UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K


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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

 Commission File Number:........... 333-53987................................

                        JACKSON PRODUCTS, INC.
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        (Exact name of registrant as specified in its charter)
           Delaware                                        75-2470881
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  (State or other jurisdiction of                       (I.R.S. Employer ID No.)
    incorporation or organization)

               2997 Clarkson Road, Chesterfield, Missouri 63017
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               (Address of principal executive offices)

                           (314) 207-2700
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       (Registrant's telephone number, including area code)
                             N/A
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(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. [X] Yes [ ] No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X] 
                    APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.
                    38,530  shares of Class A Common  Stock at February 28, 1999
                     8,526 shares of Class C Common Stock at February 28, 1999

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S>                                                                                     <C>
PART I.............................................................
    Item 1   Business..............................................           3
    Item 2.  Properties ...........................................           7
    Item 3.  Legal Proceedings.....................................           7  
    Item 4.  Submission of Matters to a Vote of Secuirty Holders...           7  

PART II............................................................
    Item 5.  Market For Registrant's Common Equity and Related 
             Stockholder Matters...................................           7
    Item 6.  Selected Financial Data...............................           8
    Item 7.  Management's Discussion and Analyisis of Financial 
             Condition and Results of Operations....................          9  
    Item 7A. Quantitative and Qualitative Disclosures about Market
             Risk..................................................           12  
    Item 8.  Financial Statements and Supplementary Data............          12
    Item 9.  Changes in and Disagreements with Accountants on 
             Accounting and Financial Disclosure....................          36  

PART III. ..........................................................
    Item 10. Directors and Executive Officers.......................          36  
    Item 11. Executive Compensation.................................          37
    Item 12. Security Ownership of Certain Beneficial Owners and 
             Management.............................................          40  
    Item 13. Certain Relationships and Related Transactions.........          41  

Part IV.
    Item 14. Exhibits, Financial Statement Schedules,and Reports 
             on Form 8-K............................................          42  
    Signatures......................................................          52
</TABLE>

                                       2
<PAGE>



ITEM 1.  BUSINESS

GENERAL

Jackson  Products,  Inc.  ("JPI"  or  the  "Company")  is  a  leading  designer,
manufacturer  and  distributor  of safety  products  serving a variety  of niche
applications  within the personal and highway  safety markets  throughout  North
America and Europe. JPI markets its products under established, well-known brand
names  to  an  extensive  network  of  over  8,000  distributors,   wholesalers,
contractors and government agencies.  Management believes that the Company holds
leading market share positions in each of its primary product lines,  reflecting
the  Company's  (i)   proprietary   technology,   (ii)  strong   reputation  and
relationships  with its customer  base,  (iii) breadth of product lines and (iv)
low cost manufacturing operations.

Due  to  strong  industry  fundamentals,  its  solid  competitive  position  and
strategic  acquisitions,  the Company has achieved  significant  and  consistent
growth under its current  management team. The Company  currently focuses on two
product groups:  (i) personal safety products,  which represented  approximately
61% of pro forma net sales in 1998,  and (ii)  highway  safety  products,  which
represented approximately 39% of pro forma net sales in 1998.

The Acquisitions

On April 22, 1998, the Company acquired all of the outstanding  capital stock of
Allsafe   and   Silencio/Safety   Direct  for  $29.5   million   (the   "Allsafe
Acquisition").   Products  sold  by  these  companies  include  safety  goggles,
spectacles,  hardhats,  hazard warnings and hearing safety products. The Allsafe
Acquisition  has  provided  JPI with  complementary  product  lines,  additional
channels of distribution and new end-users.  Allsafe and Silencio/Safety  Direct
generated an aggregate of approximately  $33.8 million of pro forma net sales in
1998.

On April 23, 1998, the Company acquired all of the outstanding  capital stock of
Crystaloid  for $6.5 million  (the  "Crystaloid  Acquisition"),  $0.5 million of
which is payable 18 months  from the April 23,  1998  closing of the  Crystaloid
Acquisition.  Crystaloid is a manufacturer of liquid crystal displays for use in
aviation  and   industrial   equipment,   including   the   Company's   line  of
auto-darkening  filter lenses and welding helmets.  The acquisition provides JPI
with an in-house  technology  base for both existing and new safety products and
an in-house  source for its current  liquid crystal  shutter  needs.  Crystaloid
generated $11.0 million of pro forma net sales in 1998.

On July 22, 1998, the Company, through Allsafe,  acquired all of the outstanding
capital  stock of Kedman  Company for a total  purchase  price of $9.2  million.
Kedman has a firm hold on its customer  base  through its service  philosophies,
marketing  plans and its "small  business,"  personal  touch.  Its  manufactured
products,  (i.e. helmets,  visors,  headgear and screwdrivers)  provide JPI with
additional   products  to  its  personal  safety  products  group.  The  Allsafe
Acquisition, the Crystaloid Acquisition and the Kedman Acquisition are hereafter
referred to as "the Acquisitions".

Personal Safety Products

The Company sells over 10,000 different safety products (a figure which includes
different   styles  of  similar   products)   including   welding   helmets  and
auto-darkening welding filter lenses, safety caps and hardhats, face shields and
visors,  safety goggles and spectacles,  prescription  safety eyewear frames and
hearing protection  products under the Jackson,  Morsafe,  Aden, Contour Marker,
American  Allsafe Co., Team  Silencio,  Huntsman and Lamba brand names.  Primary
customers for these products are found in the welding, construction, janitorial,
healthcare,  sporting,  and food service  sectors as well as throughout  general
industry, including oil, gas and chemical processors, metal fabricators and auto
and  aircraft  manufacturers.  The  Company's  products  are designed to protect
workers  from  various  head/eye/face  hazards  in  manufacturing  environments,
including flying debris,  chemical splashes,  excessive noise, noxious fumes and
ultraviolet  rays.  The  Company  differentiates  itself  within  its  market by
providing  broad  lines of  innovative  products,  often  employing  proprietary
technology, that meet the specialized needs of its end-users.

A 1998 study  prepared  by Frost &  Sullivan  (the  "Frost &  Sullivan  Report")
estimated that the size of the segment of the personal safety products market in
which the Company  competes is  approximately  $767 million in the U.S. in 1998,
and an  additional  $960 million  within Europe in 1997.  Historically,  a large
number of relatively small, independent manufacturers with limited product lines
have served the personal safety products market, and the industry remains highly
fragmented.  Management  believes  that  manufacturers  offering a wide range of
products having a high degree of market  acceptance and strong brand names, such
as the Company,  benefit  from several  competitive  advantages,  including  (i)
economies of scale in manufacturing, sales and distribution, (ii) greater appeal
to large industrial  distributors and national  retailers seeking to rationalize
their  sources  of  supply  and  (iii) an  extensive  distribution  network  for
introducing new product categories and product enhancements.

                                       3
<PAGE>


Several  factors are driving  growth in the  personal  safety  products  market.
Employers are now increasingly  aware of savings in insurance costs and workers'
compensation  costs that can be achieved through the consistent use of effective
personal safety products.  Significant growth in demand will also continue to be
realized as  government  regulations  which  mandate the use of personal  safety
products  are  instituted  and  enforced by agencies  like OSHA and the National
Institute of Occupational Safety and Health ("NIOSH"). In addition, improvements
in comfort,  performance,  and styling have resulted in the increased acceptance
of personal  safety  products by their  users.  The market for  personal  safety
products is expanding beyond the traditional U.S. industrial distributor. Retail
home centers and mass  merchandisers  are offering a greater variety of personal
safety  products  for  the  consumer  do-it-yourself  market.  As  manufacturing
employment   and  safety   awareness  grow  outside  of  the  U.S.  and  Europe,
international demand for personal safety products could increase.

Personal  safety  products  generated net sales of $110.6 million on a pro forma
basis for the Company in 1998. The Company's  product  offerings include welding
helmets and auto-darkening welding filter lenses, hardhats, face shields, safety
spectacles and prescription safety eyewear frames.  Management believes that JPI
is the leading  supplier of welding safety  equipment in North America,  with an
estimated 55% market share.  JPI's  Electronic Quick Change ("EQC") product line
offers  a  technologically  advanced  range  of  welding  helmet  filter  lenses
featuring the world's fastest  auto-darkening  switching speed.  Switching speed
represents  the time  required  for a lens to switch from a light to dark state.
Auto-darkening  technology  allows  welders to see  without  lifting the helmet,
therefore improving worker productivity while significantly  reducing repetitive
motion and eye injuries.

The U.S.  industrial  market for personal  safety  products  focused on the eye,
face,  ear and head is estimated by the Frost & Sullivan  Report to have been in
excess of $767 million in 1998.  JPI's sales of personal  safety  products  have
benefited  and are  expected  to continue to benefit  from  increased  workplace
regulation and safety  awareness.  The Company believes the outlook for the U.S.
personal safety products  market is continually  being  influenced by heightened
social awareness  regarding  worker health and safety,  which in turn stimulates
legislation  requiring and monitoring  the use of safety  products in commercial
and industrial environments.  The Company expects that the enforcement of safety
regulations by government  agencies,  such as the Occupational Safety and Health
Administration  ("OSHA"), and the efforts of employers and insurance carriers to
contain group health care and workers'  compensation  costs should  maintain the
growth of the market.

In order to capitalize on these strong  industry  fundamentals,  the Company has
made several  acquisitions to build its personal safety  products  business.  In
1996, the Company  acquired OSD Envizion,  Inc.  ("OSD"),  providing JPI with an
estimated 70% market share of the North American  auto-darkening  welding filter
lens market and establishing JPI as the only North  American-based  manufacturer
of  auto-darkening  welding  filter  lenses.  In 1997, the Company formed Lansec
Holding GmbH ("GmbH") to acquire several European  businesses.  The formation of
GmbH  provided  the  Company  with  in-house   European   distribution  for  its
auto-darkening product line as well as an overseas  infrastructure  platform for
the Company's other welding safety products. The acquisition of American Allsafe
Company ("Allsafe")and  Silencio/Safety Direct, Inc.  ("Silencio/Safety Direct")
further expands the range of the Company's  personal safety products and enhance
the  Company's   channels  of   distribution.   The  acquisition  of  Crystaloid
Technologies, Inc. ("Crystaloid") and its expertise in liquid crystal technology
is expected to strengthen  the Company's lead in  auto-darkening  technology and
allow  for the  development  of  additional  applications  in new  markets.  The
acquisition of Kedman Company,  ("Kedman") expands the Company's presence in the
west and widens the current distribution channels.

Highway Safety Products

The Company  sells over 1,100  different  products  including  reflective  glass
beads,  cones,  channelizers,  pavement  tape,  flags,  vests and roll-up signs,
barricades  and high  intensity  lights.  Primary  customers for these  products
include state and local  municipalities,  independent  contract  road  stripers,
thermoplastic manufacturers, and highway contractor supply and rental companies.
The  Company's  highway  safety  products  are designed to make both driving and
construction  on highways  safer by  enhancing  driving  visibility  and marking
construction sites.

Sales of the Company's highway safety products are driven by the amount of state
and federal  expenditures on highway construction and maintenance as well as the
increase in regulations  governing  highway  markings.  The U.S. Federal Highway
Administration has estimated that one-third of the nation's highways are in need
of repair. As a result,  management believes the U.S. highway industry is poised
to benefit from expected increases in infrastructure  spending.  Federal highway
funding since 1991 has been governed by the  Intermodal  Surface  Transportation
Efficiency Act ("ISTEA"), which provided $124 billion for highway programs to be
funded over a six-year period, initially ending in October 1997. The U.S. Senate
and  House of  Representatives  approved  a new joint  public  works  bill,  the
Transportation  Equity Act for the 21st  Century  ("TEA-21"),  on May 22,  1998.
TEA-21  provides for $173 billion in highway  funding over the next six years, a
40% increase over ISTEA.


                                       4
<PAGE>



Highway safety products  generated net sales of $71.7 million for the Company in
1998.  Highway safety products  offered by the Company include traffic cones and
markers,  barricades,  reflective  clothing and glass beads. Glass beads provide
the  reflective  agent in an extensive  range of  applications,  such as highway
striping,  traffic signs, aviation runways,  license plates and reflective tape.
The Company  believes that it has a leading market share in North America in the
majority of its primary highway safety product categories.

The U.S.  market for highway  safety  products  sold by JPI is  estimated by the
Company to be approximately $450 million. The demand for highway safety products
is primarily  driven by state and federal  expenditures on highway  construction
and maintenance.  Management expects such government spending to increase in the
future to address the  deteriorating  and increasingly  congested North American
highway  infrastructure.  The U.S. Federal Highway  Administration has estimated
that  nearly  one-third  of the  nation's  interstate  highways  are in  need of
immediate repair.

Sales and Distribution

Personal Safety Products.  The Company  distributes its personal safety products
domestically  primarily through a network of wholesalers and  distributors.  The
Company's sales force directs its efforts at the distributor and end-user levels
to create an effective  pull-through  of products to the market.  The  Company's
in-house  sales forces are covered by incentive  bonus plans while the Company's
manufacturer  representatives are compensated on a varying commission structure.
These  salespeople  and  agents  are  supported  by  regionally-based  sales and
technical  specialists  allowing  the Company to deliver high levels of customer
service  locally  in  its  significant  markets.  Internationally,  the  Company
distributes  its products  primarily  through  Lansec,  which operates  business
divisions in Germany, France, Italy, the United Kingdom and the Netherlands.

Highway Safety  Products.  The Company  distributes  its highway safety products
through direct salespersons and catalogues. The Company's line of reflective and
industrial  glass  beads  are sold by  salespeople  directly  to state and local
municipalities, independent contract road stripers, thermoplastic manufacturers,
and highway contracted supply and rental companies.  The Company's other highway
safety products are sold through a combined effort of in-house sales  personnel,
manufactures representatives, a well-circulated Company catalog and inclusion in
various industrial supply catalogs.

Manufacturing

The Company uses a variety of  manufacturing  processes to produce  products for
the personal and highway safety product  industry.  Products  manufactured  from
plastic,  polycarbonate,  polyvinylchloride  ("PVC"),  resins  and  similar  raw
materials  are produced  using  injection  molding,  compression  molding,  flow
molding and blow molding  techniques.  Such products  include  welding  helmets,
hardhats, cones, channelizers, safety goggles and face shields.

Crystaloid  possesses  liquid crystal  technology  with which it produces liquid
crystal shutters used in Jackson's auto-darkening welding filter lenses.

Flex-O-Lite  produces low index glass beads through a process by which cullet or
scrap glass is run through a pulverizer, screened and stored by size. The ground
cullet is then fed into the bottom of a gas burner,  and as the cullet  rises it
melts to form spheres,  which are cooled and packed.  High index glass beads are
produced with virgin raw materials, which are mixed in a hopper then heated into
molten glass.  The molten glass is passed through a break-up  burner where it is
formed into glass  beads.  The 1.9x beads are cooled and sorted,  the 2.1x beads
are passed through another burner which effectively polishes the beads to result
in the higher refraction.

Raw Materials and Suppliers

Raw  materials  used by the  Company  in the  manufacture  of its  products  are
purchased both domestically and  internationally.  The Company believes that its
supply sources are both well-established and reliable.  Although the Company has
no long-term  supply  contracts,  it has experienced no significant  problems in
supplying its  operations.  The Company has ongoing  relationships  with certain
suppliers of raw materials, however the Company believes that there are a number
of reliable vendors available and it is able to obtain  competitive  pricing for
raw  materials.  Raw material  prices  fluctuate  over time depending on supply,
demand and other factors and increases in raw material prices may have an impact
on the Company's financial performance.

Intellectual Property

It is the Company's policy to protect its intellectual  property through a range
of measures,  including trademarks,  patents and confidentiality agreements. The
Company owns and uses  trademarks and brand names to identify itself as a source
of certain  goods.  The following  brand names of certain  company  products and
product  lines  are   registered  in  the  United  States:   Jackson,   Morsafe,
Flex-O-Lite,  EQC, Aden,  Contour Market,  American  Allsafe Co., Team Silencio,
Huntsman and Lamba.

                                       5
<PAGE>


Whenever  possible,  the Company's  intellectual  property  rights are protected
through the filing of  applications  for and  registrations  of  trademarks  and
patents.  In  addition,  the Company  protects  its trade  secrets by  requiring
certain of its employees, consultants and other suppliers, customers, agents and
advisors  to  execute  confidentiality   agreements  upon  the  commencement  of
employment or other  relationships  with the Company.  These agreements  provide
that all confidential  information  developed by or made known to the individual
or entity during the course of the  relationship  with the Company is to be kept
confidential and not disclosed to third parties except in certain circumstances.
There  can  be  no  assurance,  however,  that  these  agreements  will  provide
meaningful  protection  for the Company's  proprietary  information  or adequate
remedies in the event of the unauthorized use or disclosure of such information.

No  assurance  can  be  given  that  others  will  not   independently   develop
substantially  equivalent  proprietary  information and technologies,  otherwise
gain access to the Company's  trade secrets or disclose such  technology or that
the Company can  meaningfully  protect its rights to unpatented  trade  secrets.
Further,  there can be no assurance that  infringement or invalidity claims will
not be asserted  against the Company in the future.  The costs of defending such
claims, or an unfavorable determination with respect to litigation based on such
claims,  could have a material  adverse  effect on the  Company's  business  and
financial condition.

The Company also relies upon  unpatented  trade  secrets for the  protection  of
certain intellectual property rights.

Environmental Matters

The  Company  is  subject  to  Federal,  state  and  local  environmental  laws,
regulations  and ordinances  that (i) govern  activities or operations  that may
have adverse  environmental  effects  (such as emissions to air,  discharges  to
water, and the generation, handling, storage and disposal of solid and hazardous
wastes) or (ii) impose liability for the costs of clean-up or other  remediation
of  contaminated  property,  including  damages from spills,  disposals or other
releases of hazardous  substances or wastes,  in certain  circumstances  without
regard to fault. The Company's  manufacturing  operations  routinely involve the
handling of chemicals and wastes,  some of which are or may become  regulated as
hazardous  substances.   The  Company  endeavors  to  maintain  compliance  with
applicable  environmental  laws, but from time to time the Company's  operations
may result in  noncompliance  or liability  for clean-up  pursuant to such laws.
Based on  information  reviewed by and  available  to the  Company,  the Company
believes it is in compliance  with  applicable  environmental  laws. The Company
does not believe it will incur significant material costs in connection with any
compliance or potential  liability  under  applicable  environmental  laws,  and
believes  that any such  costs will not have a  material  adverse  effect on its
business or financial condition.

Competition

The personal  and highway  safety  products  industries  are highly  competitive
industries with  participants  ranging in size from small companies  focusing on
single types of safety products, to a few large multinational corporations which
manufacture  and  supply  many  types of safety  products.  The  Company's  main
competitors vary by region and product.  The Company believes that  participants
in the personal and highway safety products  industries compete primarily on the
basis of price, product characteristics (such as functional performance,  design
and style),  brand name  recognition  and service.  The Company  enjoys  certain
economies of scale which are not available to smaller competitors.  Nonetheless,
other large  competitors  may enjoy  similar  economies of scale and may possess
greater financial or other resources than the Company. In addition,  to maintain
its market position, the Company must be competitive in the area of brand image,
distribution, design, style, customer service, quality and price.

Government Regulation and Industrial Standards

Government regulation mandating the use of personal safety equipment for certain
job classifications and work site environments is the most significant factor in
the creation of demand for personal safety equipment.  OSHA generally  regulates
the workplace  environments in which personal safety  equipment must be worn and
specifies the standards which such equipment must meet. The Company  believes it
has complied in all material  respects  with the  regulations  and  standards of
these agencies,  and any non-material  non-compliance  with such regulations and
standards in the past have not had a material adverse effect on its business.

The primary  users of the  Company's  personal  safety  products are  industrial
workers in the  United  States.  As a result,  decreases  in general  employment
levels of industrial  workers may have an adverse effect on the Company's sales.
The  Company's  sales  may also be  adversely  affected  by  changes  in  safety
regulations covering industrial workers in the United States and in the level of
enforcement of such  regulations.  Changes in regulations  could reduce the need
for and the utility of certain products manufactured by the Company.

                                       6
<PAGE>

The  United  States and  Canadian  regulatory  agencies  each  mandate  that the
Company's  products meet  performance  standards  established by private groups,
such as the  American  National  Standards  Institute  ("ANSI") and the Canadian
Standards Association ("CSA"),  respectively. The Company's eyewear products are
subject to the latest series of applicable  standards,  which currently  include
ANSI Industrial Standard Z87.1-1989 and CSA Z94.3-1992.  These standards require
that protective eyewear be tested for optical performance, high velocity impact,
high mass impact and other integral product  performance  features.  The Company
maintains and operates  on-site testing labs at facilities which are equipped to
perform necessary tests. 

EMPLOYEES

As of December  31,  1998,  the Company  had 957  employees.  The Company had 20
employees  represented  by a union pursuant a collective  bargaining  agreement,
which will expire, at the option of either party, at the end of 1999.

