provided, however, that in accordance with the terms of the Orders, the Agent   
and the Lenders may exercise the rights described in this Section 12.2 only     
after providing three Business Days' prior written notice to the Borrower, the  
United States Trustee and any statutory committee appointed in the Cases.       
Notwithstanding anything to the contrary contained in this Section 12.2, no     
Lender shall exercise any such right of set-off without the prior consent of the
Agent or the Required Lenders so long as the Obligations shall be secured by any
Real Property located in the State of California, it being understood and       
agreed, however, that this sentence is for the sole benefit of the Letter of    
Credit Issuers and the Lenders and may be amended, modified or waived in any    
respect by the Required Lenders without the requirement of prior notice to or   
consent by any Credit Party and does not constitute a waiver of any rights      
against any Credit Party or against any Collateral.                             

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        12.3 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing     
(including telegraphic, telex, facsimile or cable communication) and mailed,    
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,  
at the address specified opposite its signature below or in the other relevant  
Credit Documents, as the case may be; if to the Agent or any Lender, at its     
address specified for the Agent or such Lender on Annex II; or, at such other   
address as shall be designated by any party in a written notice to the other    
parties hereto. All such notices and communications shall be mailed,            
telegraphed, telexed, telecopied or cabled or sent by overnight courier, and    
shall be effective when received.                                               

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12.4  Benefit of Agreement.                             

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             (a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the   
parties hereto; provided, however, the Borrower may not assign or transfer any  
of its rights, obligations or interest hereunder or under any other Credit      
Document without the prior written consent of the Lenders and, provided further,
that, although any Lender may transfer, assign or grant participations in its   
rights hereunder, such Lender shall remain a "Lender" for all purposes hereunder
(and may not transfer or assign all or any portion of its Revolving Loan        
Commitment hereunder except as provided in Section 12.4(b)) and the transferee, 
assignee or participant, as the case may be, shall not constitute a "Lender"    
hereunder and, provided further, that no Lender shall transfer or grant any     
participation under which the participant shall have rights to approve any      
amendment to or waiver of this Agreement or any other Credit Document except to 
the extent such amendment or waiver would (i) extend the final scheduled        
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is 
not extended beyond the Final Maturity Date) in which such participant is       
participating, or reduce the rate or extend the time of payment of interest or  
Fees thereon (except in connection with a waiver of applicability of any        
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount       
thereof then in effect (it being understood that a waiver of any Default or     
Event of Default or of a mandatory reduction in the Total Revolving Loan        
Commitment or the Total Term Loan Commitment shall not constitute a change in   
the terms of such participation, and that an increase in any Commitment or Loan 
shall be permitted without the consent of any participant if the participant's  
participation is not increased as a result thereof), (ii) consent to the        
assignment or transfer by the Borrower of any of its rights and obligations     
under this Agreement or (iii) release all or substantially all of the Collateral
under all of the Security Documents (except as expressly provided in the Credit 
Documents) supporting the Loans hereunder in which such participant is          
participating and, provided further, that no Lender shall transfer, assign or   
grant participations in any interest in such Lender's Revolving Loans or        
Revolving Loan Commitment to any Person without a simultaneous transfer,        
assignment or grant of a participation in a pro rata amount of such Lender's    
Term Loans and Term Loan Commitment to such Person. In the case of any such     
participation, the participant shall not have any rights under this Agreement,  
any of the other Credit Documents, the Interim Order or the Final Order (the    
participant's rights against such Lender in respect of such participation to be 
those set forth in the agreement executed by such Lender in favor of the        
participant relating thereto) and all amounts payable by the Borrower hereunder 
shall be determined as if such Lender had not sold such participation.          

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                (b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its 
Commitments (and related outstanding Obligations hereunder) to its parent       
company and/or any affiliate of such Lender which is at least 50% owned by such 
Lender or its parent company or to one or more Lenders or (y) assign all, or if 
less than all, a portion equal to at least $2,500,000 in the aggregate for the  
assigning Lender or assigning Lenders, of such Commitments (and related         
outstanding Obligations hereunder) to one or more Eligible Transferees, each of 
which assignees shall become a party to this Agreement as a Lender by execution 
of an Assignment and Assumption Agreement, provided that (i) at such time Annex 
I shall be deemed modified to reflect the Commitments of such new Lender and of 
the existing Lenders, (ii) the assigning Lender shall advise the assignee that  
the Borrower shall not be obligated to execute replacement Notes and shall add a
legend to any of its Notes which evidence all or any part of the Loans assigned 
to the effect that rights thereunder have been assigned, (iii) the consent of   
the Agent shall be required in connection with any such assignment pursuant to  
clause (y) of this Section 12.4(b) (which consent shall not be unreasonably     
withheld), (iv) at the time of any assignment of Revolving Loan Commitments (or 
related Obligations) pursuant to clause (y) of this Section 12.4(b), the        
assigning Lender shall either (A) simultaneously assign a pro rata share of the 
Prepetition Obligations (or, as appropriate, the Term Loans) to the same        
assignee or (B) the assigning Lender shall give all Lenders which have both     
Revolving Loans and Prepetition Obligations (or, as appropriate, Term Loans) an 
opportunity to purchase its Revolving Loan Commitments (and related Obligations)
on the same terms as the proposed assignment and (v) the Agent shall receive at 
the time of each such assignment, from the assigning or assignee Lender, the    
payment of a non-refundable assignment fee of $3,500 and, provided further, that
such transfer or assignment will not be effective until recorded by the Agent on
the Register pursuant to Section 7.12 and, provided further, that after giving  
effect to such assignment, the sum of the Commitments and the outstanding Loans 
of such assigning Lender shall not be less than $2,500,000. The Agent will give 
the Borrower notice of each such assignment after it is consummated. To the     
extent of any assignment pursuant to this Section 12.4(b), the assigning Lender 
shall be relieved of its obligations hereunder with respect to its assigned     
Commitment. At the time of each assignment pursuant to this Section 12.4(b) to a
Person which is not already a Lender hereunder and which is not a United States 
person (as such term is defined in Section 7701(a)(30) of the Code) for Federal 
income tax purposes, the respective assignee Lender shall provide to the        
Borrower and the Agent the appropriate Internal Revenue Service Forms (and, if  
applicable a Section 4.4(b)(ii) Certificate) described in Section 4.4(b). To the
extent that an assignment of all or any portion of a Lender's Revolving Loan    
Commitment and related outstanding                                              

