---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

---

 

                                                                       EXHIBIT 4


                                                                  Execution Copy

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






                             SONOCO PRODUCTS COMPANY

                                       to

                              THE BANK OF NEW YORK,
                                   as Trustee



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



                          FIRST SUPPLEMENTAL INDENTURE
                            Dated as of June 23, 2004



                          Supplemental to the Indenture
                            dated as of June 15, 1991



                       Establishing a series of Securities
                        designated 5.625% Notes Due 2016







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





         FIRST SUPPLEMENTAL INDENTURE, dated as of June 23, 2004 (herein called
the "First Supplemental Indenture"), between Sonoco Products Company, a
corporation duly organized and existing under the laws of the State of South
Carolina (hereinafter called the "Company"), and The Bank of New York, successor
to Wachovia Bank of North Carolina, National Association, as Trustee under the
Original Indenture referred to below (hereinafter called the "Trustee").

                                   WITNESSETH:

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture dated as of June 15, 1991 (hereinafter called the "Original
Indenture"), to provide for the issuance from time to time in one or more series
of its unsecured debentures, notes, bonds or other evidences of indebtedness
(herein called the "Securities"), the form and terms of which are to be
established as set forth in Sections 201 and 301 of the Original Indenture;

         WHEREAS, Section 901(7) of the Original Indenture provides, among other
things, that the Company and the Trustee may enter into indentures supplemental
to the Original Indenture to, among other things, establish the form and terms
of the Securities of any series as permitted in Sections 201 and 301 of the
Original Indenture;

         WHEREAS, the Company desires to create a series of the Securities in an
aggregate principal amount of $150,000,000 to be designated the "5.625% Notes
Due 2016", and all action on the part of the Company necessary to authorize the
issuance of the Notes (as hereinafter defined) under the Original Indenture and
this First Supplemental Indenture has been duly taken; and

         WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and completed, authenticated and delivered by the Trustee as
provided in the Original Indenture and this First Supplemental Indenture, the
valid and binding obligations of the Company and to constitute these presents a
valid and binding supplemental indenture and agreement according to its terms,
have been done and performed;

         NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

         That in consideration of the premises and of the acceptance and
purchase of the Notes by the holders thereof and of the acceptance of this trust
by the Trustee, the Company covenants and agrees with the Trustee, for the equal
benefit of holders of the Notes (as hereinafter defined), as follows:



                                   ARTICLE ONE

                                   DEFINITIONS

         Except to the extent such terms are otherwise defined in this First
Supplemental Indenture or the context clearly requires otherwise, all terms used
in this First Supplemental Indenture which are defined in the Original Indenture
or the form of Initial Note (as hereinafter defined) or Exchange Note (as
hereinafter



defined) attached hereto as Exhibits A and B, respectively, have the meanings
assigned to them therein.

         In addition, as used in this First Supplemental Indenture, the
following terms have the following meanings:

         "Commission" means the U.S. Securities and Exchange Commission.

         "Exchange Notes" means the 5.625% Notes Due 2016 to be issued under
this First Supplemental Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement.

         "Global Note" means a Rule 144A Global Note.

         "Initial Notes" means the 5.625% Notes Due 2016 to be issued under this
First Supplemental Indenture on or about the date of this First Supplemental
Indenture.

         "Initial Purchasers" means (a) Bank of America Securities LLC, Deutsche
Bank Securities Inc., Tokyo-Mitsubishi International plc and Wachovia Capital
Markets, LLC, in respect of the Initial Notes and (b) the purchasers of any
additional Notes, as the case may be.

         "Issue Date" means the date on which the Initial Notes are originally
issued.

         "Notes" means the Initial Notes, the Exchange Notes , the Private
Exchange Notes and any other 5.625% Notes Due 2016 issued after the Issue Date
in accordance with clause (iii) of Section 2.3 hereof treated as a single series
of securities for all purposes, as amended or supplemented from time to time in
accordance with the terms of this First Supplemental Indenture and the Original
Indenture, that are issued pursuant to this First Supplemental Indenture.

         "Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
the Initial Purchasers, in exchange for the Initial Notes held by the Initial
Purchasers as part of their initial distribution, a like aggregate principal
amount of Private Exchange Notes.

         "Private Exchange Notes" means the 5.625% Notes Due 2016 to be issued
pursuant to this First Supplemental Indenture in connection with a Private
Exchange effected pursuant to the Registration Rights Agreement.

         "Registered Exchange Offer" means an offer by the Company, pursuant to
the Registration Rights Agreement, to certain Holders of Initial Notes, to issue
and deliver to such Holders, in exchange for the Initial Notes, a like aggregate
principal amount of Exchange Notes registered under the Securities Act.

         "Registration Rights Agreement" means (a) the Registration Rights
Agreement dated as of June 23, 2004 among the Company and the Initial Purchasers
or (b) any registration rights agreement entered into in connection with the
issuance of additional Notes following the Issue Date, as the case may be.

                                       2



         "Resale Restriction Termination Date" means (x) the date which is two
years (or such shorter period of time as permitted by Rule 144(k) under the
Securities Act) after the later of the issue date of a Restricted Security and
the last date on which the Company or any of its "affiliates" (as defined in
Rule 144 under the Securities Act) was the owner of such Restricted Security)
(or any predecessor thereto); or (y) such later date, if any, as may be required
by applicable law.

         "Restricted Securities" has the meaning given to such term in Section
2.7(a) hereof.

         "Rule 144A" means Rule 144A under the Securities Act, as may be amended
and in effect from time to time, and any successor rules.

         "Rule 144A Global Note" means the one or more Initial Notes or Private
Exchange Notes deposited with a custodian for, and registered in the name of a
nominee of, the Depositary, interests in which will be held for the benefit of
purchasers of Initial Notes or Private Exchange Notes who are "qualified
institutional buyers" as defined in Rule 144A.

         "Shelf Registration Statement" means the registration statement filed
by the Company with the Commission in connection with the offer and sale of
Notes (other than Exchange Notes) on a continuous basis under Rule 415 of the
Securities Act pursuant to the Registration Rights Agreement.

         "Transfer Restricted Notes" means Notes that bear or are required to
bear one or more of the legends set forth in Section 2.6 hereof.



                                   ARTICLE TWO

                 TERMS AND ISSUANCE OF THE 5.625% NOTES DUE 2016

         Section 2.1. Issue of Notes. A series of Securities which shall be
designated the "5.625% Notes Due 2016" shall be executed, authenticated and
delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of, the Original Indenture, as
amended, and this First Supplemental Indenture (including the form of Initial
Notes and Exchange Notes set forth hereto as Exhibits A and B, respectively).
The aggregate principal amount of the Notes which may be authenticated and
delivered under this First Supplemental Indenture shall not, except as permitted
by the provisions of the Original Indenture, initially exceed $150,000,000;
provided that the Company may from time to time or at any time, without the
consent of the Holders of the Notes, issue additional Notes, which additional
Notes shall increase the aggregate principal amount of, and shall be
consolidated and form a single series with, the Notes.

         Section 2.2. Form of Notes; Incorporation of Terms. The Initial Notes,
the Private Exchange Notes and any additional Notes issued in transactions
exempt from registration under the Securities Act shall be substantially in the
form of Exhibit A attached hereto and the Exchange Notes shall be substantially
in the form of Exhibit B attached hereto. The Notes may have such notations,
legends or endorsements approved as to form by the Company and required,

                                       3



as applicable, by law, stock exchange or depository rule, agreements to which
the Company is subject and/or usage. The terms of the Notes set forth in Exhibit
A and Exhibit B are herein incorporated by reference and are part of the terms
of this First Supplemental Indenture.

         Section 2.3. Execution and Authentication. The Trustee, upon a Company
Order and pursuant to the terms of the Original Indenture and this First
Supplemental Indenture, shall authenticate and deliver (i) Initial Notes for
original issue in an initial aggregate principal amount of $150,000,000, (ii)
Exchange Notes or Private Exchange Notes for issue only in a Registered Exchange
Offer or a Private Exchange, respectively, pursuant to the Registration Rights
Agreement, for a like principal amount of Initial Notes and (iii) additional
Notes for original issue after the Issue Date in the amounts specified by the
Company. Such Company Order shall specify the amount of the Notes to be
authenticated, the date on which the original issue of Notes is to be
authenticated, whether the Notes are to be Initial Notes, Private Exchange
Notes, Exchange Notes or Notes issued pursuant to clause (iii) above, and the
aggregate principal amount of Notes outstanding on the date of authentication.
All of the Notes issued under the Original Indenture and this First Supplemental
Indenture shall be treated as a single series for all purposes under the
Original Indenture and this First Supplemental Indenture, including, without
limitation, waivers, amendments, and offers to purchase.

         Section 2.4. Depositary for Global Securities. The Depositary for the
Securities of the series of which the Notes are a part shall be The Depository
Trust Company in the City of New York.

         Section 2.5. Place of Payment. The Place of Payment in respect of the
Notes will be at the principal office or agency of the Company in the City of
New York, State of New York or at the office or place of business of the Trustee
or its successor in trust under the Original Indenture, which, at the date
hereof, is located at [Trustee's address].

         Section 2.6. Legends.

         (a) Except as permitted by the following paragraphs (b) and (c), each
Note certificate for Notes that are Restricted Securities shall bear a legend in
substantially the following form:

         "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT: (A) PRIOR TO: (X)
THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(k) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE ISSUE DATE OF THE NOTES
AND THE LAST DATE ON WHICH WE OR ANY OF OUR "AFFILIATES" (AS DEFINED IN RULE 144
UNDER THE SECURITIES ACT) WAS THE OWNER OF SUCH NOTES (OR ANY PREDECESSOR
THERETO); OR (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW
(THE "RESALE RESTRICTION TERMINATION DATE"), SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) (a) TO A PERSON WHO IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE

                                       4



144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (ii) TO THE COMPANY, OR (iii) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT, AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO REPRESENTATION CAN BE MADE AS
TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE
SECURITY EVIDENCED HEREBY.

         THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS
OF, THE REGISTRATION RIGHTS AGREEMENT DATED JUNE 23, 2004, AMONG THE COMPANY AND
THE OTHER PARTIES REFERRED TO THEREIN."

         (b) Upon any sale or transfer of a Transfer Restricted Note pursuant to
Rule 144 under the Securities Act, the Depositary shall, subject to approval by
the Company and the provisions of Section 305 of the Original Indenture, permit
the Holder thereof to request the issuance of a Global Note that does not bear
one or more of the legends set forth above and rescind any restrictions on the
transfer of such Transfer Restricted Note, if the sale or exchange was made in
reliance on Rule 144 and the Holder certifies to that effect in writing to the
Depositary.

         (c) After a transfer of any Initial Notes or Private Exchange Notes
pursuant to and during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Notes or Private Exchange Notes, as the
case may be, all requirements pertaining to legends on such Initial Note or such
Private Exchange Note shall cease to apply, and a global Initial Note or Private
Exchange Note without legends shall be available (subject to Section 305 of the
Original Indenture) to the transferee of the Holder of such Initial Notes or
Private Exchange Notes or upon receipt of directions to transfer such Holder's
interest in a global Initial Note or Private Exchange Note, as applicable.

         (d) Upon the completion of a Registered Exchange Offer with respect to
the Initial Notes pursuant to which Holders of such Initial Notes are offered
Exchange Notes in exchange for their Initial Notes, all requirements pertaining
to such Initial Notes that Initial Notes issued to

                                       5



certain Holders be issued in global form shall still apply and Initial Notes in
global form with one or more of the legends set forth in Exhibit A shall be
available to Holders of such Initial Notes that do not exchange their Initial
Notes, and Exchange Notes in global form shall be available (subject to Section
305 of the Original Indenture) to Holders that exchange such Initial Notes in
such Registered Exchange Offer.

         (e) Upon the completion of a Private Exchange with respect to the
Initial Notes pursuant to which Holders of such Initial Notes are offered
Private Exchange Notes in exchange for their Initial Notes, all requirements
pertaining to such Initial Notes that Initial Notes issued to certain Holders be
issued in global form shall still apply, and Private Exchange Notes in global
form with one or more of the legends set forth in Exhibit A shall be available
to Holders that exchange such Initial Notes in such Private Exchange.

         Section 2.7. Restrictions on Transfer and Exchange of Initial Notes.

         (a) All Rule 144A Global Notes and all beneficial interests in one or
more Rule 144A Global Notes shall be restricted securities (within the meaning
of Rule 144 under the Securities Act; hereinafter, collectively, "Restricted
Securities") and shall be subject to the restrictions on transfer provided in
the legend set forth in Section 2.6(a) hereof. The Holder of each Restricted
Security, by such Holder's acceptance thereof, agrees to be bound by such
restrictions on transfer. All Restricted Securities shall bear the legend set
forth in Section 2.6(a).

         (b) Unless and until an Initial Note is exchanged for an Exchange Note
in connection with an effective Exchange Offer Registration Statement or a Shelf
Registration Statement is declared effective with respect to such Initial Notes
and an Initial Note is sold pursuant to the plan of distribution thereunder, the
following provisions shall apply:

                  (i) Transfer of Beneficial Interests in the Same Global Note.
         Beneficial interests in any Global Note may be transferred to persons
         who take delivery thereof in the form of a beneficial interest in the
         same Global Note in accordance with the transfer restrictions in the
         applicable legends.

                  (ii) Transfer of Beneficial Interests in a Global Note to
         Another Global Note. A beneficial interest in any Global Note may be
         transferred to a person who takes delivery thereof in the form of a
         beneficial interest in another Global Note if the transfer complies
         with the requirements of the applicable procedures of The Depository
         Trust Company and the transferor delivers to the Trustee a certificate
         in the form of Exhibit C hereto.



                                       6



                                  ARTICLE THREE

                                  MISCELLANEOUS

         Section 4.1. Execution as Supplemental Indenture. This First
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture and, as provided in the Original
Indenture, this First Supplemental Indenture forms a part thereof.

         Section 4.2. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof, or with a
provision of the Original Indenture, which is required to be included in this
First Supplemental Indenture, or in the Original Indenture, respectively, by any
of the provisions of the Trust Indenture Act, such required provision shall
control.

         Section 4.3. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.

         Section 4.4. Successors and Assigns. All covenants and agreements by
the Company in this First Supplemental Indenture shall bind its successors and
assigns, whether so expressed or not.

         Section 4.5. Separability Clause. In case any provision in this First
Supplemental Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

         Section 4.6. Benefits of First Supplemental Indenture. Nothing in this
First Supplemental Indenture or in the Notes, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
First Supplemental Indenture.

         Section 4.7. Execution and Counterparts. This First Supplemental
Indenture may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

         Section 4.8. Governing Law. This First Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York, without regard to conflicts of laws principles thereof.





                                       7





         IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.

(CORPORATE SEAL)

                                                     SONOCO PRODUCTS COMPANY


                                                     By
                                                         -----------------------
                                                         Name:
                                                         Title:



                                                     Attest:


                                                     By
                                                         -----------------------
                                                         Name:
                                                         Title:




(SEAL)                                               THE BANK OF NEW YORK,
                                                     As Trustee


                                                     By:
                                                         -----------------------
                                                         Name:
                                                         Title:



                                                     Attest:


                                                     By:
                                                         -----------------------
                                                         Name:
                                                         Title:






STATE OF    ____________   )
                           )
COUNTY OF   ____________   )



         On this ___ day of _________________, 2004, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is a ______________ of Sonoco Products Company, the corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.


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



STATE OF    ____________   )
                           )
COUNTY OF   ____________   )



         On this ___ day of _________________, 2004, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is a ______________ of The Bank of New York, a New York banking
organization described in and which executed the foregoing instrument; that he
knows the seal of said organization; that the seal affixed to said instrument is
such organization seal; that it was so affixed by authority of the Board of
Directors of said organization, and that he signed his name thereto by like
authority.


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







                                       2




                                                                       EXHIBIT A


                         [FORM OF FACE OF INITIAL NOTES]

         [IF THE SECURITY IS TO BE A GLOBAL SECURITY, INSERT -- UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

         THIS SECURITY IS A GLOBAL SECURITY AS REFERRED TO IN THE INDENTURE
HEREINAFTER REFERENCED AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY IN DEFINITIVE FORM, THIS GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

         [IF A RESTRICTED SECURITY, INSERT -- THE SECURITY (OR ITS PREDECESSOR)
EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT: (A)
PRIOR TO: (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE ISSUE
DATE OF THE NOTES AND THE LAST DATE ON WHICH WE OR ANY OF OUR "AFFILIATES" (AS
DEFINED IN RULE 144 UNDER THE

                                      A-1



SECURITIES ACT) WAS THE OWNER OF SUCH NOTES (OR ANY PREDECESSOR THERETO); OR (Y)
SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE
RESTRICTION TERMINATION DATE"), SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (i) (a) TO A PERSON WHO IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES
TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (ii) TO THE COMPANY, OR
(iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY
RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.

THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF, THE
REGISTRATION RIGHTS AGREEMENT DATED JUNE 23, 2004, AMONG THE COMPANY AND THE
OTHER PARTIES REFERRED TO THEREIN.





                             SONOCO PRODUCTS COMPANY


                              5.625% NOTES DUE 2016

                                                                         $______

NO. ________                                             CUSIP _________________

         SONOCO PRODUCTS COMPANY, a corporation duly organized and existing
under the laws of the State of South Carolina (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________, or
registered assigns, the principal sum of ______________ Dollars on June 15,
2016, and to pay interest thereon from June 23, 2004, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on June 15 and December 15 in each year, commencing December 15,
2004, at the rate of 5.625% per annum, until the principal hereof is paid or
made available for payment (assuming a 360-day year consisting of twelve 30-day
months). The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be June 1 or December 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in

                                      A-2



whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture; provided, however, that if (i) a
registration statement (the "Exchange Offer Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), registering a
security substantially identical to this Security (except that such Security
will not contain terms with respect to the Additional Interest payments
described below or legends reflecting transfer restrictions) pursuant to an
exchange offer (the "Exchange Offer") has not been filed or has not been
declared effective on or before the date on which such registration statement is
required to be filed or is required to become or be declared effective pursuant
to the Registration Rights Agreement dated as of June 23, 2004 (the
"Registration Rights Agreement"), among the Company and the other parties
referred to therein, or, if required, a registration statement registering this
Security for resale (a "Shelf Registration Statement") has not been filed or has
not become or been declared effective on or before the date on which such
registration statement is required to become or be declared effective pursuant
to the Registration Rights Agreement, or (ii) the Exchange Offer has not been
completed on or before the date on which such Exchange Offer is required to be
completed pursuant to the Registration Rights Agreement in each case in Clauses
(i) and (ii) upon the terms and conditions set forth in the Registration Rights
Agreement (each such event referred to in clauses (i) through (ii) above, a
"Registration Default"), the interest rate borne by the Securities shall be
increased ("Additional Interest") by one-quarter of one percent (0.25%) per
annum, which interest shall accrue (in addition to any stated interest on the
Securities) from and including the date on which a Registration Default occurs
to but excluding the first date (the "Step-Down Date") that no Registration
Default exists, which rate will increase by one quarter of one percent (0.25%)
at the beginning of each succeeding 90-day period (or portion thereof) that such
Additional Interest continues to accrue under any such circumstance; provided,
however, that the maximum aggregate increase in the interest rate will in no
event exceed one percent (1%) per annum, and provided further, that no
Additional Interest shall be payable, and Additional Interest shall cease to be
payable, in accordance with the terms of the Registration Rights Agreement. If
the Shelf Registration Statement is declared effective but becomes unusable for
any reason, then the interest rate borne by the Securities shall be increased
under the circumstances described in the Registration Rights Agreement. Upon the
Shelf Registration Statement once again becoming usable, the interest rate borne
by the Securities will be reduced to the original interest rate. Accrued
Additional Interest, if any, shall be paid semi-annually on June 15 and December
15 in each year, and the amount of accrued Additional Interest shall be
determined on the basis of the number of days during which such Registration
Default is in effect. The Company shall provide the Trustee with written notice
of the date of any Registration Default and the Step-Down Date. Any accrued and
unpaid interest (including Additional Interest, if any) on this Security upon
the issuance of an Exchange Security (as defined in the Indenture) in exchange
for this Security shall cease to be payable to the Holder hereof but such
accrued and unpaid interest (including Additional Interest, if any) shall be
payable to the Holder of such Exchange Security with the next Interest Payment
for such Exchange Security.

         Payment of the principal of (and premium, if any) and interest on this
Security will be

                                      A-3



made at the office or agency of the Company maintained for that purpose in New
York, New York, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register, or by wire transfer to the Person
entitled thereto.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                                SONOCO PRODUCTS COMPANY

                                                By:   __________________________

Attest:                                               Name:

                                                      Title:








                                      A-4




                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.



                                                The Bank of New York, As Trustee


Date:                                           By:   __________________________
                                                      Authorized Officer









                                      A-5




                       [FORM OF REVERSE OF INITIAL NOTES]

                             SONOCO PRODUCTS COMPANY

                              5.625% Notes due 2016

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of June 15, 1991, as supplemented by a First
Supplemental Indenture, dated as of June 23, 2004 (as so supplemented, herein
called the "Indenture"), between the Company and The Bank of New York, as
successor Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, which series is initially limited
in aggregate principal amount to $150,000,000; provided that the Company may
from time to time or at any time, without the consent of Holders of the
Securities of this series, issue additional Notes. Such additional Notes shall
increase the aggregate principal amount of, and shall be consolidated and form a
single series with, the Notes.

         The Securities of this series are subject to redemption upon not less
than 30 days' notice by mail, in whole or in part, at any time at the election
of the Company, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Securities, or (ii) as determined by the Quotation Agent
(as defined below), the sum of the present values of the remaining scheduled
payments of principal and interest on the Securities (not including any portion
of those payments of interest accrued as of the redemption date) discounted to
the redemption date on a semi-annual basis assuming a 360 day year consisting of
twelve 30 day months at the Treasury Rate (as defined below) plus 15 basis
points plus, in each case, accrued and unpaid interest on the Securities to the
redemption date.

         "Treasury Rate" means, with respect to any redemption date, the annual
rate equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price of the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
that redemption date.

         "Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities to be redeemed that would be utilized, at the time of a
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Securities.

                                      A-6




         "Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of at least three Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and lowest of five or more
Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than
five Reference Treasury Dealer Quotations, the average of all Reference Treasury
Dealer Quotations so obtained.

         "Reference Treasury Dealer" means (i) each of Banc of America
Securities LLC and Deutsche Bank Securities Inc. and their respective
successors; however, if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company will substitute another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Company.

         "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding the redemption date.

         "Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.

         In the case of a partial redemption, selection of the Securities for
redemption will be made pro rata, by lot or such other method as the Trustee in
its sole discretion deems appropriate and fair. No Securities of a principal
amount of $1,000 or less will be redeemed in part. Notice of any redemption will
be mailed by first class mail at least 30 days but not more than 60 days before
the redemption date to each holder of the Securities to be redeemed at its
registered address. If any Securities are to be redeemed in part only, the
notice of redemption that relates to the Securities will state the portion of
the Securities to be redeemed. New Securities in principal amounts of $1,000
equal to the unredeemed portion of the Securities will be issued in the name of
the holder of the Securities upon surrender for cancellation of the original
Securities. Unless the Company defaults in payment of the redemption price, on
and after the redemption date, interest will cease to accrue on the Securities
or the portions of the Securities called for redemption.

         Unless the context otherwise requires, the Initial Notes (as defined in
the Indenture) and the Exchange Notes (as defined in the Indenture) of the same
series shall constitute one series for all purposes under the Indenture,
including without limitation, amendments, waivers and redemptions.

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

         The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness on this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions, set forth therein, which
provisions apply to the Securities of this series.

         The Indenture permits, with certain exceptions as therein provided, the
amendment

                                      A-7



thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of 66 2/3% in principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

         The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

                                      A-8



         The Securities of this series are not subject to any sinking fund.

         The Securities of this series shall be governed by and construed in
accordance with the laws of the State of New York.

         All capitalized terms used but not defined in this Security shall have
the meanings assigned to them in the Indenture.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
















                                      A-9



                                                                       EXHIBIT B


                        [FORM OF FACE OF EXCHANGE NOTES]

         [IF THE SECURITY IS TO BE A GLOBAL SECURITY, INSERT -- UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

         THIS SECURITY IS A GLOBAL SECURITY AS REFERRED TO IN THE INDENTURE
HEREINAFTER REFERENCED AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY IN DEFINITIVE FORM, THIS GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]


                             SONOCO PRODUCTS COMPANY
                              5.625% NOTES DUE 2016

                                                             $ _________________
NO. ________                                             CUSIP _________________

         SONOCO PRODUCTS COMPANY, a corporation duly organized and existing
under the laws of the State of South Carolina (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________, or
registered assigns, the principal sum of ______________ Dollars on June 15,
2016, and to pay interest thereon from June 23, 2004, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on June 15 and December 15 in each year, commencing December 15,
2004, at the rate of 5.625% per annum, until the principal hereof is paid or
made available for payment (assuming a 360-day year consisting of twelve 30-day
months). The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the June 1 or

                                      B-1



December 1 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.

         Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register, or by wire
transfer to the Person entitled thereto.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:
                                                SONOCO PRODUCTS COMPANY


                                                By:   __________________________
Attest:                                               Name:
                                                      Title:






                                      B-2




                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                                The Bank of New York, As Trustee

Date:                                           By:   __________________________
                                                      Authorized Officer












                                      B-3




                       [FORM OF REVERSE OF EXCHANGE NOTES]

                             SONOCO PRODUCTS COMPANY

                              5.625% Notes due 2016

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of June 15, 1991, as supplemented by a First
Supplemental Indenture, dated as of June 23, 2004 (as so supplemented, herein
called the "Indenture"), between the Company and The Bank of New York, as
successor Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, which series is initially limited
in aggregate principal amount to $150,000,000; provided that the Company may
from time to time or at any time, without the consent of Holders of the
Securities of this series, issue additional Notes. Such additional Notes shall
increase the aggregate principal amount of, and shall be consolidated and form a
single series with, the Notes.

         The Securities of this series are subject to redemption upon not less
than 30 days' notice by mail, in whole or in part, at any time at the election
of the Company, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Securities, or (ii) as determined by the Quotation Agent
(as defined below), the sum of the present values of the remaining scheduled
payments of principal and interest on the Securities (not including any portion
of those payments of interest accrued as of the redemption date) discounted to
the redemption date on a semi-annual basis assuming a 360 day year consisting of
twelve 30 day months at the Treasury Rate (as defined below) plus 15 basis
points plus, in each case, accrued and unpaid interest on the Securities to the
redemption date.

         "Treasury Rate" means, with respect to any redemption date, the annual
rate equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price of the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
that redemption date.

         "Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities to be redeemed that would be utilized, at the time of a
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Securities.

                                      B-4



         "Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of at least three Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and lowest of five or more
Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than
five Reference Treasury Dealer Quotations, the average of all Reference Treasury
Dealer Quotations so obtained.

         "Reference Treasury Dealer" means (i) each of Banc of America
Securities LLC and Deutsche Bank Securities Inc. and their respective
successors; however, if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company will substitute another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Company.

         "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding the redemption date.

         "Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.

         In the case of a partial redemption, selection of the Securities for
redemption will be made pro rata, by lot or such other method as the Trustee in
its sole discretion deems appropriate and fair. No Securities of a principal
amount of $1,000 or less will be redeemed in part. Notice of any redemption will
be mailed by first class mail at least 30 days but not more than 60 days before
the redemption date to each holder of the Securities to be redeemed at its
registered address. If any Securities are to be redeemed in part only, the
notice of redemption that relates to the Securities will state the portion of
the Securities to be redeemed. New Securities in principal amounts of $1,000
equal to the unredeemed portion of the Securities will be issued in the name of
the holder of the Securities upon surrender for cancellation of the original
Securities. Unless the Company defaults in payment of the redemption price, on
and after the redemption date, interest will cease to accrue on the Securities
or the portions of the Securities called for redemption.

         Unless the context otherwise requires, the Initial Notes (as defined in
the Indenture) and the Exchange Notes (as defined in the Indenture) of the same
series shall constitute one series for all purposes under the Indenture,
including without limitation, amendments, waivers and redemptions.

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

         The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness on this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions, set forth therein, which
provisions apply to the Securities of this series.

                                      B-5



         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

         The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                      B-6



         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

         The Securities of this series are not subject to any sinking fund.

         The Securities of this series shall be governed by and construed in
accordance with the laws of the State of New York.

         All capitalized terms used but not defined in this Security shall have
the meanings assigned to them in the Indenture.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]







                                      B-7




                                                                       EXHIBIT C

              [Form of Restricted Securities Transfer Certificate]

                     CERTIFICATE TO SUNOCO PRODUCTS COMPANY
                                   AND TRUSTEE

                              5.625% NOTES DUE 2016

         With respect to U.S. $____________ principal amount of the
above-captioned securities presented or surrendered on the date hereof (the
"Surrendered Notes") for registration of transfer, or for exchange where the
securities issuable upon such exchange are to be registered in a name other than
that of the undersigned Holder (each such transaction being a "transfer"), as of
the date hereof the undersigned Holder (as defined in the Indenture) of the
Surrendered Notes represents and certifies for the benefit of Sonoco Products
Company (the "Company") and The Bank of New York, successor trustee, as trustee,
(the "Trustee") that the transfer of Surrendered Notes associated with such
transfer complies with the restrictive legends set forth on the face of the
Surrendered Notes for the reason checked below:

1. [ ]   The Surrendered Notes are being transferred to a person whom we
         reasonably believe is a "qualified institutional buyer" (as defined in
         Rule 144A under the Securities Act of 1933) (a "QIB") that purchases
         for its own account or for the account of one or more QIBs to whom
         notice has been given that the resale, pledge or transfer is being made
         in reliance on Rule 144A under the Securities Act; or

2. [ ]   The transfer of the Surrendered Notes complies with Rule 144 under the
         Securities Act;* or

3. [ ]   The Surrendered Notes are being transferred to the Company; or

4. [ ]   The Surrendered Notes are being transferred pursuant to an effective
         registration statement; or

5. [ ]   The Surrendered Notes are being transferred pursuant to an incompliance
         with Regulation S under the Securities Act.*

Capitalized terms used herein, but not defined herein, shall have the meaning
assigned to such terms in the Indenture dated as of June 15, 1991, between the
Company and The Bank of New York, successor trustee, as trustee (the "Trustee"),
as amended by the First Supplemental Indenture dated as of June 23, 2004 (the
"First Supplemental Indenture") between the Company and the Trustee (the
"Indenture").

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

* These transfers may require an opinion of counsel.


                                      C-1




                                                 ______________________________
                                                 [Name of Holder]
Dated:  __________, ____

[To be dated the date of presentation or surrender]
- ---------------------------------------------------


TO BE COMPLETED BY TRANSFEROR IF (1) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Security for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.

__________________________________
Dated:












                                      C-2

                                                                    EXHIBIT 10.1


                                                                  Execution Copy









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



                          REGISTRATION RIGHTS AGREEMENT

                            DATED AS OF JUNE 23, 2004

                                     BETWEEN

                       SONOCO PRODUCTS COMPANY, AS ISSUER

                                       AND

                         BANC OF AMERICA SECURITIES LLC

                          DEUTSCHE BANK SECURITIES INC.



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








                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (this "Agreement") is made and
entered into this 23rd day of June, 2004, between Sonoco Products Company, a
South Carolina corporation (the "Company"), as issuer, and Banc of America
Securities LLC ("BofA") and Deutsche Bank Securities Inc. ("Deutsche Bank"), as
representatives (the "Representatives") of the several initial purchasers (the
"Initial Purchasers") listed on Schedule A to the Purchase Agreement (as defined
below).

         This Agreement is made pursuant to the Purchase Agreement, dated June
16, 2004, between the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $150,000,000 principal amount of the Company's
5.625% Notes due 2016 (the "Securities"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed with the
Initial Purchasers to provide to the Holders (as defined below) the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.

         In consideration of the foregoing, the parties hereto agree as follows:

         1.  Definitions.

         As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

         "1933 Act" shall mean the Securities Act of 1933, as amended from time
to time.

         "1934 Act" shall mean the Securities Exchange Act of l934, as amended
from time to time.

         "Additional Interest" shall have the meaning set forth in Section 2.5
hereof.

         "Affiliate" shall have the meaning set forth in Section 4(a) hereof.

         "BofA" shall have the meaning set forth in the preamble.

         "Business Day" shall mean a day that is not a Saturday, a Sunday, or a
day on which banking institutions in New York, New York are authorized or
required to be closed.

         "Closing Date" shall mean the Closing Time as defined in the Purchase
Agreement.

         "Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.

         "CUSIP number" means the alphanumeric designation assigned to a
Security by Standard and Poor's CUSIP Service Bureau.

                                      -1-



         "Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; provided, however, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.

         "Deutsche Bank" shall have the meaning set forth in the preamble
hereof.

         "Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2.1 hereof.

         "Effectiveness Period" shall have the meaning set forth in Section
2.2(b).

         "Event Date" shall have the meaning set forth in Section 2.5.

         "Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2.1 hereof.

         "Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement,
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.

         "Exchange Period" shall have the meaning set forth in Section 2.1(b)
hereof.

         "Exchange Securities" shall mean the 5.625% Notes due 2016 issued by
the Company under the Indenture containing terms identical to the Securities in
all material respects (except for references to certain interest rate
provisions, restrictions on transfers and restrictive legends), to be offered to
Holders of Securities in exchange for Registrable Securities pursuant to the
Exchange Offer.

         "Holder" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees, any registered owners of Registrable Securities under the
Indenture, and each Participating Broker-Dealer that holds Exchange Securities
for so long as such Participating Broker-Dealer is required to deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities.

         "Indenture" shall mean the Indenture relating to the Securities dated
as of June 15, 1991, between the Company and The Bank of New York, as Trustee,
as amended by a supplemental indenture thereto to be dated as of June 23, 2004
relating to the Securities (the "First Supplemental Indenture"), and as may be
amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.

         "Initial Purchaser" or "Initial Purchasers" shall have the meaning set
forth in the preamble.

         "Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided, however, that whenever the consent or approval
of Holders of a specified percentage of Registrable

                                      -2-



Securities is required hereunder, Registrable Securities held by the Company and
other obligors on the Securities or any "affiliate" (as such term is defined in
Rule 405 under the 1933 Act) of the Company shall be disregarded in determining
whether such consent or approval was given by the Holders of such required
percentage amount.

         "NASD" shall mean the National Association of Securities Dealers, Inc.

         "Participating Broker-Dealer" shall mean any of BofA, Deutsche Bank and
any other broker-dealer which makes a market in the Securities and exchanges
Registrable Securities in the Exchange Offer for Exchange Securities.

         "Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, joint venture, association, joint stock
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.

         "Private Exchange" shall have the meaning set forth in Section 2.1(f)
hereof.

         "Private Exchange Securities" shall have the meaning set forth in
Section 2.1(f) hereof.

         "Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.

         "Purchase Agreement" shall have the meaning set forth in the preamble.

         "Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities and, if issued,
the Private Exchange Securities, shall cease to be Registrable Securities when
(i) a Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities are
eligible to be sold to the public pursuant to Rule l44 (or any similar provision
then in force, but not Rule 144A) under the 1933 Act, (iii) such Securities
shall have ceased to be outstanding or (iv) the Exchange Offer is consummated
(except in the case of Securities purchased from the Company continuing to be
held by the Initial Purchasers and having the status of an unsold allotment in
the initial distribution).

         "Registration Default" shall have the meaning set forth in Section 2.5
hereof.

         "Registration Expenses" shall mean any and all expenses incidental to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or NASD registration and filing fees, including,
if applicable, the reasonable fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained by any holder of
Registrable Securities in accordance with the rules and regulations of the NASD,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws and compliance with the rules of the NASD (including
reasonable fees and disbursements of

                                      -3-



counsel for any underwriters or Holders that are Initial Purchasers in
connection with blue sky qualification of any of the Exchange Securities or
Registrable Securities and any filings with the NASD), (iii) the cost of
preparing or assisting in preparing, word processing, printing and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this Agreement,
including, but not limited to, any expenses of counsel to the Company, (iv) any
rating agency fees, (v) the fees and disbursements of counsel for the Company
and of the independent public accountants of the Company, including the expenses
of any special audits or "cold comfort" letters required by Holders or
underwriters of Registrable Securities who may be entitled to request such
audits or letters pursuant to this Agreement, (vi) the fees and expenses of the
Trustee, and any escrow agent or custodian, (vii) the reasonable out-of-pocket
expenses of the Initial Purchasers in connection with the Exchange Offer,
including the reasonable fees and expenses of counsel to the Initial Purchasers
in connection therewith, (viii) the reasonable fees and disbursements of
Milbank, Tweed, Hadley & McCloy LLP, counsel representing the Holders of Shelf
Registrable Securities or Special Counsel and (ix) the reasonable out-of-pocket
expenses of any underwriters customarily required to be paid by an issuer or
seller of securities in an underwritten offering or an offering pursuant to a
securities sales agency agreement, but excluding underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.

         "Registration Statement" shall mean the Exchange Offer Registration
Statement or the Shelf Registration Statement and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

         "SAS 72" shall mean Statement on Auditing Standards No. 72, as amended
or supplemented from time to time.

         "SEC" shall mean the United States Securities and Exchange Commission
or any successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.

         "Securities" shall have the meaning set forth in the preamble.

         "Shelf Registrable Securities" shall have the meaning set forth in
Section 2.5.

         "Shelf Registration" shall mean a registration effected pursuant to
Section 2.2 hereof.

         "Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2.2 of this
Agreement which covers all of the Registrable Securities or all of the Private
Exchange Securities on an appropriate form under Rule 415 under the 1933 Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, and upon request, all
exhibits thereto and all material incorporated by reference therein.

         "Special Counsel" shall have the meaning set forth in Section 3(g)
hereof.

                                      -4-



         "Suspension Period" shall have the meaning set forth in Section 2.4(c)
hereof.

         "TIA" shall mean the U.S. Trust Indenture Act of 1939, as amended, any
reference herein to the TIA or a particular provision thereof shall mean such
Act or provision, as the case may be, as amended or replaced from time to time
or as supplemented from time to time by the rules or regulations adopted by the
SEC under or in furtherance of the purposes of the Act or provision as the case
may be.

         "Trustee" shall mean the trustee with respect to the Securities under
the Indenture.

         "Underwriter" shall have the meaning set forth in Section 4(a) hereof.

         2.  Registration Under the 1933 Act.

         2.1 Exchange Offer. The Company shall, for the benefit of the Holders,
at the Company's cost, (A) use its reasonable best efforts to file with the SEC
an Exchange Offer Registration Statement within 120 days of the Closing Date on
an appropriate form under the 1933 Act with respect to a proposed Exchange Offer
and the issuance and delivery to the Holders, in exchange for the Registrable
Securities (other than Private Exchange Securities), of a like principal amount
of Exchange Securities, (B) use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be declared effective under the 1933
Act within 180 days of the Closing Date, (C) use its reasonable best efforts to
keep the Exchange Offer Registration Statement effective until the closing of
the Exchange Offer, (D) use its reasonable best efforts to cause the Exchange
Offer to be consummated not later than 210 days following the Closing Date and
(E) for a period of 90 days following the consummation of the Exchange Offer, to
make available a prospectus meeting the requirements of the 1933 Act to any such
participating broker-dealer for use in connection with any resale of any
exchange notes acquired in the exchange offer. If the Company has not
consummated the Exchange Offer within 210 days of the Closing Date, then the
Company will file as promptly as practicable a Shelf Registration Statement (as
described in Section 2.2 hereof). The Exchange Securities will be issued under
the Indenture. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder eligible and electing to
exchange Registrable Securities for Exchange Securities (assuming that such
Holder (a) is not an "affiliate" (as such term is defined in Rule 405 under the
1933 Act) of the Company (b) is not a broker-dealer tendering Registrable
Securities acquired directly from the Company for its own account, (c) acquired
the Exchange Securities in the ordinary course of such Holder's business and (d)
has no arrangements or understandings with any Person to participate in the
Exchange Offer for the purpose of distributing the Exchange Securities) to
transfer such Exchange Securities from and after their receipt without any
limitations or restrictions under the 1933 Act or under state securities or blue
sky laws. Exchange Securities will be issued under the Exchange Offer as
evidence of the same continuing indebtedness under the Securities. Under no
circumstances will the surrender of the Securities and the issue of Exchange
Securities constitute new indebtedness or obligate the Company to repay the
principal amount of the Securities.

         In connection with the Exchange Offer, the Company shall:

                                      -5-



         (a) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;

         (b) keep the Exchange Offer open for acceptance for a period of not
less than 20 Business Days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");

         (c) utilize the services of the Depositary for the Exchange Offer;

         (d) permit Holders to withdraw tendered Registrable Securities at any
time prior to 5:00 PM, New York City time, on the last Business Day of the
Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for exchange,
and a statement that such Holder is withdrawing such Holder's election to have
such Securities exchanged;

         (e) notify each Holder that any Registrable Security not tendered will
remain outstanding and continue to accrue interest, but will not retain any
rights under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and

         (f) otherwise comply in all respects with all applicable laws relating
to the Exchange Offer.

         If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Securities acquired by them and having the status of an unsold
allotment in the initial distribution, the Company upon the request of any
Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in
exchange (the "Private Exchange") for such Securities held by such Initial
Purchaser, a like principal amount of unsubordinated debt securities of the
Company that are identical (except that such securities shall bear appropriate
transfer restrictions) to the Exchange Securities (the "Private Exchange
Securities").

         The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which, in either case, has been qualified under the
TIA, or is exempt from such qualification, and shall provide that the Exchange
Securities shall not be subject to the transfer restrictions set forth in the
Indenture but that the Private Exchange Securities shall be subject to such
transfer restrictions. The Indenture or such indenture shall provide that the
Exchange Securities, the Private Exchange Securities and the Securities shall
vote and consent together on all matters as one class and that none of the
Exchange Securities, the Private Exchange Securities or the Securities will have
the right to vote or consent as a separate class on any matter. The Private
Exchange Securities shall be of the same series as, and the Company shall use
its reasonable best efforts to have the Private Exchange Securities bear the
same CUSIP number as, the Exchange Securities.

         As soon as practicable after the close of the Exchange Offer and/or the
Private Exchange, as the case may be, the Company shall:

                                      -6-



                  (i) accept for exchange all Registrable Securities duly
         tendered and not validly withdrawn pursuant to the Exchange Offer in
         accordance with the terms of the Exchange Offer Registration Statement
         and the letter of transmittal which shall be an exhibit thereto;

                  (ii) accept for exchange all Registrable Securities properly
         tendered and not validly withdrawn pursuant to the Private Exchange;

                  (iii) deliver, cause to be delivered, to the Trustee for
         cancellation all Registrable Securities so accepted for exchange; and

                  (iv) cause the Trustee promptly to authenticate and deliver
         Exchange Securities or Private Exchange Securities, as the case may be,
         to each Holder of Registrable Securities so accepted for exchange in a
         principal amount equal to the principal amount of the Registrable
         Securities of such Holder so accepted for exchange.

         Interest on each Exchange Security and Private Exchange Security will
accrue from the last date on which interest was paid on the Securities
surrendered in exchange therefor or, if no interest has been paid on the
Securities, from the date of original issuance. The Exchange Offer and the
Private Exchange shall not be subject to any conditions, other than (i) that the
Exchange Offer or the Private Exchange, or the making of any exchange by a
Holder, as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) the valid tendering of Registrable
Securities in accordance with the Exchange Offer and the Private Exchange, (iii)
that each Holder of Registrable Securities exchanged in the Exchange Offer shall
have represented that all Exchange Securities to be received by it shall be
acquired in the ordinary course of its business and that at the time of the
consummation of the Exchange Offer it shall have no arrangement or understanding
with any person to participate in the distribution (within the meaning of the
1933 Act) of the Exchange Securities and shall have made such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-3 or other
appropriate form under the 1933 Act available and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer or the Private
Exchange which, in the judgment of the Company would reasonably be expected to
impair the ability of the Company to proceed with the Exchange Offer or the
Private Exchange. The Company shall, to the extent such information is available
to the Company, inform the Initial Purchasers of the names and addresses of the
Holders to whom the Exchange Offer is made, subject to the right of any Holder
to object to the disclosure of such information with respect to such Holder, and
the Initial Purchasers shall have the right, subject to applicable law, to
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.

         Upon consummation of the Exchange Offer in accordance with this
Agreement, the Company shall have no further obligation to register the
Registrable Securities pursuant to Section 2.2 of this Agreement other than
pursuant to Section 2.2(iii), (iv) or (v) below.

         2.2 Shelf Registration. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Company determines, after consultation with its outside counsel, that
the Company is not permitted to effect the Exchange

                                      -7-



Offer as contemplated by Section 2.1 hereof, (ii) if for any other reason (A)
the Exchange Offer Registration Statement is not declared effective within 180
days following the Closing Date or (B) the Exchange Offer is not consummated
within 210 days after the Closing Date, (iii) upon the request of any of the
Initial Purchasers holding Private Exchange Securities issued with respect to
Registrable Securities that were not eligible to be exchanged for Exchange
Securities in the Exchange Offer or if the Initial Purchasers do not receive
freely tradable Exchange Securities in the Exchange Offer, (iv) upon notice of
any Holder (other than an Initial Purchaser) given to the Company in writing
within 20 days after the commencement of the Exchange Offer that (A) due to a
change in law or SEC policy it is not entitled to participate in the Exchange
Offer, (B) due to a change in law or SEC policy it may not resell the Exchange
Securities acquired by it in the Exchange Offer to the public without delivering
a prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
it is a broker-dealer and owns Registrable Securities acquired directly from the
Company or an "affiliate" of the Company (as such term is defined in Rule 405
under the 1933 Act) or (v) the holders of a majority of the Exchange Securities
may not resell the Exchange Notes acquired by them in the Exchange Offer to the
public without restriction under the 1933 Act and without restriction under
applicable blue sky or state securities laws, then in case of each of clauses
(i) through (v) the Company shall, at the Company's cost:

         (a) As promptly as practicable, and, in any event, no later than 60
days after such filing obligation arises, file with the SEC, and thereafter
shall use their reasonable best efforts to cause to be declared effective as
promptly as practicable but, in any event, no later than 150 days after such
obligation arises, a Shelf Registration Statement relating to the offer and sale
of the Registrable Securities by the Holders from time to time in accordance
with the methods of distribution elected by the Majority Holders participating
in the Shelf Registration and set forth in such Shelf Registration Statement.

         (b) Use their reasonable best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming part
thereof to be usable by Holders until the earlier of (A) two years from the date
the Shelf Registration Statement is declared effective by the SEC, (B) the date
on which the Registrable Securities become eligible for resale pursuant to Rule
144(k) or any successor provision or (C) the date on which all Registrable
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or cease to be outstanding or otherwise to
be Registrable Securities (the "Effectiveness Period"); provided, however, that
the Effectiveness Period in respect of the Shelf Registration Statement shall be
extended if and to the extent necessary to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 under the 1933 Act and
as otherwise provided herein.

         (c) Notwithstanding any other provisions hereof, use their reasonable
best efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any supplement
thereto complies in all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any Prospectus
forming part of any Shelf Registration

                                      -8-



Statement, and any supplement to such Prospectus (as amended or supplemented
from time to time), does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.

         The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement, as required by Section 3(b) below, and to furnish
to the Holders of Registrable Securities copies of any such supplement or
amendment as promptly as reasonably practicable after its being used or filed
with the SEC.

         2.3 Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2.1 or 2.2. Each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.

         2.4 Effectiveness. (a) The Company will be deemed not to have used
reasonable best efforts to cause the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, to become, or to remain,
effective during the requisite period if the Company voluntarily takes any
action that would, or omits to take any action which omission would, result in
any such Registration Statement not being declared effective or in the Holders
of Registrable Securities covered thereby not being able to exchange or offer
and sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless (i) such action is required by applicable law, or
(ii) such action is taken by the Company in good faith and for valid business
reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets or a material corporate
transaction or event, so long as the Company promptly thereafter complies with
the requirements of Section 3(k) hereof, if applicable.

         (b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to an Exchange Offer Registration
Statement or a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have become effective during the period of such interference, until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume.

         (c) During any period of 365 consecutive days, the Company may suspend
the availability of a Shelf Registration Statement and the use of a related
Prospectus for two periods of up to 45 consecutive days (each such period, a
"Suspension Period") (except for such 45-day period immediately prior to
maturity of the Securities), but no more than an aggregate of 60 days during any
period of 365 consecutive days, if (A) any event shall occur as set forth in
Section 2.4(a)(i) or (ii) or as a result of which it shall be necessary, in the
good faith determination of the board of directors of the Company to amend the
Shelf Registration Statement or amend or supplement any prospectus or prospectus
supplement thereunder in order that each such document not include any untrue
statements of a material fact or omit to state a material fact

                                      -9-



necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (B) the Company has not filed with the
SEC the financial statements required by the applicable rules and regulations
for the Shelf Registration Statement to remain active; provided, however, that
the Company shall use reasonable best efforts to prepare and file any such
amendment or supplement as promptly as practicable. The two-year period referred
to in Section 2.2(b) shall be extended by an amount of time equal to all such
Suspension Periods.

         2.5 Interest. The Indenture will provide that in the event that either
(a) the Exchange Offer Registration Statement is not filed with the SEC on or
prior to the 120th day following the Closing Date, (b) the Exchange Offer
Registration Statement has not been declared effective on or prior to the 180th
day following the Closing Date or the Exchange Offer is not consummated on or
prior to the 210th day after the Closing Date, or (c) if required, a Shelf
Registration Statement is not filed with the SEC on or prior to the 60th day
following the date such obligation arises or is not declared effective on or
prior to the 150th day following the date such obligation arises (each such
event referred to in clauses (a) through (c) above, a "Registration Default"),
the interest rate borne by the Securities shall be increased ("Additional
Interest") by one-quarter of one percent (0.25%) per annum upon the occurrence
of each Registration Default, which rate will increase by one quarter of one
percent (0.25%) at the beginning of each succeeding 90-day period (or portion
thereof) that such Additional Interest continues to accrue under any such
circumstance; provided, however, that the maximum aggregate increase in the
interest rate will in no event exceed one percent (1%) per annum; provided
further, that no Additional Interest shall be payable if the Exchange Offer
Registration Statement is not filed or declared effective or the Exchange Offer
is not consummated on account of the reasons set forth in clause (i) of the
first paragraph of Section 2.2 (it being understood, however, that in any such
case the Company shall be obligated to file a Shelf Registration Statement and
Additional Interest shall be payable if the Shelf Registration Statement is not
filed or is not declared effective in accordance with clause (c) above), or
notice under clause (iv) of such paragraph was not made on a timely basis; and
provided further, that Additional Interest shall only be payable in case the
Shelf Registration Statement is not filed or is not declared effective as
aforesaid. Immediately following the cure of a Registration Default, the accrual
of Additional Interest with respect to that particular Registration Default will
cease. Immediately following the cure of all Registration Defaults or the date
on which the Exchange Securities are saleable pursuant to Rule 144(k) under the
1933 Act or any successor provision, the accrual of Additional Interest will
cease and the interest rate will revert to the original rate.

         If the Shelf Registration Statement is declared effective but becomes
unusable by the Holders of Registrable Securities covered by such Shelf
Registration Statement ("Shelf Registrable Securities") for any reason, and (a)
the aggregate number of days in any consecutive 365 day period for which the
Shelf Registration Statement shall not be usable exceeds 60 days in the
aggregate or (b) there shall be more than two Suspension Periods, then the
interest rate borne by the Shelf Registrable Securities will be increased by
0.25% per annum of the principal amount of the Securities for the first 90-day
period (or portion thereof) beginning on the 61st such day that such Shelf
Registration Statement remains unusable or the first day of the third Suspension
Period, as the case may be. If the Shelf Registration Statement remains unusable
for 60 days or if a third Suspension Period is ongoing, as the case may be,
during any 90-day period for which Additional Interest shall be payable pursuant
to this paragraph, then the interest rate borne by the Shelf Registrable
Securities during such 90-day period shall be increased by an

                                      -10-



additional 0.25% per annum of the principal amount of the Securities at the
beginning of each such subsequent 90-day period; provided, however, that the
maximum aggregate increase in the interest rate as a result of a Shelf
Registration Statement being unusable (inclusive of any interest that accrues on
such Shelf Registrable Securities pursuant to the first paragraph of this
Section 2.5) will in no event exceed one percent (1%) per annum. Upon the Shelf
Registration Statement once again becoming usable, the interest rate borne by
the Shelf Registrable Securities will be reduced to the original interest rate.
Additional Interest shall be computed based on the actual number of days elapsed
in each 90-day period for which Additional Interest is due.

         The Company shall notify the Trustee within five business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Additional Interest shall be
paid in the same manner as regular interest pursuant to the Indenture. Any
accrued and unpaid interest (including Additional Interest, if any) on a
Registrable Security upon the issuance of an Exchange Security in exchange for a
Registrable Security shall cease to be payable to the Holder thereof but such
accrued and unpaid interest (including Additional Interest, if any) shall be
payable to the Holder of such Exchange Security with the next Interest Payment
for such Exchange Security. The Additional Interest due shall be payable on each
interest payment date to the record Holder of Registrable Securities entitled to
receive the interest payment to be paid on such date as set forth in the
Indenture. Each obligation to pay Additional Interest shall be deemed to accrue
from and including the day of the applicable Event Date.

         3.  Registration Procedures.

         In connection with the obligations of the Company with respect to the
Registration Statements and pursuant to Sections 2.1 and 2.2 hereof, the Company
shall:

         (a) prepare and file with the SEC a Registration Statement, within the
relevant time period specified in Section 2, on the appropriate form under the
1933 Act, which form (i) shall be selected by the Company; (ii) shall, in the
case of a Shelf Registration, be available for the sale of the Shelf Registrable
Securities by the selling Holders thereof; and (iii) shall comply as to form in
all material respects with the requirements of the applicable form and include
or incorporate by reference all financial statements required by the SEC to be
filed therewith or incorporated by reference therein, and use their reasonable
best efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;

         (b) subject to Section 2.4 hereof, prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary under applicable law to keep such Registration Statement effective
for the applicable period as provided for in Section 2 hereof; and cause each
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to file such Prospectus pursuant to Rule 424 (or any similar
provision then in force) under the 1933 Act and comply with the provisions of
the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable
to them with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance, in the case
of a Shelf Registration, with the intended method or methods of distribution by
the selling Holders thereof (including sales by any Participating
Broker-Dealer);

                                      -11-



         (c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Shelf Registrable
Securities will be made in accordance with the method selected by the Initial
Purchasers, if any, or if no Initial Purchaser is participating in the Shelf
Registration, by the Majority Holders participating in the Shelf Registration;
(ii) furnish to each Holder of Shelf Registrable Securities and to each
underwriter of an underwritten offering of Shelf Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Initial Purchasers, Majority Holders or underwriter, selected by such
Initial Purchasers or Majority Holders, as the case may be, may reasonably
request considering the method of distribution selected by the Initial
Purchasers, if any, or if no Initial Purchaser is participating in the Shelf
Registration, by the Majority Holders, as the case may be, including financial
statements and schedules and, if any Holder so requests, all exhibits (but not
more than one set of such exhibits for each Holder) in order to facilitate the
public sale or other disposition of the Shelf Registrable Securities; and (iii)
hereby consent to the use of the Prospectus together with any amendment or
supplement thereto by each of the selling Holders of Shelf Registrable
Securities, subject to and in accordance with applicable law, in connection with
the offering and sale of the Shelf Registrable Securities covered by the
Prospectus or any amendment or supplement thereto;

         (d) use its reasonable best efforts to register or qualify the Shelf
Registrable Securities under all applicable state securities or "blue sky" laws
of such jurisdictions as the Initial Purchasers or Majority Holders
participating in the Shelf Registration and each underwriter of an underwritten
offering of Shelf Registrable Securities shall reasonably request by the time
the applicable Registration Statement is declared effective by the SEC, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable each such Initial Purchasers or Majority Holders and underwriter,
selected by such Initial Purchasers or Majority Holders, to consummate the
disposition in each such jurisdiction of such Shelf Registrable Securities owned
by the Holders; provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (ii) take any action which would subject it to general service of
process or taxation in any such jurisdiction where it is not then so subject, or
(iii) conform its capitalization or the composition of its assets at the time to
the securities or blue sky laws of such jurisdiction, or (iv) make any changes
to it articles of association or any agreement with its shareholders;

         (e) notify promptly each Holder of Shelf Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below (which notice pursuant to clauses (ii), (iv),
(v) and (vi) hereof shall be accompanied by an instruction to suspend use of the
Prospectus until the requisite changes have been made) and, if requested by such
Holder or Participating Broker-Dealer, confirm such advice in writing (if such
notice was not originally given in writing) promptly (i) when a Registration
Statement has become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of any request by the SEC or any
state securities authority for post-effective amendments and supplements to a
Registration Statement and Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the SEC or
any state

                                      -12-



securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) in the case of a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Shelf Registrable
Securities covered thereby, the representations and warranties of the Company
contained in any underwriting agreement, securities sales agreement or other
similar agreement, if any, relating to the offering cease to be true and correct
in all material respects, (v) of the happening of any event, the existence of
any condition or the discovery of any facts during the period a Shelf
Registration Statement is effective which makes (A) any statement made in such
Registration Statement untrue in any material respect or which requires the
making of any changes in such Registration Statement in order to make the
statements therein not misleading or (B) any statement made in the related
Prospectus untrue in any material respect or which requires the making of any
changes in such Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, (vi) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities or the Exchange Securities, as the
case may be, for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose and (vii) of any determination by the Company
that a post-effective amendment to such Registration Statement would be
appropriate;

         (f) (i) in the case of the Exchange Offer Registration Statement (A)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be reasonably acceptable to BofA and Deutsche
Bank, on behalf of the Participating Broker-Dealers, if any, and which shall
contain a summary statement of the positions taken or policies made by the staff
of the SEC with respect to the potential "underwriter" status of any
broker-dealer that holds Registrable Securities acquired for its own account as
a result of market-making activities or other trading activities and that will
be the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities to be received by such broker-dealer in the Exchange Offer,
including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Securities, (B) furnish to each Participating Broker-Dealer who has delivered to
the Company the notice referred to in Section 3(e), without charge, as many
copies of each Prospectus included in the Exchange Offer Registration Statement,
including any preliminary prospectus, and any amendment or supplement thereto,
as such Participating Broker-Dealer may reasonably request, (C) hereby consent
to the use of the Prospectus forming part of the Exchange Offer Registration
Statement together with any amendment or supplement thereto, by any Person
subject to the prospectus delivery requirements of the SEC, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto, and (D) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange Offer
(x) the following provision:

                  "If the exchange offeree is a broker-dealer holding
         Registrable Securities acquired for its own account as a result of
         market-making activities or other trading activities, it will deliver a
         prospectus meeting the requirements of the 1933 Act in connection with
         any resale of Exchange Securities received in respect of such
         Registrable Securities pursuant to the Exchange Offer;"

                                      -13-



and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the 1933
Act; and (ii) in the case of any Exchange Offer Registration Statement, the
Company agrees to deliver to BofA and Deutsche Bank, on behalf of the
Participating Broker-Dealers upon the effectiveness of the Exchange Offer
Registration Statement officers' certificates substantially in the form
customarily delivered in a public offering of debt securities;

         (g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
Milbank, Tweed, Hadley & McCloy LLP, as special counsel for the Holders of Shelf
Registrable Securities (or, if Milbank, Tweed, Hadley & McCloy LLP is unable or
unwilling to serve, such other special counsel (but not more than one) as may be
selected by Holders of a majority in principal amount of such Shelf Registrable
Securities ("Special Counsel")), copies of any comment letters received from the
SEC or any other request by the SEC or any state securities authority for
amendments or supplements to a Registration Statement and Prospectus or for
additional information;

         (h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
practicable moment;

         (i) in the case of a Shelf Registration, furnish to each Holder of
Shelf Registrable Securities, and each underwriter, if any, without charge, at
least one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference or exhibits thereto, unless
requested in writing);

         (j) in the case of a Shelf Registration (unless any Registrable
Securities shall be in book-entry form only), cooperate with the selling Initial
Purchasers, if any, or Majority Holders of Shelf Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Shelf Registrable Securities to be sold and not bearing any restrictive legends;
and enable such Shelf Registrable Securities to be in such denominations
(consistent with the provisions of the Indenture) and registered in such names
as the selling Initial Purchasers, if any, or Majority Holders or the
underwriters, selected by such Initial Purchasers or Majority Holders, if any,
may reasonably request at least three business days prior to the closing of any
sale of Shelf Registrable Securities;

         (k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections 3(e)(v)
and 3(e)(vi) hereof, as promptly as practicable after the occurrence of such an
event, subject to section 2.4(c), use its reasonable best efforts to prepare a
supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Shelf Registrable Securities or Participating Broker-Dealers, such
Prospectus will not contain at the time of such delivery any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a

                                      -14-



material fact or to include any omitted material fact, the Company agrees
promptly to notify each Holder of such determination and to furnish each Holder
such number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request and the Initial Purchasers, on their own behalf
and on behalf of subsequent holders, hereby agree to suspend use of the
Prospectus until the Company has amended or supplemented to correct such
misstatement or omission;

         (l) in the case of a Shelf Registration, a reasonable time prior to the
filing of any Shelf Registration Statement, any Prospectus, any amendment to a
Shelf Registration Statement or amendment or supplement to a Prospectus (other
than any document which is to be incorporated by reference into a Shelf
Registration Statement or a Prospectus after initial filing of a Shelf
Registration Statement) provide copies of such Registration Statement,
Prospectus, amendment or supplement to the Initial Purchasers, if any, or the
Majority Holders on behalf of such Holders; and make representatives of the
Company as shall be reasonably requested by the Majority Holders of Shelf
Registrable Securities, or the Initial Purchasers on behalf of such Holders,
available for discussion of such document;

         (m) obtain a CUSIP number for all Exchange Securities, Private Exchange
Securities or Registrable Securities, as the case may be, not later than the
effective date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Securities, Private Exchange Securities or the
Registrable Securities, as the case may be, in a form eligible for deposit with
the Depositary;

         (n) (i) cause the Indenture to be qualified under the TIA in connection
with the registration of the Exchange Securities or Registrable Securities, as
the case may be, (ii) cooperate with the Trustee to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the TIA and (iii) execute, and use its best efforts to cause
the Trustee to execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner;

         (o) in the case of a Shelf Registration, and considering the method of
distribution selected by the Majority Holders, enter into customary agreements
(including underwriting agreements and, if requested by the Initial Purchasers,
if any, or the Majority Holders, as the case may be, securities sales agreements
providing for, among other things, the appointment of an agent for the selling
Holders for the purpose of soliciting purchases of Shelf Registrable Securities,
which agreement shall be in form, substance and scope customary for similar
offerings) and take all other customary and appropriate actions in order to
expedite or facilitate the disposition of such Shelf Registrable Securities,
including in the case of an underwritten offering:

                  (i) make such representations and warranties to the
         underwriters selected by such Initial Purchasers or Majority Holders,
         as the case may be, and to the Holders selling through such
         underwriters, comparable in form, substance and scope to the
         representations and warranties made by the Company pursuant to the
         Purchase Agreement;

                                      -15-



                  (ii) if so requested by the Initial Purchasers, if any, the
         Majority Holders or the underwriters selected by such Initial
         Purchasers or Majority Holders, as the case may be, obtain opinions of
         counsel to the Company (which counsel shall be reasonably satisfactory
         to the underwriters, if any, selected by such Initial Purchasers and
         Majority Holders) and updates thereof addressed to such underwriters
         and to the Holders selling through such underwriters, covering matters
         comparable in form, substance and scope to those covered in the
         opinions delivered by counsel to the Company pursuant to the Purchase
         Agreement and subject to exceptions and qualifications comparable in
         form, substance and scope to those contained in such delivered
         opinions;

                  (iii) if so requested by the Initial Purchasers, if any, the
         Majority Holders or the underwriters selected by such Initial
         Purchasers or Majority Holders, as the case may be, obtain "cold
         comfort" letters and updates thereof from the Company's independent
         certified public accountants (and, if necessary, any other independent
         certified public accountants of any subsidiary of the Company, or of
         any business acquired by the Company for which financial statements
         are, or are required to be, included in the Registration Statement)
         addressed to the underwriters selected by the Initial Purchasers or the
         Majority Holders, as the case may be, and to the Holders selling
         through such underwriters, such letters to be in customary form and in
         accordance with applicable accounting standards and covering matters of
         the type customarily covered in "cold comfort" letters to underwriters
         in connection with similar underwritten offerings;

                  (iv) cause the same to set forth indemnification provisions
         and procedures comparable in scope to the indemnification provisions
         and procedures set forth in Section 4 hereof with respect to the
         underwriters and all other parties to be indemnified pursuant to said
         Section or, at the request of any underwriters, such other
         indemnification provisions customarily provided to underwriters under
         the circumstances applicable to the offering; provided, however, that
         such underwriting agreement shall contain indemnification provisions
         and procedures regarding the indemnification of the Company with
         respect to information provided by the underwriter or by any other
         party to be indemnified under Section 4 hereof, comparable in scope to
         the indemnification provisions and procedures set forth in Section 4
         hereof or, at the request of the Company, such other indemnification
         provisions customarily provided under the circumstances applicable to
         the offering; and

                  (v) deliver such documents and certificates as may be
         reasonably requested and as are customarily delivered in similar
         offerings to the Initial Purchasers, if any, the Holders of a majority
         in principal amount of the Shelf Registrable Securities being sold and
         the underwriters.

         The above shall be done at each closing under any underwriting or
similar agreement as and to the extent required thereunder;

         (p) in the case of a Shelf Registration or if a Prospectus is required
to be delivered by any Participating Broker-Dealer in the case of an Exchange
Offer, make available for inspection by representatives of the Initial
Purchasers, if any, the Majority Holders, any underwriters selected by such
Initial Purchasers or Majority Holders, as the case may be, participating in any

                                      -16-



disposition pursuant to a Shelf Registration Statement, any Participating
Broker-Dealer (provided that a Participating Broker-Dealer shall not be deemed
to be an underwriter solely as a result of it being required to deliver a
prospectus in connection with any resale of Exchange Securities), any Special
Counsel or any accountant retained by any of the foregoing, all such financial
and other records, pertinent corporate documents and properties of the Company
reasonably requested by any such persons, and cause the respective officers,
directors, employees, and any other agents of the Company to respond to such
queries, as shall be reasonably necessary to conduct a reasonable investigation
within the meaning of Section 11 of the 1933 Act; provided, however, that such
records, documents or information which the Company identifies as being
confidential shall not be disclosed by the representative, Holder, attorney or
accountant unless (i) the disclosure of such records, documents or information
is necessary to avoid or correct a misstatement or omission in a Registration
Statement, (ii) the release of such records, documents or information is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction or
as part of the evidentiary procedures of a court of competent jurisdiction,
subject to the requirements of such subpoena or order, and only after such
person shall have given the Company reasonable prior notice of such
requirements; or (iii) such records, documents or information have previously
been generally made available to the public, and provided further, that the
Company may require recipients of such records, documents or information to
enter into a confidentiality agreement;

         (q) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to the Initial Purchasers and to Milbank, Tweed,
Hadley & McCloy LLP, as counsel to the Holders of Registrable Securities, and
make such changes in any such document prior to the filing thereof as the
Initial Purchasers or such counsel to the Holders of Registrable Securities may
reasonably request and, except as otherwise required by applicable law, not file
any such document in a form to which the Initial Purchasers on behalf of the
Holders of Registrable Securities and such counsel to the Holders of Registrable
Securities shall not have previously been advised and furnished a copy of or to
which the Initial Purchasers on behalf of the Holders of Registrable Securities
or such counsel to the Holders of Registrable Securities shall reasonably
object, and make the representatives of the Company available for discussion of
such documents as shall be reasonably requested by the Initial Purchasers; and

                  (ii) in the case of a Shelf Registration, a reasonable time
         prior to filing any Shelf Registration Statement, any Prospectus
         forming a part thereof, any amendment to such Shelf Registration
         Statement or amendment or supplement to such Prospectus, provide copies
         of such document to the Initial Purchasers, if any, the Majority
         Holders, Special Counsel and to the underwriter or underwriters of an
         underwritten offering of Shelf Registrable Securities, if any, as
         appointed by the Initial Purchasers or the Majority Holders, as the
         case may be, make such changes in any such document prior to the filing
         thereof as the Initial Purchasers, Special Counsel or the underwriter
         or underwriters reasonably request and not file any such document in a
         form to which the Majority Holders of Shelf Registrable Securities, the
         Initial Purchasers on behalf of the Holders of Shelf Registrable
         Securities, Special Counsel or any underwriter shall not have
         previously been advised and furnished a copy of or to which such
         Majority Holders, the

                                      -17-



         Initial Purchasers on behalf of the Holders of Shelf Registrable
         Securities, Special Counsel or any underwriter shall reasonably object,
         and make the representatives of the Company available for discussion of
         such document as shall be reasonably requested by the Majority Holders,
         the Initial Purchasers on behalf of such Holders, Special Counsel or
         any underwriter;

         (r) [RESERVED]

         (s) in the case of a Shelf Registration, use its reasonable best
efforts to cause the Shelf Registrable Securities to be rated by two nationally
recognized statistical rating agencies, if so requested by the Initial
Purchasers, if any, or the Majority Holders, or if requested by the underwriter
or underwriters as appointed by the Initial Purchasers, if any, or the Majority
Holders of an underwritten offering of Shelf Registrable Securities, if any;

         (t) otherwise comply with all applicable rules and regulations of the
SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement of the Company covering at least 12 months
which shall satisfy the provisions of Section 11(a) of the 1933 Act, including,
at the option of the Company, Rule 158 thereunder;

         (u) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter as appointed by the Initial
Purchasers, if any, or the Majority Holders and such underwriter's counsel
(including any "qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the NASD); and

         (v) upon consummation of an Exchange Offer or a Private Exchange,
obtain a customary opinion of counsel to the Company addressed to the Trustee
for the benefit of all Holders of Registrable Securities participating in the
Exchange Offer or Private Exchange, and which includes an opinion that (i) the
Company has duly authorized, executed and delivered the Exchange Securities
and/or Private Exchange Securities, as applicable, and the related indenture,
and (ii) each of the Exchange Securities and related indenture constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms (with customary exceptions).

