EXCLUSIVE MANUFACTURING AND
                                SUPPLY AGREEMENT


        THIS  AGREEMENT  made as of December  18, 1998,  between THE  HOFFMASTER
DIVISION OF THE FONDA GROUP,  INC., a Delaware  corporation,  ("Hoffmaster") and
CREATIVE EXPRESSIONS GROUP, INC., a Delaware corporation, ("CEG").


                                W I T N E S S E T H :


        WHEREAS, CEG is engaged in the design, promotion,  distribution and sale
of  disposable  party goods,  including,  without  limitation,  the Products (as
hereinafter defined); and

        WHEREAS,   CEG  has  concurrently   herewith  sold  and  transferred  to
Hoffmaster,  all of CEG's right,  title and interest in and to certain machinery
and equipment  heretofore  utilized by CEG for the  manufacture of the Products;
and

        WHEREAS,  Hoffmaster  and CEG have  determined  that they will  mutually
benefit from an exclusive  manufacturing and distribution  relationship pursuant
to which CEG will utilize Hoffmaster  exclusively to manufacture the Products to
CEG's  specifications  and  pursuant  to  which  Hoffmaster  will  agree  to  so
manufacture  such  Products  for sale to CEG,  upon and  subject  to the  terms,
covenants and conditions set forth in this Agreement.

        NOW,  THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, Hoffmaster and CEG hereby agree as
follows:

        1.     Definitions.

               (a)  "Adjustment  Period"  shall mean the most  current  calendar
quarter for which a Purchase Price  adjustment is to be made pursuant to Section
4.1(b) hereof.

               (b) "Labor Costs" shall mean the  contractual  hourly labor rates
for the Adjustment  Period as set forth in the Collective  Bargaining  Agreement
covering Hoffmaster's hourly workers at Appleton,  Wisconsin, as the same may be
amended, extended or replaced.

               (c) "Party Goods  Market"  shall mean the party goods  segment of
the disposable consumer goods products market in the Territory.

               (d) "Products" shall mean (i) the paper plates, napkins and table
covers  listed on a products  list  initialed  by the  parties  for  purposes of
identification;  and (ii) such additional  disposable consumer goods products as
Hoffmaster and CEG may from time-to-time agree upon in


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writing.


               (e) "Raw Material Costs" with respect to each Product, shall mean
the  actual  per ton cost for all  tissue  or plate  board,  as the case may be,
incurred by Hoffmaster for the manufacture of such Product during the Adjustment
Period.

               (f) "Territory" shall mean the United States and Canada.

        2. Purchase and Sale. CEG hereby agrees to purchase from Hoffmaster, and
Hoffmaster  hereby  agrees  to  manufacture  and  sell  to  CEG,  all  of  CEG's
requirements for the Products during the Term.

        3. Term.  The term of this  Agreement (the "Term") shall commence on the
date hereof and continue through the fifth (5th) anniversary of the date of this
Agreement,  and continue  thereafter from year-to-year unless either party shall
elect to  terminate  this  Agreement by notice given to the other party not less
than  ninety  (90)  days  prior to the  expiration  of the Term,  unless  sooner
terminated as herein provided.

        4. Prices.  (a) The initial  purchase price for each Product shall be as
set  forth  on  a  price  list   initialed   by  the  parties  for  purposes  of
identification,  subject to  adjustment  in  accordance  with the  provisions of
Section 4(b) hereof (the "Purchase Price").

               (b) The parties  recognize and agree that  approximately  seventy
(70%) percent of Hoffmaster's  manufacturing costs for the Products are based on
Raw  Material  Costs,  and that the  remainder of such costs are in all material
respects  based on Labor Costs.  Therefore,  the Purchase Price for each Product
will be adjusted as of April 1, 1999 and as of the first day of each  succeeding
calendar  quarter  during the Term as follows:  (i) seventy (70%) percent of the
Purchase Price for such Product shall be adjusted by the percentage  change,  if
any, in the Raw Material Costs for the immediately  preceding  calendar quarter;
and (ii) thirty (30%)  percent of the Purchase  Price for such Product  shall be
adjusted  by  the  percentage  change,  if  any,  in the  Labor  Costs  for  the
immediately preceding calendar quarter. Further, the ratio of Raw Material Costs
to Labor Costs set forth  above shall be reviewed on April 1, 1999 and  annually
thereafter and adjusted as agreed upon by the parties.