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Obligations pursuant to Section 1.13 or this Section 12.4(b) would, at the time 
of such assignment, result in increased costs under Section 1.10, 2.5 or 4.4    
from those being charged by the respective assigning Lender prior to such       
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of   
the type described above resulting from changes after the date of the respective
assignment).                                                                    

               (c) Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in 
support of borrowings made by such Lender from such Federal Reserve Bank.       

            12.5 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Agent or any Lender in exercising any right, power or privilege hereunder
or under any other Credit Document and no course of dealing between any Credit  
Party and the Agent or any Lender shall operate as a waiver thereof; nor shall  
any single or partial exercise of any right, power or privilege hereunder or    
under any other Credit Document preclude any other or further exercise thereof  
or the exercise of any other right, power or privilege hereunder or thereunder. 
The rights and remedies herein expressly provided are cumulative and not        
exclusive of any rights or remedies which the Agent or any Lender would         
otherwise have. No notice to or demand on any Credit Party in any case shall    
entitle any Credit Party to any other or further notice or demand in similar or 
other circumstances or constitute a waiver of the rights of the Agent or the    
Lenders to any other or further action in any circumstances without notice or   
demand.                                                                         

12.6  Payments Pro Rata.                                

                (a) The Agent agrees that promptly after its receipt of each
payment from or on behalf of any Credit Party in respect of any Obligations of  
such Credit Party, it shall, except as otherwise provided in this Agreement,    
distribute such payment to the Lenders (other than any Lender that has consented
in writing to waive its pro rata share of such payment) pro rata based upon     
their respective shares, if any, of the Obligations with respect to which such  
payment was received.                                                           

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                 (b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross  
action, by the enforcement of any right under the Credit Documents, or          
otherwise) which is applicable to the payment of the principal of, or interest  
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the      
related sum or sums received by other Lenders is in a greater proportion than   
the total of such Obligation then owed and due to such Lender bears to the total
of such Obligation then owed and due to all of the Lenders immediately prior to 
such receipt, then such Lender receiving such excess payment shall purchase for 
cash without recourse or warranty from the other Lenders an interest in the     
Obligations of the respective Credit Party to such Lenders in such amount as    
shall result in a proportional participation by all of the Lenders in such      
amount; provided, that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase   
price restored to the extent of such recovery, but without interest.            

12.7  Calculations; Computations.                       

               (a) The financial statements to be furnished to the Lenders
pursuant hereto shall be made and prepared in accordance with GAAP consistently 
applied throughout the periods involved (except as set forth in the notes       
thereto or as otherwise disclosed in writing by Holdings or the Borrower to the 
Lenders); provided, that except as otherwise specifically provided herein, all  
computations determining compliance with Sections 3.3 and 8, including          
definitions used therein, shall, in each case, utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with    
those used to prepare, the December 31, 1998 financial statements delivered to  
the Lenders pursuant to Section 6.10(a).                                        

                (b) All computations of interest and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.              

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12.8  Governing Law; Submission to Jurisdiction; Venue. 

               (a)   THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND, TO 
THE EXTENT APPLICABLE, THE BANKRUPTCY CODE. Any legal action or proceeding with 
respect to this Agreement or any other Credit Document may be brought in the    
Bankruptcy Court and, if the Bankruptcy Court does not have (or abstains from)  
jurisdiction, in the courts of the State of New York or of the United States for
the Southern District of New York, and, by execution and delivery of this       
Agreement, each Credit Party hereby irrevocably accepts for itself and in       
respect of its property, generally and unconditionally, the jurisdiction of the 
aforesaid courts. Each Credit Party hereby further irrevocably waives any claim 
that any such courts lack jurisdiction over such Credit Party, and agrees not to
plead or claim, in any legal action or proceeding with respect to this Agreement
or any other Credit Document brought in any of the aforesaid courts, that any   
such court lacks jurisdiction over such Credit Party. Each Credit Party         
irrevocably consents to the service of process in any such action or proceeding 
by the mailing of copies thereof by registered or certified mail, postage       
prepaid, to such Credit Party, at its address for notices pursuant to Section   
12.3, such service to become effective 30 days after such mailing. Each Credit  
Party hereby irrevocably waives any objection to such service of process and    
further irrevocably waives and agrees not to plead or claim in any action or    
proceeding commenced hereunder or under any other Credit Document that service  
of process was in any way invalid or ineffective. Nothing herein shall affect   
the right of the Agent, any Lender or the holder of any Note to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise 
proceed against any Credit Party in any other jurisdiction.                     

                 (b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the         
aforesaid actions or proceedings arising out of or in connection with this      
Agreement or any other Credit Document brought in the courts referred to in     
clause (a) above and hereby further irrevocably waives and agrees not to plead  
or claim in any such court that any such action or proceeding brought in any    
such court has been brought in an inconvenient forum.                           