ITEM 2. PROPERTIES

In addition to its  executive  offices in  Chesterfield,  Missouri,  the Company
operates  15 major  facilities  in the United  States,  Canada and Europe with a
total area  (including the executive  offices) of  approximately  714,000 square
feet, of which the Company currently owns approximately  489,000 square feet and
leases approximately 225,000 square feet. These facilities are as follows:
<TABLE>
<CAPTION>
                                 User/                                                       Owned/       Lease
         Location              Subsidiary            Primary Use                Square Feet  Leased     Expiration
<S>        <C>                     <C>                    <C>                        <C>       <C>          <C>              
Chesterfield, Missouri         Corporate       Corporate and Administration         58,030     Leased       9/14/02
Belmont, Michigan              Jackson         Manufacturing and Distribution      148,100     Owned            --
Fenton, Missouri               SMC             Manufacturing and Distribution       84,414     Leased      12/31/00
Fenton, Missouri               Flex-O-Lite     Manufacturing and Distribution       20,400     Leased       3/31/03
Muscatine, Iowa                Flex-O-Lite     Manufacturing and Distribution       31,903     Owned            --
Paris, Texas                   Flex-O-Lite     Manufacturing and Distribution       91,363     Owned            --
Tonawonda, New York            Allsafe         Manufacturing and Distribution      100,000     Owned            --
Sparks, Nevada                 Allsafe         Manufacturing and Distribution  2 buildings     Leased      12/31/99
                                                                               20,000 each
Hudson, Ohio                   Crystaloid      Manufacturing and Distribution       36,770     Owned            --
St. Thomas, Ontario, Canada    Flex-O-Lite     Manufacturing and Distribution       21,244     Owned            --
Belmont, Ontario, Canada       Flex-O-Lite     Distribution                         10,000     Leased       Monthly
Alzenau, Germany               Lansec          Manufacturing and Distribution        5,895     Leased      10/31/02
Merignac, France               Lansec          Distribution                          2,592     Leased       8/31/01
Ede, Netherlands               Lansec          Distribution                          1,962     Leased      Monthly
Worcestershire, U.K.           Lansec          Distribution                          3,900     Leased     12/31/01
Milan, Italy                   Lansec          Sales office                            540     Leased      Monthly
</TABLE>


The Company's  facilities are adequate for its current production  requirements.
The  Company   expects  that  such  facilities  will  remain  adequate  for  the
foreseeable  future;  however,  the Company may shift  operations among existing
facilities in order to maximize production efficiency.

ITEM 3.  LEGAL PROCEEDINGS

From time to time,  the  Company is  involved in  litigation  incidental  to its
business. The Company is not aware of any pending or threatened legal proceeding
which would  reasonably  be expected  to have a material  adverse  effect on the
Company's results of operations or financial condition.

ITEM 4.  SUMBISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year ended December 31, 1998.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The only  authorized,  issued and  outstanding  classes of capital  stock of the
Company is common stock,  consisting of the Class A Common Stock and the Class C
Common Stock.  There is no established  trading market for the Company's  common
stock.

The Company  has not  declared or paid any cash  dividends  on its common  stock
since its formation in August 1995. The Company's  financing  agreements contain
restrictions on its ability to declare or pay dividends on its common stock.

                                       7
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

The following table sets forth the summary combined historical financial data of
(i) the Company's predecessor, Jackson Holding Company, for the periods 1994 and
January 1, 1995 to August 16, 1995;  (ii) the Company for the periods August 17,
1995 to  December  31,  1995,  1996,  1997 and  1998;  and  (iii)  the pro forma
financial  data for the year ended  December 31, 1998.  The pro forma  financial
information was prepared as if each of the  Acquisitions had been consummated on
the first day of the period  presented for Statement of Operations Data. The pro
forma data is unaudited. The pro forma information does not purport to represent
what  the  consolidated  results  of  the  Company  would  have  been  had  such
transactions actually occurred at the beginning of the relevant period, and does
not purport to project the combined  financial  position or the combined results
of operations of the Company for the current year or for any future period.  The
summary and pro forma  financial  information  set forth below should be read in
conjunction  with the  historical  financial  statements  and the related  notes
thereto included elsewhere in this document. 

<TABLE>
<CAPTION>
                                                 Predecessor                             The Company
                                             ---------------------   ---------------------------------------------------

                                                        January 1,   August 17,
                                                         1995 to      1995 to                                        Pro
                                                        August 16,  December 31,                                    Forma
                                                1994       1995        1995        1996         1997     1998       1998
                                                ----       ----        ----        ----         ----     ----       ---- 
<S>                                               <C>       <C>         <C>         <C>          <C>       <C>
                                                                      (Dollars in thousands) 
Statement of Operations Data:
    Net sales.......................           $92,838      $72,541   $ 37,558   $111,788     $123,417  $165,232   $182,250 
    Cost of sales...................            67,348       52,416     30,566     80,485       87,466   111,325    121,648 
    Selling, general & administrative
    expenses........................            12,337        9,640      4,965     14,440       15,205    27,566     31,816 
    Asset sales.....................               --            --         --      1,050          335       576        576
    Amortization of intangibles.....             6,733        3,009      1,688     18,849       16,378     9,654     11,493
                                                 -----        -----      -----     ------       ------     -----     ------
    Operating income (loss).........             6,420        7,476        339    (3,036)        4,033    16,111     16,717 

    Other expenses:
        Interest expense............           (6,676)       (5,279)    (4,381)  (11,306)     (12,050)   (15,803)   (16,906)
        Amortization of deferred      
        financing costs.............             (765)         (525)      (340)   (1,076)      (1,261)    (1,271)    (1,271)
        Other.......................             (102)           14         14      (599)        (401)      (643)      (594)
        Sale of company expenses....               --        (4,391)        --        --           --         --         --
                                                -----        ------      -----     ------       ------     -----     ------   
     Loss before income tax provision      
     and extraordinary item.........           (1,123)       (2,705)    (4,368)  (16,017)     ( 9,679)   ( 1,606)   ( 2,054)
     Income tax expense.............               700           --         --       429          684        224        524
                                                ------       ------      -----     ------       ------     -----      -----
     Loss before extraordinary item.           (1,823)       (2,705)    (4,368)  (16,446)     (10,363)    (1,830)    (2,578)
     Extraordinary item:
     Loss due to early  extinguishment      
     of debt........................           (1,914)       (7,236)        --        --           --     (7,558)    (7,558)
                                               ------        ------      -----     ------       ------    ------     ------ 
     Net loss.......................          $(3,737)      $(9,941)   $(4,368) $(16,446)    $(10,363)   $( 9,338) $(10,136)

Other Data
    EBITDA(1).......................           $16,894      $13,219    $ 7,209  $ 21,145       $24,660    $31,111    $34,001 
    Depreciation and amortization...            10,138        5,548      3,141    23,131        20,292     15,793     18,555 
    Capital expenditures............             2,055        1,744        465     1,910         3,246      6,670      7,605 
    Ratio of earnings to fixed charges(2)           --           --         --        --            --         --         --
    Cash (used   in)provided by                                                                        
    operating activities.............            7,104        2,774      7,410     6,833        10,313     15,417
    Cash used in investing activities          (44,485)      (1,661)    (129,154) (14,552)      (5,890)   (54,267)
    Cash (used in)provided by                                                                        
    financing activities.............           35,694       (1,113)    121,619    7,719        (3,900)    38,654 
Balance Sheet Data:
    Cash............................           $    --       $   --    $    --   $    --      $    523    $   327
    Total assets....................           112,658      108,739     141,525   135,015      125,047    171,239 
    Remeemable preferred stock and                                                                               
    long-term debt,including current            
    portion.........................            79,488       80,953     122,771   134,194      133,452    190,389 
    Total stockholder's equity(deficit)         14,215        4,329       1,517   (17,738)     (31,277)   (47,712) 

</TABLE>

(1) EBITDA  represents  operating  income plus  depreciation,  amortization  and
certain  non-cash  charges.  EBITDA is not included herein as operating data and
should  not be  construed  as a  substitute  for  operating  income  or a better
indicator  of  liquidity  than cash flow from  operating  activities,  which are
determined in accordance  with GAAP. The Company has included EBITDA because the
Company  understands  that  it is one  measure  used  by  certain  investors  to
determine the Company's  operating cash flow and  historical  ability to service
its indebtedness.

                                       8
<PAGE>

(2) In the computation of the ratio to fixed charges, earnings consist of income
before taxes and extraordinary (loss), plus fixed charges. Fixed charges consist
of interest expense on  indebtedness,  plus that portion of lease rental expense
representative of the interest factor. Earnings were insufficient to cover fixed
charges by approximately  $1,123 for 1994; $2,705 for the period from January 1,
1995 to August 16, 1995;  $4,368 for the period from August 17, 1995 to December
31, 1995; $16, 017 for 1996; $9,679 for 1997 and $1,606 for 1998.

ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS.

The following  discussion and analysis of the Company's  financial condition and
results should be read in conjunction with the "Selected Financial Data" and the
consolidated  financial statements of the Company,  including the notes thereto,
appearing  elsewhere  in  this  report.  This  report  contains  forward-looking
statements.   Such   forward-looking   statements   are  identified  by  use  of
forward-looking  words  such as  "anticipate,"  "believe,"  "plan,"  "estimate,"
"expect,"  and "intent" and other  similar  expressions.  These  forward-looking
statements  are  subject  to  various  assumptions,   risks  and  uncertainties,
including  but not limited to,  changes in political  and  economic  conditions,
demand for the Company's  products,  acceptance  of new  products,  developments
affecting the Company's products and to those discussed in the Company's filings
with the Securities and Exchange Commission.  Accordingly,  acutal results could
differ materially from those contemplated by the forward-looking statements.

The Company, which was founded in 1932, operated as Jackson Holding Company from
April 1, 1993 to August 16, 1995.  On August 16, 1995,  the Company was acquired
by members of management and affiliates of The Jordan Company.  In October 1996,
the Company acquired OSD, and in October 1997, the Company acquired Lansec.

On April 22, 1998 the Company, through its subsidiary, Jackson Acquisition, Inc.
acquired all of the  outstanding  capital stock of American  Allsafe Company and
Silencio/Safety  Direct,  Inc. for $29.1  million,  as adjusted,  (the  "Allsafe
Acquisition"). On April 23, 1998 the Company, through its subsidiary, Crystaloid
Technologies,  Inc., acquired all of the outstanding capital stock of Crystaloid
Electronics, Inc., for $6.5 million (the "Crystaloid Acquisition"), $0.5 million
of which is payable in 18 months  subject  to  certain  conditions.  On July 22,
1998, the Company,  through  Allsafe,  acquired all of the  outstanding  capital
stock of Kedman Company for a total  purchase  price of $9.2 million.  Operating
results of Allsafe,  Crystaloid  and Kedman have been  included in the financial
statements of the Company as of these dates.

<TABLE>
RESULTS OF OPERATIONS
The following table sets forth certain financial  information of the Company for
the years 1996, 1997 and 1998.
<CAPTION>

                                                     1996         1997            1998  
                                                     ----         ----            ----  
                                                           (Dollars in thousands)
<S>                                                    <C>           <C>             <C>    

Net sales...........................                  $111,788    $123,417      $165,232
Cost of sales........................                   80,485      87,466       111,325
Selling, general & administrative....                   14,440      15,205        27,566
Operating income (loss)..............                   (3,036)      4,033        16,111
Income tax expense...................                      429         684           224
</TABLE>

Fiscal  year Ended  December  31,1998  Compared  to Fiscal  Year Ended  December
31,1997

Net sales - Net sales in 1998  increased  33.9% to $165.2  million  from  $123.4
million in 1997.  The  increase in sales  resulted  from the  Acquisitions.  The
Acquisitions and the Lansec  Acquisition  contributed $45.2 million in net sales
for the twelve months ended December 31, 1998. Had the Acquisitions  occurred on
January 1, 1997,  net sales would have declined  slightly to $182.3  million for
1998 and 1997 as the  strong  growth in the  highway,  janitorial  and  avionics
markets was offset by a softening in industrial markets.

Cost of sales - Cost of sales in 1998  increased  27.3% to $111.3  million  from
$87.5 million in 1997,  primarily as a result of the increase in net sales. Cost
of sales as a percentage  of sales  decreased to 67.4% from 70.9% due to various
cost  reduction  programs  and  higher  margins  associated  with  the  acquired
companies.

Selling,  general & administrative expenses- Selling, general and administrative
expenses in 1998 increased  81.3% to $27.6 million from $15.2 million due to the
Acquisitions.  Selling, general & administrative expenses as a percentage of net
sales  increased  to 16.7%  from  12.3%  due to the  acquisition  of GmbH.  GmbH
expenses  as a  percentage  of sales are high  relative  to the other  divisions
coupled with increased  corporate  administrative  expenses  associated with the
Acquisitions and the requirements of being a SEC registrant.

                                       9
<PAGE>

Operating income - Operating income in 1998 increased to $16.1 million from $4.0
million in 1997 due to the Acquisitions and a reduction in amortization expenses
as certain intangibles were fully amortized during 1997.

Income tax expense - Income tax expense in 1998  decreased  to $0.2 million from
$0.7 million.  The Company's  effective income tax rate is  substantially  lower
than the statutory rate due to non-deductible  amortization  expenses of certain
intangibles.

Fiscal Year Ended  December 31, 1997 Compared to Fiscal Year Ended  December 31,
1996

Net sales - Net sales in 1997  increased  10.4% to $123.4  million  from  $111.8
million in 1996. The increase in net sales resulted from sales growth of welding
safety  products  and high  index  glass bead  products,  and the  October  1996
acquisition  of OSD.  Net sales were offset in 1997 as a result of a decision by
management  to  eliminate  certain low margin  product  lines within the highway
safety products group. The welding safety products sales growth was initiated by
a sales  management  reorganization  implemented in late 1996,  improved factory
responsiveness  and sales force  product  retraining.  The high index glass bead
sales  growth was the result of  redirected  marketing  efforts from the product
rationalization process.  Approximately $6.8 million of the increase in sales in
1997 were the direct result of the OSD acquisition.

Cost of sales - Cost of sales in 1997 increased 8.7% to $87.5 million from $80.5
million in 1996,  primarily  as a result of the net sales  increases  of welding
safety  products and high index glass bead products and the  acquisition of OSD.
Cost of sales as a  percentage  of sales  decreased  to 70.9%  from 72.0% due to
improved  product  mix  resulting  from  the  product   rationalization  process
discussed  above and the increased  sales of welding safety and high index glass
bead  products.  Cost of sales also  improved  through the  reduction of certain
material costs and from manufacturing productivity improvements.

Selling, general & administrative expenses - Selling, general and administrative
expenses in 1997 increased 5.3% to $15.2 million from $14.4 million in 1996. The
increase was primarily  volume driven and consisted of increases in  advertising
and commissions.  Selling,  general and administrative  expenses as a percent of
sales decreased to 12.3% in 1997 from 12.9% in 1996.

Operating income - Operating income in 1997 increased to $4.0 million from a net
loss of $3.0  million in 1996 due to the  increase  in gross  profit and reduced
amortization expenses.

Income tax expense - Income tax expense in 1997  increased  to $0.7 million from
$0.4  million  in 1996  due to an  increase  in  foreign  taxes.  The  Company's
effective income tax rate is substantially  lower than the statutory rate due to
non-deductible amortization expenses of certain intangibles.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating  activities in 1998, 1997 and 1996 was $15.4 million,
$10.3  million  and $6.8  million,  respectively.  Changes  in  working  capital
resulted in a source of cash of $0.9 million and use of cash of $1.0 million and
$2.0 million in 1998, 1997 and 1996, respectively.

Cash used in investing activities in 1998, 1997 and 1996 was $54.3 million, $5.9
million and $14.6 million  respectively.  The 1998 period includes $47.8 million
expended for the acquisition of businesses.  The Company typically makes capital
expenditures  related  to the  maintenance  and  improvements  of  manufacturing
facilities and related  processing  equipment such as injection molding machines
and glass bead furnaces.  Capital  expenditures  for in 1998, 1997 and 1996 were
$6.7 million, $3.2 million and $1.9 million, respectively.

Net cash provided by financing  activities in 1998 was $38.7  million.  Net cash
used by financing  activities  was $3.9 million in 1997. The  Acquisitions  were
financed with the proceeds of the Senior  Subordinated  Notes and the New Credit
Facility.  (See below).  Net cash  provided by financing  activities in 1996 was
$7.7 million.

Effective April 22, 1998, the Company entered into a credit  agreement (the "New
Credit   Facility")   with   BankBoston,   N.A.  and  Mercantile  Bank  National
Association,  which will provide for a line of credit in the aggregate amount of
$125.0  million  consisting  of an  acquisition  line  facility in the principal
amount of $95.0  million and a revolving  facility  in the  principal  amount of
$30.0 million.  At December 31, 1998 there was $10.2 million  outstanding on the
revolving  credit  facility  and $1.4  million of letters of credit  outstanding
resulting in availability of $18.4 million. At December 31, 1998 there was $65.8
million  outstanding on the  acquisition  facility  resulting in availability of
$29.2 million.

On April 16, 1998, the Company offered $115.0 million aggregate principal amount
of Senior  Subordinated Notes (the "Notes") due April 15, 2005 (the "Offering").
The  Notes  will  bear  interest  at the  rate  of 9  1/2%  per  annum,  payable
semi-annually in arrears on April 15 and October 15 of each year. The payment of
principal,   premium,   interest  and  liquidated   damages  on  the  Notes  are
unconditionally  guaranteed,  jointly and severally,  by the Company's  domestic
subsidiaries ("Guarantors").

                                       10
<PAGE>

The Company  believes that cash flow from  operations  together  with  available
borrowing  capacity are sufficient to fund working  capital  requirements,  debt
service  requirements,  and  capital  expenditures  on a  going  forward  basis.
Historically,  the Company's capital  expenditures have been  approximately $3.5
million  per  annum.  The  Company  anticipates  that  its  capital  expenditure
requirements for 1999 will be approximately  $5.0 million.  The Company believes
that  cash  flow from  operating  activities  and  borrowings  under the  Credit
Agreement  will be  adequate  to meet the  Company's  short-term  and  long-term
liquidity requirements for the foreseeable future,  although no assurance can be
given in this regard.

EURO CONVERSION

On January 1, 1999, eleven of the fifteen member countries of the European union
established  fixed conversion rates between their existing  soverign  currencies
and the euro. The participating countries have agreed to adopt the euro as their
common legal currency as of that date while still utilizing their local currency
until January 1, 2002.

The Company  has began to assess the  potential  impact to the Company  that may
result from the Euro covnersion. In addition, to tax accounting  considerations,
the Company is also  assessing  other areas  including  the  following:  (1) the
technical  challenges  to adapt  information  technology  and other  systems  to
accommodate  euro-denominated  transactions,  (ii)  the  competitive  impact  of
cross-border price transparency, which may make it more difficult for businesses
to charge different prices for the same products on a country-by-country  basis,
(iii) the impact on currency exchange costs and currency exchange rate risk, and
(iv) the impact on existing contracts. While the Company will continue to assess
the impact of the information, management does not believe that the introduction
of the euro will have a  material  adverse  effect  on the  Company's  financial
condition or results of operation.

NEW ACCOUNTING STANDARDS

In June 1998 the  Financial  Accounting  Standards  Board  issued  Statement  of
Financial Accounting Standards No. 133 (SFAS No. 133) "Accounting for Derivative
Instruments and Hedging Activities".  The statement  standardizes the accounting
for derivative  instruments by requiring that an entity recognize these items as
assets or liabilities in the statement of financial position and measure them at
fair value. SFAS No. 133 becomes effective for fiscal years beginning after June
15, 1999;  however,  the Company does not believe the adoption of this statement
will have a material impact on its financial statements.

YEAR 2000 COMPLIANCE

Management  has  initiated  a  comprehensive  study and  program to prepare  the
Company's computer systems,  manufacturing systems and facility systems, and the
related  systems  applications  for the Year  2000.  As it  relates  to  desktop
hardware  and  software  systems,  the  Company  has begun a desktop  update and
standardization  effort  which will  address Year 2000  compliance  issues.  The
Company is utilizing both internal and external  resources to identify,  correct
or reprogram the systems for the Year 2000 compliance. Additionally, the Company
is developing a contingency plan to attempt to address Year 2000 concerns beyond
the year 2000. The Company expects these efforts to be  substantially  completed
by September 30, 1999.

The Company has  initiated  formal  communication  with its  suppliers and large
customers  to  determine  the  extent  and steps they are taking to be Year 2000
compliant.  To date, no significant  issues have been identified that management
has not  addressed;  however there can be no guarantee that the systems of other
companies on which the Company's  businesses  rely will be converted in a timely
way and would not have an adverse effect on the Company's businesses.

Maintenance or modification  costs associated with Year 2000 will be expensed as
incurred, while the costs of new software will be capitalized and amortized over
the software's  useful life.  The Company  currently does not expect the amounts
required to be incurred to have a material  effect on its  financial  condition,
result of operations or liquidity. The costs of the project are immaterial,  and
the date on which  the  Company  believes  it will be  complete  with  Year 2000
modifications  are based on  management's  current  best  estimates,  which were
derived utilizing numerous assumptions of future events, including the continued
availability  of certain  resources,  third-party  modification  plans and other
factors.  However,  there  can be no  guarantee  that  these  estimates  will be
achieved and actual  results  could differ  materially  from those  anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the  availability  and cost of personnel  trained in this area,  the
ability to locate and correct all relevant  computer codes (desktop hardware and
software),  the  availability  of new software and the ability of the  Company's
customers and suppliers to be Year 2000 compliant.