         In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Shelf Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Shelf Registrable Securities as the Company may from time to time
reasonably request in writing for use in connection with any Shelf Registration
Statement or Prospectus included therein, including without limitation,
information specified in Item 507 of Regulation S-K under the 1933 Act.

         In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event or the
discovery of any facts, each of the kind described in Section 3(e)(v) hereof,
such Holder will forthwith discontinue disposition of Shelf Registrable
Securities pursuant to a Shelf Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k)

                                      -18-



hereof, and, if so directed by the Company, such Holder will deliver to the
Company (at the expense of the Company ) all copies in such Holder's possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Shelf Registrable Securities current at the time of
receipt of such notice.

         If any of the Shelf Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Shelf Registrable
Securities included in such offering, provided, however, that such selection is
acceptable to the Company. No Holder of Shelf Registrable Securities may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Shelf Registrable Securities on the basis provided
in any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.

         4.  Indemnification; Contribution.

         (a) The Company agrees to indemnify and hold harmless each Initial
Purchaser, its selling agents, each Holder, including Participating
Broker-Dealers, each Person who participates as an underwriter (any such Person
being an "Underwriter"), their respective affiliates (as such term is defined in
Rule 501(b) under the 1933 Act (each, an "Affiliate")), and each Person, if any,
who "controls" any of such indemnified parties within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act as follows:

                  (i) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, arising out of any untrue statement or
         alleged untrue statement of a material fact contained in any
         Registration Statement (or any amendment or supplement thereto)
         pursuant to which Exchange Securities or Registrable Securities were
         registered under the 1933 Act, including all documents incorporated
         therein by reference, or the omission or alleged omission therefrom of
         a material fact required to be stated therein or necessary to make the
         statements therein not misleading, or arising out of any untrue
         statement or alleged untrue statement of a material fact contained in
         any Prospectus (or any amendment or supplement thereto) or the omission
         or alleged omission therefrom of a material fact necessary in order to
         make the statements therein, in the light of the circumstances under
         which they were made, not misleading;

                  (ii) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, to the extent of the aggregate amount
         paid in settlement of any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or of any claim whatsoever based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission; provided,
         however, that (subject to Section 4(d) below) any such settlement is
         effected with the written consent of the Company; and

                  (iii) against any and all expense whatsoever, as incurred
         (including, in the case where the indemnified parties are entitled to
         appoint counsel in accordance with

                                      -19-



         paragraph (c) of this Section), the reasonable fees and disbursements
         of counsel chosen by the indemnified parties) reasonably incurred in
         investigating, preparing or defending against any litigation, or any
         investigation or proceeding by any governmental agency or body,
         commenced or threatened, or any claim whatsoever based upon any such
         untrue statement or omission, or any such alleged untrue statement or
         omission, to the extent that any such expense is not paid under
         subparagraph (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Holder or Underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).

         (b) In the case of a Shelf Registration, each Holder severally, but not
jointly, agrees to indemnify and hold harmless the Company, the Initial
Purchasers, each Underwriter and the other selling Holders, and each of their
respective directors and officers, and each Person, if any, who controls the
Company, the Initial Purchasers, any Underwriter or any other selling Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus included therein (or any amendment or supplement thereto) in reliance
upon and in conformity with written information with respect to such Holder
furnished to the Company by such Holder expressly for use in the Shelf
Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto); provided, however, that no such Holder shall
be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities pursuant to such
Shelf Registration Statement; and provided further, that no such underwriter
shall be liable for any claims hereunder in excess of the amount of any
underwriting fees or discounts received by such underwriter with respect to the
sale of Shelf Registrable Securities pursuant to such Shelf Registration
Statement.

         (c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party and any other
indemnified parties as the indemnifying party may designate in any action for
which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and

                                      -20-



the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party; provided, however, that (i), (ii) and (iii)
above notwithstanding, an indemnified party may participate at its own expense
in the defense of any such action. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all indemnified parties. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 4 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

         (d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 4(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided,
however, that an indemnifying party shall not be liable for any such settlement
effected without its consent if such indemnifying party, prior to the date of
such settlement, (x) reimburses such indemnified party in accordance with such
request for the amount of such fees and expenses of counsel as the indemnifying
party believes in good faith to be reasonable, and (y) provides written notice
to the indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.

         (e) If the indemnification provided for in this Section 4 is for any
reason unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchasers on another hand, and the Holders on another hand, from the
offering of the Exchange Securities or Registrable

                                      -21-



Securities included in such offering or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand, and the
Initial Purchasers on another hand, and the Holders on another hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

         The relative fault of the Company on the one hand, and the Initial
Purchasers on another hand, and the Holders on another hand, shall be determined
by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Initial Purchasers or
the Holders and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

         The Company, the Holders and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 4. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
4 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

         Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which any
underwriting fees or discounts received by such Initial Purchaser with respect
to the sale of Shelf Registrable Securities pursuant to the related Shelf
Registration Statement exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

         No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

         For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and each Initial Purchaser's or Holder's Affiliates
and selling agents shall have the same rights to contribution as such Initial
Purchaser or Holder, and each Person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Initial Purchasers'
respective obligations to contribute pursuant to this Section 4 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A to the Purchase Agreement and not joint.

                                      -22-



         5.  Miscellaneous.

         5.1 Rule 144 and Rule 144A. For so long as the Company is subject to
the reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file the reports required to be filed by it under Section
13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder. If the Company ceases to be so required to file such reports, the
Company covenants that it will upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such
information to a prospective purchaser as is necessary under applicable rules
and regulations to permit sales pursuant to Rule 144A under the 1933 Act and it
will take such further action as any Holder of Registrable Securities may
reasonably request, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by (i) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A
under the 1933 Act, as such Rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements. The
Company's obligations under this Section 5.1 shall terminate upon the later of
the consummation of the Exchange Offer and the Effectiveness Period.

         5.2 No Inconsistent Agreements. The Company has not entered into, and
the Company will not after the date of this Agreement enter into, any agreement
that could interfere with the Company's performance of its obligations hereunder
or that could prevent or limit the Holders of Registrable Securities from
enjoying the rights granted to them hereunder. The rights granted to the Holders
hereunder do not and will not for the term of this Agreement in any way conflict
with any material rights granted to the holders of the Company's other issued
and outstanding securities under any such agreements.

         5.3 Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
departure.

         5.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (a)
if to a Holder, at the most current address given by such Holder to the Company
by means of a notice given in accordance with the provisions of this Section
5.4, which address initially is the address set forth in the Purchase Agreement
with respect to the Initial Purchasers; and (b) if to the Company initially at
the address set forth in the Purchase Agreement, and thereafter at such other
address of which notice is given in accordance with the provisions of this
Section 5.4.

                                      -23-



         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered to
an air courier guaranteeing overnight delivery.

         Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.

         5.5 Successor and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement and the Indenture, and such person
shall be entitled to receive the benefits hereof.

         5.6 Third Party Beneficiaries. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company and the
Holders, and shall have the right to enforce such agreements directly to the
extent they deem such enforcement necessary or advisable to protect their rights
or the rights of Holders hereunder. Each Holder of Registrable Securities shall
be a third party beneficiary to the agreements made hereunder between the
Company and the Initial Purchasers, on the other hand, and shall have the right
to enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder.

         5.7 Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2.1 through
2.4 hereof may result in material irreparable injury to the Initial Purchasers
or the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company's obligations
under Sections 2.1 through 2.4 hereof.

         5.8 Restriction on Resales. Until the expiration of two years after the
original issuance of the Securities, the Company will not, and will cause their
"affiliates" (as such term is defined in Rule 144(a)(1) under the 1933 Act) not
to, resell any Securities which are "restricted securities" (as such term is
defined under Rule 144(a)(3) under the 1933 Act) that have been reacquired by
any of them.

                                      -24-



         5.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         5.10 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         5.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.

         5.12 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.






                                      -25-





         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.


                                               SONOCO PRODUCTS COMPANY,
                                                 as Issuer


                                               By:
                                                   -----------------------------
                                                   Name:
                                                          ----------------------
                                                   Title:
                                                          ----------------------


CONFIRMED AND ACCEPTED
as of the date first above written:


BANC OF AMERICA SECURITIES LLC


By:
    ---------------------------------------
             Authorized Signatory


DEUTSCHE BANK SECURITIES INC.


By:
    ---------------------------------------
             Authorized Signatory

By:
    ---------------------------------------
             Authorized Signatory


For themselves and as Representatives of the other Initial Purchasers
set forth above



                                      -26-

                                                                    EXHIBIT 10.2


                                                                  EXECUTION COPY

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







                                CREDIT AGREEMENT

                            Dated as of July 7, 2004

                                      among

                            SONOCO PRODUCTS COMPANY,
                                as the Borrower,

                             BANK OF AMERICA, N.A.,
                  as Administrative Agent and Swing Line Lender

                                       and

                         The Other Lenders Party Hereto


                         BANC OF AMERICA SECURITIES LLC
                                       and
                         WACHOVIA CAPITAL MARKETS, LLC,
                 as Joint Lead Arrangers and Joint Book Managers


                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                              as Syndication Agent

                                       and

                     BANK OF TOKYO-MITSUBISHI TRUST COMPANY,

                          DEUTSCHE BANK SECURITIES INC.
                                       and
                                  SUNTRUST BANK
                           as Co-Documentation Agents




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





                                TABLE OF CONTENTS


         Section                                                                                               Page
         -------                                                                                               ----
                                                                                                         
Article I.            DEFINITIONS AND ACCOUNTING TERMS............................................................1
         1.01         Defined Terms...............................................................................1
         1.02         Other Interpretive Provisions..............................................................16
         1.03         Accounting Terms...........................................................................17
         1.04         Rounding...................................................................................18
         1.05         Times of Day...............................................................................18

Article II.           THE COMMITMENTS AND BORROWINGS.............................................................18
         2.01         Committed Loans............................................................................18
         2.02         Borrowings, Conversions and Continuations of Committed Loans...............................18
         2.03         Bid Loans..................................................................................20
         2.04         Swing Line Loans...........................................................................23
         2.05         Prepayments................................................................................25
         2.06         Termination or Reduction of Commitments....................................................26
         2.07         Repayment of Loans.........................................................................27
         2.08         Interest...................................................................................27
         2.09         Fees.......................................................................................28
         2.10         Computation of Interest and Fees...........................................................28
         2.11         Evidence of Debt...........................................................................29
         2.12         Payments Generally; Administrative Agent's Clawback........................................29
         2.13         Sharing of Payments by Lenders.............................................................31
         2.14         Increase in Aggregate Commitments..........................................................32

Article III.          TAXES, YIELD PROTECTION AND ILLEGALITY.....................................................33
         3.01         Taxes......................................................................................33
         3.02         Illegality.................................................................................35
         3.03         Inability to Determine Rates...............................................................35
         3.04         Increased Costs; Reserves on Eurodollar Rate Loans.........................................35
         3.05         Funding Losses.............................................................................37
         3.06         Mitigation Obligations; Replacement of Lenders.............................................38
         3.07         Survival...................................................................................38

Article IV.           CONDITIONS PRECEDENT TO Borrowings.........................................................38
         4.01         Conditions of Initial Borrowing............................................................38
         4.02         Conditions to all Borrowings...............................................................40

Article V.            REPRESENTATIONS AND WARRANTIES.............................................................41
         5.01         Existence, Qualification and Power; Compliance with Laws...................................41
         5.02         Authorization; No Contravention............................................................41
         5.03         Governmental Authorization; Other Consents.................................................41
         5.04         Binding Effect.............................................................................41
         5.05         Financial Statements; No Material Adverse Effect...........................................41
         5.06         Litigation.................................................................................42
         5.07         No Default.................................................................................42
         5.08         Ownership of Property; Liens...............................................................42
         5.09         Environmental Compliance...................................................................43
         5.10         Insurance..................................................................................43
         5.11         Taxes......................................................................................43


                                        i



                                                                                                         
         5.12         ERISA Compliance...........................................................................43
         5.13         Subsidiaries...............................................................................44
         5.14         Margin Regulations; Investment Company Act; Public Utility Holding Company Act.............44
         5.15         Disclosure.................................................................................44
         5.16         Compliance with Laws.......................................................................45
         5.17         Intellectual Property; Licenses, Etc.......................................................45

Article VI.           AFFIRMATIVE COVENANTS......................................................................45
         6.01         Financial Statements.......................................................................45
         6.02         Certificates; Other Information............................................................46
         6.03         Notices....................................................................................48
         6.04         Payment of Obligations.....................................................................48
         6.05         Preservation of Existence, Etc.............................................................49
         6.06         Maintenance of Properties..................................................................49
         6.07         Maintenance of Insurance...................................................................49
         6.08         Compliance with Laws.......................................................................49
         6.09         Books and Records..........................................................................49
         6.10         Inspection Rights..........................................................................49
         6.11         Use of Proceeds............................................................................50

Article VII.          NEGATIVE COVENANTS.........................................................................50
         7.01         Liens......................................................................................50
         7.02         Indebtedness...............................................................................51
         7.03         Fundamental Changes........................................................................52
         7.04         Dispositions...............................................................................52
         7.05         Transactions with Affiliates...............................................................53
         7.06         Use of Proceeds............................................................................53
         7.07         Minimum Book Net Worth.....................................................................53

Article VIII.         EVENTS OF DEFAULT AND REMEDIES.............................................................54
         8.01         Events of Default..........................................................................54
         8.02         Remedies Upon Event of Default.............................................................56
         8.03         Application of Funds.......................................................................56

Article IX.           ADMINISTRATIVE AGENT.......................................................................57
         9.01         Appointment and Authority..................................................................57
         9.02         Rights as a Lender.........................................................................57
         9.03         Exculpatory Provisions.....................................................................57
         9.04         Reliance by Administrative Agent...........................................................58
         9.05         Delegation of Duties.......................................................................59
         9.06         Resignation of Administrative Agent........................................................59
         9.07         Non-Reliance on Administrative Agent and Other Lenders.....................................59
         9.08         No Other Duties, Etc.......................................................................60
         9.09         Administrative Agent May File Proofs of Claim..............................................60

Article X.            MISCELLANEOUS..............................................................................61
         10.01        Amendments, Etc............................................................................61
         10.02        Notices; Effectiveness; Electronic Communication...........................................62
         10.03        No Waiver; Cumulative Remedies.............................................................63
         10.04        Expenses; Indemnity; Damage Waiver.........................................................63
         10.05        Payments Set Aside.........................................................................65


                                       ii




                                                                                                         
         10.06        Successors and Assigns.....................................................................65
         10.07        Treatment of Certain Information; Confidentiality..........................................69
         10.08        Right of Setoff............................................................................70
         10.09        Interest Rate Limitation...................................................................70
         10.10        Counterparts; Integration; Effectiveness...................................................71
         10.11        Integration................................................................................71
         10.12        Survival of Representations and Warranties.................................................71
         10.13        Severability...............................................................................71
         10.14        Replacement of Lenders.....................................................................72
         10.15        Governing Law; Jurisdiction; Etc...........................................................72
         10.16        Waiver of Jury Trial.......................................................................73
         10.17        USA PATRIOT Act Notice.....................................................................74

         SIGNATURES.............................................................................................S-1












                                      iii





SCHEDULES

         2.01     Commitments and Applicable Percentages
         5.13     Subsidiaries
         7.01     Existing Liens
         10.02    Administrative Agent's Office, Certain Addresses for Notices



EXHIBITS
                  FORM OF

         A        Committed Loan Notice
         B-1      Bid Request
         B-2      Competitive Bid
         C        Swing Line Loan Notice
         D        Note
         E        Compliance Certificate
         F        Assignment and Assumption











                                       iv



                                CREDIT AGREEMENT

         This CREDIT AGREEMENT ("Agreement") is entered into as of July 7, 2004,
among Sonoco Products Company, a South Carolina corporation (the "Borrower"),
each lender from time to time party hereto (collectively, the "Lenders" and
individually, a "Lender"), and BANK OF AMERICA, N.A., as Administrative Agent
and Swing Line Lender.

         The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.

         In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

                                   ARTICLE I.
                        DEFINITIONS AND ACCOUNTING TERMS

         1.01     DEFINED TERMS.

         As used in this Agreement, the following terms shall have the meanings
set forth below:

         "Absolute Rate" means a fixed rate of interest expressed in multiples
of 1/100th of one basis point.

         "Absolute Rate Loan" means a Bid Loan that bears interest at a rate
determined with reference to an Absolute Rate.

         "Additional Minimum Liability" has the meaning set forth is Section
7.07.

         "Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

         "Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.

         "Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.

         "Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

         "Aggregate Commitments" means the Commitments of all the Lenders, as
such amount may be reduced or increased as set forth herein. The Aggregate
Commitments as of the Closing Date shall be $350,000,000.

         "Agreement" means this Credit Agreement.



         "Applicable Percentage" means with respect to any Lender at any time,
the percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender's Commitment at such time. If the
commitment of each Lender to make Loans has been terminated pursuant to Section
8.02 or if the Aggregate Commitments have expired, then the Applicable
Percentage of each Lender shall be determined based on the Applicable Percentage
of such Lender most recently in effect, giving effect to any subsequent
assignments. The initial Applicable Percentage of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

         "Applicable Rate" means, from time to time, the following percentages
per annum, based upon the Debt Rating as set forth below:


- -----------------------------------------------------------------------------------------------------------------------
                                                   APPLICABLE RATE
- -----------------------------------------------------------------------------------------------------------------------
                                                               ALTERNATE                                  AID W/USAGE
   PRICING           DEBT         FACILITY        LIBOR        BASE RATE       ALL-IN       UTILIZATION    (greater
    LEVEL           RATINGS          FEE         MARGIN         MARGIN          DRAWN           FEE        than 50%)
                                                                                     
      I         greater than or     .080%         .220%            0            .300%          .100%         .400%
                equal to A+/A1
     II              A/A2           .090%         .285%            0            .375%          .125%         .500%
     III             A-/A3          .110%         .390%            0            .500%          .125%         .625%
     IV            BBB+/Baa1        .140%         .485%            0            .625%          .125%         .750%
      V            BBB/Baa2         .170%         .580%            0            .750%          .250%         1.000%
     VI          less than or       .270%         .730%            0           1.000%          .250%         1.250%
              equal to BBB-/Baa3
- -----------------------------------------------------------------------------------------------------------------------


                  "Debt Rating" means, as of any date of determination, the
         rating as determined by either S&P or Moody's (collectively, the "Debt
         Ratings") of the Borrower's non-credit-enhanced, senior unsecured
         long-term debt; provided that if a Debt Rating is issued by each of the
         foregoing rating agencies, then the higher of such Debt Ratings shall
         apply (with the Debt Rating for Pricing Level I being the highest and
         the Debt Rating for Pricing Level VI being the lowest), unless there is
         a split in Debt Ratings of more than one level, in which case the
         Pricing Level that is one level higher than the Pricing Level of the
         lower Debt Rating shall apply.

Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(a)(vii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of an
upgrade, during the period commencing on the date of delivery by the Borrower to
the Administrative Agent of notice thereof pursuant to Section 6.03(d) and
ending on the date immediately preceding the effective date of the next such
change and, in the case of a downgrade, during the period commencing on the date
of the public announcement thereof and ending on the date immediately preceding
the effective date of the next such change. For purposes of the foregoing, (a)
if no Debt Rating shall be available, such rating agencies shall be deemed to
have established a Debt Rating which is one rating grade higher than the
subordinated debt rating grade of the Borrower, (b) if no Debt Rating or
subordinated debt rating grade shall be available, the Applicable Rate shall be
as set forth in Pricing Level VI.

         "Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

                                       2


         "Arrangers" means Banc of America Securities LLC and Wachovia
Securities, Inc., each in its capacity as joint lead arranger and joint book
manager.

         "Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit F or any other form approved by the
Administrative Agent.

         "Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

         "Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2003, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.

         "Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.06, and (c) the date of
termination of the commitment of each Lender to make Loans pursuant to Section
8.02.

         "Bank of America" means Bank of America, N.A. and its successors.

         "Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

         "BAS" means Banc of America Securities, LLC in its capacity as joint
lead arranger.

         "Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

         "Base Rate Committed Loan" means a Committed Loan that is a Base Rate
Loan.

         "Base Rate Loan" means a Loan that bears interest based on the Base
Rate.

         "Bid Borrowing" means a borrowing consisting of simultaneous Bid Loans
of the same Type from each of the Lenders whose offer to make one or more Bid
Loans as part of such borrowing has been accepted under the auction bidding
procedures described in Section 2.03.

                                       3


         "Bid Loan" has the meaning specified in Section 2.03(a).

         "Bid Loan Lender" means, in respect of any Bid Loan, the Lender making
such Bid Loan to the Borrower.

         "Bid Request" means a written request for one or more Bid Loans
substantially in the form of Exhibit B-1.

         "Book Net Worth" means, at any time, consolidated net shareholders'
equity of the Borrower and its Subsidiaries determined in accordance with GAAP.

         "Borrower" has the meaning specified in the introductory paragraph
hereto.

         "Borrowing" means a Committed Borrowing, a Bid Borrowing or a Swing
Line Borrowing, as the context may require.

         "Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.

         "Change in Law" means the occurrence, after the date of this Agreement,
of any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

         "Change of Control" means, with respect to any Person, an event or
series of events by which:

                  (a) any "person" or "group" (as such terms are used in
         Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
         excluding any employee benefit plan of such person or its subsidiaries,
         and any person or entity acting in its capacity as trustee, agent or
         other fiduciary or administrator of any such plan) becomes the
         "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
         Securities Exchange Act of 1934, except that a person or group shall be
         deemed to have "beneficial ownership" of all securities that such
         person or group has the right to acquire (such right, an "option
         right"), whether such right is exercisable immediately or only after
         the passage of time), directly or indirectly, of 35% or more of the
         equity securities of such Person entitled to vote for members of the
         board of directors or equivalent governing body of such Person on a
         fully-diluted basis (and taking into account all such securities that
         such person or group has the right to acquire pursuant to any option
         right); or

                  (b) during any period of 24 consecutive months, a majority of
         the members of the board of directors or other equivalent governing
         body of such Person cease to be composed of individuals (i) who were
         members of that board or equivalent governing body on the first day of
         such period, (ii) whose election or nomination to that board or

                                       4


         equivalent governing body was approved by individuals referred to in
         clause (i) above constituting at the time of such election or
         nomination at least a majority of that board or equivalent governing
         body or (iii) whose election or nomination to that board or other
         equivalent governing body was approved by individuals referred to in
         clauses (i) and (ii) above constituting at the time of such election or
         nomination at least a majority of that board or equivalent governing
         body (excluding, in the case of both clause (ii) and clause (iii), any
         individual whose initial nomination for, or assumption of office as, a
         member of that board or equivalent governing body occurs as a result of
         an actual or threatened solicitation of proxies or consents for the
         election or removal of one or more directors by any person or group
         other than a solicitation for the election of one or more directors by
         or on behalf of the board of directors).

         "Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive the applicable
payment).

         "Code" means the Internal Revenue Code of 1986.

         "Commitment" means, as to each Lender, its obligation to (a) make
Committed Loans to the Borrower pursuant to Section 2.01 and (b) purchase
participations in Swing Line Loans, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.

         "Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Committed
Loans, having the same Interest Period made by each of the Lenders pursuant to
Section 2.01.

         "Committed Loan" has the meaning specified in Section 2.01.

         "Committed Loan Notice" means a notice of (a) a Committed Borrowing,
(b) a conversion of Committed Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Committed Loans, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A.

         "Competitive Bid" means a written offer by a Lender to make one or more
Bid Loans, substantially in the form of Exhibit B-2, duly completed and signed
by a Lender.

         "Compliance Certificate" means a certificate substantially in the form
of Exhibit E.

         "Consolidated Parties" means a collective reference to the Borrower and
its Subsidiaries, and "Consolidated Party" means any one of them.

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

                                       5


         "Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

         "Debt Rating" has the meaning set forth in the definition of
"Applicable Rate."

         "Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

         "Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.

         "Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum.

         "Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans or participations in Swing Line Loans required to
be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.

         "Dollar" and "$" mean lawful money of the United States.

         "Domestic Subsidiary" means any Subsidiary that is organized under the
laws of any political subdivision of the United States.

         "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and the Swing Line Lender, and (ii)
unless an Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.

         "Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

                                       6


         "Equity Interests" means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options or other rights for the purchase or acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.

         "ERISA" means the Employee Retirement Income Security Act of 1974.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

         "ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.

         "Eurodollar Bid Margin" means the margin above or below the Eurodollar
Rate to be added to or subtracted from the Eurodollar Rate, which margin shall
be expressed in multiples of 1/100th of one basis point.

         "Eurodollar Margin Bid Loan" means a Bid Loan that bears interest at a
rate based upon the Eurodollar Rate.

         "Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:

                  (a) the rate per annum equal to the rate determined by the
         Administrative Agent to be the offered rate that appears on the page of
         the Telerate screen (or any successor thereto) that displays an average
         British Bankers Association Interest Settlement Rate for deposits in
         Dollars (for delivery on the first day of such Interest Period) with a
         term equivalent to such Interest Period, determined as of approximately

                                       7


         11:00 a.m. (London time) two Business Days prior to the first day of
         such Interest Period, or

                  (b) if the rate referenced in the preceding clause (a) does
         not appear on such page or service or such page or service shall not be
         available, the rate per annum equal to the rate determined by the
         Administrative Agent to be the offered rate on such other page or other
         service that displays an average British Bankers Association Interest
         Settlement Rate for deposits in Dollars (for delivery on the first day
         of such Interest Period) with a term equivalent to such Interest
         Period, determined as of approximately 11:00 a.m. (London time) two
         Business Days prior to the first day of such Interest Period, or

                  (c) if the rates referenced in the preceding clauses (a) and
         (b) are not available, the rate per annum determined by the
         Administrative Agent as the rate of interest at which deposits in
         Dollars for delivery on the first day of such Interest Period in same
         day funds in the approximate amount of the Eurodollar Rate Loan being
         made, continued or converted by Bank of America (or, in the case of a
         Bid Loan, the applicable Bid Loan Lender) and with a term equivalent to
         such Interest Period would be offered by Bank of America's (or such Bid
         Loan Lender's) London Branch to major banks in the London interbank
         eurodollar market at their request at approximately 4:00 p.m. (London
         time) two Business Days prior to the first day of such Interest Period.

         "Eurodollar Rate Committed Loan" means a Committed Loan that bears
interest at a rate based on the Eurodollar Rate.

         "Eurodollar Rate Loan" means a Eurodollar Rate Committed Loan or a
Eurodollar Margin Bid Loan.

         "Event of Default" has the meaning specified in Section 8.01.

         "Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 10.14), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender's failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 3.01(a).

         "Existing Credit Agreement" means that certain Credit Agreement dated
as of July 9, 2003 among the Borrower, Bank of America, as administrative agent,
and a syndicate of lenders.

                                       8


         "Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary,
to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on
such transactions as determined by the Administrative Agent.

         "Fee Letter" means the letter agreement, dated May 27, 2004, among the
Borrower, the Administrative Agent and BAS.

         "Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

          "FRB" means the Board of Governors of the Federal Reserve System of
the United States.

         "Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

         "GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

         "Governmental Authority" means the government of the United States or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

         "Granting Lender" has the meaning specified in Section 10.07(h).

         "Guarantee" means, as to any Person, any (a) any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the

                                       9


purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness
or other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien). The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith. The term
"Guarantee" as a verb has a corresponding meaning.

          "Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

                  (a) all obligations of such Person for borrowed money and all
         obligations of such Person evidenced by bonds, debentures, notes, loan
         agreements or other similar instruments;

                  (b) all direct or contingent obligations of such Person
         arising under letters of credit (including standby and commercial),
         bankers' acceptances, bank guaranties, surety bonds and similar
         instruments;

                  (c) net obligations of such Person under any Swap Contract;

                  (d) all obligations of such Person to pay the deferred
         purchase price of property or services (other than trade accounts
         payable in the ordinary course of business);

                  (e) indebtedness (excluding prepaid interest thereon) secured
         by a Lien on property owned or being purchased by such Person
         (including indebtedness arising under conditional sales or other title
         retention agreements), whether or not such indebtedness shall have been
         assumed by such Person or is limited in recourse;

                  (f) capital leases and Synthetic Lease Obligations; and

                  (g) all Guarantees of such Person in respect of any of the
         foregoing.

         For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof

                                       10


as of such date. The amount of any capital lease or Synthetic Lease Obligation
as of any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.

         "Indemnified Taxes" means Taxes other than Excluded Taxes.

         "Indemnitees" has the meaning set forth in Section 10.05.

         "Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.

         "Interest Period" means (a) as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of
any Eurodollar Rate Committed Loan) converted to or continued as a Eurodollar
Rate Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Committed Loan Notice or Bid Request, as the
case may be, and (b) as to each Absolute Rate Loan, a period of not less than 7
days and not more than 180 days as selected by the Borrower in its Bid Request;
provided that:

                  (i) any Interest Period that would otherwise end on a day that
         is not a Business Day shall be extended to the next succeeding Business
         Day unless, in the case of a Eurodollar Rate Loan, such Business Day
         falls in another calendar month, in which case such Interest Period
         shall end on the next preceding Business Day;

                  (ii) any Interest Period pertaining to a Eurodollar Rate Loan
         that begins on the last Business Day of a calendar month (or on a day
         for which there is no numerically corresponding day in the calendar
         month at the end of such Interest Period) shall end on the last
         Business Day of the calendar month at the end of such Interest Period;
         and

                  (iii) no Interest Period shall extend beyond the Maturity
         Date.

         "IRS" means the United States Internal Revenue Service.

         "Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

          "Lender" has the meaning specified in the introductory paragraph
hereto and, as the context requires, includes the Swing Line Lender.

                                       11


         "Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.

         "Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

         "Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Committed Loan, a Bid Loan or a Swing Line Loan.

         "Loan Documents" means this Agreement, each Note and the Fee Letter.

          "Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Borrower to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Borrower of any
Loan Document to which it is a party.

         "Maturity Date" means July ___, 2009.

         "Moody's" means Moody's Investors Service, Inc. and any successor
thereto.

         "Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.

         "Note" means a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit D.

         "Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, the Borrower arising under any Loan
Document or otherwise with respect to any Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against the Borrower or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.

         "Off-Balance Sheet Liabilities" means, with respect to any Person as of
any date of determination thereof, without duplication and to the extent not
included as a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase

                                       12


facility) (i) the unrecovered investment of purchasers or transferees of assets
so transferred and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of such Person or any of its Subsidiaries in
respect of assets transferred or payments made in respect thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x) have the effect of limiting the loss or credit risk of such
purchasers or transferees with respect to payment or performance by the obligors
of the assets so transferred nor (y) impair the characterization of the
transaction as a true sale under applicable Laws (including Debtor Relief Laws);
(b) the monetary obligations under any financing lease or so-called "synthetic,"
tax retention or off-balance sheet lease transaction which, upon the application
of any Debtor Relief Law to such Person or any of its Subsidiaries, would be
characterized as indebtedness; (c) the monetary obligations under any sale and
leaseback transaction which does not create a liability on the consolidated
balance sheet of such Person and its Subsidiaries; and (d) any other monetary
obligation arising with respect to any other transaction which (i) upon the
application of any Debtor Relief Law to such Person or any of its Subsidiaries,
would be characterized as indebtedness for tax purposes but not for accounting
purposes in accordance with GAAP or (ii) is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such Person and its Subsidiaries (for purposes of
this clause (d), any transaction structured to provide tax deductibility as
interest expense of any dividend, coupon or other periodic payment will be
deemed to be the functional equivalent of a borrowing).

         "Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

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

         "Outstanding Amount" means with respect to Committed Loans, Bid Loans,
and Swing Line Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any borrowings and prepayments or repayments of
Committed Loans, Bid Loans, and Swing Line Loans, as the case may be, occurring
on such date.

         "Participant" has the meaning specified in Section 10.07(d).

         "PBGC" means the Pension Benefit Guaranty Corporation.

                                       13


         "Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

         "Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

         "Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

         "Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.

         "Register" has the meaning set forth in Section 10.07(c).

         "Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.

         "Request for Borrowing" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to a Bid Loan, a Bid Request, and (c) with respect to a Swing Line Loan,
a Swing Line Loan Notice.

         "Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the Aggregate Commitments or, if the commitment of each
Lender to make Loans has been terminated pursuant to Section 8.02, Lenders
holding in the aggregate more than 50% of the Total Outstandings, excluding Bid
Loans (with the aggregate amount of each Lender's risk participation and funded
participation in Swing Line Loans being deemed "held" by such Lender for
purposes of this definition); provided that the Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

         "Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of the Borrower. Any
document delivered hereunder that is signed by a Responsible Officer of the
Borrower shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of the Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
the Borrower.

         "Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other Equity Interest of the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other Equity

                                       14


Interest, or on account of any return of capital to the Borrower's stockholders,
partners or members (or the equivalent Person thereof).

         "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

         "SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

         "SPC" has the meaning specified in Section 10.07(h).

         "Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.

         "Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward interest or exchange rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
"Master Agreement"), including any such obligations or liabilities under any
Master Agreement.

         "Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) (i.e. the current fair market value) for such Swap
Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts
(which may include a Lender or any Affiliate of a Lender).

         "Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.

                                       15


         "Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant
to Section 2.04.

         "Swing Line Lender" means Bank of America in its capacity as provider
of Swing Line Loans, or any successor swing line lender hereunder.

         "Swing Line Loan" has the meaning specified in Section 2.04(a).

         "Swing Line Loan Notice" means a notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit C.

         "Swing Line Sublimit" means an amount equal to the lesser of (a)
$15,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.

         "Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

         "Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.

         "Threshold Amount" means $50,000,000.

         "Total Assets" means at any time, all items which would, in accordance
with GAAP, be classified as assets (other than intangible assets) on a
consolidated balance sheet of the Borrower and its Subsidiaries.

         "Total Outstandings" means the aggregate Outstanding Amount of all
Loans.

         "Type" means (a) with respect to a Committed Loan, its character as a
Base Rate Loan or a Eurodollar Rate Loan, and (b) with respect to a Bid Loan,
its character as an Absolute Rate Loan or a Eurodollar Margin Bid Loan.

         "Unfunded Pension Liability" means the excess of the present value of
all vested and non-vested benefit liabilities of a Pension Plan (determined in
accordance with then current funding assumptions) over the market value of that
Pension Plan's assets.

         "United States" and "U.S." mean the United States of America.

         1.02     OTHER INTERPRETIVE PROVISIONS.

         With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:

                                       16


         (a) The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." The word "will" shall be construed to have
the same meaning and effect as the word "shall." Unless the context requires
otherwise, (i) any definition of or reference to any agreement, instrument or
other document (including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (iii) the words "herein," "hereof" and
"hereunder," and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

         (b) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding;" and the word "through" means "to and
including."

         (c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.

         1.03     ACCOUNTING TERMS.

         (a) Generally. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

         (b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall

                                       17


provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

         1.04     ROUNDING.

         Any financial ratios required to be maintained by the Borrower pursuant
to this Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).

         1.05     TIMES OF DAY.

         Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).

                                  ARTICLE II.
                         THE COMMITMENTS AND BORROWINGS

         2.01     COMMITTED LOANS.

         Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a "Committed Loan") to the
Borrower from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender plus such Lender's Applicable Percentage of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Commitment. Within the
limits of each Lender's Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.01, prepay under
Section 2.05, and reborrow under this Section 2.01. Committed Loans may be Base
Rate Loans or Eurodollar Rate Loans, as further provided herein.

         2.02     BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.

         (a) Each Committed Borrowing, each conversion of Committed Loans from
one Type to the other, and each continuation of Eurodollar Rate Committed Loans
shall be made upon the Borrower's irrevocable notice to the Administrative
Agent, which may be given by telephone (provided that such telephonic notice
complies with the information requirements of the form of Committed Loan Notice
attached hereto as Exhibit A). Each such notice must be received by the
Administrative Agent not later than 1:00 p.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate
Committed Loans to Base Rate Committed Loans, and (ii) on the requested date of
any Borrowing of Base Rate Committed Loans. Not later than 11:00 a.m., three
Business Days before the requested date of such Borrowing,

                                       18


conversion or continuation, the Administrative Agent shall notify the Borrower
(which notice may be by telephone) whether or not the requested Interest Period
has been consented to by all the Lenders. Each telephonic notice by the Borrower
pursuant to this Section 2.02(b) must be confirmed promptly by delivery to the
Administrative Agent of a written Committed Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower. Each Borrowing of,
conversion to or continuation of Eurodollar Rate Committed Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Except as provided in Section 2.04(c), each Borrowing of or conversion
to Base Rate Committed Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Committed Borrowing, a conversion of Committed Loans from one Type
to the other, or a continuation of Eurodollar Rate Committed Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Committed Loans
to be borrowed, converted or continued, (iv) the Type of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted, and (v) if
applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or
if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Committed Loans shall be made as, or converted
to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurodollar Rate Committed Loans. If the Borrower requests a
Borrowing of, conversion to, or continuation of Eurodollar Rate Committed Loans
in any such Committed Loan Notice, but fails to specify an Interest Period, it
will be deemed to have specified an Interest Period of one month.

         (b) Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Applicable
Percentage of the applicable Committed Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base Rate
Loans described in the preceding subsection. In the case of a Committed
Borrowing, each Lender shall make the amount of its Committed Loan available to
the Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 3:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Borrowing,
Section 4.01), the Administrative Agent shall make all funds so received
available to the Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of the Borrower on the books of Bank of
America with the amount of such funds or (ii) wire transfer of such funds, in
each case in accordance with instructions provided to (and reasonably acceptable
to) the Administrative Agent by the Borrower; provided, however, that if, on the
date the Committed Loan Notice with respect to such Borrowing is given by the
Borrower, there are Swing Line Loans outstanding, then the proceeds of such
Borrowing, first, shall be applied, to the payment in full of any such Swing
Line Loans, and second, shall be made available to the Borrower as provided
above.

         (c) Except as otherwise provided herein, a Eurodollar Rate Committed
Loan may be continued or converted only on the last day of an Interest Period
for such Eurodollar Rate

                                       19


Committed Loan. During the existence of a Default, no Loans may be requested as,
converted to or continued as Eurodollar Rate Committed Loans without the consent
of the Required Lenders.

         (d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Committed Loans upon determination of such interest rate. At any time that
Base Rate Loans are outstanding, the Administrative Agent shall notify the
Borrower and the Lenders of any change in Bank of America's prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

         (e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than ten Interest Periods in
effect with respect to Committed Loans.

         2.03     BID LOANS.

         (a) General. Subject to the terms and conditions set forth herein, each
Lender agrees that the Borrower may from time to time request the Lenders to
submit offers to make loans (each such loan, a "Bid Loan") to the Borrower prior
to the Maturity Date pursuant to this Section 2.03; provided, however, that
after giving effect to any Bid Borrowing, the Total Outstandings shall not
exceed the Aggregate Commitments. There shall not be more than three different
Interest Periods in effect with respect to Bid Loans at any time.

         (b) Requesting Competitive Bids. The Borrower may request the
submission of Competitive Bids by delivering a Bid Request to the Administrative
Agent not later than 2:00 p.m. (i) one Business Day prior to the requested date
of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) four
Business Days prior to the requested date of any Bid Borrowing that is to
consist of Eurodollar Margin Bid Loans. Each Bid Request shall (x) specify (i)
the requested date of the Bid Borrowing (which shall be a Business Day), (ii)
the aggregate principal amount of Bid Loans requested (which must be $5,000,000
or a whole multiple of $2,000,000 in excess thereof), (iii) the Type of Bid
Loans requested, and (iv) the duration of the Interest Period with respect
thereto, and shall be signed by a Responsible Officer of the Borrower and (y) be
accompanied by the Bid Request fee specified in Section 2.03(k). No Bid Request
shall contain a request for (i) more than one Type of Bid Loan or (ii) Bid Loans
having more than three different Interest Periods. Unless the Administrative
Agent otherwise agrees in its sole and absolute discretion, the Borrower may not
submit a Bid Request if it has submitted another Bid Request within the prior
five Business Days.

         (c) Submitting Competitive Bids.

                  (i) The Administrative Agent shall promptly notify each Lender
         of each Bid Request received by it from the Borrower and the contents
         of such Bid Request.

                  (ii) Each Lender may (but shall have no obligation to) submit
         a Competitive Bid containing an offer to make one or more Bid Loans in
         response to such Bid Request. Such Competitive Bid must be delivered to
         the Administrative Agent not later than 10:30 a.m. (A) on the requested
         date of any Bid Borrowing that is to consist of Absolute Rate

                                       20


         Loans, and (B) three Business Days prior to the requested date of any
         Bid Borrowing that is to consist of Eurodollar Margin Bid Loans;
         provided, however, that any Competitive Bid submitted by Bank of
         America in its capacity as a Lender in response to any Bid Request must
         be submitted to the Administrative Agent not later than 10:15 a.m. on
         the date on which Competitive Bids are required to be delivered by the
         other Lenders in response to such Bid Request. Each Competitive Bid
         shall specify (A) the proposed date of the Bid Borrowing; (B) the
         principal amount of each Bid Loan for which such Competitive Bid is
         being made, which principal amount (x) may be equal to, greater than or
         less than the Commitment of the bidding Lender, (y) must be $5,000,000
         or a whole multiple of $2,000,000 in excess thereof, and (z) may not
         exceed the principal amount of Bid Loans for which Competitive Bids
         were requested; (C) if the proposed Bid Borrowing is to consist of
         Absolute Rate Bid Loans, the Absolute Rate offered for each such Bid
         Loan and the Interest Period applicable thereto; (D) if the proposed
         Bid Borrowing is to consist of Eurodollar Margin Bid Loans, the
         Eurodollar Bid Margin with respect to each such Eurodollar Margin Bid
         Loan and the Interest Period applicable thereto; and (E) the identity
         of the bidding Lender.

                  (iii) Any Competitive Bid shall be disregarded if it (A) is
         received after the applicable time specified in clause (ii) above, (B)
         is not substantially in the form of a Competitive Bid as specified
         herein, (C) contains qualifying, conditional or similar language, (D)
         proposes terms other than or in addition to those set forth in the
         applicable Bid Request, or (E) is otherwise not responsive to such Bid
         Request. Any Lender may correct a Competitive Bid containing a manifest
         error by submitting a corrected Competitive Bid (identified as such)
         not later than the applicable time required for submission of
         Competitive Bids. Any such submission of a corrected Competitive Bid
         shall constitute a revocation of the Competitive Bid that contained the
         manifest error. The Administrative Agent may, but shall not be required
         to, notify any Lender of any manifest error it detects in such Lender's
         Competitive Bid.

                  (iv) Subject only to the provisions of Sections 3.02, 3.03 and
         4.02 and clause (iii) above, each Competitive Bid shall be irrevocable.

         (d) Notice to Borrower of Competitive Bids. Not later than 11:00 a.m.
(i) on the requested date of any Bid Borrowing that is to consist of Absolute
Rate Loans, or (ii) three Business Days prior to the requested date of any Bid
Borrowing that is to consist of Eurodollar Margin Bid Loans, the Administrative
Agent shall notify the Borrower of the identity of each Lender that has
submitted a Competitive Bid that complies with Section 2.03(c) and of the terms
of the offers contained in each such Competitive Bid.

         (e) Acceptance of Competitive Bids. Not later than 11:30 a.m. (i) on
the requested date of any Bid Borrowing that is to consist of Absolute Rate
Loans, and (ii) three Business Days prior to the requested date of any Bid
Borrowing that is to consist of Eurodollar Margin Bid Loans, the Borrower shall
notify the Administrative Agent of its acceptance or rejection of the offers
notified to it pursuant to Section 2.03(d). The Borrower shall be under no
obligation to accept any Competitive Bid and may choose to reject all
Competitive Bids. In the case of acceptance, such notice shall specify the
aggregate principal amount of Competitive Bids for

                                       21


each Interest Period that is accepted. The Borrower may accept any Competitive
Bid in whole or in part; provided that:

                  (i) the aggregate principal amount of each Bid Borrowing may
         not exceed the applicable amount set forth in the related Bid Request;

                  (ii) the principal amount of each Bid Loan must be $5,000,000
         or in integral multiples of $2,000,000 in excess thereof;

                  (iii) the acceptance of offers may be made only on the basis
         of ascending Absolute Rates or Eurodollar Bid Margins within each
         Interest Period; and

                  (iv) the Borrower may not accept any offer that is described
         in Section 2.03(c)(iii) or that otherwise fails to comply with the
         requirements hereof.

         (f) Procedure for Identical Bids. If two or more Lenders have submitted
Competitive Bids at the same Absolute Rate or Eurodollar Bid Margin, as the case
may be, for the same Interest Period, and the result of accepting all of such
Competitive Bids in whole (together with any other Competitive Bids at lower
Absolute Rates or Eurodollar Bid Margins, as the case may be, accepted for such
Interest Period in conformity with the requirements of Section 2.03(e)(iii))
would be to cause the aggregate outstanding principal amount of the applicable
Bid Borrowing to exceed the amount specified therefor in the related Bid
Request, then, unless otherwise agreed by the Borrower, the Administrative Agent
and such Lenders, such Competitive Bids shall be accepted as nearly as possible
in proportion to the amount offered by each such Lender in respect of such
Interest Period, with such accepted amounts being rounded to the nearest whole
multiple of $1,000,000.

         (g) Notice to Lenders of Acceptance or Rejection of Bids. The
Administrative Agent shall promptly notify each Lender having submitted a
Competitive Bid whether or not its offer has been accepted and, if its offer has
been accepted, of the amount of the Bid Loan or Bid Loans to be made by it on
the date of the applicable Bid Borrowing. Any Competitive Bid or portion thereof
that is not accepted by the Borrower by the applicable time specified in Section
2.03(e) shall be deemed rejected.

         (h) Notice of Eurodollar Rate. If any Bid Borrowing is to consist of
Eurodollar Margin Loans, the Administrative Agent shall determine the Eurodollar
Rate for the relevant Interest Period, and promptly after making such
determination, shall notify the Borrower and the Lenders that will be
participating in such Bid Borrowing of such Eurodollar Rate.

         (i) Funding of Bid Loans. Each Lender that has received notice pursuant
to Section 2.03(g) that all or a portion of its Competitive Bid has been
accepted by the Borrower shall make the amount of its Bid Loan(s) available to
the Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the date of the requested Bid
Borrowing. Upon satisfaction of the applicable conditions set forth in Section
4.02, the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent.

                                       22


         (j) Notice of Range of Bids. After each Competitive Bid auction
pursuant to this Section 2.03, the Administrative Agent shall notify each Lender
that submitted a Competitive Bid in such auction of the ranges of bids submitted
(without the bidder's name) and accepted for each Bid Loan and the aggregate
amount of each Bid Borrowing.

         (k) Bid Request Fee. The Borrower shall pay to the Administrative Agent
for each Bid Request an administration fee in the amount set forth in the Fee
Letter concurrently with delivery of any Bid Request (whether or not any
Competitive Bid is offered by a Lender or accepted by the Borrower and whether
or not any Bid Loan is extended by any Lender in connection with such Bid
Request).

         2.04     SWING LINE LOANS.

         (a) The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees, in reliance upon the agreements of the
other Lenders set forth in this Section 2.04, to make loans (each such loan, a
"Swing Line Loan") to the Borrower from time to time on any Business Day during
the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that
such Swing Line Loans, when aggregated with the Applicable Percentage of the
Outstanding Amount of Committed Loans of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender's Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Committed Loans of any Lender plus such Lender's Applicable Percentage of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment, and provided, further, that the Borrower shall not use the proceeds
of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05, and
reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender's Applicable Percentage times the amount of
such Swing Line Loan.

         (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon
the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone (provided that such
telephonic notice complies with the informational requirements of the form of
Swing Line Loan Notice attached hereto as Exhibit C). Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
2:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $500,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof.

                                       23


Unless the Swing Line Lender has received notice (by telephone or in writing)
from the Administrative Agent (including at the request of any Lender) prior to
5:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the
Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of Section 2.04(a),
or (B) that one or more of the applicable conditions specified in Article IV is
not then satisfied, then, subject to the terms and conditions hereof, the Swing
Line Lender will, not later than 6:00 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available to
the Borrower at its office by crediting the account of the Borrower on the books
of the Swing Line Lender in immediately available funds.

         (c) Refinancing of Swing Line Loans.

                  (i) The Swing Line Lender at any time in its sole and absolute
         discretion may request, on behalf of the Borrower (which hereby
         irrevocably authorizes the Swing Line Lender to so request on its
         behalf), that each Lender make a Base Rate Committed Loan in an amount
         equal to such Lender's Applicable Percentage of the amount of Swing
         Line Loans then outstanding. Such request shall be made in writing
         (which written request shall be deemed to be a Committed Loan Notice
         for purposes hereof) and in accordance with the requirements of Section
         2.02, without regard to the minimum and multiples specified therein for
         the principal amount of Base Rate Loans, but subject to the unutilized
         portion of the Aggregate Commitments and the conditions set forth in
         Section 4.02. The Swing Line Lender shall furnish the Borrower with a
         copy of the applicable Committed Loan Notice promptly after delivering
         such notice to the Administrative Agent. Each Lender shall make an
         amount equal to its Applicable Percentage of the amount specified in
         such Committed Loan Notice available to the Administrative Agent in
         immediately available funds for the account of the Swing Line Lender at
         the Administrative Agent's Office not later than 1:00 p.m. on the day
         specified in such Committed Loan Notice, whereupon, subject to Section
         2.04(c)(ii), each Lender that so makes funds available shall be deemed
         to have made a Base Rate Committed Loan to the Borrower in such amount.
         The Administrative Agent shall remit the funds so received to the Swing
         Line Lender.

                  (ii) If for any reason any Swing Line Loan cannot be
         refinanced by such a Committed Borrowing in accordance with Section
         2.04(c)(i), the request for Base Rate Committed Loans submitted by the
         Swing Line Lender as set forth herein shall be deemed to be a request
         by the Swing Line Lender that each of the Lenders fund its risk
         participation in the relevant Swing Line Loan and each Lender's payment
         to the Administrative Agent for the account of the Swing Line Lender
         pursuant to Section 2.04(c)(i) shall be deemed payment in respect of
         such participation.

                  (iii) If any Lender fails to make available to the
         Administrative Agent for the account of the Swing Line Lender any
         amount required to be paid by such Lender pursuant to the foregoing
         provisions of this Section 2.04(c) by the time specified in Section
         2.04(c)(i), the Swing Line Lender shall be entitled to recover from
         such Lender (acting through the Administrative Agent), on demand, such
         amount with interest thereon for the period from the date such payment
         is required to the date on which such payment is immediately available
         to the Swing Line Lender at a rate per annum equal to the

                                       24


         greater of the Federal Funds Rate and a rate determined by the Swing
         Line Lender in accordance with banking rules on interbank compensation.
         A certificate of the Swing Line Lender submitted to any Lender (through
         the Administrative Agent) with respect to any amounts owing under this
         clause (iii) shall be conclusive absent manifest error.

                  (iv) Each Lender's obligation to make Committed Loans or to
         purchase and fund risk participations in Swing Line Loans pursuant to
         this Section 2.04(c) shall be absolute and unconditional and shall not
         be affected by any circumstance, including (A) any set-off,
         counterclaim, recoupment, defense or other right which such Lender may
         have against the Swing Line Lender, the Borrower or any other Person
         for any reason whatsoever, (B) the occurrence or continuance of a
         Default, or (C) any other occurrence, event or condition, whether or
         not similar to any of the foregoing; provided, however, that each
         Lender's obligation to make Committed Loans pursuant to this Section
         2.04(c) is subject to the conditions set forth in Section 4.02. No such
         funding of risk participations shall relieve or otherwise impair the
         obligation of the Borrower to repay Swing Line Loans, together with
         interest as provided herein.

         (d) Repayment of Participations.

                  (i) At any time after any Lender has purchased and funded a
         risk participation in a Swing Line Loan, if the Swing Line Lender
         receives any payment on account of such Swing Line Loan, the Swing Line
         Lender will distribute to such Lender its Applicable Percentage of such
         payment (appropriately adjusted, in the case of interest payments, to
         reflect the period of time during which such Lender's risk
         participation was funded) in the same funds as those received by the
         Swing Line Lender.

                  (ii) If any payment received by the Swing Line Lender in
         respect of principal or interest on any Swing Line Loan is required to
         be returned by the Swing Line Lender under any of the circumstances
         described in Section 10.06 (including pursuant to any settlement
         entered into by the Swing Line Lender in its discretion), each Lender
         shall pay to the Swing Line Lender its Applicable Percentage thereof on
         demand of the Administrative Agent, plus interest thereon from the date
         of such demand to the date such amount is returned, at a rate per annum
         equal to the Federal Funds Rate. The Administrative Agent will make
         such demand upon the request of the Swing Line Lender. The obligations
         of the Lenders under this clause shall survive the payment in full of
         the Obligations and the termination of this Agreement.

         (e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Base Rate Committed Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender's
Applicable Percentage of any Swing Line Loan, interest in respect of such
Applicable Percentage shall be solely for the account of the Swing Line Lender.

         (f) Payments Directly to Swing Line Lender. The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

         2.05     PREPAYMENTS.

                                       25


         (a) The Borrower may, upon notice to the Administrative Agent, at any
time or from time to time voluntarily prepay Committed Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by
the Administrative Agent not later than 1:00 p.m. (A) three Business Days prior
to any date of prepayment of Eurodollar Rate Committed Loans and (B) on the date
of prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar
Rate Committed Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate
Committed Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Committed Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Applicable Percentage of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05. Each such
prepayment shall be applied to the Committed Loans of the Lenders in accordance
with their respective Applicable Percentages.

         (b) No Bid Loan may be prepaid without the prior consent of the
applicable Bid Loan Lender.

         (c) The Borrower may, upon notice to the Swing Line Lender (with a copy
to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty; provided
that (i) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and
(ii) any such prepayment shall be in a minimum principal amount of $500,000.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.

         (d) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans in an aggregate amount equal to such excess.

         2.06     TERMINATION OR REDUCTION OF COMMITMENTS.

         The Borrower may, upon notice to the Administrative Agent, terminate
the Aggregate Commitments, or from time to time permanently reduce the Aggregate
Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Borrower shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments and
(iv) if, after giving effect to any reduction of the Aggregate Commitments, the
Swing Line Sublimit exceeds the amount of the Aggregate

                                       26


Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will promptly notify the Lenders of any such
notice of termination or reduction of the Aggregate Commitments. Any reduction
of the Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Applicable Percentage. All fees accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the
effective date of such termination.

         2.07     REPAYMENT OF LOANS.

         (a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Committed Loans outstanding on such date.

         (b) The Borrower shall repay each Bid Loan on the earlier to occur of
(i) the maturity date agreed to by the Bid Loan Lender (which maturity date
shall not be (A) less than 7 days from advance thereof or (B) more than 180 days
from advance thereof) and (ii) the last day of the Interest Period in respect
thereof.

         (c) The Borrower shall repay each Swing Line Loan on the earlier to
occur of (i) the maturity date agreed to by the Swing Line Lender and the
Borrower with respect to such Loan (which maturity date shall not be a date more
than thirteen (13) days from the date of advance thereof) and (ii) the Maturity
Date.

         2.08     INTEREST.

         (a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Committed Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each
Base Rate Committed Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate; (iii) each Bid Loan shall bear interest on the
outstanding principal amount thereof for the Interest Period therefor at a rate
per annum equal to the Eurodollar Rate for such Interest Period plus (or minus)
the Eurodollar Bid Margin, or at the Absolute Rate for such Interest Period, as
the case may be; and (iv) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to (x) the Base Rate plus the Applicable Rate or (y) a
quoted rate mutually agreeable to the Swing Line Lender and the Borrower.

         (b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
upon the request of the Required Lenders, while any Event of Default exists, the
Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

                                       27


         (c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

         2.09     FEES.

         (a) Facility Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage, a
facility fee equal to the Applicable Rate times the actual daily amount of the
Aggregate Commitments (or, if the Aggregate Commitments have terminated, on the
Outstanding Amount of all Committed Loans and Swing Line Loans), regardless of
usage. The facility fee shall accrue at all times during the Availability Period
(and thereafter so long as any Committed Loans or Swing Line Loans remain
outstanding), including at any time during which one or more of the conditions
in Article IV is not met, and shall be due and payable quarterly in arrears on
the last Business Day of each March, June, September and December, commencing
with the first such date to occur after the Closing Date, and on the Maturity
Date (and, if applicable, thereafter on demand). The facility fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.

         (b) Utilization Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage, a
utilization fee equal to the Applicable Rate times the Total Outstandings on
each day that the Total Outstandings exceed 50% of the actual daily amount of
the Aggregate Commitments. The utilization fee shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the Closing Date,
and on the Maturity Date. The utilization fee shall be calculated quarterly in
arrears, and if there is any change in the Applicable Rate during any quarter,
the daily amount shall be computed and multiplied by the Applicable Rate for
each period during which such Applicable Rate was in effect. The utilization fee
shall accrue at all times, including at any time during which one or more of the
conditions in Article IV is not met.

         (c) Other Fees. The Borrower shall pay to BAS and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the Fee Letter. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever. The Borrower's obligation to pay to
the Administrative Agent the administrative agency fee pursuant to the Fee
Letter shall terminate at such time as the Aggregate Commitments have been
terminated and the aggregate amount of outstanding Loans, including principal,
interest, fees and expenses, has been repaid in full.

         2.10     COMPUTATION OF INTEREST AND FEES.

         All computations of interest for Base Rate Loans when the Base Rate is
determined by Bank of America's "prime rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made

                                       28


on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.12(a), bear
interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

         2.11     EVIDENCE OF DEBT.

         (a) The Borrowings made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Borrowings made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender's
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.

         (b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Swing Line Loans. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.

         2.12     PAYMENTS GENERALLY; ADMINISTRATIVE AGENT'S CLAWBACK.

         (a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 4:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender's Lending Office. All payments received by the Administrative Agent after
such time shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.

                                       29


         (b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Committed
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Committed Borrowing available to the Administrative Agent, then such
Lender shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon for the
period from the date such amount was made available by the Administrative Agent
to the Borrower to the date such amount is recovered by the Administrative Agent
(the "Compensation Period") at a rate per annum equal to the Federal Funds Rate
from time to time in effect. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's share of
such Committed Borrowing. If such Lender does not pay such amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to such Committed
Borrowing. If the Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrower the amount of such interest paid by
the Borrower for such period. If such Lender pays its share of the applicable
Committed Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender's Committed Loan included in such Committed Borrowing.
Any payment by the Borrower shall be without prejudice to any claim the Borrower
may have against a Lender that shall have failed to make such payment to the
Administrative Agent.

         (ii) Payments by Borrower; Presumptions by Administrative Agent. Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders, as the case may be, the amount due. In such event, if
the Borrower has not in fact made such payment, then each of the Lenders, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender, in immediately available funds
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

         A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.

         (c) Failure to Satisfy Conditions Precedent. If any Lender makes
available to the Administrative Agent funds for any Loan to be made by such
Lender as provided in the foregoing provisions of this Article II, and such
funds are not made available to the Borrower by the Administrative Agent because
the conditions to the applicable Borrowing set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent

                                       30


shall return such funds (in like funds as received from such Lender) to such
Lender, without interest.

         (d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Committed Loans and to fund participations in Swing Line Loans
and to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Committed Loan, to fund any such participation
or to make any payment under Section 10.04(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Committed Loan, to purchase its participation or to make
its payment under Section 10.04(c).

         (e) Funding Source. Nothing herein shall be deemed to obligate any
Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

         2.13     SHARING OF PAYMENTS BY LENDERS.

         If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of the Committed Loans made by it, or the participations in Swing Line Loans
held by it resulting in such Lender's receiving payment of a proportion of the
aggregate amount of such Committed Loans or participations and accrued interest
thereon greater than its pro rata share thereof as provided herein, then the
Lender receiving such greater proportion shall (a) notify the Administrative
Agent of such fact, and (b) purchase (for cash at face value) participations in
the Committed Loans and subparticipations in Swing Line Loans of the other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Committed Loans and other amounts owing them, provided that:

                  (i) if any such participations or subparticipations are
         purchased and all or any portion of the payment giving rise thereto is
         recovered, such participations or subparticipations shall be rescinded
         and the purchase price restored to the extent of such recovery, without
         interest; and

                  (ii) the provisions of this Section shall not be construed to
         apply to (x) any payment made by the Borrower pursuant to and in
         accordance with the express terms of this Agreement or (y) any payment
         obtained by a Lender as consideration for the assignment of or sale of
         a participation in any of its Committed Loans or subparticipations in
         Swing Line Loans to any assignee or participant, other than to the
         Borrower or any Subsidiary thereof (as to which the provisions of this
         Section shall apply).

         The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to

                                       31


such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

         2.14     INCREASE IN AGGREGATE COMMITMENTS.

         (a) Provided there exists no Default, upon notice to the Administrative
Agent (which shall promptly notify the Lenders), the Borrower may from time to
time, request an increase in the Aggregate Commitments; provided, however, that
(i) the maximum amount of the Aggregate Commitments after giving effect to any
such increase shall not exceed $450,000,000 and (ii) the Borrower may make a
maximum of three such requests. The aggregate amount of any individual increase
hereunder shall be in a minimum amount of $5,000,000 (and in integral multiples
of $1,000,000 in excess thereof). To achieve the full amount of a requested
increase, the Borrower may solicit increased commitments from existing Lenders
and also invite additional Eligible Assignees to become Lenders; provided,
however, that no existing Lender shall be obligated and/or required to accept an
increase in its Commitment pursuant to this Section 2.14 unless it specifically
consents to such increase in writing. Any Lender or Eligible Assignee agreeing
to increase its Commitment or provide a new Commitment pursuant to this Section
2.14 shall, in connection therewith, deliver to the Administrative Agent a new
commitment agreement in form and substance satisfactory to the Administrative
Agent and its counsel.

         (b) If the Aggregate Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrower shall determine the effective
date (the "Increase Effective Date") and the final allocation of such increase.
The Administrative Agent shall promptly notify the Borrower and the Lenders of
the final allocation of such increase and the Increase Effective Date and
Schedule 2.01 hereto shall be deemed amended to reflect such increase and final
allocation. As a condition precedent to such increase, in addition to any
deliveries pursuant to subsection (a) above, the Borrower shall deliver to the
Administrative Agent each of the following in form and substance satisfactory to
the Administrative Agent: (1) a certificate of the Borrower dated as of the
Increase Effective Date (in sufficient copies for each Lender) signed by a
Responsible Officer of the Borrower (i) certifying and attaching the resolutions
adopted by the Borrower approving or consenting to such increase, and (ii)
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article V and the other Loan
Documents are true and correct on and as of the Increase Effective Date, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Section 2.14, the representations and
warranties contained in (x) subsections (a), (b) and (c) of Section 5.05 shall
be deemed to refer to the most recent statements furnished pursuant to
subsections (a) and (b), respectively, of Section 6.01 and (y) subsection (c) of
Section 5.05 shall be deemed to refer to "through the Increase Effective Date"
rather than "through the Closing Date", and (B) no Default exists; (2) a
statement of reaffirmation from the Borrower pursuant to which the Borrower
ratifies this Agreement and the other Loan Documents and acknowledges and
reaffirms that, after giving effect to such increase, it is bound by all terms
of this Agreement and the other Loan Documents; and (3) if the increase is being
provided by a new Lender, a Note in favor of such Lender if so requested by such
Lender. The Borrower shall prepay any Committed Loans outstanding on the
Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.05) to the extent necessary to keep the outstanding

                                       32


Committed Loans ratable with any revised Applicable Percentages arising from any
nonratable increase in the Commitments under this Section.

         (c) This Section shall supersede any provisions in Sections 2.12 or
10.01 to the contrary.

                                  ARTICLE III.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

         3.01     TAXES.

         (a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document shall
be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if the Borrower shall be
required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

         (b) Payment of Other Taxes by the Borrower. Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

         (c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent or such Lender, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

         (d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

         (e) Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments

                                       33


hereunder or under any other Loan Document shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower or the Administrative Agent, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.

         Without limiting the generality of the foregoing, in the event that the
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

                  (i) duly completed copies of Internal Revenue Service Form
         W-8BEN claiming eligibility for benefits of an income tax treaty to
         which the United States is a party,

                  (ii) duly completed copies of Internal Revenue Service Form
         W-8ECI,

                  (iii) in the case of a Foreign Lender claiming the benefits of
         the exemption for portfolio interest under section 881(c) of the Code,
         (x) a certificate to the effect that such Foreign Lender is not (A) a
         "bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a
         "10 percent shareholder" of the Borrower within the meaning of section
         881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation"
         described in section 881(c)(3)(C) of the Code and (y) duly completed
         copies of Internal Revenue Service Form W-8BEN, or

                  (iv) any other form prescribed by applicable law as a basis
         for claiming exemption from or a reduction in United States Federal
         withholding tax duly completed together with such supplementary
         documentation as may be prescribed by applicable law to permit the
         Borrower to determine the withholding or deduction required to be made.

         (f) Treatment of Certain Refunds. If the Administrative Agent or any
Lender determines, in its sole discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Administrative Agent
or such Lender, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative

                                       34


Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This subsection
shall not be construed to require the Administrative Agent or any Lender to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to the Borrower or any other Person.

         3.02     ILLEGALITY.

         If any Lender determines that the adoption of or change in any Law or
in the interpretation or application thereof occurring after the Closing Date
has made it unlawful, or that any Governmental Authority has asserted that it is
unlawful as a result of any such adoption or change, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate
Committed Loans shall be suspended until such Lender notifies the Administrative
Agent and the Borrower that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, the Borrower shall, upon demand
from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted.

         3.03     INABILITY TO DETERMINE RATES.

         If the Required Lenders determine that for any reason in connection
with any request for a Eurodollar Rate Loan or a conversion to or continuation
thereof that (a) Dollar deposits are not being offered to banks in the London
interbank eurodollar market for the applicable amount and Interest Period of
such Eurodollar Rate Loan, or (b) adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Committed Loan, or that the Eurodollar Rate for
any requested Interest Period with respect to a proposed Eurodollar Rate
Committed Loan does not adequately and fairly reflect the cost to such Lenders
of funding such Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent
(upon the instruction of the Required Lenders) revokes such notice. Upon receipt
of such notice, the Borrower may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Committed Loans or, failing
that, will be deemed to have converted such request into a request for a
Committed Borrowing of Base Rate Loans in the amount specified therein.

         3.04     INCREASED COSTS; RESERVES ON EURODOLLAR RATE LOANS.

                                       35


         (a) Increased Costs Generally. If any Change in Law shall:

                  (i) impose, modify or deem applicable any reserve, special
         deposit, compulsory loan, insurance charge or similar requirement
         against assets of, deposits with or for the account of, or credit
         extended or participated in by, any Lender (except any reserve
         requirement contemplated by Section 3.04(e));

                  (ii) subject any Lender to any tax of any kind whatsoever with
         respect to this Agreement or any Eurodollar Loan made by it, or change
         the basis of taxation of payments to such Lender in respect thereof
         (except for Indemnified Taxes or Other Taxes covered by Section 3.01
         and the imposition of, or any change in the rate of, any Excluded Tax
         payable by such Lender); or

                  (iii) impose on any Lender or the London interbank market any
         other condition, cost or expense affecting this Agreement or Eurodollar
         Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender, the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

         (b) Capital Requirements. If any Lender determines that any Change in
Law affecting such Lender or any Lending Office of such Lender or such Lender's
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender, to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Lender's holding company for any such reduction suffered.