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            12.9 Counterparts, etc. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,   
each of which when so executed and delivered shall be an original, but all of   
which shall together constitute one and the same instrument. A complete set of  
counterparts executed by all the parties hereto shall be lodged with the        
Borrower and the Agent. This Agreement may be executed and delivered by         
telecopier with the same force and effect as if the same were manually executed 
and delivered.                                                                  

         12.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which (i) Holdings, WR Acquisition, the Borrower,
the Agent and each of the Revolving Lenders shall have signed a counterpart     
hereof (whether the same or different counterparts) and shall have delivered the
same to the Agent at the Notice Office or, in the case of the Revolving Lenders,
shall have given to the Agent telephonic (confirmed in writing), written, telex 
or facsimile notice (actually received) at such office that the same has been   
signed and mailed to it and (ii) the Interim Order shall have been entered and  
shall be in full force and effect. The Agent will give Holdings, WR Acquisition,
the Borrower and each Revolving Lender prompt written notice of the occurrence  
of the Effective Date.                                                          

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 12.11  Headings Descriptive.  The headings of the several
sections and subsections of this Agreement are inserted for convenience only    
and shall not in any way affect the meaning or construction of any provision    
of this Agreement.                                                              

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            12.12 Amendment or Waiver; etc. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,         
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the        
Required Revolving Lenders, provided that no such change, waiver, discharge or  
termination shall, without the consent of each Lender (other than a Defaulting  
Lender) (with Obligations being directly affected thereby in the case of the    
following clause (i)), (i) extend the final scheduled maturity of any Loan or   
Note or extend the stated maturity of any Letter of Credit or Existing Letter of
Credit beyond the Final Maturity Date, or reduce the rate or extend the time of 
payment of interest or Fees thereon, or reduce the principal amount thereof (it 
being understood that any amendment or modification to the financial definitions
in this Agreement shall not constitute a reduction in any rate of interest or   
fees for purposes of this clause (i)), (ii) release all or substantially all of 
the Collateral (except as expressly provided in the Security Documents) under   
all the Security Documents, (iii) amend, modify or waive any provision of       
Section 9.5(j) or this Section 12.12, (iv) reduce the percentage specified in   
the definition of Required Lenders (it being understood that, with the consent  
of the Required Lenders, additional extensions of credit pursuant to this       
Agreement may be included in the determination of the Required Lenders on       
substantially the same basis as the extensions of Commitments are included on   
the Effective Date), (v) consent to the assignment or transfer by the Borrower  
of any of its rights and obligations under this Agreement, (vi) modify the      
provisions of the Orders with respect to the priority of claims thereunder or   
modify the Super-priority Claim status of the Lenders in respect of any Lender's
Loans, extensions of credit hereunder, Existing Letters of Credit or Letters of 
Credit or (vii) amend, waive or modify any provision of the Credit Documents    
that expressly provides for the consent of all Lenders; provided further, that  
no such change, waiver, discharge or termination shall, without the consent of  
all Revolving Lenders (other than a Defaulting Lender) (i) amend, modify or     
waive any provision of this Agreement that expressly provides for the consent of
all of the Revolving Lenders, (ii) amend the definition of "Required Revolving  
Lenders", (iii) extend the time for repayment (including final maturity) of any 
principal amount of the Revolving Loans or increase the Total Revolving Loan    
Commitment, (iv) increase the advance rate from that set forth in the definition
of "Accounts Borrowing Base" or "Inventory Borrowing Base," or (v) amend, modify
or waive any provision that expressly provides for the consent of all Revolving 
Lenders, provided further that no such change, waiver, discharge or termination 
shall increase the Commitments of any Lender over the amount thereof then in    
effect without the consent of such Lender (it being understood that waivers or  
modifications of conditions precedent, covenants, Defaults or Events of Default 
or of a mandatory reduction in the                                              

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Total Revolving Loan Commitment or the Total Term Loan Commitment shall not     
constitute an increase of the Commitment of any Lender, and that an increase in 
the available portion of any Commitment of any Lender shall not constitute an   
increase in the Commitment of such Lender), provided further, that no such      
change, waiver, discharge or termination shall, without the consent of the      
Required Lenders, modify the second sentence of Section 4.2(d) or any provision 
of Section 8.26, provided further, that no such change, waiver, discharge or    
termination shall, without the consent of all Term Lenders (other than a        
Defaulting Lender), modify any provision of Section 5.3, provided further that  
no such change, waiver, discharge or termination shall (x) without the consent  
of each Letter of Credit Issuer, amend, modify or waive any provision of Section
2 or alter its rights or obligations with respect to Letters of Credit or       
Swingline Loans, (y) without the consent of the Agent, amend, modify or waive   
any provision of Section 11 as same applies to the Agent or any other provision 
as same relates to the rights or obligations of the Agent and (z) without the   
consent of the Collateral Agent, amend, modify or waive any provision relating  
to the rights or obligations of the Collateral Agent.                           

           12.13 Survival. All indemnities set forth herein including, without
limitation, in Section 1.10, 2.5, 4.4, 11.7 or 12.1, shall survive the execution
and delivery of this Agreement and the making and repayment of the Loans.       

       12.14 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Lender; provided, that the Borrower shall not be responsible for costs     
arising under Section 1.10, 2.5 or 4.4 resulting from any such transfer (other  
than a transfer pursuant to Section 1.12) to the extent such costs would not    
otherwise be applicable to such Lender in the absence of such transfer.         

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12.15  Confidentiality.                                 

                  (a) Each of the Lenders agrees that it will use its reasonable
efforts not to disclose without the prior consent of the Borrower (other than to
its directors, employees, auditors, counsel or other professional advisors, to  
affiliates or to another Lender if the Lender or such Lender's holding or parent
company in its sole discretion determines that any such party should have access
to such information) any information with respect to Holdings, WR Acquisition,  
the Borrower or any of its Subsidiaries which is furnished pursuant to this     
Agreement; provided, that any Lender may disclose any such information (a) as   
has become generally available to the public, (b) as may be required or         
appropriate (x) in any report, statement or testimony submitted to any          
municipal, state or Federal regulatory body having or claiming to have          
jurisdiction over such Lender or to the Federal Reserve Board or the Federal    
Deposit Insurance Corporation or similar organizations (whether in the United   
States or elsewhere) or their successors (y) in connection with any request or  
requirement of any such regulatory body or (z) in connection with the Cases, (c)
as may be required or appropriate in response to any summons or subpoena or in  
connection with any litigation, (d) to comply with any law, order, regulation or
ruling applicable to such Lender, and (e) to any prospective transferee in      
connection with any contemplated transfer of any of the Notes or any interest   
therein by such Lender; provided, that such prospective transferee agrees to be 
bound by this Section 12.15 to the same extent as such Lender.                  