                                       11
<PAGE>

SEASONALITY AND INFLATION

The   Company   experiences   seasonal   fluctuations   in  its  net  sales  and
profitability, with generally lower net sales and profitability in the first and
fourth quarters and increased working capital  requirements in the first half of
its fiscal year. The seasonality of net sales and profitability is primarily due
to the winter slowdown of highway  construction  and maintenance  projects.  The
impact of inflation on the  Company's  operations  has not been  significant  to
date.  However,  there can be no assurance  that a high rate of inflation in the
future would not have an adverse effect on the Company's operating results.

SUBSEQUENT EVENT

On December 22, 1998, the Company entered into a non-binding letter of intent to
purchase  the  assets  of  Morton  Traffic   Markings,   a  division  of  Morton
International,  Inc. This  acquisition is subject to management's  due diligence
and is tentatively scheduled to close in April 1999.

ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In general,  the  Company's  results of  operations  are  affected by changes in
exchange rates. Subject to market conditions, the Company prices its products in
Europe and Canada in local  currency.  While many of the  Company's  selling and
distribution costs are also denominated in these currencies,  a large portion of
product costs are U.S. Dollar denominated.  As a result , a decline in the value
of the U.S.  Dollar  relative to other  currencies can have a negative effect on
the  profitability  of the Company.  As a result of the acquisition of GmbH, the
Company's  operations  are also affected by changes in exhange rates relative to
the German Deutsche mark, Italia Lira, British Pound, French Franc, Netherland's
Guilder and the Euro. A decline in the value of any of these currencies relative
to other  currencies  can have a  negative  impact on the  profitability  of the
Company.  The Company  estimates that these exchange rate changes had the effect
of increasing profitabilty by $0.2 million for the year ended December 31, 1998.

The  Company is exposed to market  risk from  changes  in  interest  rates.  The
Company's  exposure to interest  rate risk  consists of its floating rate Credit
Agreement.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(1)      Index to Financial Statements



                                                                          Page
Independent Auditors Report................................................  4

Consolidated Balance Sheets-December 31, 1998 and 1997.....................  5

Consolidated Statement of Operations-Year Ended December 31, 1998 and 1997.  6

Consolidated Statements of Stockholder's Equity (Deficit)- Years Ended
December 31, 1998 and 1997................................................   7

Notes to Consolidated Financial Statements................................   8


                                       12
<PAGE>



                          Independent Auditors' Report

The Board of Directors 
Jackson Products, Inc.:

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Jackson
Products,  Inc. and subsidiaries (the Company) as of December 31, 1998 and 1997,
and the related consolidated  statements of operations,  stockholders'  deficit,
and cash flows for each of the years in the three-year period ended December 31,
1998. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Jackson Products,
Inc. and subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended  December  31,  1998 in  conformity  with  generally  accepted  accounting
principles.

                                             KPMG LLP



St. Louis, Missouri, 
February 8, 1999 

                                       13
<PAGE>

<TABLE>
                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           December 31, 1998 and 1997
<CAPTION>
                                                                                                                   1998        1997
                                                                                                                   ----        ----

                                                                                                              (In thousands, except
                                                                                                                     share data) 
<S>                                                                                                                <C>          <C>
                           ASSETS
Current assets:
     Cash ...................................................................................................    $   327    $    523
     Accounts receivable, net of allowance for doubtful accounts of $651 and $404 in
        1998 and 1997, respectively .........................................................................     18,479      14,888
     Inventories ............................................................................................     34,275      22,837
     Prepaid expenses .......................................................................................        746         409
                                                                                                                     ---         ---
          Total current assets ..............................................................................     53,827      38,657

Property, plant and equipment, net...........................................................................     34,362      20,818
Intangibles .................................................................................................     75,242      60,050
Deferred financing costs ....................................................................................      7,372       5,180
Other noncurrent assets .....................................................................................        436         342
                                                                                                                     ---         ---
                                                                                                                $ 171,239  $ 125,047
                                                                                                                =========  =========


                           LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
     Current maturities of long-term obligations ............................................................   $  --      $   6,120
     Accounts payable .......................................................................................    15,313       11,432
     Other accrued liabilities ..............................................................................     6,056        5,201
     Accrued interest .......................................................................................     3,044        2,102
     Accrued taxes ..........................................................................................     1,075          534
                                                                                                                -------       ------
          Total current liabilities .........................................................................    25,488       25,389
                                                                                                                -------       ------
Long-term debt ..............................................................................................   190,389      106,381
Other non-current liabilities ...............................................................................     3,074        3,603

Series A cumulative, 13.25%, exchangeable preferred stock, $.01 par value; 2,000
shares authorized, 1,700 shares issued and outstanding at December 31, 1997
(liquidation value of $23,065 in 1997).......................................................................      --         20,951

Stockholders' deficit:
         Class A common stock, $.01 par value; 100,000 shares authorized 38,530 and
           40,000 shares issued and outstanding at December 31, 1998 and 1997, respectively..................      --           --  
         Class C common stock, $.01 par value; 15,000 shares authorized; 8,526 shares
           issued and outstanding at December 31, 1998 and 1997..............................................      --           --  
     Additional paid-in capital .............................................................................     2,952       7,102
     Accumulated other comprehensive income..................................................................        59        (106)
     Loans due on common stock ..............................................................................      (343)       (343)
     Accumulated deficit ....................................................................................   (50,380)    (37,930)
                                                                                                                -------      ------ 
          Total stockholders' deficit .......................................................................   (47,712)    (31,277)
                                                                                                                -------     -------
                                                                                                              $ 171,239   $ 125,047
                                                                                                               =========  =========

</TABLE>

          See accompanying notes to consolidated financial statements.

                                       14
<PAGE>

<TABLE>

                                      JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                                       CONSOLIDATED STATEMENTS OF OPERATIONS

                                   Years ended December 31, 1998, 1997 and 1996
<CAPTION>

                                                                   1998           1997         1996
                                                                   ----           ----         ----
                                                                         (In thousands)
<S>                                                                <C>          <C>            <C>  

Net sales........................................                $165,232      $123,417    $111,788
Operating expenses:
     Cost of sales...............................                 111,325        87,466      80,485
     Selling, general and administrative.........                  27,566        15,205      14,440
     Write-down of assets........................                     576           335       1,050
     Amortization of intangibles.................                   9,654        16,378      18,849
                                                                  -------       -------     -------
Total operating expenses.........................                 149,121       119,384     114,824
                                                                  -------       -------     -------

Operating income (loss)..........................                  16,111         4,033     (3,036)
Other:
     Interest expense............................                 (15,803)      (12,050)   (11,306)
     Amortization of deferred financing costs....                  (1,271)       (1,261)    (1,076)
     Other.......................................                    (643)         (401)      (599)
                                                                   -------       -------    ------- 

Loss before income tax provision and
extraordinary item...............................                  (1,606)       (9,679)   (16,017)
Income tax expense...............................                     224           684        429
                                                                   ------        ------     -------
Loss before extraordinary item...................                  (1,830)      (10,363)   (16,446)
Extraordinary item-loss due to early extinguishment                                   
of debt, net of taxes............................                  (7,558)        ----       ----
                                                                   -------      --------    -------             
Net loss.........................................                 $(9,388)     $(10,363)  $(16,446)
                                                                  ========     =========   ======== 
</TABLE>



          See accompanying notes to consolidated financial statements.

                                       15
<PAGE>


<TABLE>
                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                     Years Ended December 31, 1998 and 1997
<CAPTION>

                                                                   Accumulated  Loans
                                   Class A   Class C  Additional   Other Com-   Due On
                                    Common    Common   Paid-In     prehensive   Common   Accumulated
                                    Stock     Stock    Capital     Income       Stock     Deficit        Total
                                    ------    ------   --------    --------     ------    --------       -----

                                                                 (In thousands) 
<S>                                   <C>       <C>       <C>         <C>         <C>        <C>          <C>
Balance, December 31, 1995.......    $40       $10      $7,199        $  14    $(427)     $(5,319)      $1,517
Reverse stock split                  (40)      (10)         50         --        --         --            -- 
Repurchase of common stock.......    --        --         (140)        --         60        --            (80)
Sale of common stock                 --        --           45         --        (8)        --              37
Accrued dividends-preferred
   stock.........................    --        --         --           --        --        (2,442)     (2,442)
Accretion of preferred stock.....    --        --         --           --        --          (288)       (288)
Cumulative translation
   adjustment....................    --        --         --           (36)      --          --           (36)
Net loss.........................    --        --         --           --        --       (16,446)    (16,446)
                                    -------  -------     -------      -------  ------     -------     -------  
Balance, December 31, 1996.......    --        --        7,154         (22)     (375)     (24,495)    (17,738)

Repurchase of common stock.......    --        --         (52)         --         32         --           (20)
Accrued dividends-preferred
   stock.........................    --        --         --           --        --        (2,778)     (2,778)
Accretion of preferred stock.....    --        --         --           --        --          (294)       (294)
Cumulative translation
   adjustment....................    --        --         --           (84)      --          --           (84)
Net loss.........................    --        --         --           --        --       (10,363)    (10,363)
                                    -------  -------     -------      ------   ------      --------    -------                    
Balance, December 31, 1997.......    --        --        7,102        (106)     (343)     (37,930)    (31,277)

Repurchase of common stock.......    --        --       (4,150)         --       --          --        (4,150)
Accrued dividends-preferred
   stock.........................    --        --         --            --       --        (2,609)     (2,609)
Accretion of preferred stock.....    --        --         --            --       --          (453)       (453)
Cumulative translation
   adjustment....................    --        --         --            165      --          --           165
Net loss.........................    --        --         --            --       --        (9,388)     (9,388) 
                                    ------    ------    ------        ------   ------      ------      -------  
Balance, December 31, 1998.......   $--       $--       $2,952        $  59    $(343)    $(50,380)   $(47,712)
                                    ======    ======    ======        ======   ======     ========   =========

</TABLE>



          See accompanying notes to consolidated financial statements.

                                       16
<PAGE>



<TABLE>
                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                 Years ended December 31, 1998 and 1997 and 1996

<CAPTION>

                                                                                 1998       1997          1996
                                                                                 ----       ----          ----
                                                                                       (In thousands)
<S>                                                                             <C>       <C>               <C> 

Cash flows from operating activities:
   Loss before extraordinary item........................................      $(1,830)  $(10,363)     $(16,446)
   Adjustments to reconcile net loss to net cash provided by operating
     activities:
     Depreciation........................................................         4,770     3,914         4,282 
     Write down of assets................................................           576       335         1,050 
     Net gain on sale of assets..........................................          --        (298)          --  
     Amortization of deferred financing costs, intangibles, and debt
        discount.........................................................        11,023    17,706        19,989 
     Changes in operating assets and liabilities net of effects of
        acquisitions:
        Accounts receivable..............................................         2,826      (409)          (7)
        Inventories......................................................       (2,338)    (4,725)          378
        Accounts payable.................................................           855     3,169         (286)
        Accrued and other liabilities....................................         (478)       611       (2,327)
        Accrued interest.................................................           942        31           159
        Accrued taxes....................................................          (67)       459            54 
        Other, net.......................................................         (862)      (117)         (13)
                                                                                 ------    ------         ----- 
   Net cash provided by operating activities.............................        15,417    10,313         6,833 
                                                                                 ------    ------         ----- 

Cash flows from investing activities:
   Acquisition of businesses, net of cash acquired.......................      (47,752)    (2,461)     (14,947)
   Deferral of acquisition price, net of payments .......................         (105)    (1,695)        2,125
   Capital expenditures, net.............................................       (6,670)    (3,246)      (1,910)
   Proceeds from sale of assets..........................................           260     1,512           180
                                                                               -------     ------       -------
   Net cash used in investing activities.................................      (54,267)    (5,890)      (14,552)
                                                                               -------     ------       ------- 
Cash flows from financing activities:
   Proceeds from issuance of long-term obligations.......................       204,332       --         13,634
   Repurchase of common stock, net of loan repayments ...................       (4,150)       (20)         (53)
   Repurchase of preferred stock.........................................      (23,998)       --           --  
   Financing costs ......................................................       (8,300)       --          (856)
   Repayment premium of long-term obligations............................       (2,210)       --           --  
   Repayment of long-term obligations....................................     (127,020)    (3,880)      (5,006)
                                                                              --------     ------       ------- 
   Net cash (used in) provided by financing activities...................       38,654     (3,900)        7,719
                                                                              --------     ------        ------

Increase (decrease) in cash..............................................        (196)         523         --  
Cash, beginning of year..................................................          523         --          --
                                                                                ------      ------        ------          
Cash, end of year........................................................       $  327      $  523        $--
                                                                                ======      ======        ====== 

</TABLE>

            See accompanying notes to consolidated financial statements.

                                       17
<PAGE>



                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)

(1) The Company 

Jackson Acquisition Corp., a Delaware  corporation,  was formed on July 27, 1995
for the purpose of  acquiring  all of the  outstanding  common  stock of Jackson
Holding  Company  (Holding).  On August  16,  1995,  Jackson  Acquisition  Corp.
purchased  all of the  outstanding  stock  of  Holding  for  $129,000  (the  JPI
Acquisitions),  with  Holding  the  surviving  corporation.  Prior  to  the  JPI
Acquisition,  Holding  owned  100% of the  outstanding  common  stock of Jackson
Products, Inc. Immediately following the JPI Acquisition, Jackson Products, Inc.
was merged into Holding with Holding being the surviving corporation and renamed
Jackson Products, Inc. (the Company).

The Company is engaged in the  manufacture,  design,  and distribution of safety
equipment used primarily in the cutting and welding,  construction,  and general
industrial  markets.  The Company owns 100% of the  outstanding  common stock of
Flex-O-Lite,  Inc.;  OSD  Envizion,  Inc.  (OSD);  Lansec  Holding  GmbH (GmbH);
American Allsafe Company  (Allsafe);  Silencio Safety Direct,  Inc.  (Silencio),
Crystaloid   Technologies   Inc.   (Crystaloid)  and  Kedman  Company  (Kedman).
Flex-O-Lite,  Inc. is engaged in the  manufacture,  design,  and distribution of
highway and industrial  safety  products.  OSD is engaged in the manufacture and
design of auto-darkening  filter lenses for welding helmets.  GmbH is engaged in
the assembly and distribution of safety equipment in Europe.  Allsafe is engaged
in the  manufacture,  design and  distribution of safety products to industrial,
construction,  janitorial,  healthcare and food service  customers.  Silencio is
engaged in the  manufacture,  design  and  distribution  of  hearing  protection
products for the sporting industry. Crystaloid is engaged in the manufacture and
design of liquid crystal  displays and filters for mid-market  manufacturers  of
industrial,  commercial and aviation equipment.  Kedman is engaged in developing
safety products for the welding industry.

(2) Acquisitions

On October 22, 1996, the Company  acquired all of the  outstanding  stock of OSD
for $14,947  (the OSD  Acquisition).  As of  December  31,  1996,  $2,125 of the
purchase price was payable in 1997 based upon certain performance  requirements,
which were met and paid during 1997.  On October 29, 1997,  GmbH acquired all of
the  outstanding  stock of Lansec  GmbH and Lansec  S.A.  for $2,461 (the Lansec
Acquisition).  The OSD Acquisition and the Lansec Acquisition were accounted for
using the purchase  method of accounting.  Accordingly,  total purchase cost for
each of these  transactions  has been allocated to the assets and liabilities of
the Company based on their respective fair values.  The results of operations of
the  acquired  businesses  have  been  included  in the  consolidated  financial
statements since their respective  acquisition dates,  except for Lansec,  whose
results subsequent to the acquisition were immaterial to 1997. Intangible assets
totaling $14,251 and $2,034 were recorded in connection with the OSD Acquisition
and Lansec Acquisition, respectively, and are being amortized over 2-15 years

On April 22, 1998, the Company,  through its  subsidiary,  Jackson  Acquisition,
Inc.,  acquired all of the outstanding capital stock of Allsafe and Silencio for
$29,100 (the Allsafe Acquisition).  On April 23, 1998, the Company,  through its
subsidiary,  Crystaloid  acquired  all  of  the  outstanding  capital  stock  of
Crystaloid Electronics,  Inc., for $6,500 (the Crystaloid Acquisition),  $500 of
which is  payable  in 18 months  subject  to  certain  conditions.  The  Allsafe
Acquisition and the Crystaloid Acquisition were accounted for using the purchase
method  of  accounting.  Accordingly,  total  purchase  costs  for each of these
transactions  has been  allocated to the assets and  liabilities  of the Company
based on their  respective  fair  values at April 22,  1998 and April 23,  1998,
respectively.  The results of  operations of the acquired  businesses  have been
included  in  the  consolidated  financial  statements  since  their  respective
acquisition  dates.  Intangible assets totaling $11,594 and $4,331 were recorded
in  connection  with  the  Allsafe   Acquisition  and  Crystaloid   Acquisition,
respectively, and are being amortized over 3-15 years.

On July 22,1998, Allsafe acquired all of the outstanding capital stock of Kedman
( the Kedman  Acquisition)  for a total  purchase  price of  $9,200.  The Kedman
Acquisition   was  accounted  for  using  the  purchase  method  of  accounting.
Accordingly,  total purchase cost for this transaction has been allocated to the
assets and liabilities of the Company based on their respective fair values.


                                       18
<PAGE>



                JACKSON PRODUCTS, INC. AND SUBSIDIARIES NOTES TO
                 CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The results of  operations  of the acquired  business  have been included in the
consolidated  financial statements since the acquisition date. Intangible assets
totaling  $6,197 were recorded in connection  with the Kedman  Acquisition.  The
Allsafe Acquisition,  the Crystaloid  Acquisition and the Kedman Acquisition are
hereinafter collectively referred to as (the Acquisitions).

The unaudited proforma  consolidated  statement of operations of the Company for
the twelve  months  ended  December  31, 1998 and 1997 gives  effect to: (i) the
Acquisitions  and (ii) the refinancing (See discussion in Note 7) as if each had
occurred on the first day of the period  presented.  Assuming  the  Acquisitions
occurred  on January 1, 1997 pro forma  consolidated  net sales  would have been
$182,250  and  $183,005  for twelve  months  ended  December  31, 1998 and 1997,
respectively.  Pro forma consolidated net loss before  extraordinary items would
have been $2,578 and $11,051 for the twelve  months ended  December 31, 1998 and
1997,  respectively.  These amounts represent unaudited data and in management's
opinion  and are not  indicative  of actual  results had the  acquisitions  been
consummated at the beginning of the respective fiscal years.

(3) Summary of  Significant  Accounting  Policies  

Principles of Consolidation 

The consolidated  financial  statements  include the accounts of the Company and
its  wholly  owned  subsidiaries.   All  material   intercompany  balances  and
transactions have been eliminated in consolidation.

Use of  Estimates

Management  of the  Company  has  made a number  of  estimates  and  assumptions
relating to the reporting of assets and liabilities and the reported  amounts of
revenues and expenses to prepare  these  consolidated  financial  statements  in
conformity with generally accepted accounting  principles.  Actual results could
differ from those estimates.

Consolidated   Statements  of  Cash  Flows  

For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid investments  purchased with initial maturities of three months
or less to be cash  equivalents.  Interest paid for the years ended December 31,
1998, 1997 and 1996 totaled $14,789,  $11,952 and $11,803,  respectively.  Taxes
paid for the years ended December 31, 1998, 1997 and 1996 totaled $215, $224 and
$375, respectively.

Revenue and Accounts Receivable 

The Company  recognizes  revenue upon shipment of  merchandise to its customers.
The Company's  sales are primarily  North  American,  with  customers  generally
located throughout the United States, Canada, and Europe.

Financial  instruments that potentially subject the Company to concentrations of
credit risk consist primarily of trade receivables. The Company performs ongoing
credit  evaluations of its customers and generally does not require  collateral.
For the year ended  December 31, 1998 the Company had one major  customer  whose
purchases  exceeded  10% of net  sales.  The  percentage  of net  sales  to this
customer totaled 11%. For the year ended December 31, 1997 and 1996, the Company
had  two  major  customers  whose  purchases  exceeded  10%  of net  sales.  The
percentage of net sales to these customers  represented 12% and 13% respectively
for the period  ended  December 31, 1997 and 12% and 12%  respectively,  for the
period ended  December 31, 1996. The  outstanding  accounts  receivable  balance
related to those  customers  represented  9% and 19% of the accounts  receivable
balances at December 31, 1998 and 1997, respectively. 

                                       19
<PAGE>



                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


Inventories

Inventories are stated at the lower of cost or market.  Cost is determined using
the first-in,  first-out  (FIFO) method or the average cost method.  Elements of
cost in  inventory  include  raw  materials,  direct  labor,  and  manufacturing
overhead.