         (c) Certificates for Reimbursement. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in subsection (a) or (b) of this
Section and delivered to the Borrower shall be conclusive absent manifest error.
The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

         (d) Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to the foregoing provisions of this Section shall
not constitute a waiver of such Lender's right to demand such compensation,
provided that the Borrower shall not be required to compensate a Lender pursuant
to the foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such

                                       36


Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the nine-month period referred to above shall
be extended to include the period of retroactive effect thereof).

         (e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each
Lender, as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as "Eurocurrency liabilities"), additional interest
on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual
costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), which shall
be due and payable on each date on which interest is payable on such Loan,
provided the Borrower shall have received at least 10 days' prior notice (with a
copy to the Administrative Agent) of such additional interest from such Lender.
If a Lender fails to give notice 10 days prior to the relevant Interest Payment
Date, such additional interest shall be due and payable 10 days from receipt of
such notice.

         3.05     FUNDING LOSSES.

         Upon demand of any Lender (with a copy to the Administrative Agent)
from time to time, the Borrower shall promptly compensate such Lender for and
hold such Lender harmless from any loss, cost or expense incurred by it as a
result of:

         (a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

         (b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or

         (c) any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.16;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Committed Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Committed Loan was in fact so funded.

                                       37


         3.06     MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

         (a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then, upon the Borrower's request with respect to matters under
Section 3.01 and 3.04 only, such Lender shall use reasonable efforts to
designate a different Lending Office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
3.01 or 3.04, as the case may be, in the future, or eliminate the need for the
notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

         (b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrower may replace such Lender in accordance with Section
10.14.

         3.07     SURVIVAL.

         All of the Borrower's obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.

                                  ARTICLE IV.
                       CONDITIONS PRECEDENT TO BORROWINGS

         4.01     CONDITIONS OF INITIAL BORROWING.

         The occurrence of the Closing Date, the effectiveness of this Agreement
and the obligation of each Lender to make its initial Loan hereunder is subject
to satisfaction of the following conditions precedent:

         (a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
Borrower, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and its legal counsel:

                  (i) executed counterparts of this Agreement, in the number
         requested by the Administrative Agent or its legal counsel;

                  (ii) a Note executed by the Borrower in favor of each Lender
         requesting a Note;

                                       38


                  (iii) such certificates of resolutions or other action,
         incumbency certificates and/or other certificates of Responsible
         Officers of the Borrower as the Administrative Agent may require
         evidencing the identity, authority and capacity of each Responsible
         Officer thereof authorized to act as a Responsible Officer in
         connection with this Agreement and the other Loan Documents to which
         the Borrower is a party;

                  (iv) such documents and certifications as the Administrative
         Agent may reasonably require to evidence that the Borrower is duly
         organized or formed, and that the Borrower is validly existing, in good
         standing and qualified to engage in business in (A) the jurisdiction of
         its incorporation or organization and (B) each other jurisdiction where
         its ownership, lease or operation of properties or the conduct of its
         business requires such qualification, except to the extent that failure
         to do so could not reasonably be expected to have a Material Adverse
         Effect;

                  (v) a favorable opinion of Haynsworth Sinkler Boyd, P.A.,
         counsel to the Borrower, addressed to the Administrative Agent and each
         Lender, covering enforceability of the Loan Documents and such other
         matters to be agreed upon;

                  (vi) a certificate of a Responsible Officer of the Borrower
         either (A) attaching copies of all consents, licenses and approvals
         required in connection with the execution, delivery and performance by
         the Borrower and the validity against the Borrower of the Loan
         Documents to which it is a party, and certifying that such consents,
         licenses and approvals are in full force and effect, or (B) stating
         that no such consents, licenses or approvals are so required;

                  (vii) a certificate signed by a Responsible Officer of the
         Borrower certifying (A) that the conditions specified in Sections
         4.02(a) and (b) have been satisfied, (B) that there has been no event
         or circumstance since the date of the Audited Financial Statements that
         has had or could be reasonably expected to have, either individually or
         in the aggregate, a Material Adverse Effect; and (C) the current Debt
         Ratings;

                  (viii) evidence that the Existing Credit Agreement has been or
         concurrently with the Closing Date is being terminated and any and all
         Liens securing obligations under the Existing Credit Agreement have
         been or concurrently with the Closing Date are being released; and

                  (ix) such other assurances, certificates, documents, consents
         or opinions as the Administrative Agent, the Swing Line Lender or the
         Required Lenders reasonably may require.

         (b) Any fees required to be paid on or before the Closing Date shall
have been paid.

         (c) Unless waived by the Administrative Agent, the Borrower shall have
paid all fees, charges and disbursements of counsel to the Administrative Agent
to the extent invoiced prior to or on the Closing Date, plus such additional
amounts of fees, charges and disbursements as shall constitute its reasonable
estimate of fees, charges and disbursements incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Borrower and the
Administrative Agent).

                                       39


         (d) The representations and warranties of the Borrower contained in
Article V and in any other Loan Document, and those which are contained in any
other document furnished at any time under or in connection herewith or
therewith, shall be true and correct on and as of the Closing Date.

         (e) No Default shall exist and be continuing as of the Closing Date.

         (f) The Closing Date shall have occurred on or before July 8, 2004.

         Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

         4.02     CONDITIONS TO ALL BORROWINGS.

         The obligation of each Lender to honor any Request for Borrowing (other
than a Committed Loan Notice requesting only a conversion of Committed Loans to
the other Type, or a continuation of Eurodollar Rate Committed Loans) is subject
to the following conditions precedent:

         (a) The representations and warranties of the Borrower contained in
Article V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct on and as of the date of such Borrowing, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date, and except
that for purposes of this Section 4.02, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to
the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01.

         (b) No Default shall exist, or would result from such proposed
Borrowing or from the application of the proceeds thereof.

         (c) The Administrative Agent and, if applicable, the Swing Line Lender
shall have received a Request for Borrowing in accordance with the requirements
hereof.

         Each Request for Borrowing (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Committed Loans) submitted by the Borrower shall
be deemed to be a representation and warranty that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Borrowing.

                                       40


                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to the Administrative Agent and
the Lenders that:

         5.01     EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS.

         Each Consolidated Party (a) is a corporation duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i)
own its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i), (c)
or (d), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

         5.02     AUTHORIZATION; NO CONTRAVENTION.

         The execution, delivery and performance by the Borrower of each Loan
Document have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of the Borrower's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under (i) any
Contractual Obligation to which the Borrower is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which the Borrower or its property is subject; or (c) violate any Law, except
in each case referred to in clause (b)(i),(b)(ii) or (c), to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

         5.03     GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.

         No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Borrower of this Agreement or any other Loan
Document.

         5.04     BINDING EFFECT.

         This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by the Borrower. This
Agreement constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms.

         5.05     FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.

                                       41


         (a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Consolidated Parties as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Consolidated Parties as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.

         (b) The unaudited consolidated financial statements of the Consolidated
Parties dated March 28, 2004, and the related consolidated statements of income
or operations, shareholders' equity and cash flows for the fiscal quarter ended
on that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present the financial condition of the Consolidated
Parties as of the date thereof and their results of operations for the period
covered thereby, subject, in the case of clauses (i) and (ii), to the absence of
footnotes and to normal year-end audit adjustments.

         (c) From the date of the Audited Financial Statements through the
Closing Date, (i) no Consolidated Party has incurred any material Off-Balance
Sheet Liabilities and (ii) there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

         5.06     LITIGATION.

         There are no actions, suits, proceedings, claims or disputes pending
or, to the knowledge of the Borrower after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against any Consolidated Party or against any of
their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

         5.07     NO DEFAULT.

         No Consolidated Party is in default under or with respect to any
Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

         5.08     OWNERSHIP OF PROPERTY; LIENS.

         Each Consolidated Party has good record and marketable title in fee
simple to, or valid leasehold interests in, all real property necessary or used
in the ordinary conduct of its business, except for such defects in title as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The property of the Consolidated Parties is subject to
no Liens, other than Liens permitted by Section 7.01.

                                       42


         5.09     ENVIRONMENTAL COMPLIANCE.

         The Borrower and its Subsidiaries conduct in the ordinary course of
business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof the Borrower has reasonably concluded that such
Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

         5.10     INSURANCE.

         The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts (after giving effect to any self-insurance compatible
with the following standards), with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

         5.11     TAXES.

         The Consolidated Parties have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against any Consolidated Party that would, if made, have a Material
Adverse Effect.

         5.12     ERISA COMPLIANCE.

         (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

         (b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

         (c) (i) No ERISA Event has occurred; (ii) no Pension Plan has any
Unfunded Pension Liability (except with respect to certain non-qualified Pension
Plans where the estimated

                                       43


amount of such Unfunded Pension Liability is reflected on the consolidated
balance sheet of the Consolidated Parties); (iii) neither the Borrower nor any
ERISA Affiliate has incurred any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA; except in each case referred to above, to the
extent that such occurrence could not reasonably be expected to have a Material
Adverse Effect.

         5.13     SUBSIDIARIES.

         As of the Closing Date, except as set forth on Schedule 5.13, the
Borrower has no material equity investments in any Subsidiary or other
corporation or entity other than those specifically disclosed in Exhibit 21 to
Borrower's Annual Report on Form 10-K for the year ended December 31, 2003.

         5.14     MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.

         (a) The Borrower is not engaged and will not engage, principally or as
one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.

         (b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) 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, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.

         5.15     DISCLOSURE.

         As of the Closing Date, the Borrower has disclosed to the
Administrative Agent and the Lenders all matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

                                       44


         5.16     COMPLIANCE WITH LAWS.

         Each Consolidated Party is in compliance in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a)
such requirement of Law or order, writ, injunction or decree is being contested
in good faith by appropriate proceedings diligently conducted or (b) the failure
to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

         5.17     INTELLECTUAL PROPERTY; LICENSES, ETC.

         Each Consolidated Party owns, or possesses the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person except for those rights, the loss of which
could not reasonably be expected to have a Material Adverse Effect. To the best
knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrower or any Subsidiary infringes upon
any rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or, to the best knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

                                  ARTICLE VI.
                              AFFIRMATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, the Borrower
shall, and shall (except in the case of the covenants set forth in Sections
6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:

         6.01     FINANCIAL STATEMENTS.

         Deliver to the Administrative Agent, in form and detail satisfactory to
the Administrative Agent and the Required Lenders:

         (a) as soon as available, but in any event within the earlier of (i)
the 90th day after the end of each fiscal year of the Borrower and (ii) the day
that is three (3) Business Days after the date the Borrower's annual report on
Form 10-K is required to be filed with the SEC (commencing with the fiscal year
ending December 31, 2004), a consolidated balance sheet of the Consolidated
Parties as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by a report and opinion of PricewaterhouseCoopers
LLP or another independent certified public accountant of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and opinion

                                       45


shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any "going concern" or like qualification, exception,
assumption or explanatory language or any qualification, exception, assumption
or explanatory language as to the scope of such audit; and

         (b) as soon as available, but in any event within the earlier of (i)
the 45th day after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower and (ii) the day that is three (3) Business Days
after the date the Borrower's quarterly report on Form 10-Q is required to be
filed with the SEC (commencing with the fiscal quarter ending on or about June
30, 2004), a consolidated balance sheet of the Consolidated Parties as at the
end of such fiscal quarter, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal quarter and for
the portion of the Borrower's fiscal year then ended, setting forth in each case
in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
shareholders' equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.

As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.

         6.02     CERTIFICATES; OTHER INFORMATION.

         Deliver to the Administrative Agent, in form and detail satisfactory to
the Administrative Agent and the Required Lenders:

         (a) concurrently with the delivery of the financial statements referred
to in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default under
the financial covenants set forth herein or, if any such Default shall exist,
stating the nature and status of such event;

         (b) concurrently with the delivery of the financial statements referred
to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed
by a Responsible Officer of the Borrower;

         (c) promptly after any written request by the Administrative Agent or
any Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Borrower by independent accountants in connection
with the accounts or books of the Borrower or any Subsidiary, or any audit of
any of them;

         (d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower,

                                       46


and copies of all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto;

         (e) promptly after the Borrower has notified the Administrative Agent
of any intention by the Borrower to treat the Loans and related transactions as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4), a duly completed copy of IRS Form 8886 or any successor form;
and

         (f) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary, or compliance
with the terms of the Loan Documents, as the Administrative Agent or any Lender
may from time to time reasonably request.

         Documents required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: (i)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Borrower shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower, if it
initially provides for electronic delivery of the Compliance Certificates
required pursuant to Section 6.02(b), must, contemporaneously therewith, provide
to the Administrative Agent a signed copy of such Compliance Certificates via
facsimile and shall, within ten Business Days thereafter, provide paper copies
of such Compliance Certificates to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

         The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make available to the Lenders materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
"Borrower Materials") by posting the Borrower Materials on IntraLinks or another
similar electronic system (the "Platform") and (b) certain of the Lenders may be
"public-side" Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
"Public Lender"). The Borrower hereby agrees that so long as any Lender is a
Public Lender (w) all Borrower Materials

                                       47


that the Borrower intends to make available to Public Lenders shall be clearly
and conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word
"PUBLIC" shall appear prominently on the first page thereof; (x) by marking
Borrower Materials "PUBLIC," the Borrower shall be deemed to have authorized the
Administrative Agent, the Arranger and the Lenders to treat such Borrower
Materials as either publicly available information or not material information
(although it may be sensitive and proprietary) with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws;
(y) all Borrower Materials marked "PUBLIC" are permitted to be made available
through a portion of the Platform designated "Public Investor;" and (z) the
Administrative Agent and the Arranger shall be entitled to treat any Borrower
Materials that are not marked "PUBLIC" as being suitable only for posting on a
portion of the Platform not designated "Public Investor."

         6.03     NOTICES.

         Promptly notify the Administrative Agent:

         (a) of the occurrence of any Default;

         (b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws; or (iv) the occurrence of any
ERISA Event;

         (c) of any material change in accounting policies or financial
reporting practices by the Borrower or any Subsidiary; and

         (d) of any announcement by Moody's or S&P of any change or possible
change in a Debt Rating.

         Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.

         6.04     PAYMENT OF OBLIGATIONS.

         Pay and discharge as the same shall become due and payable, all its
obligations and liabilities, including (a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness; unless the same are being contested in good faith by
appropriate proceedings

                                       48


diligently conducted and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Subsidiary.

         6.05     PRESERVATION OF EXISTENCE, ETC.

         (a) Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.03 or 7.04; (b) take
all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.

         6.06     MAINTENANCE OF PROPERTIES.

         (a) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; and (b) make all necessary repairs
thereto and renewals and replacements thereof except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.

         6.07     MAINTENANCE OF INSURANCE.

         Maintain with financially sound and reputable insurance companies not
Affiliates of the Borrower, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts (after giving effect to any self-insurance compatible with the following
standards) as are customarily carried under similar circumstances by such other
Persons.

         6.08     COMPLIANCE WITH LAWS.

         Comply in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its business
or property, except in such instances in which (a) such requirement of Law or
order, write, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

         6.09     BOOKS AND RECORDS.

         Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be.

         6.10     INSPECTION RIGHTS.

                                       49


         Permit representatives and independent contractors of the
Administrative Agent or the Required Lenders to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that when an Event of Default exists the Administrative Agent or any
Lender (or any of their respective representatives or independent contractors)
may do any of the foregoing at the expense of the Borrower at any time during
normal business hours and without advance notice.

         6.11     USE OF PROCEEDS.

         Use the proceeds of the Borrowings for (i) commercial paper backup,
(ii) working capital, (iii) capital expenditures and (iv) general corporate
purposes, in each case not in contravention of any Law or of any Loan Document.

                                  ARTICLE VII.
                               NEGATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder or any Loan
or other Obligation hereunder shall remain unpaid or unsatisfied, the Borrower
shall not, nor shall it permit any Subsidiary (or in the case of Section 7.01
only, any Domestic Subsidiary) to, directly or indirectly:

         7.01     LIENS.

         Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired; provided,
however, that the foregoing restriction shall not apply to:

         (a) Liens on any assets of the Borrower or any Subsidiaries existing on
the date hereof and set forth on Schedule 7.01;

         (b) Liens on any assets of any corporation existing at the time such
corporation becomes a Domestic Subsidiary (and not incurred in contemplation
thereof);

         (c) Liens on any assets existing at the time of acquisition of such
assets by the Borrower or a Domestic Subsidiary, or Liens to secure the payment
of all or any part of the purchase price of such assets upon the acquisition of
such assets by the Borrower or a Domestic Subsidiary or to secure any
Indebtedness incurred, assumed or guaranteed by the Borrower or a Domestic
Subsidiary prior to, at the time of, or within 180 days after such acquisition
(or in the case of real property, the completion of construction (including any
improvements on an existing asset) or commencement of full operation of such
asset, whichever is later) which Indebtedness is incurred, assumed or guaranteed
for the purpose of financing all or any part of the purchase price thereof or,
in the case of real property, construction or improvements thereon; provided,
however, that in the case of any such acquisition, construction or improvement,
the Lien shall not apply to any assets theretofore owned by the Borrower or a
Domestic Subsidiary, other than, in

                                       50


the case of any such construction or improvement, any real property on which the
property so constructed, or the improvement, is located;

         (d) Liens on any assets to secure Indebtedness of a Subsidiary to the
Borrower or to any wholly owned Domestic Subsidiary;

         (e) Liens on any assets of a corporation existing at the time such
corporation is merged into or consolidated with the Borrower or a Domestic
Subsidiary or at the time of a purchase, lease or other acquisition of the
assets of a corporation or firm as an entirety or substantially as an entirety
by the Borrower or a Domestic Subsidiary (and not incurred in contemplation
thereof);

         (f) Liens on any assets of the Borrower or a Domestic Subsidiary in
favor of the United States of America or any State thereof, or any department,
agency or instrumentality or political subdivision of the United States of
America or any State thereof, or in favor of any other country, or any political
subdivision thereof, to secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any Indebtedness incurred or
guaranteed for the purpose of financing all or any part of the purchase price
(or, in the case of real property, the cost of construction) of the assets
subject to such Liens (including, but not limited to, Liens incurred in
connection with pollution control, industrial revenue or similar financings);

         (g) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in the
foregoing clauses (a) to (f), inclusive; provided, however, that the principal
amount of Indebtedness secured thereby shall not exceed the principal amount of
Indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement shall be limited to all or a
part of the assets which secured the Lien so extended, renewed or replaced (plus
improvements and construction on real property);

         (h) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person; and

         (i) Liens not permitted by clauses (a) through (h) above if at the time
of, and after giving effect to, the creation or assumption of any such Lien, the
aggregate amount of all Indebtedness of the Borrower and its Domestic
Subsidiaries secured by all such Liens not so permitted by clauses (a) through
(h) above does not exceed 10% of Total Assets.

         7.02     INDEBTEDNESS.

         As to the Subsidiaries only, create, incur, assume or suffer to exist
any Indebtedness, except:

         (a) Indebtedness of the Subsidiaries existing as of the Closing Date as
referenced in the financial statements referred to in Section 5.05 and renewals,
refinancings or extensions

                                       51


thereof in a principal amount not in excess of that outstanding as of the date
of such renewal, refinancing or extension;

         (b) Indebtedness of the Subsidiaries incurred after the Closing Date
consisting of capital leases or Indebtedness incurred to provide all or a
portion of the purchase price or cost of construction of an asset provided that
(i) such Indebtedness when incurred shall not exceed the purchase price or cost
of construction of such asset; (ii) no such Indebtedness shall be refinanced for
a principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing; and (iii) the total amount of all such Indebtedness
shall not exceed $50,000,000 at any time outstanding;

         (c) unsecured intercompany Indebtedness among the Borrower and its
Subsidiaries;

         (d) Indebtedness and obligations owing under any Swap Contracts,
provided that (i) such obligations are (or were) entered into by such Person in
the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held
or reasonably anticipated by such Person, or changes in the value of securities
issued by such Person, and not for purposes of speculation or taking a "market
view;" and (ii) such Swap Contract does not contain any provision exonerating
the non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;

         (e) Indebtedness and obligations of the Subsidiaries owing under
documentary letters of credit for the purchase of goods or other merchandise
(but not under standby, direct pay or other letters of credit) generally;

         (f) Indebtedness of the Subsidiaries incurred in connection with
acquisitions (including Indebtedness of Subsidiaries incurred or assumed in
connection with joint ventures) provided that (i) such Indebtedness when
incurred shall not exceed the purchase price for such acquisition (or the total
capital (equity and debt) of a joint venture) and (ii) if the aggregate amount
of any such Indebtedness (whether anticipated to be funded at one time or over a
series of fundings) exceeds $100,000,000, then (A) the Borrower shall give the
Administrative Agent prior written notice of such Indebtedness and (B) prior to
the incurrence of any such Indebtedness the Borrower shall have provided to the
Administrative Agent such evidence as the Administrative Agent may reasonably
request demonstrating pro forma covenant compliance and the maintenance of an
investment grade Debt Rating from S&P and Moody's (defined for purposes hereof
as BBB- or better by S&P and Baa3 or better by Moody's); and

         (g) other non-acquisition-related Indebtedness of the Subsidiaries
which does not exceed $50,000,000 in the aggregate at any time outstanding.

         7.03     FUNDAMENTAL CHANGES.

         As to the Borrower only, merge, dissolve, liquidate, consolidate with
or into another Person, or dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person.

         7.04     DISPOSITIONS.

                                       52


         Sell, transfer or otherwise dispose of any of its properties and assets
(including without limitation any capital stock in any of its Subsidiaries)
except:

         (a) sales or leases in the ordinary course of business; and

         (b) other non-ordinary course of business sales, provided that (i) the
aggregate net book value of the assets sold by the Borrower or any of its
Subsidiaries in all such transactions after the Closing Date does not exceed 25%
of Total Assets as of the Closing Date and (ii) no Default shall have occurred
and be continuing at the time of any such sale or shall result upon giving
effect thereto.

         7.05     TRANSACTIONS WITH AFFILIATES.

         Except (i) as otherwise specifically permitted in this Agreement, (ii)
in regards to intercompany transactions among Subsidiaries and (iii) in regards
to intercompany transactions between the Borrower and any Subsidiary (to the
extent, in the case of this clause (iii), the Borrower is advantaged), enter
into any transactions or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder or Affiliate other
than on terms and conditions substantially as favorable as would be obtainable
in a comparable arm's length transaction with a Person other than an officer,
director, shareholder or Affiliate.

         7.06     USE OF PROCEEDS.

         Use the proceeds of any Borrowing, whether directly or indirectly, and
whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.

         7.07     MINIMUM BOOK NET WORTH.

         Permit Book Net Worth to be less than $883,000,000 (which represents
approximately 85% of Book Net Worth as of March 28, 2004) as of the last day of
any fiscal quarter (commencing with the fiscal quarter ending on or about June
30, 2004); provided, however, (i) such amount shall be increased at the end of
each fiscal quarter (commencing with the fiscal quarter ending June 30, 2004) by
an amount equal to 25% of the Borrower and its Subsidiaries' net income for the
fiscal quarter then ending (computed on a consolidated basis in accordance with
GAAP and with no deduction for a net loss in any such fiscal quarter), such
increases to be cumulative; (ii) such amount shall be decreased Dollar for
Dollar by the aggregate cumulative amount of all payments made by the Borrower
on and after the Closing Date for the redemption, retirement or other repurchase
of any shares of the capital stock of the Borrower so long as the Borrower's
Debt Rating is A- or higher by S&P and A3 or higher by Moody's at the time of
such payments; and (iii) for the purpose of calculating Book Net Worth with
respect to this Section 7.07, the calculation shall exclude (i.e., there will be
added back to Book Net Worth) any year-end non-cash adjustment (on an after-tax
basis) to other comprehensive income to reflect any Additional Minimum Liability
(as defined below). With respect to clause (ii) of the proviso in the
immediately preceding sentence, if, as a result of the payments made by the
Borrower for such redemption, retirement or other repurchase of any shares of
the capital stock of the

                                       53


Borrower, the Debt Rating of the Borrower is lowered by either S&P or Moody's
below the applicable level set forth in the preceding sentence within forty-five
(45) days of the last of such payments, then any reduction in the minimum Book
Net Worth amount previously made pursuant to clause (ii) of this Section 7.07 in
connection with such payments shall be reversed. For purposes hereof,
"Additional Minimum Liability" means, as of any date, with respect to the
Borrower's U.S. defined benefit Pension Plans, the sum of the absolute values of
(x) the unfunded accumulated benefit obligation existing as of the end of the
fiscal year then ending or the most recently ended fiscal year, as applicable,
plus (y) the Borrower's prepaid pension asset position existing as of the end of
the fiscal year then ending or the most recently ended fiscal year, as
applicable.

                                 ARTICLE VIII.
                         EVENTS OF DEFAULT AND REMEDIES

         8.01     EVENTS OF DEFAULT.

         Any of the following shall constitute an Event of Default:

         (a) Non-Payment. The Borrower fails to pay (i) when and as required to
be paid herein, any amount of principal of any Loan, or (ii) within three days
after the same becomes due, any interest on any Loan, or any facility,
utilization or other fee due hereunder, or (iii) within five days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document; or

         (b) Specific Covenants. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Sections 6.03, 6.11, 7.02 or
7.07; or

         (c) Other Defaults. The Borrower fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days after written notice thereof being received from the
Administrative Agent or any Lender; or

         (d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or

         (e) Payment Cross-Default. The Borrower or any Subsidiary fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, and such failure shall
continue for more than the period of grace, if any, applicable thereto and shall
not have been waived; provided, however, the occurrence of any of the foregoing
events with respect to any Subsidiary of the Borrower shall not constitute an
Event of Default unless such occurrence could reasonably be expected to have a
Material Adverse Effect; or

                                       54


         (f) Insolvency Proceedings, Etc. The Borrower or any of its
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; provided, however, the occurrence of any of the
foregoing events with respect to any Subsidiary of the Borrower shall not
constitute an Event of Default unless such occurrence could reasonably be
expected to have a Material Adverse Effect; or

         (g) Inability to Pay Debts; Attachment. (i) The Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; provided, however, the occurrence
of any of the foregoing events with respect to any Subsidiary of the Borrower
shall not constitute an Event of Default unless such occurrence could reasonably
be expected to have a Material Adverse Effect; or

         (h) Judgments. There is entered against the Borrower or any Subsidiary
(i) a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of 60 consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; provided, however, the occurrence of any
of the foregoing events with respect to any Subsidiary of the Borrower shall not
constitute an Event of Default unless such occurrence could reasonably be
expected to have a Material Adverse Effect; or

         (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

         (j) Invalidity of Loan Documents. Any Loan Document, at any time after
its execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or the Borrower or any other Person acting by or
on behalf of the Borrower contests in any manner the

                                       55


validity or enforceability of any Loan Document; or the Borrower denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document; or

         (k) Change of Control. There occurs any Change of Control with respect
to the Borrower.

         8.02     REMEDIES UPON EVENT OF DEFAULT.

         If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders, take any or all of the following actions:

         (a) declare the commitment of each Lender to make Loans to be
terminated, whereupon such commitments and obligation shall be terminated;

         (b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and

         (c) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable, in each case without further act of the Administrative Agent or any
Lender.

         8.03     APPLICATION OF FUNDS.

After the exercise of remedies provided for in Section 8.02 (or after the Loans
have automatically become immediately due and payable as set forth in the
proviso to Section 8.02), any amounts received on account of the Obligations
shall be applied by the Administrative Agent in the following order:

         First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

         Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;

                                       56


         Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;

         Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and Swap Contracts between the Borrower and any
Lender or Affiliate of any Lender, ratably among the Lenders in proportion to
the respective amounts described in this clause Fourth held by them; and

         Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.

                                   ARTICLE IX.
                              ADMINISTRATIVE AGENT

         9.01     APPOINTMENT AND AUTHORITY.

         Each of the Lenders hereby irrevocably appoints Bank of America to act
on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent and the Lenders, and the Borrower shall not
have rights as a third party beneficiary of any of such provisions.

         9.02     RIGHTS AS A LENDER.

         The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.

         9.03     EXCULPATORY PROVISIONS.

         The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:

                  (a) shall not be subject to any fiduciary or other implied
         duties, regardless of whether a Default has occurred and is continuing;

                  (b) shall not have any duty to take any discretionary action
         or exercise any discretionary powers, except discretionary rights and
         powers expressly contemplated

                                       57


         hereby or by the other Loan Documents that the Administrative Agent is
         required to exercise as directed in writing by the Required Lenders (or
         such other number or percentage of the Lenders as shall be expressly
         provided for herein or in the other Loan Documents), provided that the
         Administrative Agent shall not be required to take any action that, in
         its opinion or the opinion of its counsel, may expose the
         Administrative Agent to liability or that is contrary to any Loan
         Document or applicable law; and

                  (c) shall not, except as expressly set forth herein and in the
         other Loan Documents, have any duty to disclose, and shall not be
         liable for the failure to disclose, any information relating to the
         Borrower or any of its Affiliates that is communicated to or obtained
         by the Person serving as the Administrative Agent or any of its
         Affiliates in any capacity.

         The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary, or as
the Administrative Agent shall believe in good faith shall be necessary, under
the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.

         The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

         9.04     RELIANCE BY ADMINISTRATIVE AGENT.

         The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan that by its
terms must be fulfilled to the satisfaction of a Lender, the Administrative
Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
prior to the making of such Loan. The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants and
other experts selected by

                                       58


it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

         9.05     DELEGATION OF DUTIES.

         The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

         9.06     RESIGNATION OF ADMINISTRATIVE AGENT.

         The Administrative Agent may at any time give notice of its resignation
to the Lenders and the Borrower. Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative Agent shall
notify the Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents and (2) all payments, communications and determinations provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent's resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

         9.07     NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.

                                       59


         Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

         9.08     NO OTHER DUTIES, ETC.

         Anything herein to the contrary notwithstanding, none of the Book
Managers, Arrangers, or Syndication Agent listed on the cover page hereof shall
have any powers, duties or responsibilities under this Agreement or any of the
other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent or a Lender hereunder.

         9.09     ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Borrower, the Administrative Agent
(irrespective of whether the principal of any Loan shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
the Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise

                  (a) to file and prove a claim for the whole amount of the
         principal and interest owing and unpaid in respect of the Loans and all
         other Obligations that are owing and unpaid and to file such other
         documents as may be necessary or advisable in order to have the claims
         of the Lenders and the Administrative Agent (including any claim for
         the reasonable compensation, expenses, disbursements and advances of
         the Lenders and the Administrative Agent and their respective agents
         and counsel and all other amounts due the Lenders and the
         Administrative Agent under Sections 2.09 and 10.04) allowed in such
         judicial proceeding; and

                  (b) to collect and receive any monies or other property
         payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

                                       60


         Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

                                   ARTICLE X.
                                  MISCELLANEOUS

         10.01    AMENDMENTS, ETC.

         No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower therefrom, shall
be effective unless in writing signed by the Required Lenders and the Borrower
and acknowledged by the Administrative Agent, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no such amendment, waiver or consent
shall:

         (a) waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;

         (b) except pursuant to Section 2.14, extend or increase the Commitment
of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02)
without the written consent of such Lender;

         (c) postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) or any mandatory reduction of the Aggregate
Commitments hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;

         (d) reduce the principal of, or the rate of interest specified herein
on, any Loan, or (subject to clause (iii) of the second proviso to this Section
10.01) any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of "Default Rate" or to waive any obligation
of the Borrower to pay interest at the Default Rate;

         (e) change Section 2.13 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;

         (f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or

         (g) modify the pro rata distribution of payments, proceeds, or fees
payable to Lenders under this Agreement without the written consent of each
Lender;

                                       61


and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Swing Line Lender in addition to the Lenders required
above, affect the rights or duties of the Swing Line Lender under this
Agreement; (ii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document; and (iii) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that (x) the Commitment of such Lender may not be increased or extended
and (y) Section 2.13 and Section 8.03 may not be changed in a manner that would
alter the pro rata sharing of payments required thereby, in each case without
the consent of such Lender.

         10.02    NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.

         (a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

                  (i) if to the Borrower, the Administrative Agent or the Swing
         Line Lender, to the address, telecopier number, electronic mail address
         or telephone number specified for such Person on Schedule 10.02; and

                  (ii) if to any other Lender, to the address, telecopier
         number, electronic mail address or telephone number specified in its
         Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

         (b) Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

                                       62


         Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

         (c) Change of Address, Etc. Each of the Borrower, the Administrative
Agent and the Swing Line Lender may change its address, telecopier or telephone
number for notices and other communications hereunder by notice to the other
parties hereto. Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Borrower, the Administrative Agent and the Swing Line Lender.

         (d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices and Swing Line Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

         10.03    NO WAIVER; CUMULATIVE REMEDIES.

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

         10.04    EXPENSES; INDEMNITY; DAMAGE WAIVER.

         (a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated) and (ii) all out-of-pocket

                                       63


expenses incurred by the Administrative Agent or any Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent or any
Lender), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.

         (b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof) and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower arising out of, in connection with, or as a result of (i) the execution
or delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or the use or
proposed use of the proceeds therefrom, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available (A) to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower against an Indemnitee for breach in bad faith of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Borrower has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction and (B) with respect to
a dispute among two or more Indemnitees which does not arise as a result of the
action or inaction of the Borrower.

         (c) Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of any of
the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).

                                       64


         (d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, the Borrower shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby. Nothing
contained in this Section 10.04 shall be deemed to restrict the Borrower's right
to pursue any and all legal remedies available to the Borrower for breach of any
representation, covenant, warranty or other agreement set forth in any Loan
Document.

         (e) Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.

         (f) Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

         10.05    PAYMENTS SET ASIDE.

         To the extent that any payment by or on behalf of the Borrower is made
to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect. The obligations of the Lenders under clause
(b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

         10.06    SUCCESSORS AND ASSIGNS.

         (a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b)

                                       65


of this Section, (ii) by way of participation in accordance with the provisions
of subsection (d) of this Section, (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) or (i) of this
Section, or (iv) to an SPC in accordance with the provisions of subsection (h)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

         (b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), Swing Line Loans) at the time
owing to it); provided that

                  (i) except in the case of an assignment of the entire
         remaining amount of the assigning Lender's Commitment and the Loans at
         the time owing to it or in the case of an assignment to a Lender or an
         Affiliate of a Lender or an Approved Fund (as defined in subsection (g)
         of this Section) with respect to a Lender, the aggregate amount of the
         Commitment (which for this purpose includes Loans outstanding
         thereunder) or, if the Commitment is not then in effect, the principal
         outstanding balance of the Loans of the assigning Lender subject to
         each such assignment, determined as of the date the Assignment and
         Assumption with respect to such assignment is delivered to the
         Administrative Agent or, if "Trade Date" is specified in the Assignment
         and Assumption, as of the Trade Date, shall not be less than $5,000,000
         unless each of the Administrative Agent and, so long as no Event of
         Default has occurred and is continuing, the Borrower otherwise consents
         (each such consent not to be unreasonably withheld or delayed);

                  (ii) each partial assignment shall be made as an assignment of
         a proportionate part of all the assigning Lender's rights and
         obligations under this Agreement with respect to the Loans or the
         Commitment assigned, except that this clause (ii) shall not apply to
         rights in respect of Bid Loans or Swing Line Loans;

                  (iii) any assignment of a Commitment must be approved by the
         Administrative Agent and the Swing Line Lender unless the Person that
         is the proposed assignee is itself a Lender (whether or not the
         proposed assignee would otherwise qualify as an Eligible Assignee),
         such approval not to be unreasonably withheld or delayed; and

                  (iv) the parties to each assignment shall execute and deliver
         to the Administrative Agent an Assignment and Assumption, together with
         a processing and recordation fee of $3,500, and the Eligible Assignee,
         if it shall not be a Lender, shall deliver to the Administrative Agent
         an Administrative Questionnaire.

                  Subject to acceptance and recording thereof by the
         Administrative Agent pursuant to subsection (c) of this Section, from
         and after the effective date specified in each Assignment and
         Assumption, the Eligible Assignee thereunder shall be a party to this

                                       66


         Agreement and, to the extent of the interest assigned by such
         Assignment and Assumption, have the rights and obligations of a Lender
         under this Agreement, and the assigning Lender thereunder shall, to the
         extent of the interest assigned by such Assignment and Assumption, be
         released from its obligations under this Agreement (and, in the case of
         an Assignment and Assumption covering all of the assigning Lender's
         rights and obligations under this Agreement, such Lender shall cease to
         be a party hereto but shall continue to be entitled to the benefits of
         Sections 3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and
         circumstances occurring prior to the effective date of such
         assignment). Upon request, the Borrower (at its expense) shall execute
         and deliver a Note to the assignee Lender. Any assignment or transfer
         by a Lender of rights or obligations under this Agreement that does not
         comply with this subsection shall be treated for purposes of this
         Agreement as a sale by such Lender of a participation in such rights
         and obligations in accordance with subsection (d) of this Section.

         (c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Administrative Agent's Office
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

         (d) Participations. Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's Swing Line
Loans) owing to it); provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 10.01
that directly affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender.

                                       67


         (e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 10.15 as though it were a
Lender.

         (f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

         (g) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

         (h) Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (a "Granting Lender") may grant to a
special purpose funding vehicle identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Borrower (an "SPC")
the option to provide all or any part of any Committed Loan that such Granting
Lender would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Committed Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Committed Loan, the Granting
Lender shall be obligated to make such Committed Loan pursuant to the terms
hereof. Each party hereto hereby agrees that (i) neither the grant to any SPC
nor the exercise by any SPC of such option shall increase the costs or expenses
or otherwise increase or change the obligations of the Borrower under this
Agreement (including its obligations under Section 3.04), (ii) no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement for
which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Committed Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Committed Loan were
made by such Granting Lender. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation

                                       68


proceeding under the laws of the United States or any State thereof.
Notwithstanding anything to the contrary contained herein, any SPC may (i) with
notice to, but without prior consent of the Borrower and the Administrative
Agent and without paying any processing fee therefor, assign all or any portion
of its right to receive payment with respect to any Committed Loan to the
Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Committed Loans to any rating agency,
commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPC.

         (i) Resignation as Swing Line Lender after Assignment. Notwithstanding
anything to the contrary contained herein, any Lender that is a Fund may create
a security interest in all or any portion of the Loans owing to it and the Note,
if any, held by it to the trustee for holders of obligations owed, or securities
issued, by such Fund as security for such obligations or securities, provided
that unless and until such trustee actually becomes a Lender in compliance with
the other provisions of this Section 10.07, (i) no such pledge shall release the
pledging Lender from any of its obligations under the Loan Documents and (ii)
such trustee shall not be entitled to exercise any of the rights of a Lender
under the Loan Documents even though such trustee may have acquired ownership
rights with respect to the pledged interest through foreclosure or otherwise.

         (j) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, upon 5 Business Days' notice to the
Borrower and the Lenders, resign as Swing Line Lender. In the event of any such
resignation as Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor Swing Line Lender hereunder; provided, however,
that no failure by the Borrower to appoint any such successor shall affect the
resignation of Bank of America as Swing Line Lender, as the case may be. If Bank
of America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

         10.07    TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.

         Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or under any other
Loan Document or any suit, action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any Eligible Assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty's or prospective
counterparty's

                                       69


professional advisor) to any credit derivative transaction relating to
obligations of the Borrower; (g) with the consent of the Borrower; (h) to the
extent such Information (x) becomes publicly available other than as a result of
a breach of this Section or (y) becomes available to the Administrative Agent or
any Lender on a nonconfidential basis from a source other than the Borrower; or
(i) to the National Association of Insurance Commissioners or any other similar
organization. In addition, the Administrative Agent and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments and the Borrowings. For purposes of this Section, "Information"
means all information received from the Borrower or any Subsidiary relating to
the Borrower or any Subsidiary or any of their respective businesses, other than
any such information that is available to the Administrative Agent or any Lender
on a nonconfidential basis prior to disclosure by the Borrower or any
Subsidiary, provided that, in the case of information received from the Borrower
or any Subsidiary after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

         10.08    RIGHT OF SETOFF.

         If an Event of Default shall have occurred and be continuing, each
Lender and each of their respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or their respective Affiliates may have. Each Lender agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application.

         10.09    INTEREST RATE LIMITATION.

         Notwithstanding anything to the contrary contained in any Loan
Document, the interest paid or agreed to be paid under the Loan Documents shall
not exceed the maximum rate of non-usurious interest permitted by applicable Law
(the "Maximum Rate"). If the Administrative Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid

                                       70


principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

         10.10    COUNTERPARTS; INTEGRATION; EFFECTIVENESS.

         This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement and the other Loan Documents constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties
hereto. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

         10.11    INTEGRATION.

         This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, the provisions of this Agreement
shall control; provided that the inclusion of supplemental rights or remedies in
favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.

         10.12    SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

         All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Borrowing, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid
or unsatisfied.

         10.13    SEVERABILITY.

                                       71


         If any provision of this Agreement or the other Loan Documents is held
to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

         10.14    REPLACEMENT OF LENDERS.

         If any Lender requests compensation under Section 3.04, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01,
if any Lender is a Defaulting Lender, then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in, and consents required by, Section
10.06), all of its interests, rights and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

         (a) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);

         (b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

         (c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and

         (d) such assignment does not conflict with applicable Laws.

         A Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

         10.15    GOVERNING LAW; JURISDICTION; ETC.

         (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         (b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK

                                       72


SITTING IN NEW YORK CITY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF SUCH STATE, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

         (c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

         (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

         10.16    WAIVER OF JURY TRIAL.

         EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND

                                       73


THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.


         10.17    USA PATRIOT ACT NOTICE.

         Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.














                                       74



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.


                                          SONOCO PRODUCTS COMPANY

                                          By:
                                              ----------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                 -------------------------------


















                                      S-1





                                          BANK OF AMERICA, N.A., as
                                          Administrative Agent

                                          By:
                                              ----------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                 -------------------------------



















                                      S-2





                                          BANK OF AMERICA, N.A., as a Lender and
                                          Swing Line Lender

                                          By:
                                              ----------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                 -------------------------------
















                                      S-3





                                 [OTHER LENDERS]



















                                      S-4

                                                                    EXHIBIT 10.3

                                                                  Execution Copy






                     MEMBERSHIP INTEREST PURCHASE AGREEMENT

                                      AMONG

                            SONOCO PRODUCTS COMPANY,

                             CORRFLEX GRAPHICS, LLC,

                            CORRFLEX PACKAGING, LLC,

                                   N717CF, LLC

                                       AND

                  THE MEMBERS AND OPTION AND WARRANT HOLDERS OF
                             CORRFLEX GRAPHICS, LLC



                                 APRIL 28, 2004









        THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO SECTION 8.7
        ----------------------------------------------------------------



                                TABLE OF CONTENTS

                                                                                                          
ARTICLE I     DEFINITIONS.........................................................................................2

ARTICLE II    COVENANTS AND UNDERTAKINGS.........................................................................10

   2.1      PURCHASE OF MEMBERSHIP INTERESTS.....................................................................10
   2.2      ADDITIONAL COVENANTS.................................................................................11
   2.3      PURCHASE PRICE ADJUSTMENT............................................................................11
   2.4      CONDUCT OF THE BUSINESS OF THE COMPANY PRIOR TO CLOSING..............................................12
   2.5      CONSENTS OF THIRD PARTIES; GOVERNMENTAL AUTHORIZATIONS...............................................12
   2.6      NEGOTIATION WITH OTHERS..............................................................................13
   2.7      INVESTIGATIONS.......................................................................................14
   2.8      ENVIRONMENTAL INSPECTION.............................................................................14
   2.9      TITLE ABSTRACTS AND SURVEYS..........................................................................15
   2.10     KEY EMPLOYEES........................................................................................15
   2.11     TAX MATTERS..........................................................................................15
   2.12     EFFORTS TO SATISFY CLOSING CONDITIONS................................................................16
   2.13     MONTHLY FINANCIAL STATEMENTS.........................................................................16
   2.14     MEMBERS' REPRESENTATIVE..............................................................................16
   2.15     COLLECTION OF RECEIVABLES............................................................................17
   2.16     ENVIRONMENTAL........................................................................................17
   2.17     CORRFLEX NAME........................................................................................19

ARTICLE III   REPRESENTATIONS AND WARRANTIES OF..................................................................19

   3.1      AUTHORIZATION........................................................................................19
   3.2      ORGANIZATIONAL, EXISTENCE AND GOOD STANDING OF THE COMPANY AND THE SUBSIDIARIES......................20
   3.3      MEMBERSHIP INTEREST OF THE COMPANY...................................................................20
   3.4      SUBSIDIARIES.........................................................................................21
   3.5      FINANCIAL STATEMENTS.................................................................................21
   3.6      ACCOUNTS AND NOTES RECEIVABLE........................................................................21
   3.7      GOVERNMENTAL PERMITS.................................................................................22
   3.8      TAX MATTERS..........................................................................................22
   3.9      ASSETS AND PROPERTIES................................................................................23
   3.10     REAL PROPERTY LEASES; OPTIONS........................................................................24
   3.11     ENVIRONMENTAL LAWS AND REGULATIONS...................................................................24
   3.12     CONTRACTS............................................................................................25
   3.13     UNDISCLOSED LIABILITIES..............................................................................26
   3.14     NO VIOLATIONS........................................................................................26
   3.15     CONSENTS.............................................................................................26
   3.16     LITIGATION AND RELATED MATTERS.......................................................................27
   3.17     COMPLIANCE WITH LAWS.................................................................................27
   3.18     INTELLECTUAL PROPERTY RIGHTS.........................................................................27
   3.19     EMPLOYEE BENEFIT PLANS...............................................................................28
   3.20     EMPLOYEES; EMPLOYEE RELATIONS........................................................................29
   3.21     INSURANCE............................................................................................31
   3.22     INTERESTS IN CUSTOMERS, SUPPLIERS, ETC...............................................................31
   3.23     BUSINESS RELATIONS...................................................................................31
   3.24     OFFICERS AND MANAGERS................................................................................31
   3.25     BANK ACCOUNTS AND POWERS OF ATTORNEY.................................................................31
   3.26     ABSENCE OF CERTAIN CHANGES OR EVENTS.................................................................31
   3.27     VALIDITY OF AGREEMENT................................................................................32
   3.28     ABSENCE OF CLAIMS AGAINST THE COMPANY................................................................32
   3.29     NO OTHER REPRESENTATIONS OR WARRANTIES...............................................................32


                                       i




                                                                                                          
ARTICLE IV    REPRESENTATIONS AND WARRANTIES OF PURCHASER........................................................33

   4.1      ORGANIZATION AND STANDING............................................................................33
   4.2      CORPORATE POWER AND AUTHORITY........................................................................33
   4.3      AGREEMENT DOES NOT VIOLATE OTHER INSTRUMENTS; CONSENTS...............................................33
   4.4      NO DEFAULT...........................................................................................33
   4.5      CONSENTS.............................................................................................34
   4.6      FINANCING............................................................................................34

ARTICLE V     CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER TO CLOSE..........................................34

   5.1      COVENANTS OF THE COMPANY AND THE MEMBERS.............................................................34
   5.2      NO INJUNCTION, ETC...................................................................................34
   5.3      OPINION OF COUNSEL...................................................................................34
   5.4      HSR ACT..............................................................................................34
   5.5      DOCUMENTS TO BE DELIVERED............................................................................34
   5.6      CONSENTS.............................................................................................34
   5.7      NO MATERIAL ADVERSE EFFECT...........................................................................35

ARTICLE VI    CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE MEMBERS TO CLOSE....................................35

   6.1      COVENANTS OF PURCHASER...............................................................................35
   6.2      NO INJUNCTION, ETC...................................................................................35
   6.3      OPINION OF COUNSEL FOR PURCHASER.....................................................................35
   6.4      REPRESENTATIONS TRUE AT CLOSING......................................................................35
   6.5      DOCUMENT DELIVERY....................................................................................35
   6.6      HSR ACT..............................................................................................35

ARTICLE VII   CLOSING............................................................................................36

   7.1      TIME AND PLACE OF CLOSING............................................................................36
   7.2      THE COMPANY'S AND THE MEMBERS' PERFORMANCE AT CLOSING................................................36
   7.3      PERFORMANCE BY PURCHASER AT CLOSING..................................................................37

ARTICLE VIII  INDEMNIFICATION; REMEDIES..........................................................................37

   8.1      SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................................................37
   8.2      INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE MEMBERS................................................38
   8.3      INDEMNIFICATION AND PAYMENT OF DAMAGES BY PURCHASER..................................................38
   8.4      LIMITATIONS ON INDEMNIFICATION.......................................................................38
   8.5      INDEMNIFICATION BY THE EXCLUDED SUBSIDIARIES.........................................................39
   8.6      PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS....................................................39
   8.7      PROCEDURE FOR INDEMNIFICATION--DIRECT CLAIMS.........................................................40
   8.8      SUBROGATION..........................................................................................41
   8.9      EXCLUSIVE REMEDY.....................................................................................41

ARTICLE IX    TERMINATION........................................................................................41

   9.1      TERMINATION..........................................................................................41
   9.2      NOTICE OF TERMINATION................................................................................42
   9.3      EFFECT OF TERMINATION................................................................................42

ARTICLE X     GENERAL PROVISIONS.................................................................................42

   10.1     NOTICES..............................................................................................42
   10.2     BROKERS..............................................................................................44
   10.3     FURTHER ASSURANCE....................................................................................44
   10.4     WAIVER...............................................................................................45
   10.5     TAXES AND EXPENSES...................................................................................45


                                       ii




                                                                                                          
   10.6     BINDING EFFECT.......................................................................................45
   10.7     HEADINGS.............................................................................................45
   10.8     ENTIRE AGREEMENT.....................................................................................45
   10.9     GOVERNING LAW........................................................................................45
   10.10    CONFIDENTIALITY......................................................................................45
   10.11    PUBLICITY............................................................................................46
   10.12    ASSIGNMENT...........................................................................................46
   10.13    COUNTERPARTS.........................................................................................46
   10.14    PRONOUNS.............................................................................................46
   10.15    EXHIBITS INCORPORATED................................................................................46
   10.16    CREATION OF THE HOLDING COMPANY......................................................................46
   10.17    OPERATING AGREEMENT..................................................................................47

LIST OF SCHEDULES................................................................................................49


LIST OF EXHIBITS.................................................................................................51

















                                      iii




                     MEMBERSHIP INTEREST PURCHASE AGREEMENT

         THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT entered into this 28th day
of April, 2004, among SONOCO PRODUCTS COMPANY, a South Carolina corporation
(hereinafter sometimes referred to as "Purchaser"), CORRFLEX GRAPHICS, LLC, a
North Carolina limited liability company (hereinafter sometimes referred to as
the "Company"), CORRFLEX PACKAGING, LLC, a North Carolina limited liability
company, N717CF, LLC, a North Carolina limited liability company (each an
"Excluded Subsidiary" and collectively the "Excluded Subsidiaries") and each
Person identified on Schedule 2.1 (each referred to herein as a "Member" and
collectively the "Members").

                                   WITNESSETH:

         WHEREAS, the Members own all of the membership or other equity
interest, or rights to acquire such interests, of the Company; and

         WHEREAS, the Purchaser desires to purchase and the Members desire to
sell all of the membership or other equity interest, or rights to acquire such
interests, of the Company, subject to the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
promises, representations, warranties and covenants hereinafter set forth, the
parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         As used herein, the following terms shall have the following meanings
unless the context otherwise requires:

         1.1      "Allied" shall have the meaning assigned to such term in
                  SECTION 2.14.1

         1.2      "AAA Rules" shall have the meaning assigned to such term in
                  Section 8.7.

         1.3      "Affiliate" means, with respect to any Person, any other
                  Person, directly or indirectly, controlling, controlled by, or
                  under common control with, such Person. For purposes of this
                  definition, the term "control" (including the correlative
                  terms "controlling", "controlled by" and "under common control
                  with") means the possession, direct or indirect, of the power
                  to direct or cause the direction of the management and
                  policies of a Person, whether through the ownership of voting
                  securities, by contract, or otherwise.

         1.4      "Agreement" shall mean this Membership Interest Purchase
                  Agreement.

         1.5      "Agreement Termination Date" shall have the meaning assigned
                  to such term in Section 9.1.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 2



         1.6      Allocation Schedule" shall have the meaning assigned to such
                  term in Section 2.11.2.

         1.7      "Assets" shall mean all of the assets (other than the excluded
                  assets set forth on Schedule 2.2(b)) of the Company and the
                  Retained Subsidiaries, including, without limitation, (a) all
                  owned real property, leasehold and subleasehold estates,
                  improvements, fixtures and fittings thereon owned by the
                  Company and the Retained Subsidiaries, and easements,
                  rights-of-way and other appurtenances thereto, (b) all
                  tangible personal property (such as machinery, equipment,
                  inventories of raw materials and supplies, manufactured and
                  purchased parts, goods in process and finished goods,
                  furniture, automobiles, trucks, tractors, trailers, tools,
                  jigs, dies and office equipment) owned by the Company and the
                  Retained Subsidiaries, (c) Intellectual Property of the
                  Company and the Retained Subsidiaries, the goodwill associated
                  therewith, licenses and sublicenses granted and obtained with
                  respect thereto, and rights thereunder including the name
                  "CorrFlex" and the stylized trade mark "CorrFlex", (d)
                  accounts, accounts receivable, notes receivable and all other
                  receivables owned by the Company and the Retained
                  Subsidiaries, (e) cash and cash equivalents owned by the
                  Company and the Retained Subsidiaries, (f) prepaid assets
                  owned by the Company and the Retained Subsidiaries, (g)
                  marketable securities owned by the Company and the Retained
                  Subsidiaries and (h) deposits owned by the Company and the
                  Retained Subsidiaries.

         1.8      "Assumption Notice" shall have the meaning assigned to such
                  term in Section 8.6(a).

         1.9      "Audited Statements" shall have the meaning assigned to such
                  term in Section 3.5.

         1.10     "CERCLA" shall mean the federal Comprehensive Environmental
                  Response, Compensation and Liability Act (42 U.S.C.ss.9601 et
                  seq.).

         1.11     "Class C Membership Interests" shall mean the membership
                  Interests obtained by the exercise of the option under the
                  Class C Agreement.

         1.12     "Class C Agreement" shall mean the Class C Membership Option
                  and Redemption Agreement between the Company and John G.
                  Sutlive dated October 13, 1998.

         1.13     "Class D Membership Interests" shall mean the membership
                  Interests obtained by the exercise of the option under the
                  Class D Agreement.

         1.14     "Class D Agreement" shall mean the Class D Membership Option
                  and Redemption Agreement between the Company and John G.
                  Sutlive dated October 13, 1998.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 3



         1.15     "Class E Membership Interests" shall mean the membership
                  Interests obtained by the exercise of the option under the
                  Class E Agreement.

         1.16     "Class E Agreement" shall mean the Class E Membership Option
                  and Redemption Agreement between the Company and John G.
                  Sutlive dated October 13, 1998.

         1.17     "Closing" shall mean the consummation of the transactions
                  provided for in this Agreement.

         1.18     "Closing Date" shall mean the date on which the Closing occurs
                  pursuant to SECTION 7.1 hereof.

         1.19     "Closing Date Balance Sheet" shall have the meaning assigned
                  such term in SECTION 2.3.

         1.20     "Code" shall mean the Internal Revenue Code of 1986, as
                  amended.

         1.21     "Confidential Information" shall have the meaning assigned
                  such term in SECTION 10.10.

         1.22     "Company" shall have the meaning assigned to such term in the
                  preamble.

         1.23     "Consent" shall mean any approval, consent, ratification,
                  waiver, or other authorization (including any Governmental
                  Authorization).

         1.24     "Contemplated Transactions" shall mean all of the transactions
                  contemplated by this Agreement including the purchase of the
                  Membership Interests and the performance by Purchaser, the
                  Company and the Members of their respective covenants and
                  obligations under this Agreement.

         1.25     "Contracts" shall mean all of the agreements, contracts,
                  licenses and undertakings of the Company and the Retained
                  Subsidiaries including those listed on Schedule 3.12(a) and
                  Schedule 3.10.

         1.26     "Damages" shall have the meaning assigned to such term in
                  SECTION 8.2.

         1.27     "Dispute" shall have the meaning assigned to such term in
                  SECTION 8.7.

         1.28     "Environmental Information" shall have the meaning assigned to
                  such term in SECTION 2.8.

         1.29     "Environmental Requirements" means all laws, statutes, rules,
                  regulations, ordinances, guidance documents, judgments,
                  decrees, orders, agreements and other restrictions and
                  requirements of any governmental authority, including, without
                  limitation, federal, state and local authorities, relating to
                  the regulation or protection of the environment, or the
                  storage, treatment, disposal, transportation,

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 4



                  handling or other management of industrial or solid waste,
                  hazardous waste, hazardous or toxic substances or chemicals,
                  pollutants or Hazardous Substances, including without
                  limitation, CERCLA; the Resource Conservation and Recovery
                  Act, as amended, 42 U.S.C.ss.6901 et seq.; the Federal Water
                  Pollution Control Act, as amended, 33 U.S.C.ss.1251 et seq.;
                  the Toxic Substances Control Act, 15 U.S.C.ss.2601 et seq.;
                  the Clean Air Act, 42 U.S.C.ss.7401 et seq.; the Safe Drinking
                  Water Act, 42 U.S.C. 300f et seq.; and their foreign, state
                  and local counterparts and equivalents.

         1.30     "ERISA" shall mean the Employee Retirement Income Security Act
                  of 1974, as amended.

         1.31     "Escrow Agent" shall mean Wachovia Bank, National Association
                  or such other financial institution as agreed to by the
                  parties.

         1.32     "Escrow Agreement" shall mean the escrow agreement between
                  Purchaser, Members and the Escrow Agent in the form of Exhibit
                  1.32.

         1.33     "Escrow Amount" shall have the meaning assigned to such term
                  in SECTION 2.1.

         1.34     "Excluded Subsidiaries" shall have the meaning assigned to
                  such term in the preamble.

         1.35     "Financial Debt" shall mean all interest-bearing debt, capital
                  leases and obligations under the Class C Membership Interest
                  including such debt and other items set forth in Schedule
                  2.2(a).

         1.36     "Financial Debt Payoff" shall have the meaning assigned to
                  such term in SECTION 2.1.

         1.37     "Financial Statements" shall have the meaning assigned to such
                  term in SECTION 3.15.

         1.38     "GAAP" means generally accepted accounting principles as
                  recognized by the American Institute of Certified Public
                  Accountants, applied on a basis consistent with the basis on
                  which the Financial Statements were prepared.

         1.39     "Governmental Entity" shall mean any federal, state, local,
                  foreign or other governmental or administrative authority,
                  agency, entity, body, court or tribunal.

         1.40     "Governmental Authorization" means any approval, consent,
                  license, permit, waiver, or other authorization issued,
                  granted, given, or otherwise made available by or under the
                  authority of any Governmental Entity or pursuant to any Legal
                  Requirement.

         1.41     "Group Members" shall have the meaning assigned to such term
                  in SECTION 3.19(c).

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 5



         1.42     "Hazardous Substance" shall mean (i) any "hazardous substance"
                  as defined in ss.101(14) of CERCLA, or any regulations
                  promulgated thereunder, or the Occupational Safety and Health
                  Act of 1970, as amended from time to time (29 U.S.C. ss. 651
                  et seq.), or any regulations promulgated thereunder; (ii)
                  petroleum and petroleum by-products, asbestos and
                  asbestos-containing materials polychlorinated biphenyls and
                  pesticides; or (iii) any additional substances or materials
                  that are currently classified or considered to be hazardous or
                  toxic under Environmental Requirements.

         1.43     "Holding Company" shall have the meaning assigned to such term
                  in SECTION 10.16.

         1.44     "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
                  Improvements Act of 1976, or any successor law, and
                  regulations and rules issued pursuant to the Act or any
                  successor law.

         1.45     "Incentive Bonus Plan" shall mean the CorrFlex Graphics, LLC
                  Incentive Bonus Plan as adopted on January 28, 2002, as
                  amended.

         1.46     "Indemnification Threshold" shall have the meaning assigned to
                  such term in SECTION 8.6(a).

         1.47     "Indemnifying Party" shall have the meaning assigned to such
                  term in SECTION 8.6(a).

         1.48     "Indemnitee" shall have the meaning assigned to such term in
                  SECTION 8.6(a).

         1.49     "Intellectual Property" shall have the meaning assigned to
                  such term in SECTION 3.18 hereof.

         1.50     "IRS" shall have the meaning assigned to such term in SECTION
                  3.19(a).

         1.51     "Key Employees" shall have the meaning assigned to such term
                  in SECTION 2.10.

         1.52     "Knowledge of the Company" or similar words shall mean the
                  actual knowledge of the Members and, with respect to Members
                  who also are officers of Company and the Retained
                  Subsidiaries, their actual knowledge after commercially
                  reasonable due inquiry.

         1.53     "Legal Requirement" shall mean any federal, state, local,
                  municipal, foreign, international, multinational, or other
                  administrative order, constitution, law, ordinance, principle
                  of common law, regulation, statute, or treaty.

         1.54     "Liabilities" means any liability whether known or unknown,
                  asserted or unasserted, absolute or contingent, accrued or
                  unaccrued, liquidated or unliquidated or whether due or to
                  become due.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 6



         1.55     "Liens" shall mean all liens, mortgages, security interests,
                  encumbrances, pledges, charges, adverse claims, options,
                  buy-sell agreements, rights of first refusal agreements, and
                  property settlement or marital dissolution agreements.

         1.56     "Material Adverse Effect" shall mean any effect or change that
                  is or would be reasonably expected to be, materially adverse
                  (i) to the business, assets, condition (financial or
                  otherwise), operating results, operations or business
                  prospects of the Company and the Retained Subsidiaries, taken
                  as a whole, considered within the context of the terms of the
                  Contemplated Transactions including, but not limited to, the
                  limitations in SECTIONS 8.1, 8.2 and 8.4; or (ii) to the
                  ability of any party to consummate timely the transactions
                  contemplated hereby ; provided that the following shall not be
                  considered when determining whether a Material Adverse Effect
                  has occurred: any effect resulting from (i) economic or
                  industry conditions within the United States or generally
                  affecting the industry in which the Company and the Retained
                  Subsidiaries operate, (ii) changes in U.S. or global financial
                  markets or conditions, (iii) any generally applicable change
                  in law, rule or regulation or GAAP or interpretation of any
                  thereof or (iv) the announcement of this Agreement or the
                  Contemplated Transactions.

         1.57     "Material Permits" shall have the meaning assigned to such
                  term in SECTION 3.7.

         1.58     "Member" or "Members" shall have the meaning assigned to such
                  term as in the preamble. With respect to Allied Capital
                  Corporation, the terms "Member" or "Members" as used herein
                  and in any other document relating to the Contemplated
                  Transactions are used solely for drafting simplicity. The
                  parties acknowledge and agree that Allied Capital Corporation
                  is not a member of the Company or the Subsidiaries but in fact
                  is solely the owner and holder or the warrants and purchase
                  options shown on Schedule 2.1.

         1.59     "Membership Interests" shall mean all of the membership or
                  equity ownership interests and the rights to acquire such
                  interests in the Company owned by the Members as set forth in
                  Schedule 2.1. With respect to Allied Capital Corporation, the
                  terms "Membership Interest" or "Membership Interests" as used
                  herein and in any other document relating to the Contemplated
                  Transactions are used solely for drafting simplicity. The
                  parties acknowledge and agree that Allied Capital Corporation
                  does not own or hold any membership interests in the Company
                  or the Subsidiaries but in fact is solely the owner and holder
                  or the warrants and purchase options shown on Schedule 2.1 and
                  which are being purchased pursuant to this Agreement by the
                  Purchaser.

         1.60     "Members' Representative" shall have the meaning assigned to
                  such term in SECTION 2.14.1.

         1.61     "Monthly Financial Statements" shall the meaning assigned to
                  such term in SECTION 2.13.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 7



         1.62     "Noncompetition Agreement" shall mean the agreements between
                  the Company and certain of the Members in the form of Exhibit
                  1.62.

         1.63     "Organizational Documents" means (a) the articles or
                  certificate of incorporation and the bylaws or code of
                  regulations of a corporation; (b) the partnership agreement
                  and any certificate or statement of partnership of a general
                  partnership; (c) the limited partnership agreement and the
                  certificate of limited partnership of a limited partnership;
                  (d) the articles or certificate of organization of a limited
                  liability company and the operating agreement or limited
                  liability company agreement of a limited liability company;
                  (e) any charter or similar document adopted or filed in
                  connection with the creation, formation or organization of a
                  Person; and (f) any amendment to any of the foregoing.

         1.64     "PBGC" means the Pension Benefit Guaranty Corporation.

         1.65     "Permitted Encumbrance" or "Permitted Lien" shall mean (i) any
                  Lien for taxes or assessments that are not delinquent or are
                  being contested in good faith by appropriate proceedings, (ii)
                  any statutory Lien, including, without limitation, Liens of
                  carriers, warehousemen, mechanics, materialmen and landlords,
                  arising in the ordinary course of business by operation of law
                  with respect to a liability that is not yet due or delinquent
                  or is being contested in good faith by appropriate
                  proceedings, (iii) any Liens set forth on Schedule 1.65, and,
                  in addition with respect to Real Property, (iv) imperfections
                  of title that, individually or in the aggregate, do not
                  materially detract from the value or impair the present use of
                  the Real Property subject thereto; (v) zoning laws and other
                  land use restrictions; (vi) items that are reflected on
                  surveys of the Real Property which have been delivered to the
                  Purchaser by the Company or the Members and (vii) all Liens
                  disclosed in policies of title insurance or title commitments
                  that have been delivered to Purchaser by the Company or the
                  Members.

         1.66     "Person" shall mean any individual, corporation (including any
                  non-profit corporation), general or limited partnership,
                  limited liability company, joint venture, estate, trust,
                  association, organization, labor union, or other entity or
                  Governmental Entity.

         1.67     "Plans" shall have the meaning assigned to such term in
                  SECTION 3.10.

         1.68     "Preliminary Working Capital" shall mean the Working Capital
                  estimated as of the Closing Date by the Company by virtue of a
                  statement to be delivered by the Company at Closing signed by
                  the President and Chief Financial Officer of the Company
                  certifying that such statement is their best estimate of
                  Working Capital as of the Closing.

         1.69     "Proceeding" shall mean any action, arbitration, audit,
                  hearing, litigation, or suit (whether civil, criminal or
                  administrative) commenced, brought, conducted, or heard by or
                  before, or otherwise involving, any Governmental Entity or
                  arbitrator.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 8



         1.70     "Pro-Forma Statements" shall have the meaning assigned to such
                  term in SECTION 3.5.

         1.71     "Purchase Price" shall have the meaning assigned to such term
                  in SECTION 2.2 hereof.

         1.72     "Purchaser" shall have the meaning assigned to such term in
                  the preamble.

         1.73     "Purchaser Indemnified Persons" shall have the meaning
                  assigned to such term in SECTION 8.2.

         1.74     "Real Property" shall have the meaning assigned to such term
                  in SECTION 3.9(a).

         1.75     "Real Property Leases" shall have the meaning assigned to such
                  term in SECTION 3.10.

         1.76     "Remediation Amount" shall mean the amount, if any, to be
                  added to the Escrow Amount pursuant to SECTION 2.16.

         1.77     The terms "removal," "remedial" and "response" action shall
                  include the types of activities required by CERCLA or RCRA,
                  and shall additionally include, without limitation, any other
                  form of response or cleanup, corrective action, removal,
                  containment, monitoring, treatment or other mitigation or
                  remediation of Hazardous Materials on, in, under or about the
                  Real Property, or offsite, and other work on the Real Property
                  or offsite incidental to such actions.

         1.78     "Representative" means, with respect to a particular Person,
                  any director, officer, employee, agent, consultant, advisor,
                  or other representative of such Person, including legal
                  counsel, accountants, and financial advisors.

         1.79     "Retained Subsidiaries" shall mean CorrFlex Display &
                  Packaging, LLC, a North Carolina limited liability company and
                  CorrFlex D&P, LLC a North Carolina limited liability company.

         1.80     "Subject Property" means all Real Property and all property
                  subject to the Real Property Leases.

         1.81     "Subsidiaries" shall mean the Excluded Subsidiaries and the
                  Retained Subsidiaries.

         1.82     "Subsidiary Membership Interests" shall have the meaning
                  assigned to such term in SECTION 3.4.

         1.83     "Taxes" means all taxes (including, without limitation,
                  income, corporation, capital, sales, withholding, franchise,
                  customs duties, profits, gross receipts, excise, property,
                  stamp, transfer, water, business, and goods and services
                  taxes), imposts, duties, levies, deductions, withholdings,
                  charges, assessments,

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                        PAGE 9



                  reassessments or fees of any nature (including, without
                  limitation, interest, penalties and additions) that are
                  imposed by any relevant taxing authority; and "Tax" shall mean
                  any one of them.