                (b) Each of Holdings, WR Acquisition and the Borrower hereby
acknowledges and agrees that each Lender may share with any of its affiliates   
any information related to Holdings or any of its Subsidiaries (including,      
without limitation, any nonpublic customer information regarding the            
creditworthiness of Holdings and its Subsidiaries), provided that such Persons  
shall be subject to the provisions of this Section 12.15 to the same extent as  
such Lender.                                                                    

         12.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT  
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.                   

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          12.17 Absence of Prejudice to the Existing Lenders with Respect to
Matters Before the Bankruptcy Court. Each of the Credit Parties acknowledges    
that the Bankruptcy Code and Bankruptcy Rules require it to seek Bankruptcy     
Court authorization for certain matters that may also be addressed in this      
Agreement. None of the Credit Parties will (a) mention in any pleading or       
argument before the Bankruptcy Court in support of, or in any way relating to, a
position that Bankruptcy Court authorization should be granted on the ground    
that such authorization is permitted by this Agreement (unless a Person opposing
any such pleading or argument relies on this Agreement to assert or question the
propriety of such) or (b) in any way attempt to support a position before the   
Bankruptcy Court based on the provisions of this Agreement. The Agent or any    
Lender, in its capacity as the Prepetition Agent or an Existing Lender,         
respectively, shall be free to bring, oppose or support any matter before the   
Bankruptcy Court no matter how treated in this Agreement, and the fact that the 
Agent is also the Prepetition Agent and any Lender is also an Existing Lender   
shall in no way prejudice the rights of the Agent or any Existing Lender under  
the Existing Credit Agreement or hereunder.                                     

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12.18  [Intentionally Omitted].                         

       12.19  Application of Proceeds; Priority of Revolving Loans and
Letter of Credit Outstandings.                                                  

                  (a) Notwithstanding anything to the contrary contained in this
Agreement or any other Credit Document, (i) if the Agent takes action under     
Section 9 upon the occurrence and during the continuance of an Event of Default,
any payment by the Borrower or any Guarantor on account of principal of and     
interest on the Loans and any proceeds arising out of any realization (including
after foreclosure) upon the Collateral shall be applied as follows: first, to   
the payment in full of all costs and expenses (including without limitation,    
reasonable attorneys' fees and disbursements) paid or incurred by the Agent or  
any of the Lenders in connection with any such realization upon the Collateral, 
second, as a permanent reduction of the Revolving Loan Commitments, pro rata to 
the payment in full of the Revolving Loans (including any accrued and unpaid    
interest thereon, and any fees and other Obligations in respect thereof), third,
as a permanent reduction of the Revolving Loan Commitments, to the payments in  
full of Letter of Credit Outstandings constituting unreimbursed drawings under  
any Letter of Credit, fourth, as a permanent reduction of the Revolving Loan    
Commitments, to cash collateralize Letters of Credit in an amount equal to 105% 
of the aggregate amount of all Letter of Credit Outstandings constituting       
undrawn Letters of Credit, fifth, if the Term Loan Effective Date has occurred, 
to the payment in full of the principal of and interest on the Term Loans       
(including any accrued and unpaid interest thereon and any fees and other       
Obligations in respect thereof), sixth, if the Term Loan Effective Date has     
occurred, to pay unreimbursed drawings under any Existing Letter of Credit,     
seventh, if the Term Loan Effective Date has occurred, to cash collateralize    
Existing Letters of Credit in an amount equal to 105% of the aggregate undrawn  
face amount of Existing Letters of Credit, eighth, to the payment in full of any
remaining Obligations, provided that if any payments or distributions are       
received prior to the Term Loan Effective Date, then such payments or           
distribution shall be applied pursuant to this clause eighth to the payment in  
full of the Prepetition Obligations after application of such payments or       
distributions to the remaining Postpetition Obligations, and (ii) any payments  
or distributions of any kind or character, whether in cash, property or         
securities, made by the Borrower or any Guarantor or otherwise in a manner      
inconsistent with clause (i) of this Section 12.19(a) shall be held in trust and
paid over or delivered to the Agent so that the priorities and requirements set 
forth in such clause (i) are satisfied.                                         

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             (b) It is understood that the Borrower and the Guarantors
shall remain liable to the extent of any deficiency between the amount of the   
proceeds of the Collateral and the amount of the Obligations.                   

         12.20 Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Agent shall be in addition to every other      
right, power and remedy specifically given under this Agreement, the Orders or  
the other Credit Documents or now or hereafter existing at law or in equity, or 
by statute and each and every right, power and remedy whether specifically      
herein given or otherwise existing may be exercised from time to time or        
simultaneously and as often and in such order as may be deemed expedient by the 
Agent. All such rights, powers and remedies shall be cumulative and the exercise
or the beginning of exercise of one shall not be deemed a waiver of the right to
exercise of any other or others. No delay or omission of the Agent in the       
exercise of any such right, power or remedy and no renewal or extension of any  
of the Obligations shall impair any such right, power or remedy or shall be     
construed to be a waiver of any Default or Event of Default or an acquiescence  
therein. In the event that the Agent shall bring any suit to enforce any of its 
rights hereunder and shall be entitled to judgment, then in such suit the Agent 
may recover reasonable expenses, including attorney's fees, and the amounts     
thereof shall be included in such judgment.                                     