Property, Plant, and Equipment

Property,  plant, and equipment acquired through the purchases of businesses are
recorded at fair value.  Subsequent  additions  and  improvements  to  property,
plant, and equipment are capitalized at cost.

Depreciation is calculated using the straight-line method. The average estimated
lives  utilized  in  calculating  depreciation  are as  follows:  buildings  and
improvements,  7-40 years;  and machinery and equipment,  2-18 years.  Leasehold
improvements,  which are included in buildings and improvements, are depreciated
over  the  shorter  of the  term  of the  respective  lease  or the  life of the
respective improvement.

Intangibles

The excess of cost over the net tangible  assets  acquired  consists of patents,
customer lists, technology-related agreements, and goodwill, and is amortized on
a  straight-line  basis over periods from 2-15 years.  The Company  periodically
re-evaluates  the  carrying  value of its  intangibles  and its other  long-term
assets based on the expected  undiscounted cash flows over the remaining life of
the related assets.

Deferred Financing Costs

Deferred financing costs,  consisting of fees and other expenses associated with
the debt  financing,  are amortized  over the term of the related debt using the
effective  interest  method.  In connection with the  Acquisitions,  the Company
recorded  fees  and  expenses  totaling  $8,300.   These  costs  relate  to  the
refinancing  of debt,  included  in  deferred  financing  costs,  and are  being
amortized over the term of the related debt instruments.

Related-Party Transactions

In connection with the August 1995 JPI  Acquisition,  the Company entered into a
Management Services Agreement  (Agreement) with The Jordan Company (Jordan),  an
affiliate of the Company.  In connection with the Acquisitions,  the Company and
Jordan agreed to amend the  Agreement.  The Agreement  provides that the Company
shall  pay  Jordan  an  annual  fee of  higher  of (i) $600 or (ii)  2.5% of the
Company's  annual Earnings Before Interest Taxes  Depreciation  and Amortization
(EBITDA) as defined in the  Agreement.  For the years ended  December  31, 1998,
1997 and 1996, the Company expensed $775, $699 and $550,  respectively,  related
to the Agreement. These amounts are included in other expense.

In connection with the August 1995 JPI  Acquisition,  the Company loaned certain
employees $427, of which $343 is outstanding as of December 31, 1998. All of the
loans are due upon the  earlier  of March 31,  2006,  or within 90 days  after a
borrower  ceases to be an  employee  of the  Company.  The  loans  relate to the
purchase of common stock of the  Company,  are  collateralized  by the pledge of
common shares of the Company,  may be prepaid in part or in full without  notice
or penalty,  and are  represented  by  nonrecourse  promissory  notes which bear
interest at a rate per annum of 7%. The loans have been  recorded as an increase
in stockholders' deficit in the consolidated financial statements.

Financial Instruments

The fair market  value of those  long-term  obligations,  which  carry  variable
rates,  approximates  carrying value since the interest  rates are  periodically
adjusted for changes in market interest rates.The fair market value of the 9.50%
senior  subordinated notes approximates  carrying value as the rates approximate
those,  which could be obtained for similar issues with similar maturities given
the Company's overall financial condition.

The fair market values of the Company's other financial  instruments included in
the consolidated balance sheets approximate the carrying values of the financial
instruments.

                                       20
<PAGE>
 

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Income Taxes

The Company  accounts  for income  taxes under the asset and  liability  method.
Accordingly,  deferred tax assets and  liabilities are recognized for the future
tax  consequences  attributable to differences  between the financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  The provision for income taxes  includes  federal and state income taxes
currently  payable and those deferred because of temporary  differences  between
the financial statements and tax basis of assets and liabilities.

Comprehensive Income

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130,  Comprehensive Income. SFAS No. 130 requires all items
that are required to be recognized under  accounting  standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same  prominence  as  other  financial  statements.  The  provisions  of the
Statement  however,  need not be  applied to  immaterial  items.  The  Company's
comprehensive loss is impacted only by foreign currency translation adjustments,
which are immaterial in nature.

Segment Reporting

Effective  January 1, 1998, the Company  adopted SFAS No. 131,  Diclosure  about
Segments  of an  Enterprise.  The Company  operates in one segment  which is the
manufacture,  design,  and  distribution  of  safety  products.  Therefore,  the
adoption of SFAS No. 131 has not impacted the Company's  consolidated  financial
statements.

(4) Inventories
     Inventories consist of the following:
<TABLE>
<CAPTION>

                                                  1998      1997
                                                  ----      ----
<S>                                                <C>       <C>   

               Raw materials...............    $ 13,319    $9,780
               Work-in-process.............       4,516     4,455
               Finished goods..............      16,440     8,602
                                                 ------     -----
                                                $34,275   $22,837
                                                =======   =======
</TABLE>


(5) Property, Plant, and Equipment

Property, plant, and equipment consists of the following:

<TABLE>
<CAPTION>
                                                       1998      1997
                                                       ----      ----
<S>                                                     <C>        <C>  

               Land.............................      $1,418     $ 844
               Buildings and improvements.......      12,149     9,763
               Machinery and equipment..........      33,167    18,513
                                                      ------    ------
                                                      46,734    29,120
               Less accumulated depreciation....      12,372     8,302
                                                      ------     -----
                                                     $34,362   $20,818
                                                     =======   =======
</TABLE>

Depreciation  expense  totaled $ 4,770,  $3,914 and  $4,282 for the years  ended
December 31, 1998, 1997 and 1996, respectively.


                                       21
<PAGE>



                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(6) Intangibles

Intangibles consist of the following:
<TABLE>
<CAPTION>

                                                       1998      1997
                                                       ----      ----
<S>                                                     <C>       <C>

        Goodwill.................................     $91,404   $67,488
        Customer lists...........................      15,362    15,362
        Patents, technology agreement, and other.      14,114    14,114
                                                       ------    ------
                                                      120,880    96,964
        Less accumulated amortization............      45,638    36,914
                                                       ------    ------
                                                      $75,242   $60,050
                                                      =======   =======
</TABLE>

(7) Long-term Obligations

Long-Term obligations consist of the following:
<TABLE>
<CAPTION>

                                                         1998        1997
                                                         ----        ----
<S>                                                       <C>         <C>

            Term loans...........................    $   ---       $65,095 
            Acquisition loans...................       65,800        ---
            Revolver.............................      10,231      13,900 
            12.25% senior subordinated notes.....        ---       34,000 
            9.50% senior subordinated notes......     115,000        ---
            Unamortized debt discount............       (642)       (494)
                                                        ----        ---- 
                                                      190,389     112,501 
            Less current maturities..............        ---        6,120
                                                       ------       -----
                                                     $190,389    $106,381
                                                     ========    ========
</TABLE>

Credit Agreement

In connection with the Acquisitions, the Company refinanced its revolving credit
facility and term loans,  repurchased a portion of common stock and  repurchased
all of the issued and outstanding  preferred stock.  Additionally,  a portion of
the  refinancing  proceeds  was  utilized  to pay a  prepayment  premium  on its
preferred  stock. In conjunction  with the  Acquisitions,  the Company  recorded
$7,558 of extraordinary expense for the year December 31, 1998 consisting of (i)
the write-off of $5,348 in deferred financing costs and (ii) a $2,210 prepayment
premium on its senior subordinated notes.

On April 22, 1998,  the Company  entered into a $125,000  Credit  Agreement with
BankBoston, NA, as agent, and Mercantile Bank National Association, as co-agent,
that is comprised of a $30,000  revolving working capital facility and a $95,000
acquisition  facility.  The Revolver provides that up to $5,000 of such facility
may be used for the  issuance  of letters of credit and lender  guaranties.  The
Credit Agreement also contains several  financial  covenants,  which require the
Company to maintain certain  financial ratios and restrict the Company's ability
to incur  indebtedness  and pay  dividends.  The  commitment  fee on the  unused
portion of the Revolver is 1/2 % per annum, payable quarterly.

The Credit Agreement is guaranteed by the Company's domestic subsidiaries and is
secured by a perfected first priority  security interest in all of the assets of
each  domestic  subsidiary,  the  pledge  of 100% of the  capital  stock of each
domestic  subsidiary  and the  pledge of up to a maximum  of 66% of the  capital
stock of each direct foreign subsidiary. 

                                       22
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Mandatory  principal  payments on the acquisition  facility are due in quarterly
installments beginning on June 30, 2001, with the final installment due on April
22, 2004.  For the quarters  ending June 30, 2001  through  March 31, 2003,  the
Company is required to pay 3.125% of the Acquisition  loan  outstanding on April
30,  2001.  For the quarters  ending  April 1, 2003  through  March 31, 2004 the
Company  is  required  to  pay  18.75%  of  the  outstanding  principal  balance
outstanding on April 30, 2001 with the unpaid balance due on April 22, 2004.

The  borrowings  under the Credit  Agreement  bear interest at the option of the
Company,  at a rate per  annum  equal to (i) the Base  Rate (as  defined  in the
Credit  Agreement)  plus .75%;  or (ii) the LIBOR Rate (as defined in the Credit
Agreement)  plus 2.25% for the  working  capital  facility  and the  acquisition
facility.  For each of the quarters  following  September  30, 1998,  the factor
added to either  the Base Rate or the LIBOR Rate will be  adjusted  based on the
ratio  of the  Company's  Total  Debt  to  EBITDA  (as  defined  by  the  Credit
Agreement). The average interest rate on the outstanding borrowings was 7.54% at
December 31, 1998.

The Company is  currently  in  compliance  with all of the  financial  covenants
contained  in the Credit  Agreement.  At  December  31,  1998 there was  $10,231
outstanding  on the  revolving  credit  facility and $1,385 of letters of credit
outstanding resulting in availability of $18,384.

Senior Subordinated Notes

On April 16, 1998, the Company offered  $115,000  aggregate  principal amount of
Senior  Subordinated  Notes due April 15,  2005 (the  Offering).  The Notes bear
interest at the rate of 9 1/2% per annum,  payable  semi-annually  in arrears on
April 15 and  October  15.  The  payment of  principal,  premium,  interest  and
liquidated  damages on the Notes are  unconditionally  guaranteed,  jointly  and
severally,  by the Company's domestic subsidiaries  (Guarantors).  The Notes are
callable on or after April 15, 2001,  in whole or from time to time in part,  at
the option of the Company,  at a call price of 105%  commencing  April 15, 2001;
103%  commencing  April 15,  2002;  102%  commencing  April 15,  2003;  and 100%
commencing April 14, 2004.

The Notes require the Company to maintain certain  financial ratios and restrict
the  incurrence  of  additional  indebtedness  by the  Company;  the  payment of
dividends and other  distributions  with respect to the Company's capital stock;
the  creation  of  liens  on  the  assets  of  the  Company  to  secure  certain
subordinated  debt; and certain mergers,  sales of assets, and transactions with
affiliates.  The company was in compliance  with these covenants at December 31,
1998.

The net proceeds of the issuance of the Notes totaled  $114,273.  The difference
between the face value and the net proceeds from issue is being amortized over 7
years, the term of the notes.

In connection with the Acquisitions and the refinancing,  the Company repaid the
$34,000 of 12.25% Senior  Subordinated Notes that were issued on August 15, 1995
and due on August 15, 2004. As indicated previously, with the repayment of these
notes, the Company incurred a prepayment penalty of $2,210.

Interest Rate Cap

The  Company  utilizes an interest  rate cap  agreement  to reduce the impact of
increases in interest  rates on its floating  rate debt.  The interest  rate cap
agreement  was purchased on December 1, 1997 and expires  December 1, 1999,  and
entitles the Company to receive from a counterparty an amount,  if any, by which
the  selected  market  interest  rate  exceeds  the  strike  rate  stated in the
agreement.  The interest rate cap has a notional  amount of $50,000 and a strike
rate of 7%. Any  amounts  received  related to the  agreement  are  recorded  as
adjustments to interest expense.

(8) Stockholders' Deficit and Preferred Stock

On July 1, 1996, the Company amended its Certificate of Incorporation to reflect
the  100-to-1  reverse  stock  split of all  authorized  and  issued  common and
preferred stock. Following this stock split, the authorized capital stock of the
Company  consists of 100,000  shares of Class A common  stock,  45,000 shares of
Class B common stock,  15,000 shares of Class C common stock  (collectively  the
Common  Stock),  and 2,000  shares of Series A  Cumulative  13.25%  Exchangeable
Preferred Stock (the Preferred Stock).

                                       23
<PAGE>



                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

In  connection  with the  financing  for the August  1995 JPI  Acquisition,  the
Company  issued,  on a post-stock  split basis,  40,000 shares of Class A common
stock,  10,000  shares of Class C common  stock,  and 1,700  shares of Preferred
Stock.  On  April  22,  1998,  in  connection  with  the  Acquisitions  and  the
refinancing,  the Company repurchased all of the outstanding  preferred stock at
$23, 998. 

Common Stock

Dividends  are  payable  equally  on shares of all  classes  of common  stock in
amounts as and when  declared by the Company's  Board of  Directors,  subject to
legally  available  funds and  restrictions  contained  in  certain  agreements.
Holders of Class A and Class C common  stock are  entitled to one vote per share
on all matters submitted to a vote of stockholders.

Upon  the  sale of  shares  of Class B common  stock  and  pursuant  to a public
offering, each share of Class B common stock will be converted into one share of
Class A common stock.  In addition,  each holder of Class B common stock may, at
their  option,  convert  each share of Class B common  stock into Class A common
stock at any time, subject to certain conditions.  Upon the sale of Common Stock
pursuant  to a public  offering of Class B common  stock,  each share of Class C
common stock will be converted into one share of Class A common stock.

In connection with the Acquisitions and the refinancing, the Company repurchased
$4,150 of common stock and warrants from an institutional holder.

Warrants

In connection with the August 1995 JPI  Acquisition,  the Company  issued,  on a
post-stock split basis, warrants to purchase 34,482.76 shares of common stock at
an exercise price of $100 per share. These warrants may be exercised at any time
prior to their expiration date of August 15, 2005. The proceeds from the sale of
these  warrants  ($100 per warrant)  have been  recorded as  additional  paid-in
capital  in  the  consolidated  financial  statements.  No  warrants  have  been
exercised since their  issuance.  In connection  with the  Acquisitions  and the
refinancing,  the Company  repurchased  6,761.53  warrants from an institutional
investor. 

Stock Option Plan

In  connection  with the August  1995 JPI  Acquisition,  the  Company  adopted a
nonqualified  stock  option  plan (the  Option  Plan) for its  officers  and key
employees.  Under the Option Plan,  eligible  participants may receive incentive
and  nonqualified  options to purchase  shares of the  Company's  Class C common
stock.  Options  are  exercisable  at such time an option is earned and  vested.
Generally,  options  become  exercisable  at a rate of 20% for each full year of
employment  from the date of grant and may be exercised only if the holder is an
employee of the Company.  No options have been  exercised  since the adoption of
the Option Plan.  All options  currently  outstanding  have an exercise price of
$100 per share on a post-stock split basis. All options expire on the earlier of
(i) 10 years from date of grant;  (ii) 90 days from the  employee's  termination
date;  or  (iii)  one  year  from  the  employee's  termination  due to death or
disability.


The following is a summary of options granted and outstanding:

<TABLE>
<CAPTION>
                                                   1998                  1997                 1996
                                                   ----                  ----                 ----

                                                         Exercise               Exercise            Exercise
                                               Shares      Price      Shares      Price    Shares    Price
                                               ------      -----      --------    -----    ------    -----
<S>                                              <C>        <C>         <C>        <C>       <C>      <C>

Beginning of year.........................     3,198.04     $100.00    1,704.14   $100.00  1,724.14   $100.00
Granted...................................          ---         ---    1,503.90    100.00     10.00    100.00
Exercised.................................          ---         ---         ---       ---       ---       ---
Cancelled.................................          ---      100.00       10.00    100.00     30.00    100.00
                                                  -----      ------       -----    ------     -----    ------
End of year...............................     3,198.04     $100.00    3,198.04   $100.00  1,704.14   $100.00
Exercisable at the end of year............     1,488.81     $100.00      849.18   $100.00    424.59   $100.00
                                               ========     =======      ======   =======    ======   =======
Weighted average fair value of options
   Granted................................                  $  N/A                $ 63.70             $ _____
                                                            =======               =======             =======     
</TABLE>


                                       24
<PAGE>

The weighted  average fair value of options  granted is estimated on the date of
grant  using  the  Black-Scholes   options  pricing  model  with  the  following
assumptions for 1997: risk free interest rate of 6.5%;  expected  dividend yield
of 0%;  expected  life of ten years and expected  volatility of 0%. The weighted
average contractual life of the options outstanding at December 31, 1998 was 7.5
years.


The  Company has  elected to  continue  to measure  compensation  cost using the
intrinsic  value  method as  prescribed  by  Accounting  Principles  Board (APB)
Opinion No. 25 and has recorded no compensation expense relative to the issuance
of its stock  options.  Had the Company  applied the principles of SFAS No. 123,
Accounting for Stock-Based  Compensation,  additional compensation expense would
have been recorded of $54, $34 and $11 for 1998, 1997 and 1996, respectively.

(9) Income Taxes

Current  income tax expense for the year ended  December  31, 1998  consisted of
$216 and $221 for state and foreign income taxes,  respectively  offset by state
tax refunds of $213.  Current income tax expense for the year ended December 31,
1997  consisted of $40,  $310,  and $334 for federal,  state and foreign  income
taxes, respectively.  Current income tax expense for the year ended December 31,
1996 consisted of $215 and $214 for state and foreign taxes, respectively.

Reconciliation  between the  statutory  income tax  provision  and effective tax
provision is summarized  below for the years ended  December 31, 1998,  1997 and
1996: <TABLE> <CAPTION>

                                                                 1998        1997      1996
                                                                 ----        ----      ---- 
<S>                                                              <C>          <C>       <C>
          Statutory rate (34%)...................              $(3,116)   $(3,291)  $(5,446)
          Amortization of goodwill and other.....                 1,003      4,778     5,435 
          State income tax refunds...............                 (213)       ---       ---
          Change in valuation allowance..........                 2,550      (803)      440
                                                                  -----      ----      ----
          Income tax provision...................              $    224    $  684   $   429
                                                               ========    ======   =======

</TABLE>

The tax effects of significant temporary differences,  representing deferred tax
assets and the deferred tax  liability,  as of December 31, 1998 and 1997 are as
follows:
<TABLE>
<CAPTION>
                                                                      1998       1997
                                                                      ----       ----
<S>                                                                   <C>          <C>
Deferred tax assets:
               Net operating loss carryforwards..................    $ 9,839   $ 7,912
               Receivables.......................................        194       125
               Accrued liabilities...............................      1,558       680 
               Postretirement benefits...........................        690       739
               Inventory.........................................        642       373
               Intangibles.......................................      1,010       392
                                                                      ------    ------
                                                                      13,963    10,221 
          Valuation allowance....................................    (12,626)  (10,076)
                                                                     -------    ------ 
          Net deferred tax assets................................      1,337       145 
          Deferred tax liability property-plant, and equipment...     (1,337)     (145)
                                                                      ------    ------
          Net deferred taxes.....................................    $ ---      $ ---
                                                                     =======    ======= 
</TABLE>

The  Company  establishes  valuation  allowances  and  continually  reviews  the
adequacy of the allowance,  recognizing benefits only as reassessment  indicates
that it is more likely than not that benefits will be realized.  The increase in
the  valuation  allowance  during  1998 was a result  of  changes  in  temporary
differences  and an  increase  in the  net  operating  loss  carryforwards.  The
decrease  during  1997  was the  result  of a  decrease  in net  operating  loss
carryforwards   resulting   from   taxable   income  and  changes  in  temporary
differences.  At December 31, 1998 and 1997,  the Company  concluded that it did
not meet the  requirement  that it was more  likely  than not that the  benefits
would be  realized.  At December 31, 1998,  the Company had net  operating  loss
carryforwards  (NOL) of  approximately  $25,890  for  U.S.  federal  income  tax
purposes  which begin to expire in 2009 to the extent not  previously  utilized.
Approximately  $12,328 of the NOL is  restricted in  availability  subject to an
annual  limitation  of  approximately  $1,236 under  Section 382 of the Internal
Revenue  Code.  The  remaining  balance of  approximately  $13,562 is  available
without restriction.


                                       25
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(10) Retirement Benefit Plans

Retirement  benefits  are  provided  to  substantially  all  employees  under  a
discretionary  profit  sharing and  contributory  retirement  plan under Section
401(k) of the Internal Revenue Code.