         1.84     "Third Party Claim" shall have the meaning assigned to such
                  term in SECTION 8.6(a).

         1.85     "Third Party Claim Notice" shall have the meaning assigned to
                  such term in SECTION 8.6(a).

         1.86     "Third Party Intellectual Property" shall have the meaning
                  assigned to such term in SECTION 3.18.

         1.87     "Threshold Working Capital" shall mean $16,000,000.

         1.88     "Transition Services Agreement" shall mean the transition
                  services agreement to be entered into at Closing between the
                  Excluded Subsidiaries and the Company in the form of Exhibit
                  1.88.

         1.89     "Working Capital" shall mean "current assets" reduced by
                  "current liabilities" of the Company and the Retained
                  Subsidiaries consistently calculated as reflected on Schedule
                  1.89.

         1.90     "Working Capital Escrow Account" shall have the meaning
                  assigned such term in SECTION 2.1.

                                   ARTICLE II

                           COVENANTS AND UNDERTAKINGS

         2.1 PURCHASE OF MEMBERSHIP INTERESTS. On the Closing Date, Purchaser
agrees to purchase from the Members, and the Members agree to sell to Purchaser,
all of the Membership Interests as set forth on Schedule 2.1 and certain of the
Members (as identified on Schedule 2.10.2) agree to enter into the
Noncompetition Agreements for a total purchase price of $250,000,000 (i) reduced
by the (A) the Financial Debt Payoff and (B) any bonuses paid to employees
outside of the ordinary course of business including any bonus paid to Robert
Tiede during the period beginning on the date hereof until Closing; and (ii)
increased to the extent Preliminary Working Capital is greater than Threshold
Working Capital and decreased to the extent Preliminary Working Capital is less
than Threshold Working Capital (the "Purchase Price"). The Purchase Price, less
the sum of $12,500,000 plus (x) the greater of $500,000 or any positive
adjustment to the Purchase Price under (ii) of this Section 2.1 (the "Working
Capital Escrow Amount") and (y) any Remediation Amount (collectively, the
"Escrow Amount") shall be paid to the Members and/or the Members' Representative
(as directed in writing by the Members' Representative at or prior to the
Closing) by wire transfer at Closing. The Escrow Amount shall be paid to the
Escrow Agent by wire transfer at Closing. At Closing, the Company shall deliver
to the Purchaser a schedule as of the date of Closing listing all Financial Debt
and the then current balance of such debt, accrued interest through the date of
Closing,

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 10



prepayment and other costs or expenses payable by the Company in connection with
such Financial Debt, along with letters from all financial institutions or
lenders of such Financial Debt stating the total amount payable by the Company
on the Closing Date in complete satisfaction of all obligations under the
Financial Debt and that any and all Liens on the Assets or the Membership
Interests held by such lender shall be released upon the payment of such stated
amount on the Closing Date (the "Financial Debt Payoff"). Purchaser shall cause
the Company to pay the Financial Debt Payoff at Closing pursuant to such
letters.

         2.2 ADDITIONAL COVENANTS.

         (a) The Company and each of the Retained Subsidiaries, between the date
hereof and Closing, shall collect its receivables in the ordinary course of
business, purchase and sell its inventory in the ordinary course of business,
and pay its accounts payable and retire its other obligations in the ordinary
course of its business, consistent with prior practice, except as otherwise
provided in this Agreement.

         (b) The parties acknowledge and agree that prior to Closing, all
excluded assets on Schedule 2.2(b) shall be paid or distributed to, or for the
benefit of the Members, as provided in SECTION 10.16 or in accordance with
SECTION 2.5.3.

         2.3 PURCHASE PRICE ADJUSTMENT. Within thirty (30) days after the
Closing, the Company shall prepare and deliver to the Members' Representative a
statement of Working Capital as of the Closing Date ("Closing Date Working
Capital Statement") which shall be prepared on a basis consistent with the
method used in calculating Schedule 1.89. In the event the Members'
Representative does not object by written notice to the Purchaser to such
Closing Date Balance Sheet within thirty (30) days from receipt thereof by the
Members' Representative, the Closing Date Working Capital Statement shall be
deemed accepted. If the Members' Representative makes a timely objection to the
Closing Date Working Capital Statement, Purchaser and the Members'
Representative shall have ten (10) calendar days from receipt of such objection
by Purchaser in which to reach agreement as to the Closing Date Working Capital
Statement. If no agreement is reached in said ten (10) calendar day period, at
the end of such period, Purchaser and the Members' Representative shall appoint
Ernst & Young to arbitrate the dispute and calculate the Closing Date Working
Capital Statement. The determination shall be binding on the parties. Purchaser
shall pay one-half of the fees and expenses of such accounting firm and one-half
of such fees shall be a reduction of the Working Capital of the Company at
Closing to be calculated based on such Closing Date Working Capital Statement.
The Purchase Price shall be reduced to the extent the Working Capital as
determined based on the Closing Date Working Capital Statement is less than
Preliminary Working Capital and the Purchase Price shall be increased to the
extent the Working Capital as determined based on the Closing Date Working
Capital Statement is greater than Preliminary Working Capital. Any required
reduction to the Purchase Price made under this SECTION 2.3 shall be paid by the
Escrow Agent to Purchaser pursuant to the Escrow Agreement (such amount to be
paid first from the Working Capital Account and thereafter, to the extent
necessary, from the Primary Account (as such terms are used in the Escrow
Agreement). Any required addition to the Purchase Price shall be paid by
Purchaser to the Members or the Members' Representative by wire transfer to the
same wire transfer instructions delivered to the Purchaser for Closing. Upon
receipt of the Closing Date Working Capital Statement, the parties will instruct
the

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 11



Escrow Agent to release to the Members' Representative the balance of the funds,
if any, remaining with respect to the Working Capital Escrow Amount held by the
Escrow Agent. All such payments required under this SECTION 2.3 shall be made
within 5 business days after final determination of the Closing Date Working
Capital Statement.

         2.4 CONDUCT OF THE BUSINESS OF THE COMPANY PRIOR TO CLOSING. Except
with the consent in writing of Purchaser or as provided otherwise in this
Agreement, the Company covenants that, between the date of this Agreement and
the Closing Date, the Company and the Retained Subsidiaries will conduct their
business in the ordinary course, which shall include: (a) using commercially
reasonable efforts to preserve the business intact and to preserve the goodwill
of customers and others having material business relations with the Company and
the Retained Subsidiaries; (b) using commercially reasonable efforts to (i)
maintain the Assets in all material respects in the same working order and
condition as such Assets are in as of the date of this Agreement, reasonable
wear and tear, casualty and other events beyond the Company's and the Retained
Subsidiaries control, excepted and subject to the sale of any of such Assets in
the ordinary course of business, and (ii) not liquidate the Assets to cash
except in the ordinary course of business; (c) using commercially reasonably
efforts to retain its employees, subject to the termination of employees in the
ordinary course of business or for cause; (d) keeping in force at no less than
their present limits, if available at commercially reasonable cost, all existing
bonds and policies of insurance insuring the Assets or the business of the
Company and the Retained Subsidiaries; (e) not unreasonably delay the acceptance
of any new equipment or machinery presently on order; (f) not unreasonably delay
commencing or completing any material capital expenditure or capital improvement
project heretofore approved by the Company or the Retained Subsidiaries; (g) not
enter into any material contract, commitment, arrangement or transaction of the
type described in SECTION 3.12 hereof, except for contracts for the sale of
goods or services or the purchase of inventory and supplies, personal property
leases and nondisclosure agreements, in each case in the ordinary course of
business; and (h) using commercially reasonable efforts to cause the Company and
the Retained Subsidiaries not to suffer, permit or incur any of the transactions
or events described in SECTION 3.26 hereof to the extent such events or
transactions are within the control of the Company and the Retained
Subsidiaries.

         2.5 CONSENTS OF THIRD PARTIES; GOVERNMENTAL AUTHORIZATIONS.

                  2.5.1 The Company shall use commercially reasonable efforts to
secure the Consent, in form and substance reasonably satisfactory to Purchaser,
from any party to any Contract as required to be obtained to permit the
consummation of the Contemplated Transactions; provided that the Company shall
not, and the Company shall cause the Members not to, make any agreement or
understanding materially affecting the Assets, the Company, the Retained
Subsidiaries or their business after Closing as a condition for obtaining any
such Consent except with the prior written consent of Purchaser, such consent
not to be unreasonably withheld. During the period prior to the Closing Date,
Purchaser shall act diligently and reasonably to cooperate with the Company and
the Members (to the extent their participation is required) to obtain the
Consents contemplated by this SECTION 2.5.1.

                  2.5.2 During the period prior to the Closing Date, the
Purchaser shall, the Company shall, and the Company shall cause the Members to
(to the extent their participation is

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 12



required), act diligently and reasonably, and shall cooperate with each other,
in making any required filing or notification and in securing any Consents of
any Governmental Entity required to be obtained by them in order to permit the
consummation of the Contemplated Transactions, or to otherwise satisfy the
conditions set forth in Article V or Article VI; provided that the Company shall
not, and the Company shall cause the Members not to, make any agreement or
understanding materially affecting the Assets, the Company, the Retained
Subsidiaries or their business as a condition to obtaining any such Consents
except with the prior written consent of Purchaser, such consent not to be
unreasonably withheld. The Purchaser shall be responsible for all filing fees
payable to any Governmental Entity in connection with the foregoing.

                  2.5.3 The Excluded Subsidiaries and Purchaser (on behalf of
itself, the Company and the Retained Subsidiaries) shall use commercially
reasonable efforts to secure the Consent to a partial assignment, as applicable,
from any party to a Contract entered into by the Company or a Retained
Subsidiary that covers any excluded assets set forth on Schedule 2.2. Each such
Consent shall be in form and substance reasonably satisfactory to the Excluded
Subsidiaries and Purchaser. If any such Consent is not obtained, or if an
attempted partial assignment thereof would be ineffective, the Excluded
Subsidiaries and Purchaser (on behalf of itself, the Company and the Retained
Subsidiaries) will cooperate with each other in any reasonable arrangement
pursuant to which the Excluded Subsidiaries will continue to obtain the benefits
of use of the applicable excluded asset and perform the contractual obligations
associated with such excluded asset.

         2.6 NEGOTIATION WITH OTHERS. From and after the date of this Agreement
until the earlier of Closing or the Agreement Termination Date, the Company
shall not, and the Company shall cause the Members not to, directly or
indirectly, except as it may relate exclusively to the Excluded Subsidiaries:

                  2.6.1 solicit, initiate discussions or engage in negotiations
with any Person, or take any action to facilitate the efforts of any Person,
other than Purchaser, relating to the possible acquisition of all or a
substantial part of the Assets, the Company, the Retained Subsidiaries or their
business (whether by way of merger, purchase of capital stock, purchase of
assets or otherwise);

                  2.6.2 except for information furnished to Purchaser or to
third parties required for the Company to obtain all necessary consents in
connection with the transactions contemplated by this Agreement, provide
information with respect to the Company to any Person, other than Purchaser and
its advisors or the Company's Members, officers and advisors, relating to the
possible acquisition of all or a substantial part of the Assets, the Company or
its business (whether by way of merger, purchase of equity interests, purchase
of assets or otherwise);

                  2.6.3 enter into any agreement with any Person, other than
Purchaser, providing for the possible acquisition of all of a substantial part
of the Assets, the Company, the Retained Subsidiaries or their business (whether
by way of merger, purchase of capital stock, purchase of assets or otherwise);
or

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 13



                  2.6.4 make or authorize any statement, recommendation or
solicitation in support of any possible acquisition by any Person, other than
Purchaser, of all or a substantial part of the Assets, the Company, the Retained
Subsidiaries or their business (whether by way of merger, purchase of capital
stock, purchase of assets or otherwise).

Each Member shall be severally liable for its breach of this SECTION 2.6, and no
other Member shall be liable (jointly or otherwise) for the breach hereof by
another Member.

         2.7 INVESTIGATIONS. Following the date of this Agreement, the Company
shall provide Purchaser and its representatives and agents such access to the
books and records of the Company and the Retained Subsidiaries and furnish to
Purchaser such financial and operating data and other information in the
Company's or the Retained Subsidiaries' possession with respect to the
businesses and property of the Company and the Retained Subsidiaries as it may
reasonably request from time to time, and permit Purchaser and its
representatives and agents to make such inspections of the Company's and the
Retained Subsidiaries' real and personal properties as they may reasonably
request. The foregoing access and inspections shall be allowed during normal
business hours and upon reasonable notice, and shall be conducted in such a
manner as not to interfere unreasonably with the normal operations of the
Company or the Retained Subsidiaries. The Company shall promptly arrange for
Purchaser and its representatives and agents to meet with such directors,
officers, employees and agents of the Company and the Retained Subsidiaries as
requested.

         2.8 ENVIRONMENTAL INSPECTION. Following the date of this Agreement, the
Company shall provide to Purchaser access to all records and information in the
Company's and the Retained Subsidiaries' possession concerning all Hazardous
Substances, used, stored, generated, treated or disposed of by the Company or
the Retained Subsidiaries, all environmental or safety studies in the Company's
and the Retained Subsidiaries' possession conducted by or on behalf of the
Company or the Retained Subsidiaries and all reports, correspondence or filings
to Governmental Entities with jurisdiction over Environmental Requirements
concerning the compliance of the Subject Property or the operation of the
Subject Property with Environmental Requirements, all policies and procedures
manuals or guidelines utilized by the Company and the Retained Subsidiaries to
comply with Environmental Requirements in the Company's or the Retained
Subsidiaries' possession, and any other information reasonably requested by
Purchaser in the Company's or the Retained Subsidiaries' possession pertaining
to environmental, health and safety issues (the "Environmental Information").
The Company agrees that Purchaser shall have the right to inspect the
Environmental Information and the Subject Property, including the performance of
a "Phase 1" environmental site assessment and audit, and, at the discretion of
Purchaser, perform subsurface or other invasive investigations, including air
monitoring, at or near the Subject Property all at Purchaser's expense, subject
to (i) compliance by Purchaser with all applicable Legal Requirements (including
without limitation any applicable well permitting requirements), and (ii) as to
property covered by the Real Property Leases or otherwise owned by third
parties, approval of the lessor or other property owner of such work in writing
if required under such leases which the Company or the Retained Subsidiaries
shall diligently assist in obtaining; and (iii) SECTION 10.10. Except to the
extent required by Applicable Law, Purchaser shall not disclose any
Environmental Information or the results of any Phase I or other environmental
investigation to any third party who is not Purchaser's agent, without first

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 14



obtaining the consent of the Company, which consent shall not be unreasonably
withheld. Purchaser shall indemnify, defend and hold harmless the Company, the
Subsidiaries and the Members from and against all claims, actions, damages,
liens, liabilities, obligations and expenses (including reasonable attorneys'
fees and court costs) arising out of or relating in any manner to Purchaser's
work and investigations under this SECTION 2.8 and SECTION 2.7 above, which
indemnity shall survive Closing or termination of this Agreement. In the event
of Termination of this Agreement without a Closing, Purchaser shall repair any
damage resulting from such activities (including without limitation, proper
closure of all well and borings installed by Purchaser and removal at
Purchaser's sole cost of all waste derived from such investigation).

         2.9 TITLE ABSTRACTS AND SURVEYS. The Company has delivered to
Purchaser, with respect to each parcel of Real Property, (i) the Company's or
the Retained Subsidiaries' most recent title insurance policy and copies of all
documents referenced in the policies, to the extent in the Company's or the
Retained Subsidiaries' possession, and (ii) the Company's or the Retained
Subsidiaries' most recent survey, to the extent in the Company's or the Retained
Subsidiaries' possession.

         2.10 KEY EMPLOYEES. The Company agrees to use commercially reasonable
efforts to assist and cooperate with Purchaser in encouraging the Key Employees
to remain employed by the Company or the Retained Subsidiaries after Closing.
The "Key Employees" are the individuals identified on Schedule 2.10.

         2.11 TAX MATTERS.

                  2.11.1 Tax Returns. The Members' Representative shall prepare,
or cause to be prepared, and deliver to the Purchaser for review the partnership
tax returns for the calendar year 2003, if not prepared prior to the date
hereof. The Members' Representative shall prepare, or cause to be prepared, and
deliver to the Purchaser for review the Company's final partnership tax returns
for the period beginning January 1, 2004 through the Closing Date within 150
days after the Closing. Purchaser's review and approval of such tax returns
shall not be unreasonably withheld. If the parties cannot agree on such returns,
such dispute shall be submitted to any nationally recognized firm of certified
public accountants except for Grant Thornton or PricewaterhouseCoopers for
resolution. Once the returns are agreed to by the parties, the parties shall
require officers of the Company to execute and file the returns. Purchaser shall
provide to the Members' Representative fully executed copies of such tax
return(s) following their filing. For an appropriate period of time after the
Closing Date, Purchaser shall provide or cause to be provided to the Members'
Representative such records and information concerning the Company and the
Retained Subsidiaries as the Members may reasonably require, to prepare,
determine or verify the Members' tax liability in respect of the Company.

                  2.11.2 Allocation Schedule. The parties have agreed upon an
allocation of the purchase price for the Membership Interests and the
Noncompetition Agreements as attached hereto as Schedule 2.11.2 (the "Allocation
Schedule"). The Purchaser shall obtain a third party appraisal of the Assets and
shall provide the Members' Representative a copy of such appraisal. The
Allocation Schedule and the valuation shown on such appraisal shall be binding
on all parties for tax purposes and no party shall file any tax returns
inconsistent with the Allocation

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 15



Schedule and such appraisal unless required to do so pursuant to a determination
(as defined in Section 1313(a) of the Code) or any similar state or local Tax
provision. If such a determination is made, no party shall bear any liability to
any other party hereunder for taking such an inconsistent position. In addition,
neither party shall have any liability to any other party hereunder if a Tax
authority takes any position inconsistent with the Allocation Schedule or any
adjustment resulting therefrom.

         2.12 EFFORTS TO SATISFY CLOSING CONDITIONS. The Company and the
Purchaser shall use commercially reasonable efforts to cause the conditions in
Articles V and VI to be satisfied in a timely manner and, in any event, by July
15, 2004. As promptly as practicable after the date of this Agreement, the
Company and the Purchaser shall make all filings required by the Legal
Requirements to be made by them to consummate the transactions contemplated
hereby (including all filings under the HSR Act). Between the date of this
Agreement and the Closing Date, the Purchaser shall cooperate with the Company
in obtaining all of the Consents identified in Schedule 3.15. The Purchaser and
the Company shall each request early termination of the applicable waiting
period under the HSR Act.

         2.13 MONTHLY FINANCIAL STATEMENTS. Between the date hereof and the
Closing, Company shall provide to Purchaser, as soon as reasonably available, a
monthly financial statement for each calendar month ending 30 days or more prior
to the Closing Date (the "Monthly Financial Statements").

         2.14 MEMBERS' REPRESENTATIVE

                  2.14.1 Each Member hereby irrevocably appoints and authorizes
L. Kerry Vickar and Bryan L. Smith, acting jointly, to act as its
representatives (the "Members' Representative"). So long as two individuals
serve jointly as the Members' Representative, any action approved by both
individuals shall be the action of the Members' Representative. In the event of
the death, incapacity or refusal to serve (i) of either Messrs. Vickar or Smith,
then the other shall be the sole Members' Representative or (ii) of both Messrs.
Vickar and Smith, then a majority of the Members (based on their fully-diluted
percentage interests, or rights to acquire such interests, in the Company
immediately prior to the Closing) shall appoint a successor Members'
Representative, which appointment shall be subject to the consent (not to be
unreasonably withheld) of Allied Capital Corporation ("Allied"). The Members'
Representative is hereby granted full authority, in its sole discretion, on
behalf of all of the Members to (i) oversee the preparation and completion of
all matters and execution of all documents for Closing and post-Closing as
contemplated herein (including, without limitation, the Escrow Agreement), (ii)
collect the Purchase Price (including funds released from the Escrow from time
to time) and use such funds to (A) settle and pay the selling expenses of the
Company, (B) pay any required tax make-up payment to Allied Capital Corporation,
(C) fund the Incentive Bonus Plan, (D) pay any required taxes or tax
withholding, and, thereafter, (E) distribute the net proceeds to the Members pro
rata in accordance with the Allocation Schedule, provided that the ratable share
of the Purchase Price payable to Allied after giving effect to the adjustments
in clauses (A) through (D) above shall be paid directly to Allied, unless Allied
consents otherwise in writing, (iii) negotiate, defend, pursue, settle and pay
(from the Escrow only) any indemnification claims, and (iv) take any other
action that may be necessary or desirable on behalf of the Members in connection
with

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 16



this Agreement, provided that such action affects the Members ratably, unless
each Member affected by more than its ratable share consents otherwise in
writing. By each Member's execution of this Agreement it shall irrevocably make,
constitute and appoint the Members Representative as such Member's
attorney-in-fact and authorizes and empowers the Members' Representative to act
with the foregoing authority (provided that the Members' Representative is not
authorized to execute any Noncompetition Agreement or employment agreement on
behalf of any Member or otherwise bind or subject any Member to individual
liability other than claims to be satisfied exclusively from the Escrow).
Nothing set forth herein shall convey or be construed to authorize the Members'
Representative to take any action on behalf of Allied in its capacity as a
creditor of the Company or its affiliates.

                  2.14.2 The Members' Representative shall have no duties or
obligations other than those specifically set forth herein and shall not be
liable under any circumstances for any actions or inactions in such capacity
other than for its or their willful misconduct. Any individual Members'
Representative may resign at any time upon ten days' notice to all Members and
the Purchaser. The Members agree to indemnify and hold the Members'
Representative harmless from any claims, losses, expenses (including reasonable
attorneys' fees) and damages arising out of his or their services hereunder. The
Members' Representative is authorized to pay or reimburse any such claims,
losses, expenses and damages from the Purchase Price, including any funds in the
Escrow that may be released from time to time.

                  2.14.3 Each of the Members and the Members' Representative
acknowledge and agree that Purchaser may rely on the Members' appointment of the
Members' Representative and deal exclusively with the Members' Representative
consistent with such appointment as provided herein and the provisions of this
Agreement and the Escrow Agreement dealing with actions to be taken by the
Members' Representative on behalf of the Members, and the Members agree to
indemnify and save harmless the Purchaser from and against any loss, liability,
cost or expense that it may incur by reason of its relying upon the authority of
the Members' Representative as provided herein.

         2.15 COLLECTION OF RECEIVABLES. After the Closing, the Purchaser shall
cause the Company to use commercially reasonable efforts to collect all accounts
receivable existing as of Closing in the ordinary course of business consistent
with past practice.

         2.16 ENVIRONMENTAL.

                  2.16.1 After the date hereof, Purchaser shall conduct the
limited environmental investigation at the properties owned by the Company in
Winston-Salem, North Carolina and York, Pennsylvania (the "Sites") as set forth
in the letter from ERM to Purchaser dated April 27, 2004 attached hereto as
Schedule 2.16. Immediately following such investigation, Purchaser shall cause
ERM to issue a written report identifying any environmental conditions that
require remediation in order for the Sites to comply with applicable
Environmental Laws and providing an estimate of the cost of such remediation
(collectively, the "ERM Findings"). If the Company does not object by written
notice to the ERM Findings within ten (10) days after the Company's receipt of
the ERM letter, the ERM Findings shall be deemed accepted. In such event, the
Company will use commercially reasonable efforts to complete the required
remediation prior to

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 17



Closing. If such remediation has not been completed prior to Closing, ERM shall
provide to the parties an estimate of the remaining cost of such remediation,
which shall constitute the initial Remediation Amount. Such amount shall be
added to the Escrow Amount and held by the Escrow Agent to reimburse Purchaser,
pursuant to the Escrow Agreement, for the costs of such post-Closing remediation
incurred in accordance with this Section 2.16.

                  2.16.2 If the Company objects to the ERM Findings (based on
either the recommended scope of remediation or the estimated costs), it shall
provide written notice to Purchaser identifying the objections and if a final
determination of the cost of remediation has not been made prior to Closing, the
costs of remediation included in the ERM Findings shall constitute the initial
Remediation Amount. Such amount shall be added to the Escrow Amount and held by
the Escrow Agent to reimburse Purchaser, pursuant to the Escrow Agreement, for
the costs of such post-Closing remediation incurred in accordance with this
Section 2.16. Following delivery of a written notice of objections, the Company,
at the direction of the Members' Representative, shall retain a national
environmental contracting firm (the "Company Consultant") to conduct an
evaluation of the disputed ERM Findings (which may, in the discretion of the
Members' Representative, involve a limited investigation similar to the one
conducted by ERM). The Company shall provide Purchaser and the Members'
Representative with a copy of the written findings of the Company Consultant,
which shall include an estimate of the costs of any remediation required at the
Sites to comply with applicable Environmental Laws. If the findings of the
Company Consultant differ from the ERM Findings, and the Members' Representative
and Purchaser are unable to resolve such differences within five (5) days after
Purchaser's receipt of such report, the parties shall select a qualified,
independent environmental contracting firm (the "Third Party Consultant") to
evaluate the disputed ERM Findings (which may, in the discretion of the Third
Party Consultant, involve a limited investigation similar to the one conducted
by ERM), and provide an estimate of the costs of any remediation required in
order for the Sites to comply with applicable Environmental Laws. In the event
the Members' Representative and Purchaser are unable to agree upon a Third Party
Consultant within seven (7) days after Purchaser's receipt of the report of the
Company Consultant, then ERM and the Company Consultant shall mutually select
such firm within five (5) days thereafter. Upon completion of its investigation,
the Third Party Consultant shall deliver a written report to the Members'
Representative and Purchaser identifying any environmental conditions that
require remediation at the Sites in order to comply with applicable
Environmental Laws and providing an estimate of the cost of such remediation. If
the Third Party Consultant's estimate is closer to the Company Consultant's
estimate than it is to ERM's estimate, the Remediation Amount shall be deemed to
be the Company Consultant's estimate (and any excess Remediation Amount then
held in escrow shall be distributed by the Escrow Agent in accordance with the
Escrow Agreement). If the Third Party Consultant's estimate is closer to ERM's
Estimate than it is to the Company Consultant's estimate (or the Third Party
Consultant's estimate is equidistant from ERM's Estimate and the Company
Consultant's Estimate), the Remediation Amount shall not change.

                  2.16.3 In performing any post-Closing remediation hereunder,
Purchaser shall employ cost- effective methods and shall limit such work to the
minimum needed to satisfy applicable Environmental Laws. Purchaser may take into
account operational concerns in determining the cost-effectiveness of a remedial
method, provided that under no circumstances shall

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 18



the Members have any obligation to pay for any work required as a result of (a)
a change in the use of the applicable property from its use as of the Closing,
or (b) any hazardous material released on or about, or migrating to, the
applicable property after the Closing. Upon completion of any post-Closing
remediation work performed in accordance with this Section 2.16, Purchaser shall
submit to the Escrow Agent and the Members' Representative invoices or other
written evidence of the expenses incurred by Purchaser in connection with such
remediation work. Unless the Members' Representative objects in writing within
five (5) days after receipt thereof, he shall execute a joint direction to the
Escrow Agent to distribute to Purchaser an amount equal to its documented
expenses, provided that, in no event shall such distribution exceed the then
remaining Remediation Amount. If the Members' Representative delivers a timely
objection, the dispute shall be resolved in accordance with this Agreement. Upon
completion of the required post-Closing remediation as determined in accordance
with this Section 2.16 and the distribution of any of the Remediation Amount to
Purchaser as required hereunder, the parties will instruct the Escrow Agent to
release to the Members' Representative the balance of the funds, if any,
remaining with respect to the Remediation Amount held by the Escrow Agent.

                  2.16.4 The Remediation Amount shall be held by the Escrow
Agent solely for the purpose of reimbursing to Purchaser the remaining costs of
remediation incurred in accordance with this Section 2.16 after the Closing and
shall not be used for any other purpose. The Remediation Amount shall constitute
Purchaser's sole and exclusive remedy for any remediation work conducted after
the Closing that arises from the ERM Findings.

         2.17 CORRFLEX NAME. On or before the later of the date which is 6
months after the Closing Date or December 31, 2004, CorrFlex Packaging, LLC
shall change its name to delete any reference to the name "CorrFlex" and
discontinue using such name in any form or manner except as required to comply
with any applicable Legal Requirement. At Closing, CorrFlex Packaging, LLC shall
discontinue the use of the "CorrFlex" stylized trademark.

                                  ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
                                  THE COMPANY

         The Company represents and warrants to Purchaser, as of the date hereof
and subject to the disclosure in the schedules that corresponds to each such
representation and warranty (whether directly or through the related
definitions), as follows:

         3.1 AUTHORIZATION. This Agreement has been duly executed and delivered
by the Company, the Excluded Subsidiaries and the Members and constitutes the
valid and binding obligation of each such party, enforceable in accordance with
its terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, (ii) the remedies of specific performance and injunctive
relief are subject to certain equitable defenses and to the discretion of the
court before which any proceedings may be brought and (iii) rights to
indemnification hereunder may be limited under applicable securities laws. The
Company and the Excluded Subsidiaries have full limited

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 19



liability company power, capacity and authority to execute this Agreement and
all other agreements and documents contemplated hereby.

         3.2 ORGANIZATIONAL, EXISTENCE AND GOOD STANDING OF THE COMPANY AND THE
SUBSIDIARIES. The Company and each of the Subsidiaries is a limited liability
company duly organized, validly existing and in good standing under the laws of
the state of North Carolina with all limited liability company power and
authority to own, lease and operate their properties and to carry on their
business as now being conducted. The Company and each of the Subsidiaries is
duly qualified or licensed as a foreign limited liability company and in good
standing in each jurisdiction in which the character or location of the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so duly
qualified or licensed would not have a Material Adverse Effect. Set forth on
Schedule 3.2 is a list of the jurisdictions in which the Company and each of the
Subsidiaries is qualified or licensed to do business as a foreign corporation.
Set forth in Schedule 3.2 is a listing of all names of all predecessor companies
for the past five (5) years of the Company and each of the Retained
Subsidiaries, including the names of any entities from whom the Company or any
of the Retained Subsidiaries previously acquired assets with a purchase price in
excess of $5,000,000 (and in the event of any such acquisitions, a copy of the
related purchase agreement has been delivered to the Purchaser). In addition,
set forth on Schedule 3.2 is a complete list of all the names under which the
Company or any of the Subsidiaries does or has done business since its
formation. True, complete and correct copies of the Articles of Organization of
the Company and each of the Subsidiaries certified by the Secretary of State of
the State of North Carolina as of the date not more than twenty (20) days prior
to the date of execution of this Agreement and of the operating agreement of the
Company and each of the Retained Subsidiaries has been delivered to the
Purchaser. The minute books of the Company and each of the Subsidiaries, as
heretofore delivered to Purchaser, are true copies of the minute books for each
of the Company and the Subsidiaries. The minute books of the Company and each of
the Subsidiaries have been maintained in accordance with applicable Legal
Requirements in all material respects.

         3.3 MEMBERSHIP INTEREST OF THE COMPANY.

         (a) The Membership Interests represents all of the membership interests
or other equity ownership interest in the Company. All of the Membership
Interests have been validly issued and are fully paid and are nonassessable.
Except as set forth on Schedule 3.3, there are no outstanding conversion or
exchange rights, subscriptions, options, warrants or other arrangements or
commitments obligating the Company to issue any additional membership or equity
interests in the Company or other securities or to purchase, redeem or otherwise
acquire any membership or equity interests in the Company or other securities,
or to make any distribution in respect thereof.

         (b) The Members own of record and beneficially and have good title to
all of the Membership Interests, free and clear of any and all Liens other than
standard state and federal securities law private offering legends and
restrictions and the restrictions set forth in the Company's Operating
Agreement.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 20



         (c) The Company does not, and shall not at Closing or after Closing,
have any obligations (i) to any holders of Class C Membership Interests, Class D
Membership Interests, or Class E Membership Interests or (ii) under the Class C
Agreement, Class D Agreement or Class E Agreement except for an obligation to
the holders of the Class C Membership Interests which is included in Financial
Debt and will be included in the Financial Debt Payoff at Closing.

         3.4 SUBSIDIARIES. Except for the Subsidiaries, the Company and the
Subsidiaries do not presently own, of record or beneficially, or control
directly or indirectly, any capital stock, securities convertible into capital
stock or any other equity interest in any corporation, association or business
entity, nor is the Company or any of the Subsidiaries, directly or indirectly, a
participant in any joint venture, partnership or other non-corporate entity. The
Company owns of record and beneficially and has good title to 100% of the
membership interests or other equity ownership interests ("Subsidiary Membership
Interests") in each of the Retained Subsidiaries free of any Liens other than
standard state and federal securities law private offering legends and
restrictions and the restrictions set forth in the applicable Operating
Agreement. All of the Subsidiary Membership Interests have been validly issued
and are fully paid and nonassessable. There are no outstanding conversion or
exchange rights, subscriptions, options, warrants or other arrangements or
commitments obligating any Subsidiary to issue any additional membership or
equity interests in any Retained Subsidiaries or other securities or to
purchase, redeem or otherwise acquire any membership or equity interests in any
subsidiaries or other securities, or to make any distribution in respect
thereof.

         3.5 FINANCIAL STATEMENTS. Attached as Schedule 3.5 are (i) the audited
balance sheet of the Company and the Subsidiaries as of December 31, 2001,
December 31, 2002 and December 31, 2003 and the related statements of income,
Members' equity and cash flows (the Audited Financial Statements"), (ii) the
Company's and the Retained Subsidiaries (but excluding the Excluded
Subsidiaries) unaudited pro-forma statement of Working Capital and fixed assets
as of December 31, 2003, and the related statement of operating income for the
12-month period then ended, and (iii) the Company and the Retained Subsidiaries
(but excluding the Excluded Subsidiaries) unaudited pro-forma statement of
Working Capital and fixed assets as of March 31, 2004 and the related statement
of operating income for the 3-month period ended then ended (collectively items
(ii) and (iii), the "Pro-Forma Statements") and together with the Audited
Statements, the "Financial Statements"). The Audited Statements present fairly,
in all material respects, the financial position and results of operations of
the Company as of the indicated dates and for the indicated periods in
accordance with GAAP. The Pro-Forma Statements present fairly, in all material
respects, the Working Capital and fixed assets and operating income of the
Company and the Retained Subsidiaries as of the indicated dates and for the
indicated periods, and except as set forth on Schedule 3.5 are in accordance
with GAAP in all material respects.

         3.6 ACCOUNTS AND NOTES RECEIVABLE. Set forth on Schedule 3.6 is an
accurate list of the accounts and notes receivable of the Company and the
Retained Subsidiaries, as of March 31, 2004, and including receivables from and
advances to employees and the Members (other than routine travel advances to be
repaid or formally accounted for within sixty (60) days). Schedule 3.6 sets
forth information showing the aging of all such accounts and notes receivable.
Except to the extent reflected on Schedule 3.6, all such accounts and notes are
legal, valid and

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 21



binding obligations of the obligors, collectible in the amount shown on Schedule
3.6 net of reserves reflected on the Audited Financial Statements.

         3.7 GOVERNMENTAL PERMITS. Except with respect to environmental permits
or authorizations (which are covered exclusively in SECTION 3.11), the Company
and the Retained Subsidiaries hold all licenses, franchises, permits and
authorizations from Governmental Entities (including Real Property licenses and
permits) which are required by applicable Legal Requirements and material to the
operation of the business of the Company and the Retained Subsidiaries as
currently conducted (the "Material Permits"). An accurate list is set forth on
Schedule 3.7 hereto of all such Material Permits. The Material Permits are
valid, and neither the Company nor any Retained Subsidiary has received any
written notice that any Governmental Entity intends to cancel, terminate or not
renew any such Material Permit. Except as disclosed on Schedule 3.7, the Company
and the Retained Subsidiaries have conducted and are conducting their business
in compliance in all materials respects with the requirements, standards,
criteria and conditions set forth in the Material Permits and are not in
violation in any material respect of any of the foregoing. Except as
specifically provided on Schedule 3.7, the Contemplated Transactions will not
result in a default under or a breach or violation of any such Material Permits.

         3.8 TAX MATTERS.

         (a) The Company and the Subsidiaries have filed all income tax returns
required to be filed by the Company and the Subsidiaries and all returns,
reports and forms of other Taxes required to be filed by the Company and the
Subsidiaries. The Company and the Subsidiaries have paid or provided for all
Taxes shown to be due on such returns and all such returns are accurate and
correct in all material respects. Except as set forth on Schedule 3.8, (i) no
action or proceeding for the assessment or collection of any Taxes is pending
against the Company and no notice of any claim for Taxes, whether pending or
threatened, has been received; (ii) no deficiency, assessment or other formal
claim for any Taxes has been asserted or made against the Company or any
Retained Subsidiary that has not been fully paid or finally settled; and (iii)
no issue has been formally raised by any taxing authority in connection with an
audit or examination of any return of Taxes; (iv) no federal, state or foreign
income tax returns of the Company or the Subsidiaries have been audited by any
Governmental Entity, and (v) there are no outstanding agreements or waivers
extending the applicable statutory periods of limitation for such Taxes for any
period. All Taxes that the Company and the Subsidiaries have been required to
collect or withhold have been duly withheld or collected and, to the extent
required, have been paid to the proper taxing authority. No Taxes will be
assessed on or after the Closing Date against the Company or any Subsidiary for
any tax period ending on or prior to the Closing Date in excess of the amounts
reserved therefor.

         (b) Neither the Company nor any of the Subsidiaries is a party to any
Tax allocation or sharing agreement (other than the tax provisions of the
Company's operating agreement.)

         (c) None of the assets of the Company or any of the Subsidiaries
constitute tax-exempt bond financed property or tax-exempt use property, within
the meaning of Section 168 of the Code. Neither the Company nor any of the
Subsidiaries is a party to any "safe harbor lease"

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 22



that is subject to the provisions of Section 168(f)(8) of the Code as in effect
prior to the Tax Reform Act of 1986, or to any "long-term contract" within the
meaning of Section 460 of the Code.

         3.9 ASSETS AND PROPERTIES.

         (a) Real Property. Neither the Company nor any of the Retained
Subsidiaries owns or holds any ownership interest in any real property other
than as set forth in Schedule 3.9(a) (the "Real Property"). Except as set forth
on such schedule, the Company or the Retained Subsidiaries have good and
marketable title to all Real Property and none of the Real Property is subject
to any Lien, except for Permitted Liens and Liens securing any of the Financial
Debt which will be released upon payment of the Financial Debt at or prior to
Closing as provided herein. All facilities on the Real Property are supplied
with utilities and other similar services necessary for the current operation of
such facilities.

         (b) Personal Property. Except as set forth on Schedule 3.9(b) and
except for inventory, supplies and other personal property disposed of or
consumed, and accounts receivable collected or written off, and cash utilized,
all in the ordinary course of business consistent with past practice, the
Company and the Retained Subsidiaries own all of their inventory, equipment and
other tangible personal property reflected on the latest balance sheet included
in the Audited Financial Statements, not disposed of in the ordinary course of
business consistent with past business practice since such date or listed on
Schedule 3.9(b), free and clear of any Liens, except for Permitted Liens and
Liens securing any of the Financial Debt which will be released upon payment of
the Financial Debt at or prior to Closing as provided herein.

         (c) Condition of Properties. Except as set forth on Schedule 3.9(c),
the buildings, structures and material improvements located on the Real Property
("Improvements"), the tangible personal property owned or leased by the Company
and the Retained Subsidiaries and used in the operation of the business as
currently conducted and, to the Knowledge of the Company, the premises that are
the subject of the Real Property Leases (as defined in SECTION 3.10), are in
good operating condition and repair, ordinary wear and tear excepted; and the
Company does not have any Knowledge of any condition not disclosed herein of any
such Improvements or premises that would materially affect the use or operation
of such Improvements or premises in the ordinary course of its existing business
or materially affect the fair market value of the Real Property.

         (d) Compliance. The current ownership, operation, use and occupancy of
the Real Property and the Improvements, the current use and occupancy of the
leasehold estates that are the subject of the Real Property Leases does not
violate any applicable zoning, building, health, flood control or fire law,
ordinance, order or regulation or any restrictive covenant. Except with respect
to Environmental Requirements (which are covered exclusively in SECTION 3.11),
there are no current material violations of any applicable Legal Requirement
affecting any portion of the Real Property or such leasehold estates, and no
written notice of any such violation has been issued by any Governmental Entity,
with respect to the Real Property, or to the Knowledge of the Company, with
respect to such leasehold estates. The assets owned, leased or licensed by the
Company and the Retained Subsidiaries are adequate for Purchaser to continue to
operate the

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 23



business of such entities immediately after the Closing as currently conducted
and consistent with past practices.

         3.10 REAL PROPERTY LEASES; OPTIONS. Schedule 3.10 sets forth a list of
(i) all leases and subleases under which the Company or any of the Retained
Subsidiaries is lessor or lessee or sublessor or sublessee of any real property,
together with all amendments, supplements, nondisturbance agreements, brokerage
and commission agreements and other agreements pertaining thereto and binding
upon the Company or any of the Retained Subsidiaries ("Real Property Leases");
(ii) all material options held by the Company or any of the Retained
Subsidiaries or contractual obligations on the part of the Company or any of the
Retained Subsidiaries to purchase or acquire any interest in real property; and
(iii) all options granted by the Company or any of the Retained Subsidiaries or
contractual obligations on the part of the Company or any of the Retained
Subsidiaries to sell or dispose of any interest in real property. Copies of all
Real Property Leases and such options and contractual obligations have been
delivered to Purchaser. Neither the Company nor any of the Retained Subsidiaries
has assigned any Real Property Leases or any such options or obligations, except
for purposes of securing any of the Financial Debt which will be released upon
payment of the Financial Debt as provided herein. To the Knowledge of the
Company, there are no disputes, oral agreements or forbearance programs in
effect as to any Real Property Lease; all facilities leased under the Real
Property Leases (including alterations constructed by the Company or any of the
Retained Subsidiaries) have received all approvals of Governmental Entities
(including licenses and permits) required in connection with the operation
thereof; and all facilities leased under the Real Property Leases are supplied
with utilities and other similar services necessary for the operation of said
facilities. There are no Liens on the interest of the Company and the Retained
Subsidiaries in the Real Property Leases, except for Permitted Liens and except
for Liens securing any of the Financial Debt which will be released upon payment
of the Financial Debt at or prior to Closing as provided herein. The Real
Property Leases and options and contractual obligations listed on Schedule 3.10
are in full force and effect and constitute binding obligations of the Company,
the Retained Subsidiaries and, to the Knowledge of the Company, the other
parties thereto, subject to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditor's rights generally, and (x) there are no
defaults thereunder by the Company, the Retained Subsidiaries and, to the
Knowledge of the Company, the other parties thereto and (y) no event has
occurred that with notice, lapse of time or both would constitute a default by
the Company or any of the Retained Subsidiaries or, to the Knowledge of the
Company by any other party thereto.


         3.11 ENVIRONMENTAL LAWS AND REGULATIONS. Except as disclosed in
Schedule 3.11, (i) during the occupancy and operation of the Subject Property by
the Company or any of the Subsidiaries and, to the Knowledge of the Company,
prior to its occupancy and operation, the operations of the Subject Property,
and any use, storage, treatment, disposal or transportation of Hazardous
Substances that has occurred in, on, to, from or under the Subject Property
prior to the date of this Agreement have been in compliance in all material
respects with all applicable Environmental Requirements; (ii) during the
occupancy and operation of the Subject Property by the Company or the
Subsidiaries and, to the Knowledge of the Company, prior to its occupancy or
operation, no material release, leak, discharge, spill, disposal or emission of
Hazardous Substances has occurred in, on, to, from or under the Subject Property
in a quantity or manner

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 24



that currently violates Environmental Requirements; (iii) there is no pending
Proceeding or, to the Knowledge of the Company, threatened Proceeding or
investigation concerning the Subject Property or the Company or any of the
Subsidiaries involving Hazardous Substances or Environmental Requirements; (iv)
there are no asbestos-containing materials or above-ground or underground
storage tank systems located at the Subject Property, except in compliance in
all material respects with applicable Environmental Requirements and all such
storage tank systems are disclosed on Schedule 3.11; (v) neither the Company nor
any of the Retained Subsidiaries has ever owned, operated, or leased any real
property other than the Subject Property; and (vi) the Company's and Retained
Subsidiaries' transportation to or disposal at any off-site location of any
Hazardous Substances from property now or formerly owned, operated or leased by
the Company or any of the Retained Subsidiaries at the time of the Company's or
any of the Retained Subsidiaries' ownership, operation or lease thereof was
conducted in material compliance with applicable Environmental Requirements; and
(vii) to the Knowledge of the Company, there are no facts, conditions or
circumstances that could reasonably be expected to form the basis for a material
claim against the Company or any of the Retained Subsidiaries or the Purchaser
relating to the Company's or any of the Subsidiaries' compliance or failure to
comply with any Environmental Requirements. This Section 3.11 is the sole and
exclusive warranty of the Company with regard to Environmental Requirements.


         3.12 CONTRACTS.

         (a) Set forth on Schedule 3.12(a) is a list of all Contracts as of the
date hereof, (except Real Property Leases, which are listed on Schedule 3.10),
(whether oral (summaries only) or written) to which the Company or any of the
Retained Subsidiaries is a party and that relate to (i) the sale, lease or other
disposition by the Company or any of the Retained Subsidiaries of all or any
substantial part of its business or assets or the purchase by the Company or any
of the Retained Subsidiaries of a substantial amount of assets with a purchase
price in excess of $50,000 (in each event other than in the ordinary course of
business), (ii) the employment of any person other than personnel employed at
the pleasure of the Company or any of the Retained Subsidiaries; (iii)
collective bargaining with, or any representation of any employees by, any labor
union or association; (iv) the acquisition of services, supplies, equipment or
other personal property in each case in which payments are due after the date of
this Agreement involving more than $50,000 and that is not terminable by the
Company or the Retained Subsidiaries upon not more than thirty (30) days' notice
without obligation on the part of the Company or any of the Retained
Subsidiaries; (v) noncompetition or nondisclosure (other than, with respect to
nondisclosure, Contracts that are not primarily intended to facilitate the
exchange of confidential information but also include confidentiality or
nondisclosure provisions); (vi) the purchase or sale of real property or any
interest therein; (vii) distribution, agency or construction; (viii) (A) lease
of personal property as lessor or sublessor or (B) lease of personal property as
lessee or sublessee in each case in which payments are due after the date of
this Agreement involving more than $50,000 and that is not terminable by the
Company or the Retained Subsidiaries upon not more than thirty (30) days' notice
without obligation on the part of the Company or any of the Retained
Subsidiaries; (ix) lending or advancing of funds other than the extension of
credit to trade purchasers in the ordinary course of the Company's or any of the
Retained Subsidiaries' business consistent with past business practice; (x)
borrowing of funds or receipt of credit other than by the Company or any of the
Retained Subsidiaries in the ordinary

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 25



course of business consistent with past business practice and except for trade
payables in amounts and on terms consistent with past business practice; (xi)
incurring of any obligation or liability except for transactions engaged in by
the Company or any of the Retained Subsidiaries in the ordinary course of
business consistent with past business practice; (xii) the sale of personal
property (other than sales of inventory in the ordinary course of business
consistent with past business practice) or services in each case in which
payments are due after the date of this Agreement that exceed $50,000 and (xiii)
any matter or transaction not in the ordinary course of the business of the
Company and of the Retained Subsidiaries and, in each case, imposes a material
obligation on the Company or provides a material benefit to the Company. The
Company and the Retained Subsidiaries have delivered to Purchaser copies of all
of the written Contracts listed on Schedule 3.12(a).

         (b) Except as set forth on Schedule 3.12(b), each Contract is in full
force and effect on the date hereof, neither the Company nor any of the Retained
Subsidiaries is in default under any Contract, neither the Company nor any of
the Retained Subsidiaries has given or received notice of any default under any
Contract, and to the Knowledge of the Company, no other party to any Contract is
in default thereunder.

         3.13 UNDISCLOSED LIABILITIES. Except as disclosed on Schedule 3.13 and
excluding liabilities that fall within the subject matter covered by the other
sections of this Article III, neither the Company nor any of the Retained
Subsidiaries has any Liability in an amount in excess of $50,000 except for (a)
Liabilities set forth on the face of the most recent Audited Financial Statement
or Pro Forma Statement; (b) Liabilities which have arisen after the most recent
Audited Financial Statement in the ordinary course of business, none of which
relates to, is in the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of any applicable Legal
Requirement (except to the extent reserved for in the most recent Audited
Financial Statement); or (c) Liabilities that arise from or relate to the
performance of obligations under any Contract, but not the breach thereof.

         3.14 NO VIOLATIONS. Except with respect to Environmental Requirements
which are covered exclusively in Section 3.11, the execution, delivery and
performance of this Agreement and the other agreements and documents
contemplated hereby by the Company, any of the Retained Subsidiaries and the
Members and the consummation of the transactions contemplated hereby by such
parties will not (i) violate any provision of any Organization Document, (ii)
violate in any material respect any statute, rule, regulation, order or decree
of any public body or authority by which the Company, any of the Retained
Subsidiaries or the Members or its or their respective properties or assets are
bound, or (iii) result in a violation or breach of, or constitute a default
under, or result in the creation of any encumbrance upon, or create any rights
of termination, cancellation or acceleration in any person with respect to any
Contract or any Material Permit, except as set forth on Schedule 3.7 or Schedule
3.15.

         3.15 CONSENTS. Except as set forth on Schedule 3.15, no consent,
approval, notice to, registration or filing with, authorization or order, of any
Governmental Entity or under any Contract or Material Permit is required as a
result of or in connection with the execution or delivery, by the Company, the
Retained Subsidiaries or the Members, of this Agreement and the other agreements
and documents to be executed by the Company, the Retained Subsidiaries and

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 26



the Members in connection herewith or the consummation by the Company, the
Retained Subsidiaries and the Members of the transactions contemplated hereby.

         3.16 LITIGATION AND RELATED MATTERS. Except with respect to
Environmental Requirements which are covered exclusively in Section 3.11, set
forth on Schedule 3.16 is a list of all Proceedings pending against the Company
or any of the Retained Subsidiaries or, to the Knowledge of the Company,
Proceedings threatened or investigations or grievances pending against the
Company or any of the Retained Subsidiaries, the business or any property or
rights of the Company or any of the Retained Subsidiaries, at law or in equity,
before or by any arbitration board or panel or Governmental Entity. None of the
Proceedings, investigations or grievances listed on Schedule 3.16 either (i) has
had, or, if adversely determined, would be likely to have, a Material Adverse
Effect or (ii) has adversely affected in any material respect or, if adversely
determined, would be likely to adversely affect in any material respect, the
right or ability of the Company and the Retained Subsidiaries to carry on its
business substantially as now conducted. Neither the Company nor any of the
Retained Subsidiaries is subject to any continuing court or Governmental Entity
order, writ, injunction or decree applicable specifically to its business,
operations or assets or their employees, nor in default with respect to any
order, writ, injunction or decree of any court or Governmental Entity with
respect to their assets, business or operations.

         3.17 COMPLIANCE WITH LAWS. Except with respect to Environmental
Requirements (which are covered exclusively in SECTION 3.11), the Company and
the Retained Subsidiaries are in compliance in all material respects with all
applicable Legal Requirements.

         3.18 INTELLECTUAL PROPERTY RIGHTS. Schedule 3.18 lists the registered
domestic and foreign trade names, trademarks, service marks, trademark
applications, service mark applications, patents, patent applications, patent
licenses, copyrights and copyright applications owned by the Company and the
Retained Subsidiaries (collectively, the "Intellectual Property"). Unless
otherwise indicated on Schedule 3.18, the Company and the Retained Subsidiaries
have the right to use and license the Intellectual Property, and the
consummation of the transactions contemplated hereby will not result in the loss
or material impairment of any rights of the Company and the Retained
Subsidiaries in the Intellectual Property. Each item constituting part of the
Intellectual Property has been, to the extent indicated on Schedule 3.18,
registered with, filed in or issued by, as the case may be, the United States
Patent and Trademark Office or such other government entity, domestic or
foreign, as is indicated on Schedule 3.18; all such registrations, filings and
issuances remain in full force and effect; and all fees and other charges with
respect thereto are current. Except as stated on Schedule 3.18, there are no
pending proceedings or adverse claims made or, to the Knowledge of the Company,
threatened against the Company or any of the Retained Subsidiaries with respect
to the Intellectual Property; there has been no litigation commenced or
threatened in writing within the past five (5) years with respect to the
Intellectual Property or the rights of the Company and the Retained Subsidiaries
therein; and, to the Knowledge of the Company, (i) the Intellectual Property or
the use thereof by the Company and the Retained Subsidiaries does not conflict
with any trade names, trademarks, service marks, trademark or service mark
registrations or applications, patents, patent applications, patent licenses or
copyright registrations or applications of others ("Third Party Intellectual
Property"), and (ii) such Third Party Intellectual Property or its use by others
or any

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 27



other conduct of a third party does not conflict with or infringe upon the
Intellectual Property or its use by the Company or any of the Retained
Subsidiaries. Schedule 3.18 separately lists all of the computer software, other
than off-the-shelf software or other software generally available from retail
vendors, that the Company uses in, and is material to, its business and
identifies each contract pursuant to which the Company has licensed such
software from any other Person.

         3.19 EMPLOYEE BENEFIT PLANS.

         (a) Each employee benefit, stock or compensation plan, including
without limitation employee benefit plans within the meaning of Section 3(3) of
ERISA, maintained or contributed to by the Company or any of its Group Members
(collectively, the "Plans") is listed on Schedule 3.19, is in substantial
compliance with applicable law and has been administered and operated in all
material respects in accordance with its terms. Each Plan that is intended to be
"qualified" within the meaning of Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service (the "IRS") and
no event has occurred and no condition exists that could be expected to result
in the revocation of any such determination. For purposes of this Agreement, the
term "Plan" shall include each bonus, incentive or deferred compensation,
severance, termination, retention, change of control, stock option, stock
appreciation, stock purchase, SERP, phantom stock or equity-based, performance
or other employee or retiree benefit or compensation plan, welfare benefit
program, arrangement, agreement, policy or understanding, whether written or
unwritten.


         (b) No Plan is subject to Title IV of ERISA, and neither the Company
nor any Group Member has made any contributions to or participated in any
"multiple employer plan" (within the meaning of the Code or ERISA) or
"multi-employer plan" (as defined in Section 4001(a)(3) of ERISA). Full payment
has been made of all amounts that the Company or any Group Member was required
under the terms of the Plans to have paid as contributions to such Plans on or
prior to the date hereof (excluding any amounts not yet due) and all amounts
properly accrued to date as liabilities of the Company and the Group Members
that have not been paid have been properly recorded on the Financial Statements,
and no Plan that is subject to Part 3 of Subtitle B of Title 1 of ERISA has
incurred any "accumulated funding deficiency" (within the meaning of Section 302
of ERISA or Section 412 of the Code), whether or not waived. Neither the
Company, any Group Member nor, to the Knowledge of the Company, any other
"disqualified person" or "party in interest" (within the meaning of Section
4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has engaged in
any transactions in connection with any Plan that could be expected to result in
the imposition of a material penalty pursuant to Section 502(i) of ERISA,
damages pursuant to Section 409 of ERISA or a tax pursuant to Section 4975(a) of
the Code. No material claim, action, proceeding, or litigation has been made,
commenced or, to the Knowledge of the Company, threatened with respect to any
Plan (other than for benefits payable in the ordinary course and PBGC insurance
premiums). No Plan or related trust owns any securities in violation of Section
407 of ERISA. Neither the Company nor any Group Member has incurred any
liability or taken any action, or has any knowledge of any action or event, that
could cause it to incur any liability (i) under Section 412 of the Code or Title
IV of ERISA with respect to any "single employer plan" (within the meaning of
Section 4001(a)(15) of ERISA), (ii) on account of a partial or complete
withdrawal (within the meaning of Section 4205 and 4203 of ERISA, respectively)
with respect to any "multi-employer plan" (within the meaning of

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 28



Section 3(37) of ERISA), (iii) on account of unpaid contributions to any such
multi-employer plan, or (iv) to provide health benefits or other non-pension
benefits to retired or former employees, except as specifically required by
Section 4980B(f) of the Code.

         (c) Except as set forth on Schedule 3.19, neither the execution and
delivery of this Agreement by the Company or the Retained Subsidiaries nor the
consummation of the transactions contemplated hereby will (i) entitle any
current or former employee of the Company or any Subsidiary to severance pay,
unemployment compensation or any similar payment, (ii) accelerate the time of
payment or vesting, or increase the amount of, any compensation due to any such
employee or former employee, or (iii) directly or indirectly result in any
payment made or to be made to or on behalf of any person to constitute a
"parachute payment" (within the meaning of Section 280G of the Code). For
purposes of this Agreement, "Group Member" shall mean each corporation which is
a member of a controlled group of corporations (as defined in Code Section
414(b)), a group of trades or businesses (whether or not incorporated) which are
under common control (as defined in Code Section 414(c)) or an affiliated
service group (as defined in Code Section 414(m)) which includes the Company,
and any other entity required to be aggregated with the Company pursuant to
regulations prescribed under Code Section 414(o).

         (d) With respect to each Plan, the Company has delivered to Purchaser a
true and complete copy of such plan document, including any amendments and a
copy of any related trust agreement or insurance contract, all determination
letters issued by the Internal Revenue Service for such Plan, the most recent
summary plan description, together with any summaries of material modifications,
the most recently filed Form 5500, as applicable, and other material related
documents.

         3.20 EMPLOYEES; EMPLOYEE RELATIONS.

         (a) Schedule 3.20 sets forth as of the dates set forth on such schedule
(i) the name and current annual salary (or rate of pay) and other compensation
(including, without limitation, normal bonus, profit-sharing and other
compensation) now payable by the Company or any of the Retained Subsidiaries to
each employee (which for all purposes shall include employees leased by the
Company or any Retained Subsidiaries from a third party) and all incentive or
bonus payments paid to all such employees by the Company or the Retained
Subsidiaries for each of 2002 and 2003 along with any such bonus or incentive
payments accrued in 2004 to the date hereof, (ii) any increase to become
effective after the date of this Agreement in the total compensation or rate of
total compensation payable by the Company or any of the Retained Subsidiaries to
each such person, (iii) any increase to become payable after the date of this
Agreement by the Company or any of the Retained Subsidiaries to employees other
than those specified in clause (i) of this SECTION 3.20(a), (iv) all presently
outstanding loans and advances (other than routine travel advances to be repaid
or formally accounted for within sixty (60) days) made by the Company or any of
the Retained Subsidiaries to, or made to the Company or any of the Retained
Subsidiaries by, any director, officer or employee, (v) all accrued but unpaid
vacation pay owing to any officer or employee that is not disclosed on the
Financial Statements, and (vi) any relative of any of the Members (whether by
blood, marriage or adoption) employed by the Company or any of the Retained
Subsidiaries and the position and salary and other compensation payable thereto.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 29



         (b) Except as disclosed on Schedule 3.20, neither the Company nor any
of the Retained Subsidiaries is a party to, or bound by, the terms of any
collective bargaining agreement, and neither the Company nor any of the Retained
Subsidiaries has experienced any material labor difficulties during the last
five (5) years and, during the last five (5) years, none of the employees of the
Company or any of the Retained Subsidiaries has been represented by any labor
union or other employee collective bargaining organization, was a party to, or
bound by, any labor or other collective bargaining agreement or has been subject
to or involved in or, to the Knowledge of the Company, threatened with, any
union elections, petitions or other organizational or recruiting activities.
Except as set forth on Schedule 3.20, there are no labor disputes existing, or
to the Knowledge of the Company, threatened involving, by way of example,
strikes, work stoppages, slowdowns, picketing, or any other interference with
work or production, or any other concerted action by employees. No charges or
proceedings before the National Labor Relations Board, or similar agency, exist,
or to the Knowledge of the Company, are threatened.

         (c) The Company believes that the relationships enjoyed by the Company
and the Retained Subsidiaries with their employees in general are good and the
Company does not have any Knowledge that any Key Employee does not plan, at this
time, to continue in the employ thereof following the Closing on a basis similar
to that existing on the date of this Agreement. Except as disclosed on Schedule
3.20, neither the Company nor any of the Retained Subsidiaries is a party to any
employment contract with any individual or employee, either express or implied.
No legal proceedings, charges, complaints or similar actions are pending or, to
the Knowledge of the Company, are threatened under any federal, state or local
laws affecting the employment relationship including, but not limited to: (i)
anti-discrimination statutes such as Title VII of the Civil Rights Act of 1964,
as amended (or similar state or local laws prohibiting discrimination because of
race, sex, religion, national origin, age and the like); (ii) the Fair Labor
Standards Act or other federal, state or local laws regulating hours of work,
wages, overtime and other working conditions; (iii) requirements imposed by
federal, state or local governmental contracts; (iv) state laws with respect to
tortious employment conduct, such as slander, harassment, false light, invasion
of privacy, negligent hiring or retention, intentional infliction of emotional
distress, assault and battery, or loss of consortium; or (v) the Occupational
Safety and Health Act, as amended, as well as any similar state laws, or other
regulations respecting safety in the workplace; and to the Knowledge of the
Company, no proceedings, charges, or complaints are threatened under any such
laws or regulations and no facts or circumstances exist that would give rise to
any such proceedings, charges, complaints, or claims, whether valid or not.
Neither the Company nor any of the Retained Subsidiaries is subject to any
settlement or consent decree with any present or former employee, employee
representative or any Governmental Entity relating to claims of discrimination
or other claims in respect to employment practices and policies; and no
government or Governmental Entity has issued a judgment, order, decree or
finding with respect to the labor and employment practices (including practices
relating to discrimination) of the Company or any of the Retained Subsidiaries.
The Company has received properly executed releases from each employee
terminated as a part of workforce reduction program in January of 2004 in the
form of release provided to the Purchaser.

         (d) The Company and the Retained Subsidiaries are in compliance in all
material respects with the provisions of the Americans with Disabilities Act.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 30



         3.21 INSURANCE. Schedule 3.21 contains an accurate list of the policies
and contracts (including insurer, named insured, and type of coverage) for fire,
casualty, liability and other forms of insurance maintained by, or for the
benefit of, the Company or any of the Retained Subsidiaries. All such policies
are in full force and effect and shall remain in full force and effect through
the Closing Date. Neither the Company, any of the Retained Subsidiaries nor the
Members has received any notice of cancellation or non-renewal or of significant
premium increases with respect to any such policy. Except as disclosed on
Schedule 3.21, no pending claims made by or on behalf of the Company or any of
the Retained Subsidiaries under such policies have been denied or are being
defended against third parties under a reservation of rights by an insurer
thereof. All premiums due prior to the date hereof for periods prior to the date
hereof with respect to such policies have been timely paid.

         3.22 INTERESTS IN CUSTOMERS, SUPPLIERS, ETC. Except as set forth on
Schedule 3.22, no Member, officer, director or affiliate of the Company
possesses, directly or indirectly, any financial interest in, or is a director,
officer, employee or affiliate of, any corporation, firm, association or
business organization that is a client, supplier, customer, lessor, lessee or
competitor of the Company or any of the Retained Subsidiaries. Ownership of
securities of a corporation whose securities are registered under the Securities
Exchange Act of 1934 not in excess of five percent (5%) of any class of such
securities shall not be deemed to be a financial interest for purposes of this
SECTION 3.22.

         3.23 BUSINESS RELATIONS. Schedule 3.23 contains an accurate list of (a)
all customers representing one percent (1%) or more of the combined sales of the
Company and the Retained Subsidiaries during the twelve (12) months ended
December 31, 2003 and (b) all suppliers representing one percent (1%) or more of
the combined operating expenses of the Company and the Retained Subsidiaries for
the twelve (12) months ended December 31, 2003. Except as set forth on Schedule
3.23, to the Knowledge of the Company as of the date hereof, no customer or
supplier of the Company or any of the Subsidiaries has indicated that it plans
to terminate its commercial relationship with the Company or any of its
Subsidiaries, which termination would have a Material Adverse Effect.

         3.24 OFFICERS AND MANAGERS. Set forth on Schedule 3.24 is a list of the
current officers and managers of the Company and each of the Retained
Subsidiaries.

         3.25 BANK ACCOUNTS AND POWERS OF ATTORNEY. Schedule 3.25 sets forth
each bank, savings institution and other financial institution with which the
Company or any of the Retained Subsidiaries has an account or safe deposit box
and the names of all persons authorized to draw thereon or to have access
thereto. Each person holding a power of attorney or similar grant of authority
on behalf of the Company or any of the Retained Subsidiaries is identified on
Schedule 3.25. Except as disclosed on such Schedule, neither the Company nor any
of the Retained Subsidiaries has given any revocable or irrevocable powers of
attorney to any person, firm, corporation or organization relating to its
business for any purpose whatsoever.

         3.26 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on
Schedule 3.26 or as otherwise contemplated by this Agreement, since December 31,
2003, there has not been (a) any material damage, destruction or casualty loss
to the physical properties of the Company

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 31



or any of the Retained Subsidiaries or to the physical properties of any third
parties that are located on the Company's or any of the Retained Subsidiaries'
premises or within the Company's or any of the Subsidiaries' control (whether or
not covered by insurance), (b) a Material Adverse Effect, (c) any entry into any
Contract material to the Company or any of the Retained Subsidiaries, except
transactions, commitments or agreements in the ordinary course of business
consistent with past practice, (d) any declaration, setting aside or payment of
any distribution in cash, stock or property with respect to the membership or
other equity interest of the Company, any repurchase, redemption or other
acquisition by the Company of any membership interest, equity interest or other
securities, or any agreement, arrangement or commitment by the Company to do so
except as allowed under this Agreement, (e) any increase that is material in the
compensation payable or to become payable by the Company or any of the Retained
Subsidiaries to their managers, officers, employees or agents or any increase in
the rate or terms of any bonus, pension or other employee benefit plan, payment
or arrangement made to, for or with any such managers, officers, employees or
agents, (f) any sale, transfer or other disposition of, or the creation of any
Lien upon, any material part of the Assets, except for sales of inventory and
use of supplies and collections of accounts receivables in the ordinary course
of business consistent with past practice, or any cancellation or forgiveness of
any material debts or claims by the Company or any of the Retained Subsidiaries,
(g) any material change in the relations of the Company or any of the Retained
Subsidiaries with or material loss of its customers or suppliers, or any
material loss of business or material increase in the cost of inventory items or
material change in the terms offered to customers, or (h) any capital
expenditure (including any capital leases) or commitment therefor by the Company
or any of the Retained Subsidiaries except in the ordinary course of business
consistent with past practice.

         3.27 VALIDITY OF AGREEMENT. This Agreement has been duly executed and
delivered and is the legal, valid and binding obligations of the Company, the
Retained Subsidiaries and each Member in accordance with its terms, except as
enforceability may be limited by applicable equitable principles, or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the enforcement of creditors' rights generally..

         3.28 ABSENCE OF CLAIMS AGAINST THE COMPANY. Neither the Members nor any
Excluded Subsidiary has any claims against the Company or any Retained
Subsidiary.

         3.29 NO OTHER REPRESENTATIONS OR WARRANTIES. Except as expressly set
forth in this Article III, neither the Company, the Subsidiaries nor the
Members, makes, and no party shall be entitled to rely upon, any representation
or warranty as to any fact or matter about the Company, the Subsidiaries and the
Members; provided, however, that the foregoing shall not be deemed to negate the
express representations and warranties made by a party in an independent
agreement with respect to such agreement (e.g. the Noncompetition Agreements).

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 32



                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         Purchaser represents and warrants to the Company and the Members as
follows:

         4.1 ORGANIZATION AND STANDING. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina. Purchaser has the full corporate power and authority to carry on
its business in the places and as it is now being conducted and to own and lease
the properties and assets which it now owns or leases.

         4.2 CORPORATE POWER AND AUTHORITY. Purchaser has the corporate power,
capacity and authority to execute and deliver this Agreement, to perform
hereunder, and to consummate the transactions contemplated hereby. The
execution, delivery and performance by Purchaser of this Agreement and each and
every agreement, document and instrument provided for herein has been duly
authorized and approved by its Board of Directors. This Agreement, and each and
every other agreement, document and instrument to be executed, delivered and
performed by Purchaser in connection herewith, constitutes or will, when
executed and delivered, constitute the valid and legally binding obligation of
Purchaser enforceable against it in accordance with their respective terms,
except as enforceability may be limited by applicable equitable principles, or
by bankruptcy, insolvency, reorganization, moratorium, or similar laws from time
to time in effect affecting the enforcement of creditors' rights generally.