         12.21 Discontinuance of Proceedings. In case the Agent shall have
instituted any proceeding to enforce any right, power or remedy under this      
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall   
have been discontinued or abandoned for any reason or shall have determined     
adversely to the Agent, then and in every such case the Borrower, the Agent and 
each holder of any of the Obligations shall be restored to their former         
positions and rights hereunder with respect to the Collateral subject to the    
security interest created under this Agreement, and all rights, remedies and    
powers of the Agent and the Lenders shall continue as if no such proceeding had 
been instituted.                                                                

  12.22 Existing Credit Agreement. The Credit Parties hereby
acknowledge that (a) they are truly and justly indebted to the Existing Lenders 
for the Existing Lender Debt in the aggregate principal amount of               
$264,473,176.27 (including $11,823,176.23 in undrawn Existing Letters of Credit)
plus accrued and unpaid interest, fees and expenses, without defense,           
counterclaim or offset of any kind and (b) the Existing Lender Debt is secured  
by valid, perfected and enforceable Liens on substantially all of the assets of 
the Credit Parties.                                                             

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           12.23 Addition of Term Lenders. The parties hereto acknowledge that
no Term Lender shall be a party to this Agreement as of the Effective Date. The 
parties hereto agree that, on the Term Loan Effective Date and without the need 
to obtain the consent of any party hereto, the Term Lenders will become parties 
hereto by executing and delivering a counterpart of this Agreement with Term    
Loan Commitments in the amounts set forth on Annex I and the Agent may amend    
Annex I to reflect the Term Loan Commitments of the Term Lenders as of the Term 
Loan Effective Date (it being understood that the Total Term Loan Commitment    
shall be equal to the Existing Lender Debt). Notwithstanding anything to the    
contrary set forth herein, no Term Lender shall be deemed to be a Lender unless 
and until the conditions set forth in Section 5.3 have been satisfied.          

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SECTION 13.  Parent's Guaranty.                         

            13.1 The Guaranty. In order to induce the Lenders to enter into this
Agreement and to extend credit hereunder and in recognition of the direct       
benefits to be received by each Parent Guarantor from the proceeds of the Loans 
and the issuance of the Letters of Credit, each Parent Guarantor hereby agrees  
with the Lenders as follows: Each Parent Guarantor hereby unconditionally and   
irrevocably, jointly and severally, guarantees, as primary obligor and not      
merely as surety, the full and prompt payment when due, whether upon maturity,  
acceleration or otherwise, of any and all of the Guaranteed Obligations of the  
Borrower to the Guaranteed Creditors. If any or all of the Guaranteed           
Obligations of the Borrower to the Guaranteed Creditors becomes due and payable 
hereunder, each Parent Guarantor, jointly and severally, and unconditionally    
promises to pay such Guaranteed Obligations to the Guaranteed Creditors, or     
order, on demand, together with any and all expenses (including reasonable legal
fees and expenses) which may be incurred by the Guaranteed Creditors in         
collecting or enforcing any of the Guaranteed Obligations. If claim is ever made
upon any Guaranteed Creditor for repayment or recovery of any amount or amounts 
received in payment or on account of any of the Guaranteed Obligations and any  
of the aforesaid payees repays all or part of said amount by reason of (i) any  
judgment, decree or order of any court or administrative body having            
jurisdiction over such payee or any of its property or (ii) any settlement or   
compromise of any such claim effected by such payee with any such claimant      
(including the Borrower), then and in such event each Parent Guarantor agrees   
that any such judgment, decree, order, settlement or compromise shall be binding
upon such Parent Guarantor, notwithstanding any revocation of this Guaranty or  
any other instrument evidencing any liability of the Borrower, and each Parent  
Guarantor shall be and remain jointly and severally liable to the aforesaid     
payees hereunder for the amount so repaid or recovered to the same extent as if 
such amount had never originally been received by any such payee. This is a     
guaranty of payment and not of collection.                                      

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13.2  Nature of Liability.                              

                 (a) The liability of each Parent Guarantor hereunder is joint
and several and exclusive and independent of any security for or other guaranty 
of the Guaranteed Obligations of the Borrower whether executed by such Parent   
Guarantor, any other Parent Guarantor, any other guarantor or by any other      
party, and the liability of each Parent Guarantor hereunder is not affected or  
impaired by (a) any direction as to application of payment by the Borrower or by
any other party, or (b) any other continuing or other guaranty, undertaking or  
maximum liability of a guarantor or of any other party as to the Guaranteed     
Obligations of the Borrower, or (c) any payment on or in reduction of any such  
other guaranty or undertaking, or (d) any dissolution, termination or increase, 
decrease or change in personnel by the Borrower, or (e) any payment made to the 
Guaranteed Creditors on the Guaranteed Obligations which any such Guaranteed    
Creditor repays to the Borrower pursuant to court order in any bankruptcy,      
reorganization, arrangement, moratorium or other debtor relief proceeding, and  
each Parent Guarantor waives any right to the deferral or modification of its   
obligations hereunder by reason of any such proceeding.                         

                (b) It is the desire and intent of each Parent Guarantor and
the Guaranteed Creditors that this Guaranty shall be enforced against each      
Parent Guarantor to the fullest extent permissible under the laws and public    
policies applied in each jurisdiction in which enforcement is sought. If,       
however, and to the extent that, the obligations of any Parent Guarantor under  
this Guaranty shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law  
relating to fraudulent conveyances or transfers), then the amount of the        
Guaranteed Obligations of such Parent Guarantor shall be deemed to be reduced   
and such Parent Guarantor shall pay the maximum amount of the Guaranteed        
Obligations which would be permissible under applicable law.                    

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   13.3 Independent Obligation. The obligations of each Parent
Guarantor hereunder are independent of the obligations of any other Parent      
Guarantor, any other guarantor, any other party or the Borrower, and a separate 
action or actions may be brought and prosecuted against each Parent Guarantor   
whether or not action is brought against any other Parent Guarantor, any other  
guarantor, any other party or the Borrower and whether or not any other         
guarantor, any other party or the Borrower be joined in any such action or      
actions. Each Parent Guarantor waives, to the full extent permitted by law, the 
benefit of any statute of limitations affecting its liability hereunder or the  
enforcement thereof. Any payment by the Borrower or other circumstance which    
operates to toll any statute of limitations as to the Borrower shall operate to 
toll the statute of limitations as to any Parent Guarantor.                     