The Company  provides  postretirement  health care and other benefits to certain
qualifying  retirees.  As of January  1, 1998 the  Company  amended  its plan to
restrict  new  participants.  The  Company  does not fund  retiree  health  care
benefits  in advance and has the right to modify  these  benefits in the future.
Net periodic  postretirement  benefit cost (NPPBC) for the years ended  December
31, 1998 and 1997 includes the following components:

<TABLE>
<CAPTION>

                           1998   1997
                           ----   ----
<S>                        <C>     <C>  

          Service cost...   $108    $78 
          Interest cost..     70     58 
          Other..........   (50)    (57)
                            ---     --- 
          NPPBC..........   $128    $79
                            ====    ====
</TABLE>

The Plan's status as of December 31 is as follows:

<TABLE>
<CAPTION>
                                                                           1998     1997
                                                                           ----     ----
<S>                                                                        <C>       <C>  
          Actuarial present value of benefit obligation:
               Fully eligible active participants...................       $ 98    $ 98
               Other active participants............................        869     861
               Retirees.............................................         40      40
               Unrecognized net gain................................        781   1,187
               Unrecognized prior service cost......................         29      23
                                                                         ------- ------
          Accumulated postretirement benefit obligation (APBO)......     $1,817  $2,209
                                                                         ======= =======
</TABLE>

The APBO was determined by  application of the terms of the Plan,  together with
relevant actuarial assumptions for active employees. Health care cost trends are
projected  at annual  rates  ranging  from 7.5% in 1999 down to 5.5% in 2009 and
thereafter.  The effect of a 1% annual  increase  in these  assumed  rates would
increase the APBO at December 31, 1998 by approximately $320 and the service and
interest cost  components of the NPPBC for the years ended December 31, 1998 and
1997 by  approximately  $54. The assumed  discount rate used in determining  the
APBO was 7.5%.  The APBO is  included  in other  noncurrent  liabilities  on the
consolidated balance sheets.

(11) Commitments and Contingencies

The Company is involved in certain  legal  actions  from time to time related to
the normal conduct of its business.  Management  believes that  liabilities,  if
any,  resulting  from  litigation  will not materially  affect the  consolidated
financial position or results of operations of the Company.

Future  minimum  lease  payments  under all  operating  leases  with  initial or
remaining  noncancelable  lease terms in excess of one year at December 31, 1998
are as follows:

          1999..................   $1,483
          2000..................    1,258
          2001..................      742
          2002..................      660
          2003 and thereafter...      416

Rent  expense for the years  ended  December  31,  1998,  1997 and 1996  totaled
$1,547, $1,462 and $1,300, respectively.

(12) Sale of Assets

During  1998,  the Company  decided to  consolidate  certain  production  lines;
thereby closing its Elwood, Indiana facility.  During December 1998, the Company
recorded a loss on the sale of assets of $576.  Additionally,  on  December  30,
1998 the Company completed the sale of this facility for $260. In addition,  the
Company  incurred  $503 of  expenses  related to the  closure of this  facility,
primarily related to severance costs. 
                                       26
<PAGE>


                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(13)Subsequent Event

On December 22, 1998, the Company entered into a non-binding letter of intent to
purchase  the  assets  of  Morton  Traffic   Markings,   a  division  of  Morton
International,  Inc. This  acquisition is subject to management's  due diligence
and is tentatively scheduled to close late April of 1999.

(14)  Condensed   Consolidating   Financial  Information

Financial  information regarding the Guarantors for the years ended December 31,
1998,  1997 and 1996 is  presented  below for  purposes  of  complying  with the
reporting requirements of the Guarantor Subsidiaries.  The financial information
regarding the  Guarantors is being  presented  through  condensed  consolidating
financial  statements  since the guarantees are full and  unconditional  and are
joint  and  several.  Guarantor  financial  statements  have not been  presented
because management does not believe that such financial  statements are material
to investors.  Kedman was acquired in 1998 and  incorporated by its predecessors
in  September  1961.  Silencio  was  acquired  in 1998 and  incorporated  by its
predecessors in May 1996.  Allsafe was acquired in 1998 and was  incorporated in
March 1998.  Crystaloid was acquired in 1998 and incorporated in March 1998. OSD
was  incorporated  in October  1996.  Flex-O-Lite  was  acquired  in 1994 by the
Company's  predecessor.  Disclosures concerning the operations of GmbH, the only
Non-Guarantor  Subsidiary,  prior to December  31, 1997 have not been  presented
because its operations are not material.
                                             (Note 14 continued on next page)


                                       27
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14)                  Condensed   Consolidating  Financial  Information  (con't)
                      CONDENSED CONSOLIDATING BALANCE SHEET
                                December 31, 1998
<TABLE>
<CAPTION>

                                                                                       Non-
                                                     Parent         Guarantor       Guarantor
                                                     Company       Subsidiaries     Subsidiary     Eliminations     Consolidated
                                                     -------       ------------     ----------     ------------     ------------
<S>                                                    <C>            <C>                <C>            <C>             <C>
                     ASSETS
Current assets:
     Cash                                             $      --        $     --     $       327       $      --        $      327
     Accounts receivable, net                             3,565           13,427          1,487              --            18,479
     Inventories                                          8,162           25,011          1,444            (342)           34,275
     Prepaid expenses                                       259              407             80              --               746
                                                  --------------  ---------------  -------------   -------------   ---------------
                 Total current assets                    11,986           38,845          3,338            (342)           53,827

Property, plant and equipment                            11,385           22,779            198              --            34,362
Intangibles                                              13,968           58,628          2,646              --            75,242
Note receivable                                          48,271            9,229             --         (57,500)               --
Deferred financing costs                                  7,372               --             --              --             7,372
Investment in subsidiaries                               24,094               --             --         (24,094)               --
Other noncurrent assets                                      --              436             --              --               436
                                                  --------------  ---------------  -------------   -------------   ---------------
                                                      $ 117,076        $ 129,917     $    6,182       $ (81,936)        $ 171,239
                                                  ==============  ===============  =============   =============   ===============

                   LIABILITIES AND                 
                STOCKHOLDERS' DEFICIT

Current liabilities:                                                                                
     Notes payable to parent                          $      --         $ 53,971        $ 3,529       $ (57,500)         $     --
     Accounts payable                                     3,580           10,932            801              --            15,313
     Accrued and other liabilities                        3,717            1,533            806              --             6,056
     Accrued interest                                     3,044               --             --              --             3,044
     Accrued taxes                                        1,075               --             --              --             1,075
                                                  --------------  ---------------  -------------   -------------   ---------------
                 Total current liabilities               11,416           66,436          5,136         (57,500)           25,488
                                                  --------------  ---------------  -------------   -------------   ---------------

Long-term debt                                          190,389               --             --              --           190,389
Other noncurrent liabilities                              3,074               --             --              --             3,074
Due to parent                                           (40,374)          38,600          1,774              --                --

Stockholders' deficit                                                                                               
     Common stock                                            --                1             --              (1)               --
     Additional paid-in capital                           2,951           34,499             --         (34,498)            2,952
     Accumulated other comprehensive income                  --             (238)           297              --                59
     Loans due on common stock                             (343)              --             --              --              (343)
     Accumulated deficit                                (50,037)          (9,381)        (1,025)         10,063           (50,380)
                                                  --------------  ---------------  -------------   -------------   ---------------
                 Total stockholders' deficit            (47,429)          24,881           (728)        (24,436)          (47,712)
                                                  --------------  ---------------  -------------   -------------   ---------------

                                                      $ 117,076        $ 129,917        $ 6,182       $ (81,936)        $ 171,239
                                                  ==============  ===============  =============   =============   ===============

</TABLE>

                                       28
<PAGE>



                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14) Condensed Consolidating Financial Information (con't)

<TABLE>
<CAPTION>

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                          Year ended December 31, 1998


                                                                                        Non
                                                        Parent        Guarantor      Guarantor
                                                       Company        Subsidiaries   Subsidiary      Eliminations   Consolidated
                                                     ------------   --------------  ------------   --------------   --------------
<S>                                                      <C>               <C>            <C>             <C>            <C>    
 Net sales                                              $ 46,876       $ 122,385        $ 8,746       $ (12,775)        $ 165,232
 Operating expenses:
      Cost of sales                                       30,441          87,654          5,688         (12,458)          111,325
      Selling, general and administrative                  9,868          13,749          3,949              --            27,566
      Write-down of assets                                    --             576             --              --               576
      Amortization of intangibles                          1,166           8,272            216              --             9,654
                                                     ------------   -------------   ------------   -------------   ---------------
                                                          41,475         110,251          9,853         (12,458)          149,121
                                                     ------------   -------------   ------------   -------------   ---------------

 Operating income (loss)                                   5,401          12,134         (1,107)           (317)           16,111

 Other:                                                                                             
      Interest expense, net                              (13,516)         (2,287)            --              --           (15,803)
      Amortization of deferred financing costs            (1,271)             --             --              --            (1,271)
      Other                                                8,962          (9,687)            82              --              (643)
                                                     ------------   -------------   ------------   -------------   ---------------
 Income (loss) before income tax
      provision, equity in earnings of
      subsidiaries and extraordinary item                   (424)            160         (1,025)           (317)           (1,606)

 Income tax expense                                            3             221             --              --               224

 Equity in earnings of subsidiaries                       (1,086)             --             --           1,086                --

 Extraordinary item - loss due
       to early extinguishment of debt                    (7,558)             --             --              --            (7,558)
                                                     ------------   -------------   ------------   -------------   ---------------

 Net income (loss)                                      $ (9,071)          $ (61)      $ (1,025)          $ 769          $ (9,388)
                                                     ============   =============   ============   =============   ===============
</TABLE>

                                       29
<PAGE>


                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14) Condensed Consolidating Financial Information (con't)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                          Year ended December 31, 1998

<TABLE>
<CAPTION>
                                                           Parent      Guarantor      Non Guarantor
                                                          Company      Subsidiaries    Subsidiary     Eliminations    Consolidated
                                                          -------      ------------    ----------     ------------    ------------
<S>                                                          <C>            <C>             <C>           <C>             <C>    
Cash flows from operating activities:
Net cash provided by (used in) operating activities         $ 8,630       $ 10,246         $ (1,966)      $ (1,493)       $ 15,417
                                                         -----------  -------------  ---------------  -------------   -------------

Cash flows from investing activities:
      Acquisition of business, including direct expenses    (47,752)            --               --             --         (47,752)
      Deferral of acquisition price, net of payments            500             --             (605)            --            (105)
      Capital expenditures                                   (1,679)        (4,819)            (172)            --          (6,670)
      Proceeds from sale of assets                               --            260               --             --             260
                                                         -----------  -------------  ---------------  -------------   -------------
Net cash used in investing activities                       (48,931)        (4,559)            (777)            --         (54,267)
                                                         -----------  -------------  ---------------  -------------   -------------

Cash flows from financing activities:
      Proceeds from issuance of long-term obligations       204,332             --               --             --         204,332
      Repurchase of common stock, net of loan payments       (4,150)            --               --             --          (4,150)
      Repurchase of preferred stock                         (23,998)            --               --             --         (23,998)
      Financing costs                                        (7,903)          (397)              --             --          (8,300)
      Prepayment premium of long-term obligations            (2,210)            --               --             --          (2,210)
      Repayment of long-term obligations                   (127,020)            --               --             --        (127,020)
                                                         -----------  -------------  ---------------  -------------   -------------
Net cash provided by (used in) financing activities          39,051           (397)              --             --          38,654
                                                         -----------  -------------  ---------------  -------------   -------------

Net increase (decrease) in cash                            $ (1,250)       $ 5,290         $ (2,743)      $ (1,493)           (196)
                                                         ===========  =============  ===============  =============
Cash, beginning of year                                                                                                        523
                                                                                                                      -------------
Cash, end of year                                                                                                            $ 327
                                                                                                                      =============

</TABLE>

                                       30
<PAGE>


                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14) Condensed Consolidating Financial Information (con't)

                      CONDENSED CONSOLIDATING BALANCE SHEET
                                December 31, 1997

<TABLE>
<CAPTION>


                                                                                        Non-
                                                           Parent       Guarantor     Guarantor
                                                          Company      Subsidiaries   Subsidiary    Eliminations    Consolidated
                                                          -------      ------------   ----------    ------------    ------------
<S>                                                         <C>            <C>           <C>          <C>              <C>
                         ASSETS
Current assets:
     Cash                                                  $    --         $    --       $   523         $    -         $     523
     Accounts receivable, net                                 7,565           8,426        1,476          (2,579)          14,888
     Inventories                                              8,064          14,322          476             (25)          22,837
     Prepaid expenses                                           256             104           49              --              409
                                                         -----------   -------------  -----------   -------------   --------------
             Total current assets                            15,885          22,852        2,524          (2,604)          38,657

Property, plant and equipment                                11,625           9,035          158              --           20,818
Intangibles                                                  16,836          41,179        2,035              --           60,050
Deferred financing costs                                      5,180              --           --              --            5,180
Investment in subsidiaries                                   25,180              --           --         (25,180)              --
Other noncurrent assets                                          --             342           --              --              342
                                                         -----------   -------------  -----------   -------------   --------------
                                                           $ 74,706        $ 73,408      $ 4,717       $ (27,784)       $ 125,047
                                                         ===========   =============  ===========   =============   ==============

                    LIABILITIES AND
                 STOCKHOLDERS' DEFICIT

Current liabilities:
     Current maturities of long-term debt                   $ 6,120        $     --      $    --        $     --          $ 6,120
     Accounts payable                                         3,743           7,493          196              --           11,432
     Accrued and other liabilities                            2,949             855        1,397              --            5,201
     Accrued interest                                         2,102              --           --              --            2,102
     Accrued taxes                                              482              --           52              --              534
                                                         -----------   -------------  -----------   -------------   --------------
             Total current liabilities                       15,396           8,348        1,645              --           25,389
                                                         -----------   -------------  -----------   -------------   --------------

Long-term debt, less current maturities                     106,381              --           --              --          106,381
Other noncurrent liabilities                                  3,368              --          235              --            3,603
Due to parent                                               (40,244)         39,986        2,837          (2,579)              --
Preferred stock                                              20,951              --           --              --           20,951

Stockholders' deficit:                                                                                               
     Common stock                                                --               1           --              (1)              --
     Additional paid-in capital                               7,102          34,499           --         (34,499)           7,102
     Accumulated other comprehensive income                      --            (106)          --              --             (106)
     Loans due on common stock                                 (343)             --           --              --             (343)
     Accumulated deficit                                    (37,905)         (9,320)          --           9,295          (37,930)
                                                         -----------   -------------  -----------   -------------   --------------
             Total stockholders' deficit                    (31,146)         25,074           --         (25,205)         (31,277)
                                                         -----------   -------------  -----------   -------------   --------------

                                                           $ 74,706        $ 73,408      $ 4,717       $ (27,784)       $ 125,047
                                                         ===========   =============  ===========   =============   ==============


</TABLE>

                                       31
<PAGE>


                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14) Condensed Consolidating Financial Information (con't)

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                          Year ended December 31, 1997

<TABLE>
<CAPTION>

                                                                                    Non
                                                   Parent         Guarantor      Guarantor
                                                   Company      Subsidiaries     Subsidiary     Eliminations     Consolidated
                                                   -------      ------------     ----------     ------------     ------------
<S>                                                  <C>              <C>            <C>            <C>              <C>

Net sales                                            $ 47,759        $ 83,033         $   --         $ (7,375)        $ 123,417
Operating expenses:
      Cost of sales                                    32,257          62,594             --           (7,385)           87,466
      Selling, general and administrative               8,876           6,329             --               --            15,205
      Write-down of assets                                 --             335             --               --               335
      Amortization of intangibles                      13,185           3,193             --               --            16,378
                                                --------------  --------------  -------------  ---------------  ----------------
                                                       54,318          72,451             --           (7,385)          119,384
                                                --------------  --------------  -------------  ---------------  ----------------

Operating income (loss)                                (6,559)         10,582             --               10             4,033

Other:                                                                                          
      Interest expense, net                           (12,050)             --             --               --           (12,050)
      Amortization of deferred financing costs         (1,261)             --             --               --            (1,261)
      Other                                             6,996          (7,397)            --               --              (401)
                                                --------------  --------------  -------------  ---------------  ----------------

 Income (loss) before income tax
       provision and equity in earnings
       of subsidiaries                                (12,874)          3,185             --               10            (9,679)


Income tax expense                                        540             144             --               --               684

Equity in earnings of subsidiaries                      3,041              --             --           (3,041)               --
                                                --------------  --------------  -------------  ---------------  ----------------

Net income (loss)                                   $ (10,373)        $ 3,041        $    --         $ (3,031)        $ (10,363)
                                                ==============  ==============  =============  ===============  ================

</TABLE>

                                       32
<PAGE>



                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14) Condensed Consolidating Financial Information (con't)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                          Year ended December 31, 1997
<TABLE>
<CAPTION>


                                                                              Parent         Guarantor
                                                                              Company       Subsidiaries     Consolidated
                                                                              -------       ------------     ------------
<S>                                                                              <C>             <C>                <C>        
Cash flows from operating activities:
Net cash provided by operating activities                                       $ 1,328           $ 8,985         $ 10,313  
                                                                            ------------   ---------------   --------------

Cash flows from investing activities:
     Acquisition of business                                                     (2,461)               --           (2,461)
     Deferral of acquisition, net of payments                                    (1,695)               --           (1,695)
     Capital expenditures                                                        (2,168)           (1,078)          (3,246) 
     Proceeds from the sale of assets                                               708               804            1,512
                                                                            ------------   ---------------   --------------
Net cash used in investing activities                                            (5,616)             (274)          (5,890) 
                                                                            ------------   ---------------   --------------

Cash flows from financing activities:
     Repayment of long-term obligations                                          (3,880)               --           (3,880)
     Repurchase of common stock, net of loan payments                               (20)               --              (20)
                                                                            ------------   ---------------   --------------
Net cash used in financing activities                                            (3,900)               --           (3,900)
                                                                            ------------   ---------------   --------------

Net increase (decrease) in cash                                                $ (8,188)          $ 8,711              523
                                                                            ============   ===============
Cash, beginning of year                                                                                                 --
                                                                                                             --------------
Cash, end of year                                                                                                    $ 523
                                                                                                             ==============

</TABLE>

                                       33
<PAGE>



                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14) Condensed Consolidating Financial Information (con't)

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                          Year ended December 31, 1996

<TABLE>
<CAPTION>

                                                             Parent         Guarantor
                                                            Company        Subsidiaries     Eliminations   Consolidated
                                                            -------        ------------     ------------   ------------
<S>                                                            <C>             <C>               <C>             <C>
Net sales                                                     $ 43,236         $ 72,509       $ (3,957)       $ 111,788
Operating expenses:
     Cost of sales                                              29,036           55,370         (3,921)          80,485
     Selling, general and administrative                         7,807            6,633             --           14,440
     Write-down of assets                                        1,050               --             --            1,050
     Amortization of intangibles                                16,196            2,653             --           18,849
                                                          -------------    -------------   ------------    -------------
                                                                54,089           64,656         (3,921)         114,824
                                                          -------------    -------------   ------------    -------------

Operating income (loss)                                        (10,853)           7,853            (36)          (3,036)

Other:                                                                                      
     Interest expense                                          (11,306)              --             --          (11,306)
     Amortization of deferred financing costs                   (1,076)              --             --           (1,076)
     Other                                                       8,860           (9,459)            --             (599)
                                                          -------------    -------------   ------------    -------------

Loss before income tax provision and equity
     in earnings (loss) of subsidiaries                        (14,375)          (1,606)           (36)         (16,017)


Income tax expense                                                 215              214             --              429

Equity in earnings (loss) of subsidiaries                       (1,820)              --          1,820               --
                                                          -------------    -------------   ------------    -------------

Net income (loss)                                            $ (16,410)        $ (1,820)       $ 1,784        $ (16,446)
                                                          =============    =============   ============    =============

</TABLE>

                                       34
<PAGE>




                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(continued)

(14) Condensed Consolidating Financial Information (con't)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                          Year ended December 31, 1996

<TABLE>
<CAPTION>
                                                                 Parent        Guarantor
                                                                Company       Subsidiary       Eliminations    Consolidated
                                                                --------       -----------     ------------   --------------
<S>                                                               <C>             <C>              <C>              <C>
Cash flows from operating activities:
Net cash provided by operating activities                          $ 3,870          $ 2,215           $ 748           $ 6,833
                                                              -------------    -------------    ------------   ---------------
Cash flows from investing activities:
     Acquisition of business                                       (14,947)              --              --           (14,947)
     Deferral of acquisition price, net of payments                  2,125               --              --             2,125 
     Capital expenditures                                           (1,210)            (700)             --            (1,910)
     Proceeds from sale of assets                                      180               --              --               180
                                                              -------------    -------------    ------------   ---------------
Net cash used in investing activities                              (13,852)            (700)             --           (14,552) 
                                                             -------------    -------------    ------------   ---------------
Cash flows from financing activities:
     Proceeds from borrowings                                       13,634               --              --            13,634
     Repurchase of common stock, net of loan payments                  (53)              --              --               (53)
     Financing costs                                                  (856)              --              --              (856)
     Repayment of long term obligations                             (5,006)              --              --            (5,006) 
                                                              -------------    -------------    ------------   ---------------
Net cash provided by financing activities                            7,719               --              --             7,719
                                                              -------------    -------------    ------------   ---------------

Net increase (decrease) in cash                                   $ (2,263)         $ 1,515           $ 748                --
                                                             =============    =============    ============
Cash, beginning of year                                                                                                    --
                                                                                                               --------------- 
Cash, end of year                                                                                                     $    --
                                                                                                              ===============

</TABLE>

                                       35
<PAGE>


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE
None

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>

The  following  sets  forth the names and ages of the  Company's  directors  and
certain officers and the positions they hold.
<CAPTION>
<S>      <C>                       <C>                        <C>                                                       

         Name                       Age             Position with Company 
         ----                       ---             --------------------- 

         Robert H. Elkin            53      Director, Chairman Chief Executive Officer
         Christopher T. Paule       35      Vice President, Chief Financial Officer and Secretary
         Mark R. Hefty              47      President, Jackson Division
         Lincoln M. Kennedy         63      President, American Allsafe
         Allan A. Huning            61      President, Flex-O-Lite
         John W. Jordan II          52      Director
         David W. Zalaznick         45      Director
         A. Richard Caputo, Jr.     33      Director and Vice President
         Jonathan F. Boucher        42      Director
</TABLE>


Set  forth  below is a brief  description  of the  business  experience  of each
director  and  certain  officers  of the  Company.  The term of office  for each
director will last until the next annual  shareholder's  meeting.  Each officer,
other than Messrs. Elkin, Paule, Hefty and Huning, serves at the pleasure of the
Company's Board of Directors with no set term of office.
See"-Employment/Non-Interference Agreements."