        5.  Orders,   Shipments  and  Forecasts.  CEG  shall  place  its  orders
specifying the Products to be purchased hereunder not later than twenty-one (21)
days  prior  to the date on  which  such  Products  are to be  shipped.  CEG has
provided a yearly usage forecast which CEG shall update semi-annually during the
Term. CEG shall be required to purchase all raw materials  specifically relating
to  the  Products  but  not  to  exceed  three  (3)  months  of  normal  demand,
work-in-process   and  finished  goods  Products  inventory  on  hand  upon  the
expiration or sooner termination of the Term and such obligation shall survive.


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        6.  Delivery,  Freight and Title.  The Purchase Price shall be the price
F.O.B.  CEG's  facility at  Indianapolis,  Indiana,  with full freight  being at
Hoffmaster's sole cost and expense; except, however, that the Purchase Price for
Products manufactured for Target shall be the price F.O.B.  Appleton,  Wisconsin
and CEG shall have the right to select and contract with the applicable carriers
for such Products.  Title to and possession of Products shipped  hereunder shall
pass to CEG upon  delivery  by  Hoffmaster  to the  carrier or if  delivered  by
Hoffmaster,  upon  delivery  to CEG's  facility,  as the  case may be,  and such
Products shall be at the risk of CEG from and after the date of such delivery.

        7. Taxes. In addition to the Purchase Price, CEG shall pay to Hoffmaster
an amount equal to all federal,  state, or local sales, use, or excise taxes now
or  hereafter  imposed or payable  with  respect to the sale and delivery of the
Products sold hereunder ("Taxes").

        8. Invoices, Terms of Payment. Invoices setting forth the Purchase Price
and the Taxes with  respect  thereto  shall be  forwarded  to CEG at the time of
delivery of the Products  covered thereby to CEG.  Payment shall be in cash, net
thirty (30) days, from the date of such invoices.

        9. Separate Sale.  Each shipment of Products under this Agreement  shall
constitute  a separate and distinct  sale,  and except as otherwise  provided in
Section 13 hereof, any default of CEG in specifying, accepting or paying for any
shipment shall not affect  Hoffmaster's right to insist upon full performance of
the provisions of this Agreement for the full Term.

        10. Contingencies.  The obligations of each party hereto with respect to
the manufacture,  sale,  purchase,  shipment,  delivery and receipt of Products,
shall be suspended to the extent that such party is unable to manufacture, sell,
purchase,  ship,  deliver or receive  Products by reason of  strikes,  lockouts,
boycott,  picketing,  riots, civil commotion,  sabotage, acts of war, embargoes,
carrier shortage, mechanical failures,  prohibition imposed by federal, state or
local authority, fires, accidents, floods or any other event beyond such party's
reasonable control. During any period of shipping suspension, or with respect to
Products  with  specifications  which  exceed  Hoffmaster's  technical  or other
capabilities,  CEG shall have the right to purchase CEG's  requirements  for the
Products affected thereby, without restriction.

        11.  Inspections  and Claims.  Any claim asserted by CEG, for any reason
whatsoever  except  for  quality,  shall  be  made  by  notice  given  by CEG to
Hoffmaster  within sixty (60) days after  receipt of the  material  which is the
subject matter of the claim,  or such claim shall be deemed to have been waived.
CEG shall also store  inside,  and set aside such  material  for  inspection  by
Hoffmaster,  and shall give  Hoffmaster  an  opportunity  to conduct an adequate
investigation.  No claim  shall be allowed  for  defects in quality  unless made
within sixty (60) days after shipment nor after the material  shipped  hereunder
is  processed by CEG in any manner.  Hoffmaster  shall be deemed to have allowed
each such claim unless Hoffmaster disputes the same in writing within sixty (60)
days  following  Hoffmaster's  receipt of notice of such claim and sets forth in
reasonable detail the basis for such dispute.