           13.4 Authorization. Each Parent Guarantor authorizes the Guaranteed
Creditors without notice or demand (except as shall be required by applicable   
statute and cannot be waived), and without affecting or impairing its liability 
hereunder, from time to time to:                                                

               (a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or alter,  
any of the Guaranteed Obligations (including any increase or decrease in the    
rate of interest thereon), any security therefor, or any liability incurred     
directly or indirectly in respect thereof, and the Guaranty herein made shall   
apply to the Guaranteed Obligations as so changed, extended, renewed or altered;

                (b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise   
deal with in any manner and in any order any property by whomsoever at any time 
pledged or mortgaged to secure, or howsoever securing, the Guaranteed           
Obligations or any liabilities (including any of those hereunder) incurred      
directly or indirectly in respect thereof or hereof, and/or any offset          
thereagainst;                                                                   

                  (c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;                     

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        (d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;                                     

               (e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those hereunder)       
incurred directly or indirectly in respect thereof or hereof, and may           
subordinate the payment of all or any part thereof to the payment of any        
liability (whether due or not) of the Borrower to its creditors other than the  
Guaranteed Creditors;                                                           

                  (f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Guaranteed Creditors        
regardless of what liability or liabilities of the Borrower remain unpaid;      

                  (g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the          
instruments or agreements referred to herein or therein, or otherwise amend,    
modify or supplement this Agreement, any other Credit Document or any of such   
other instruments or agreements; and/or                                         

          (h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of any Parent Guarantor from its liabilities under this Guaranty.               

          13.5 Reliance. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the Borrower or the officers, directors, 
partners or agents acting or purporting to act on their behalf, and any         
Guaranteed Obligations made or created in reliance upon the professed exercise  
of such powers shall be guaranteed hereunder.                                   

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          13.6 Subordination. Any of the indebtedness of the Borrower now or
hereafter owing to any Parent Guarantor is hereby subordinated to the Guaranteed
Obligations of the Borrower owing to the Guaranteed Creditors; and if the Agent 
so requests at a time when an Event of Default exists, all such indebtedness of 
the Borrower to any Parent Guarantor shall be collected, enforced and received  
by such Parent Guarantor for the benefit of the Guaranteed Creditors and be paid
over to the Agent on behalf of the Guaranteed Creditors on account of the       
Guaranteed Obligations of the Borrower to the Guaranteed Creditors, but without 
affecting or impairing in any manner the liability of any Parent Guarantor under
the other provisions of this Guaranty. Prior to the transfer by any Parent      
Guarantor of any note or negotiable instrument evidencing any of the            
indebtedness of the Borrower to such Parent Guarantor, such Parent Guarantor    
shall mark such note or negotiable instrument with a legend that the same is    
subject to this subordination. Without limiting the generality of the foregoing,
each Parent Guarantor hereby agrees with the Guaranteed Creditors that it will  
not exercise any right of subrogation which it may at any time otherwise have as
a result of this Guaranty (whether contractual, under Section 509 of the        
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been        
irrevocably paid in full in cash.                                               

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13.7  Waiver.                                           

                  (a) Each Parent Guarantor waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed  
Creditor to (i) proceed against the Borrower, any other Parent Guarantor, any   
other guarantor or any other party, (ii) proceed against or exhaust any security
held from the Borrower, any other Parent Guarantor, any other guarantor or any  
other party or (iii) pursue any other remedy in any Guaranteed Creditor's power 
whatsoever. Each Parent Guarantor waives any defense based on or arising out of 
any defense of the Borrower, any other Parent Guarantor, any other guarantor or 
any other party, other than payment in full of the Guaranteed Obligations, based
on or arising out of the disability of the Borrower, any other Parent Guarantor,
any other guarantor or any other party, or the unenforceability of the          
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of the    
Guaranteed Obligations. The Guaranteed Creditors may, at their election,        
foreclose on any security held by the Agent, the Collateral Agent or any other  
Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such    
sale is permitted by applicable law), or exercise any other right or remedy the 
Guaranteed Creditors may have against the Borrower or any other party, or any   
security, without affecting or impairing in any way the liability of any Parent 
Guarantor hereunder except to the extent the Guaranteed Obligations have been   
paid. Each Parent Guarantor waives any defense arising out of any such election 
by the Guaranteed Creditors, even though such election operates to impair or    
extinguish any right of reimbursement or subrogation or other right or remedy of
such Parent Guarantor against the Borrower or any other party or any security.  

                  (b) Each Parent Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of    
nonperformance, notices of protest, notices of dishonor, notices of acceptance  
of this Guaranty, and notices of the existence, creation or incurring of new or 
additional Guaranteed Obligations. Each Parent Guarantor assumes all            
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of   
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which each Parent Guarantor assumes and incurs hereunder, and agrees that 
the Guaranteed Creditors shall have no duty to advise any Parent Guarantor of   
information known to them regarding such circumstances or risks.                