Robert H.  Elkin.  Mr.  Elkin has  served as the  Company's  Chairman  and Chief
Executive  Officer and as a Director  since August 1995. Mr. Elkin was appointed
President and Chief Executive Officer of the predecessor to the Company in March
1994. From September 1987 to March 1996, Mr. Elkin served as President and Chief
Operating  Officer of Clarke  Industries (a division of  Thermadyne  Industries,
Inc. ("Thermadyne").

Christopher  T. Paule.  Mr. Paule has served as the  Company's  Vice  President,
Chief Financial Officer and Secretary since August 1995. Mr. Paule was appointed
Vice  President-Finance  of the predecessor to the Company in January 1994. From
1988 to 1994, he served as Controller at Coyne  Cylinder  Company in Huntsville,
Alabama (a  division  of  Thermadyne),  Controller  of the  Cutting  and Welding
segment of Thermadyne and various other financial and operating positions.

Mark R. Hefty. Mr. Hefty has served as the President and Chief Operating Officer
of Jackson since October  1997.  From 1996 to 1997,  Mr. Hefty was President and
Chief Executive  Officer of Clarke  Industries.  He also served in several other
marketing and sales positions at Clarke Industries beginning in 1981. 

Lincoln M.Kennedy. Mr. Kennedy has served as President of American Allsafe since
1981. From 1975 to 1981, Mr. Kennedy served as General Manager of the Industrial
Division of American Safety Equipment.  From 1964 to 1975, he served as Director
of Operations at Pennsylvania Optical Company, Redding, Pennsylvania.

Allan A. Huning.  Mr. Huning has served as President of Flex-O-Lite  since 1991.
Mr. Huning joined  Flex-O-Lite in 1969,  became  Regional Sales Manager in 1972,
General Sales Manager in 1974, Director of Operations in 1980, Vice President of
Operations in 1986, and was named President in January 1991.

John W.  Jordan II. Mr.  Jordan has served as a Director  of the  Company  since
August 1995.  Mr. Jordan is a managing  director of The Jordan  Company,  LLC, a
private  merchant  banking firm,  which he founded in 1982. Mr. Jordan is also a
director of Jordan Industries,  Inc., Jordan  Telecommunication  Products, Inc.,
American Safety Razor Company, AmeriKing, Inc., Carmike Cinemas, Inc., Rockshox,
Inc.,  GFSI  Holdings,  Inc.,  GFSI,  Inc.,  Motors and Gears,  Inc. and Apparel
Ventures, Inc., as well as other privately held companies.

David W. Zalaznick.  Mr. Zalaznick has served as a Director of the Company since
August 1995. Mr.  Zalaznick is a managing  director of The Jordan Company,  LLC,
which he co-founded with Mr. Jordan in 1982. Mr. Zalaznick is also a director of
Jordan  Industries,  Inc.,  Jordan  Telecommunication  Products,  Inc.,  Carmike
Cinemas, Inc., AmeriKing, Inc., American Safety Razor Company, Marisa Christina,
Inc., Great American Cookie Company, GFSI Holdings,  Inc., GFSI, Inc. Motors and
Gears,  Inc.  and  Apparel  Ventures,  Inc.,  as well as  other  privately  held
companies.

A. Richard Caputo,  Jr. Mr. Caputo has served as a Director of the Company since
August 1995. Mr. Caputo has been a managing director of The Jordan Company, LLC,
since 1990.  Mr. Caputo is also a director of AmeriKing,  Inc.,  GFSI  Holdings,
Inc. and GFSI, Inc., as well as other privately held companies.

                                       36
<PAGE>


Jonathan F. Boucher.  Mr.  Boucher has served as a Director of the Company since
August 1995.  Mr.  Boucher has been a managing  director of The Jordan  Company,
LLC,  since 1983.  Mr.  Boucher is also a director of Jordan  Industries,  Inc.,
Jordan  Telecommunication  Products,  Inc.,  Motors and Gears, Inc. and American
Safety Razor Company, as well as other privately held companies.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth information concerning the aggregate compensation
paid and accrued to the  Company's  top five  executive  officers  for  services
rendered to the Company  during each of the three most recent fiscal years.  The
executive  officers  include  Robert H.  Elkin,  Chairman  and  Chief  Executive
Officer,  Christopher  T. Paule,  Vice  President and Chief  Financial  Officer,
Lincoln M. Kennedy, President, Allsafe, Allan A. Huning, President,  Flex-O-Lite
and Mark R. Hefty, President, Jackson Division.
<TABLE>
                                            Summary Compensation Table

<CAPTION>
                                                                   Annual
                                                    Fiscal      Compensation              All other
Position                                             Year           Salary      Bonus   Compensation (1)
--------                                             ----           ------      -----   ----------------
<S>                                                  <C>              <C>         <C>       <C>  

Robert H. Elkin.............................         1998         401,086      248,400      21,847
Chariman and Chief Executive Officer........         1997         347,591      222,507      20,195
                                                     1996         338,755      136,000      20,195

Christopher T. Paule........................         1998          167,850      84,480      10,923
Vice President and Chief Financial Officer..         1997          126,363      83,151       6,326
                                                     1996          118,993      59,000       6,000

Lincoln M. Kennedy (2)......................         1998          111,240      50,000       5,309
President, American Allsafe.................

Allan A. Huning.............................         1998          144,364      7,000       12,592
President, Flex-O-Lite......................         1997          139,970     70,570       12,084
                                                     1996          136,075     10,000       13,626

Mark R. Hefty (3)...........................         1998          176,986   ---------      11,028
President, Jackson Division.................         1997           30,438      18,699       1,500
</TABLE>

(1) Other annual compensation consists of car allowance and defined contribution
    payments paid by the Company.
(2)  Lincoln  Kennedy  was  employed  as of April 22,  1998.  (3) Mark Hefty was
employed as of October 30, 1997.

Employment/Non-Interference Agreements

Elkin  Employment  Agreement.  Mr. Elkin has an employment and  non-interference
agreement with the Company which provides for Mr. Elkin's employment as Chairman
and Chief Executive  Officer of the Company.  The initial term of the employment
agreement  terminates  on  August  15,  2000,  at which  time  the term  will be
automatically  extended for successive one-year periods until either party gives
notice  of its  intention  to not  renew  180 days  prior to the end of the then
current term. The employment agreement can also be terminated at any time by the
Company.  His base salary (which is increased  annually  based on a CPI formula)
was $360,000 for 1998, and he may be awarded a bonus,  at the sole discretion of
the Board, of up to 65% of his annual salary, which amounts are inclusive of any
compensation, fees, salary, bonuses or other payments to Mr. Elkin by any of the
subsidiaries  of affiliates of the Company or affiliates of The Jordan  Company.
On April 22, 1998,  the Company and Mr.  Elkin  agreed to amend this  employment
agreement.  The amended agreement  provides for a base salary of $414,000 with a
discretionary  bonus  of up to 75% of  Mr.  Elkin's  annual  salary.  Under  the
employment agreement,  if Mr. Elkin's employment is terminated for reasons other
than  voluntary  termination,  cause,  disability  or  death,  he will be paid a
severance  payment of varying amounts,  depending on the reason for termination,
up to the full amount of his compensation through the term of the agreement.  In
addition,  Mr.  Elkin is  entitled to receive an amount in respect of his vested
equity  ownership  in  the  Company  equal  to  such  vested  equity  percentage
multiplied by the product of 6.0 times the Company's  EBITDA for the immediately
preceding  fiscal year (net of  indebtedness  and  transaction  expenses) in the
event he is  terminated  by the Company  other than for Cause (as defined in his
employment  agreement).  If Mr. Elkin's employment is terminated  voluntarily or
for  reasons of Cause,  no  severance  payment  is made.  Under the terms of the
employment  agreement,  Mr.  Elkin may not compete  with the Company in the same
market for 24 months following the termination of his employment.

                                       37
<PAGE>

Paule  Employment  Agreement.  Mr. Paule has an employment and  non-interference
agreement with the Company which  provides for Mr.  Paule's  employment as Chief
Financial Officer of the Company.  The initial term of the employment  agreement
terminates  on August 15,  2000,  at which  time the term will be  automatically
extended for successive  one-year periods until either party gives notice of its
intention to not renew 180 days prior to the end of the then current  term.  The
employment agreement can also be terminated at any time by the Company. His base
salary  (which is  increased  annually  based on a CPI formula) was $153,000 for
1998, and he may be awarded a bonus,  at the sole discretion of the Board, of up
to 50% of his annual  salary,  which amounts are inclusive of any  compensation,
fees, salary,  bonuses or other payments to Mr. Paule by any of the subsidiaries
or affiliates of the Company or affiliates of The Jordan  Company.  On April 22,
1998, the Company and Mr. Paule agreed to amend this employment  agreement.  The
amended  agreement  provides for a base salary of $176,000 with a  discretionary
bonus of up to 60% of Mr. Paule's annual salary. Under the employment agreement,
if Mr.  Paule's  employment  is  terminated  for  reasons  other than  voluntary
termination,  cause, disability or death, he will be paid a severance payment of
varying amounts, depending on the reason for termination,  up to the full amount
of his compensation through the term of the agreement. In addition, Mr. Paule is
entitled to receive an amount in respect of his vested  equity  ownership in the
Company equal to such vested equity percentage  multiplied by the product of 6.0
times the Company's  EBITDA for the  immediately  preceding  fiscal year (net of
indebtedness  and  transaction  expenses) in the event he is  terminated  by the
Company other than for Cause (as defined in his  employment  agreement).  If Mr.
Paule's  employment  is  terminated  voluntarily  or for  reasons  of Cause,  no
severance  payment is made. Under the terms of the agreement,  Mr. Paule may not
compete  with the  Company  in the  same  market  for 24  months  following  the
termination of his employment.

Kennedy Employment Agreement. Mr. Kennedy has an employment and non-interference
agreement  with the Company  which  provides  for Mr.  Kennedy's  employment  as
President of Allsafe. The initial term of the employment agreement terminates on
May 6,  2001,  at  which  time  the  term  will be  automatically  extended  for
successive  one-year periods until either party gives notice of its intention to
not renew 90 days  prior to the end of the then  current  term.  The  employment
agreement can also be terminated at any time by the Company. His base salary was
$153,300 for 1998, and he may be awarded a bonus,  at the sole discretion of the
Board, which amounts are inclusive of any compensation, fees, salary, bonuses or
other  payments to Mr. Kennedy by any of the  subsidiaries  or affiliates of the
Company or affiliates of The Jordan Company. Under the employment agreement,  if
Mr.  Kennedy 's  employment  is  terminated  for  reasons  other than  voluntary
termination,  cause, disability or death, he will be paid a severance payment of
varying amounts, depending on the reason for termination,  up to the full amount
of his  compensation  through  the  term  of  the  agreement.  If Mr.  Kennedy's
employment  is  terminated  voluntarily  or for reasons of Cause,  no  severance
payment is made.  Under the terms of the agreement,  Mr. Kennedy may not compete
with the Company in the same market for 24 months  following the  termination of
his employment.

Huning Employment  Agreement.  Mr. Huning has an employment and non-interference
agreement  with  Flex-O-Lite  which  provides  for Mr.  Huning's  employment  as
President  of  Flex-O-Lite.   The  initial  term  of  the  employment  agreement
terminates  on August 15,  2000,  at which  time the term will be  automatically
extended for successive  one-year periods until either party gives notice of its
intention to not renew 180 days prior to the end of the then current  term.  The
employment agreement can also be terminated at any time by the Company. His base
salary  (which is  increased  annually  based on a CPI formula) was $142,578 for
1998, and he may be awarded a bonus,  at the sole discretion of the Board, of up
to 50% of his annual  salary,  which amounts are inclusive of any  compensation,
fees, salary, bonuses or other payments to Mr. Huning by any of the subsidiaries
or affiliates of  Flex-O-Lite  or  affiliates of The Jordan  Company.  Under the
employment agreement, if Mr. Huning's employment is terminated for reasons other
than  voluntary  termination,  cause,  disability  or  death,  he will be paid a
severance  payment of varying amounts,  depending on the reason for termination,
up to the full amount of his  compensation  through  the term of the  employment
agreement.  If Mr. Huning's employment is terminated  voluntarily or for reasons
of Cause,  no  severance  payment  is made.  Under  the terms of the  employment
agreement, Mr. Huning may not compete with Flex-O-Lite in the same market for 24
months following the termination of his employment.

                                       38
<PAGE>

Hefty  Employment  Agreement.  Mr. Hefty has an employment and  non-interference
agreement  with  the  Company  which  provides  for Mr.  Hefty's  employment  as
President of Jackson. The initial term of the employment agreement terminates on
April 22,  2001,  at which  time the term  will be  automatically  extended  for
successive  one-year periods until either party gives notice of its intention to
not renew 180 days prior to the end of the then  current  term.  The  employment
agreement  can also be  terminated  at any time by the Company.  His base salary
(which is increased  annually based on a CPI formula) was $175,000 for 1998, and
he may be awarded a bonus,  at the sole discretion of the Board, of up to 65% of
his annual  salary,  which  amounts are  inclusive  of any  compensation,  fees,
salary,  bonuses or other  payments to Mr. Hefty by any of the  subsidiaries  or
affiliates  of the  Company  or  affiliates  of The  Jordan  Company.  Under the
employment agreement,  if Mr. Hefty's employment is terminated for reasons other
than  voluntary  termination,  cause,  disability  or  death,  he will be paid a
severance  payment of varying amounts,  depending on the reason for termination,
up to the full amount of his compensation through the term of the agreement.  If
Mr. Hefty's  employment is terminated  voluntarily  or for reasons of Cause,  no
severance  payment is made. Under the terms of the agreement,  Mr. Hefty may not
compete  with the  Company  in the  same  market  for 24  months  following  the
termination of his employment.

Incentive Compensation Plan
The Company  has adopted  incentive  compensation  plans for its key  management
employees, which provide for annual cash bonuses payable if certain EBITDA, cash
flow and individual performance targets are met.

SAR Agreements

In April 1998 the Company entered into stock appreciation right  agreements("SAR
Agreements")  with Messrs.  Elkin,  Paule and Hefty  providing  for an aggregate
payment of up to 3.0% of the  Company's  equity value upon a sale of the Company
above a specified  threshold.  The  initial  term of the SAR  Agreements  is ten
years,  at which  time the term  will be  automatically  extended  for  one-year
periods.  The rights of Messrs.  Paule and Hefty under the SAR  Agreements  vest
ratably over the three-year period from April 22, 1998. Stock Option Plan

The Company  adopted a stock option plan (the "Option Plan") in order to provide
incentives to certain key officers,  managers and employees through ownership of
the Company's Common Stock. The shares of Common Stock to be sold or transferred
pursuant  to the  exercise  of options  granted  under the Option  Plan shall be
authorized shares of Common Stock of the Company, and may be newly issued shares
and treasury  shares.  As of December  31,  1998,  options have been granted for
3,198.04  shares of the Class C Common Stock of the  Company.  These shares vest
over a five-year  period,  and as of December  31,  1998,  1,488.81  shares were
vested.  In  addition,  up to 639.598  shares  will vest in 1999,  up to 639.602
shares will vest in 2000, up to 215.00 shares will vest in 2001 and up to 215.03
shares will vest in 2002.

                                       39
<PAGE>

ITEM 12.          SECURITY OWNERSHIP AND CERTAIN BENEFICAL OWNERS AND MANAGEMENT

The table  below  sets forth  certain  information,  as of  December  31,  1998,
regarding  beneficial  ownership of the common stock of the Company held by: (i)
each  director of the  Company who  beneficially  owns common  stock,  (ii) each
executive officer of the Company named in the table below  "Management-Executive
Compensation-Summary  Compensation  Table who  beneficially  owns common  stock,
(iii) all directors  and  executive  officers of the Company as a group and (iv)
each person known by the Company to own beneficially  more than 5% of its common
stock.  The  Company  believes  that each  individual  or entity  named has sole
investment and voting power with respect to shares of common stock  indicated as
beneficially   owned  by  them,   except  as  otherwise   noted.   See  "Certain
Transactions." <TABLE> <CAPTION>
                                                                Amount of Beneficial Ownership(1)
                                                                 ---------------------------------
                                                                  Number of          Percentage
                                                                    Shares              Owned
                                                                    ------              -----
<S>                                                                   <C>                  <C>
         Directors and Executive Officers:
         John W. Jordan II (2)(3)...............................       4,631              9.8%
         David W. Zalaznick (3).................................       4,631              9.8
         Robert H. Elkin (4)....................................       4,393              9.2
         Jonathan F. Boucher (3)................................       3,970              8.4
         Christopher T. Paule (5)...............................       1,485              3.1
         A. Richard Caputo, Jr. (3).............................       1,453              3.1
         Allan A. Huning (6)....................................         888              1.9
         Jack L. Bortle (7).....................................         754              1.6
         John L. Garavaglia III (8).............................         250               *
         All directors and executive officers as a group (11 persons)
           (2)(3)(4)(5)(6)(7)(8)                                      22,800             47.6%

         Other Principal Stockholders:_.........................
         Massachusetts Mutual Life Insurance Company (9)........      13,168             22.7%
         JZ Equity Partners PLC (10)............................      12,352             21.6
         Leucadia Investors, Inc. (11)..........................       7,263             15.4
         Northwestern Mutual Life Insurance Company (12)........       8,231             15.3
         Safety Partners, L.P. (13).............................       3,448              7.3
         John R. Lowden (3).....................................       2,905              6.2
         Adam E. Max (3)........................................       2,905              6.2
</TABLE>
--------
* Indicates beneficial ownership of less than 1% of shares of Common Stock.

(1)  Calculated  pursuant to Rule 13d-3(d)  under the Exchange  Act.  Under Rule
13d-3(d), shares not outstanding which are subject to options,  warrants, rights
or conversion  privileges  exercisable within 60 days are deemed outstanding for
the purpose of calculating the number and percentage  beneficially owned by such
person, but not deemed outstanding for the purpose of calculating the percentage
beneficially  owned by each other person listed.  As of December 31, 1998, there
were 47,056 shares of common stock of the Company issued and outstanding.

(2) All shares are held by the John W. Jordan II Revocable  Trust,  of which Mr.
Jordan is the trustee.

(3) Each of  Messrs.  Jordan,  Zalaznick,  Boucher,  Lowden,  Max and Caputo are
affiliated with The Jordan Company, whose address is 767 Fifth Avenue, New York,
New York 10153.

(4) Includes  immediately  exercisable  options to purchase 605 shares of common
stock.  Mr. Elkin was also granted SARs in  connection  with the  Offering.  See
"Management-SAR   Agreements."  Mr.  Elkin's  address  is  2997  Clarkson  Road,
Chesterfield, Missouri 63017.

(5) Includes  immediately  exercisable  options to purchase 210 shares of common
stock.  Mr. Paule was also granted SARs in  connection  with the  Offering.  See
"Management-SAR   Agreements."  Mr.  Paule's  address  is  2997  Clarkson  Road,
Chesterfield, Missouri 63017.

(6)  Includes  immediately  exercisable  options to purchase 14 shares of common
stock. Mr. Huning's address is 2997 Clarkson Road, Chesterfield, Missouri 63017.

(7)  Includes  immediately  exercisable  options to  purchase 4 shares of common
stock. Mr. Bortle's address is 2997 Clarkson Road, Chesterfield, Missouri 63017.

(8) Mr.  Garavaglia's  address is 2997  Clarkson  Road,  Chesterfield,  Missouri
63017.