         4.3 AGREEMENT DOES NOT VIOLATE OTHER INSTRUMENTS; CONSENTS. The
execution and delivery of this Agreement and each and every agreement, document
and instrument to be executed and delivered in connection herewith by Purchaser
does not, and the consummation of the transactions contemplated hereby will not,
violate any provisions of the Articles of Incorporation, as amended, or Bylaws,
as amended, of Purchaser or violate or constitute an occurrence of default under
any provision of, or conflict with, result in acceleration of any obligation
under, or give rise to a right by any party to terminate its obligations under,
any mortgage, deed of trust, conveyance to secure debt, note, loan, lien, lease,
agreement, instrument, or any order, judgment, decree or other arrangement to
which Purchaser is a party or is bound or by which its assets are affected which
violation, default, conflict, acceleration or termination, either singularly or
in the aggregate, would have a material adverse effect on the ability of
Purchaser to perform under this Agreement. Except for approval under the HSR
Act, no consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required to be obtained
or made by or with respect to Purchaser in connection with the execution and
delivery by Purchaser of this Agreement or any of the agreements, certificates
or other documents delivered or to be delivered on or after the date hereof and
at or prior to Closing in connection with the transactions contemplated hereby
to which Purchaser is or will be a party or the consummation of the transactions
contemplated hereby.

         4.4 NO DEFAULT. No event of default or default, or event which with the
giving of notice, lapse of time, or both, would constitute a default or an event
of default under any loan agreement, note, deed of trust, mortgage, lease,
instrument or other similar agreement, to which Purchaser is a party of by which
it or its properties are bound, exists, the effect of which would

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 33



be to materially interfere with or prevent the consummation of the transactions
contemplated hereby.

         4.5 CONSENTS. Except as set forth on Schedule 4.5, no consent,
approval, notice to, registration or filing with, authorization or order, of any
governmental authority or under any Contract or other agreement or commitment to
which the Purchaser is a party or by which its assets are bound is required as a
result of or in connection with the execution or delivery of this Agreement and
the other agreements and documents to be executed by the Purchaser or the
consummation by the Purchaser of the transactions contemplated hereby.

         4.6 FINANCING. Purchaser has, and on the Closing Date will have,
sufficient funds unconditionally available to it (without the need to obtain any
additional bank or third party financing) to pay the Purchase Price to the
Members and to consummate the transactions contemplated hereby.

                                   ARTICLE V

            CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER TO CLOSE

         The obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each and every one of the following conditions.

         5.1 COVENANTS OF THE COMPANY AND THE MEMBERS. The Company and the
Members shall have duly performed in all material respects all of the covenants,
acts and undertakings to be performed by them on or prior to the Closing Date
and an authorized officer of the Company and the Members' Representative shall
have delivered to Purchaser a certificate dated as of the Closing Date
certifying to the fulfillment of this condition.

         5.2 NO INJUNCTION, ETC. No Proceeding or investigation shall have been
instituted, before any Governmental Entity to enjoin, restrain, prohibit, or
obtain substantial damages in respect of, this Agreement or the consummation of
the Contemplated Transactions.

         5.3 OPINION OF COUNSEL. An opinion of Robinson Bradshaw and Hinson,
counsel for the Company and the Subsidiaries shall have been delivered to
Purchaser dated as of the Closing Date, substantially in form and substance of
the opinion attached hereto as Exhibit 5.3.

         5.4 HSR ACT. Early termination of or expiration of the waiting period
under the HSR Act shall have occurred on or prior to the Closing Date.

         5.5 DOCUMENTS TO BE DELIVERED. The Company and the Members shall have
obtained for delivery at Closing the documents set forth in SECTION 7.2.

         5.6 CONSENTS. The Members shall deliver all the Consents listed on
Schedule 5.6 in form and substance reasonably satisfactory to the Purchaser, or
deliver the notices, if applicable set forth on Schedule 5.6.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 34



         5.7 NO MATERIAL ADVERSE EFFECT. Between the date of this Agreement and
the Closing Date there shall not have been any Material Adverse Effect.

                                   ARTICLE VI

                   CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
                              THE MEMBERS TO CLOSE

         The obligations of Members to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each and every one of the following conditions.

         6.1 COVENANTS OF PURCHASER. Purchaser shall have duly performed in all
material respects all of the covenants, acts and undertakings to be performed by
it on or prior to the Closing Date, and a duly authorized officer of Purchaser
shall deliver to the Members' Representative certificates dated as of the
Closing Date certifying to the fulfillment of this condition.

         6.2 NO INJUNCTION, ETC. No Proceeding or investigation shall have been
instituted, before any Governmental Entity to enjoin, restrain, prohibit, or
obtain substantial damages in respect of, this Agreement or the consummation of
the Contemplated Transactions.

         6.3 OPINION OF COUNSEL FOR PURCHASER. An opinion of Haynsworth Sinkler
Boyd, P.A., counsel for Purchaser shall have been delivered to Members'
Representative dated as of the Closing Date, substantially in form and substance
of the opinion attached hereto as Exhibit 6.3.

         6.4 REPRESENTATIONS TRUE AT CLOSING. The representations and warranties
made by Purchaser in this Agreement, the Schedules and the Exhibits hereto shall
be true and correct on the Closing Date with the same force and effect as though
such representation and warranty had been made on and as of such time (except
for representations and warranties specifically made as of a certain date,
changes expressly contemplated by this Agreement or otherwise previously
disclosed to, and agree to by, the Company in writing) other than such
representations and warranties that in the aggregate are not or would not be
reasonably expected to be materially adverse to the interest of the Company or
the Members or in connection with the Contemplated Transactions;

         6.5 DOCUMENT DELIVERY. Purchaser shall have obtained for delivery at
Closing the documents set forth in SECTION 7.3.

         6.6 HSR ACT. Early termination of or expiration of the waiting period
under the HSR Act shall have occurred on or prior to the Closing Date.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 35



                                  ARTICLE VII

                                     CLOSING

         7.1 TIME AND PLACE OF CLOSING. The Closing shall be held at the offices
of Haynsworth Sinkler & Boyd, P.A., 1201 Main Street, Suite 2200, Columbia,
South Carolina commencing at 10:00 a.m., Eastern Time, on a date to be agreed
that is no more than five business days following the later of (i) the
expiration or early termination of the applicable waiting period under the HSR
Act or (ii) the fulfillment, or waiver by the applicable party, of all of the
conditions of ARTICLES V and VI (the "Closing Date") unless another place or
date is agreed to in writing by the Company, the Members' Representative and
Purchaser.

         7.2 THE COMPANY'S AND THE MEMBERS' PERFORMANCE AT CLOSING. At the
Closing, the Company and the Members shall deliver to Purchaser, where
appropriate, the following:

                  7.2.1 the Certificates representing the Membership Interests
and the Assignments of the Membership Interests in the form of Exhibit 7.2.1;

                  7.2.2 releases in form and substance reasonably satisfactory
to the Purchaser effective as of the Closing from each of the (i) Members; (ii)
managers, officers of the Company and each Retained Subsidiaries (as listed on
Schedule 3.24) including a resignation for each such officer and manager, and
(iii) participants in the Incentive Bonus Plan which releases the Company from
any liability under the Incentive Bonus Plan;

                  7.2.3 resignations from employment by L. Kerry Vickar,
Bryan L. Smith and Whitcomb Honeycutt without severance or other payments;

                  7.2.4 noncompetition agreements executed by each of the
Members (other than Allied Capital Corporation) that own 1% or more of the
Membership Interests (the "Noncompetition Agreements");

                  7.2.5 certificates of compliance or certificates of good
standing of the Company and each of the Retained Subsidiaries, as of the most
recent practicable date, from the appropriate governmental authority of the
state of North Carolina;

                  7.2.6 certificates of incumbency of the officers of Company
and the Excluded Subsidiaries who are executing this Agreement and the other
documents contemplated hereunder;

                  7.2.7 certified copies of resolutions of the managing board of
the Company and the Excluded Subsidiaries approving the Contemplated
Transactions;

                  7.2.8 opinion of counsel described in SECTION 5.3;

                  7.2.9 the Transition Services Agreement executed by the
Excluded Subsidiaries;

                  7.2.10 certificate described in SECTION 5.1; and

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 36



                  7.2.11 the Escrow Agreement.

         7.3 PERFORMANCE BY PURCHASER AT CLOSING. At the Closing, Purchaser
shall deliver to the Members' Representative the following:

                  7.3.1 cash payable to the Members as set out in SECTION 2.1;

                  7.3.2 Noncompetition Agreements signed by Purchaser;

                  7.3.3 opinion of counsel described in SECTION 6.3;

                  7.3.4 certificates of incumbency of the officers of Purchaser
who are executing this Agreement and the other documents contemplated hereunder;

                  7.3.5 certified copies of resolutions of the Board of
Directors of Purchaser approving the Contemplated Transactions;

                  7.3.6 the Transition Services Agreement executed by the
Company;

                  7.3.7 certificate described in SECTION 6.1; and

                  7.3.8 the Escrow Agreement.

                                  ARTICLE VIII

                            INDEMNIFICATION; REMEDIES

         8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, covenants and agreements set forth in this Agreement by Purchaser,
Company and the Members are material and have been relied on by the other party
hereto. All representations, warranties, covenants and agreements set forth in
this Agreement and the remedies of Purchaser and the Company and the Members
with respect thereto, shall survive the Closing Date and shall not merge in the
performance of any obligation by any party hereto; provided, however, (a) that
any claim for indemnification relating to the breach by Purchaser of any of its
covenants, representations and warranties contained in this Agreement may be
made by the Members only if the Members shall notify Purchaser on or before the
expiration of thirty-six months after the Closing Date and (b) that any claim
for indemnification relating to the breach by the Company or the Members of any
of their covenants, representations and warranties contained in this Agreement
may be made by Purchaser only if Purchaser shall notify the Members'
Representative on or before the expiration of the following time periods:

         (a) 36 months after the Closing Date for a claim based on a breach of
SECTIONS 3.1, 3.3, 3.8 AND 3.11; and

         (b) 18 months after the Closing Date for a claim based on a breach of
any representation other than representations in SECTIONS 3.1, 3.3, 3.8 and
3.11.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 37



         8.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE MEMBERS. The Members
will jointly and severally indemnify and hold harmless Purchaser and its
Affiliates (collectively, the "Purchaser Indemnified Persons") for, and will pay
to the Purchaser Indemnified Persons, the amount of, any loss, liability claim,
damage (excluding consequential, multiple, exemplary, punitive and incidental
damage claimed directly by any Purchaser Indemnified Person, but including any
such damage to the extent that a Purchaser Indemnified Person becomes liable
therefore pursuant to any Third Party Claim), fine, penalty or expenses
(collectively, "Damages"), incurred by the Purchaser Indemnified Persons
arising, directly or indirectly, from or in connection with:

         (a) any breach of any representation or warranty made by the Company in
this Agreement as of the date of this Agreement and as if made again as of the
Closing, excluding any such breach under Sections 3.12(b), 3.20, 3.23 or 3.26
arising after the date hereof and resulting from or caused by (i) economic or
industry conditions within the United States or generally affecting the industry
in which the Company and the Retained Subsidiaries operate, (ii) changes in U.S.
or global financial markets or conditions, (iii) any generally applicable change
in law, rule or regulation or GAAP or interpretation of any thereof or (iv) the
announcement of this Agreement or the Contemplated Transactions;

         (b) any breach by the Company of any covenant or obligation of the
Company to be performed prior to or at Closing in this Agreement;

         (c) any breach by the Members of any covenant or obligation of the
Members in this Agreement; and

         (d) the litigation matters listed as items 2 and 3 on Schedule 3.16 to
the extent not covered by insurance maintained by the Company.

         8.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY PURCHASER. Purchaser will
indemnify and hold harmless the Members for, and will pay to the Members, the
amount of any Damages incurred by the Members arising, directly or indirectly,
from or in connection with:

         (a) any breach of any representation or warranty made by Purchaser in
this Agreement and as if made again as of the Closing; or

         (b) any breach by Purchaser of any covenant or obligation of Purchaser
in this Agreement.

         8.4 LIMITATIONS ON INDEMNIFICATION.

         (a) Except for claims under SECTION 8.2(d) which shall not be subject
to the Indemnification Threshold, no claim shall be made for indemnification
against the Members pursuant to this Agreement unless and until the aggregate
amount of Damages incurred by the Purchaser Indemnified Persons under this
Agreement exceeds $1,000,000 (the "Indemnification Threshold") and then the
Members shall be liable for Damages only to the extent of the excess over the
Indemnification Threshold. Notwithstanding the above, if the Company after
Closing collects receivables in excess of the accounts receivable net of its
allowance as of the Closing

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 38



Date as shown on the detailed accounting provided to Purchaser under
SECTION 2.2(b), the Indemnification Threshold shall be increased by the amount
of such excess.

         (b) No claim shall be made for indemnification against Purchaser
pursuant to this Agreement unless and until the aggregate amount of Damages
incurred by the Members exceeds the Indemnification Threshold and then Purchaser
shall be liable for Damages only to the extent of the excess over the
Indemnification Threshold.

         (c) The total liability of the Members to Purchaser under SECTION 8.2
or of Purchaser to the Members under SECTION 8.3 hereof shall be limited in the
aggregate (for the Members on the one hand and the Purchaser on the other hand,
not combined) to $12,500,000 and in no event shall at any time exceed the amount
held in the Escrow Account.

         8.5 INDEMNIFICATION BY THE EXCLUDED SUBSIDIARIES. The Excluded
Subsidiaries will severally indemnify and hold harmless the Company, the
Retained Subsidiaries, the Purchaser and its Affiliates for, and will pay to
such Persons, the amount of Damages required to be paid by such Persons arising,
directly or indirectly, from or in connection with any claim, suit, course of
action, investigation or proceeding of any kind whatsoever which relates to, or
arises from, any Liabilities of the Excluded Subsidiaries before, on or after
the Closing Date. Claims hereunder may be brought at any time after Closing. The
limitations of SECTION 8.4 shall not apply to this SECTION 8.5.

         8.6 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.

         (a) If any Members or Purchaser Indemnified Person entitled to
indemnification under this Agreement (an "Indemnitee") receives notice of the
commencement of any Proceeding by any Person who is not a party to this
Agreement or an affiliate of such a party (a "Third Party Claim") against such
Indemnitee for which a party is obligated to provide indemnification under this
Agreement (an "Indemnifying Party"), the Indemnitee will give such Indemnifying
Party reasonably prompt written notice thereof (the "Third Party Claim Notice"),
but the failure to so notify Indemnifying Party shall not relieve Indemnifying
Party of its indemnity obligations with respect to such Third Party Claim unless
the Indemnifying Party establishes that the defense of such Third Party Claim is
actually prejudiced by the Indemnitee's failure to give such notice. The Third
Party Claim Notice will describe the Third Party Claim in reasonable detail and
will indicate the estimated amount, if reasonably practicable, of the Damages
that have been or may be sustained by the Indemnitee. Except as otherwise set
forth in this SECTION 8.5, the Indemnifying Party will have the right to assume
the defense of any Third Party Claim at the Indemnifying Party's own expense and
with counsel selected by the Indemnifying Party (which counsel shall be
reasonably satisfactory to the Indemnitee) by giving to the Indemnitee written
notice in which the Indemnifying Party acknowledges its responsibility to
indemnify the Indemnitee (the "Assumption Notice") no later than thirty calendar
days after receipt of the Third Party Claim Notice. The Indemnifying Party shall
not be entitled to assume the defense of, and the Indemnitee shall be entitled
to have sole control over, the defense or settlement of any Third Party Claim to
the extent that such claim seeks an order, injunction or other equitable relief
against the Indemnitee which, if successful, would be reasonably likely to
materially interfere with the business, operations, assets, or financial
condition of the Indemnitee. In the event the Indemnifying Party assumes the
defense of a Third Party Claim, the Indemnitee

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 39



will cooperate in good faith with the Indemnifying Party in such defense and
will have the right to participate in the defense of any Third Party Claim
assisted by counsel of its own choosing and at its own expense. Notwithstanding
the foregoing, if the named parties to the Third Party Claim (including any
impleaded parties) include both the Indemnifying Party and the Indemnitee or if
the Indemnifying Party proposes that the same counsel represent both the
Indemnitee and the Indemnifying Party and the Indemnitee in good faith
determines that representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, then
the Indemnitee shall have the right to retain its own counsel (which counsel
shall be reasonably satisfactory to the Indemnifying Party) at the cost and
expense of the Indemnifying Party. If the Indemnitee does not receive the
Assumption Notice within the thirty calendar day period set forth above or if
the Indemnifying Party is not entitled to assume the defense of the Third Party
Claim, the Indemnitee shall have sole control over the defense and settlement of
the Third Party Claim, and the Indemnifying Party will be liable for all Damages
paid or incurred in connection therewith; provided that the Indemnifying Party
may elect to participate in such proceedings, negotiation or defense at any time
at its own expense.

         (b) If the Indemnifying Party assumes the defense of the Third Party
Claim, the Indemnifying Party shall not compromise or settle such claim without
the Indemnitee's consent unless (i) there is no finding or admission of any
violation of legal requirements or any violation of the rights of any Person by
the Indemnitee and no effect on any other claims that may be made against the
Indemnitee, (ii) the sole relief provided is monetary damages that are paid in
full by the Indemnifying Party and (iii) the settlement includes as an
unconditional term a complete release of each Indemnitee from all liability in
respect of such claim.

         (c) Each Indemnifying Party who assumes the defense of a Third Party
Claim shall use reasonable efforts to diligently defend such claim.

         8.7 PROCEDURE FOR INDEMNIFICATION--DIRECT CLAIMS. If an Indemnified
Party shall claim indemnification hereunder for any claim other than a Third
Party Claim, the Indemnified Party shall notify the Indemnifying Party in
writing of the basis for such claim setting forth the nature and amount (or
reasonable estimate) of the Damages resulting from such claim. The Indemnifying
Party shall give written notice of any disagreement with such claim within 15
days following receipt of the Indemnified Party's notice of the claim,
specifying in reasonable detail the nature and extent of such disagreement. If
the Indemnifying Party and the Indemnified Party are unable to resolve any
disagreement (a "Dispute") within 30 days following receipt by the Indemnified
Party of the notice referred to in the preceding sentence, the disagreement
shall be submitted for resolution by arbitration administered by and in
accordance with the rules of the American Arbitration Association (the "AAA
Rules"). Disputes shall be heard and decided by a single arbitrator agreed to by
the Indemnified Party and the Indemnifying Party from the American Arbitration
Association's National Roster of Arbitrators or, if the parties cannot agree on
an arbitrator, appointed from the same panel in accordance with the AAA Rules.
All arbitration hearings shall be conducted in Charlotte, North Carolina. The
parties agree that this agreement to arbitrate does not extend to any demand
which would be barred by the applicable

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 40



statute of limitations, that any award on such a demand would exceed the scope
of the arbitrator's authority under this Agreement, and that either party may
apply to the court for a stay of arbitration of any claim that would be barred
by the applicable statute of limitations. The arbitrator shall have no power to
award punitive or exemplary damages or to ignore or vary the terms of this
Agreement and shall be bound to apply controlling law. The arbitrator shall have
the authority to award interest on any damages and to award attorneys fees and
costs to the prevailing party or parties, if any, or to allocate such fees and
costs as the arbitrator shall determine to be equitable. A judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof and may include the award of prejudgment interest, attorneys' fees and
other costs. The parties agree that such arbitration will be in lieu of either
party's rights to assert any claim, demand or suit in any court action, provided
that either party may elect to initiate a court action solely to obtain
injunctive relief. The parties further agree that any disputes as to the
applicability of the indemnification provisions of this Article VIII shall also
be submitted to arbitration in accordance with the foregoing provisions.

         8.8 SUBROGATION. Upon any payment of Damages to an Indemnitee, the
Indemnifying Party shall be subrogated to all rights of the Indemnitee with
respect to the Damages to which such indemnification relates; provided, however,
that the Indemnifying Party will only be subrogated to the extent that any
amount paid by it pursuant to this Agreement in connection with such Damages;
and provided further that no such right of subrogation will arise in favor of an
Indemnifying Party if such right would give such Indemnifying Party the right to
be reimbursed or further indemnified by the Company.

         8.9 EXCLUSIVE REMEDY. From and after the Closing, the right to
indemnification and other rights under this Article VIII shall constitute
Purchaser's and the Members' sole and exclusive remedies with respect to any and
all claims arising under or relating to this Agreement or the transactions
contemplated by this Agreement. In furtherance of the foregoing, Purchaser and
the Members and their respective Affiliates hereby waive, from and after the
Closing, to the fullest extent permitted by law, any and all rights, claims and
causes of action that they may have against any other party or its Affiliates,
except those arising under this Article VIII. Without limiting the generality of
the foregoing, Purchaser shall have no right of rescission following the Closing
with respect to the transactions contemplated by this Agreement. The foregoing
shall not waive, limit or restrict any parties' rights to enforce the
Noncompetition Agreements or any employment or consulting agreements pursuant to
the terms thereof. Notwithstanding anything in this Article VIII, nothing in
this Agreement shall limit the representations made by the Members at Closing in
the Assignment of Membership Interests to be executed by each Member at Closing
or the rights or remedies that the Purchaser may have directly against such
Member pursuant to such representations or otherwise under the Assignment of
Membership Interests.

                                   ARTICLE IX

                                   TERMINATION

         9.1 TERMINATION. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date (the "Agreement Termination Date").

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 41



                  9.1.1 by mutual consent of Purchaser, the Company, and the
Members' Representative;

                  9.1.2 by Purchaser, the Company or the Members' Representative
if the Closing shall not have occurred on or before July 15, 2004 (or such later
date as may be mutually agreed to by Purchaser, the Company, and the Members'
Representative), provided that the failure to close by such date shall not have
been caused by the failure of the party seeking termination to comply fully with
any of its obligations under this Agreement;

                  9.1.3 by Purchaser in the event of any material breach by the
Company or the Members of any of the Company's or the Members' agreements,
covenants, representations or warranties contained herein and which breach, if
unremedied, would cause any condition precedent stated in Article V not to be
satisfied and the breach continues for a period of fifteen (15) days after
receipt of notice from Purchaser requesting such breach to be cured; or,

                  9.1.4 by the Company and the Members' Representative in the
event of any material breach by Purchaser of any of Purchaser's agreements,
covenants, representations or warranties contained herein and which breach, if
unremedied, would cause any condition precedent stated in Article VI not to be
satisfied and the breach continues for a period of fifteen (15) days after
receipt of notice from the Members' Representative requesting such breach to be
cured.

                  9.1.5 by either Purchase, the Company or the Members'
Representative in the event that any of the conditions set forth in SECTION 5.2,
5.4, 6.2 or 6.5 shall have become incapable of fulfillment (other than through
the failure of the party seeking termination to comply fully with any of its
obligations under this Agreement).

         9.2 NOTICE OF TERMINATION. Any party desiring to terminate this
Agreement pursuant to SECTION 9.1 shall give notice of such termination to the
other party to this Agreement.

         9.3 EFFECT OF TERMINATION. In the event this Agreement shall be
terminated pursuant to SECTION 9.1.1, each party shall pay all expenses incurred
by it in connection with this Agreement, and no party shall have any further
obligations or liability for any damages or expenses under this Agreement. In
the event of any other termination, all further obligations of the parties under
this Agreement (other than as provided in SECTION 10.10 below) shall be
terminated without further liability of any party to the other, but each party
shall retain any and all rights incident to a breach by the other party of any
covenant, representation or warranty under this Agreement.

                                   ARTICLE X

                               GENERAL PROVISIONS

         10.1 NOTICES. All notices, requests, demands and other communications
shall be in writing and shall be delivered by hand or mailed by registered or
certified mail, return receipt

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 42



requested, first class postage prepaid, or sent by telecopy confirmed by a copy
sent by the sender registered or certified mail, first class postage prepaid, in
each case, addressed as follows:

                  10.1.1 If to the Company:

                                   CorrFlex Graphics, LLC
                                   701 Rickert Street (28677)
                                   P. O. Box 5878 (28687)
                                   Statesville, North Carolina
                                   Attention: L. Kerry Vickar and Bryan L. Smith
                                   Fax: (704) 872-7778

                          and to

                                   Robinson, Bradshaw Hinson
                                   101 N. Tryon Street, #1900
                                   Charlotte, North Carolina 28246
                                   Attention: Allain C. Andry, Esq.
                                   Fax: (704) 373-3959

                  10.1.2 If to Members' Representative:

                                   L. Kerry Vickar
                                   789 Harbour Isles Court
                                   North Palm Beach, Florida 33410
                                   Fax: (561) 775-8338

                          and to

                                   Bryan L. Smith
                                   1826 Plumbago Lane
                                   Naples, Florida 34105
                                   Fax: (239) 434-7131

                          and to

                                   Robinson, Bradshaw Hinson
                                   101 N. Tryon Street, #1900
                                   Charlotte, North Carolina 28246
                                   Attention: Allain C. Andry, Esq.
                                   Fax: (704) 373-3959

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 43



                  10.1.3 If to Purchaser:

                                   Sonoco Products Company
                                   1 North Second Street
                                   Hartsville, South Carolina 29550
                                   Attn: President
                                   Telecopier: (843) 383-7478

                          and to:

                                   Haynsworth Sinkler Boyd, P.A.
                                   1201 Main Street, Suite 2200
                                   Columbia, South Carolina 29201
                                   Attn: William C. Boyd,. Esq.
                                   Telecopier: (803) 540-7878

                  10.1.4 If delivered personally, the date on which a notice,
request, instruction or document is delivered shall be the date on which such
delivery is made and, if delivered by mail, the date on which such notice,
request, instruction or document is received shall be the date of delivery, and
in the case of telecopy, when the telecopy or the confirmed copy is received,
whichever is earlier. In the event any such notice, request, instruction or
document is mailed to a party in accordance with this SECTION 10.1 and is
returned to the sender as nondeliverable, then such notice, request, instruction
or document shall be deemed to have been delivered, or received on the fifth day
following the deposit of such notice, request, instruction, or document in the
United States mail.

                  10.1.5 Any party hereto may change its address specified for
notices herein by designating a new address by notice in accordance with this
SECTION 10.1.

         10.2 BROKERS. Purchaser represents and warrants to the Company that no
broker or finder has acted for it or any entity controlling, controlled by or
under common control with it in connection with this Agreement. The Company and
the Members represent and warrant to Purchaser that, except for Wachovia
Securities whose fees and expenses shall be paid by the Members at Closing from
the transaction proceeds, no broker or finder has acted for them or any entity
controlling, controlled by or under common control with them in connection with
this Agreement. Purchaser releases, discharges and agrees to indemnify and hold
harmless the Company and the Members against any fee, loss or expense arising
out of any claim by any broker or finder employed or alleged to have been
employed by it. The Members agree to jointly and severally indemnify and hold
harmless Purchaser and the Company and the Retained Subsidiaries after Closing
against any fee, loss, or expense arising out of any claim by any broker or
finder employed or alleged to have been employed by them or the Company.

         10.3 FURTHER ASSURANCE. Each party covenants that at any time, and from
time to time, after the Closing Date, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 44



         10.4 WAIVER. Any failure on the part of either party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived by
the other party hereto. No waiver of any provision of this Agreement shall be
deemed, or shall constitute, a waiver of any other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver.

         10.5 TAXES AND EXPENSES. All expenses incurred by the parties hereto in
connection with or related to the authorization, preparation and execution of
this Agreement and the Closing of the Contemplated Transactions, including,
without limitation of the generality of the foregoing, all fees and expenses of
agents, representatives, counsel and accountants employed by any such party,
shall be borne solely and entirely by the Purchaser on the one hand for its
expenses and the Members on the other hand for their expenses. The Company and
the Retained Subsidiaries shall not be responsible for the third party expenses
in connection with or related to the distribution of the Excluded Assets
including the Excluded Subsidiaries or the authorization, preparation and
execution of this Agreement and the Closing of the Contemplated Transactions.

         10.6 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and assigns.

         10.7 HEADINGS. The section and other headings in this Agreement are
inserted solely as a matter of convenience and for reference, and are not a part
of this Agreement.

         10.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written or
implied, among the parties hereto relating to the Contemplated Transactions or
the subject matter herein. Neither this Agreement nor any provision hereof may
be changed, waived, discharged or terminated orally, but only by an agreement in
writing signed by the party against whom or which the enforcement of such
change, waiver, discharge or termination is sought.

         10.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of South Carolina.

         10.10 CONFIDENTIALITY. Each party hereto shall, and shall cause its
affiliates to, and shall use reasonable commercial efforts to cause its
representatives to (a) hold in strict confidence and not utilize in its
respective business or otherwise all information and documents concerning any
other party hereto or any of its Affiliates or the Assets ("Confidential
Information") furnished to it by such other party or its Representatives in
connection with this Agreement or the transactions contemplated hereby and to
(b) hold in strict confidence and not disclose the fact that the parties have
entered into this Agreement or any documents executed pursuant hereto, except
where disclosure may be required by judicial or administrative process or law or
as may be necessary for each party to fulfill its obligations or to enforce its
rights under this Agreement (or any documents executed pursuant hereto).
Notwithstanding the foregoing, the following will not constitute Confidential
Information for purposes of this Agreement: (i) information which was already in
the possession of the disclosing party or its Affiliate prior to the date hereof
and which was not acquired or obtained from any other party or its Affiliates,
(ii) information which

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 45



is independently developed by the disclosing party or any Affiliate thereof
without access to the Confidential Information and without utilizing its
inspection rights hereunder, (iii) information which is obtained or was
previously obtained by the disclosing party from a third Person who, insofar as
is known to the disclosing party or its Affiliate, is not prohibited from
transmitting the information to the other party or such Affiliate by a
contractual, legal or fiduciary obligation to the other party or any of its
Affiliates, and (iv) information which is or becomes generally available to the
public other than as a result of a disclosure by the disclosing party or any
Affiliate thereof or their agents or employees. If this Agreement is terminated
pursuant to Article IX hereof, each party hereto will not use any such
Confidential Information in competition with or in any manner to the detriment
of the other party, will not disclose any Confidential Information except as
required by court order or by law and will promptly return to the other party
Confidential Information delivered to such party or its Representatives, by or
on behalf of the other party. The foregoing shall not affect or limit any rights
of Allied Capital Corporation in its capacity as a lender to the Company.

         10.11 PUBLICITY. No party hereto shall issue any public announcement or
similar publicity of the Contemplated Transactions without first obtaining the
prior written consent of the Members' Representative and Purchaser; provided
that nothing contained herein shall prohibit any party from making any public
announcement if such party determines in good faith, on the advice of legal
counsel, that such public disclosure is required by a Legal Requirement, so long
as such party consults with the Members' Representative and Purchaser prior to
making such disclosure.

         10.12 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties.

         10.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         10.14 PRONOUNS. All pronouns used herein shall be deemed to refer to
the masculine, feminine or neuter gender as the context requires.

         10.15 EXHIBITS INCORPORATED. All Exhibits attached hereto are
incorporated herein by reference, and all blanks in such Exhibits, if any, will
be filled in as required in order to consummate the transactions contemplated
herein and in accordance with this Agreement.

         10.16 CREATION OF THE HOLDING COMPANY.

         (a) Prior to the Closing, the Company shall (i) create a wholly-owned
limited liability company (the "Holding Company"), (ii) contribute to the
Holding Company all of its equity interests in the Excluded Subsidiaries, and
(iii) assign to the Holding Company all of its rights, duties and obligations
under the Incentive Bonus Plan and cause the Holding Company to assume all such
duties and obligations. Notwithstanding the foregoing assignment of the
Incentive Bonus Plan, the obligation of the Members to fund the Incentive Bonus
Plan in

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 46



connection with the Closing shall remain in effect pursuant to the terms of the
Incentive Bonus Plan.

         (b) At or prior to the Closing, the Company shall distribute in-kind to
the Members its equity interest in the Holding Company in accordance with the
distribution provisions of the Company's operating agreement, except that Allied
Capital Corporation shall be distributed or granted a warrant to purchase an
equity interest in the Holding Company on terms substantially identical to the
terms of its existing warrants and purchase options in the Company.

         (c) The Members hereby authorize the Board of Managers to make all
amendments to the Incentive Bonus Plan that may be necessary or advisable to
provide for or facilitate the transactions contemplated by this Agreement.

         (d) At any time and from time to time after the date hereof, each party
to this Agreement shall, at the request of the Company (for the period prior to
the Closing) or the Members' Representative (for the period after the Closing),
execute and deliver such instruments, agreements or other documents and take all
such further action as the requesting Person may reasonably request to evidence
or give effect to the provisions of this SECTION 10.16 and to otherwise carry
out the intent of the parties hereunder.

         10.17 OPERATING AGREEMENT. The Members agree that the terms of this
Agreement supercede the membership interest transfer restrictions in Section 9
of the Company's operating agreement. If any provisions in such operating
agreement would prevent or restrict any of the Contemplated Transactions, the
Members waive the application and enforcement of such provisions to the extent
reasonably necessary to prepare for and to close the Contemplated Transactions.


         IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first-above mentioned.

                                            SONOCO PRODUCTS COMPANY
                                            ("Purchaser")

                                            By:
                                                   -----------------------------
                                            Name:
                                                   -----------------------------
                                            Title:
                                                   -----------------------------


                                            CORRFLEX GRAPHICS, LLC
                                            ("Company")

                                            By:
                                                   -----------------------------
                                            Name:
                                                   -----------------------------
                                            Title:
                                                   -----------------------------

                                            By:
                                                   -----------------------------
                                            Name:
                                                   -----------------------------
                                            Title:
                                                   -----------------------------

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 47



                                            CORRFLEX PACKAGING, LLC
                                            ("Excluded Subsidiary")

                                            By:
                                                   -----------------------------
                                            Name:
                                                   -----------------------------
                                            Title:
                                                   -----------------------------


                                            By:
                                                   -----------------------------
                                            Name:
                                                   -----------------------------
                                            Title:
                                                   -----------------------------


                                            N717CF, LLC
                                            ("Excluded Subsidiary")

                                            By:
                                                   -----------------------------
                                            Name:
                                                   -----------------------------
                                            Title:
                                                   -----------------------------


                                            By:
                                                   -----------------------------
                                            Name:
                                                   -----------------------------
                                            Title:
                                                   -----------------------------





- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 48



                                LIST OF SCHEDULES


Schedule 1.65         Liens

Schedule 1.89         Working Capital

Schedule 2.1          Membership Interests Ownership

Schedule 2.2(a)       Financial Debt

Schedule 2.2(b)       Excluded Assets

Schedule 2.10         Key Employees

Schedule 2.11.2       Allocation Schedule

Schedule 2.16         ERM Proposal

Schedule 3.2          Jurisdictions Licensed to do Business; List of Predecessor
                      Companies; Prior Business Names; Exceptions to Accuracy
                      and Completeness of Minutes

Schedule 3.3          Outstanding conversion or exchange rights, subscriptions,
                      options, warrants or other arrangements or commitments

Schedule 3.5          Financial Statements

Schedule 3.6          Accounts and Notes Receivable

Schedule 3.7          Material Permits

Schedule 3.8          Tax Matters

Schedule 3.9(a)       Real Property

Schedule 3.9(b)       Personal Property

Schedule 3.9(c)       Personal Property Exceptions.

Schedule 3.10         Real Property Leases

- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 49



Schedule 3.11         Environmental Compliance

Schedule 3.12(a)      Contracts

Schedule 3.12(b)      Contract Exceptions

Schedule 3.13         Undisclosed Liabilities

Schedule 3.15         Consents

Schedule 3.16         Litigation

Schedule 3.18         Intellectual Property

Schedule 3.19         Employee Benefit Plans

Schedule 3.20         Employees

Schedule 3.21         Insurance

Schedule 3.22         Interests in Customers and Suppliers

Schedule 3.23         Customers and Supplies

Schedule 3.24         Officers and Directors

Schedule 3.25         Bank Accounts and Powers of Attorney

Schedule 3.26         Absence of Certain Changes or Events

Schedule 4.5          Consents

Schedule 5.6          Material Consents



- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 50



                                LIST OF EXHIBITS


Exhibit 1.32          Escrow Agreement

Exhibit 1.62          Noncompetition Agreement

Exhibit 1.88          Transition Services Agreement

Exhibit 5.3           Form of Opinion of Counsel for the Company, the Excluded
                      Subsidiaries and the Members

Exhibit 6.3           Form of Opinion of Counsel for Purchaser

Exhibit 7.2.1         Assignment of Membership Interests



















- --------------------------------------------------------------------------------
CORRFLEX GRAPHICS, LLC
MEMBERSHIP INTEREST
PURCHASE AGREEMENT                                                       PAGE 51





                                 AMENDMENT NO. 1
                                       TO
                     MEMBERSHIP INTEREST PURCHASE AGREEMENT

         This Amendment No. 1 to the Membership Interest Purchase Agreement,
dated as of May 28, 2004 (the "Amendment"), among SONOCO PRODUCTS COMPANY, a
South Carolina corporation ("Purchaser"), CORRFLEX GRAPHICS, LLC, a North
Carolina limited liability company ("Company"), CORRFLEX PACKAGING, LLC, a North
Carolina limited liability company, and N717CF, LLC, a North Carolina limited
liability company (collectively the "Excluded Subsidiaries") and the members and
option and warrant holders of the Company (collectively the "Members") amends
the Membership Interest Purchase Agreement dated as of April 28, 2004, among
Purchaser, the Company, the Excluded Subsidiaries and the Members (the
"Agreement"). All capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Agreement.

                                    RECITALS

         WHEREAS, the parties hereto entered into the Agreement pursuant to
which Purchaser agreed to purchase from the Members, and the Members agreed to
sell to Purchaser, all of the membership or other equity interests of the
Company, subject to the terms and conditions set forth therein; and

         WHEREAS, the parties seek to amend the Agreement to make certain
changes as set forth below.

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Agreement, the parties hereby agree as follows:

                                    AGREEMENT

         1. Section 1.68 is hereby deleted in its entirety and replaced with the
following:

         "Preliminary Working Capital" shall mean the Working Capital estimated
         as of 11:59 p.m., Eastern Time, on May 29, 2004 by the Company by
         virtue of a statement to be delivered by the Company at Closing signed
         by the President and Chief Financial Officer of the Company certifying
         that such statement is their best estimate of Working Capital as of
         11:59 p.m., Eastern Time, on May 29, 2004.

         2. Section 2.1(i)(B) is hereby deleted in its entirety and replaced
with the following:

         "(B) any bonuses paid to employees outside of the ordinary course of
         business (other than any bonus paid to Robert Tiede) during the period
         beginning on the date hereof until Closing."

         3. Section 2.2 is hereby amended by adding a new subsection (c) as
follows:

         "(c) L. Kerry Vickar hereby agrees to make a capital contribution to
         the Company immediately prior to the Closing in the amount of
         $5,320,521, which equals the special



         bonus payment due to Robert Tiede from the Company as of the Closing
         (the "Bonus Payment"). L. Kerry Vickar further directs Purchaser to
         fund such capital contribution by withholding $5,320,521 at the Closing
         from the distribution amount to which he is entitled under Section 2.1.
         At the Closing, Purchaser shall cause the Company to make the Bonus
         Payment directly to Robert Tiede. The Company covenants that the Bonus
         Payment is the entire amount payable by the Company relating to the
         special bonus to Robert Tiede described in this subsection and that any
         breach of such covenant shall be covered by Article VIII, without
         regard to the Indemnification Threshold. Any Damages payable in
         accordance with the preceding sentence shall reduce the portion of the
         Escrow Amount to which L. Kerry Vickar is entitled in accordance with
         the Escrow Agreement."

         4. Section 2.3 is hereby amended by deleting the first sentence and
replacing it with the following:

         "Within thirty (30) days after the Closing, the Company shall prepare
         and deliver to the Members' Representative a statement of Working
         Capital as of 11:59 p.m., Eastern Time, on May 29, 2004 ("Closing Date
         Working Capital Statement") which shall be prepared on a basis
         consistent with the method used in calculating Schedule 1.89."

         5. Schedule 1.89 of the Agreement shall be amended by adding the
following notes to the bottom of that Schedule:

         "* Any cash held by the Company as of 11:59 p.m., Eastern Time, on May
         29, 2004 shall be deemed to be part of the "current assets" and
         included in Working Capital on the Closing Date Working Capital
         Statement."

         ** The accrual of employee bonuses, although set forth on the Financial
         Statements, shall be excluded from the calculation of Working Capital
         for all purposes of the Agreement, including Section 2.3."

         6. Schedule 2.11.2 of the Agreement shall be amended by deleting the
parenthetical under "Non-Competition Agreements" and replacing it with the
following:

         "(L. Kerry Vickar, Bryan L. Smith, Whitney Honeycutt, Frank Russ,
         Michael M. Sherck, Janet Simpson, William Phillip Dunn, Jr. and Robert
         Carsten Tiede)."

         7. Working Capital. Between the Closing and 11:59 p.m., Eastern Time,
on May 29, 2004, Purchaser shall operate the business of the Company in the
ordinary course consistent with past practice with respect to any matters that
affect Working Capital.

         8. Environmental Remediation. Pursuant to Section 2.16.1 and 2.16.2,
Purchaser and the Company have agreed that the Remediation Amount, as defined,
for the potential costs of post-closing remediation shall be $150,000 for the
York, PA site and $100,000 for the Winston-Salem, NC site, which escrowed
amounts shall be considered separate and available for use only with respect to
the respective specified sites. On May 27, 2004 the Company provided notice to
the State of Pennsylvania of its request for inclusion in the state UST fund
redemption program. In addition to the requirements of Section 2.16.3, Purchaser
agrees to take promptly all commercially reasonable action to qualify the York
site for the state UST fund redemption

                                       2


program. If the York site is definitely accepted into such program, to the
extent that the site is therefore considered in compliance with Environmental
Laws, Purchaser agrees to release the escrow funds for York that are in excess
of the amount reasonably estimated to cover the owner's required costs (and
associated expenses) under such program. For the Winston-Salem site, prior to
beginning remediation, Purchase agrees first to notify NC DEHNR (to the most
limited extent it deems reasonably necessary or advisable) of the findings from
the site investigation and to seek the formal or informal acknowledgement or
acquiescence of the state that no remedial action will be required.

         9. Entire Agreement. This Amendment, together with the Agreement it
amends, contains all the terms and conditions agreed upon by the parties
relating to the subject matter of this Amendment, and supersedes all prior
agreements, negotiations, correspondence, undertakings, and communications of
the parties, whether oral or written, respecting that subject matter. Except as
explicitly amended by this Amendment, all of the terms and conditions of the
Agreement shall remain in full force and effect.

                         (signatures on following page)

















                                       3




         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.


                                             CORRFLEX GRAPHICS, LLC


                                             -----------------------------------
                                             By:
                                             Title:



                                             CORRFLEX PACKAGING, LLC


                                             -----------------------------------
                                             By:
                                             Title:



                                             N717CF, LLC


                                             -----------------------------------
                                             By:
                                             Title:



                                             SONOCO PRODUCTS COMPANY


                                             -----------------------------------
                                             By:
                                             Title:



                    (Signatures continued on following page)




                                       4


MEMBERS:



- -----------------------------------         -----------------------------------
L. Kerry Vickar                             Leon E. Formancyzk


- -----------------------------------         -----------------------------------
Bryan L. Smith                              Larry J. Hockensmith


- -----------------------------------         -----------------------------------
Whitney Honeycutt                           Thomas L. Becht


- -----------------------------------         -----------------------------------
Frank Russ                                  William Kenneth Kesler


- -----------------------------------         -----------------------------------
Michael M. Sherck                           Jeffrey S. Guillebeau


- -----------------------------------         -----------------------------------
Janet Simpson                               Jeffrey E. Tedder


___________________________________         Allied Capital Corporation:
William Phillip Dunn, Jr.

                                            By:  _______________________________
___________________________________         Name _______________________________
Robert Carsten Tiede





  (Signature page to Amendment No. 1 to Membership Interest Purchase Agreement)

                                                                    EXHIBIT 10.4


                                                                  EXECUTION COPY

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








                             CONTRIBUTION AGREEMENT

                                 BY AND BETWEEN

                             SONOCO PRODUCTS COMPANY

                                       AND

                              AHLSTROM CORPORATION

                                      DATED

                                 APRIL 19, 2004









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





                                TABLE OF CONTENTS



                                                                                                               Page
                                                                                                               ----
                                                                                                         
1.       DEFINITIONS.............................................................................................1
2.       FORMATION AND CONTRIBUTION..............................................................................2
         2.1      Formation of the Joint Venture.................................................................2
         2.2      Contribution and Ownership.....................................................................2
3.       CLOSING.................................................................................................3
         3.1      Date and Place of Closing......................................................................3
         3.2      Closing Actions................................................................................3
4.       POST CLOSING REVIEW.....................................................................................7
         4.1      Understanding of the Parties...................................................................7
         4.2      Delivery and Review of Closing Statements......................................................8
         4.3      Disputes......................................................................................11
         4.4      Schedule of Payments..........................................................................12
         4.5      Joint Venture Starting Balance Sheet..........................................................12
         4.6      Accounting Issue Dispute Resolution Procedures................................................12
5.       UNDERTAKINGS AND COVENANTS.............................................................................13
         5.1      Completion of Reorganization; Interim Period Adjustments......................................13
         5.2      Access to Records and Properties..............................................................14
         5.3      Consents and Approvals; Undertakings to Competition Authorities...............................14
         5.4      Operation of Business During the Interim Period...............................................15
         5.5      Exclusivity...................................................................................18
         5.6      Public Announcements..........................................................................19
         5.7      Subsequent Events.............................................................................19
         5.8      Further Assurances............................................................................19
         5.9      Release of Guarantees.........................................................................20
         5.10     Repayment of Intercompany Debt................................................................20
         5.11     Karhula Services..............................................................................21
         5.12     Use of Ahlstrom Name, Labels, Corporate Names, Etc............................................21
         5.13     Paperinkerays Oy..............................................................................22
         5.14     UK Pension....................................................................................22
6.       REPRESENTATIONS AND WARRANTIES OF SONOCO PRODUCTS......................................................23
         6.1      Organization; Power and Authority; Good Standing..............................................24
         6.2      Authorization, Execution, Enforceability and No Conflicts.....................................24
         6.3      Ownership of Sonoco Holding Companies and Sonoco Operating Companies..........................25
         6.4      Bankruptcy....................................................................................26
         6.5      Distributions.................................................................................26
         6.6      Employee Remuneration.........................................................................26


                                       i




                                                                                                         
         6.7      Financial Statements..........................................................................27
         6.8      Absence of Undisclosed Liabilities............................................................27
         6.9      Absence of Changes............................................................................28
         6.10     Outstanding Borrowings; Intercompany Debt.....................................................30
         6.11     Related Party Transactions....................................................................30
         6.12     Compliance with Laws..........................................................................31
         6.13     Taxes.........................................................................................32
         6.14     Real Property.................................................................................33
         6.15     Environmental and Safety......................................................................34
         6.16     Title to Assets...............................................................................35
         6.17     Insurance.....................................................................................36
         6.18     Intellectual Property.........................................................................36
         6.19     Leased Personal Property......................................................................37
         6.20     Certain Material Agreements...................................................................38
         6.21     Litigation; Disputes..........................................................................40
         6.22     Labor Relations...............................................................................41
         6.23     Investment Representations....................................................................42
         6.24     Subsidies.....................................................................................42
         6.25     UK Pension....................................................................................42
         6.26     Completeness of Contribution..................................................................42
7.       REPRESENTATIONS AND WARRANTIES OF AHLSTROM CORP........................................................43
         7.1      Organization; Power and Authority; Good Standing..............................................43
         7.2      Authorization, Execution, Enforceability and No Conflicts.....................................43
         7.3      Ownership of Ahlstrom Holding Companies and Ahlstrom Operating Companies......................45
         7.4      Bankruptcy....................................................................................46
         7.5      Distributions.................................................................................46
         7.6      Employee Remuneration.........................................................................46
         7.7      Financial Statements..........................................................................46
         7.8      Absence of Undisclosed Liabilities............................................................47
         7.9      Absence of Changes............................................................................47
         7.10     Outstanding Borrowings; Intercompany Debt.....................................................49
         7.11     Related Party Transactions....................................................................49
         7.12     Compliance with Laws..........................................................................50
         7.13     Taxes.........................................................................................51
         7.14     Real Property.................................................................................52
         7.15     Environmental and Safety......................................................................54
         7.16     Title to Assets...............................................................................55
         7.17     Insurance.....................................................................................55
         7.18     Intellectual Property.........................................................................55
         7.19     Leased Personal Property......................................................................57
         7.20     Certain Material Agreements...................................................................57


                                       ii




                                                                                                         
         7.21     Litigation; Disputes..........................................................................59
         7.22     Labor Relations...............................................................................60
         7.23     Investment Representations....................................................................61
         7.24     Subsidies.....................................................................................61
         7.25     Completeness of Contribution..................................................................61
8.       CONDITIONS TO OBLIGATION OF SONOCO PRODUCTS............................................................61
         8.1      Representations and Warranties................................................................62
         8.2      Performance...................................................................................62
         8.3      Legal Proceedings.............................................................................62
         8.4      Change in Law.................................................................................62
         8.5      Absence of Ahlstrom Material Adverse Effect...................................................63
         8.6      Required Consents.............................................................................63
         8.7      Required Competition Filings..................................................................63
         8.8      Ahlstrom Reorganization.......................................................................63
         8.9      China Purchase................................................................................63
         8.10     Works Council Consultation....................................................................63
9.       CONDITIONS TO OBLIGATION OF AHLSTROM CORP..............................................................64
         9.1      Representations and Warranties................................................................64
         9.2      Performance...................................................................................64
         9.3      Legal Proceedings.............................................................................64
         9.4      Change in Law.................................................................................65
         9.5      Absence of Sonoco Material Adverse Effect.....................................................65
         9.6      Required Consents.............................................................................65
         9.7      Required Competition Filings..................................................................65
         9.8      Sonoco Reorganization.........................................................................65
         9.9      China Purchase................................................................................66
         9.10     Works Council Consultation....................................................................66
10.      SURVIVAL; INDEMNIFICATION; REMEDIES....................................................................66
         10.1     Survival of Representations and Warranties....................................................66
         10.2     Agreement of Sonoco Products to Indemnify.....................................................67
         10.3     Agreement of Ahlstrom Corp to Indemnify.......................................................68
         10.4     Indemnification Procedures....................................................................70
         10.5     Remedies Exclusive and Cumulative.............................................................72
11.      TERMINATION............................................................................................73
         11.1     Termination...................................................................................73
         11.2     Effect of Termination.........................................................................73
12.      GENERAL PROVISIONS.....................................................................................74
         12.1     Additional Actions and Documents..............................................................74
         12.2     No Brokers....................................................................................74
         12.3     Expenses......................................................................................74
         12.4     Assignment....................................................................................75
         12.5     Entire Agreement; Amendments..................................................................75
         12.6     Waiver........................................................................................76


                                      iii




                                                                                                         
         12.7     Governing Law; Service of Process.............................................................76
         12.8     Arbitration...................................................................................76
         12.9     Severability..................................................................................78
         12.10    Notices.......................................................................................78
         12.11    Interpretation; Headings......................................................................79
         12.12    Limitation on Benefits........................................................................80
         12.13    Successors and Assigns........................................................................80















                                       iv



                                LIST OF EXHIBITS
                            TO CONTRIBUTION AGREEMENT



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

 EXHIBIT                                DESCRIPTION
- -------------------------------------------------------------------------------
Exhibit A     Definitions
- -------------------------------------------------------------------------------
Exhibit B     Organizational Chart of Sonoco and its Affiliates and Other
              Entities Engaged in the Sonoco Business
- -------------------------------------------------------------------------------
Exhibit C     Organizational Chart of Ahlstrom and its Affiliates and Other
              Entities Engaged in the Ahlstrom Business
- -------------------------------------------------------------------------------
Exhibit D     Form of Initial Articles of Association of the Joint Venture
- -------------------------------------------------------------------------------
Exhibit E     Business Plan
- -------------------------------------------------------------------------------
Exhibit F     Form of Minutes of Initial Joint Venture Shareholder's Meeting
- -------------------------------------------------------------------------------
Exhibit G     Form of New Articles of Association of the Joint Venture
- -------------------------------------------------------------------------------
Exhibit H     List of New Directors
- -------------------------------------------------------------------------------
Exhibit I     Form of Shareholders' Agreement
- -------------------------------------------------------------------------------
Exhibit J     Form of Joint Venture/Sonoco IP License Agreement
- -------------------------------------------------------------------------------
Exhibit K     Form of SDI IP License Agreement
- -------------------------------------------------------------------------------
Exhibit L     Form of Services Agreement
- -------------------------------------------------------------------------------
Exhibit M     Form of Joint Venture Supply Agreement
- -------------------------------------------------------------------------------
Exhibit N     Form of Representation Agreement
- -------------------------------------------------------------------------------
Exhibit O     Form of VP Supply Agreement
- -------------------------------------------------------------------------------
Exhibit P     Form of Opinion of Ahlstrom General Counsel
- -------------------------------------------------------------------------------
Exhibit Q     Form of Minutes of Board of Directors' Meeting
- -------------------------------------------------------------------------------
Exhibit R     Equalization Statement
- -------------------------------------------------------------------------------
Exhibit S     Description of Sonoco Reorganization
- -------------------------------------------------------------------------------
Exhibit T     Description of Ahlstrom Reorganization
- -------------------------------------------------------------------------------
Exhibit U     Ahlstrom Accounting Principles
- -------------------------------------------------------------------------------



                                       v




                                LIST OF SCHEDULES
                            TO CONTRIBUTION AGREEMENT



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

   SCHEDULE                         DESCRIPTION
- -------------------------------------------------------------------------------
Schedule 5.3       List of Required Competition Filings
- -------------------------------------------------------------------------------
Schedule 5.10      List of Intercompany Debt and Applicable Rate of Interest
- -------------------------------------------------------------------------------
Schedule 5.14      UK Pension Plan Accounting Principles
- -------------------------------------------------------------------------------
Schedule 6.1       Sonoco Charter Documents
- -------------------------------------------------------------------------------
Schedule 6.2       Sonoco Consents
- -------------------------------------------------------------------------------
Schedule 6.3       Sonoco Group Capitalization and Ownership Structure
- -------------------------------------------------------------------------------
Schedule 6.6       Sonoco Employee Remuneration
- -------------------------------------------------------------------------------
Schedule 6.7       Sonoco Financial Statements
- -------------------------------------------------------------------------------
Schedule 6.8       Sonoco Undisclosed Liabilities
- -------------------------------------------------------------------------------
Schedule 6.9       Sonoco Absence of Changes
- -------------------------------------------------------------------------------
Schedule 6.10      Sonoco Outstanding Borrowings; Intercompany Debt
- -------------------------------------------------------------------------------
Schedule 6.11      Sonoco Related Party Transactions
- -------------------------------------------------------------------------------
Schedule 6.12      Sonoco Compliance with Laws
- -------------------------------------------------------------------------------
Schedule 6.13      Sonoco Tax Consolidation Agreements
- -------------------------------------------------------------------------------
Schedule 6.14      Sonoco Real Property
- -------------------------------------------------------------------------------
Schedule 6.15      Sonoco Environmental and Safety
- -------------------------------------------------------------------------------
Schedule 6.18      Sonoco Intellectual Property
- -------------------------------------------------------------------------------
Schedule 6.19      Sonoco Leased Personal Property
- -------------------------------------------------------------------------------
Schedule 6.20      Sonoco Material Agreement
- -------------------------------------------------------------------------------
Schedule 6.21      Sonoco Litigation; Disputes
- -------------------------------------------------------------------------------
Schedule 6.22      Sonoco Labor Relations
- -------------------------------------------------------------------------------
Schedule 6.24      Sonoco Subsidies
- -------------------------------------------------------------------------------
Schedule 7.1       Ahlstrom Charter Documents
- -------------------------------------------------------------------------------
Schedule 7.2       Ahlstrom Consents
- -------------------------------------------------------------------------------
Schedule 7.3       Ahlstrom Group Capitalization and Ownership Structure
- -------------------------------------------------------------------------------
Schedule 7.6       Ahlstrom Employee Remuneration
- -------------------------------------------------------------------------------
Schedule 7.7       Ahlstrom Financial Statements
- -------------------------------------------------------------------------------
Schedule 7.8       Ahlstrom Undisclosed Liabilities
- -------------------------------------------------------------------------------
Schedule 7.9       Ahlstrom Absence of Changes
- -------------------------------------------------------------------------------
Schedule 7.10      Ahlstrom Outstanding Borrowings; Intercompany Debt
- -------------------------------------------------------------------------------
Schedule 7.11      Ahlstrom Related Party Transactions
- -------------------------------------------------------------------------------
Schedule 7.12      Ahlstrom Compliance with Laws
- -------------------------------------------------------------------------------
Schedule 7.13      Ahlstrom Tax Consolidation Agreements
- -------------------------------------------------------------------------------
Schedule 7.14      Ahlstrom Real Property
- -------------------------------------------------------------------------------
Schedule 7.15      Ahlstrom Environmental and Safety
- -------------------------------------------------------------------------------

                                       vi



Schedule 7.18      Ahlstrom Intellectual Property
- -------------------------------------------------------------------------------
Schedule 7.19      Ahlstrom Leased Personal Property
- -------------------------------------------------------------------------------
Schedule 7.20      Ahlstrom Material Agreements
- -------------------------------------------------------------------------------
Schedule 7.21      Ahlstrom Litigation; Disputes
- -------------------------------------------------------------------------------
Schedule 7.22      Ahlstrom Labor Relations
- -------------------------------------------------------------------------------
Schedule 7.24      Ahlstrom Subsidies
- -------------------------------------------------------------------------------












                                      vii



                             CONTRIBUTION AGREEMENT


         This CONTRIBUTION AGREEMENT (this "CONTRIBUTION AGREEMENT") is entered
into on April 19, 2004 by and between Sonoco Products Company, a company
incorporated under the laws of South Carolina, located at One North Second
Street, Hartsville, South Carolina, 29550, U.S.A. ("SONOCO PRODUCTS"), and
Ahlstrom Corporation, a company incorporated under the laws of Finland, with its
registered office at Etelaesplanadi 14, 00130, Helsinki, Finland ("AHLSTROM
CORP"). Each of Sonoco Products and Ahlstrom Corp is hereinafter referred to
individually as a "Party" and collectively as the "PARTIES."

                             RECITALS OF THE PARTIES

         A. Sonoco Products, through its Affiliates and other entities in which
it has an ownership interest as of the Closing included in the organizational
chart set forth on Exhibit B, is engaged in the paper core/tube and core board
business in Europe (the "SONOCO BUSINESS");

         B. Ahlstrom Corp, through its Affiliates and other entities in which it
has an ownership interest as of the Closing included in the organizational chart
set forth on Exhibit C is engaged in the paper core/tube and core board business
in Europe (the "AHLSTROM BUSINESS");

         C. The Parties desire to create a joint venture through the combination
of the Sonoco Business and the Ahlstrom Business (the "TRANSACTION") in a
holding company to be organized under the laws of Luxembourg (the "JOINT
VENTURE");

         D. This Contribution Agreement is being entered into by the Parties to
set forth the terms and conditions pursuant to which the Sonoco Business and the
Ahlstrom Business will be contributed to the Joint Venture in exchange for Joint
Venture shares; and

         E. Upon completion of the transactions contemplated by this
Contribution Agreement, Sonoco Products and Ahlstrom Corp will, directly or
indirectly, own 64.5% and 35.5%, respectively, of the Joint Venture shares.

         NOW, THEREFORE, the Parties hereby agree as follows:

1.       DEFINITIONS

         For all purposes of this Contribution Agreement, capitalized terms used
herein shall have the meanings ascribed to such terms in Exhibit A.




2.       FORMATION AND CONTRIBUTION

         2.1      FORMATION OF THE JOINT VENTURE

                  (a) Prior to the Closing, Sonoco Products shall cause the
formation of the Joint Venture as a limited liability company (Societe a
Responsabilite Limitee) pursuant to the laws of Luxembourg under the corporate
name "Sonoco - JV S.a r.l.".

                  (b) The Joint Venture shall have an initial registered share
capital of EUR12,500, which Sonoco Products shall cause to be paid in full to
the Joint Venture in cash prior to the registration of the Joint Venture with
the Commercial Register of Luxembourg, Grand Duchy of Luxembourg.

                  (c) The initial articles of association of the Joint Venture
shall be executed in the form attached as Exhibit D.

                  (d) Sonoco Products undertakes to ensure through the Closing:
(i) that the Joint Venture will not carry out any activity, enter into any
Agreements or assume any Liabilities; and (ii) that none of the shares in the
Joint Venture are Transferred and no Encumbrance is created with respect to such
shares, except, in each of (i) and (ii), as may be required under the laws of
Luxembourg in connection with the Joint Venture's formation or as specifically
contemplated in this Contribution Agreement.

                  (e) The initial five-year strategic business plan of the Joint
Venture is attached as Exhibit E (the "BUSINESS PLAN").

         2.2      CONTRIBUTION AND OWNERSHIP

                  (a) Sonoco Contribution and Ownership. On the Closing, in
accordance with, and subject to, the provisions of this Contribution Agreement:
(i) Sonoco Products shall cause to be contributed, assigned, transferred and
conveyed to the Joint Venture by way of contribution in kind (Sacheinlage) the
Sonoco Contributed Shares, free and clear of all Encumbrances (other than the
Encumbrances listed on Schedule 6.3) and together with all rights which are on
the Closing Date, or may thereafter become, attached to them (including the
right to receive all undistributed profits, dividends and distributions), and
the Joint Venture shall accept the Sonoco Contributed Shares (the "SONOCO
CONTRIBUTION"); and (ii) the Joint Venture shall issue to Sonoco Luxco Class A
shares of the Joint Venture in a nominal amount of EUR 25 representing, together
with all shares previously owned by Sonoco Luxco, 64.5% of the issued and
outstanding shares, of all classes, of the Joint Venture as of the Closing Date
(the "SONOCO SHARES") and a share reserve account in the maximum amount possible
to be agreed further by the

                                       2


Parties prior to the Closing Date that would not reasonably be expected to cause
any additional capital Tax Liability to any Party or any of their Affiliates.

                  (b) Ahlstrom Contribution and Ownership. On the Closing, in
accordance with, and subject to, the provisions of this Contribution Agreement:
(i) Ahlstrom Corp shall cause to be contributed, assigned, transferred and
conveyed to the Joint Venture by way of contribution in kind (Sacheinlage) the
Ahlstrom Contributed Shares, free and clear of all Encumbrances (other than the
Encumbrances listed on Schedule 7.3) and together with all rights which are on
the Closing Date, or may thereafter become, attached to them (including the
right to receive all undistributed profits, dividends and distributions), and
the Joint Venture shall accept the Ahlstrom Contributed Shares (the "AHLSTROM
CONTRIBUTION"); and (ii) the Joint Venture shall issue to Ahlstrom Holding Class
B shares of the Joint Venture in a nominal amount of EUR 25 representing 35.5%
of the issued and outstanding shares, of all classes, of the Joint Venture as of
the Closing Date (the "AHLSTROM SHARES") and a share reserve account in the
maximum amount possible to be agreed further by the Parties prior to the Closing
Date that would not reasonably be expected to cause any additional capital Tax
Liability to any Party or any of their Affiliates.

3.       CLOSING

         3.1      DATE AND PLACE OF CLOSING

                  The Closing of the Transaction (the "CLOSING") shall take
place at the offices of Hogan & Hartson Raue L.L.P., Potsdamer Platz 1, 10785
Berlin, Germany, on the last Business Day of the calendar month in which the
conditions precedent to the Closing set forth in Sections 8 and 9 have been
satisfied or waived by the Party for whose benefit the condition exists (to the
extent such conditions may be waived), with effect as of the last day of such
calendar month or such other date as is mutually agreed upon by the Parties (the
"CLOSING DATE").

         3.2      CLOSING ACTIONS

                  At the Closing, the Parties shall take, or cause their
relevant Affiliates to take, the following actions in the sequence of (a)
through (h) below:

                  (a) Joint Venture Shareholder's Meeting. The holding by Sonoco
Luxco of a shareholder's meeting of the Joint Venture before a Luxembourg notary
resolving as substantially set forth in the draft minutes attached as Exhibit F,
including that: (i) the stated capital of the Joint Venture shall be increased
by the Sonoco Contribution and the Ahlstrom Contribution; (ii) new shares shall
be created and issued to Sonoco Luxco and Ahlstrom Holding, respectively; (iii)
the initial articles of association of the Joint Venture, attached as Exhibit D,
shall be amended


                                       3


by adopting new articles of association substantially in the form of Exhibit G;
(iv) the new directors listed in Exhibit H shall be appointed; and (v) the
accounting rules and procedures with respect to the application of International
Accounting Standards to be used by the Joint Venture shall be adopted.

                  (b) Share Transfer Agreements and Deeds.

                           (i)      The authorization and execution by the Joint
                                    Venture and Sonoco Luxco of share transfer
                                    agreements, notarial deeds or comparable
                                    documents, as applicable, with respect to
                                    the transfer to the Joint Venture of the
                                    Sonoco Contributed Shares in the form
                                    customary for the jurisdiction of
                                    organization of the Sonoco Group company
                                    represented by such Sonoco Contributed
                                    Shares and reasonably acceptable to Ahlstrom
                                    Corp; and

                           (ii)     The authorization and execution by the Joint
                                    Venture, Ahlstrom Corp and Ahlstrom Holding,
                                    of a notarial deed with respect to the
                                    transfer to the Joint Venture of the
                                    Ahlstrom Contributed Shares in the form
                                    customary in Germany and reasonably
                                    acceptable to Sonoco Products.

                  (c) Registration of Sonoco Shares and Ahlstrom Shares. The
registration by the Joint Venture of the newly created and issued Sonoco Shares
and Ahlstrom Shares in the name of Sonoco Luxco and Ahlstrom Holding,
respectively in the stock book of the Joint Venture;

                  (d) Resignation of Initial Joint Venture Directors. The
delivery by Sonoco Products or its Affiliate of the resignation letters of all
directors of the Joint Venture;

                  (e) Related Documents.

                           (i)      The authorization and execution by Sonoco
                                    Luxco and Sonoco Products, on the one hand,
                                    and Ahlstrom Holding and Ahlstrom Corp, on
                                    the other hand, of the Shareholders'
                                    Agreement substantially in the form of
                                    Exhibit I (the "SHAREHOLDERS' AGREEMENT");

                           (ii)     The authorization and execution by Sonoco
                                    Products, as licensee, and the Joint
                                    Venture, as licensor, of an IP License
                                    Agreement substantially in the form of
                                    Exhibit J (the "JOINT VENTURE/SONOCO IP
                                    LICENSE AGREEMENT");

                                       4




                           (iii)    The delivery of an authorized and executed
                                    IP License Agreement by and between Sonoco
                                    Development Inc., as licensor, and Sonoco
                                    Newco Gibraltar, as licensee, substantially
                                    in the form of Exhibit K (the "SDI IP
                                    LICENSE AGREEMENT"), together with documents
                                    in customary form evidencing that the SDI IP
                                    License Agreement has been (1) assigned by
                                    Sonoco Newco Gibraltar to Sonoco Luxco and
                                    (2) contributed by Sonoco Luxco to Sonoco
                                    Newco Swiss;

                           (iv)     The authorization and execution by each of
                                    Sonoco Products or its affiliate and
                                    Ahlstrom Corp and its affiliate, as the case
                                    may be, and the Joint Venture, respectively,
                                    of Services Agreements substantially in the
                                    form of, and for the services described on
                                    the exhibits to such Services Agreements set
                                    forth on, Exhibit L (the "SERVICES
                                    AGREEMENTS");

                           (v)      The authorization and execution by the Joint
                                    Venture or its Affiliate and Ahlstrom Corp
                                    or its Affiliate of a Supply Agreement
                                    substantially in the form of Exhibit M (the
                                    "JOINT VENTURE SUPPLY AGREEMENT");

                           (vi)     The authorization and execution by the Joint
                                    Venture or its Affiliate and Ahlstrom Corp
                                    of a Representation Agreement, pursuant to
                                    which Ahlstrom Corp shall exercise its
                                    rights as a shareholder in Paperinkerays Oy
                                    in the interest and at the direction of the
                                    Joint Venture, substantially in the form of
                                    Exhibit N (the "REPRESENTATION AGREEMENT");
                                    and

                           (vii)    The authorization and execution by each of
                                    the Joint Venture and Ahlstrom Corp of a
                                    Supply Agreement substantially in the form
                                    of Exhibit O (the "VP SUPPLY AGREEMENT").

                  (f) Charter Documents.