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<PAGE>

        12.  Hoffmaster's  Warranty.   Hoffmaster  warrants  that  the  Products
delivered   hereunder   shall  be   merchantable,   comply  with  CEG's  Product
specifications  and  otherwise be of standard  grade and quality as described in
TAPPI standards.  HOFFMASTER SHALL NOT BE LIABLE FOR ANY BREACH OF SUCH WARRANTY
IN ANY AMOUNT IN EXCESS OF THE PRICE OF THE PARTICULAR  PRODUCTS WITH RESPECT TO
WHICH SUCH BREACH OCCURS. IN NO EVENT SHALL CEG BE ENTITLED TO MAKE ANY CLAIM TO
RECOVER FOR LOSS OF CONTENTS OR FOR SPECIAL OR  CONSEQUENTIAL  DAMAGES WHICH CEG
HEREBY EXPRESSLY WAIVES.  HOFFMASTER DOES NOT WARRANT FITNESS FOR ANY PARTICULAR
PURPOSE OR MAKE ANY OTHER  WARRANTY  EXPRESSED  OR IMPLIED  WITH  RESPECT TO THE
PRODUCTS DELIVERED HEREUNDER.

        13. Default. In the event of a breach of this Agreement by either CEG or
Hoffmaster,  as the case may be,  which shall not be cured  within  fifteen (15)
days following the defaulting party's receipt of notice of such default from the
non-defaulting  party, the  non-defaulting  party, at its option may (a) without
affecting  in any way the  obligation  of either  party in  respect  of  further
shipment  hereunder,  regard such shipment as a separate and independent sale on
the terms and conditions applicable  hereunder,  or (b) terminate this Agreement
as  regards  further  shipments  and  if CEG  shall  be  the  defaulting  party,
Hoffmaster  may in such event  declare the  obligations  of CEG for all Products
shipped due  forthwith,  but the  defaulting  party shall  remain  liable to the
non-defaulting  party for all losses  and  damages  sustained  by reason of such
breach.

        14. Bankruptcy,  Receivership,  etc. In the event of the adjudication of
either party as bankrupt,  or of the  appointment of a receiver for either party
which shall remain undischarged for forty-five (45) days after such appointment,
or of the making by either party of an assignment  for the benefit of creditors,
the other party shall have the right to terminate this  Agreement  forthwith but
without  waiving thereby its right to recover any losses and damages to which it
may be entitled.

        15.  Non-Compete.  Hoffmaster  agrees that during the Term,  it will not
compete with CEG in those market  segments of the Party Goods Market  accounting
for not less than sixty (60%)  percent of CEG's  aggregate  Product sales during
calendar year 1998.

        16.    Trademarks and Copyrights.

               (a) Products and their labels and packaging  under this Agreement
may bear,  as CEG may  direct,  CEG  trademarks,  corporate  logo and  copyright
notice. Hoffmaster's use of CEG trademarks,  corporate logo and designs (whether
or not copyrighted)  shall be limited to Products and their labels and packaging
manufactured  or sold to CEG under this  Agreement,  and upon the  expiration or
sooner  termination of this Agreement,  Hoffmaster shall not use any CEG designs
(whether or not  copyrighted) or any CEG trademark,  corporate logo or any other
marks  confusingly  similar  thereto except to the extent  necessary to complete
ensembles, if any, work-in-process inventory and packaging for such inventory on
hand at such time.

               (b) Except as expressly  provided in Section  16(a)  above,  this
Agreement in no


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<PAGE>


way creates or conveys a license or permission of any kind for Hoffmaster to use
CEG trademarks,  corporate logo,  copyrights or designs, and expressly prohibits
the unauthorized use of CEG trademarks, corporate logo, copyrights or designs.

               (c)  Hoffmaster  shall not at any time contest or claim rights in
CEG trademarks, corporate logo or designs (whether or not copyrighted), or cause
or permit any other person or entity to do anything  that may tend to disparage,
confuse or lessen the  significance  of any CEG  trademarks,  corporate  logo or
designs.  Hoffmaster  will  not  avail  itself  of  the  name  of  CEG in any of
Hoffmaster's   promotional  or  advertising  literature,   or  otherwise  assert
affiliation with CEG or any of its subsidiaries without prior written permission
of CEG.

        17. Independent  Contractor.  CEG acknowledges that it is an independent
business  acting as an independent  contractor.  Nothing in this Agreement or in
the course of dealing of the parties  shall be construed  to create  between the
parties hereto a relationship as partners,  joint  venturers,  or as authorizing
either party to obligate the other in any manner.