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              (c) Each Parent Guarantor understands, is aware and hereby
acknowledges that to the extent the Guaranteed Obligations are secured by real  
property located in the State of California, such Parent Guarantor shall be     
liable for the full amount of its liability hereunder notwithstanding           
foreclosure on such real property by trustee sale or any other reason impairing 
such Parent Guarantor's or any Guaranteed Creditor's right to proceed against   
any Credit Party. Each Parent Guarantor hereby waives, to the fullest extent    
permitted by law, all rights and benefits under Section 2809 of the California  
Civil Code purporting to reduce a guarantor's obligation in proportion to the   
principal obligation. Each Parent Guarantor hereby waives all rights and        
benefits under Section 580a of the California Code of Civil Procedure purporting
to limit the amount of any deficiency judgment which might be recoverable       
following the occurrence of a trustee's sale under a deed of trust and all      
rights and benefits under Section 580b of the California Code of Civil Procedure
stating that no deficiency may be recovered on a real property purchase money   
obligation. Each Parent Guarantor further understands, is aware and hereby      
acknowledges that if the Guaranteed Creditors elect to nonjudicially foreclose  
on any real property security located in the State of California any right of   
subrogation of such Parent Guarantor against the Guaranteed Creditors may be    
impaired or extinguished and that as a result of such impairment or             
extinguishment of subrogation rights, such Parent Guarantor may have a defense  
to a deficiency judgment arising out of the operation of (i) Section 580d of the
California Code of Civil Procedure which states that no deficiency may be       
recovered on a note secured by a deed of trust on real property in case such    
real property is sold under the power of sale contained in such deed of trust,  
and (ii) related principles of estoppel. To the fullest extent permitted by law,
each Parent Guarantor waives all rights and benefits and any defense arising out
of the operation of Section 580d of the California Code of Civil Procedure and  
related principles of estoppel, even though such election operates to impair or 
extinguish any right of reimbursement or subrogation or other right or remedy of
such Parent Guarantor against any Credit Party or any other party or any        
security. In addition, each Parent Guarantor hereby waives, to the fullest      
extent permitted by applicable law, without limiting the generality of the      
foregoing or any other provision hereof, all rights and benefits which might    
otherwise be available to such Parent Guarantor under Section 726 of the        
California Code of Civil Procedure and all rights and benefits which might      
otherwise be available to such Parent Guarantor under California Civil Code     
Sections 2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and   
3433.                                                                           

           (d) Each Parent Guarantor hereby further waives (to the
fullest extent permitted by applicable law): (1) all rights and defenses arising
out of an election of remedies by the                                           

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Guaranteed Creditors, even though that election of remedies, such as a          
nonjudicial foreclosure with respect to security for a Guaranteed Obligation,   
has destroyed such Parent Guarantor's rights of subrogation and reimbursement   
against the principal by the operation of Section 580d of the California Code of
Civil Procedure or otherwise; (2) such Parent Guarantor's rights of subrogation 
and reimbursement and any other rights and defenses available to such Parent    
Guarantor by reason of the California Civil Code Sections 2787 to 2855,         
inclusive, including, without limitation, (i) any defenses such Parent Guarantor
may have to the Guaranteed Obligations by reason of an election of remedies by  
the Guaranteed Creditors and (ii) any rights or defenses such Parent Guarantor  
may have by reason of protection afforded to the principal borrower with respect
to the obligation so guaranteed pursuant to the antideficiency or other laws of 
the State of California limiting or discharging the borrower's indebtedness,    
including, without limitation, California Code of Civil Procedure Sections 580a,
580b, 580d or 726.                                                              

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     IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first  
above written.                                                                  

AMERICAN PAD & PAPER COMPANY, as Debtor                                         
and Debtor-in-Possession                                                        

By: /s/ James W. Swent III                                                      
--------------------------------                                          
Name: James W. Swent III                                                  
Title: Chief Executive Officer                                            

WR ACQUISITION, INC., as Debtor and                                             
Debtor-in-Possession                                                            

By: /s/ James W. Swent III                                                      
--------------------------------                                          
Name: James W. Swent III                                                  
Title: Chief Executive Officer                                            

AMERICAN PAD & PAPER COMPANY OF DELAWARE,                                       
INC., as Debtor and Debtor-in-Possession                                        

By: /s/ James W. Swent III                                                      
--------------------------------                                          
Name: James W. Swent III                                                  
Title: Chief Executive Officer                                            

AP&P MANUFACTURING, INC., as Debtor and                                         
Debtor-in-Possession                                                            

By: /s/ James W. Swent III                                                      
--------------------------------                                          
Name: James W. Swent III                                                  
Title: Chief Executive Officer                                            

AMERICAN PAD & PAPER SALES COMPANY, INC.,                                       
as Debtor and Debtor-in-Possession                                              

By: /s/ James W. Swent III                                                      
--------------------------------                                          
Name: James W. Swent III                                                  
Title: Chief Executive Officer                                            

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AMERICAN PAD AND PAPER FOREIGN SALES                                            
CORPORATION, as Debtor and                                                      
Debtor-in-Possession                                                            

By: /s/ James W. Swent III                                                      
--------------------------------                                          
Name: James W. Swent III                                                  
Title: Chief Executive Officer                                            

AP&P FINANCING COMPANY, INC., as Debtor                                         
and Debtor-in-Possession                                                        

By: /s/ James W. Swent III                                                      
--------------------------------                                          
Name: James W. Swent III                                                  
Title: Chief Executive Officer                                            

BANKERS TRUST COMPANY,                                                          
as Agent                                                                        

By: /s/ Robert P. Tinari                                                        
--------------------------------                                          
Name: Robert P. Tinari                                                    
Title: Managing Director                                                  

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BANKERS TRUST COMPANY                                                           

By: /s/ Robert P. Tinari                                                        
--------------------------------                                          
Name: Robert P. Tinari                                                    
Title: Managing Director                                                  

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BANK OF AMERICA, N.A.                                                           

By: /s/ Edward Harmon                                                           
--------------------------------                                          
Name: Edward Harmon                                                       
Title: Assistant Vice President                                           

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BANK OF SCOTLAND                                                                

By:  /s/ Annie Glynn                                                            
--------------------------------                                          
Name: Annie Glynn                                                         
Title: Senior Vice President                                              

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BANK ONE TEXAS, N.A.                                                            

By: /s/ Randall B. Durant                                                       
--------------------------------                                          
Name: Randall B. Durant                                                   
Title: First Vice President                                               

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CARL MARKS MANAGEMENT COMPANY, L.P.                                             

By: /s/ Andrew M. Boas                                                          
--------------------------------                                          
Name: Andrew M. Boas                                                      
Title: General Partner                                                    

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CIBC INC.                                                                       