                           (i)      The delivery by Ahlstrom Corp of copies of
                                    the following supporting documents (in form
                                    and substance reasonably satisfactory to
                                    Sonoco Products):

                                    (A)      trade register extract or
                                             comparable document in effect on
                                             the Closing Date from an
                                             appropriate Governmental Authority,
                                             dated as of a date

                                       5



                                             reasonably close in time to the
                                             Closing Date, of each of the
                                             Ahlstrom Holding Companies and the
                                             Ahlstrom Operating Companies as in
                                             effect on the Closing Date, if the
                                             trade register extract or
                                             comparable document for any such
                                             entity set forth on Schedule 7.1 is
                                             no longer true, correct and
                                             complete as of the Closing Date;
                                             and

                                    (B)      (i) a true, correct and complete
                                             copy of each of the articles of
                                             association and by-laws (or
                                             comparable documents) of each of
                                             the Ahlstrom Holding Companies and
                                             the Ahlstrom Operating Companies as
                                             in effect on the Closing Date, if
                                             the articles of association or
                                             by-laws (or comparable documents)
                                             for any such entity set forth on
                                             Schedule 7.1 are no longer true,
                                             correct and complete as of the
                                             Closing Date; and (ii) (1) an
                                             opinion of the general counsel of
                                             Ahlstrom Corp as to the
                                             authorization, execution and
                                             performance of the Contribution
                                             Agreement and the Related Documents
                                             by Ahlstrom Corp in the form of
                                             Exhibit P, and (2) a true, correct
                                             and complete copy of all
                                             resolutions adopted by the board of
                                             managers or board of directors (and
                                             any committees thereof), and the
                                             unitholders or stockholders, of
                                             each of the Ahlstrom Holding
                                             Companies and the Ahlstrom
                                             Operating Companies (as applicable)
                                             authorizing the execution and
                                             performance of this Contribution
                                             Agreement and the Related
                                             Documents.

                           (ii)     The delivery by Sonoco Products of copies of
                                    the following supporting documents (in form
                                    and substance reasonably satisfactory to
                                    Ahlstrom Corp):

                                    (A)      trade register extract or
                                             comparable document in effect on
                                             the Closing Date from an
                                             appropriate Governmental Authority,
                                             dated as of a date reasonably close
                                             in time to the Closing Date, of
                                             each of the Sonoco Holding
                                             Companies and the Sonoco Operating
                                             Companies as in effect on the
                                             Closing Date, if the trade register
                                             extract or comparable document for
                                             any such entity set forth on
                                             Schedule 6.1 is no longer true,
                                             correct and complete as of the
                                             Closing Date; and

                                       6



                                    (B)      (i) a true, correct and complete
                                             copy of each of the articles of
                                             association and by-laws (or
                                             comparable documents) of each of
                                             the Sonoco Holding Companies and
                                             the Sonoco Operating Companies as
                                             in effect on the Closing Date, if
                                             the articles of association or
                                             by-laws (or comparable documents)
                                             for any such entity set forth on
                                             Schedule 6.1 are no longer
                                             accurate; and (ii) a true, correct
                                             and complete copy of all
                                             resolutions adopted by the board of
                                             managers or board of directors (and
                                             any committees thereof), and the
                                             unitholders or stockholders, of
                                             each such entity (as applicable)
                                             authorizing the execution and
                                             performance of this Contribution
                                             Agreement and the Related
                                             Documents.

                  (g) Board of Directors' Meeting. The holding of a board of
directors' meeting of the Joint Venture resolving substantially as set forth in
the draft minutes attached as Exhibit Q including that: (i) the appointment of
James A. Harrell, III, as chief executive officer shall be approved; (ii) the
Business Plan shall be adopted; and (iii) the annual budget of the Joint Venture
shall be adopted.

4.       POST CLOSING REVIEW

         4.1      UNDERSTANDING OF THE PARTIES

                  The Parties agree that:

                  (a) each of the Sonoco Reorganization and the Sonoco
Contribution as well as the Ahlstrom Reorganization and the Ahlstrom
Contribution shall be carried out with economic effect as of December 31, 2003;

                  (b) the equalization statement attached as Exhibit R (the
"EQUALIZATION STATEMENT") sets forth:

                          (i)      the pro forma Sonoco Financial Statements
                                   described in Section 6.7(a)(ii) and attached
                                   as Schedule 6.7 and the pro forma Ahlstrom
                                   Financial Statement described in Section
                                   7.7(a)(ii) and attached as Schedule 7.7;

                          (ii)     the aggregate value of the Net Cash/Interest
                                   Bearing Debt of the Sonoco Holding Companies
                                   and Sonoco Operating Companies as of December
                                   31, 2003, calculated on a consolidated basis,
                                   which value is intended to reflect the

                                       7



                                   results of the Sonoco Reorganization as if
                                   such reorganization was completed as of
                                   December 31, 2003.

                          (iii)    the aggregate value of the Net Cash/Interest
                                   Bearing Debt of the Ahlstrom Holding
                                   Companies and Ahlstrom Operating Companies as
                                   of December 31, 2003, calculated on a
                                   consolidated basis, which value is intended
                                   to reflect the results of the Ahlstrom
                                   Reorganization as if such reorganization was
                                   completed as of December 31, 2003; and

                          (iv)     the agreed Sonoco Equalization Amount and the
                                   Ahlstrom Equalization Amount calculated in a
                                   manner more fully described in the
                                   Equalization Statement and to be settled in
                                   accordance with Sections 5.1(c) and 5.1.(d),
                                   respectively;

                  (c) there shall be no transactions of the Sonoco Holding
Companies, Sonoco Operating Companies and the Sonoco Predecessor Companies with
other Sonoco entities occurring during the period from December 31, 2003 until
the Closing Date (the "REFERENCE PERIOD") other than transactions contemplated
by and occurring in connection with the Sonoco Reorganization or necessary for
the settlement of the Equalization Amount, contemplated by the Equalization
Statement or Section 6.5, or transactions occurring in the Ordinary Course of
Business of the Sonoco Business (the "SONOCO PROHIBITED TRANSACTIONS");

                  (d) there shall be no transactions of the Ahlstrom
Holding Companies and Ahlstrom Operating Companies with other Ahlstrom entities
occurring during the Reference Period, other than transactions contemplated by
and occurring in connection with the Ahlstrom Reorganization or necessary for
the settlement of the Equalization Amount, contemplated by the Equalization
Statement, or transactions occurring in the Ordinary Course of Business of the
Ahlstrom Business (the "AHLSTROM PROHIBITED TRANSACTIONS"); and

                  (e) all transactions contemplated under this Section 4.1
will be carried out with economic effect as if they had been carried out on
December 31, 2003, applying an interest rate of 3 % per annum as applicable.

         4.2      DELIVERY AND REVIEW OF CLOSING STATEMENTS

                  (a) As soon as practicable after the Closing Date (but in
no case later than 45 days after the Closing Date):

                           (i)      Sonoco Products shall cause to be prepared
                                    and delivered to Ahlstrom Corp:

                                       8



                                    (A)      a statement identifying all
                                             deviations from the Sonoco
                                             Reorganization as contemplated by
                                             this Agreement and the Equalization
                                             Statement (the "SONOCO
                                             REORGANIZATION DEVIATIONS");

                                    (B)      a statement describing the
                                             difference, if any, between the
                                             actual aggregate value of the
                                             consolidated Net Cash/Interest
                                             Bearing Debt of the Sonoco Holding
                                             Companies and Sonoco Operating
                                             Companies as of December 31, 2003,
                                             which value shall reflect the
                                             results of the Sonoco
                                             Reorganization as if such
                                             reorganization was completed as of
                                             December 31, 2003, and the
                                             aggregate value of the consolidated
                                             Net Cash/Interest Bearing Debt of
                                             each of the Sonoco Holding
                                             Companies and Sonoco Operating
                                             Companies as set forth in the
                                             Equalization Statement; and

                                    (C)      a statement identifying all Sonoco
                                             Prohibited Transactions occurring
                                             during the Reference Period, if
                                             any;

                                    each of (A), (B) and (C) prepared in
                                    accordance with U.S. GAAP and the principles
                                    upon which the Sonoco Financial Statements
                                    were prepared (collectively, the "SONOCO
                                    CLOSING STATEMENTS"); and identifying
                                    separately the adjustments that have been
                                    carried out to calculate the economic
                                    benefit as of December 31, 2003; and

                           (ii)     Ahlstrom Corp shall cause to be prepared and
                                    delivered to Sonoco Products:

                                    (A)      a statement identifying all
                                             deviations from the Ahlstrom
                                             Reorganization as contemplated by
                                             this Agreement and the Equalization
                                             Statement (the "AHLSTROM
                                             REORGANIZATION DEVIATIONS");

                                    (B)      a statement describing the
                                             difference, if any, between the
                                             actual aggregate value of the
                                             consolidated Net Cash/Interest
                                             Bearing Debt of the Ahlstrom
                                             Holding Companies and Ahlstrom
                                             Operating Companies as of December
                                             31, 2003,

                                       9



                                             which value shall reflect the
                                             results of the Ahlstrom
                                             Reorganization as if such
                                             reorganization was completed as of
                                             December 31, 2003, and the
                                             aggregate value of the consolidated
                                             Net Cash/Interest Bearing Debt of
                                             each of the Ahlstrom Holding
                                             Companies and the Ahlstrom
                                             Operating Companies as set forth on
                                             the Equalization Statement; and

                                    (C)      a statement identifying all
                                             Ahlstrom Prohibited Transactions
                                             occurring during the Reference
                                             Period, if any;

                                    each of (A), (B) and (C) prepared in
                                    accordance with Ahlstrom Accounting
                                    Principles and the principles upon which the
                                    Ahlstrom Financial Statements were prepared
                                    (the "AHLSTROM CLOSING STATEMENTS" and
                                    together with the Sonoco Closing Statement,
                                    the "CLOSING STATEMENTS"), and identifying
                                    separately the adjustments that have been
                                    carried out to calculate the economic
                                    benefit as of December 31, 2003.

                  (b) Each of Sonoco Products and its auditors and Ahlstrom
Corp and its auditors shall conduct a review of the Ahlstrom Closing Statements
and the Sonoco Closing Statements, respectively, and shall use good faith
efforts to agree in writing upon: (i) the occurrence, and the net financial
statement impact, of each of the Sonoco Reorganization Deviations and the
Ahlstrom Reorganization Deviations, if any, (ii) the difference, if any, in the
aggregate amount of the consolidated Net Cash/Interest Bearing Debt as described
in the Sonoco Closing Statements and the Ahlstrom Closing Statements,
respectively, as against the amount of such item set forth on the Equalization
Statement, (iii) the occurrence, and the net financial statement impact, of each
of the Sonoco Prohibited Transactions and the Ahlstrom Prohibited Transactions,
if any, and (iv) the payments, if any, required to be made by Sonoco Products or
Ahlstrom Corp, as the case may be, to, or Distributions to Sonoco Products or
Ahlstrom Corp, as the case may be, from, the Joint Venture in order to (A)
eliminate such net financial statement impact of each of the Sonoco
Reorganization Deviations and the Ahlstrom Reorganization Deviations, (B)
correct for any such differences in Net Cash/Interest Bearing Debt and (C)
eliminate such net financial statement impact of each of the Sonoco Prohibited
Transactions and the Ahlstrom Prohibited Transactions (such written agreement,
the "SETTLEMENT AGREEMENT"). For the avoidance of doubt, and unless otherwise
agreed by the Parties, (x) if the aggregate amount of the consolidated Net
Cash/Interest Bearing Debt described on the Sonoco Closing Statement or the
Ahlstrom Closing

                                       10



Statement, as the case may be, is greater than the aggregate amount of the
consolidated Net Cash/Interest Bearing Debt described on the Equalization
Statement, then the Joint Venture shall be obligated to make a Distribution to
Sonoco Products or Ahlstrom Corp, as the case may be, in an amount equal to the
amount of such difference and (y) if the aggregate amount of the consolidated
Net Cash/Interest Bearing Debt described on the Sonoco Closing Statement or the
Ahlstrom Closing Statement, as the case may be, is less than the aggregate
amount of the consolidated Net Cash/Interest Bearing Debt described on the
Equalization Statement, then Sonoco Products or Ahlstrom Corp, as the case may
be, shall be obligated to make a payment to the Joint Venture in an amount equal
to the amount of such difference. Any such payments required to be made by
Sonoco Products or Ahlstrom Corp, as the case may be, to the Joint Venture,
shall be made (i) as a contribution to the free reserves of the Joint Venture,
and not against issuance of shares of the Joint Venture, and include an amount
equal to the capital contribution duty or any other taxes to be paid by the
Joint Venture under Luxembourg law on such contribution to the free reserves or
(ii) as a cancellation of Intercompany Debt. For the avoidance of doubt, any
such payment shall not affect the other Partner's respective ownership
percentage in the Joint Venture.

                  (c) Each of Sonoco Products and Ahlstrom Corp shall
provide the other Party with access, during normal business hours, to its
working papers, documents, financial information and other information as such
other Party may reasonably request in connection with such review and
examination of the Closing Statements.

         4.3      DISPUTES

                  Either Party may object to the other Party's Closing Statement
within ten Business Days of its receipt of such Closing Statement (the
"EXAMINATION PERIOD") by providing to the other Party a written notice (an
"OBJECTION NOTICE") describing in reasonable detail such Party's objections to
any item or valuation of such Closing Statement. Either Party's failure to
deliver an Objection Notice to the other Party by the end of the Examination
Period shall constitute such Party's binding acceptance of such Closing
Statement and all matters identified therein. If the parties are unable to
resolve the objection described in an Objection Notice within 20 Business Days
after an Objection Notice is delivered to a Party, then the matter shall be
resolved pursuant to the accounting issue dispute resolution procedures set
forth in Section 4.6.

         4.4      SCHEDULE OF PAYMENTS

                  Any payments required to be made pursuant to this Section 4
shall be made as follows: (i) if no Party shall have delivered an Objection
Notice to the other Party in accordance with the provisions of Section 4.3, then
the payments, if any,

                                       11



required to be made pursuant to the Settlement Agreement shall be made no later
than five Business Days after the execution of the Settlement Agreement; and
(ii) if a Party shall have delivered an Objection Notice to the other Party in
accordance with the provisions of Section 4.3, then payments of any amounts set
forth in the Accountant's Determination shall be made within five Business Days
of the delivery of the Accountant's Determination as provided in Section 4.6.

         4.5      JOINT VENTURE STARTING BALANCE SHEET

                  Within 90 days after the Closing Date, the Joint Venture
auditors shall prepare and deliver to each Party and the Joint Venture a
statement representing the unaudited consolidated balance sheet (the "JOINT
VENTURE STARTING BALANCE SHEET") of the Joint Venture and the Sonoco Holding
Companies and the Sonoco Operating Companies and the Ahlstrom Holding Companies
and the Ahlstrom Operating Companies as of the Closing Date, which statement
shall be prepared in accordance with International Accounting Standards, which
will exclude footnotes and disclosures otherwise required, but including
supplementary information as needed by the Parties, as applied according to the
accounting rules and principles approved at the Second Joint Venture
Shareholders' Meeting described in Section 3.2(a). The Joint Venture Starting
Balance Sheet shall be the initial financial statement of the Joint Venture. The
Joint Venture auditors shall also prepare and deliver to each Party and the
Joint Venture financial statements prepared in accordance with U.S. GAAP which
will exclude footnotes and disclosures otherwise required, but including
supplementary information as needed by the Parties, together with a
reconciliation between the International Accounting Standards and U.S. GAAP
financial statements.

         4.6      ACCOUNTING ISSUE DISPUTE RESOLUTION PROCEDURES

                  At such time as a matter becomes subject to resolution
pursuant to the accounting issue dispute resolution procedures set forth in this
Section 4.6, the Parties shall select an independent accounting firm of
recognized international standing which shall resolve the issue as to which
there is a dispute as promptly as possible. The accounting firm selected shall
not at the time of selection be performing services for either Party or their
Affiliates. A decision by the independent accounting firm as to the resolution
of such issue, and the determination of the amount of any payments to be made as
a result thereof, shall be (absent an agreement of the Parties regarding an
error that is manifest) conclusive and binding upon the Parties for purposes of
this Agreement (the "ACCOUNTANT'S DETERMINATION"). The Accountant's
Determination shall: (i) be in writing; (ii) be made in accordance with
principles upon which the relevant financial statement of the Parties or the
Joint Venture were made; (iii) be made after having given each Party the
opportunity to state its case in writing; (iv) set forth the basis upon which it
is made; and (v) be incontestable by either Party and each of their

                                       12



respective Affiliates and successors and not subject to collateral attack for
any such reason. All fees and costs payable to the independent accounting firm
referred to in this Section shall be borne by the Parties equally.

5.       UNDERTAKINGS AND COVENANTS

         5.1      COMPLETION OF REORGANIZATION; INTERIM PERIOD ADJUSTMENTS

                  (a) Prior to the Closing, Sonoco Products shall duly and
validly complete, or cause to be duly and validly completed, all transactions,
filings, registrations and other steps or actions contemplated by the
reorganization of the Sonoco Business as described in Exhibit S (the "SONOCO
REORGANIZATION"). Notwithstanding anything to the contrary in Exhibit S, and
without prejudice to Section 10.2(d), Sonoco Products shall cause the Sonoco
Reorganization to be carried out in a manner that neither any Sonoco Holding
Company nor any Sonoco Operating Company owns or has any Liability for any
Sonoco Excluded Asset or Liability.

                  (b) Prior to the Closing, Ahlstrom Corp shall duly and validly
complete, or cause to be duly and validly completed, all transactions, filings,
registrations and other steps or actions contemplated by the reorganization of
the Ahlstrom Business as described in Exhibit T (the "AHLSTROM REORGANIZATION").
Notwithstanding anything to the contrary in Exhibit T, and without prejudice to
Section 10.3(d), Ahlstrom Corp shall cause the Ahlstrom Reorganization to be
carried out in a manner that neither any Ahlstrom Holding Company nor any
Ahlstrom Operating Company owns or has any Liability for any Ahlstrom Excluded
Asset or Liability.

                  (c) Prior to Closing, Sonoco Products shall cause to be
Distributed, from the Sonoco Business cash in the amount of EUR 4,400,000, plus
interest thereon at the rate of 3% per annum from December 31, 2003 to and
including the date of distribution (such amount, including interest, the "SONOCO
EQUALIZATION AMOUNT"). Alternatively, in connection with the Distribution of the
Sonoco Equalization Amount, Sonoco may, at its election, cause the Sonoco
Business to issue Indebtedness to a third Person in an amount equal to the
Sonoco Equalization Amount, the proceeds of which shall be Distributed from the
Sonoco Business.

                  (d) Prior to Closing, Ahlstrom Corp shall (i) contribute, or
cause to be contributed, to the Ahlstrom Business cash in the amount of EUR
4,400,000, plus interest thereon at the rate of 3% per annum from December 31,
2003 to and including the date of contribution (such amount, including interest,
the "AHLSTROM EQUALIZATION Amount"). Alternatively, in lieu of the contribution
of the Ahlstrom Equalization Amount, Ahlstrom may, at its election, cancel, or
caused to be

                                       13



cancelled, Outstanding Borrowings of the Ahlstrom Business in an amount equal to
the Ahlstrom Equalization Amount.

         5.2      ACCESS TO RECORDS AND PROPERTIES

                  (a) Subject to the applicable confidentiality requirements and
Laws, from and after the date hereof until the earlier of the Closing or the
termination of this Agreement in accordance with its terms (the "INTERIM
Period"), Sonoco Products shall provide, or cause to be provided, to Ahlstrom
Corp and its Affiliates, and each of their respective authorized
representatives, including, without limitation, accountants, consultants and
attorneys (collectively, "REPRESENTATIVES"), the information they might
reasonably request concerning the Interim Period business and financial results
or reasonably related to its integration planning of the Sonoco Business and the
Ahlstrom Business, together with monthly financial results of the Sonoco
Business.

                  (b) Subject to applicable confidentiality requirements and
Laws, during the Interim Period, Ahlstrom Corp shall provide, or cause to be
provided, to Sonoco Products and its Affiliates, and each of their respective
Representatives, the information they might reasonably request related to the
monthly Interim Period business and financial results or reasonably continue its
integration planning of the Sonoco Business and the Ahlstrom Business, together
with monthly financial results of the Ahlstrom Business.

                  (c) Each Party agrees: that the information provided pursuant
to this Section 5.2 shall not affect or otherwise diminish or obviate in any
respect any of the representations and warranties or the indemnification rights
of the other Party contained in this Contribution Agreement.

         5.3      CONSENTS AND APPROVALS; UNDERTAKINGS TO COMPETITION
AUTHORITIES

                  (a) Each Party shall take all commercially reasonable measures
during the Interim Period to secure, or cause to be secured, such consents,
authorizations and approvals of any Governmental Authority, and of any other
Person, as may be necessary or advisable in order for such Party to carry out
the transactions contemplated by this Contribution Agreement and to perform all
of its other obligations hereunder, including, without limitation, in connection
with the Sonoco Reorganization and the Ahlstrom Reorganization, and obtaining
the Required Consents; and

                  (b) Each of Sonoco Products and Ahlstrom Corp shall, and shall
cause the other Controlled members of the Sonoco Group and the Ahlstrom Group,
respectively, during the Interim Period to cooperate in the filing of all forms,
notifications, reports and information, and conduct of Proceedings, if any,
required

                                       14



or reasonably deemed advisable pursuant to Laws or Orders of any Governmental
Authority in connection with the transactions contemplated by this Contribution
Agreement, including, without limitation, the competition filings listed on
Schedule 5.3 (the "REQUIRED COMPETITION FILINGS").

                  (c) In the event that a competent Governmental Authority in
charge of a Required Competition Filing raises objections to the Transaction,
the Parties undertake to use good faith best efforts to agree on appropriate
measures to overcome these objections, it being understood: (i) that any such
measure to be agreed shall not affect this Contribution Agreement (including the
valuation of the Sonoco Business and the Ahlstrom Business); (ii) that the
economic burden or benefit associated with such measures shall be assumed by or
credited to the Joint Venture; and (iii) that the Parties shall not be obligated
to agree on any measure that would (A) have a material adverse effect on Sonoco
Products or Ahlstrom Corp as the case may be, or any of their respective
Affiliates or Assets not contributed to the Joint Venture or its subsidiaries as
part of the Transaction or (B) amount to a Sonoco Material Adverse Effect or an
Ahlstrom Material Adverse Effect.

         5.4      OPERATION OF BUSINESS DURING THE INTERIM PERIOD

                  Except as expressly contemplated by this Contribution
Agreement (including, without limitation, as contemplated by the Sonoco
Reorganization or the Ahlstrom Reorganization, respectively), during the Interim
Period, each of Sonoco Products and Ahlstrom Corp shall cause each Sonoco
Holding Company and Controlled Sonoco Operating Company and each Ahlstrom
Holding Company and Controlled Ahlstrom Operating Company, respectively, to:

                  (a) (i) preserve the Sonoco Business and the Ahlstrom Business
as reflected on the Sonoco Financial Statements and the Ahlstrom Financial
Statements, respectively, and the organizations and relationships with
consultants, employees and third parties, consistent with the Ordinary Course of
Business; and (ii) maintain the Assets of the Sonoco Business and the Ahlstrom
Business, respectively, in customary repair and condition;

                  (b) conduct the Sonoco Business and the Ahlstrom Business,
respectively, only in the Ordinary Course of Business, and, in addition, not to:

                           (i)      enter into any material transaction or
                                    Agreement, or cause any event or condition,
                                    which, individually or in the aggregate,
                                    could reasonably be expected to have a
                                    Sonoco Material Adverse Effect or an
                                    Ahlstrom Material Adverse Effect, as the
                                    case may be;

                           (ii)     commit any act or omit to do any act, or
                                    engage in any activity or transaction or
                                    incur any Liability (by conduct

                                       15



                                    or otherwise) or cause any damage,
                                    destruction or Loss, whether or not covered
                                    by insurance, which, individually or in the
                                    aggregate, could reasonably be expected to
                                    have a Sonoco Material Adverse Effect or an
                                    Ahlstrom Material Adverse Effect, as the
                                    case may be;

                           (iii)    issue any shares or ownership interests, or
                                    any options, warrants or other rights to
                                    subscribe for or purchase any of its shares
                                    or ownership interests, or any securities
                                    convertible into or exchangeable for its
                                    shares or ownership interests;

                           (iv)     declare, pay or set aside any Distribution
                                    (whether outstanding or issuable upon the
                                    conversion, exchange or exercise of
                                    outstanding shares or ownership interests),
                                    or directly or indirectly redeem, purchase
                                    or otherwise acquire any of its shares or
                                    ownership interests;

                           (v)      effect a split, reclassification or other
                                    change in or of any of its shares or
                                    ownership interests;

                           (vi)     amend its Charter Documents;

                           (vii)    grant any increase in, or prepayment of, the
                                    compensation payable, or to become payable,
                                    to its directors, officers, managing
                                    directors, managers, employees or agents, or
                                    enter into any bonus, insurance, pension or
                                    other benefit plan, payment or arrangement
                                    for or with any of such directors, officers,
                                    managing directors, managers, employees or
                                    agents, other than normal salary increases
                                    in the Ordinary Course of Business;

                           (viii)   make any lay-offs with respect to a
                                    significant part of the workforce;

                           (ix)     incur any Indebtedness, including
                                    Intercompany Debt (other than Indebtedness
                                    incurred in the Ordinary Course of Business
                                    on reasonable arms length terms), or
                                    directly or indirectly provide a Guarantee,
                                    or agree to provide a Guarantee, of
                                    Indebtedness of any other Person;

                           (x)      cancel, or make any material change to, any
                                    Indebtedness owing to it from any Person or
                                    any Claims which it may possess, or waive or
                                    release any material rights (other than in
                                    the Ordinary Course of Business);

                                       16



                           (xi)     place, or allow to be placed, an Encumbrance
                                    (other than a Permitted Encumbrance) on any
                                    of its Assets;

                           (xii)    make any change in any method of accounting
                                    or accounting practice or policy except as
                                    required by U.S. GAAP, in the case of the
                                    Sonoco Group, and Ahlstrom Accounting
                                    Principles, in the case of the Ahlstrom
                                    Group, including, without limitation, any
                                    change in its policies with respect to the
                                    payment of accounts payable or other current
                                    Liabilities or the collection of accounts
                                    receivable, including, without limitation,
                                    any acceleration or deferral of the payment
                                    or collection thereof, as applicable;

                           (xiii)   Transfer any Intellectual Property (other
                                    than in the Ordinary Course of Business);

                           (xiv)    Transfer any material portion of its Assets,
                                    or scrap any material portion of its Assets
                                    as obsolete, in each case except in the
                                    Ordinary Course of Business and for fair
                                    value;

                           (xv)     materially change the general manner in
                                    which it markets and sells its products or
                                    services;

                           (xvi)    make any commitments for capital
                                    expenditures in excess of EUR1,000,000 per
                                    occurrence or EUR5,000,000 in the aggregate;

                           (xvii)   violate any material Law or material Order;

                           (xviii)  make any loan or advance to any of its
                                    members, stockholders or other equity
                                    holders, or, officers, directors, managing
                                    directors, managers or to any other Person;
                                    or

                           (xix)    commit any act or omit to do any act which
                                    could reasonably be expected to result in
                                    the untruth, inaccuracy or breach of any
                                    representation or warranty contained in
                                    Sections 6 or 7;

                  (c) keep proper books of record and account in which true and
complete entries will be made of all transactions in accordance with applicable
accounting methods Applied on a Consistent Basis; and

                  (d) subject to the requirements of applicable Law, provide the
other Party on a regular and ongoing basis an update with respect to the Sonoco
Business

                                       17



and the Ahlstrom Business, as the case may be, including, without limitation,
any significant or extraordinary developments relating to the Sonoco Business or
the Ahlstrom Business, as the case may be.

         5.5      EXCLUSIVITY

                  (a) During the Interim Period, except as may be required by
applicable securities Laws, or the rules or requirements of any relevant stock
exchange or other Governmental Authority, without the prior written consent of
the other Party, no Party shall, nor shall it through any officer, director,
managing director, manager, employee, Representative, agent or direct or
indirect stockholder or subsidiary, directly or indirectly, take, or permit the
taking of, any action to: (i) encourage, initiate or solicit the submission of
any proposal that constitutes an Alternative Transaction; (ii) enter into any
Agreement with respect to or accept any Alternative Transaction; (iii)
encourage, initiate or solicit (including by way of furnishing information) the
making of any proposal that constitutes, or may reasonably be expected to lead
to, an Alternative Transaction; (iv) furnish to any Person other than the other
Party any information relating to the Sonoco Business or the Ahlstrom Business,
as the case may be; (v) Transfer any stock or other equity interests in any
member of the Sonoco Group or the Ahlstrom Group, as the case may be (except as
contemplated by this Contribution Agreement); or (vi) enter into negotiations
with respect to any of the foregoing.

                  (b) In addition to the obligations of the Parties set forth in
paragraph (a) of this Section 5.5, each Party shall immediately advise the other
Party orally and in writing of any request for information or of any proposal or
any inquiry regarding any Alternative Transaction, the material terms and
conditions of such request, proposal or inquiry and the identity of the Person
making such request, proposal or inquiry. Each Party will keep the other Party
fully informed of the status and details (including amendments or proposed
amendments) of any such request, proposal or inquiry.

         5.6      PUBLIC ANNOUNCEMENTS

                  Upon execution of this Contribution Agreement, the Parties
shall issue an agreed press release announcing the transactions contemplated by
this Contribution Agreement and the Related Documents. Neither Party shall issue
or approve, or cause or permit to be issued or approved, any additional news
release or other public announcement concerning the transactions contemplated by
this Contribution Agreement or any Related Document without the prior written
approval of the other Party; provided, however, that no prior approval shall be
needed for releases or announcements required to comply with applicable
securities Laws, or the rules or requirements of any relevant stock exchange or
other Governmental Authority, it being understood that in such situations the
Parties

                                       18



will consult in good faith in advance with one another regarding such releases
or announcements.

         5.7      SUBSEQUENT EVENTS

                  During the Interim Period, each Party shall notify the other
Party promptly in writing of the occurrence of any event, or the failure of any
event to occur, prior to the Closing that results in a breach of any of the
covenants or representations and warranties made by or on behalf of such Party
in this Contribution Agreement or any Related Document, or any other document
furnished in connection herewith or therewith, but such notification shall not
excuse breaches of representations, warranties, covenants, guarantees or
agreements disclosed in such notification. In addition, each Party shall
immediately notify the other Party in writing in the event it reasonably
believes that any condition set forth in Sections 8 or 9 cannot be satisfied on
or prior to the Closing. Without limiting the generality of the foregoing, each
Party shall notify the other Party promptly in writing of any change occurring,
or known to likely occur, prior to the Closing which has had, or could
reasonably be expected to have, a Sonoco Material Adverse Effect or an Ahlstrom
Material Adverse Effect, as the case may be, including, without limitation,
information (including without limitation copies of all Agreements relating
thereto) concerning all Claims instituted, threatened or asserted against or
affecting the Sonoco Business or the Ahlstrom Business, as the case may be,
before or by any Governmental Authority or before any other relevant Person.

         5.8      FURTHER ASSURANCES

                  During the Interim Period:

                  (a) Subject to the terms and conditions of this Contribution
Agreement, each Party shall take or do, and shall use commercially reasonable
efforts to cause to be taken or done in respect of any acts or obligations
involving third Persons, all actions and things required under all applicable
Laws in order to consummate the transactions contemplated hereby and by the
Related Documents.

                  (b) Each Party shall satisfy, and shall use commercially
reasonable efforts to cause to be satisfied in respect of any conditions
involving third Persons, each of the closing conditions set forth in Sections 8
and 9 to the extent such satisfaction is within its power, provided, however,
that Section 5.3 comprehensively regulates the Parties' obligations in
connection with the Required Competition Filings.

                                       19



         5.9      RELEASE OF GUARANTEES

                  As soon as practicable following the Closing Date (and in any
event within 90 days after the Closing Date): (i) Sonoco Products and Ahlstrom
Corp shall procure the release of each Sonoco Holding Company and Controlled
Sonoco Operating Company or Ahlstrom Holding Company and Controlled Ahlstrom
Operating Company, respectively, from any Guarantees or indemnities undertaken
by them in respect of obligations of Sonoco Group companies or Ahlstrom Group
companies (other than Affiliates of the Joint Venture), and, pending such
release, shall indemnify the Ahlstrom Indemnified Persons or the Sonoco
Indemnified Persons, as the case may be, against any Loss whatsoever arising out
of such Guarantees; and (ii) the Joint Venture shall procure the release of each
of Sonoco Products and Ahlstrom Corp from any Guarantees or indemnities
undertaken by them in respect of Affiliates of the Joint Venture, and, pending
such release, shall indemnify Sonoco Products and Ahlstrom Corp, as the case may
be, against any Loss whatsoever arising out of such Guarantees.

         5.10     REPAYMENT OF INTERCOMPANY DEBT

                  As soon as practicable following the Closing Date (and in any
event within 90 days after the Closing Date), each of Sonoco Products and
Ahlstrom Corp shall cause the Joint Venture or its Subsidiaries to repay and
release in full all Intercompany Debt of each Sonoco Holding Company and
Controlled Sonoco Operating Company or Ahlstrom Holding Company and Ahlstrom
Operating Company, respectively, plus interest at the rate of interest set forth
for each such Intercompany Debt in Schedule 5.10 from December 31, 2003 to and
including the date of repayment, or indemnities undertaken by them in respect of
such Intercompany Debt, by refinancing such Intercompany Debt with Indebtedness
issued by the Joint Venture or any of its subsidiaries to Third Persons;
provided, however, that if the amount of such Indebtedness that the Joint
Venture is able to issue to such Third Persons is less than the amount of such
Intercompany Debt outstanding as of the date of refinancing, plus such amount of
interest, then such Intercompany Debt, plus such amount of interest, of each
Sonoco Holding Company and Sonoco Operating Company or Ahlstrom Holding Company
or Ahlstrom Operating Company, respectively, shall be repaid pro rata in
accordance with Sonoco Luxco's and Ahlstrom Holding's respective ownership
interest in the Joint Venture as of such date of refinancing.

         5.11     KARHULA SERVICES

                  (a) On or prior to the Closing, Ahlstrom Corp: (i) shall use
its best efforts to cause the Karhula Commitment Agreement to be terminated and
Ahlstrom Cores Oy to have no further Liability under such Agreement; and (ii)
shall, and shall cause all of its Affiliates that are also shareholders in
Karhula

                                       20



Services (other than Ahlstrom Cores Oy) to, enter into an Agreement,
satisfactory to Sonoco Products, whereby (A) Ahlstrom Cores Oy commits to pay to
Karhula Services the portion of any land restoration or landscaping actually
incurred by Karhula Services upon closure of the landfill operated by Karhula
Services equal to 25% of such costs, up to a maximum payment of EUR344,000 (the
"JOINT VENTURE COMMITMENT AMOUNT") and (B) Ahlstrom Corp and such Affiliates
agree to assume any Liability or obligation of Ahlstrom Cores Oy for (1) land
restoration or landscaping required upon the closure of the landfill operated by
Karhula Services in excess of the Joint Venture Commitment Amount, (2) any
remediation obligation resulting from Ahlstrom Cores Oy's ownership in Karhula
Services, delivery of waste to such landfill or otherwise, or (3) any obligation
of Karhula Services to construct an environmental lining, install a sewage
system or upgrade the wastewater management system at the landfill.

                  (b) The Parties recognize that the continued use by the Joint
Venture or its Affiliates of the landfill after the Closing Date will be subject
to such terms as shall be agreed between the Joint Venture or its Affiliates and
Karhula Services.

         5.12     USE OF AHLSTROM NAME, LABELS, CORPORATE NAMES, ETC.

                  From and after the Closing Date, in connection with the sale
or other disposition of products of, or otherwise in the conduct of, the
Business of the Joint Venture, Ahlstrom agrees that the Joint Venture shall have
the right (without any fee or other charge) to: (i) sell or otherwise dispose of
any products bearing as of the Closing Date Ahlstrom's name, marks or other
Intellectual Property; (ii) use any carton, labels, forms, brochures, invoices
or other printed material bearing as of the Closing Date Ahlstrom's name, marks
or other Intellectual Property; and (iii) continue to use the corporate names of
the Ahlstrom Holding Companies and the Ahlstrom Operating Companies, in each of
(i), (ii) and (iii), for so long as such products or other materials described
in (i) and (ii) remain in the inventory of the Joint Venture but in any event
not later than six months after the Closing Date; provided that the Joint
Venture shall use its commercially reasonable efforts to cause the corporate
name of the Ahlstrom Holding Companies and the Ahlstrom Operating Companies to
be changed to exclude the name "Ahlstrom" as soon as practicable after the
Closing Date. Ahlstrom shall have and retain sole ownership of the name
"Ahlstrom" and the Ahlstrom corporate logo.

         5.13     PAPERINKERAYS OY

                  After the Closing, Ahlstrom Corp shall: (i) use best efforts
to promptly (but in no case later than one year after the Closing) obtain all
consents, approvals and waivers of the shareholders of Paperinkerays Oy required
under the Articles of Association of Paperinkerays Oy for the sale of the shares
of Paperinkerays Oy

                                       21



owned by Ahlstrom Corp to the Joint Venture or its designee; and (ii) upon
receipt of all required consents, approvals and waivers described in (i) above,
(A) sell such shares in Paperinkerays Oy to the Joint Venture or its designee
for EUR2,100,000, plus interest on such EUR2,100,000 at the rate of 3% per annum
from the Closing Date until the date of such sale, and (B) in connection with
such sale, provide to the Joint Venture or its designee representations,
warranties and indemnities with respect to Paperinkerays Oy substantially
similar to those that Ahlstrom Corp has provided in respect of each Ahlstrom
Holding Company and Ahlstrom Operating Company in this Contribution Agreement.

         5.14     UK PENSION

                  (a) As part of the Sonoco Reorganization, Sonoco Products
shall cause the Sonoco UK Predecessor to: (i) Transfer to Sonoco Newco UK
certain employees of the Sonoco UK Predecessor who are active exclusively in the
Sonoco Business as of the date of the Transfer and do not elect to contest such
Transfer under applicable Law (the "UK Transfer Employees"); (ii) procure that
Sonoco Newco UK becomes a participating employer in the current pension plan of
the Sonoco UK Predecessor of which the UK Transfer Employees are members (the
"UK PENSION PLAN") in relation to UK Transfer Employees so far as possible
within applicable Law and as permitted by the UK Pension Plan; and (iii) procure
that the terms on which Sonoco Newco UK participates in the UK Pension Plan are
such that, so far as possible within applicable Law, Sonoco Newco UK's maximum
Pension Contributions for a period will be equal to the Pension Service Cost for
that period.

                  (b) Sonoco Products unconditionally and irrevocably agrees, as
a continuing obligation, that if at any time Sonoco Newco UK, the Joint Venture
or any of its Affiliates becomes liable to pay Pension Contributions in excess
of the Pension Service Cost, Sonoco Products will meet that Liability and Sonoco
Products will immediately indemnify Sonoco UK and the Joint Venture against any
such Liability.

                  (c) For the purposes of (a) and (b) above, (i) "PENSION
CONTRIBUTIONS" includes all contributions or payments made or due to the UK
Pension Plan under the provisions governing the UK Pension Plan or by applicable
Law, including any payments becoming due as a result of Sonoco Newco UK ceasing
to participate in the UK Pension Plan or the UK Pension Plan being terminated or
wound up, and any other liabilities arising in relation to the UK Pension Plan
including any liability to indemnify the trustees or administrators of the UK
Pension Plan and any Losses, Taxes, levies, penalties, demands and expenses; and
(ii) "PENSION SERVICE COST" for any period means the value of benefits accrued
under the UK Pension Plan during that period by UK employees active exclusively
in the Sonoco Business calculated in accordance with the principles set forth in
Schedule 5.14 which were used in the calculation of the 2003 Pension Service
Cost.

                                       22



6.       REPRESENTATIONS AND WARRANTIES OF SONOCO PRODUCTS

         No representation and warranty contained in this Section 6 shall be
construed as a seller's guarantee (Garantie fur die Beschaffenheit der Sache)
within the meaning of Sections 443 and 444 of the German Civil Code.
Notwithstanding anything to the contrary contained in this Contribution
Agreement, or the Schedules hereto, the information and disclosures contained in
each Schedule to a particular representation, warranty, guaranty or covenant
shall not be deemed to be disclosed and incorporated by reference in any other
section of any other Schedule and shall not be deemed to qualify or limit any
other representation, warranty, guarantee or covenant of Sonoco Products
contained in this Contribution Agreement unless such information or disclosure
is clearly incorporated by reference into such other section of such other
Schedule or the applicability of such information to such other Schedule is
reasonably obvious. Each schedule referenced in this Section 6 may be amended by
Sonoco Products within two weeks from the date hereof by notice to Ahlstrom
Corp, subject to approval of such amendment by Ahlstrom Corp, such approval not
to be unreasonably withheld or delayed. For the avoidance of doubt, all
representations and warranties (i) in respect of Sonoco Newco UK, Sonoco Newco
Swiss, Sonoco Newco Germany and Sonoco Greece (in respect of the Sonoco Business
Transferred from the Sonoco Greece Predecessor as part of the Sonoco
Reorganization only) shall be deemed delivered by Sonoco Products as of the
Closing Date only and, to the extent any such representation or warranty is made
as of a particular date other than the Closing Date, such representation and
warranty shall be deemed not made by Sonoco Products in respect of Sonoco Newco
UK and Sonoco Newco Swiss and (ii) in respect of the Sonoco Predecessor
Companies shall be deemed delivered by Sonoco Products as of the date hereof
only. Subject to the foregoing, Sonoco Products hereby represents and warrants
to Ahlstrom Corp by way of an independent guarantee (within the meaning of
section 311, paragraph 1, of the German Civil Code) and, for the avoidance of
doubt, subject to the limitations contained herein, including, in particular in
Section 10, that the statements made in this Section 6 are true and correct.

         6.1      ORGANIZATION; POWER AND AUTHORITY; GOOD STANDING

                  Each of the Sonoco Holding Companies and the Sonoco Operating
Companies is duly organized, validly existing and in good standing under the
Laws of the jurisdiction of its formation, incorporation or organization, as
applicable, and has all requisite power and authority to own, lease and operate
its Assets and to carry on its applicable portion of the Sonoco Business as
presently conducted. Schedule 6.1 contains true, correct and complete copies of
the Charter Documents of each of the Sonoco Holding Companies and the Sonoco
Operating Companies (other than Schweighouse and Sodarec), as amended and in
effect on the date hereof and on the Closing Date.

                                       23



         6.2      AUTHORIZATION, EXECUTION, ENFORCEABILITY AND NO CONFLICTS

                  (a) Each of Sonoco Products, Sonoco Luxco and any other Sonoco
Group Person has all requisite power and authority (corporate or otherwise) to
execute this Contribution Agreement and each Related Document (collectively, the
"TRANSACTION DOCUMENTS") to which it is a party and any and all instruments
necessary or appropriate in order to effectuate fully the terms and conditions
of each such document and to perform and consummate the transactions
contemplated hereby and thereby. Each Transaction Document to which Sonoco
Products, Sonoco Luxco or any other Sonoco Group Person is a party, and the
performance of its respective obligations hereunder and thereunder, has been
duly and validly authorized by all requisite action on the part of Sonoco
Products, Sonoco Luxco or such other Sonoco Group Person, as applicable, and
each such Transaction Document to which Sonoco Products, Sonoco Luxco or such
other Sonoco Group Person is a party has been, or upon its execution on the
Closing Date will be, duly and validly executed by Sonoco Products, Sonoco Luxco
or such other Sonoco Group Person, and constitutes, or upon its execution on the
Closing Date will constitute, a valid and legally binding obligation of Sonoco
Products, Sonoco Luxco or such other Sonoco Group Person, as applicable,
enforceable against Sonoco Products or Sonoco Luxco or such other Sonoco Group
Person, as applicable, in accordance with its terms and conditions, except as
enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other Laws affecting creditors' rights generally
or by general principles of equity.

                  (b) The execution and performance by each of Sonoco Products,
Sonoco Luxco and any other Sonoco Group Person of each Transaction Document to
which it is a party, and the consummation of the transactions contemplated
hereby and thereby, will not: (i) violate any Law applicable to Sonoco Products,
Sonoco Luxco or such other Sonoco Group Person, or any of the Assets of the
Sonoco Group; or (ii) conflict with, or result in any breach of, any of the
terms, conditions or provisions of, or constitute (with due notice or lapse of
time, or both) a default or give rise to any right of termination, cancellation
or acceleration, or result in the creation of any Encumbrance (other than a
Permitted Encumbrance) upon: (x) any of the Assets of the Sonoco Group; or (y)
under any provision of: (1) the Transaction Documents, (2) the Charter Documents
of Sonoco Products, Sonoco Luxco or such other Sonoco Group Person, as
applicable, (3) any Permit required or issued in connection with the operation
of the Sonoco Business or (4) any other Agreement to which it is a party or by
which the Assets of the Sonoco Group is or may be bound, except for such
violations, conflicts or breaches of or with respect to (x), (y) (1), (3) and
(4) above that, individually or in the aggregate, have not had, and are not
reasonably expected to have, a Sonoco Material Adverse Effect. Except for the
Required Competition Filings and as set forth on Schedule 6.2, neither Sonoco
Products nor any relevant Person of the Sonoco Group has been or is required to
give any notice to, obtain the consent of or make any filing with, any
Governmental

                                       24



Authority or any other Person, or obtain any material Permit, in each case for
the valid execution and performance by Sonoco Products, Sonoco Luxco or such
other Sonoco Group Person of the Transaction Documents to which it is a party.

         6.3      OWNERSHIP OF SONOCO HOLDING COMPANIES AND SONOCO OPERATING
COMPANIES

                  (a) Schedule 6.3 lists: (i) the authorized, issued and
outstanding shares of capital stock or equity interests of each of the Sonoco
Holding Companies and the Sonoco Operating Companies; (ii) the record and
beneficial holders of the authorized, issued and outstanding shares of capital
stock or equity interests of each of the Sonoco Holding Companies and the Sonoco
Operating Companies; and (iii) the number of shares or units, and percentage of
shares or units, of capital stock or equity interests of each such holder. Other
than as set forth on Schedule 6.3, Sonoco Products has no Affiliates, and no
equity investment or other interest in any Person, engaged in any aspect of the
core/tube and core board business in the Territory.

                  (b) Except as set forth on Schedule 6.3, Sonoco Products is,
or will be immediately prior to the Closing, the lawful direct or indirect
record and beneficial owner of all the shares of capital stock of, or other
ownership interests in, each of the Sonoco Holding Companies and the Sonoco
Operating Companies, and has good and marketable title to such shares of capital
stock or ownership interests, free and clear of all Encumbrances (other than
Permitted Encumbrances). Except as set forth on Schedule 6.3, there are no: (i)
outstanding subscriptions, preemptive rights, warrants, calls or options to
acquire, or instruments convertible into or exchangeable for, or Agreements or
understandings with respect to the sale or issuance of, shares of capital stock
or ownership interest of any of the Sonoco Holding Companies or the Sonoco
Operating Companies; (ii) Encumbrances (other than Permitted Encumbrances),
rights of first refusal, rights of first offer, proxies, voting trusts, or
voting Agreements with respect to the sale, issuance or voting of any shares of
capital stock or ownership interest of any of the Sonoco Holding Companies or
the Sonoco Operating Companies (whether outstanding or issuable upon the
conversion, exchange or exercise of outstanding securities); or (iii)
obligations to redeem, repurchase or otherwise acquire shares of capital stock
or ownership interest of any of the Sonoco Holding Companies or the Sonoco
Operating Companies, in each of (i), (ii) or (iii) above, pursuant to any Law
(other than any limitations or restrictions on Transferability under any
applicable securities Laws), any Charter Document of any of the Sonoco Holding
Companies or the Sonoco Operating Companies or any Agreement to which Sonoco
Luxco, any of the Sonoco Holding Companies or the Sonoco Operating Companies is
a party or may be bound.

                  (c) All shares of capital stock of, or other ownership
interests in, the Sonoco Holding Companies and the Sonoco Operating Companies
that are indirectly

                                       25



held by Sonoco Products have been, or upon their issuance on or prior to the
Closing Date will be, duly authorized, validly issued, outstanding and fully
paid in (and such capital payments have not been paid back).

                  (d) None of the Sonoco Holding Companies or the Sonoco
Operating Companies is a party to a company agreement (Unternehmensvertrag
within the meaning of the German Stock Corporation Act), except for those
agreements disclosed in Schedule 6.3 which will be validly terminated with
effect prior to or as of the Closing Date.

         6.4      BANKRUPTCY

                  No Sonoco Holding Company or Sonoco Operating Company is
involved in any Proceeding by or against it as a debtor before any Governmental
Authority under any insolvency, restructuring or debtors' relief act, or for the
appointment of a trustee, receiver, liquidator, assignee, sequestrator or other
similar official, or under any similar Law, for any part of its Assets.

         6.5      DISTRIBUTIONS

                  Except as contemplated by the Sonoco Reorganization and the
EUR2,440,628 Distribution made on March 3, 2004 from Sonoco Holding Italia
S.r.l. to Sonoco Luxco, no Distribution has been made since December 31, 2003 by
or to any of the Sonoco Holding Companies or the Sonoco Operating Companies.

         6.6      EMPLOYEE REMUNERATION

                  Schedule 6.6 lists the aggregate annual remuneration,
including, without limitation, bonuses and fringe benefits, paid or payable, as
applicable, by each of the Sonoco Holding Companies, the Sonoco Operating
Companies (other than Schweighouse and Sodarec) and the Sonoco Predecessor
Companies, to its respective employees, managers or directors, for the most
recently completed fiscal year and, based on Sonoco Products' good faith
estimate, for the current fiscal year.

         6.7      FINANCIAL STATEMENTS

                  (a) Schedule 6.7 contains true, correct and complete copies of
the following (the "SONOCO FINANCIAL STATEMENTS"):

                           (i)      The unaudited consolidated balance sheet and
                                    profit and loss account of the Sonoco
                                    Holding Companies and the Sonoco Operating
                                    Companies as of December 31, 2003 and for
                                    the 12-month period then ended; and

                                       26



                           (ii)     The pro forma unaudited consolidated balance
                                    sheet and profit and loss account of the
                                    Sonoco Holding Companies and the Sonoco
                                    Operating Companies as of December 31, 2003
                                    and for the 12-month period then ended,
                                    which balance sheet and profit and loss
                                    account shall reflect the results of the
                                    Sonoco Reorganization as if the Sonoco
                                    Reorganization was completed as of December
                                    31, 2003.

                  (b) The Sonoco Financial Statements, together with the notes
thereto: (i) have been prepared in accordance with U.S. GAAP, Applied on a
Consistent Basis; (ii) have been prepared in accordance with the books and
records of each of the Sonoco Holding Companies and the Sonoco Operating
Companies, which books and records have been properly maintained; (iii) present
fairly the financial condition and results of operations of the Sonoco Holding
Companies and Sonoco Operating Companies on a consolidated basis, as of the date
thereof and for the period covered thereby; provided, however, that the Sonoco
Financial Statements do not contain all footnotes required under U.S. GAAP.
Since December 31, 2003, there has been no change in any accounting principle,
procedure or practice followed by the Sonoco Holding Companies and the Sonoco
Operating Companies or in the method of applying such principle, procedure or
practice.

         6.8      ABSENCE OF UNDISCLOSED LIABILITIES

                  No Sonoco Holding Company or Sonoco Operating Company has any
Liabilities, except: (i) Liabilities as set forth in the Sonoco Financial
Statements; (ii) Liabilities that need not be shown on the balance sheet under
U.S. GAAP and that arose in the Ordinary Course of Business; (iii) Liabilities
arising in the Ordinary Course of Business since December 31, 2003; (iv)
Liabilities set forth on Schedule 6.8; or (v) Liabilities which are not, and are
not reasonably expected to become, material to the Sonoco Business.

         6.9      ABSENCE OF CHANGES

                  Except as set forth on Schedule 6.9 or as provided or
contemplated by the Transaction Documents (including, without limitation, as
contemplated by the Sonoco Reorganization), since December 31, 2003, each of the
Sonoco Holding Companies, the Sonoco Operating Companies, the Sonoco Predecessor
Companies and the Sonoco Business has been operated in the Ordinary Course of
Business and there has not been:

                  (a) any event or condition, or any material transaction or
Agreement which, individually or in the aggregate, has had, or is reasonably
expected to have, a Sonoco Material Adverse Effect;

                                       27



                  (b) any act, omission of any act, activity or transaction, or
incurrence of Liability (by conduct or otherwise), or any damage, destruction or
Loss, whether or not covered by insurance, which, individually or in the
aggregate, has had, or is reasonably expected to have, a Sonoco Material Adverse
Effect;

                  (c) any issuance of any shares or ownership interests, or any
options, warrants or other rights to subscribe for or purchase any of its shares
or ownership interests, or any securities convertible into or exchangeable for
its shares or ownership interests by any Sonoco Holding Company, Sonoco
Operating Company or Sonoco Predecessor Company;

                  (d) split, reclassification or other change in or of any of
the shares or ownership interests of any Sonoco Holding Company, Sonoco
Operating Company or Sonoco Predecessor Company;

                  (e) amendment of the Charter Documents of any Sonoco Holding
Company, Sonoco Operating Company or Sonoco Predecessor Company;

                  (f) any increase in, or prepayment of, the compensation
payable, or to become payable, by any Sonoco Holding Company, Sonoco Operating
Company or Sonoco Predecessor Company to any of its directors, officers,
managing directors, managers, employees or agents, or enter into any bonus,
insurance, pension or other benefit plan, payment or arrangement for or with any
of such directors, officers, managing directors, managers, employees or agents,
other than normal salary increases in the Ordinary Course of Business;

                  (g) any lay-offs with respect to a significant part of the
workforce of any Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company;

                  (h) any incurrence of any Indebtedness, including Intercompany
Debt (other than Indebtedness incurred in the Ordinary Course of Business on
reasonable arms length terms), or direct or indirect provision of a Guarantee,
or any agreement to provide a Guarantee, or Indebtedness of any other Person;

                  (i) any cancellation of, or material change to, Indebtedness
owing to any Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company from any Person or any Claims which any Sonoco Holding
Company, Sonoco Operating Company or Sonoco Predecessor Company may possess, or
any waiver or release of any material rights (other than in the Ordinary Course
of Business);

                  (j) any placement, or allowance to place, an Encumbrance
(other than a Permitted Encumbrance) on any Assets of any Sonoco Holding
Company, Sonoco Operating Company or Sonoco Predecessor Company;

                                       28



                  (k) any change in any method of accounting or accounting
practice or policy of any Sonoco Holding Company, Sonoco Operating Company or
Sonoco Predecessor Company, except as required by U.S. GAAP, including, without
limitation, any change in its policies with respect to the payment of accounts
payable or other current Liabilities or the collection of accounts receivable,
including, without limitation, any acceleration or deferral of the payment or
collection thereof, as applicable;

                  (l) any Transfer of Intellectual Property (other than in the
Ordinary Course of Business) from or to any Sonoco Holding Company, Sonoco
Operating Company or Sonoco Predecessor Company;

                  (m) any Transfer of a material portion of the Assets of any
Sonoco Holding Company, Sonoco Operating Company or the Sonoco UK Predecessor,
or scrapping of a material portion of the Assets of any Sonoco Holding Company,
Sonoco Operating Company or Sonoco Predecessor Company as obsolete;

                  (n) any material change in the general manner in which any
Sonoco Holding Company, Sonoco Operating Company or Sonoco Predecessor Company
markets its products or services;

                  (o) any commitments for capital expenditures of any Sonoco
Holding Company, Sonoco Operating Company or Sonoco Predecessor Company in
excess of EUR1,000,000 per occurrence or EUR5,000,000 in the aggregate;

                  (p) any violation of any material Law or material Order; or

                  (q) any loan or advance to any members, stockholders or equity
holders, or officers, directors, managing directors, managers or to any other
Person of any Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company.

         6.10     OUTSTANDING BORROWINGS; INTERCOMPANY DEBT

                  Schedule 6.10 lists: (i) the amount of principal, interest and
other obligations of all Outstanding Borrowings and Intercompany Debt of each
Sonoco Holding Company, Sonoco Operating Company and Sonoco Predecessor Company
as of December 31, 2003; (ii) the Encumbrances that relate to such Outstanding
Borrowings and Intercompany Debt; (iii) the name of each lender or party
thereof; and (iv) the amount of any unfunded commitments available in connection
with such Outstanding Borrowings and Intercompany Debt.

                                       29



         6.11     RELATED PARTY TRANSACTIONS

                  Except as set forth on Schedule 6.11, and except for: (i)
compensation and payment of reimbursable expenses incurred in the Ordinary
Course of Business to regular employees of any Sonoco Holding Company, Sonoco
Operating Company or Sonoco Predecessor Company; (ii) any individual amount not
exceeding EUR100,000 per year; or (iii) sales of products in the Ordinary Course
of Business on arms-length terms, no current or former Affiliate of any Sonoco
Holding Company, Sonoco Operating Company or Sonoco Predecessor Company, is now,
or has been since December 31, 2003: (x) a party to any transaction or Agreement
with any Sonoco Holding Company, Sonoco Operating Company or Sonoco Predecessor
Company; (y) Indebted to any Sonoco Holding Company, Sonoco Operating Company or
Sonoco Predecessor Company; or (z) the direct or indirect owner of an interest
in any Person which is a competitor, supplier or customer of any Sonoco Holding
Company, Sonoco Operating Company or Sonoco Predecessor Company (other than
non-affiliated holdings in publicly held companies), nor, to the Actual
Knowledge of Sonoco Products, does any such Person receive income from any
source other than any Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company which should properly accrue to any Sonoco Holding Company,
Sonoco Operating Company or Sonoco Predecessor Company. Except as set forth on
Schedule 6.11, no current or former Affiliate of any Sonoco Holding Company,
Sonoco Operating Company or Sonoco Predecessor Company provides a Guarantee or
is otherwise responsible for any Liability (including Indebtedness) of any
Sonoco Holding Company, Sonoco Operating Company or Sonoco Predecessor Company.

         6.12     COMPLIANCE WITH LAWS

                  (a) Except as disclosed on Schedule 6.12, each of the Sonoco
Holding Companies, Sonoco Operating Companies and the Sonoco Predecessor
Companies have: (i) complied in all material respects with, is in compliance in
all material respects with and has operated the Sonoco Business and maintained
its Assets in compliance in all material respects with, all Laws applicable to
it and its applicable portion of the Sonoco Business as currently conducted; and
(ii) all Permits used or necessary in the conduct of its applicable portion of
the Sonoco Business, except for such Permits the absence of which, individually
or in the aggregate, has not had, and is not reasonably expected to have, a
Sonoco Material Adverse Effect. Such Permits described in clause (ii) are valid
and in good standing and are in full force and effect, no violations with
respect to any thereof have occurred or are or have been recorded and no
Proceeding is pending or, to the Best Knowledge of Sonoco Products, threatened
to revoke or limit any thereof.

                  (b) Schedule 6.12 contains a true, correct and complete list
of: (i) all such Permits described in paragraph (a) of this Section 6.12 (other
than Permits for

                                       30



Schweighouse and Sodarec); and (ii) all material Orders under which each of the
Sonoco Holding Companies, the Sonoco Operating Companies (other than Orders for
Schweighouse and Sodarec) and the Sonoco Predecessor Companies are operating or
bound. To the Actual Knowledge of Sonoco Products, there is no proposed change
in any applicable Law which would require any Sonoco Holding Company, Sonoco
Operating Company or Sonoco Predecessor Company to obtain any Permits not set
forth on Schedule 6.12 in order to conduct its applicable portion of the Sonoco
Business as presently conducted. Except as disclosed in Schedule 6.12, none of
such Permits or Orders shall be adversely affected as a result of Sonoco
Products', any Sonoco Holding Company's or Sonoco Operating Company's execution
of, or the performance of its obligations under, any Transaction Document to
which it is a party, or the consummation of the transactions contemplated hereby
and thereby. No Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company has received any opinion or memorandum or legal advice from
legal counsel to the effect that it is exposed, from a legal standpoint, to any
Liability or disadvantage, individually or in the aggregate, which has had, or
is reasonably expected to have, a Sonoco Material Adverse Effect. To the Actual
Knowledge of Sonoco Products, no Sonoco Holding Company, Sonoco Operating
Company or Sonoco Predecessor Company is aware of any proposed Law which would
prohibit or restrict it from, or otherwise materially adversely affect it in,
conducting its applicable portion of the Sonoco Business in any jurisdiction in
which it is now conducting the Sonoco Business.

         6.13     TAXES

                  (a) Each of the Sonoco Holding Companies and the Sonoco
Operating Companies has (or, in the case of Tax Returns becoming due after the
date hereof and on or before the Closing Date, will have prior to the Closing
Date) duly filed all Tax Returns, notices and other reports or filings required
to be filed by any of the Sonoco Holding Companies or the Sonoco Operating
Companies (collectively, "SONOCO TAX RETURNS") on or before the Closing Date
(including, without limitation, in connection with or as a result of the Sonoco
Reorganization) with respect to all applicable Taxes. All such Tax Returns are
(or, in the case of returns becoming due after the date hereof, including,
without limitation, in connection with or as a result of the Sonoco
Reorganization, will be) true and complete in all material respects.

                  (b) All Taxes which are required to be paid by each of the
Sonoco Holding Companies and the Sonoco Operating Companies before the Closing
Date have been or will be paid in full prior to the Closing Date and an
appropriate provision has been provided in respect of all Taxes that are not due
prior to the Closing Date and that relate to the time period through December
31, 2003 in the Sonoco Financial Statements.

                                       31



                  (c) There is no investigation or Claim pending or, to the Best
Knowledge of Sonoco Products, threatened in respect of any material Taxes for
which any of the Sonoco Holding Companies and the Sonoco Operating Companies is,
or is reasonably expected to become, liable. No Sonoco Holding Company or Sonoco
Operating Company has consented to any waivers or extensions of any statute of
limitations with respect to any taxable year of the Sonoco Group.

                  (d) No Sonoco Holding Company or Sonoco Operating Company is a
party to an Agreement or arrangement relating to the sharing, allocation or
payment of, indemnity or security for, Taxes, except for the Tax consolidation
Agreements (e.g., Organschaft) set forth on Schedule 6.13, which will be
terminated prior to the Closing Date.

                  (e) The execution and performance of this Contribution
Agreement and the Related Documents will not result in: (i) the imposition of
any Tax on or with respect to any Sonoco Holding Company or Sonoco Operating
Company, or their respective Assets; or (ii) the Loss by any Sonoco Holding
Company or Sonoco Operating Company of any Tax relief or Tax benefit other than
the loss of trade Tax loss carryforwards and Tax loss carryforwards or other Tax
attributes for which adequate provision has been made on the Sonoco Financial
Statements.

                  (f) No Sonoco Holding Company and no Sonoco Operating Company
has carried out any dealings with Affiliates on a non-arms length basis that
could be assessed by the relevant Governmental Authorities to constitute hidden
distributions of profits (verdeckte Gewinnausschuettung).

         6.14     REAL PROPERTY

                  (a) Schedule 6.14 lists all the Real Property used in the
Sonoco Business (the "SONOCO REAL PROPERTY") and specifies the owner of each
parcel thereof and sets forth a legal description for all such Real Property.
The Sonoco Real Property is suitable and adequate in all material respects for
the uses for which it is currently devoted. None of the Sonoco Holding
Companies, the Sonoco Operating Companies or the Sonoco Predecessor Companies
own, lease, sublease, license or use any Real Property in the operation of the
Sonoco Business, other than the Sonoco Real Property.

                  (b) Each of the Sonoco Holding Companies, the Sonoco Operating
Companies and the Sonoco Predecessor Companies, as applicable, is the sole owner
of good, valid and marketable fee simple or comparable title to the Sonoco Real
Property listed in Schedule 6.14 as owned Sonoco Real Property and has valid and
binding rights under leases to the Sonoco Real Property listed in Schedule 6.14
as leased Sonoco Real Property, in each case free and clear of all Encumbrances
(other

                                       32



than Permitted Encumbrances). Schedule 6.14 contains an accurate and complete
list of all mortgages and similar Encumbrances on the Sonoco Real Property.

                  (c) All buildings, structures, fixtures and other improvements
on the Sonoco Real Property are: (i) in good repair, normal wear and tear
excepted, and free of material defects (latent or patent); and (ii) are suitable
and adequate in all material respects for the uses to which they are currently
devoted. All such buildings, structures, fixtures and improvements on the Sonoco
Real Property conform in all material respects to all material Laws. The
buildings, structures, fixtures and improvements on each parcel of Sonoco Real
Property lie entirely within the boundaries of such parcel of the Sonoco Real
Property as specified in the legal description set forth in Schedule 6.14, and
do not encroach in any material respects on any adjoining premises and no
structures of any kind encroach in any material respects on such Sonoco Real
Property.

                  (d) Except as set forth on Schedule 6.14: (i) none of the
Sonoco Real Property is subject to any material Agreement or other material
restriction of any nature whatsoever (recorded or unrecorded) preventing or
limiting in any material respects any Sonoco Holding Company's, Sonoco Operating
Company's or Sonoco Predecessor Company's right to convey or otherwise dispose
of its interest in same; and (ii) none of the Sonoco Real Property is subject to
any material Agreement or other material restriction of any nature whatsoever
(recorded or unrecorded) preventing or limiting in any material respects any
Sonoco Holding Company's, Sonoco Operating Companies' or the Sonoco Predecessor
Company's right to use it.

                  (e) No material portion of the Sonoco Real Property or any
building, structure, fixture or improvement thereon is the subject of, or
affected by, any condemnation or eminent domain Proceeding currently instituted
or pending, and to Sonoco Products' Actual Knowledge, none of the foregoing will
be the subject of, or affected by, any such future Proceeding.

                  (f) The Sonoco Real Property has reasonably direct and
unobstructed access to material public roads and to reasonably adequate material
electric, gas, water, sewer and telephone lines, all of which are reasonably
adequate for the uses to which such Sonoco Real Property is currently devoted.

                  (g) Except as disclosed on Schedule 6.14, there are no Persons
in possession, or who have a right of possession of any portion of the Sonoco
Real Property other than the Sonoco Holding Companies, the Sonoco Operating
Companies or the Sonoco Predecessor Companies, whether as lessees, tenants at
will or otherwise.

                  (h) Schedule 6.14 contains a complete and accurate copy of all
Real Property Leases relating to the Sonoco Real Property. Each Real Property
Lease

                                       33



entered into (whether as lessor or lessee) by each of the Sonoco Holding
Companies, the Sonoco Operating Companies or the Sonoco Predecessor Companies
is: (i) valid, binding and enforceable in all material respects against the
Sonoco Holding Companies, the Sonoco Operating Companies and the Sonoco
Predecessor Companies, as applicable; and (ii) to Sonoco Products' Actual
Knowledge, is valid, binding and enforceable in all material respects against
the other parties thereto in accordance with its terms, and is in full force and
effect in all material respects.

                  (i) None of the Sonoco Holding Companies, the Sonoco Operating
Companies or the Sonoco Predecessor Companies are in material default under, or
in material breach of, or are otherwise materially delinquent in performance
under any Real Property Lease entered into (whether as lessor or lessee) by the
Sonoco Holding Companies, the Sonoco Operating Companies or the Sonoco
Predecessor Companies, and, to Sonoco Products' Actual Knowledge, no event has
occurred which, with due notice or lapse of time, or both, would constitute such
a default.

         6.15     ENVIRONMENTAL AND SAFETY

                  (a) Each of the Sonoco Holding Companies, the Sonoco Operating
Companies and the Sonoco Predecessor Companies has complied in all material
respects with, and each such company and all of the Sonoco Real Property is in
compliance in all material respects with, all material Environmental and Safety
Requirements; and there are no Proceedings pending or, to the Best Knowledge of
Sonoco Products, threatened against any Sonoco Holding Company, Sonoco Operating
Company or Sonoco Predecessor Company alleging any failure to so comply or
involving any Environmental and Safety Requirement issue with respect to its
past operations or any Real Property of any Sonoco Holding Company, Sonoco
Operating Company or Sonoco Predecessor Company.

                  (b) No Sonoco Holding Company, Sonoco Operating Company or
Sonoco Predecessor Company has any material Liability arising under any
Environmental and Safety Requirements.

                  (c) Except as set forth on Schedule 6.15, no Sonoco Holding
Company, Sonoco Operating Company or Sonoco Predecessor Company has received any
written notice or report with respect to it or its Real Property regarding any:
(i) actual or alleged violation of Environmental and Safety Requirements; or
(ii) actual or potential Liability arising under Environmental and Safety
Requirements, including any investigatory, remedial or corrective obligation, in
each of (i) and (ii), during the last three calendar years.

                  (d) No Sonoco Holding Company, Sonoco Operating Company or
Sonoco Predecessor Company has assumed or undertaken any material Liability of
any other Person under any Environmental and Safety Requirements.