        18.    Indemnification.

               (a) Subject to the  limitations  contained  in Section 12 hereof,
Hoffmaster hereby agrees to indemnify and hold CEG harmless from and against any
and all damages, losses,  deficiencies,  actions, demands,  judgments, costs and
expenses (including  reasonable attorneys' fees) of or against CEG to the extent
resulting  from (i) the  breach of any  warranty  or the  nonfulfillment  of any
undertaking, warranty, covenant or agreement on the part of Hoffmaster contained
herein; (ii) a defect in any of the Products;  or (iii) except with respect to a
claim for which  Hoffmaster  is entitled to  indemnification  pursuant to clause
(ii) of Section  18(b)  hereof,  any claim by a third  party  that the  Products
infringe upon the rights of such party.

               (b) CEG hereby agrees to indemnify and hold  Hoffmaster  harmless
from and against any and all damages, losses,  deficiencies,  actions,  demands,
judgments,  costs and  expenses  (including  reasonable  attorneys'  fees) of or
against  Hoffmaster to the extent resulting from (i) the  nonfulfillment  of any
undertaking,  covenant or agreement on the part of CEG contained herein; or (ii)
any claim by a third party that  Hoffmaster's  use of any  trademark,  corporate
logo or Product design pursuant to Section 16 hereof,  infringes upon the rights
of such party.

        19. Confidentiality. The parties mutually agree that all information and
documentation  made  available  or  disclosed  to each other as a result of this
Agreement,  shall be received and treated by each other as confidential and such
information  shall be maintained on a restricted basis. The parties agree not to
disclose  to  third  parties  any  such   information   regarding  each  other's
operations,  business, marketing strategies or finances. CEG and Hoffmaster each
acknowledge   that  the  other  may  possess  certain  trade  secrets  or  other
intellectual property regarding its manufacturing processes for the Products and
agrees to strictly maintain the  confidentiality  thereof.  The above provisions
shall  not  apply to  information  which (a) is or  becomes  publicly  available
through  no  fault  of the  receiving  party  (b) was in the  receiving  party's
possession as shown by written records prior to


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disclosure  hereunder  or (c) is  received  from a third  party  with  right  to
disclose and without any  obligation  on the  receiving  party to maintain  such
information in confidence.

        20. Notices.  Any notice,  consent,  approval or election  authorized or
required by this  Agreement  shall be  effective  only if in writing and sent by
United States registered or certified mail, return receipt requested,  addressed
to the other party at the  following  address or to such other address as either
party shall designate by notice to the other.


        If to Hoffmaster:    The Fonda Group, Inc.
                             Hoffmaster Division
                             2920 North Main Street
                             Oshkosh, Wisconsin 54901
                             Attn:  Robert Korzenski
                                    President


        If to CEG:           Creative Expressions Group, Inc.
                             7240 Shadeland Station
                             Suite 300
                             Indianapolis, Indiana 46256-3928
                             Attn:  Jon McLain
                             Vice President and General Manager


Notices shall be deemed received on the third business day following the mailing
thereof in the manner set forth above.

        21. Arbitration.  Any controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration in Oshkosh,
Wisconsin  (or in such  other  place  as the  parties  may  mutually  agree)  in
accordance  with  the  laws  or  regulations  then  obtaining  of  the  American
Arbitration Association,  and judgment upon the award rendered may be entered in
any court, state or federal, having jurisdiction.


                                  (INTENTIONALLY LEFT BLANK)


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        22.  Miscellaneous.  This Agreement shall be governed by the laws of the
State of  Wisconsin,  contains the entire  agreement of the parties  hereto with
respect to the  subject  matter  hereof,  may not be amended or  modified in any
manner except by written  instrument  executed and delivered by duly  authorized
officers  of each  party  hereto,  and  shall be  binding  upon and inure to the
benefit of the  parties  hereto and their  respective  successors  and  assigns;
provided,  however,  that  neither  party  shall  have the right to assign  this
Agreement  without  obtaining the other  party's  prior consent  thereto in each
instance.

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


ATTEST:                                THE FONDA GROUP, INC.




/s/Harvey L. Friedman                  By: /s/Robert Korzenski
---------------------                     --------------------
Harvey L. Friedman                         Robert Korzenski
Secretary                                  President



ATTEST:                                CREATIVE EXPRESSIONS GROUP, INC.



/s/Harvey L. Friedman                  By: /s/Jon McLain
---------------------                     --------------
Harvey L. Friedman                         Jon McLain
Secretary                                  Vice President and General Manager


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