(9) Includes 432 shares of common stock and immediately  exercisable warrants to
purchase 1988 shares of common stock held by MassMutual Corporate Value Partners
Limited,  217 shares of common  stock and  immediately  exercisable  warrants to
purchase 999 shares of common stock held by MassMutual  Participation  Investors
and 434 shares of common stock and immediately  exercisable warrants to purchase
1999 shares of common  stock held by  MassMutual  Corporate  Investors,  each of
which are affiliates of Massachusetts  Mutual Life Insurance Company,  and 1,267
shares of common stock and  immediately  exercisable  warrants to purchase 5,832
shares of common stock held by Massachusetts  Mutual Life Insurance Company. The
principal  address of Massachusetts  Mutual Life Insurance Company is 1295 State
Street, Springfield, Massachusetts 01111.
                                       40
<PAGE>

(10)  Includes  immediately  exercisable  warrants to purchase  10,142 shares of
common stock. JZ Equity Partners PLC is a publicly traded U.K.  investment trust
advised by an affiliate of The Jordan Company.  See "Certain  Relationships  and
Related  Transactions."  The principal  address of JZ Equity Partners PLC is c/o
Jordan/Zalaznick Capital Company, 767 Fifth Avenue, New York, New York 10153.

(11) The principal address of Leucadia Investors, Inc. is 315 Park Avenue South,
New York, New York 10010.

(12)  Includes  immediately  exercisable  warrants to purchase  6,762  shares of
common  stock.  The  principal  address of  Northwestern  Mutual Life  Insurance
Company is 720 East Wisconsin Avenue, 18th Floor, Milwaukee, Wisconsin 53203.

(13) Safety Partners,  L.P. is an affiliate of Jefferies & Company, Inc., one of
the Initial  Purchasers.  The  beneficial  owners of Safety  Partners,  L.P. are
comprised entirely of Jefferies & Company,  Inc. as the sale general partner and
certain  employees  and  officers of  Jefferies  & Company,  Inc. as the limited
partners.  The principal address of Safety Partners,  L.P. is 11100 Santa Monica
Blvd., 10th Floor, Los Angeles, California 90025.

Stockholders Agreement

The Stockholders Agreement provides for certain rights and obligations among the
Company  and the  Current  Holders  including  with  respect to the  election of
directors,  restrictions on transfer,  co-sale rights and  registration  rights.
Pursuant to the Stockholders Agreement,  the Current Holders have agreed to vote
their shares for the election of at least four members of the board of directors
designated by affiliates of The Jordan Company,  and JZ Equity Partners PLC (the
"Jordan Investors") and one director designated by management  stockholders (the
"Management Investors").

The Current  Holders may only transfer shares of Common Stock in accordance with
the Stockholders Agreement.  The Company and the Current Holders have a right of
first offer to purchase  all or any portion of any shares of Common  Stock to be
transferred by any Current Holder, subject to certain limited exceptions, on the
same terms put forth for such transfer by the selling holder.  The  Stockholders
Agreement  provides for  preferences  on the rights of first offer such that the
Management  Investors have the first right to purchase  shares sold by any other
Management  investor and the Jordan  Investors  have the first right to purchase
shares sold by any other Jordan Investor.

Pursuant to the  Stockholders  Agreement,  Current Holders other than the Jordan
Investors and the Management Investors (the "Institutional Investors") have been
granted  demand and  incidental  registration  rights by the Company.  All other
Current Holders have been granted incidental registration rights. The Company is
required to bear all  registration  expenses in connection  with each demand and
incidental  registration  and has agreed to indemnify  the holders of demand and
incidental  registration rights against,  and provide  contribution with respect
to, certain  liabilities  under the Securities Act in connection with the demand
and incidental registrations.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  Jordan  Company.  In  connection  with its  acquisition  by the  Management
Investors and the Jordan  Investors in August 1995, the Company  entered into an
agreement (the "TJC Management  Agreement")  with The Jordan Company  Management
Corporation  ("TJMC"),  an  affiliate  of The  Jordan  Company.  Under  the  TJC
Management  Agreement,  the  Company  retains  TJMC to  render  services  to the
Company,  its financial and business affairs, its relationships with its lenders
and  stockholders,  and the operation  and  expansion of its  business.  The TJC
Management  Agreement  will  expire in 2005,  but is  automatically  renewed for
successive  one-year  terms,  unless  either party  provides  written  notice of
termination 60 days prior to the scheduled  renewal date. In connection with the
Offering,  the  Company  and  TJMC  have  agreed  to  amend  the TJC  Management
Agreement.  The TJC  Management  Agreement,  as amended,  will provide an annual
consulting fee payable on a quarterly basis equal to at least $600,000 but in no
event greater than 2.5% of EBITDA (as defined in the TJC Management  Agreement).
In addition, the TJC Management Agreement provides for payment to TJMC of (i) an
investment  banking and  sponsorship  fee of up to 2% of the  purchase  price of
certain  acquisitions  or sales  involving  the  Company  and  (ii) a  financial
consulting fee of up to 1% of any debt,  equity or other  financing  arranged by
the Company with the  assistance  of TJMC. A fee in the amount of $1.65  million
was payable to TJMC upon consummation of the Offering.  Such fees are subject to
board of  directors  approval.  The Company  believes  that the terms of the TJC
Management  Agreement  are  comparable  to the terms that it would  obtain  from
disinterested  third parties for comparable  services.  Pursuant to the terms of
the Indenture,  payment of fees to TJMC pursuant to the TJC Management Agreement
is not  permitted in the event of a payment or financial  covenant  default with
respect to the Notes.

                                       41
<PAGE>

EMPLOYEE  STOCKHOLDER  LOANS.  In  1995,  the  Company  made  loans  to  certain
employees,  including  Messrs.  Elkin,  Paule  and  Huning,  to be used  for the
purchase of the Company's stock. The loan to Mr. Elkin had an original principal
amount of  $165,553  and is the only loan with a  principal  amount in excess of
$60,000.  As of  December  31,  1998  there  was  $343,000  outstanding  on  all
stockholder loans, including $165,553 outstanding on the loan to Mr. Elkin. Each
of the loans bears  interest  at a rate of 7% per annum and, as of December  31,
1998, payments on all of the loans by the employee stockholders were current.

DIRECTOR'S  INDEMNIFICATION.   The  Company  has  entered  into  indemnification
agreements  with each member of the Board of  Directors  whereby the Company has
agreed,  subject to certain  exceptions,  to indemnify  and hold  harmless  each
director  from  liabilities  incurred as a result of such  person's  status as a
director of the Company.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K

(1)      Financial Statements

Reference is made to the Index to Consolidated Financial Statements appearing in
Item 8, which is incorporated herein by reference.

(2)      Financial Statements Schedule

All  schedules  for  which  provision  is  made  in  the  applicable  accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions, are not applicable and therefore have been omitted, or the
information  has been included in the  consolidated  financial  statements or is
considered immaterial.

(3)      Exhibits

A list of the exhibits included as part of this Form 10-K is set forth below.


                                       42
<PAGE>

                                  EXHIBIT INDEX
                                                                    Sequentially
                Exhibit Description                                   Numbered
                                                                        Page
1      Purchase Agreement, dated as of April 16, 1998,                         *
       by and among Jackson Products,Inc. (the "Registrant"),
       Jefferies & Company, Inc. and Goldman, Sachs & Co.

2.1    Stock Purchase Agreement, dated as of March 30, 1998, 
       by and among Jackson Acquisition, Inc., NCH Corporation,
       American Allsafe Company and Silencio/Safety Direct, Inc.++             *

2.2    Stock Purchase Agreement, dated as of March 31, 1998, by              
       and among Crystaloid Technologies, Inc., the Management 
       Sellers party thereto, Dahl Partners Incorporated and 
       Crystaloid Electronics Company++                                        *

2.3    Stock Purchase Agreement, dated as of June 12, 1998 by and 
       among American Allsafe Company, the sellers party thereto 
       and Kedman Company++                                                   **

2.4    First Amendment to Stock Purchase Agreement, dated as of 
       June 12, 1998 by and among American Allsafe Company, 
       the sellers party thereto and Kedman Company                           **

2.5    Second Amendment to Stock Purchase Agreement, dated as 
       of July 22, 1998 by and among American Allsafe Company, 
       the sellers party thereto and Kedman Company                           **

2.6    Third Amendment to Stock Purchase Agreement, dated as of 
       July 22, 1998 by and among American Allsafe Company, the 
       sellers party thereto and Kedman Company                               **

2.7    Real Property Purchase Agreement, dated as of June 12, 
       1998 by and among American Allsafe Company and certain 
       stockholders of Kedman Company                                         **

3.1    Amended and Restated Certificate of Incorporation of the 
       Registrant                                                              *

3.2    Bylaws of the Registrant                                                *

4.1    Indenture,  dated as of April 22, 1998,  between the Registrant 
       and State Street Bank and Trust Company, as Trustee                     *

4.2    Form of Global Series A Senior Note                                     *

4.3    Form of Global Series B Senior Note                                     *

4.4    Registration Rights Agreement, dated as of April 22, 1998, 
       by and among the Registrant, Jefferies & Company, Inc. and 
       Goldman, Sachs & Co.                                                    *
4.5    Supplemental  Indenture,   dated  as  of  April  24,  1998,  
       between  the Registrant and State Street Bank and Trust Company, 
       as Trustee                                                              *

4.6    Stockholders Agreement, dated as of August 16, 1995, by and among 
       the Registrant and its stockholders                                     *

4.7    First Amendment to Stockholders Agreement,  dated as of March 1, 
       1996, by and among the Registrant and its stockholders                  *

4.8    Second Amendment to Stockholders Agreement,  dated as of July 1, 
       1996, by and among the Registrant and its stockholders                  *

4.9    Third Amendment to Stockholders Agreement, dated as of June 1, 
       1997, by and among the Registrant and its stockholders                  *

4.10   Jackson Products, Inc. 1995 Management Stock Option Plan, 
       dated as of August 16,1995                                              *

4.11   First Amendment to 1995 management Stock Option Plan, dated as
       of June 1, 1997                                                         *

4.12   Form of Stock Option Agreement                                          *

4.13   Jordan Investors Subscription Agreement,  dated as of August 16,
       1995, by and among the Registrant and certain stockholders 
       named therein                                                           *

4.14   Advisor Subscription Agreement, dated as of August 16, 1995, 
       between the Registrant and Safety Partners, L.P                         *

                                       43
<PAGE>

4.15   Management  Subscription  Agreement,  dated as of August 16, 1995,
       by and among the Registrant and certain stockholders named therein      *

4.16   First Amendment to Management Subscription Agreement, dated
       March 1, 1996, by and among the Registrant and certain
       stockholders named therein                                              *

4.17   Second Amendment to Management Subscription Agreement, dated 
       as of December 1,1996, by and among the Registrant and certain 
       stockholders named therein                                              *

4.18   Form of Non-Recourse Promissory Note between the Registrant and 
       certain of its stockholders                                             *

4.19   Form of Stock Pledge Agreement between the Registrant and 
       certain of its stockholders                                             *

4.20  Securities Purchase  Agreement,  dated as of August 16, 1995, 
      by and among the Registrant and certain stockholders named therein       *

4.21  First  Amendment to  Securities  Purchase  Agreement,  dated as 
      of July 1, 1996, by and among the Registrant and certain stockholders 
      named therein                                                            *

4.22  Form of Warrant of the Registrant                                        *

10.1(a)Credit  Agreement,  dated  as  of  April  22,  1998,  by  and  
       among  the Registrant,   BankBoston,   N.A.,  as  Agent,  Mercantile  
       Bank  National Association, as Co-agent, the other lenders party
       thereto, and BancBoston Securities, Inc., as Syndication Agent
       and Arranger                                                            *

10.1(b)Amendment  No. 1 to Credit  Agreement,  dated as of June 19, 1998,
       by and among  the  Registrant,  BankBoston,  N.A.,  as  Agent,  
       Mercantile  Bank National Association,  as Co-Agent,  the other 
       lenders party thereto, and BancBoston Securities, Inc., as 
       Syndication Agent and Arranger                                          *

10.2   Revolving Note in the aggregate principal amount of $19,500,000         *

10.3   Revolving Note in the aggregate principal amount of $10,500,000         *

10.4   Acquisition Note in the aggregate principal amount of $61,750, 000      *

10.5   Acquisition Note in the aggregate principal amount of $33,250,000       *

10.6  Guaranty, dated as of April 22, 1998, by and among Flex-O-Lite,  
      Inc., OSD Envizion, Inc., Crystaloid Technologies,  Inc., Jackson 
      Acquisition, Inc., American Allsafe  Company,  Silencio/Safety  Direct,
      Inc. and BankBoston, N.A., as Agent                                      *

10.7  Stock Pledge  Agreement,  dated as of April 22,  1998,  by and 
      between the Registrant and BankBoston, N.A., as Agent                    *

                                    
10.8  Stock Pledge Agreement (Subsidiaries), dated as of April 22, 1998, 
      by and between Flex-O-Lite, Inc. and BankBoston, N.A., as Agent          *

10.9  Stock Pledge Agreement (Subsidiaries),  dated as of April 22, 1998, 
      by and between Jackson Acquisition, Inc. and BankBoston, N.A., as Agent  *

10.10 Security  Agreement,  dated as of  April  22,  1998,  by and  between
      the Registrant and BankBoston, N.A., as Agent                            *

10.11 Security Agreement (Subsidiaries), dated as of April 22, 1998 by 
      and among Flex-O-Lite,  Inc., OSD Envizion,  Inc.,  Crystaloid  
      Technologies,  Inc., Jackson  Acquisition,  Inc.,  American  Allsafe
      Company,  Silencio/Safety Direct, Inc. and BankBoston, N.A., as Agent    *

10.12 Patent Collateral Assignment and Security Agreement, dated as of 
      April 22, 1998, by and between the Registrant and BankBoston, 
      N.A., as Agent                                                           *

10.13 Patent Collateral Assignment and Security Agreement, dated as of 
      April 22, 1998, by and between Flex-O-Lite, Inc. and BankBoston,
      N.A., as Agent                                                           *

10.14 Patent Collateral Assignment and Security Agreement, dated as of 
      April 22, 1998, by and between OSD Envizion, Inc. and BankBoston, 
      N.A., as Agent                                                           *

10.15 Patent Collateral Assignment and Security Agreement, dated as 
      of April 22, 1998, by and between American Life Allsafe Company 
      and BankBoston, N.A., as Agent                                           *
                                   44
<PAGE>

10.16 Patent Collateral Assignment and Security Agreement, dated as of 
      April 22, 1998, by and between Silencio/Safety Direct, Inc. and 
      BankBoston, N.A., as Agent                                               *

10.17 Patent Collateral Assignment and Security Agreement, dated as of
      April 22, 1998,by and between Crystaloid Technologies, Inc. and 
      BankBoston, N.A., as Agent                                               *

10.18 Trademark Collateral Assignment and Security Agreement,  dated 
      as of April 22, 1998, by and between the Registrant and BankBoston,
      N.A., as Agent                                                           *

10.19 Trademark Collateral Assignment and Security Agreement, dated as 
      of April 22, 1998, by and between Flex-O-Lite, Inc. and 
      BankBoston, N.A., as Agent                                               *

10.20 Trademark Collateral Assignment and Security Agreement, dated as
      of April 22, 1998, by and between OSD Envizion, Inc. and 
      BankBoston, N.A., as Agent                                               *

10.21 Trademark Collateral Assignment and Security Agreement,  dated 
      as of April 22,1998, by and between American Allsafe Company and 
      BankBoston,  N.A., as Agent                                              *

10.22 Trademark Collateral Assignment and Security Agreement, dated as 
      of April 22, 1998, by and between Silencio/Safety Direct, Inc. and
      BankBoston, N.A., as Agent                                               *

10.23 Trademark Collateral Assignment and Security Agreement, dated as
      of April 22, 1998, by and between Crystaloid Technologies, Inc.
      and BankBoston, N.A., as Agent                                           *

10.24 Form of Indemnification Agreement, dated as of August 16, 1995, 
      between the Registrant and its directors                                 *

10.25 TJC Management Consulting Agreement, dated as of August 16, 1995,
      by and among,the Registrant, Flex-O-Lite, Inc. and TJC Management 
      Corporation                                                              *

10.26 Employment and Non-Interference Agreement, dated as of August 16, 
      1995, by and between the Registrant and Robert H. Elkin                  *

10.27 Amendment to Employment Agreement, dated as of April 22, 1998, by 
      and between the Registrant and Robert H. Elkin                           *

10.28 Employment and Non-Interference Agreement, dated as of August 16,
      1995, by and between the Registrant and Christopher T. Paule             *

10.29 Amendment to Employment Agreement, dated as of April 22, 1998, by 
      and between the Registrant and Christopher T. Paule                      *

10.30 Employment and Non-Interference Agreement, dated as of August 16,
      1995, by and between Flex-O-Lite, Inc. and Allan Huning                  *

10.31 Employment and Non-Interference Agreement, dated as of April 22,
      1998, by and between the Registrant and Mark R. Hefty                    *

10.32 Employment and Non-Interference Agreement, dated as of April 22,
      1998, by and between the Registrant, Crystaloid Technologies, 
      Inc. and Edward D. Surjan, Jr.                                           *

10.33 Employment and Non-Interference Agreement, dated as of April 22,
      1998, by and between the Registrant, Crystaloid Technologies, 
      Inc. and Edward M. Stiles                                                *

10.34 Employment and Non-Interference Agreement, dated as of April 22, 
      1998, by and between the Registrant, Crystaloid Technologies, Inc.
      and Michael A. Fout                                                      *

10.35 Employment and Non-Interference Agreement, dated as of April 22,
      1998, by and between the Registrant, Crystaloid Technologies, Inc. 
      and Gregory J. Putman                                                    *

10.36 Employment and Non-Interference Agreement, dated as of April 22, 1998,
      by between American Allsafe Company and Lincoln M. Kennedy               *

10.37 Stock Appreciation Rights Agreement, dated as of April 22, 1998, 
      between the Registrant and Robert H. Elkin                               *

10.38 Stock Appreciation Rights Agreement, dated as of April 22, 1998, 
      between the Registrant and Christopher T. Paule                          *

10.39 Stock Appreciation Rights Agreement, dated as of April 22, 1998, 
      between the Registrant and Mark R. Hefty                                 *

10.40 Stock Appreciation Rights Agreement, dated as of April 22, 1998, 
      between the Registrant, Crystaloid Technologies, Inc. and 
      Edward D. Surjan, Jr.                                                    *
                                       45
<PAGE>

10.41 Stock Appreciation Rights Agreement, dated as of April 22, 1998, 
      between the Registrant, Crystaloid Technologies, Inc. and 
      Edward M. Stiles                                                         *
10.42 Stock Appreciation Rights Agreement, dated as of April 22, 1998, 
      between the Registrant, Crystaloid Technologies, Inc. and  
      Michael A. Fout                                                          *

10.43 Intercompany Management Consulting Agreement, dated as of August 16, 
      1995, by and among the Registrant and its subsidiaries                   *

12  Statements  regarding  computation of ratios 21 List of  Subsidiaries 
    of the Registrant                                                          *

25  Statement on Form T-1 of eligibility of the Trustee under the Trust
    Indenture Act                                                              *

27  Financial Data Schedule                                                  

++  The schedules and exhibits to this agreement have not been filed pursuant to
    Item 601(b)(2) of Regulation  S-K. Such schedules and exhibits will be filed
    supplementally upon the request of the Securities and Exchange Commission.

*   Incorporated  by  reference  to the  exhibits  filed  with the  Registration
    Statement  on Form  S-4 of the  Registrant  filed  with the  Securities  and
    Exchange  Commission on September 11, 1998 (Commission  File No.  333-53987)
    and all supplements thereto.

**  Incorporated  by reference to the exhibits  filed with the Current Report on
    Form 8-K of the Registrant  with the  Securities and Exchange  Commission on
    August 6, 1998 (Commission File No. 333-53987) and all supplements thereto.



                                       46
<PAGE>




                            AMENDMENT AGREEMENT NO. 1

                                 to that certain

                 REVOLVING CREDIT AND ACQUISITION LOAN AGREEMENT


This AMENDMENT  AGREEMENT NO. 1 (this "Amendment") dated as of June 19, 1998, is
among (a) Jackson Products, Inc. (the "Borrower"),  (b) BankBoston, N.A. and the
other  lending  institutions  listed on Schedule 1 to the Credit  Agreement  (as
hereinafter defined) (collectively,  the "Banks"), (c) BankBoston, N.A. as agent
(the "Agent") for itself and the other Banks,  and (d) Mercantile  Bank National
Association, as co-agent (the "Co-Agent").

WHEREAS, the Borrower, the Banks, the Agent and the Co-Agent are parties to that
certain  Revolving Credit and Acquisition Loan Agreement,  dated as of April 22,
1998 (as  amended  and in effect  from time to time,  the  "Credit  Agreement"),
pursuant to which the Banks,  upon certain terms and conditions,  have agreed to
make loans to, and issue letters of credit for the benefit of, the Borrower; and

WHEREAS,  the Borrower has requested that the Agent,  the Co-Agent and the Banks
agree, and the Agent,  the Co-Agent and the Banks have agreed,  on the terms and
subject to the  conditions  set forth herein,  to amend certain of the terms and
provisions of the Credit Agreement;

NOW, THEREFORE, the parties hereto hereby agree as follows:

S1. Defined Terms.  Capitalized  terms which are used herein without  definition
and which are  defined in the  Credit  Agreement  shall  have the same  meanings
herein as in the Credit Agreement.