                                       34



                  (e) No Sonoco Holding Company, Sonoco Operating Company or
Sonoco Predecessor Company has treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled or released any substance, or
owned or operated any Real Property, in a manner that has given rise to material
Liabilities of any Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company pursuant to any Environmental and Safety Requirement,
including any material Liability for response costs, corrective action costs,
personal injury, property damage, natural resources damage or attorney fees, or
any investigative, corrective or remedial obligations.

                  (f) Schedule 6.15 sets forth all environmental matters for
which a financial reserve has been made on the Sonoco Financial Statements and
the amount of such reserve.

         6.16     TITLE TO ASSETS

                  Except for the leased Assets listed in Schedule 6.19 and
subject to Section 6.14, each of the Sonoco Holding Companies and the Sonoco
Operating Companies has, or upon consummation of the Sonoco Reorganization will
have at the Closing Date, good, valid and marketable title to all Assets used in
its applicable portion of the Sonoco Business, free and clear of all
Encumbrances (other than Permitted Encumbrances). All personal property of the
Sonoco Holding Companies and Sonoco Operating Companies is in normal operating
condition and repair, normal wear and tear excepted, and is suitable and
adequate for the uses for which it is used. All inventory of the Sonoco Holding
Companies and Sonoco Operating Companies consists of items which are good and
merchantable and of a quality and quantity presently usable and saleable in the
Ordinary Course of Business, subject to any reserves properly reflected on the
Sonoco Financial Statements under U.S. GAAP.

         6.17     INSURANCE

                  All policies of Assets, fire, hazard, casualty, liability,
life, and other forms of insurance of any kind owned or held by, or for the
benefit of, the Sonoco Holding Companies and the Sonoco Operating Companies: (i)
are in full force and effect and, to the Best Knowledge of Sonoco Products, no
grounds for termination of such policies exist; (ii) are sufficient for
compliance by each of the Sonoco Holding Companies and the Sonoco Operating
Companies with all requirements of applicable Law and of all Agreements which
require any of the Sonoco Holding Companies or the Sonoco Operating Companies to
acquire and/or maintain insurance; (iii) are valid and enforceable against the
insurer in all material respects; and (iv) insure against risks of the kind
customarily insured against and in amounts customarily carried by companies
similarly situated and by companies engaged in similar businesses and owning
similar properties, and provide adequate

                                       35



insurance coverage for the Sonoco Business and Assets of the Sonoco Holding
Companies and the Sonoco Operating Companies. All premium and other payments
required to be paid by, or on behalf of, each of the Sonoco Holding Companies
and the Sonoco Operating Companies pursuant to such policies have been fully and
timely made.

         6.18     INTELLECTUAL PROPERTY

                  (a) Schedule 6.18 contains a list: (i) of all Intellectual
Property owned by each of the Sonoco Holding Companies, the Sonoco Operating
Companies and the Sonoco Predecessor Companies in respect of which a
registration has been granted, and in respect of which a registration has been
applied for, in each case specifying, as applicable (A) the nature of such
Intellectual Property, (B) the owner of such Intellectual Property, (C) the
jurisdictions in which such Intellectual Property has been registered, or in
which an application for registration has been filed, and the registration or
application numbers and (D) any licenses that have been granted with respect to
such Intellectual Property; and (ii) of all licenses pursuant to which each of
the Sonoco Holding Companies and the Sonoco Operating Companies has been granted
the right to use Intellectual Property owned by another Person, in each case
specifying (A) the licensor, (B) the duration of the license and (C) the
royalties payable. The Intellectual Property listed on Schedule 6.18 is all
Intellectual Property necessary to conduct the Sonoco Business as currently
conducted.

                  (b) Each of the Sonoco Holding Companies, the Sonoco Operating
Companies and the Sonoco Predecessor Companies: (i) owns, or has a valid license
to use, all Intellectual Property used by it in the Ordinary Course of Business
in the Sonoco Business, except where the failure to own, or have a valid license
to use, such Intellectual Property, individually or in the aggregate, has not
had, and is not reasonably expected to have, a Sonoco Material Adverse Effect;
and (ii) each of the Sonoco Holding Companies, the Sonoco Operating Companies
and the Sonoco Predecessor Companies has made, or has had made on its behalf,
all payments as and when required to validly maintain all registrations of, its
ownership of, or its license to use, such Intellectual Property in full force
and effect, with any Governmental Authority or other Person, as the case may be.
To the Best Knowledge of Sonoco Products, there exist no grounds for termination
of the Sonoco Holding Companies', the Sonoco Operating Companies' or the Sonoco
Predecessor Companies ownership rights in, or licenses to use, the Intellectual
Property referred to in the preceding sentence, in particular, there are no
pending challenges of any Intellectual Property owned by any Sonoco Holding
Company, Sonoco Operating Company or Sonoco Predecessor Company, and to Sonoco
Products' Best Knowledge, no such challenges are threatened.

                                       36



                  (c) No Sonoco Holding Company, Sonoco Operating Company or the
Sonoco Predecessor Company has granted an exclusive license with respect to any
Intellectual Property used in the Sonoco Business to any third Person (other
than another Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company).

                  (d) No Sonoco Holding Company, Sonoco Operating Company or
Sonoco Predecessor Company has any Actual Knowledge of, nor has it received any
notice to the effect, that any product that any Sonoco Holding Company, Sonoco
Operating Company or Sonoco Predecessor Company sells or that any service any
Sonoco Holding Company, Sonoco Operating Company or Sonoco Predecessor Company
renders, or that the manufacture, distribution, marketing, sale or use of any
such product or service, may or is Claimed to infringe any Intellectual Property
right of another.

         6.19     LEASED PERSONAL PROPERTY

                  Schedule 6.19 lists every lease, sublease and Agreement
involving aggregate annual lease payments exceeding EUR30,000 per lease, per
year (net of ancillary costs) under which any of the Sonoco Holding Companies,
the Sonoco Operating Companies or the Sonoco Predecessor Companies is lessee or
lessor of any material Asset, or holds, manages or operates any material Asset
owned by any third party, or under which any material Asset owned by any of the
Sonoco Holding Companies, the Sonoco Operating Companies or the Sonoco
Predecessor Companies is held, operated or managed by a third party. Each of the
Sonoco Holding Companies and the Sonoco Operating Companies or the Sonoco UK
Predecessor is the owner and holder of all rights under leases used by it in the
Sonoco Business. Each such lease, sublease and other Agreement is in full force
and effect and constitutes a legal, valid and binding obligation of, and is
legally enforceable against, the respective Parties and grants the leasehold
interest it purports to grant free and clear of all Encumbrances (other than
Permitted Encumbrances). Each of the Sonoco Holding Companies, the Sonoco
Operating Companies and the Sonoco Predecessor Companies has in all material
respects performed all obligations thereunder required to be performed by any of
them to date. No Party is in default in any material respect under any of the
foregoing, and there has not occurred any event which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute such a material default.

         6.20     CERTAIN MATERIAL AGREEMENTS

                  (a) Subject to Section 6.14, except for the Agreements set
forth on Schedule 6.20 ("SONOCO MATERIAL AGREEMENTS"), no Sonoco Holding
Company, Sonoco Operating Company or Sonoco Predecessor Company is a party to
any written or oral:

                                       37



                           (i)      Agreement for the employment or retention
                                    of, whether on a full-time, part-time,
                                    consulting or other basis, or understanding
                                    with, any of the directors, top five
                                    officers, managing directors, general
                                    managers or country managers of the Sonoco
                                    Business, any Sonoco Holding Company, Sonoco
                                    Operating Company or Sonoco Predecessor
                                    Company;

                           (ii)     Agreement relating to Indebtedness or to the
                                    mortgaging, pledging or otherwise placing an
                                    Encumbrance (other than a Permitted
                                    Encumbrance) on any Asset of the Sonoco
                                    Business, or any Sonoco Holding Company,
                                    Sonoco Operating Company or Sonoco
                                    Predecessor Company, with a fair market
                                    value in excess of EUR50,000;

                           (iii)    Agreement preventing or otherwise
                                    restricting the right of any Sonoco Holding
                                    Company, Sonoco Operating Company or Sonoco
                                    Predecessor Company to make or receive
                                    Distributions;

                           (iv)     Agreement involving the sale of the accounts
                                    receivable of any Sonoco Holding Company,
                                    Sonoco Operating Company or Sonoco
                                    Predecessor Company to any other Person;

                           (v)      Agreement with respect to the investing of
                                    funds, including, without limitation, any
                                    hedging Agreement;

                           (vi)     Agreement under which any Sonoco Holding
                                    Company, Sonoco Operating Company or Sonoco
                                    Predecessor Company is the lessor of, or
                                    permits any third Person to hold or operate,
                                    any real or personal property owned or
                                    controlled by any Sonoco Holding Company,
                                    Sonoco Operating Company or Sonoco
                                    Predecessor Company in excess of EUR30,000;

                           (vii)    assignment, license, indemnification or
                                    other Agreement with respect to any form of
                                    intangible property with Third Parties,
                                    including, without limitation, any
                                    Intellectual Property;

                           (viii)   Agreement or group of related Agreements
                                    with the same Person for the sale of Assets
                                    or services which generated in excess of
                                    EUR100,000 in revenues in the most recent
                                    12-month period or is reasonably expected to
                                    generate in

                                       38


                                    excess of EUR100,000 in revenues in any
                                    12-month period ending after the date
                                    hereof;

                           (ix)     non-competition agreement which limits any
                                    Sonoco Holding Company, Sonoco Operating
                                    Company or Sonoco Predecessor Company from
                                    freely engaging in any business anywhere in
                                    the world;

                           (x)      Agreement relating to the purchase,
                                    distribution, marketing, advertising or sale
                                    of any Sonoco Holding Company's, Sonoco
                                    Operating Company's or Sonoco Predecessor
                                    Company's or any other Person's products or
                                    services (other than Agreements entered into
                                    in the Ordinary Course of Business); or

                           (xi)     other than Agreements described and
                                    disclosed in subsections (i) through (x)
                                    above, Agreement pursuant to which any
                                    Sonoco Holding Company, Sonoco Operating
                                    Company or Sonoco Predecessor Company has
                                    Liabilities or is required to make or give,
                                    or entitled to receive, aggregate payments
                                    or other value in excess of EUR100,000.

                  (b) All Sonoco Material Agreements are, or following the
Sonoco Reorganization will be, an Asset of a Sonoco Holding Company, a Sonoco
Operating Company or a Sonoco Predecessor Company, and no other Sonoco Group
company is, or will be following the Sonoco Reorganization, a party to any such
Sonoco Material Agreement.

                  (c) Except as specifically disclosed in Schedule 6.20, each of
the Sonoco Holding Companies, the Sonoco Operating Companies and the Sonoco
Predecessor Companies has performed in all material respects all obligations
required to be performed by it, and is not in default under or in breach of, nor
in receipt of any Claim of default or breach under, any Sonoco Material
Agreement to which it is a party or by which any of its Assets may be bound,
and, to the Actual Knowledge of Sonoco Products, no event has occurred which
with the passage of time or the giving of notice or both would result in such a
material default or breach under any such Sonoco Material Agreement. To the
Actual Knowledge of Sonoco Products, no other party to any Sonoco Material
Agreement to which any of the Sonoco Holding Companies, the Sonoco Operating
Companies or the Sonoco Predecessor Companies is a party, or by which any of
their Assets may be bound, is in material default under or in breach of any
Sonoco Material Agreements, and no event has occurred which with the passage of
time or giving of notice or both would result in a material default or breach by
such other party under any Sonoco

                                       39


Material Agreement. There has been made available to Ahlstrom Corp in the Sonoco
Data Room: (i) a true and complete copy of each written Sonoco Material
Agreement, together with all amendments, waivers or other changes thereto; and
(ii) a true and complete description of the material terms of all oral Sonoco
Material Agreements.

         6.21     LITIGATION; DISPUTES

                  Except as (x) set forth on Schedule 6.21 and (y) for matters
which have not resulted, and could not reasonably be expected to result, in a
fine or other award of damages in excess of EUR100,000, there are no: (i)
Proceedings pending (for which proper service has been made) against or
involving any of the Sonoco Holding Companies, the Sonoco Operating Companies or
the Sonoco Predecessor Companies, whether at law or in equity, whether civil or
criminal in nature or by or before any Governmental Authority; (ii) customer
Claims of any nature against any of the Sonoco Holding Companies, the Sonoco
Operating Companies or the Sonoco Predecessor Companies; or (iii) Orders of any
Governmental Authority with respect to or involving any of the Sonoco Holding
Companies, the Sonoco Operating Companies or the Sonoco Predecessor Companies,
nor, in the case of (i), (ii) or (iii), to the Best Knowledge of Sonoco
Products, does there exist any basis for any such Proceeding, Claim or Order, or
has any such Proceeding, Claim or Order been threatened.

         6.22     LABOR RELATIONS

                  (a) Except as set forth on Schedule 6.22, there are no
strikes, work stoppages, or other disputes pending or, to the Best Knowledge of
Sonoco Products, threatened, or reasonably anticipated between any of the Sonoco
Holding Companies, the Sonoco Operating Companies or the Sonoco Predecessor
Companies and: (i) any current or former employees of any of the Sonoco Holding
Companies, the Sonoco Operating Companies or the Sonoco Predecessor Companies
involving amounts, individually or in the aggregate, exceeding EUR100,000; (ii)
any union, employee representatives or other collective bargaining unit
representing employees of the Sonoco Holding Companies, the Sonoco Operating
Companies or the Sonoco Predecessor Companies; or (iii) any social security
Governmental Authority.

                  (b) No Sonoco Holding Company or Sonoco Operating Company has,
or is obligated with respect to, any stock option, stock bonus, phantom stock
plan, scheme or similar arrangement. Except for the UK Pension Obligation, any
unfunded pension Liability arrangements for present or former employees,
directors, officers, managing directors, managers or workers of each of the
Sonoco Holding Companies, the Sonoco Operating Companies or the Sonoco
Predecessor Companies is covered by adequate reserves in the Sonoco Financial
Statements, and

                                       40


any other pension Liability is fully funded and complies with all statutory and
regulatory funding obligations in respect of all categories of member.

                  (c) No Sonoco Holding Company, Sonoco Operating Company or the
Sonoco Predecessor Company has any consulting arrangements with their respective
directors.

                  (d) Each of the Sonoco Holding Companies, the Sonoco Operating
Companies and the Sonoco Predecessor Companies has complied, and is in
compliance with, in all material respects, all Laws relating to employment,
workers, the workplace, the termination of employment or income tax, wage
withholding tax or social security matters, including, without limitation,
provisions relating to wages, hours, collective bargaining, employee
representation, consultation, safety and health, work authorization, equal
employment opportunity, discrimination, immigration, withholding, unemployment
compensation, worker's compensation, employee privacy and right to know and
social security contributions.

                  (e) Except as set forth on Schedule 6.22 and without limiting
the generality of the foregoing, no Sonoco Holding Company, Sonoco Operating
Company or Sonoco Predecessor Company is a party to any existing Agreement with
an employee, officer, director, managing director, manager or agent which in
case of termination could result in compensation payments in an amount exceeding
EUR50,000.

                  (f) The consummation of the transactions contemplated in this
Contribution Agreement (including the Sonoco Reorganization) will not cause any
Sonoco Holding Company or Sonoco Operating Company to incur or suffer any
Liability relating to, or obligation to pay, severance, termination, social
security or other payments (including interest, penalties and charges relating
thereto) to any Person.

                  (g) Except as set forth in Schedule 6.22, or as imposed by
applicable Law, no Sonoco Holding Company, Sonoco Operating Company or Sonoco
Predecessor Company is a party to an Agreement or arrangement with any union,
works counsel, other employee representation body or employee representatives,
limiting its right to consummate the restructurings contemplated by the Business
Plan, including the closure of any plants or other facilities, relocation or
termination of employees.

         6.23     INVESTMENT REPRESENTATIONS

                  Sonoco Luxco is acquiring the Sonoco Shares hereunder, for its
own account, for investment and not with a view to the distribution thereof in
violation of applicable securities Laws.

                                       41


         6.24     SUBSIDIES

                  Schedule 6.24 contains a complete and correct list of all
subsidies in an amount of EUR100,000 or more granted or awarded to any of the
Sonoco Holding Companies, the Sonoco Operating Companies or the Sonoco
Predecessor Companies or any of their predecessors during the last five calendar
years in respect of the relevant portion of the Sonoco Business. Neither the
Transaction (including the Sonoco Reorganization) nor the measures contemplated
under the Business Plan will result in an obligation to repay (or lose the
award) of any such subsidies.

         6.25     UK PENSION

                  The Pension Service Cost for the UK Pension Plan reflected in
the Sonoco Financial Statements was calculated based on the assumptions
described on Schedule 5.14.

         6.26     COMPLETENESS OF CONTRIBUTION

                  Following the Sonoco Reorganization, all Assets, Agreements
and employees used in the conduct of the Sonoco Business as it is presently
conducted will have been Transferred to the Sonoco Holding Companies and the
Sonoco Operating Companies.

7.       REPRESENTATIONS AND WARRANTIES OF AHLSTROM CORP

         No representation and warranty contained in this Section 7 shall be
construed as a seller's guarantee (Garantie fur die Beschaffenheit der Sache)
within the meaning of Sections 443 and 444 of the German Civil Code.
Notwithstanding anything to the contrary contained in this Contribution
Agreement, or the Schedules hereto, the information and disclosures contained in
each Schedule to a particular representation, warranty, guaranty or covenant
shall not be deemed to be disclosed and incorporated by reference in any other
section of any other Schedule and shall not be deemed to qualify or limit any
other representation, warranty, guarantee or covenant of Ahlstrom Corp contained
in this Contribution Agreement unless such information or disclosure is clearly
incorporated by reference into such other section of such other Schedule or the
applicability of such information to such other Schedule is reasonably obvious.
Each schedule referenced in this Section 7 may be amended by Ahlstrom Corp
within two weeks from the date hereof by notice to Sonoco Products, subject to
approval of such amendment by Sonoco Products, such approval not to be
unreasonably withheld or delayed. Subject to the foregoing, Ahlstrom Corp hereby
represents and warrants to Sonoco Products by way of an independent guarantee
(within the meaning of section 311, paragraph 1, of the German Civil Code) and,
for the avoidance of doubt, subject to the limitations contained herein,
including, in particular in Section 10, that the statements made in this Section
7 are true and correct.

                                       42


         7.1      ORGANIZATION; POWER AND AUTHORITY; GOOD STANDING

                  Each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies is duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its formation, incorporation or
organization, as applicable, and has all requisite power and authority to own,
lease and operate its Assets and to carry on its applicable portion of the
Ahlstrom Business as presently conducted. Schedule 7.1 contains true, correct
and complete copies of the Charter Documents of each of the Ahlstrom Holding
Companies and the Ahlstrom Operating Companies (other than Karhula Services and
AT-Spiral), as amended and in effect on the date hereof and on the Closing Date.

         7.2      AUTHORIZATION, EXECUTION, ENFORCEABILITY AND NO CONFLICTS

                  (a) Each of Ahlstrom Corp, Ahlstrom Holding and any other
Ahlstrom Group Person has all requisite power and authority (corporate or
otherwise) to execute the Transaction Documents to which it is a party and any
and all instruments necessary or appropriate in order to effectuate fully the
terms and conditions of each such document and to perform and consummate the
transactions contemplated hereby and thereby. Each Transaction Document to which
Ahlstrom Corp, Ahlstrom Holding or any other Ahlstrom Group Person is a party,
and the performance of its respective obligations hereunder and thereunder, has
been duly and validly authorized by all requisite action on the part of Ahlstrom
Corp, Ahlstrom Holding or such other Ahlstrom Group Person, as applicable, and
each such Transaction Document to which Ahlstrom Corp, Ahlstrom Holding or such
other Ahlstrom Group Person is a party has been, or upon its execution on the
Closing Date will be, duly and validly executed by Ahlstrom Corp, Ahlstrom
Holding or such other Ahlstrom Group Person, and constitutes, or upon its
execution on the Closing Date will constitute, a valid and legally binding
obligation of Ahlstrom Corp, Ahlstrom Holding or such other Ahlstrom Group
Person, as applicable, enforceable against Ahlstrom Corp, Ahlstrom Holding or
such other Ahlstrom Group Person, as applicable, in accordance with its terms
and conditions, except as enforceability thereof may be limited by any
applicable bankruptcy, reorganization, insolvency or other Laws affecting
creditors' rights generally or by general principles of equity.

                  (b) The execution and performance by each of Ahlstrom Corp,
Ahlstrom Holding and any other Ahlstrom Group Person of each Transaction
Document to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, will not: (i) violate any Law applicable to
Ahlstrom Corp, Ahlstrom Holding or such other Ahlstrom Group Person, or any of
the Assets of the Ahlstrom Group; or (ii) conflict with, or result in any breach
of, any of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default or give rise to any right of
termination, cancellation or

                                       43


acceleration, or result in the creation of any Encumbrance (other than a
Permitted Encumbrance) upon: (x) any of the Assets of the Ahlstrom Group; or (y)
under any provision of: (1) the Transaction Documents, (2) the Charter Documents
of Ahlstrom Corp, Ahlstrom Holdings or such other Ahlstrom Group Person, as
applicable, (3) any Permit required or issued in connection with the operation
of the Ahlstrom Business or (4) any other Agreement to which it is a party or by
which the Assets of the Ahlstrom Group is or may be bound, except for such
violations, conflicts or breaches of or with respect to (x), (y) (1), (3) and
(4) above that, individually or in the aggregate, have not had, and are not
reasonably expected to have, an Ahlstrom Material Adverse Effect. Except for the
Required Competition Filings and as set forth on Schedule 7.2, neither Ahlstrom
Corp nor any relevant Person of the Ahlstrom Group has been or is required to
give any notice to, obtain the consent of or make any filing with, any
Governmental Authority or any other Person, or obtain any material Permit, in
each case for the valid execution and performance by Ahlstrom Corp, Ahlstrom
Holdings or any other Ahlstrom Group Person of the Transaction Documents to
which it is a party.

         7.3      OWNERSHIP OF AHLSTROM HOLDING COMPANIES AND AHLSTROM OPERATING
COMPANIES

                  (a) Schedule 7.3 lists: (i) the authorized, issued and
outstanding shares of capital stock or equity interests of each of the Ahlstrom
Holding Companies and the Ahlstrom Operating Companies; (ii) the record and
beneficial holders of the authorized, issued and outstanding shares of capital
stock or equity interests of each of the Ahlstrom Holding Companies and the
Ahlstrom Operating Companies; and (iii) the number of shares or units, and
percentage of shares or units, of capital stock or equity interests of each such
holder. Other than as set forth on Schedule 7.3, Ahlstrom Corp has no
Affiliates, and no equity investment or other interest in any Person, engaged in
any aspect of the core/tube and core board business in the Territory.

                  (b) Except as set forth on Schedule 7.3, Ahlstrom Corp is, or
will be immediately prior to the Closing, the lawful direct or indirect record
and beneficial owner of all the shares of capital stock of, or other ownership
interests in, each of the Ahlstrom Holding Companies and the Ahlstrom Operating
Companies, and has good and marketable title to such shares of capital stock or
ownership interests, free and clear of all Encumbrances (other than Permitted
Encumbrances). Except as set forth on Schedule 7.3, there are no: (i)
outstanding subscriptions, preemptive rights, warrants, calls or options to
acquire, or instruments convertible into or exchangeable for, or Agreements or
understandings with respect to the sale or issuance of, shares of capital stock
or ownership interest of any of the Ahlstrom Holding Companies or the Ahlstrom
Operating Companies; (ii) Encumbrances (other than Permitted Encumbrances),
rights of first refusal, rights of first offer, proxies, voting trusts, or
voting Agreements with respect to the sale, issuance or

                                       44


voting of any shares of capital stock or ownership interest of any of the
Ahlstrom Holding Companies or the Ahlstrom Operating Companies (whether
outstanding or issuable upon the conversion, exchange or exercise of outstanding
securities); or (iii) obligations to redeem, repurchase or otherwise acquire
shares of capital stock or ownership interest of any of the Ahlstrom Holding
Companies or the Ahlstrom Operating Companies, in each of (i), (ii) or (iii)
above, pursuant to any Law (other than any limitations or restrictions on
Transferability under any applicable securities Laws), any Charter Document of
any of the Ahlstrom Holding Companies or the Ahlstrom Operating Companies or any
Agreement to which any of the Ahlstrom Holding Companies or the Ahlstrom
Operating Companies is a party or may be bound.

                  (c) All shares of capital stock of, or other ownership
interests in, the Ahlstrom Holding Companies and the Ahlstrom Operating
Companies that are indirectly held by Ahlstrom Corp have been, or upon their
issuance on or prior to the Closing Date will be, duly authorized, validly
issued, outstanding and fully paid in (and such capital payments have not been
paid back).

                  (d) None of the Ahlstrom Holding Companies or the Ahlstrom
Operating Companies is a party to a company agreement (Unternehmensvertrag
within the meaning of the German Stock Corporation Act), except for those
agreements disclosed in Schedule 7.3 which will be validly terminated with
effect prior to or as of the Closing Date.

         7.4      BANKRUPTCY

                  No Ahlstrom Holding Company or Ahlstrom Operating Company is
involved in any Proceeding by or against it as a debtor before any Governmental
Authority under any insolvency, restructuring or debtors' relief act, or for the
appointment of a trustee, receiver, liquidator, assignee, sequestrator or other
similar official, or under any similar Law, for any part of its Assets.

         7.5      DISTRIBUTIONS

                  Except as contemplated by the Ahlstrom Reorganization, no
Distribution has been made since December 31, 2003 by or to any of the Ahlstrom
Holding Companies or the Ahlstrom Operating Companies.

         7.6      EMPLOYEE REMUNERATION

                  Schedule 7.6 lists the aggregate annual remuneration,
including, without limitation, bonuses and fringe benefits of each employee,
manager and director of each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies (other than Karhula Services and AT-Spiral) due and accrued
for the

                                       45


first quarter of the current fiscal year and paid in the most recently completed
fiscal year.

         7.7      FINANCIAL STATEMENTS

                  (a) Schedule 7.7 contains true, correct and complete copies of
the following (the "AHLSTROM FINANCIAL STATEMENTS"):

                           (i)      The unaudited consolidated balance sheet and
                                    profit and loss account of the Ahlstrom
                                    Holding Companies and the Ahlstrom Operating
                                    Companies as of December 31, 2003 and for
                                    the 12-month period then ended; and

                           (ii)     The pro forma unaudited consolidated balance
                                    sheet and profit and loss account of the
                                    Ahlstrom Holding Companies and the Ahlstrom
                                    Operating Companies as of December 31, 2003
                                    and for the 12-month period then ended,
                                    which balance sheet and profit and loss
                                    account shall reflect the results of the
                                    consummation of the transactions
                                    contemplated by the China Purchase Agreement
                                    as if such transactions were completed as of
                                    December 31, 2003.

                  (b) The Ahlstrom Financial Statements, together with the notes
thereto: (i) have been prepared in accordance with Ahlstrom Accounting
Principles, Applied on a Consistent Basis; (ii) have been prepared in accordance
with the books and records of each of the Ahlstrom Holding Companies and the
Ahlstrom Operating Companies, which books and records have been properly
maintained; and (iii) present fairly the financial condition and results of
operations of the Ahlstrom Holding Companies and Ahlstrom Operating Companies on
a consolidated basis, as of the date thereof and for the period covered thereby;
provided, however, that the Ahlstrom Financial Statements do not contain all
footnotes required under Ahlstrom Accounting Principles. Since December 31,
2003, there has been no change in any accounting principle, procedure or
practice followed by the Ahlstrom Holding Companies and the Ahlstrom Operating
Companies or in the method of applying such principle, procedure or practice.

         7.8      ABSENCE OF UNDISCLOSED LIABILITIES

                  No Ahlstrom Holding Company or Ahlstrom Operating Company has
any Liabilities, except: (i) Liabilities as set forth in the Ahlstrom Financial
Statements; (ii) Liabilities that need not be shown on the balance sheet under
Ahlstrom Accounting Principles and that arose in the Ordinary Course of
Business; (iii) Liabilities arising in the Ordinary Course of Business since
December 31, 2003;

                                       46


(iv) Liabilities set forth on Schedule 7.8; or (v) Liabilities which are not,
and are not reasonably expected to become, material to the Ahlstrom Business.

         7.9      ABSENCE OF CHANGES

                  Except as set forth on Schedule 7.9 or as provided or
contemplated by the Transaction Documents (including, without limitation, as
contemplated by the Ahlstrom Reorganization), since December 31, 2003, each of
the Ahlstrom Holding Companies, the Ahlstrom Operating Companies and the
Ahlstrom Business has been operated in the Ordinary Course of Business and there
has not been:

                  (a) any event or condition, or any material transaction or
Agreement, which, individually or in the aggregate, has had, or is reasonably
expected to have, an Ahlstrom Material Adverse Effect;

                  (b) any act, omission of any act, activity or transaction, or
incurrence of Liability (by conduct or otherwise), or any damage, destruction or
Loss, whether or not covered by insurance, which, individually or in the
aggregate, has had, or is reasonably expected to have, an Ahlstrom Material
Adverse Effect;

                  (c) any issuance of any shares or ownership interests or any
options, warrants or other rights to subscribe for or purchase any of its shares
or ownership interests or any securities convertible into or exchangeable for
its shares or ownership interests by any Ahlstrom Holding Company or Ahlstrom
Operating Company;

                  (d) split, reclassification or other change in or of any of
the shares or ownership interests of any Ahlstrom Holding Company or Ahlstrom
Operating Company;

                  (e) amendment of the Charter Documents of any Ahlstrom Holding
Company or Ahlstrom Operating Company;

                  (f) any increase in, or prepayment of, the compensation
payable, or to become payable, by any Ahlstrom Holding Company or Ahlstrom
Operating Company to any of its directors, officers, managing directors,
managers, employees or agents, or enter into any bonus, insurance, pension or
other benefit plan, payment or arrangement for or with any of such directors,
officers, managing directors, managers, employees or agents, other than normal
salary increases in the Ordinary Course of Business;

                  (g) any lay-offs with respect to a significant part of the
workforce of any Ahlstrom Holding Company or Ahlstrom Operating Company;

                                       47


                  (h) any incurrence of any Indebtedness, including Intercompany
Debt (other than Indebtedness incurred in the Ordinary Course of Business on
reasonable arms length terms), or direct or indirect provision of a Guarantee,
or any agreement to provide a Guarantee, or Indebtedness of any other Person;

                  (i) any cancellation of, or material change to, Indebtedness
owing to any Ahlstrom Holding Company or Ahlstrom Operating Company from any
Person or any Claims which any Ahlstrom Holding Company or Ahlstrom Operating
Company may possess, or any waiver or release of any material rights (other than
in the Ordinary Course of Business);

                  (j) any placement, or allowance to place, an Encumbrance
(other than a Permitted Encumbrance) on any Assets of any Ahlstrom Holding
Company or Ahlstrom Operating Company;

                  (k) any change in any method of accounting or accounting
practice or policy of any Ahlstrom Holding Company or Ahlstrom Operating
Company, except as required by Ahlstrom Accounting Principles, including,
without limitation, any change in its policies with respect to the payment of
accounts payable or other current Liabilities or the collection of accounts
receivable, including, without limitation, any acceleration or deferral of the
payment or collection thereof, as applicable;

                  (l) any Transfer of Intellectual Property (other than in the
Ordinary Course of Business) from or to any Ahlstrom Holding Company or Ahlstrom
Operating Company;

                  (m) any Transfer of a material portion of the Assets of any
Ahlstrom Holding Company or Ahlstrom Operating Company, or scrapping of a
material portion of the Assets of any Ahlstrom Holding Company or Ahlstrom
Operating Company as obsolete;

                  (n) any material change in the general manner in which any
Ahlstrom Holding Company or Ahlstrom Operating Company markets its products or
services;

                  (o) any commitments for capital expenditures of any Ahlstrom
Holding Company or Ahlstrom Operating Company in excess of EUR1,000,000 per
occurrence or EUR5,000,000 in the aggregate;

                  (p) any violation of any material Law or material Order; or

                  (q) any loan or advance to any members, stockholders or equity
holders, or officers, directors, managing directors, managers or to any other
Person of any Ahlstrom Holding Company or Ahlstrom Operating Company.

                                       48


         7.10     OUTSTANDING BORROWINGS; INTERCOMPANY DEBT

                  Schedule 7.10 lists: (i) the amount of principal, interest and
other obligations of all Outstanding Borrowings and Intercompany Debt of each
Ahlstrom Holding Company and each Ahlstrom Operating Company as of December 31,
2003; (ii) the Encumbrances that relate to such Outstanding Borrowings and
Intercompany Debt; (iii) the name of each lender or party thereof; and (iv) the
amount of any unfunded commitments available in connection with such Outstanding
Borrowings and Intercompany Debt.

         7.11     RELATED PARTY TRANSACTIONS

                  Except as set forth on Schedule 7.11, and except for: (i)
compensation and payment of reimbursable expenses incurred in the Ordinary
Course of Business to regular employees of any Ahlstrom Holding Company or
Ahlstrom Operating Company; (ii) any individual amount not exceeding EUR100,000
per year; or (iii) sales of products in the Ordinary Course of Business on
arms-length terms, no current or former Affiliate of any Ahlstrom Holding
Company or Ahlstrom Operating Company, is now, or has been since December 31,
2003: (x) a party to any transaction or Agreement with any Ahlstrom Holding
Company or Ahlstrom Operating Company; (y) Indebted to any Ahlstrom Holding
Company or Ahlstrom Operating Company; or (z) the direct or indirect owner of an
interest in any Person which is a competitor, supplier or customer of any
Ahlstrom Holding Company or Ahlstrom Operating Company (other than
non-affiliated holdings in publicly held companies), nor, to the Actual
Knowledge of Ahlstrom Corp, does any such Person receive income from any source
other than any Ahlstrom Holding Company or Ahlstrom Operating Company which
should properly accrue to any Ahlstrom Holding Company or Ahlstrom Operating
Company. Except as set forth on Schedule 7.11, no current or former Affiliate of
any Ahlstrom Holding Company or Ahlstrom Operating Company provides a Guarantee
or is otherwise responsible for any Liability (including Indebtedness) of any
Ahlstrom Holding Company or Ahlstrom Operating Company.

         7.12     COMPLIANCE WITH LAWS

                  (a) Except as disclosed on Schedule 7.12, each of the Ahlstrom
Holding Companies and Ahlstrom Operating Companies has: (i) complied in all
material respects with, is in compliance in all material respects with and has
operated the Ahlstrom Business and maintained its Assets in compliance in all
material respects with, all Laws applicable to it and its applicable portion of
the Ahlstrom Business as currently conducted; and (ii) all Permits used or
necessary in the conduct of its applicable portion of the Ahlstrom Business,
except for such Permits the absence of which, individually or in the aggregate,
has not had, and is not reasonably expected to have, an Ahlstrom Material
Adverse Effect. Such

                                       49


Permits described in clause (ii) are valid and in good standing and are in full
force and effect, no violations with respect to any thereof have occurred or are
or have been recorded and no Proceeding is pending or, to the Best Knowledge of
Ahlstrom Corp, threatened to revoke or limit any thereof.

                  (b) Schedule 7.12 contains a true, correct and complete list
of: (i) all such Permits described in paragraph (a) of this Section 7.12 (other
than Permits for Karhula Services and AT-Spiral); and (ii) all material Orders
under which each of the Ahlstrom Holding Companies and the Ahlstrom Operating
Companies (other than Orders for Karhula Services and AT-Spiral) are operating
or bound. To the Actual Knowledge of Ahlstrom Corp, there is no proposed change
in any applicable Law which would require any Ahlstrom Holding Company or
Ahlstrom Operating Company to obtain any Permits not set forth on Schedule 7.12
in order to conduct its applicable portion of the Ahlstrom Business as presently
conducted. Except as disclosed in Schedule 7.12, none of such Permits or Orders
shall be adversely affected as a result of Ahlstrom Corp's, any Ahlstrom Holding
Company's or Ahlstrom Operating Company's execution of, or the performance of
its obligations under, any Transaction Document to which it is a party, or the
consummation of the transactions contemplated hereby and thereby. No Ahlstrom
Holding Company or Ahlstrom Operating Company has received any opinion or
memorandum or legal advice from legal counsel to the effect that it is exposed,
from a legal standpoint, to any Liability or disadvantage, individually or in
the aggregate, which has had, or is reasonably expected to have, an Ahlstrom
Material Adverse Effect. To the Actual Knowledge of Ahlstrom Corp, no Ahlstrom
Holding Company or Ahlstrom Operating Company is aware of any proposed Law which
would prohibit or restrict it from, or otherwise materially adversely affect it
in, conducting its applicable portion of the Ahlstrom Business in any
jurisdiction in which it is now conducting the Ahlstrom Business.

         7.13     TAXES

                  (a) Each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies has (or, in the case of Tax Returns becoming due after the
date hereof and on or before the Closing Date, will have prior to the Closing
Date) duly filed all Tax Returns, notices and other reports or filings required
to be filed by any of the Ahlstrom Holding Companies or the Ahlstrom Operating
Companies (collectively, "AHLSTROM TAX RETURNS") on or before the Closing Date
(including, without limitation, in connection with or as a result of the
Ahlstrom Reorganization) with respect to all applicable Taxes. All such Tax
Returns are (or, in the case of returns becoming due after the date hereof,
including, without limitation, in connection with or as a result of the Ahlstrom
Reorganization, will be) true and complete in all material respects.

                                       50


                  (b) All Taxes which are required to be paid by each of the
Ahlstrom Holding Companies and the Ahlstrom Operating Companies before the
Closing Date have been or will be paid in full prior to the Closing Date and an
appropriate provision has been provided in respect of all Taxes that are not due
prior to the Closing Date and that relate to the time period through December
31, 2003 in the Ahlstrom Financial Statements.

                  (c) There is no investigation or Claim pending or, to the Best
Knowledge of Ahlstrom Corp, threatened in respect of any material Taxes for
which any of the Ahlstrom Holding Companies and the Ahlstrom Operating Companies
is, or is reasonably expected to become, liable. No Ahlstrom Holding Company or
Ahlstrom Operating Company has consented to any waivers or extensions of any
statute of limitations with respect to any taxable year of the Ahlstrom Group.

                  (d) No Ahlstrom Holding Company or Ahlstrom Operating Company
is a party to an Agreement or arrangement relating to the sharing, allocation or
payment of, indemnity or security for, Taxes, except for the Tax consolidation
Agreements (e.g., Organschaft) set forth on Schedule 7.13, which will be
terminated prior to the Closing Date.

                  (e) The execution and performance of this Contribution
Agreement and the Related Documents will not result in: (i) the imposition of
any Tax on or with respect to any Ahlstrom Holding Company or Ahlstrom Operating
Company, or their respective Assets; or (ii) the Loss by any Ahlstrom Holding
Company or Ahlstrom Operating Company of any Tax relief or Tax benefit other
than the loss of trade Tax loss carryforwards and Tax loss carryforwards or
other Tax attributes for which adequate provision has been made on the Ahlstrom
Financial Statements.

                  (f) No Ahlstrom Holding Company and no Ahlstrom Operating
Company has carried out any dealings with Affiliates on a non-arms length basis
that could be assessed by the relevant Governmental Authorities to constitute
hidden distributions of profits (verdeckte Gewinnausschuettung).

         7.14     REAL PROPERTY

                  (a) Schedule 7.14 lists all the Real Property used in the
Ahlstrom Business (the "AHLSTROM REAL PROPERTY") and specifies the owner of each
parcel thereof and sets forth a legal description for all such Real Property.
The Ahlstrom Real Property is suitable and adequate in all material respects for
the uses for which it is currently devoted. None of the Ahlstrom Holding
Companies and the Ahlstrom Operating Companies own, lease, sublease, license or
use any Real Property in the operation of the Ahlstrom Business other than the
Ahlstrom Real Property.

                                       51


                  (b) Each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies, as applicable, is the sole owner of good, valid and
marketable fee simple or comparable title to the Ahlstrom Real Property listed
in Schedule 7.14 as owned Ahlstrom Real Property and has valid and binding
rights under leases to the Ahlstrom Real Property listed in Schedule 7.14 as
leased Ahlstrom Real Property, in each case free and clear of all Encumbrances
(other than Permitted Encumbrances). Schedule 7.14 contains an accurate and
complete list of all mortgages and similar Encumbrances on the Ahlstrom Real
Property.

                  (c) All buildings, structures, fixtures and other improvements
on the Ahlstrom Real Property are: (i) in good repair, normal wear and tear
excepted, and free of material defects (latent or patent); and (ii) are suitable
and adequate in all material respects for the uses to which they are currently
devoted. All such buildings, structures, fixtures and improvements on the
Ahlstrom Real Property conform in all material respects to all material Laws.
The buildings, structures, fixtures and improvements on each parcel of Ahlstrom
Real Property lie entirely within the boundaries of such parcel of the Ahlstrom
Real Property as specified in the legal description set forth in Schedule 7.14,
and do not encroach in any material respects on any adjoining premises and no
structures of any kind encroach in any material respects on such Ahlstrom Real
Property.

                  (d) Except as set forth on Schedule 7.14: (i) none of the
Ahlstrom Real Property is subject to any material Agreement or other material
restriction of any nature whatsoever (recorded or unrecorded) preventing or
limiting in any material respects any Ahlstrom Holding Company's or Ahlstrom
Operating Company's right to convey or otherwise dispose of its interest in
same; and (ii) none of the Ahlstrom Real Property is subject to any material
Agreement or other material restriction of any nature whatsoever (recorded or
unrecorded) preventing or limiting in any material respects any Ahlstrom Holding
Company's or Ahlstrom Operating Companies' right to use it.

                  (e) No material portion of the Ahlstrom Real Property or any
building, structure, fixture or improvement thereon is the subject of, or
affected by, any condemnation or eminent domain Proceeding currently instituted
or pending, and to Ahlstrom Corp's Actual Knowledge, none of the foregoing will
be the subject of, or affected by, any such future Proceeding.

                  (f) The Ahlstrom Real Property has reasonably direct and
unobstructed access to material public roads and to reasonably adequate material
electric, gas, water, sewer and telephone lines, all of which are reasonably
adequate for the uses to which such Ahlstrom Real Property is currently devoted.

                  (g) Except as disclosed on Schedule 7.14, there are no Persons
in possession, or who have a right of possession of any portion of the Ahlstrom
Real

                                       52


Property other than the Ahlstrom Holding Companies or the Ahlstrom Operating
Companies, whether as lessees, tenants at will or otherwise.

                  (h) Schedule 7.14 contains a complete and accurate copy of all
Real Property Leases relating to the Ahlstrom Real Property. Each Real Property
Lease entered into (whether as lessor or lessee) by each of the Ahlstrom Holding
Companies or the Ahlstrom Operating Companies is: (i) valid, binding and
enforceable in all material respects against the Ahlstrom Holding Companies and
the Ahlstrom Operating Companies, as applicable; and (ii) to Ahlstrom Corp's
Actual Knowledge, is valid, binding and enforceable in all material respects
against the other parties thereto in accordance with its terms, and is in full
force and effect in all material respects.

                  (i) None of the Ahlstrom Holding Companies or the Ahlstrom
Operating Companies are in material default under, or in material breach of, or
are otherwise materially delinquent in performance under any Real Property Lease
entered into (whether as lessor or lessee) by the Ahlstrom Holding Companies or
the Ahlstrom Operating Companies, and, to Ahlstrom Corp's Actual Knowledge, no
event has occurred which, with due notice or lapse of time, or both, would
constitute such a default.

         7.15     ENVIRONMENTAL AND SAFETY

                  (a) Each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies has complied in all material respects with, and each such
company and all of the Ahlstrom Real Property is in compliance in all material
respects with, all material Environmental and Safety Requirements; and there are
no Proceedings pending or, to the Best Knowledge of Ahlstrom Corp, threatened
against any Ahlstrom Holding Company or Ahlstrom Operating Company alleging any
failure to so comply or involving any Environmental and Safety Requirement issue
with respect to Ahlstrom its past operations or any Real Property of any
Ahlstrom Holding Company or Ahlstrom Operating Company.

                  (b) No Ahlstrom Holding Company or Ahlstrom Operating Company
has any material Liability arising under any Environmental and Safety
Requirements.

                  (c) Except as set forth on Schedule 7.15, no Ahlstrom Holding
Company or Ahlstrom Operating Company has received any written notice or report
with respect to it or its Real Property regarding any: (i) actual or alleged
violation of Environmental and Safety Requirements; or (ii) actual or potential
Liability arising under Environmental and Safety Requirements, including any
investigatory, remedial or corrective obligation, in each of (i) and (ii),
during the last three calendar years.

                                       53


                  (d) No Ahlstrom Holding Company or Ahlstrom Operating Company
has assumed or undertaken any material Liability of any other Person under any
Environmental and Safety Requirements.

                  (e) No Ahlstrom Holding Company or Ahlstrom Operating Company
has treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or released any substance, or owned or operated any Real
Property in a manner that has given rise to material Liabilities of any Ahlstrom
Holding Company or Ahlstrom Operating Company pursuant to any Environmental and
Safety Requirement, including any material Liability for response costs,
corrective action costs, personal injury, property damage, natural resources
damage or attorney fees, or any investigative, corrective or remedial
obligations.

                  (f) Schedule 7.15 sets forth all environmental matters for
which a financial reserve has been made on the Ahlstrom Financial Statements and
the amount of such reserve.

         7.16     TITLE TO ASSETS

                  Except for the leased Assets listed in Schedule 7.19 and
subject to Section 7.14, each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies has, or upon consummation of the Ahlstrom Reorganization
will have at the Closing Date, good, valid and marketable title to all Assets
used in its applicable portion of the Ahlstrom Business, free and clear of all
Encumbrances (other than Permitted Encumbrances). All personal property of the
Ahlstrom Holding Companies and Ahlstrom Operating Companies is in normal
operating condition and repair, normal wear and tear excepted, and is suitable
and adequate for the uses for which it is used. All inventory of the Ahlstrom
Holding Companies and Ahlstrom Operating Companies consists of items which are
good and merchantable and of a quality and quantity presently usable and
saleable in the Ordinary Course of Business, subject to any reserves properly
reflected on the Ahlstrom Financial Statements under Ahlstrom Accounting
Principles.

         7.17     INSURANCE

                  All policies of Assets, fire, hazard, casualty, liability,
life, and other forms of insurance of any kind owned or held by, or for the
benefit of, the Ahlstrom Holding Companies and the Ahlstrom Operating Companies:
(i) are in full force and effect and, to the Best Knowledge of Ahlstrom Corp, no
grounds for termination of such policies exist; (ii) are sufficient for
compliance by each of the Ahlstrom Holding Companies and the Ahlstrom Operating
Companies with all requirements of applicable Law and of all Agreements which
require any of the Ahlstrom Holding Companies or the Ahlstrom Operating
Companies to acquire and/or maintain insurance; (iii) are valid and enforceable
against the insurer in all material

                                       54


respects; and (iv) insure against risks of the kind customarily insured against
and in amounts customarily carried by companies similarly situated and by
companies engaged in similar businesses and owning similar properties, and
provide adequate insurance coverage for the Ahlstrom Business and Assets of the
Ahlstrom Holding Companies and the Ahlstrom Operating Companies. All premium and
other payments required to be paid by, or on behalf of, each of the Ahlstrom
Holding Companies and the Ahlstrom Operating Companies pursuant to such policies
have been fully and timely made.

         7.18     INTELLECTUAL PROPERTY

                  (a) Schedule 7.18 contains a list: (i) of all Intellectual
Property owned by each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies in respect of which a registration has been granted, and in
respect of which a registration has been applied for, in each case specifying,
as applicable (A) the nature of such Intellectual Property, (B) the owner of
such Intellectual Property, (C) the jurisdictions in which such Intellectual
Property has been registered, or in which an application for registration has
been filed, and the registration or application numbers and (D) any licenses
that have been granted with respect to such Intellectual Property; and (ii) of
all licenses pursuant to which each of the Ahlstrom Holding Companies and the
Ahlstrom Operating Companies has been granted the right to use Intellectual
Property owned by another Person, in each case specifying (A) the licensor, (B)
the duration of the license and (C) the royalties payable. The Intellectual
Property listed on Schedule 7.18 is all Intellectual Property necessary to
conduct the Ahlstrom Business as currently conducted.

                  (b) Each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies: (i) owns, or has a valid license to use, all Intellectual
Property used by it in the Ordinary Course of Business in the Ahlstrom Business,
except where the failure to own, or have a valid license to use, such
Intellectual Property, individually or in the aggregate, has not had, and is not
reasonably expected to have, an Ahlstrom Material Adverse Effect; and (ii) has
made, or has had made on its behalf, all payments as and when required to
validly maintain all registrations of, its ownership of, or its license to use,
such Intellectual Property in full force and effect with any Governmental
Authority or other Person, as the case may be. To the Best Knowledge of Ahlstrom
Corp, there exist no grounds for termination of the Ahlstrom Holding Companies'
or the Ahlstrom Operating Companies' ownership rights in, or licenses to use,
the Intellectual Property referred to in the preceding sentence, in particular,
there are no pending challenges of any Intellectual Property owned by an
Ahlstrom Holding Company or an Ahlstrom Operating Company, and to Ahlstrom
Corp's Best Knowledge, no such challenges are threatened.

                                       55


                  (c) Other than the restrictions contained in the License
Agreement, dated February 16, 2000, between Ahlstrom Alcore Oy, on the one hand,
and Selectube and Abzac Inc., on the other hand, no Ahlstrom Holding Company or
Ahlstrom Operating Company has granted an exclusive license with respect to any
Intellectual Property used in the Ahlstrom Business to any third Person (other
than another Ahlstrom Holding Company or Ahlstrom Operating Company).

                  (d) No Ahlstrom Holding Company or Ahlstrom Operating Company
has any Actual Knowledge of, nor has it received any notice to the effect, that
any product that any Ahlstrom Holding Company or Ahlstrom Operating Company
sells or that any service any Ahlstrom Holding Company or Ahlstrom Operating
Company renders, or that the manufacture, distribution, marketing, sale or use
of any such product or service, may or is Claimed to infringe any Intellectual
Property right of another.

         7.19     LEASED PERSONAL PROPERTY

                  Schedule 7.19 lists every lease, sublease and Agreement
involving aggregate annual lease payments exceeding EUR30,000 per lease, per
year (net of ancillary costs) under which any of the Ahlstrom Holding Companies
and the Ahlstrom Operating Companies is lessee or lessor of any material Asset,
or holds, manages or operates any material Asset owned by any third party, or
under which any material Asset owned by any of the Ahlstrom Holding Companies
and Ahlstrom Operating Companies is held, operated or managed by a third party.
Each of the Ahlstrom Holding Companies and the Ahlstrom Operating Companies is
the owner and holder of all rights under leases used by it in the Ahlstrom
Business. Each such lease, sublease and other Agreement is in full force and
effect and constitutes a legal, valid and binding obligation of, and is legally
enforceable against, the respective Parties and grants the leasehold interest it
purports to grant free and clear of all Encumbrances (other than Permitted
Encumbrances). Each of the Ahlstrom Holding Companies and Ahlstrom Operating
Companies has in all material respects performed all obligations thereunder
required to be performed by any of them to date. No Party is in default in any
material respect under any of the foregoing, and there has not occurred any
event which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a material default.

         7.20     CERTAIN MATERIAL AGREEMENTS

                  (a) Subject to Section 7.14, except for the Agreements set
forth on Schedule 7.20 ("AHLSTROM MATERIAL AGREEMENTS"), no Ahlstrom Holding
Company or Ahlstrom Operating Company is a party to any written or oral:

                                       56


                           (i)      Agreement for the employment or retention
                                    of, whether on a full-time, part-time,
                                    consulting or other basis, or understanding
                                    with, any of the directors, top five
                                    officers, managing directors, general
                                    managers or country managers of the Ahlstrom
                                    Business, any Ahlstrom Holding Company or
                                    Ahlstrom Operating Company;

                           (ii)     Agreement relating to Indebtedness or to the
                                    mortgaging, pledging or otherwise placing an
                                    Encumbrance (other than a Permitted
                                    Encumbrance) on any Asset of the Ahlstrom
                                    Business, or any Ahlstrom Holding Company or
                                    Ahlstrom Operating Company, with a fair
                                    market value in excess of EUR50,000;

                           (iii)    Agreement preventing or otherwise
                                    restricting the right of any Ahlstrom
                                    Holding Company or Ahlstrom Operating
                                    Company to make or receive Distributions;

                           (iv)     Agreement involving the sale of the accounts
                                    receivable of any Ahlstrom Holding Company
                                    or Ahlstrom Operating Company to any other
                                    Person;

                           (v)      Agreement with respect to the investing of
                                    funds, including, without limitation, any
                                    hedging Agreement;

                           (vi)     Agreement under which any Ahlstrom Holding
                                    Company or Ahlstrom Operating Company is the
                                    lessor of, or permits any third Person to
                                    hold or operate, any real or personal
                                    property owned or controlled by any Ahlstrom
                                    Holding Company or Ahlstrom Operating
                                    Company in excess of EUR30,000;

                           (vii)    assignment, license, indemnification or
                                    other Agreement with respect to any form of
                                    intangible property with Third Parties,
                                    including, without limitation, any
                                    Intellectual Property;

                           (viii)   Agreement or group of related Agreements
                                    with the same Person for the sale of Assets
                                    or services which generated in excess of
                                    EUR100,000 in revenues in the most recent
                                    12-month period or is reasonably expected to
                                    generate in excess of EUR100,000 in revenues
                                    in any 12-month period ending after the date
                                    hereof;

                                       57


                           (ix)     non-competition agreement which limits any
                                    Ahlstrom Holding Company or Ahlstrom
                                    Operating Company from freely engaging in
                                    any business anywhere in the world;

                           (x)      Agreement relating to the purchase,
                                    distribution, marketing, advertising or sale
                                    of any Ahlstrom Holding Company's or
                                    Ahlstrom Operating Company's or any other
                                    Person's products or services (other than
                                    Agreements entered into in the Ordinary
                                    Course of Business); or

                           (xi)     other than Agreements described and
                                    disclosed in subsections (i) through (x)
                                    above, Agreement pursuant to which any
                                    Ahlstrom Holding Company or Ahlstrom
                                    Operating Company has Liabilities or is
                                    required to make or give, or entitled to
                                    receive, aggregate payments or other value
                                    in excess of EUR100,000.

                  (b) All Ahlstrom Material Agreements are, or following the
Ahlstrom Reorganization will be, an Asset of an Ahlstrom Holding Company or an
Ahlstrom Operating Company, and no other Ahlstrom Group company is, or will be
following the Ahlstrom Reorganization, a party to any such Ahlstrom Material
Agreement.

                  (c) Except as specifically disclosed in Schedule 7.20, each of
the Ahlstrom Holding Companies and Ahlstrom Operating Companies has performed in
all material respects all obligations required to be performed by it, and is not
in default under or in breach of, nor in receipt of any Claim of default or
breach under, any Ahlstrom Material Agreement to which it is a party or by which
any of its Assets may be bound, and, to the Actual Knowledge of Ahlstrom Corp,
no event has occurred which with the passage of time or the giving of notice or
both would result in such a material default or breach under any such Ahlstrom
Material Agreement. To the Actual Knowledge of Ahlstrom Corp, no other party to
any Ahlstrom Material Agreement to which any of the Ahlstrom Holding Companies
or the Ahlstrom Operating Companies is a party, or by which any of their Assets
may be bound, is in material default under or in breach of any Ahlstrom Material
Agreements, and no event has occurred which with the passage of time or giving
of notice or both would result in a material default or breach by such other
party under any Ahlstrom Material Agreement. There has been made available to
Ahlstrom Corp in the Ahlstrom Data Room: (i) a true and complete copy of each
written Ahlstrom Material Agreement, together with all amendments, waivers or
other changes thereto; and (ii) a true and complete description of the material
terms of all oral Ahlstrom Material Agreements.

                                       58


         7.21     LITIGATION; DISPUTES

                  Except as (x) set forth on Schedule 7.21 and (y) for matters
which have not resulted, and could not reasonably be expected to result, in a
fine or other award of damages in excess of EUR100,000, there are no: (i)
Proceedings pending (for which proper service has been made) against or
involving any of the Ahlstrom Holding Companies or the Ahlstrom Operating
Companies, whether at law or in equity, whether civil or criminal in nature or
by or before any Governmental Authority; (ii) customer Claims of any nature
against any of the Ahlstrom Holding Companies or the Ahlstrom Operating
Companies; or (iii) Orders of any Governmental Authority with respect to or
involving any of the Ahlstrom Holding Companies and Ahlstrom Operating
Companies, nor, in the case of (i), (ii) or (iii), to the Best Knowledge of
Ahlstrom Corp, does there exist any basis for any such Proceeding, Claim or
Order, or has any such Proceeding, Claim or Order been threatened.

         7.22     LABOR RELATIONS

                  (a) Except as set forth on Schedule 7.22, there are no
strikes, work stoppages, or other disputes pending or, to the Best Knowledge of
Ahlstrom Corp, threatened, or reasonably anticipated between any of the Ahlstrom
Holding Companies or the Ahlstrom Operating Companies and: (i) any current or
former employees of any of the Ahlstrom Holding Companies or the Ahlstrom
Operating Companies involving amounts, individually or in the aggregate,
exceeding EUR100,000; (ii) any union, employee representatives or other
collective bargaining unit representing employees of the Ahlstrom Holding
Companies or the Ahlstrom Operating Companies; or (iii) any social security
Governmental Authority.

                  (b) No Ahlstrom Holding Company or Ahlstrom Operating Company
has, or is obligated with respect to, any stock option, stock bonus, phantom
stock plan, scheme or similar arrangement. Any unfunded pension Liability
arrangements for present or former employees, directors, officers, managing
directors, managers or workers of each of the Ahlstrom Holding Companies and the
Ahlstrom Operating Companies is covered by adequate reserves in the Ahlstrom
Financial Statements, and any other pension Liability is fully funded and
complies with all statutory and regulatory funding obligations in respect of all
categories of member.

                  (c) No Ahlstrom Holding Company or Ahlstrom Operating Company
has any consulting arrangements with their respective directors.

                  (d) Each of the Ahlstrom Holding Companies and the Ahlstrom
Operating Companies has complied, and is in compliance with, in all material
respects, all Laws relating to employment, workers, the workplace, the
termination

                                       59


of employment or income tax, wage withholding tax or social security matters,
including, without limitation, provisions relating to wages, hours, collective
bargaining, employee representation, consultation, safety and health, work
authorization, equal employment opportunity, discrimination, immigration,
withholding, unemployment compensation, worker's compensation, employee privacy
and right to know and social security contributions.

                  (e) Except as set forth in Schedule 7.22 and without limiting
the generality of the foregoing, no Ahlstrom Holding Company or Ahlstrom
Operating Company is a party to any existing Agreement with an employee,
officer, director, managing director, manager or agent which in case of
termination could result in compensation payments in an amount exceeding
EUR50,000.

                  (f) The consummation of the transactions contemplated in this
Contribution Agreement (including the Ahlstrom Reorganization) will not cause
any Ahlstrom Holding Company or Ahlstrom Operating Company to incur or suffer
any Liability relating to, or obligation to pay, severance, termination, social
security or other payments (including interest, penalties and charges relating
thereto) to any Person.

                  (g) Except as set forth in Schedule 7.22, or as imposed by
applicable Law, no Ahlstrom Holding Company or Ahlstrom Operating Company is a
party to an Agreement or arrangement with any union, works council, other
employee representation body or employee representatives, limiting its right to
consummate the restructurings contemplated by the Business Plan, including the
closure of any plants or other facilities, relocation or termination of
employees.

         7.23     INVESTMENT REPRESENTATIONS

                  Ahlstrom Holding is acquiring the Ahlstrom Shares hereunder,
for its own account, for investment and not with a view to the distribution
thereof in violation of applicable securities Laws.

         7.24     SUBSIDIES

                  Schedule 7.24 contains a complete and correct list of all
subsidies in an amount of EUR100,000 or more granted or awarded to any of the
Ahlstrom Holding Companies or Ahlstrom Operating Companies or any of their
predecessors during the last five calendar years in respect of the relevant
portion of the Ahlstrom Business. Neither the Transaction (including the
Ahlstrom Reorganization) nor the measures contemplated under the Business Plan
will result in an obligation to repay (or lose the award) of any such subsidies.

                                       60


         7.25     COMPLETENESS OF CONTRIBUTION

                  Following the Ahlstrom Reorganization, all Assets, Agreements
and employees used in the conduct of the Ahlstrom Business as it is presently
conducted will have been Transferred to the Ahlstrom Holding Companies and the
Ahlstrom Operating Companies.

8.       CONDITIONS TO OBLIGATION OF SONOCO PRODUCTS

         The obligation of Sonoco Products to proceed with the Closing, and to
consummate the transactions contemplated hereby and by each Related Document, is
subject to the fulfillment or waiver by Sonoco Products (to the extent such
condition can be waived), at or prior to the Closing, of each of the following
conditions precedent:

         8.1      REPRESENTATIONS AND WARRANTIES

                  The representations and warranties given by Ahlstrom Corp and
any other Ahlstrom Group Person party to a Transaction Document, to Sonoco
Products or any other Sonoco Group Person in this Contribution Agreement and in
each Related Document, as the case may be, shall be true and correct in all
respects on the date hereof and at and as of the Closing Date (except for any
changes expressly contemplated or permitted hereby), as if made at and as of
such date (except for those representations and warranties which address matters
only as of a particular date, which representations and warranties shall be true
and correct as of such date); provided, however, that the condition precedent
provided in this Section 8.1 shall be deemed to be met unless the failure of the
representations and warranties given by Ahlstrom Corp and any other Ahlstrom
Group Person party to a Transaction Document to be so true and correct results
in, has resulted in, or could reasonably be expected to result in, individually
or in the aggregate, a diminution in value of, Indebtedness of, or a Claim or
Loss applicable to, the Ahlstrom Business in excess of EUR8,500,000.

         8.2      PERFORMANCE

                  Each of Ahlstrom Corp and its Affiliates shall have performed
and complied in all material respects with all of its obligations, agreements
and covenants required by this Contribution Agreement to be performed or
complied with by Ahlstrom Corp and its Affiliates on or prior to the Closing
Date, including, without limitation, its obligations, agreements and covenants
set forth in Section 3.2, which shall have been performed in all respects.

                                       61


         8.3      LEGAL PROCEEDINGS

                  There shall not be: (i) any Order of any nature issued by a
Governmental Authority with competent jurisdiction directing that the
transactions provided for herein or any aspect of them not be consummated as
herein provided; or (ii) any Proceeding pending wherein an unfavorable Order
would prevent the performance of this Contribution Agreement or any of the
Related Documents, or the consummation of any aspect of the transactions or
events contemplated hereby or thereby, declare unlawful any aspect of the
transactions or events contemplated by this Contribution Agreement or any of the
Related Documents or cause any aspect of the transactions contemplated by this
Contribution Agreement or any of the Related Documents to be rescinded.

         8.4      CHANGE IN LAW

                  As of the Closing Date, there shall not have been any change
in any Law that would prevent the consummation of the transactions contemplated
by this Contribution Agreement or any of the Related Documents.

         8.5      ABSENCE OF AHLSTROM MATERIAL ADVERSE EFFECT

                  During the Interim Period, there shall not have occurred any
Ahlstrom Material Adverse Effect, or any other material adverse change in the
Assets, rights, Liabilities, financial condition or affairs of the Ahlstrom
Business (other than (i) changes or conditions affecting the paper core/tube and
core board industry generally, (ii) changes in macro-economic, regulatory or
political conditions generally or (iii) changes resulting from a decision of a
customer of the Ahlstrom Business not to continue to conduct business with any
Ahlstrom Holding Company or Ahlstrom Operating Company), that, individually or
in the aggregate, have resulted, or are reasonably expected to result, in a
diminution in value of, Indebtedness of, or a Claim or Loss applicable to, the
Ahlstrom Business in excess of EUR8,500,000.

         8.6      REQUIRED CONSENTS

                  All of the Required Consents shall have been obtained and be
in full force and effect on the Closing Date.

         8.7      REQUIRED COMPETITION FILINGS

                  All of the Required Competition Filings shall have been made
or given and approved, authorized, cleared or exempted by the applicable
Governmental Authorities.

                                       62


         8.8      AHLSTROM REORGANIZATION

                  The Ahlstrom Reorganization shall have been completed pursuant
to Section 5.1(b).

         8.9      CHINA PURCHASE

                  The transaction contemplated by the China Purchase Agreement
shall have been simultaneously consummated with the transactions contemplated
hereby.

         8.10     WORKS COUNCIL CONSULTATION

                  The contribution of the paper plant located at Aalten, The
Netherlands to the Joint Venture (the "AALTEN CONTRIBUTION") by way of
contribution by Sonoco Luxco to the Joint Venture of the shares it owns in
Sonoco Netherlands BV, shall not be consummated until Sonoco Netherlands BV
shall have complied with its obligations under Article 24 of the Works Council
Act of The Netherlands (the "WOR ACT"), and the works council of Sonoco
Netherlands BV shall have been informed about the Joint Venture and the
consequences thereof.

9.       CONDITIONS TO OBLIGATION OF AHLSTROM CORP

         The obligation of Ahlstrom Corp to proceed with the Closing, and to
consummate the transactions contemplated hereby and by each Related Document, is
subject to the fulfillment or waiver by Ahlstrom Corp (to the extent such
condition can be waived), at or prior to the Closing, of each of the following
conditions precedent:

         9.1      REPRESENTATIONS AND WARRANTIES

                  The representations and warranties given by Sonoco Products,
and any other Sonoco Group Person party to a Transaction Document, to Ahlstrom
Corp or any other Ahlstrom Group Person in this Contribution Agreement and in
each Related Document, as the case may be, shall be true and correct in all
respects on the date hereof and at and as of the Closing Date (except for any
changes expressly contemplated or permitted hereby), as if made at and as of
such date (except for those representations and warranties which address matters
only as of a particular date, which representations and warranties shall be true
and correct as of such date); provided, however, that the condition precedent
provided in this Section 9.1 shall be deemed to be met unless the failure of the
representations and warranties given by Sonoco Products and any other Sonoco
Group Person party to a Transaction Document to be so true and correct results
in, has resulted in, or could reasonably be expected to result in, individually
or in the aggregate, a diminution in

                                       63


value of, Indebtedness of, or a Claim or Loss applicable to, the Sonoco Business
in excess of EUR8,500,000.

         9.2      PERFORMANCE

                  Each of Sonoco Products and its Affiliates shall have
performed and complied in all material respects with all of its obligations,
agreements and covenants required by this Contribution Agreement to be performed
or complied with by Sonoco Products and its Affiliates on or prior to the
Closing Date, including, without limitation, its obligations, agreements and
covenants set forth in Section 3.2, which shall have been performed in all
respects.

         9.3      LEGAL PROCEEDINGS

                  There shall not be: (i) any Order of any nature issued by a
Governmental Authority with competent jurisdiction directing that the
transactions provided for herein or any aspect of them not be consummated as
herein provided; or (ii) any Proceeding pending wherein an unfavorable Order
would prevent the performance of this Contribution Agreement or any of the
Related Documents or the consummation of any aspect of the transactions or
events contemplated hereby or thereby, declare unlawful any aspect of the
transactions or events contemplated by this Contribution Agreement or any of the
Related Documents or cause any aspect of the transactions contemplated by this
Contribution Agreement or any of the Related Documents to be rescinded.

         9.4      CHANGE IN LAW

                  As of the Closing Date, there shall not have been any change
in any Law that would prevent the consummation of the transactions contemplated
by this Contribution Agreement or any of the Related Documents.

         9.5      ABSENCE OF SONOCO MATERIAL ADVERSE EFFECT

                  During the Interim Period, there shall not have occurred any
Sonoco Material Adverse Effect, or any other material adverse change in the
Assets, rights, Liabilities, financial condition or affairs of the Sonoco
Business (other than (i) changes or conditions affecting the paper core/tube and
core board industry generally, (ii) changes in macro-economic, regulatory or
political conditions generally or (iii) changes resulting from a decision of any
customer of the Sonoco Business not to continue to conduct business with any
Sonoco Holding Company or Sonoco Operating Company), that, individually or in
the aggregate, have resulted, or are reasonably expected to result, in a
diminution in value of, Indebtedness of, or a Claim or Loss applicable to, the
Sonoco Business in excess of EUR8,500,000.

                                       64


         9.6      REQUIRED CONSENTS

                  All of the Required Consents shall have been obtained and be
in full force and effect on the Closing Date.

         9.7      REQUIRED COMPETITION FILINGS

                  All of the Required Competition Filings shall have been made
or given and approved, authorized, cleared or exempted by the applicable
Governmental Authorities.

         9.8      SONOCO REORGANIZATION

                  The Sonoco Reorganization shall have been completed pursuant
to Section 5.1(a).