By: /s/ Ronald Spitzer                                                          
--------------------------------                                          
Name: Ronald Spitzer                                                      
Title: Agent                                                              

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CITIBANK, N.A.                                                                  

By: /s/ Carlton B. Klein                                                        
--------------------------------                                          
Name: Carlton B. Klein                                                    
Title: Managing Director                                                  

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ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG                                  

By: /s/ Anca Trifan                                                             
--------------------------------                                          
Name: Anca Trifan                                                         
Title: Vice President                                                     

By: /s/ John S. Runion                                                          
--------------------------------                                          
Name: John S. Runion                                                      
Title: First Vice President                                               

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FIRST UNION NATIONAL BANK, as Syndication Agent and a Lender                    

By: /s/ Jill W. Akre                                                            
--------------------------------                                          
Name: Jill W. Akre                                                        
Title: Vice President and                                                 
Director                                                    

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GUARANTY BUSINESS CREDIT CORPORATION, dba Fidelity Funding                      

By: /s/ Michael D. Haddad                                                       
--------------------------------                                          
Name: Michael D. Haddad                                                   
Title: President and Chief                                                

Executive Officer                                           

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HCM OFFSHORE TRUST                                                              

By: /s/ Michael E. Lewitt                                                       
--------------------------------                                          
Name: Michael E. Lewitt                                                   
Title: Authorized Signatory                                               

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LEHMAN COMMERCIAL PAPER INC.                                                    

By: /s/ Jeffrey D. Tuck                                                         
--------------------------------                                          
Name: Jeffrey D. Tuck                                                     
Title: Authorized Signatory                                               

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PAM CAPITAL FUNDING, L.P.                                                       

By: Highland Capital Management,                                                
L.P., as Collateral Manager                                             

By: /s/ Mark K. Okada                                                           
--------------------------------                                          
Name: Mark K. Okada                                                       
Title: Executive Vice President                                           

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TRI-LINKS INVESTMENT TRUST                                                      

By: Wilmington Trust Company,                                                   
solely in its capacity as Owner Trustee                                 

By: /s/ David A. Vanaskey, Jr.                                                  
--------------------------------                                          
Name: David A. Vanaskey, Jr.                                              
Title: Vice President                                                     

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                                                                         ANNEX I

 LIST OF LENDERS AND COMMITMENTS

Lender                                     Revolving              Term Loan     
------                                       Loan                 Commitment    
                                         Commitment            (after the Term
                                        ----------            Loan Effective
                                                               Date)
                                                               ---------------
Bankers Trust Company                       $6,500,000          $26,549,723.52  
Bank of America, N.A.                        3,000,000            4,439,843.19  
Bank of Scotland                             3,250,000           13,223,658.81  
Bank One Texas, N.A.                         6,500,000           26,447,317.63  
Carl Marks Management                        4,000,000           16,238,148.28  
Co., L.P.                                                                       
CIBC, Inc.                                   3,250,000           10,899,500.59  
Citibank, N.A.                               4,000,000           16,954,778.71  
Erste Bank Der                               1,000,000            4,407,885.27  
Oesterreichischen                                                               
Sparkassen AG                                                                   
First Union National Bank                   15,000,000           18,883,695.39  
Guaranty Business                            9,500,000                          
Credit Corporation                                                              
Guaranty Federal Bank,                                           17,631,546.08  
F.S.B.                                                                          
HCM Offshore Trust                           1,000,000            4,007,169.33  
Lehman Commercial Paper                      3,000,000            4,897,651.41  
Pam Capital Funding, L.P.                    3,000,000           12,422,224.95  
Tri-Links Investment Trust                   2,000,000            4,808,603.20  
BankBoston, N.A.                                                 18,432,078.86  
Chase Securities, Inc.                                           12,430,239.28  
Christiania Bank og                                               8,816,772.55  
Kreditkasse                                                                     
Franklin Mutual Advisers,                                         7,693,785.14  
LLC                                                                             
ING Barings (U.S.) Capital                                        1,745,344.85  
LLC                                                                             
Contrarian Capital                                                6,732,044.49  
Management LLC                                                                  
Resurgence Asset                                                  4,407,888.27  
Management, L.L.C.                                                              
Societe Generale                                                 17,631,545.08  
Tribeca Distressed                                                5,823,762.79  
Securities, LLC                                                                 
                                         -----------         ---------------
Total:                                     $65,000,000         $264,473,176.27  

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                                                                        ANNEX II
                                                                        --------

LENDER ADDRESSES
----------------

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                                                                       ANNEX III
                                                                       ---------

 BANK ACCOUNTS
 -------------

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                                                                        ANNEX IV
                                                                        --------

 REAL PROPERTIES
 ---------------

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                                                                         ANNEX V
                                                                         -------

EXISTING INVESTMENTS
--------------------

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                                                                        ANNEX VI
                                                                        --------

SUBSIDIARIES
------------

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                                                                       ANNEX VII
                                                                       ---------

 EXISTING INDEBTEDNESS
 ---------------------

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                                                                      ANNEX VIII
                                                                      ----------

EXISTING LETTERS OF CREDIT
--------------------------

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                                      ANNEX IX
                                      --------

EXISTING LIENS                                                        

Filing       Debtor     Secured Party      File        Original    Description  
Location     ------     -------------      Number      File Date   of Collateral
--------                                   ------      ---------   -------------

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                                                                         ANNEX X
                                                                         -------

 EXISTING LITIGATION
 -------------------

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		7/17/00		123					8-K
		6/30/00		130
Filed on:		4/14/00
		1/29/00		123
		1/18/00		1		8			8-K
		1/15/00		130
		1/14/00		52		116
		1/10/00		127
For Period End:		12/31/99							NTN 10K
		12/30/99		64
		9/30/99		53					10-Q
		12/31/98		53		151			10-K,  5,  5/A
		7/8/96		7
		5/24/96		104		109
		12/1/95		131
		10/31/95		120
									List all Filings