S2. Amendments to the Credit  Agreement.  The Credit Agreement is hereby amended
as follows:
(a) Section 1.1 of the Credit Agreement is amended as follows:

(i) the definition of "Drawdown Date" is hereby amended by inserting the words ,
any Swing Line Loan" immediately  following the words "Revolving Credit Loan" in
the first line thereof.

(ii) the  definition of "Loans" is hereby  amended by inserting the words ", the
Swing Line Loans"  immediately  following the words "Revolving  Credit Loans" in
the first line thereof.

(iii) the  definition of "Notes" is hereby amended by inserting the words ", the
Swing Line Note" immediately following the words "Revolving Credit Notes" in the
first line thereof.

(iv)  the  following  definition  will  be  inserted  after  the  definition  of
"Ineligible Securities":

"Initial Public Offering. The initial underwritten public offering of the common
stock of the Borrower registered under the Securities Act of 1933."

(v) the following  definition  will be inserted after the definition of "Maximum
Drawing Amount":

"Maximum Swing Line Loan Amount. See S2.10 hereof".

(vi) the following  definition  will be inserted  after the definition of "Stock
Purchase Agreements":

"Stockholders Agreement. The Stockholders Agreement,  dated or to be dated on or
prior to the Closing Date among the Borrower and the other parties  thereto,  in
the form delivered to the Agent on or prior to the Closing Date."

(vii)  the  following  definitions  will be  inserted  after the  definition  of
"Subsidiary": "Swing Line Bank. BankBoston, N.A.

Swing Line Loan  Maturity  Date.  With respect to any Swing Line Loan,  the date
specified  by the  Borrower  in the  Loan  Request  relating  thereto  as to the
maturity date of such Swing Line Loan, which shall in no event be later than the
Revolving Credit Loan Maturity Date.

Swing Line Loans. Any Loan made by the Swing Line Bank pursuant to S2.10 hereof.
Swing Line Note.  See S2.10  hereof." 

(b) the  heading of Section 2 is amended by  deleting  the word  "FACILITY"  and
replacing it with the words "AND SWING LINE FACILITIES".

(c) Section 2.1 of the Credit Agreement is amended by inserting the words", plus
the outstanding  amount of the Swing Line Loans" after the word  "requested)" in
the twelfth line thereof.

                                       47
<PAGE>


(d) Section 2.3 of the Credit  Agreement is amended by deleting the  penultimate
sentence thereof and replacing it with the following sentence:

"Upon the effective date of any  termination the Borrower shall pay to the Agent
for the respective accounts of the Banks the full amount of the Revolving Credit
Loans and the Swing  Line  Loans  then  outstanding  and the full  amount of any
interest and fees then accrued.  Upon the effective date of any  reduction,  the
Borrower  shall pay to the Agent for the  respective  accounts  of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction."

(e)  Section  2.6  of  the  Credit   Agreement  is  amended  by  inserting   the
parenthetical  "(other than Swing Line Loans)" after the words "Base Rate Loans"
in the fifth line thereof.

(f)  Section  2.8.1 of the Credit  Agreement  is amended  by (i)  inserting  the
parenthetical "(or upon fulfillment of the conditions precedent to the making of
a Swing Line Loan  pursuant to S2.10)" after the word "amount" in the sixth line
thereof;  and (ii)  inserting  the words  "and the Swing  Line Bank  shall  make
available to the  Borrower the  aggregate  amount of funds  otherwise  available
under S2.10, if any" after the words "by the Banks" in the tenth line thereof.

(g) Section 2 of the Credit  Agreement  is amended by  inserting  the  following
section after Section 2.9 thereof:

"S2.10.  The  Swing  Line  Loans.  (a)  Subject  to  the  terms  and  conditions
hereinafter  set forth,  upon notice by the Borrower made to the Swing Line Bank
in accordance  with S2.10(b)  hereof,  the Swing Line Bank agrees to lend to the
Borrower  Swing Line Loans on any  Business  Day from the Closing Date until the
Maturity Date in an aggregate  principal  amount not to exceed  $3,000,000  (the
"Maximum Swing Line Loan Amount").  Except for Swing Line Loans for interest and
fees owed to the Swing  Line  Bank,  each  Swing Line Loan shall be in a minimum
amount equal to $100,000. Notwithstanding any other provisions of this Agreement
and in addition  to the limit set forth  above,  at no time shall the  aggregate
principal amount of all outstanding Swing Line Loans exceed the Total Commitment
then in  effect  minus  the sum of (i) the  aggregate  principal  amount  of all
Revolving Credit Loans outstanding and (ii) the aggregate Maximum Drawing Amount
of all Letters of Credit outstanding.

(b)Notice of Borrowing.  When the Borrower desires the Swing Line Bank to make a
Swing  Line  Loan,  it shall  send to the Agent  and the Swing  Line Bank a Loan
Request,  which shall set forth the principal  amount of the proposed Swing Line
Loan and the Swing Line Loan Maturity Date relating  thereto,  which shall in no
event be later than the  Revolving  Credit Loan  Maturity  Date.  Each such Loan
Request  must be  received  by the  Swing  Line  Bank not  later  than 2:00 p.m.
(Central time) on the date of the proposed borrowing. Each Loan Request shall be
irrevocable  and binding on the  Borrower  and shall  obligate  the  Borrower to
borrow  the Swing Line Loan from the Swing  Line Bank on the  proposed  Drawdown
Date thereof.  Upon satisfaction of the applicable  conditions set forth in this
Agreement,  on the  proposed  Drawdown  Date the Swing  Line Bank shall make the
Swing Line Loan  available  to the  Borrower on the  proposed  Drawdown  Date by
wiring  funds in the  amount of the Swing  Line Loan to the  Borrower's  account
maintained  with the Co-Agent at its head office;  provided  that the Swing Line
Bank shall not advance any Swing Line Loans  after it has  received  notice from
any Bank that a Default or Event of Default has occurred and stating that no new
Swing Line Loans are to be made until such  Default or Event of Default has been
cured or waived in accordance with the provisions of this  Agreement.  The Swing
Line Bank shall not be  obligated  to make any Swing Line Loans at any time when
any Bank is a  Delinquent  Bank  unless  the Swing  Line Bank has  entered  into
arrangements  satisfactory  to it to  eliminate  the Swing Line Bank's risk with
respect  to  such  Delinquent  Bank,  including  by  cash  collateralizing  such
Delinquent Bank's Commitment  Percentage of the outstanding Swing Line Loans and
any such additional Domestic Swing Line Loans to be made.

(c)Interest on Swing Line Loans.  Each Swing Line Loan shall be a Base Rate Loan
and, except as otherwise provided in S6.11 hereof,  shall bear interest from the
Drawdown  Date  thereof  until repaid in full at the rate per annum equal to the
Base Rate plus the Applicable  Margin,  which shall be paid quarterly in arrears
on the last day of each calendar quarter.

(d)Repayment  of Swing Line Loans.  The  Borrower  shall repay each  outstanding
Swing  Line  Loan on or prior to the  Swing  Line Loan  Maturity  Date  relating
thereto.  Upon notice by the Swing Line Bank on any Business Day (whether before
or on the Revolving Credit Loan Maturity Date),  each of the Banks hereby agrees
to make  payments to the Agent,  for the account of the Swing Line Bank,  on the
next succeeding  Business Day following such notice,  in an amount equal to such
Bank's  Commitment  Percentage of the  aggregate  amount of all Swing Line Loans
outstanding.  The parties  hereto agree that such payments made to the Agent for
the account of the Swing Line Bank shall constitute  Revolving Credit Loans made
to the Borrower  hereunder,  and shall be a Base Rate Loan. The proceeds thereof
shall be  applied  directly  to the Swing Line Bank to repay the Swing Line Bank
for  such   outstanding   Swing  Line  Loans.   Each  Bank  hereby   absolutely,
unconditionally  and irrevocably agrees to make such Revolving Credit Loans upon
one  Business  Day's  notice as set forth  above,  notwithstanding  (i) that the
amount of such Loan may not comply  with the  applicable  minimums  set forth in
S2.6 hereof,  (ii) the failure of the Borrower to meet the  conditions set forth
in SS12 or 13 hereof,  (iii) the  occurrence or  continuance  of a Default or an
Event  of  Default  hereunder,  (iv) the date of such  Loan,  and (v) the  Total
Commitment  in effect at such time.  In the event that it is  impracticable  for
                                       48
<PAGE>

such  amounts  to be paid to the Agent or the Swing Line Bank or such Loan to be
made for any reason on the date otherwise  required above, then each Bank hereby
agrees that it shall  forthwith  purchase  (as of the date such payment and such
Loan would have been made,  but  adjusted  for any  payments  received  from the
Borrower on or after such date and prior to such  purchase)  from the Swing Line
Bank, and the Swing Line Bank shall sell to each Bank,  such  participations  in
the Swing  Line Loans  (including  all  accrued  and  unpaid  interest  thereon)
outstanding as shall be necessary to cause the Banks to share in such Swing Line
Loans pro rata based on their respective Commitment  Percentages (without regard
to any  termination of the Total  Commitment)  by making  available to the Swing
Line Bank an amount equal to such Bank's  participation in the Swing Line Loans;
provided that (x) all interest  payable on the Swing Line Loans shall be for the
account of the Swing  Line Bank as a funding  and  administrative  fee until the
date as of which the respective  participation is purchased  (unless paid to the
Swing Line Bank pursuant to clause (y) below),  and (y) at the time any purchase
of such participation is actually made, the purchasing Bank shall be required to
pay the Swing Line Bank interest on the principal amount of the participation so
purchased  for each day from and  including  the date such Loan would  otherwise
have been made until the date of payment for such  participation  at the rate of
interest in effect applicable to Base Rate Loans during such period.

(e)The Swing Line  Note.The  obligation  of the Borrower to repay the Swing Line
Loans made pursuant to this  Agreement and to pay interest  thereon as set forth
in this Agreement  shall be evidenced by a promissory  note of the Borrower with
appropriate  insertions  substantially in the form of ExhibitA-3 attached hereto
(the " Swing Line Note"), dated the Closing Date and payable to the order of the
Swing Line Bank in a principal amount stated to be the lesser of (i) the Maximum
Swing Line Loan Amount,  or (ii) the  aggregate  principal  amount of Swing Line
Loans at any time  advanced by the Swing Line Bank and  outstanding  thereunder.
The Borrower  irrevocably  authorizes the Swing Line Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Swing Line Loan or at the
time of  receipt  of any  payment  of  principal  on the  Swing  Line  Note,  an
appropriate notation on the Record reflecting the making of such Swing Line Loan
or (as the case may be) the receipt of such payment.  The outstanding  amount of
the Swing Line Loans set forth on such Record  shall be prima facie  evidence of
the principal  amount  thereof owing and unpaid to the Swing Line Bank,  but the
failure to record, or any error in so recording,  any such amount on such Record
shall not limit or otherwise  affect the actual amount of the obligations of the
Borrower hereunder or under the Swing Line Note to make payments of principal of
or interest on the Swing Line Note when due."

(h) Section 3.1 of the Credit  Agreement is amended by inserting  the words "and
Swing Line Loans"  after the words  "Revolving  Credit  Loans" in the third line
thereof.

(i) Section 3.2 of the Credit  Agreement is amended by (i)  inserting  the words
"the Swing Line Loans," after the words "Revolving  Credit Loans," in the second
line thereof;  (ii) inserting the words "to the Swing Line Loans;  third," after
the word  "second" in the seventh  line  thereof;  and (iii)  deleting  the word
"third" and replacing it with the word "fourth" in the seventh line thereof.

(j) Section  4.1.2 of the Credit  Agreement is amended by deleting the reference
to "S14" and replacing it with "S13" in the thirty-sixth line thereof.

(k) Section 4.6 of the Credit Agreement is amended by inserting the words "after
the end of the  Disbursement  Period"  following  the  word  "Loan"  in the last
sentence thereof.

(l) Section  5.1.1 of the Credit  Agreement is amended by inserting the words ",
and (iv) the  amount  of all  Swing  Line  Loans  outstanding"  after  the words
"Revolving Credit Loans outstanding" in the fourth to the last line thereof.

(m)  Section  5.6 of the Credit  Agreement  is amended  by  inserting  the words
"quarterly  in arrears"  after the  parenthetical  "(in each case,  a "Letter of
Credit Fee")" in the third line thereof.

(n) Section 9 of the Credit  Agreement is amended by inserting  the words ", the
Swing Line Bank has any  obligation to make any Swing Line Loans" after the word
"Loans" in the third line thereof.

(o) Section 9.19 of the Credit  Agreement is amended (i) by replacing  the words
"the  Borrower  and the  Agent" in the third  line  thereof  with the words "the
Borrower and each of the Banks" and (ii) by inserting the word "Holdings"  after
the word "Lansec" in the fifth line thereof.

(p) Section 10 of the Credit  Agreement is amended by inserting the words ", the
Swing Line Bank has any  obligation to make any Swing Line Loans" after the word
"Loans" in the third line thereof.

(q) Section 12 of the Credit  Agreement is amended by inserting  the words ", of
the Swing Line Bank to make any Swing Line Loans"  after the words  "Acquisition
Loan" in the second line thereof.

(r) Section 13 of the Credit Agreement is amended by inserting the words "of the
Swing  Line  Bank to make any Swing  Line  Loans"  after the words  "Acquisition
Loan," in the second line thereof.

                                       49
<PAGE>

(s)  Section  16.5.3 of the Credit  Agreement  is amended by  deleting  the word
"Loan" and replacing it with the words "Revolving Credit Loan or any Acquisition
Loans,  to make available to the Swing Line Bank its pro rata share of any Swing
Line Loan" in the fourth line thereof.

(t) Section 18 of the Credit  Agreement is amended by inserting the words ", the
making by the Swing Line Bank of the Swing Line  Loans"  after the words "any of
the Loans" in the sixth line thereof.

(u) Section 26 of the Credit  Agreement  is amended by (i)  inserting  the words
"the amount of the Acquisition Commitments of the Banks, the amount of principal
owing to the Banks" after the words "Commitments of the Banks" in the thirteenth
line thereof; (ii) deleting the word "and" after the words "may not be amended,"
in the eighteenth line thereof; (iii) inserting the words "and any Guarantor may
not be released  (except in  accordance  with  S10.5)"  after the  parenthetical
"(except in accordance with S10.5.2)," in the nineteenth line thereof;  and (iv)
inserting the sentence "No amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Bank in  addition  to the Banks  required  above to
take such action, affect the rights and obligations of the Swing Line Bank under
this Credit  Agreement."  after the words "of the  Agent." in the  twenty-second
line thereof.

S3.   Affirmation   and   Acknowledgment   of  the  Borrower  and  the  Domestic
Subsidiaries.  The Borrower and each of the Domestic  Subsidiaries hereby affirm
and acknowledge to the Banks as follows:

(a) The Borrower  hereby  ratifies and  confirms all of its  Obligations  to the
Banks, including, without limitation, the Loans, and the Borrower hereby affirms
its  absolute  and  unconditional  promise  to pay to the Banks the  Loans,  the
Reimbursement Obligations,  and all other amounts due under the Credit Agreement
as amended  hereby.  The Borrower  hereby  confirms that the Obligations are and
remain  secured  pursuant to the  Security  Documents  and pursuant to all other
instruments and documents executed and delivered by the Borrower as security for
the Obligations.

(b) Each of the Domestic Subsidiaries hereby acknowledges the provisions of this
Amendment and hereby  reaffirms its absolute and  unconditional  guaranty of the
Borrower's payment and performance of the Obligations as more fully described in
the  Guaranty.  Each of the  Domestic  Subsidiaries  hereby  confirms  that  its
obligations  under the Guaranty are and remain secured  pursuant to the Security
Documents to which it is a party.

S4. Representations and Warranties. The Borrower hereby represent and warrant to
the Banks as follows:

(a) The execution  and delivery by the Borrower and each Domestic  Subsidiary of
this Amendment, and the performance by the Borrower and each Domestic Subsidiary
of its obligations and agreements  under this Amendment and the Credit Agreement
as amended hereby,  are within the corporate  authority of the Borrower and each
Domestic  Subsidiary,  have  been duly  authorized  by all  necessary  corporate
proceedings on behalf of the Borrower and each Domestic  Subsidiary,  and do not
and will not  contravene  any provision of law,  statute,  rule or regulation to
which  the  Borrower  and each  Domestic  Subsidiary  is  subject  or any of the
Borrower's and each Domestic Subsidiary's  charter,  other incorporation papers,
by-laws or any stock  provision or any amendment  thereof or of any agreement or
other instrument binding upon the Borrower and each Domestic Subsidiary.

(b) This Amendment and the Credit Agreement as amended hereby  constitute legal,
valid and binding  obligations  of the  Borrower and each  Domestic  Subsidiary,
enforceable  in accordance  with their  respective  terms,  except as limited by
bankruptcy, insolvency, reorganization,  moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights.

(c) No  approval  or consent  of, or filing  with,  any  governmental  agency or
authority is required to make valid and legally binding the execution,  delivery
or performance  by the Borrower or any Domestic  Subsidiary of this Amendment or
the Credit Agreement as amended hereby.

(d) The representations  and warranties  contained in S8 of the Credit Agreement
are  true and  correct  at and as of the  date  made and as of the date  hereof,
except to the extent of changes  resulting  from  transactions  contemplated  or
permitted  by this Credit  Agreement  and the other Loan  Documents  and changes
occurring in the ordinary course of business that singly or in the aggregate are
not  materially  adverse,  and to  the  extent  that  such  representations  and
warranties relate expressly to an earlier date.

(e) The Borrower and each Domestic  Subsidiary has performed and complied in all
material  respects with all terms and conditions herein required to be performed
or  complied  with by it  prior  to or at the  time  hereof,  and as of the date
hereof,  after giving effect to the provisions hereof,  there exists no Event of
Default or Default.

S5. Effectiveness. This Amendment shall become effective upon the receipt by the
Agent of a fully executed counterpart hereof signed by each of the Borrower, the
Domestic Subsidiaries, the Agent, the Co-Agent and all of the Banks.

                                       50
<PAGE>

S6. Miscellaneous Provisions.

(a) Except as otherwise expressly provided by this Amendment,  all of the terms,
conditions and provisions of the Credit  Agreement  shall remain the same. It is
declared and agreed by each of the parties hereto that the Credit Agreement,  as
amended hereby, shall continue in full force and effect, and that this Amendment
and the Credit Agreement shall be read and construed as one instrument.

(b) This  Amendment  is intended to take effect as an  agreement  under seal and
shall be construed  according to and governed by the laws of the Commonwealth of
Massachusetts.

(c) This Amendment may be executed in any number of  counterparts,  but all such
counterparts  shall together  constitute but one instrument.  In making proof of
this Amendment it shall not be necessary to produce or account for more than one
counterpart  signed by each party hereto by and against which enforcement hereof
is sought.

(d) The Borrower hereby agrees to pay to the Agent, on demand by the Agent,  all
reasonable  out-of-pocket  costs and expenses incurred or sustained by the Agent
in connection with the preparation of this Amendment (including reasonable legal
fees).

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

                             JACKSON PRODUCTS, INC.

                           By:_______________________
                                     Title:

                           FLEX-O-LITE, INC.

                           By:_______________________
                                     Title:

                           OSD ENVIZION, INC.

                           By:_______________________
                                     Title:

                           CRYSTALOID TECHNOLOGIES,INC

                           By:_______________________
                                     Title:

                            AMERICAN ALLSAFE COMPANY

                           By:_______________________
                                     Title:

                           SILENCIO/SAFETY DIRECT,INC.

                           By:_______________________
                                     Title:


                            BANKBOSTON, N.A., 
                            individually and as Agent

                           By:_______________________
                                     Title:

                            MERCANTILE BANK NATIONAL
                            ASSOCIATION, individually
                            and as Co-Agent

                           By:_______________________
                                     Title:

                           SANWA BUSINESS CREDIT CORP.

                           By:_______________________
                                     Title:

                           BHF-BANK AKTIENGESELLSCHAFT

                           By:_______________________
                                     Title:

                                       51
<PAGE>

                           ANTARES LEVERAGED CAPITAL
                           CORP.

                           By:_______________________
                                     Title:

                           COMERICA BANK


                           By:_______________________
                                     Title:


                           FLEET NATIONAL BANK

                           By:_______________________
                                     Title:


                           PARIBAS

                           By:_______________________
                                     Title:



                           By:_______________________
                                     Title:



                           FIRST SOURCE FINANCIAL LLP
                         by First Source Financial Inc.,
                           as Agent/Manager

                           By:_______________________
                                     Title:


                           KEY CORPORATE CAPITAL INC.

                           By:_______________________
                                     Title:


                           DEUTSCHE FINANCIAL
                           SERVICES CORP.

                           By:_______________________
                                     Title:



SIGNATURES

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


                                         JACKSON PRODUCTS, INC.
                                              (Registrant)


Date : 3/26/99                           By:/s/ Christopher T. Paule
                                          ---------------------------
                                          Christopher T. Paule
                                          Vice President, Chief Financial
                                          Officer and Chief Accounting Officer


                                       52
<PAGE>

27.

Financial Data Schedule