         9.9      CHINA PURCHASE
                  The transaction contemplated by the China Purchase Agreement
shall have been simultaneously consummated with the transactions contemplated
hereby.

         9.10     WORKS COUNCIL CONSULTATION

                  The Aalten Contribution shall not be consummated until Sonoco
Netherlands BV shall have complied with its obligations under the WOR Act, and
the works council of Sonoco Netherlands BV shall have been informed about the
Joint Venture and the consequences thereof.

10.      SURVIVAL; INDEMNIFICATION; REMEDIES

         10.1     SURVIVAL OF REPRESENTATIONS AND WARRANTIES

                  (a) Claims for breach of the representations and warranties
contained in this Contribution Agreement and Section 5 of the SDI IP License
Agreement shall survive the Closing until (verjaehren) 24 months after the
Closing Date; provided, however, that: (i) Claims for breach of the
representations and warranties contained in Sections 6.1, 6.2, 6.3, 7.1, 7.2 and
7.3 of this Contribution Agreement shall survive the Closing until ten years
after the Closing Date; (ii) Claims for breach of the representations and
warranties contained in Sections 6.15 and 7.15 of this Contribution Agreement
shall survive the Closing until seven years after the Closing Date; and (iii)
Claims for breach of the representations and warranties contained in Sections
6.13 and 7.13 of this Contribution Agreement shall survive the Closing until the
ninetieth day after the expiration of the respective assessment period
applicable to the matters covered thereby. The covenants and

                                       65


other agreements of the Parties contained in this Contribution Agreement shall
survive the Closing Date until they are otherwise terminated by their terms. The
period from the Closing until the date upon which any representation, warranty,
covenant or agreement contained herein shall terminate is referred to as the
"SURVIVAL PERIOD."

                  (b) No Sonoco Indemnified Person or Ahlstrom Indemnified
Person shall be entitled to make any Claim with respect to such representations,
warranties, covenants or agreements after the expiration of the applicable
Survival Period, if any, except that each Claim initiated by a Sonoco
Indemnified Person or Ahlstrom Indemnified Person, as the case may be, prior to
the expiration of the applicable Survival Period shall survive until it is
settled or resolved. In addition: (i) no Sonoco Indemnified Person shall be
entitled to make any Claim with respect to representations, warranties,
covenants or agreements of Ahlstrom Corp or any other Ahlstrom Group Person at
any time after Sonoco Products ceases, directly or indirectly, to be a
shareholder of the Joint Venture; and (ii) no Ahlstrom Indemnified Person shall
be entitled to make any Claim with respect to representations, warranties,
covenants or agreements of Sonoco Products or any Sonoco Group Person at any
time after Ahlstrom Corp ceases, directly or indirectly, to be a shareholder of
the Joint Venture.

                  (c) The Representations and warranties contained in this
Contribution Agreement and Section 5 of the SDI IP License Agreement shall
survive the execution of the Transaction Documents and the consummation of the
transactions contemplated hereby and all indemnification rights hereunder shall
survive the execution of the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby until the applicable Survival
Period.

         10.2     AGREEMENT OF SONOCO PRODUCTS TO INDEMNIFY

                  Sonoco Products shall indemnify, defend and hold harmless the
Ahlstrom Indemnified Persons from and against all Losses in connection with,
related to or arising out of:

                  (a) the untruth, inaccuracy or breach of any representation or
warranty given or made by Sonoco Products or any Sonoco Group Person pursuant to
this Contribution Agreement or in Section 5 of the SDI IP License Agreement;

                  (b) any nonfulfillment or breach of any covenant or agreement
on the part of Sonoco Products or any Sonoco Group Person contained in this
Contribution Agreement;

                  (c) any Claim by any third party (including Governmental
Authorities) against or affecting the Joint Venture or any Sonoco Holding
Company or Sonoco Operating Company which, if successful, would give rise to or
relate to a

                                       66


breach of: (i) any of the representations or warranties on the part of Sonoco
Products or any Sonoco Group Person referred to in paragraph (a) above at the
time made; or (ii) covenants or agreements of Sonoco Products or any Sonoco
Group Person referred to in paragraph (b) above;

                  (d) any Claim by any third party (including Governmental
Authorities) or any incurrence of any Loss by any Ahlstrom Indemnified Person
for, or that arose from or in connection with, or is directly or indirectly
related to, any Sonoco Excluded Asset or Liability;

                  (e) any Losses sustained or suffered by any Ahlstrom
Indemnified Person, including Claims sustained or suffered by any Ahlstrom
Indemnified Person, (whether by, against or relating to Sonoco Products or any
other Person, including without limitation a Governmental Authority) and
arising, directly or indirectly, from the Sonoco Reorganization including,
without limitation, any Tax or employment restructuring indemnities arising in
connection with or triggered, directly or indirectly, by the Sonoco
Reorganization and to be borne by the Joint Venture or any of its Affiliates;

                  (f) without prejudice to Section 6.3(d), the obligation of a
Sonoco Holding Company or a Sonoco Operating Company to reimburse Losses of a
Sonoco Group company or to Transfer its profits to a Sonoco Group company under
a company agreement (Unternehmensvertrag within the meaning of the German Stock
Corporation Act), except if such Sonoco Group company is a Sonoco Holding
Company or a Sonoco Operating Company, or if (and to the extent that) such
obligation is reflected in the Sonoco Financial Statements;

                  (g) without prejudice to Section 6.13, all Taxes paid and to
be paid by the Sonoco Holding Companies or the Sonoco Operating Companies since
December 31, 2003 (including under Tax consolidation arrangements (e.g.,
Organschaft) with other Sonoco Group companies) that relate to the time period
through December 31, 2003, except if and to the extent that such Taxes were
provided for in the Sonoco Financial Statements;

                  (h) any Liability arising out of, or related to, Sonoco SAS's
ownership interest in, or sale of, shares of Papeteries du Rhin SA; or

                  (i) any Liability arising as a result of the Joint Venture's
or its Affiliates' failure to fulfill its obligations under the Demolli Put or
the Demolli Call (each as defined in the Shareholders' Agreement) due to the
failure to obtain required approval from, or a prohibition by, a Governmental
Authority responsible for enforcing applicable competition laws;

                           provided, however, that: (i) Sonoco Products shall
not be Liable under Sections 10.2(a) or 10.2(c)(i) until the aggregate amount of
Losses with

                                       67


respect to the matters referred to in Sections 10.2(a) and 10.2(c)(i) exceeds
EUR750,000, and then to the extent of Losses incurred in excess of such amount
only, provided, that items of Loss that are individually in an amount less than
EUR37,500 shall not be applied against such EUR750,000 amount; (ii) Sonoco
Products' maximum Liability under Sections 10.2(a) and 10.2(c)(i) shall not
exceed EUR25,000,000 in the aggregate; and (iii) Sonoco Products shall not be
Liable for any matter disclosed in the Schedules to this Contribution Agreement.

         10.3     AGREEMENT OF AHLSTROM CORP TO INDEMNIFY

                  Ahlstrom Corp shall indemnify, defend and hold harmless the
Sonoco Indemnified Persons from and against all Losses in connection with,
related to or arising out of:

                  (a) the untruth, inaccuracy or breach of any representation or
warranty given or made by Ahlstrom Corp or any Ahlstrom Group Company pursuant
to this Contribution Agreement;

                  (b) any nonfulfillment or breach of any covenant or agreement
on the part of Ahlstrom Corp or any Ahlstrom Group Company contained in this
Contribution Agreement;

                  (c) any Claim by any third party (including Governmental
Authorities) against or affecting the Joint Venture or any Ahlstrom Holding
Company or Ahlstrom Operating Company which, if successful, would give rise to
or relate to a breach of: (i) any of the representations or warranties on the
part of Ahlstrom Corp or any Ahlstrom Group Company referred to in paragraph (a)
above at the time made; or (ii) covenants or agreements of Ahlstrom Corp or any
Ahlstrom Group Company referred to in paragraph (b) above;

                  (d) any Claim by any third party (including Governmental
Authorities) or any incurrence of any Loss by any Sonoco Indemnified Person for,
or that arose from or in connection with, or is directly or indirectly related
to, any Ahlstrom Excluded Asset or Liability;

                  (e) any Losses sustained or suffered by any Sonoco Indemnified
Person, including Claims sustained or suffered by any Sonoco Indemnified Person,
(whether by, against or relating to Ahlstrom Corp or any other Person, including
without limitation a Governmental Authority) and arising, directly or
indirectly, from the Ahlstrom Reorganization including, without limitation, any
Tax or employment restructuring indemnities arising in connection with or
triggered, directly or indirectly, by the Ahlstrom Reorganization and to be
borne by the Joint Venture or any of its Affiliates;

                                       68


                  (f) without prejudice to Section 7.3(d), the obligation of an
Ahlstrom Holding Company or an Ahlstrom Operating Company to reimburse Losses of
an Ahlstrom Group company or to Transfer its profits to an Ahlstrom Group
company under a company agreement (Unternehmensvertrag within the meaning of the
German Stock Corporation Act), except if such Ahlstrom Group company is an
Ahlstrom Holding Company or an Ahlstrom Operating Company, or if (and to the
extent) that such obligation is reflected in the Ahlstrom Financial Statements;

                  (g) without prejudice to Section 7.13, all Taxes paid and to
be paid by the Ahlstrom Holding Companies or the Ahlstrom Operating Companies
since December 31, 2003 (including under Tax consolidation arrangements (e.g.,
Organschaft) with other Ahlstrom Group companies) that relate to the time period
through December 31, 2003, except if and to the extent that such Taxes were
provided for in the Ahlstrom Financial Statements; or

                  (h) any Liability arising under the Concluding Memorandum,
dated April 25, 2002, between Advance Agro Holding Co., Ltd. and Ahlstrom Cores
Oy; or

                  (i) any Liability arising under Environmental and Safety
Requirements with respect to the landfill operated by Karhula Services,
including, without limitation, any Liability related to (A) land restoration or
landscaping required upon the closure of such landfill in excess of the Joint
Venture Commitment, (B) the Karhula Commitment Agreement, (C) any remediation
obligation resulting from Ahlstrom Cores Oy's ownership in Karhula Services,
delivery of waste to such landfill or otherwise, or (D) any obligation of
Karhula Services to construct an environmental lining, install a sewage system
or upgrade the wastewater management system at the landfill; provided, however,
that any such Liability related to the use of the landfill by the Joint Venture
or its Affiliates after the Closing Date shall be the responsibility of the
Joint Venture.

                           provided, however, that: (i) Ahlstrom Corp shall not
be Liable under Sections 10.3(a) or 10.3(c)(i) until the aggregate amount of
Losses with respect to the matters referred to in Sections 10.3(a) and
10.3(c)(i) exceeds EUR750,000, and then to the extent of Losses incurred in
excess of such amount only, provided, that items of Loss that are individually
in an amount less than EUR37,500 shall not be applied against such EUR750,000
amount; (ii) Ahlstrom Corp's maximum Liability under Sections 10.3(a) and
10.3(c)(i) shall not exceed EUR25,000,000 in the aggregate; and (iii) Ahlstrom
Corp shall not be Liable for any matter disclosed in the Schedules to this
Contribution Agreement.

                                       69


         10.4     INDEMNIFICATION PROCEDURES

                  The Liabilities of each of Sonoco Products and Ahlstrom Corp
with respect to its indemnities pursuant to this Section 10 resulting from any
Claim or Loss shall be subject to the following terms and conditions:

                  (a) Sonoco Products or Ahlstrom Corp, as the case may be,
shall give prompt written notice to the indemnifying Party as soon as it has
knowledge of any Claim or Loss which is asserted against, resulting to, imposed
upon or incurred by an Ahlstrom Indemnified Person or a Sonoco Indemnified
Person, as the case may be, and which may give rise to Liability of the
indemnifying Party pursuant to this Section 10, stating (to the extent known or
reasonably anticipated) the nature and basis of such Claim or Loss and the
amount thereof. Any delay in notification to the indemnifying Party of such
Claim or Loss shall not relieve the indemnifying Party of its obligations
hereunder, except to the extent such delay shall have adversely prejudiced the
ability of the indemnifying Party to defend the Claim.

                  (b) The indemnifying Party shall have the right, but not the
obligation, to control the defense and engage counsel or representatives of its
own choosing with respect to any such Claim or Loss, such representation
(including the compromise or settlement of any Claim or Loss) to be undertaken
on behalf of and for the account and risk of the indemnifying Party. In the
event the indemnifying Party elects not to undertake such defense by its own
representatives, the indemnifying Party shall give prompt written notice of such
election to the indemnified Person, and the indemnified Person will undertake
the defense thereof by counsel or other representatives designated by it whom
the indemnifying Party determines in writing to be satisfactory for such
purposes. The consent of the indemnifying Party to the indemnified Person's
choice of counsel or other representative shall not be unreasonably withheld and
shall be deemed granted if not objected to within ten days of notice thereof.

                  (c) In the event that any Claim or Loss shall arise out of a
transaction or cover any period or periods wherein Sonoco Products and Ahlstrom
Corp, on the one hand, and the Joint Venture, on the other hand, shall each be
liable hereunder for part of the Liability arising therefrom, then the Parties
shall, each choosing its own counsel and bearing its own expense, defend such
Claim or Loss, and no settlement or compromise of such Claim or Loss may be made
without the joint consent or approval of Sonoco Products and Ahlstrom Corp
(which consent shall not be unreasonably withheld).

                  (d) To the extent an indemnification payment pursuant to this
Section 10 shall be reduced by withholding Tax or causes a Tax to be payable by
the indemnified person with respect to such payment without such indemnified
Person having received and utilized a corresponding Tax reduction or benefit
with respect

                                       70


to the Claim or Loss for which the indemnification payment was made, the
indemnifying Party shall increase the gross amount of such payment by a
sufficient amount so that the net balance held by the indemnified Person, after
imposition of such withholding Tax or Tax payable with respect to such payment,
equals the amount of the indemnity payment to which the indemnified Person is
entitled pursuant to this Section 10.4.

                  (e) An indemnifying Party shall not be held liable for
indemnification to the extent the Loss for which indemnification is sought may
be attributed to any grossly negligent voluntary action or omission on the part
of the indemnified Party after the date hereof.

                  (f) An indemnifying Party shall not be held liable in respect
of any breach of representation or warranty which would not have occurred but
for: (i) any Tax Law promulgated after the date of this Agreement; or (ii) any
Environment and Safety Requirements promulgated after the date of this
Agreement.

                  (g) Any indemnification due by an indemnifying Party in
connection with any Loss shall be reduced by the amount of any insurance
proceeds actually received by the indemnified Person.

                  (h) An indemnifying Party shall not be held liable for
indemnification to the extent the indemnified Person (i) did not, after
acquiring Actual Knowledge of the facts or circumstances giving rise or likely
to give rise to a Loss, use reasonable efforts to mitigate the corresponding
Loss or (ii) intentionally uncovered facts or circumstances in order to make a
Claim for a breach of the representation and warranties contained in Section
6.15 or 7.15, as applicable, except if such facts and circumstances were
uncovered by any such indemnified Person in satisfaction of its obligations
under applicable Law.

                  (i) In the event that the facts or circumstances giving rise
to a Claim is curable, in whole or in part, the Sonoco Indemnified Person or
Ahlstrom Indemnified Person, as the case may be, shall give the indemnifying
Party 30 days to cure such facts or circumstances.

                  (j) Any indemnification payments required by this Section 10
shall be made by wire transfer of immediately available funds to the account
designated by the indemnified Person within 15 days of determination. For the
avoidance of doubt, any indemnification payments owing by an indemnifying Party
in respect of Losses suffered by the Joint Venture or its Affiliates shall be
payable exclusively by such indemnifying Party to the Joint Venture or its
Affiliate concerned.

                                       71


         10.5     REMEDIES EXCLUSIVE AND CUMULATIVE

                  The rights and remedies provided in this Contribution
Agreement shall, to the extent permitted by Law, be the exclusive remedies of
the Parties with respect to the subject matter of this Contribution Agreement.
Except as expressly stated in this Contribution Agreement, including in
particular in this Section 10, all other and further liability of the Parties
with respect to the Contribution of the Sonoco Business or the Ahlstrom
Business, as the case may be, regardless of the kind of liability and the legal
basis on which claims may be raised (including warranty claims for factual or
legal deficiencies (Gewaehrleistung), fault at the conclusion of an agreement
(culpa in contrahendo), violation of implied obligations (positive
Vertragsverletzung), rescission for error (Anfechtung wegen Irrtum), or
frustration (Wegfall der Geschaeftsgrundlage, etc.) are explicitly excluded,
unless a Party or their respective representatives violated intentionally their
statutory or contractual obligations to the other Party. Also excluded is the
right of the Parties to any remedies not specially provided for herein,
including the right to withdraw from this Contribution Agreement (Ruecktritt).
The rights and remedies provided herein shall be cumulative with one another and
the assertion by any Party of certain of such rights or remedies shall not
preclude the assertion by that Party of any of the other rights or remedies
hereunder against a Party or its successors or permitted assigns, as provided
herein.

11.      TERMINATION

         11.1     TERMINATION

                  This Contribution Agreement may be terminated at any time
before the Closing Date only under any one or more of the following
circumstances:

                  (a) by the mutual written consent of Sonoco Products and
Ahlstrom Corp;

                  (b) by Sonoco Products, by written notice of termination
delivered to Ahlstrom Corp, if any of the conditions set forth in Section 8 have
not been satisfied or waived by Sonoco Products (to the extent they may be
waived) by September 30, 2004, and such failure to satisfy such conditions is
not the result solely of the necessity of obtaining approvals or satisfying
requirements of any Governmental Authority;

                  (c) by Ahlstrom Corp, by written notice of termination
delivered to Sonoco Products, if any of the conditions set forth in Section 9
have not been satisfied or waived by Ahlstrom Corp (to the extent they may be
waived) by September 30, 2004, and such failure to satisfy such conditions is
not the result solely of the necessity of obtaining approvals or satisfying
requirements of any Governmental Authority; or

                                       72


                  (d) by either Party, by written notice of termination
delivered to the other Party, if any of the conditions set forth in Section 8
(if Sonoco Products is the Party seeking to terminate this Contribution
Agreement) or Section 9 (if Ahlstrom Corp is the Party seeking to terminate this
Contribution Agreement) are not satisfied or waived by the Party for whose
benefit such conditions exist by December 31, 2004.

         11.2     EFFECT OF TERMINATION

                  In the event this Contribution Agreement is terminated as
provided in this Section 11, this Contribution Agreement shall forthwith become
wholly void and of no effect, and the Parties shall be released from all future
obligations hereunder; provided, however, that nothing in this Section 11 shall
relieve any Party of Liability for any breach occurring prior to termination,
and provided further that the provisions of Section 10 (with respect to any
Claim for indemnification relating to the period before such termination only),
this Section 11, Sections 12.2, 12.3, 12.7 and 12.8 shall not be extinguished
but shall survive such termination. The Parties shall have any and all remedies
to enforce such obligations provided at Law.

12.      GENERAL PROVISIONS

         12.1     ADDITIONAL ACTIONS AND DOCUMENTS

                  Each Party hereby agrees to take, or cause to be taken, all
such further commercially reasonable actions to issue and receive such legal
declarations, or cause to be issued or received such legal declarations, to
execute and file, or cause to be executed and filed, such further documents and
to obtain such consents, as may be necessary or as may be reasonably requested,
in order to fully effect the purposes, terms and conditions of this Contribution
Agreement.

         12.2     NO BROKERS

                  Each Party represents and warrants to the other Party that
such Party has not engaged any broker, finder or agent in connection with the
transactions contemplated by this Contribution Agreement or any Related Document
which will give rise to any obligation of any other Party or its Affiliates
under applicable Law to pay any brokerage fees, finders' fees or commissions,
and has not incurred (and will not incur) any unpaid liability to any broker,
finder or agent for any brokerage fees, finders' fees or commissions, with
respect to the transactions contemplated by this Contribution Agreement. Each
Party agrees to indemnify, defend and hold harmless the other Party from and
against any and all Claims or Losses asserted against such Party or its
Affiliates for any such fees or commissions by any persons purporting to act or
to have acted for or on behalf of the indemnifying Party. For the avoidance of
doubt, all fees, expenses or other amounts payable to Per Karlsson

                                       73


& Co AB for services rendered in connection with the transactions contemplated
hereby shall be paid by Ahlstrom Corp.

         12.3     EXPENSES

                  Each Party shall pay its own expenses incident to this
Contribution Agreement and each Related Document, and the transactions
contemplated hereunder and thereunder (including, without limitation, in
connection with the Sonoco Reorganization or the Ahlstrom Reorganization),
including all legal and accounting fees and disbursements. Notwithstanding the
foregoing: (i) the filing fees required in connection with the Required
Competition Filings as contemplated by this Contribution Agreement, and legal
fees and expenses incurred in connection with the assessment, preparation and
filing of such Required Competition Filings, shall be borne one-half by Sonoco
Products and one-half by Ahlstrom Corp; and (ii) all fees incurred in connection
with the notarization of the Transaction Documents as required under German Law
shall be borne one-half by Sonoco Products and one-half by Ahlstrom Corp;
provided, however, that Sonoco Products shall pay no more than EUR20,000 (net)
in connection with such notarization, and Ahlstrom Corp shall pay any remaining
amount.

         12.4     ASSIGNMENT

                  (a) Neither Sonoco Products nor Ahlstrom Corp may assign its
rights and obligations under this Contribution Agreement, in whole or in part,
whether by operation of Law or otherwise, without the prior written consent of
the other Party, and any such assignment contrary to the terms hereof shall be
null and void and of no force and effect.

                  (b) No Party may unreasonably withhold its consent to an
assignment by a Party of rights and obligations under this Contribution
Agreement, provided that: (i) the proposed assignee is a wholly-owned downstream
Affiliate of the assignor; (ii) the assignee agrees in writing to assume the
obligations of assignor under this Contribution Agreement and the Related
Documents; (iii) the assignor unconditionally guarantees (by way of an
independent guarantee (selbststaendiges Schuldversprechen)) that the assignee
will duly perform the assumed obligations under this Contribution Agreement or
the Related Documents; and (iv) the assignee agrees to Transfer back to the
assignor such rights and obligations in the event that such assignee ceases to
be a wholly-owned downstream Affiliate of the assignor.

         12.5     ENTIRE AGREEMENT; AMENDMENTS

                  (a) This Contribution Agreement, including the Exhibits and
Schedules, and the Related Documents constitute the entire agreement of the
Parties with respect to the transactions contemplated hereby, and it supersedes
all prior oral or written agreements, commitments or understandings with respect
to

                                       74


the matters provided for herein. Notwithstanding the foregoing, the
Confidentiality Agreement, dated June 6, 2003, between Sonoco Products and
Ahlstrom Corp shall remain in full force and effect pursuant to its terms.

                  (b) The terms and provisions of this Contribution Agreement
(including this Section 12.5(b)) may not be amended, modified, or waived,
temporarily or permanently, except pursuant to a written instrument executed by
both Parties.



         12.6     WAIVER

                  No delay or failure on the part of any Party in exercising any
right, power or privilege under this Contribution Agreement or any Related
Document shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power or privilege shall preclude the further exercise of
such right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any Party unless made in writing and
signed by the Party against whom enforcement of such waiver is sought and then
only to the extent expressly specified therein.

         12.7     GOVERNING LAW; SERVICE OF PROCESS

                  (a) This Contribution Agreement shall be governed by and
construed in accordance with the domestic laws of the Federal Republic of
Germany without giving effect to any choice of law or conflict of law provision
or rule (whether of the laws of the Federal Republic of Germany or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the jurisdiction of the Federal Republic of Germany.

                  (b) Sonoco Products appoints Sonoco CPD GmbH,
Nikolaus-Otto-Stra(beta)e, 56727 Mayen, Germany and Ahlstrom Corp appoints
Ahlstrom Holding, Romereschstrasse 33, 49070, Osnabruck, Germany, as its agent
for service of process (Zustellungsbevollmaechtigter) for all legal proceedings
arising out of or in connection with this Contribution Agreement. This
appointment shall only terminate upon the appointment of another agent for
service of process domiciled in Germany and the appointment has been notified to
and approved in writing by Sonoco or Ahlstrom, as the case may be (which
approval shall not be unreasonably withheld). Sonoco Products and Ahlstrom Corp
shall promptly after the date hereof and upon appointment of any new agent for
service of process, as the case may be, issue to the agent a written power of
attorney (Vollmachtsurkunde) and shall irrevocably instruct the agent to submit
such deed in connection with any service of process under this Contribution
Agreement.

                                       75


         12.8     ARBITRATION

                  All controversies, Claims, disputes and matters in question
arising out of, or relating to, this Contribution Agreement or any Related
Document, including any questions regarding the existence, validity or
termination of this Contribution Agreement ("DISPUTES") shall be finally
resolved through submission to final and binding arbitration as follows:

                  (a) Any Party may exercise the right to arbitrate any Disputes
against the other by sending written notice to arbitrate to the other Party of
any action that gives rise to such Disputes, which notice shall include the
amount in controversy. The written notice shall identify and describe the nature
of any and all Disputes asserted and the facts upon which such Disputes are
based;

                  (b) The place of the arbitration shall be Frankfurt am Main,
Germany, and the proceedings shall be conducted in the English language;

                  (c) The arbitration will be conducted pursuant to the
International Chamber of Commerce ("ICC") arbitration rules and procedures and
by three arbitrators chosen in accordance with the procedure used by the ICC.
All of the arbitrators shall be qualified to be a judge in Germany under the
German Law of the Judiciary ("Deutsches Richtergesetz") and shall not be an
Affiliate of any party to the Dispute and shall not have any potential for bias
or conflict of interest with respect to any party to the Dispute, directly or
indirectly, by virtue of any direct or indirect financial interest, family
relationship, close friendship or otherwise (the "ARBITRATORS");

                  (d) Each Party shall bear equally the costs of arbitration,
filing fees and the fees of the Arbitrators. Each Party shall bear its own
attorneys' fees, witness fees and other costs. The Parties shall mutually agree
with the Arbitrators on the date, time and place of the arbitration. In the
event that the Parties are unable to mutually agree to the date, time, and place
within the Frankfurt am Main, Germany, for the arbitration to be conducted, the
Arbitrators shall determine the date, time, and place of the arbitration in
Frankfurt am Main, Germany;

                  (e) Notwithstanding the above, the Arbitrators shall have the
power, but not the obligation, to order that the Party it deems to be the losing
Party pay to the prevailing Party all or a portion of the prevailing Party's
fees and expenses in the arbitration, including the Arbitrators' fees,
attorneys' fees, fees for expert testimony and for other expenses of presenting
its case;

                  (f) The Arbitrators shall have exclusive authority to resolve
any Disputes between the Parties. The Arbitrators shall have the power to award
damages against any Party and to make an award granting such further relief as
they deem just, proper, and equitable. The Arbitrators shall follow the laws of
the

                                       76


Federal Republic of Germany. The Arbitrators shall render a written arbitration
decision that reveals the essential findings and conclusions upon which the
award is based; and

                  (g) Any award issued by the Arbitrators pursuant to this
Section 12.8 shall be made in the English language, denominated in Euros and
delivered within 120 days of the date on which such arbitration proceeding
commenced and shall be final and binding and enforceable in any court of
competent jurisdiction. Judgment on the award rendered by the Arbitrators may be
entered in any court having jurisdiction thereof.

         12.9     SEVERABILITY

                  If any part of any provision of this Contribution Agreement or
any Related Document, or other document delivered pursuant herewith or
therewith, shall be invalid or unenforceable in any respect, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without
in any way affecting the validity and enforceability of the remaining parts of
such provision or the remaining provisions of this Contribution Agreement. The
Parties shall negotiate with a view to agreeing a replacement provision that is
valid, and the nature and economic considerations of which come as close as
possible to the voided provision. Failing agreement of the Parties on such
replacement provision after good faith negotiations, any Party may, by notice to
the other Party, refer the determination of such replacement provision to
arbitration pursuant to Section 12.8. For the avoidance of doubt, this Section
12.9 shall not be construed to amend automatically this Contribution Agreement,
or to require any Party to agree to changes in this Contribution Agreement,
which are, in either case, imposed by Governmental Authorities as a condition to
any review, approval or other action by such Governmental Authorities.

         12.10    NOTICES

                  All notices, requests, demands, claims, consents and other
communications which are required or otherwise delivered hereunder shall be in
writing in the English language and shall be deemed to have been duly given if:
(i) personally delivered; (ii) sent by internationally recognized overnight
courier; (iii) mailed by registered or certified mail with postage prepaid,
return receipt requested; or (iv) transmitted by facsimile or telecopy (with a
copy of such transmission concurrently transmitted by registered or certified
mail with postage prepaid, return receipt requested), to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice):

                                       77


         (i)      If to Sonoco Products, to:

                  Harris E. DeLoach, Jr.
                  President and Chief Executive Officer
                  Sonoco Products Company
                  1 North Second Street
                  Hartsville, SC 29550 USA
                  Facsimile: +1-843-383-7008

         with a copy (which shall not constitute notice) to:

                  Claud v.S. Eley
                  Hogan & Hartson L.L.P.
                  875 Third Avenue
                  New York, NY  10022 USA
                  Facsimile: +1-212-918-3100

         (ii)     If to Ahlstrom Corp, to:

                  General Counsel
                  Ahlstrom Corporation, PB 329
                  Etelaesplanadi 14
                  00101 Helsinki, Finland
                  Facsimile: + 358-10-888-4789

         with a copy (which shall not constitute notice) to:

                  Stephan Barthelmess
                  Cleary, Gottlieb, Steen & Hamilton
                  Main Tower
                  Neue Mainzer Strasse 52
                  60311 Frankfurt an Main, Germany
                  Facsimile: + 49-69-97103-199

or to such other address as the Party to whom such notice or other communication
is to be given may have furnished to each other Party in writing in accordance
herewith. Any such notice or communication shall be deemed to have been
received: (i) when delivered, if personally delivered; (ii) when sent, if sent
by facsimile or telecopy; (iii) on the next Business Day after dispatch, if sent
by nationally recognized, overnight courier guaranteeing next Business Day
delivery; and (iv) on the tenth Business Day following the date on which the
piece of mail containing such communication is posted, if sent by mail;
provided, that where, in the case of personal delivery, facsimile or telecopy
transmission, delivery or transmission occurs after 6:00 p.m. (local time at the
place of receipt) on a Business

                                       78


Day or on a day which is not a Business Day, receipt shall be deemed to occur at
9:00 a.m. (local time at the place of receipt) on the next following Business
Day.

         12.11    INTERPRETATION; HEADINGS

                  (a) To the extent that the interpretation of any English
language provision of this Contribution Agreement conflicts or is otherwise
inconsistent with the German language equivalent of such provision contained in
this Contribution Agreement, if any, the German language equivalent of such
provision contained in this Contribution Agreement shall govern such
interpretation and the Arbitrators shall be bound thereby.

                  (b) Section headings contained in this Contribution Agreement
are inserted for convenience of reference only, shall not be deemed to be a part
of this Contribution Agreement for any purpose, and shall not in any way define
or affect the meaning, construction or scope of any of the provisions hereof.

         12.12    LIMITATION ON BENEFITS

                  The covenants, undertakings and agreements set forth in this
Contribution Agreement shall be solely for the benefit of, and shall be
enforceable only by, the Parties and their respective successors and permitted
assigns, except that the agreements set forth in Section 10 also shall be for
the benefit of, and enforceable by, the Ahlstrom Indemnified Persons, the Sonoco
Indemnified Persons and their respective successors or permitted assigns as
third party beneficiaries (unechter Vertrag zugunsten Dritter).

         12.13    SUCCESSORS AND ASSIGNS

                  Subject to any provisions hereof restricting assignment, this
Contribution Agreement shall be binding upon and shall inure to the benefit of
the Parties and their respective successors and assigns
(Gesamtrechtsnachfolger).



                                       79


                                    EXHIBIT A
                            TO CONTRIBUTION AGREEMENT


                                   DEFINITIONS

         "AALTEN CONTRIBUTION" has the meaning set forth in Section 8.10.

         "ACCOUNTANT'S DETERMINATION" has the meaning set forth in Section 4.6.

         "ACTUAL KNOWLEDGE" means, with respect to any Person, actual knowledge
of such Person, including, without limitation, in the case of incorporated
Persons, the actual knowledge of the officers, directors, managing directors and
general managers, as the case may be, of such Person; provided, that: (i) the
"Actual Knowledge" of Sonoco Products shall include the Actual Knowledge of any
Sonoco Holding Company and Sonoco Operating Company; and (ii) the "Actual
Knowledge" of Ahlstrom Corp shall include the Actual Knowledge of any Ahlstrom
Holding Company and Ahlstrom Operating Company.

         "AFFILIATE" means, with respect to any specified Person, any other
Person who, directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with such specified
Person; provided, however, that, from and after the Closing, the Joint Venture
and its subsidiaries shall not be deemed an Affiliate of either Sonoco Products
and its Affiliates (other than the Joint Venture and its subsidiaries) or
Ahlstrom Corp and its Affiliates (other than the Joint Venture and its
subsidiaries), and vice versa.

         "AGREEMENT" means any concurrence of understanding and intention
between two or more persons (or entities) with respect to their relative rights
and/or obligations or with respect to a thing done or to be done (whether oral
or in recorded form and whether or not conditional, executory, express, implied,
in writing or meeting the requirements of contract), including without
limitation contracts, leases, promissory notes, easements, rights of way,
covenants and commitments, including those related to the settlement of disputes
or Claims.

         "AHLSTROM ACCOUNTING PRINCIPLES" means accounting standards Applied on
a Consistent Basis by Ahlstrom Corp and attached as Exhibit U.

         "AHLSTROM BUSINESS" has the meaning set forth in the Recitals.

         "AHLSTROM CLOSING STATEMENTS" has the meaning set forth in Section
4.2(ii)(C).

         "AHLSTROM CONSENTS" means the consents listed in Schedule 7.2.

                               Exhibit A - Page 1


         "AHLSTROM CONTRIBUTED SHARES" means all of the shares or ownership
interests, as applicable, in Ahlstrom Cores Oy and Ahlstrom Cores GmbH.

         "AHLSTROM CONTRIBUTION" has the meaning set forth in Section 2.2(b).

         "AHLSTROM CORP" has the meaning set forth in the Introduction.

         "AHLSTROM DATA ROOM" means, collectively, the due diligence rooms
containing the information regarding the Ahlstrom Business assembled for
purposes of the due diligence carried out by Sonoco Products and its
Representatives at KPMG LLP's offices and Ahlstrom Corp's offices in Helsinki,
Finland.

         "AHLSTROM EQUALIZATION AMOUNT" has the meaning set forth in Section
5.1(d).

         "AHLSTROM EXCLUDED ASSET OR LIABILITY" means any Asset or Liability of
Ahlstrom Corp or the Ahlstrom Group, whether presently existing or arising
hereafter, which is not part of the Ahlstrom Business, including, without
limitation, any Liability (environmental or otherwise) of any Ahlstrom Group
company related to the Pont Audemer facility in France and any Liability of any
Ahlstrom Holding Company or Ahlstrom Operating Company in respect of any
employees who are not primarily working for the Ahlstrom Business.

         "AHLSTROM FINANCIAL STATEMENTS" has the meaning set forth in Section
7.7(a).

         "AHLSTROM GROUP" means, collectively, Ahlstrom Corp with respect to the
Ahlstrom Business, including, prior to the Closing, the Ahlstrom Holding
Companies and the Ahlstrom Operating Companies.

         "AHLSTROM HOLDING" means Ahlstrom Holding GmbH, a company organized
under the laws of Germany and a wholly-owned subsidiary of Ahlstrom Corp.

         "AHLSTROM HOLDING COMPANIES" means, collectively: (i) Ahlstrom Cores
Oy, a company organized under the laws of Finland; and (ii) Ahlstrom Cores
Holding AB, a company organized under the laws of Sweden.

         "AHLSTROM INDEMNIFIED PERSON" means the Joint Venture, Ahlstrom Corp,
the Ahlstrom Holding Companies, the Ahlstrom Operating Companies, and their
respective Affiliates, partners, officers, directors, managing directors,
managers, employees, agents and representatives, in each case other than any
member of the Sonoco Group.

                               Exhibit A - Page 2


         "AHLSTROM MATERIAL ADVERSE EFFECT" means any circumstance, event,
change in, or effect on any of the Ahlstrom Holding Companies or the Ahlstrom
Operating Companies that has a material adverse effect or change on or to the
Ahlstrom Business, Assets, Liabilities, relationship with material customers or
suppliers, condition (financial or otherwise), prospects, operations, earnings,
cash flows or results of operations of the Ahlstrom Holding Companies or the
Ahlstrom Operating Companies, taken as a whole, whether such material adverse
effect or change occurs before or after the Ahlstrom Contribution.

         "AHLSTROM MATERIAL AGREEMENTS" has the meaning set forth in Section
7.20(a).

          "AHLSTROM OPERATING COMPANIES" means, collectively: (i) Ahlstrom Cores
SAS, a company organized under the laws of France; (ii) Ahlstrom Cores Ou, a
company organized under the laws of Estonia; (iii) Ahlstrom Cores B.V., a
company organized under the laws of The Netherlands; (iv) Ahlstrom Cores
Sp. z o.o., a company organized under the laws of Poland; (v) Ahlstrom Cores AS,
a company organized under the laws of Norway; (vi) Ahlstrom Cores AB, a company
organized under the laws of Sweden; (vii) ZAO Ahlstrom Cores, a company
organized under the laws of Russia; (viii) AT-Spiral; (ix) Ahlstrom Cores GmbH,
a company organized under the laws of Germany; and (x) Karhula Services.

         "AHLSTROM PROHIBITED TRANSACTIONS" has the meaning set forth in Section
4.1(d).

         "AHLSTROM REAL PROPERTY" has the meaning set forth in Section 7.14(a).

         "AHLSTROM REORGANIZATION" has the meaning set forth in Section 5.1(b).

         "AHLSTROM REORGANIZATION DEVIATIONS" has the meaning set forth in
Section 4.2(a)(ii)(A).

         "AHLSTROM SHARES" has the meaning set forth in Section 2.2(b).

         "AHLSTROM SUPPLY AGREEMENT" has the meaning set forth in Section
3.2(f)(vii).

         "AHLSTROM TAX RETURNS" has the meaning set forth in Section 7.13(a).

         "ALTERNATIVE TRANSACTION" means: (i) any direct or indirect acquisition
or purchase of any shares of equity interests or debt securities of any of the
Sonoco Holding Companies or the Sonoco Operating Companies or any of the
Ahlstrom Holding Companies or the Ahlstrom Operating Companies, as the case may
be, or any interests therein; (ii) any direct or indirect acquisition or
purchase of all or a material portion of the Assets of any of the Sonoco Holding
Companies or the

                               Exhibit A - Page 3


Sonoco Operating Companies, or any of the Ahlstrom Holding Companies or the
Ahlstrom Operating Companies, as the case may be; (iii) the merger,
consolidation or business combination of any of the Sonoco Holding Companies or
the Sonoco Operating Companies, or any of the Ahlstrom Holding Companies or the
Ahlstrom Operating Companies, as the case may be; (iv) the refinancing of any of
the Sonoco Holding Companies or the Sonoco Operating Companies, or any of the
Ahlstrom Holding Companies or the Ahlstrom Operating Companies, as the case may
be; or (v) the liquidation, dissolution, reorganization or similar transaction
involving any of the Sonoco Holding Companies or the Sonoco Operating Companies,
or any of the Ahlstrom Holding Companies or the Ahlstrom Operating Companies, as
the case may be, in each of clauses (i) through (v) above, other than the
transactions contemplated by this Contribution Agreement.

         "APPLIED ON A CONSISTENT BASIS" means, with respect to any Person,
prepared using the same accounting principles, policies, standards, practices
and estimates used by such Person in prior periods and as used in the
preparation of such Person's most recent audited financial statements.

         "ARBITRATORS" has the meaning set forth in Section 12.8(c).

         "ASSETS" means, with respect to any Person, all businesses, properties,
fixed assets, machinery, equipment, furniture, fixtures, licenses, permits,
franchises, goodwill and rights of such Person, individually and as a going
concern, of every nature, kind and description, tangible and intangible, owned
or leased, wheresoever located and whether or not carried or reflected on the
books or records of such Person, used or held for use, in connection with the
operation of such Person's business, as the case may be; provided, that: (i) the
"Assets" of the Sonoco Group means the "Assets" of the Sonoco Group upon
consummation of the Sonoco Reorganization; and (ii) the "Assets" of the Ahlstrom
Group means the "Assets" of the Ahlstrom Group upon consummation of the Ahlstrom
Reorganization.

         "AT-SPIRAL" means AT-Spiral Oy, a company organized under the laws of
Finland.

         "BEST KNOWLEDGE" means, with respect to any Person: (i) actual
knowledge of such Person and its Affiliates (including, without limitation, in
the case of incorporated Persons, the actual knowledge of the officers,
directors, managing directors and managers, as the case may be, of such Person
and its Affiliates); and (ii) that knowledge which could have been acquired by
such Person after making such due inquiry and exercising such due diligence as a
prudent business person would have made or exercised in the management of his or
her business affairs in light of all the circumstances applicable thereto,
including due inquiry of those key employees and professionals of such Person
and its Affiliates who could reasonably be expected to have actual knowledge of
the matters in question.

                               Exhibit A - Page 4


         "BUSINESS DAY" means any day that is not a Saturday, Sunday or legal
holiday or other day on which banks are required to be closed in Brussels,
Belgium, Helsinki, Finland or New York, New York.

         "BUSINESS PLAN" has the meaning set forth in Section 2.1(e).

         "CASH AND CASH EQUIVALENTS" means, with respect to any Person, cash or
cash equivalents, of such Person, whether credited to an account at a financial
institution, or in hand, of such Person, including marketable short-term
securities, other short-term investments, notes receivable, non-trade
intercompany receivables and accrued interest income.

         "CHARTER DOCUMENT" means, with respect to any Person, the articles of
association, by-laws, partnership agreement and/or other applicable constitutive
or organizational documents of such Person.

         "CHINA PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated
the date hereof, between Sonoco Products and Ahlstrom Corp.

         "CLAIM" means any claim, demand, Order or Proceeding.

         "CLOSING" has the meaning set forth in Section 3.1.

         "CLOSING DATE" has the meaning set forth in Section 3.1.

         "CLOSING STATEMENTS" has the meaning set forth in Section 4.2(a)(i)(C).

         "CONTRIBUTION AGREEMENT" has the meaning set forth in the Introduction,
including all Schedules and Exhibits hereto.

         "CONTROL" (together with the correlative meanings, "CONTROLLED BY" or
"UNDER COMMON CONTROL WITH") means the possession, direct or indirect, of the
power to direct, or cause the direction of, the management and policies of a
Person whether through the ownership of shares or ownership interests, voting
rights, by contract or otherwise.

         "DISPUTES" has the meaning set forth in Section 12.8.

         "DISTRIBUTIONS" means, with respect to any Person: (i) the payment of
any dividend on or in respect of shares or ownership interests or membership
interests of such Person; (ii) the purchase, redemption, or other retirement of
any shares or ownership interests or membership interests of such Person,
directly by such Person or indirectly through a Subsidiary of such Person or
otherwise; (iii) the direct or indirect return of capital by such Person to its
stockholders or members as

                               Exhibit A - Page 5


such; or (iv) any other distribution on or in respect of any shares or ownership
interests or membership interests of such Person.

         "ENCUMBRANCE" means and includes any security interest, mortgage, Lien,
pledge, Claim, charge, escrow, encumbrance, cloud, option, security agreement or
other similar agreement, arrangement, Agreement, understanding or obligation,
whether written or oral and whether or not relating in any way to credit or the
borrowing of money.

         "ENVIRONMENTAL AND SAFETY REQUIREMENTS" means all Laws, Orders,
contractual obligations and all common law concerning public health and safety,
worker health and safety, and pollution or protection of the environment,
including all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, control or cleanup
of any hazardous materials, substances or wastes, chemical substances or
mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation.

         "EQUALIZATION STATEMENT" has the meaning set forth in Section 4.1(b).

         "EXAMINATION PERIOD" has the meaning set forth in Section 4.3.

         "EXHIBIT" means an Exhibit to this Contribution Agreement.

         "GAAP" means generally accepted accounting principles, Applied on a
Consistent Basis.

         "GERMAN CIVIL CODE" means Buergerliches Gesetzbuch.

         "GERMAN LAW OF THE JUDICIARY" means Deutsches Richtergesetz.

         "GERMAN STOCK CORPORATION ACT" means Aktiengesetz.

         "GOVERNMENTAL AUTHORITY" means any federal, state, local or regional
government, regulatory authority, administrative agency, instrumentality,
department, commission, board, bureau, agency, arbitrator, court or tribunal,
whether domestic, foreign or supranational and whether legislative, executive or
judicial, including, without limitation, any competition Law authority or
commission.

         "GUARANTEE" means any obligation, contingent or otherwise, of any
Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person in any manner, whether
directly or indirectly, including any obligation of such Person, direct or
indirect: (i) to purchase or pay (or

                               Exhibit A - Page 6


advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation; (ii)
to purchase property, securities or services for the purpose of assuring the
owner of such Indebtedness or other obligation of the payment thereof; (iii) to
purchase or otherwise pay for merchandise, materials, supplies, services or
other property under an Agreement or other arrangement which provides that
payment for such merchandise, materials, supplies, services or other property
shall be made regardless of whether delivery of such merchandise, materials,
supplies, services or other property is ever made or tendered; or (iv) to
maintain the working capital, equity capital or other financial statement
condition of any primary obligor, provided, however, that the term Guarantee
shall not include endorsement of instruments for deposit and collection in the
Ordinary Course of Business.

         "ICC" has the meaning set forth in Section 12.8(c).

         "INDEBTEDNESS" means, with respect to any Person, without duplication:
(i) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind; (ii) all obligations of such Person evidenced
by (or which customarily would be evidenced by) bonds, debentures, notes or
similar instruments; (iii) all reimbursement obligations of such Person with
respect to letters of credit and similar instruments; (iv) all obligations of
such Person under conditional sale or other title retention agreements relating
to property or assets purchased by such Person; (v) all obligations of such
Person incurred, issued or assumed as the deferred purchase price of property
other than accounts payable incurred and paid on terms customary in the business
of such Person (it being understood that the "deferred purchase price" in
connection with any purchase of property or assets shall include only that
portion of the purchase price which shall be deferred beyond the date on which
the purchase is actually consummated); (vi) all obligations secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed; (vii)
all obligations of such Person under forward sales, futures, options and other
similar hedging arrangements (including interest rate hedging or protection
agreements); (viii) all obligations of such Person to purchase or otherwise pay
for merchandise, materials, supplies, services or other property under an
arrangement which provides that payment for such merchandise, materials,
supplies, services or other property shall be made regardless of whether
delivery of such merchandise, materials, supplies, services or other property is
ever made or tendered; (ix) all guarantees by such Person of obligations of
others; and (x) all capitalized lease obligations of such Person.

         "INTELLECTUAL PROPERTY" means all patents, trademarks, service marks,
trade names, domain names, logos, trade dress, copyrights, know-how, trade

                               Exhibit A - Page 7


secrets, inventions, methods, processes, practices, computer software, web
sites, industrial and other designs and drawings, other works of authorship, and
all general intangibles of a like nature, whether or not protectable by
copyright, patent, trademark or other applicable law, and all registrations,
applications, disclosures and filings with respect to the foregoing, and all
reissuances, continuations-in-part, revisions, extensions, reexaminations and
renewals thereof, together with their foreign counterparts, as applicable.

         "INTERCOMPANY DEBT" means: (i) with respect to the Sonoco Products or
any of its Affiliates, all Indebtedness between a Sonoco Holding Company or
Sonoco Operating Company, on the one hand, and Sonoco Products and its other
Affiliates not transferred to the Joint Venture, on the other hand, which
Indebtedness is outstanding on such date of determination; and (ii) with respect
to the Ahlstrom Corp and any of its Affiliates, all Indebtedness between a
Ahlstrom Holding Company or Ahlstrom Operating Company, on the one hand, and
Ahlstrom Corp and its other Affiliates not transferred to the Joint Venture, on
the other hand, which Indebtedness is outstanding on such date of determination.

         "INTEREST BEARING DEBT" means, with respect to any Person, any interest
bearing Indebtedness owed to financial institutions, Liabilities under capital
leases and non-trade Intercompany Debt, plus, where applicable, any accrued and
unpaid interest thereon.

         "INTERIM PERIOD" has the meaning set forth in Section 5.2(a).

         "INTRODUCTION" means the Introduction to this Contribution Agreement.

         "IP LICENSE AGREEMENTS" means, collectively, the Joint Venture/Sonoco
IP License Agreement and the SDI IP License Agreement.

         "JOINT VENTURE" has the meaning set forth in the Recitals.

         "JOINT VENTURE COMMITMENT AMOUNT" has the meaning set forth in Section
5.11.

         "JOINT VENTURE/SONOCO IP LICENSE AGREEMENT" has the meaning set forth
in Section 3.2(e)(ii).

         "JOINT VENTURE STARTING BALANCE SHEET" has the meaning set forth in
Section 4.5.

         "JOINT VENTURE SUPPLY AGREEMENT" has the meaning set forth in Section
3.2(e)(v).

                               Exhibit A - Page 8


         "KARHULA COMMITMENT AGREEMENT" means the Commitment, dated December 31,
1999, by and between Ahlstrom Cores Oy and Karhula Services.

         "KARHULA SERVICES" means Ahlstrom Karhulan Palvelot Oy, a company
organized under the laws of Finland.

         "LAW" means all statutes, laws, ordinances, regulations, rules,
resolutions, orders, determinations, writs, injunctions, awards (including
without limitation awards of any arbitrator), judgments and decrees applicable
to the specified persons or entities and to the businesses and assets thereof
(including without limitation Laws relating to securities registration and
regulation; the sale, leasing, ownership or management of real property;
employment practices, terms and conditions, and wages and hours; building
standards, land use and zoning; safety, health and fire prevention; and
environmental protection).

         "LIABILITY" means any liability or obligation, whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due, regardless of when
asserted.

         "LIEN" means, with respect to any Asset, any mortgage, lien, pledge,
charge, security interest or Encumbrance of any kind, or any Agreement to give
the foregoing in respect of such Asset.

         "LOSS" means any loss, Liability, action, cause of action, cost,
damage, deficiency, Tax, penalty, fine or expense, whether or not arising out of
any Claims by or on behalf of any Party to this Contribution Agreement or any
Third Party, including interest, penalties, reasonable attorneys' fees and
expenses and all amounts paid in investigation, defense or settlement of any of
the foregoing which any such Party or the Joint Venture or its subsidiaries may
suffer, sustain or become subject to, as a result of, in connection with, or
relating to or by virtue of any indemnifiable event or condition, reduced by the
amount of any Tax benefit to such Party resulting from such Loss, in each case
on an after Tax basis; provided, however, any Claim relating to a Loss suffered
by Demolli Industria Cartaria S.p.A., or by any Party, the Joint Venture or its
subsidiaries as a result of its direct or indirect interest in Demolli Industria
Cartaria S.p.A., shall include 100% of such Loss if such Loss is suffered by any
Party, the Joint Venture or its subsidiaries after the acquisition by the Joint
Venture or its Affiliates of the remaining 75% of Demolli Industria Cartaria
S.p.A. that an Affiliate of Sonoco Products does not own on the date hereof.

         "NET CASH/INTEREST BEARING DEBT" means, with respect to any Person, all
Cash and Cash Equivalents of such Person less Interest Bearing Debt calculated
in accordance with accounting principles used in the Ordinary Course of Business
of such Person. If Cash and Cash Equivalents exceed Interest Bearing Debt, the

                               Exhibit A - Page 9


amount of Net Cash/Interest Bearing Debt shall be positive; if Interest Bearing
Debt exceeds Cash and Cash Equivalents, the amount of Net Cash/Interest Bearing
Debt shall be negative.

         "OBJECTION NOTICE" has the meaning set forth in Section 4.3.

         "ORDER" or "ORDERS" means any judgments, writs, decrees, injunctions,
orders, compliance agreements or settlement agreements of or with any
Governmental Authority.

         "ORDINARY COURSE OF BUSINESS" means, with respect to any Person,
ordinary course of business consistent with past practices of such Person and
prudent customary business operations.

         "OUTSTANDING BORROWINGS" means: (i) with respect to the Sonoco Group,
all Indebtedness of each Sonoco Holding Company, Sonoco Operating Company and
Sonoco Products or any of its other Affiliates on behalf of the Sonoco Business
for money borrowed, or any Guarantee provided, by any Sonoco Holding Company,
Sonoco Operating Company and Sonoco Products or any of its other Affiliates on
behalf of the Sonoco Business, other than Intercompany Debt of the Sonoco Group,
which Indebtedness is outstanding on such date of determination; and (ii) with
respect to the Ahlstrom Group, all Indebtedness of each Ahlstrom Holding
Company, Ahlstrom Operating Company and Ahlstrom Corp or any of its other
Affiliates on behalf of the Ahlstrom Business for money borrowed, or any
Guarantee provided, by any Ahlstrom Holding Company, Ahlstrom Operating Company
and Ahlstrom Corp or any of its other Affiliates on behalf of the Ahlstrom
Business, other than Intercompany Debt of the Ahlstrom Group, which Indebtedness
is outstanding on such date of determination.

         "PARTY" and "PARTIES" has the meanings set forth in the Introduction.

         "PENSION CONTRIBUTIONS" has the meaning set forth in Section 5.14.

         "PENSION SERVICE COST" has the meaning set forth in Section 5.14.

         "PERMITTED ENCUMBRANCES" means: (i) Encumbrances for Taxes not yet due
and payable or being contested in good faith by appropriate proceedings and for
which there are adequate reserves on the books of the applicable Person; (ii)
workers or unemployment compensation Liens arising in the Ordinary Course of
Business; (iii) mechanic's, materialman's, supplier's, vendor's or similar Liens
arising in the Ordinary Course of Business securing amounts that are not
delinquent or past due; (iv) Encumbrances relating to purchase money security
interests arising in the Ordinary Course of Business; (v) Liens not created by a
Person that affect the underlying fee interest of any Real Property leased by
such Person but which do not materially interfere with the ordinary conduct of
the

                               Exhibit A - Page 10


business of such Person and will not materially interfere with the quiet
enjoyment of such leased Real Property during the term of the applicable lease;
(vi) zoning ordinances and other governmental land use restrictions; (vii)
easements, reservations and restrictions of legal record affecting Real Property
which would not, individually or in the aggregate, materially affect the value
of such Real Property or materially interfere with the present use of such Real
Property; and (viii) any state of facts that an accurate survey would show,
provided such facts do not individually or in the aggregate, materially affect
the value of such Real Property or materially interfere with the present use of
such Real Property.

         "PERMITS" means all permits, licenses, authorizations, registrations,
franchises, approvals, consents, certificates, variances and similar rights
obtained, or required to be obtained, from Governmental Authorities.

         "PERSON" means, and shall be construed broadly and shall include, an
individual, a partnership, a corporation, a company, an association, a joint
stock company, a limited liability company, a limited liability partnership, a
trust, a joint venture, an unincorporated organization and a Governmental Entity
or similar entities.

         "PROCEEDING" means any action, suit, proceeding, complaint, charge,
hearing, inquiry, audit or investigation before or by any Governmental
Authority.

         "REAL PROPERTY" means, with respect to any Person, the real property
owned, leased, subleased, licensed, operated, used, held for use or otherwise
occupied by such Person in its business and all buildings, structures,
improvements and fixtures thereon, together with all rights of way, easements,
privileges and appurtenances pertaining thereto, including any right, title and
interest in and to any street adjoining any portion of such real property.

         "REAL PROPERTY LEASE" means any lease, sublease, license or other form
of occupancy agreement entered into by a Person (whether as lessor or lessee)
with respect to Real Property.

         "RECITALS" means the Recitals to this Contribution Agreement.

         "REFERENCE PERIOD" has the meaning set forth in Section 4.1(c).

         "RELATED DOCUMENTS" means, collectively, the Shareholders' Agreement,
the Services Agreements, the Joint Venture/Sonoco IP License Agreement, the SDI
IP License Agreement, the Representation Agreement, the China Purchase
Agreement, the Joint Venture Supply Agreement and the VP Supply Agreement.

         "REPRESENTATION AGREEMENT" has the meaning set forth in Section
3.2(e)(vi).

                               Exhibit A - Page 11


         "REPRESENTATIVES" has the meaning set forth in Section 5.2(a).

         "REQUIRED COMPETITION FILINGS" has the meaning set forth in Section
5.3(b).

         "REQUIRED CONSENTS" means, collectively, the Sonoco Consents and the
Ahlstrom Consents; provided, however, that for purposes of the conditions
precedent in Sections 8.6 and 9.6, (i) any Ahlstrom Consent the satisfaction of
which is solely within the control of Ahlstrom Corp shall not be a condition
precedent for Ahlstrom Corp and (ii) any Sonoco Consent the satisfaction of
which is solely within the control of Sonoco Products shall not be a condition
precedent for Sonoco Products.

         "SCHEDULE" means a Schedule to this Contribution Agreement.

         "SCHWEIGHOUSE" means SEM Construction Schweighouse S.a r.l., a company
organized under the laws of France.

         "SDI IP LICENSE AGREEMENT" has the meaning set forth in Section
3.2(e)(iii).

         "SECTION" means a Section (or a subsection) of this Contribution
Agreement.

         "SERVICES AGREEMENT" has the meaning set forth in Section 3.2(e)(iv).

         "SETTLEMENT AGREEMENT" has the meaning set forth in Section 4.2(b).

         "SHAREHOLDERS' AGREEMENT" has the meaning set forth in Section
3.2(e)(i).

         "SODAREC" means Sodarec S.a r.l., a company organized under the laws of
France.

         "SONOCO BUSINESS" has the meaning set forth in the Recitals.

         "SONOCO CLOSING STATEMENTS" has the meaning set forth in Section
4.2(a)(i)(C).

         "SONOCO CONSENTS" means the consents listed on Schedule 6.2.

         "SONOCO CONTRIBUTED SHARES" means all of the shares or ownership
interests, as applicable, in the Sonoco Holding Companies, Sonoco Greece, Sonoco
Netherlands B.V. and Sonoco Poland S.p. z o.o.

         "SONOCO CONTRIBUTION" has the meaning set forth in Section 2.2(a).

                               Exhibit A - Page 12


         "SONOCO DATA ROOM" means the due diligence room containing the
information regarding the Sonoco Business assembled for purposes of the due
diligence carried out by Ahlstrom Corp and its Representatives at the offices of
Sonoco Europe S.A. in Brussels, Belgium.

         "SONOCO EQUALIZATION AMOUNT" has the meaning set forth in Section
5.1(c).

         "SONOCO EXCLUDED ASSET OR LIABILITY" means any Asset or Liability of
Sonoco Products or the Sonoco Group, whether presently existing or arising
hereafter, which is not part of the Sonoco Business, including, without
limitation, the UK Pension Obligation and any Liability of any Sonoco Holding
Company or Sonoco Operating Company in respect of any employees who are not
primarily working for the Sonoco Business

         "SONOCO EXTRAORDINARY TRANSACTIONS" has the meaning set forth in
Section 4.1(a).

         "SONOCO FINANCIAL STATEMENTS" has the meaning set forth in Section
6.7(a).

         "SONOCO GREECE" means Hellenic Paper Mill of Central Macedonia-Sonoco
S.A., a company organized under the Laws of Greece.

         "SONOCO GREECE PREDECESSOR" means Sonoco IPD Greece SA, a company
organized under the laws of Greece.

         "SONOCO GROUP" means, collectively, Sonoco Products with respect to the
Sonoco Business, Sonoco International, Sonoco Luxco, including prior to the
Closing, the Sonoco Holding Companies and the Sonoco Operating Companies.

         "SONOCO HOLDING COMPANIES" means, collectively: (i) Sonoco Deutschland
Holdings GmbH, a company organized under the laws of Germany; (ii) Sonoco SAS, a
company organized under the laws of France; (iii) Sonoco Newco Swiss; (iv)
Sonoco Iberia S.L., a company organized under the laws of Spain; (v) Sonoco
Netherlands Holdings I B.V., a company organized under the laws of The
Netherlands; and (vi) Sonoco Holding Italia S.r.l., a company organized under
the laws of Italy.

         "SONOCO INDEMNIFIED PERSON" means the Joint Venture, Sonoco Products,
the Sonoco Holding Companies, the Sonoco Operating Companies, and their
respective Affiliates, partners, officers, directors, managing directors,
managers, employees, agents and representatives, in each case other than any
member of the Ahlstrom Group.

         "SONOCO INTERNATIONAL" means Sonoco International, Inc., a company
organized under the laws of the State of Delaware.

                               Exhibit A - Page 13


         "SONOCO LUXCO" means Sonoco Luxembourg S.a r.l., a company organized
under the laws of Luxembourg and an indirect, wholly-owned subsidiary of Sonoco
Products.

         "SONOCO MATERIAL ADVERSE EFFECT" means any circumstance, event, change
in, or effect on any of the Sonoco Holding Companies or the Sonoco Operating
Companies that has a material adverse effect or change on or to the Sonoco
Business, Assets, Liabilities, relationship with material customers or
suppliers, condition (financial or otherwise), prospects, operations, earnings,
cash flows or results of operations of the Sonoco Holding Companies or the
Sonoco Operating Companies taken as a whole, whether such material adverse
effect or change occurs before or after the Sonoco Contribution.

         "SONOCO MATERIAL AGREEMENTS" has the meaning set forth in Section
6.20(a).

         "SONOCO NEWCO GERMANY" means a company to be organized under the laws
of Germany as part of the Sonoco Reorganization, as described in more detail in
Exhibit S.

         "SONOCO NEWCO GIBRALTAR" means a company organized under the laws of
Gibraltar which is part of the Sonoco Reorganization, as described in more
detail in Exhibit S.

         "SONOCO NEWCO UK" means a company to be organized under the laws of
England and Wales as part of the Sonoco Reorganization, as described in more
detail in Exhibit S.

         "SONOCO NEWCO SWISS" means a company to be organized under the laws of
Switzerland as part of the Sonoco Reorganization, as described in more detail in
Exhibit S.

         "SONOCO OPERATING COMPANIES" means, collectively: (i) Sonoco IPD France
S.A., a company organized under the laws of France; (ii) Sonoco Eurocore, S.A.,
a company organized under the laws of Belgium; (iii) Sonoco Paper France S.A., a
company organized under the laws of France; (iv) Tubetex, NV, a company
organized under the laws of Belgium; (v) Sonoco IPD GmbH, a company organized
under the laws of Germany; (vi) Sonoco Caprex Karton- und Papierverarbeitungs
AG, a company organized under the laws of Switzerland; (vii) Sonoco Deutschland
GmbH, a company organized under the laws of Germany; (viii) Sonoco OPV Hulsen
GmbH, a company organized under the laws of Germany; (ix) Demolli Industria
Cartaria S.p.A., a company organized under the laws of Italy; (x) Sonoco Poland
S.p. z o.o., a company organized under the laws of Poland; (xi) Sonoco Barcelona
S.A., a company organized under the laws of Spain; (xii) Sonoco Pina S.A., a
company

                               Exhibit A - Page 14


organized under the laws of Spain; (xiii) Sonoco Ambalaj Sanayi ve Ticaret AS, a
company organized under the laws of Turkey; (xiv) Sonoco Norge AS, a company
organized under the laws of Norway; (xv) Sonoco Newco UK; (xvi) Sonoco Europe
S.A., a company organized under the laws of Belgium; (xvii) Sonoco Greece;
(xviii) Sonoco Netherlands B.V., a company organized under the laws of The
Netherlands; (xix) Schweighouse; (xx) Sodarec; and (xxi) Sonoco Newco Germany.

         "SONOCO PREDECESSOR COMPANIES" means the Sonoco UK Predecessor and the
Sonoco Greece Predecessor.

         "SONOCO PRODUCTS" has the meaning set forth in the Introduction.

         "SONOCO PROHIBITED TRANSACTIONS" has the meaning set forth in Section
4.1(c).

         "SONOCO REAL PROPERTY" has the meaning set forth in Section 6.14(a).

         "SONOCO REORGANIZATION" has the meaning set forth in Section 5.1(a).

         "SONOCO REORGANIZATION DEVIATIONS" has the meaning set forth in Section
4.2(a)(i)(A).

         "SONOCO SHARES" has the meaning set forth in Section 2.2(a).

         "SONOCO TAX RETURNS" has the meaning set forth in Section 6.13(a).

         "SONOCO UK PREDECESSOR" means Sonoco Ltd., the predecessor of Sonoco
Newco UK, in respect of its operation of its allocable portion of the Sonoco
Business, prior to the Transfer of such allocable portion of the Sonoco Services
to Sonoco Newco UK.

         "SURVIVAL PERIOD" has the meaning set forth in Section 10.1(a).

         "TAXES" means all national, local and foreign taxes (including without
limitation income, withholding on dividends, interest and royalties, profit,
franchise, sales, use, real property, personal property, value added (VAT), ad
valorem, excise, employment, wage taxes, and withholding taxes or advance
payments regarding taxes as well as social security contributions, stamp or
capital taxes and taxes on net wealth) and installments of estimated taxes,
assessments, deficiencies, levies, imports, duties, license fees, registration
fees, withholdings, or other similar charges of every kind, character or
description imposed by any governmental or quasi-governmental authorities, and
any interest, penalties or additions to tax imposed thereon or in connection
therewith.

                               Exhibit A - Page 15


         "TAX RETURN" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

         "TERRITORY" means, collectively, the countries of continental Africa,
Europe (including Russia) and the Middle East (for purposes of this Contribution
Agreement the following countries shall be deemed to be the Middle East:
Afganistan, Bahrain, Cyprus, Iran, Iraq, Israel, Jordan, Kuwait, Kyrgyzstan,
Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Syria, Tajikistan, Turkey,
Turkmenistan, United Arab Emirates, Uzbekistan and Yemen).

         "TRANSACTION" has the meaning set forth in the Recitals.

         "TRANSACTION DOCUMENTS" has the meaning set forth in Section 6.2(a).

         "TRANSFER" means, as to any security or assets, to sell, or in any
other way transfer, assign, gift, contribute, pledge, grant a security interest
in, distribute, encumber or otherwise dispose of (including, without limitation,
the foreclosure or other acquisition by any lender with respect to any security
or asset pledged to such lender by the holder of such security or asset), such
security or asset, either voluntarily or involuntarily and with or without
consideration.

         "UK PENSION OBLIGATION" means any Pension obligation of any member of
the Sonoco Group incorporated or active in the UK with respect to employees who
are not, at the time of the Sonoco Reorganization, active exclusively in the
Sonoco Business and either are not Transferred, or object to being Transferred,
to the Joint Venture in connection with the transactions contemplated hereby.

         "UK PENSION PLAN" has the meaning set forth in Section 5.14(a).

         "UK TRANSFERRED EMPLOYEES" has the meaning set forth in Section 5.14.

         "VP SUPPLY AGREEMENT" has the meaning set forth in Section 3.2(e)(vii).

         "WOR ACT" has the meaning set forth in Section 8.10.

                                     * * * *



                               Exhibit A - Page 16





                                    EXHIBIT H
                            TO CONTRIBUTION AGREEMENT


                              LIST OF NEW DIRECTORS


Sonoco Appointees
- -----------------
Harris DeLoach
Charles Hupfer
Jim Bowen
Isabelle Flamme

Ahlstrom Appointees
- -------------------
Juha Rantanen
Svante Adde
Alex Schmitt














                               Exhibit H - Page 1





                                    EXHIBIT T
                            TO CONTRIBUTION AGREEMENT


                     DESCRIPTION OF AHLSTROM REORGANIZATION

1.       The contribution by Ahlstrom Corp of its direct and indirect interests
         in the Ahlstrom Holding Companies and the Ahlstrom Operating Companies
         to Ahlstrom Holding.

2.       With affect as of the Closing Date, Ahlstrom Corp shall, and shall
         cause its Affiliates to, terminate all management services agreements
         and division management services agreements between any of the Ahlstrom
         Holding Companies or the Ahlstrom Operating Companies, on the one hand,
         and Ahlstrom Corp or any of its other Affiliates, on the other hand,
         referred to in Schedule 7.11. Any amounts paid under such agreements
         for the period from January 1, 2004 through the Closing Date shall be
         promptly reimbursed to the payor from the respective payee after the
         Closing Date including interest thereon from the date the payment was
         made until the date the reimbursement is made at a rate of 3% per
         annum.

         As soon as practicable after the Closing Date (but in no event later
         than 45 days after the Closing Date), Ahlstrom Corp will prepare and
         deliver to Sonoco Products a reasonably detailed report on such
         payments and reimbursements.









                               Exhibit T - Page 1

 

 

---