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, 1999

 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)

                                 (636) 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 29, 2000
                 8,526 shares of Class C Common Stock at February 29, 2000


<PAGE>

TABLE OF CONTENTS                                                          PAGE

PART I......................................................................
     Item 1  Business.......................................................  2
     Item 2. Properties.....................................................  8
     Item 3. Legal Proceedings..............................................  8
     Item 4. Submission of Matters to a Vote of Security Holders............  8

PART II.....................................................................
     Item 5. Market For  Registrant's Common Equity and Related Stockholder
             Matters........................................................  8
     Item 6. Selected Financial Data........................................  9
     Item 7. Management's Discussion and Analysis of Financial Condition and
             Results of Operations.......................................... 10
     Item 7A Quantitative and Qualitative Disclosures about Market Risk..... 14
     Item 8. Financial Statements and Supplementary Data.................... 15
     Item 9. Changes in and Disagreements with Accountants on Accounting and
             Financial Disclosure........................................... 42

PART III....................................................................
    Item 10. Directors and Executive Officers............................... 42
    Item 11. Executive Compensation......................................... 43
    Item 12. Security Ownership of Certain Beneficial Owners and Management. 46
    Item 13. Certain Relationships and Related Transactions................. 48

Part IV.
    Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
             8-K Signatures................................................. 48








<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  international  personal  and highway  safety  markets,
principally  throughout North America and Europe. JPI markets its products under
established,  well-known  brand names to an  extensive  network of  thousands of
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  capitalizes  on the
synergies of the acquired companies to grow externally and internally.

ACQUISITIONS
------------

During the period 1996  through  1998,  the Company  made  several  acquisitions
including  OSD  Envizion,  Inc. on October 22, 1996;  Lansec GmbH on October 29,
1997;  American Allsafe Company and  Silencio/Safety  Direct,  Inc. on April 22,
1998; Crystaloid Technologies, Inc. on April 23, 1998 and Kedman Company on July
22, 1998. OSD Envizion, Inc. (OSD), provides JPI with a significant share of the
North  American  auto-darkening  welding  filter  lens  market  and,  management
believes,  establishing  JPI as the only North  American-based  manufacturer  of
auto-darkening  welding  filter  lenses.  The Company formed Lansec Holding GmbH
(GmbH) to acquire several  European  businesses.  The formation of GmbH provides
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  enhances the  Company's
channels of  distribution.  The  acquisition  of Crystaloid  Technologies,  Inc.
(Crystaloid)  and its expertise in liquid  crystal  technology  strengthens  the
Company's lead in auto-darkening  technology and has allowed for the development
of additional  applications  in new markets.  The acquisition of Kedman Company,
(Kedman) expands the Company's  presence in the western United States and widens
the current distribution channels.

On January 25, 1999, the Company  acquired  certain assets of OK Beads Inc. ("OK
Beads"). OK Beads manufactures reflective glass beads used in highway safety and
industrial applications.  On May 17, 1999, the Company, through its wholly owned
subsidiary,  TMT-Pathway, L.L.C. ("TMT-Pathway"),  acquired the assets of Morton
Traffic  Markings,  a  division  of  Morton   International,   Inc.  TMT-Pathway
manufactures   and  distributes   traffic   coatings  and  specialized   coating
applications  equipment for the highway  safety  industry.  The  acquisition  of
certain assets of OK Beads increases the Company's manufacturing capacity in the
reflective  glass bead market.  The acquisition of TMT-Pathway  further enhances
the Company's position in the highway safety market,  providing new resources in
paint and paint application technology,  which, management believes, will create
further market  opportunities  through  improved product quality and new product
development.

SEGMENTS
--------

The Company operates two business segments. The Personal Safety Products segment
("PSP")  manufactures and sells thousands of safety products  including  welding
helmets,  auto-darkening  welding filter  lenses,  safety caps,  hardhats,  face
shields,  visors,  safety goggles,  spectacles and hearing  protection  products
under its well-known brand names: Jackson, Aden, EQC, Morsafe,  American Allsafe
Co., Team Silencio, Huntsman and Lamba. PSP represented approximately 48% of pro
forma net sales in 1999.

The Highway Safety Products segment ("HSP") sells reflective glass beads, cones,
channelizers,   pavement  tape,  flags,   vests,   roll-up  signs,   barricades,
high-intensity  lights,  traffic coatings and specialized coatings  applications
equipment under  well-known  brand names:  Flex-O-Lite,  Blast-O-Lite,  Morline,
Dura-Line,   Dura-Stripe,   Norline,   TMT-Traffic   Marking   Technologies  and
Legend-Build. HSP represented approximately 52% of pro forma net sales in 1999.


                                       2
<PAGE>

PRODUCTS - PERSONAL SAFETY PRODUCTS SEGMENT
-------------------------------------------

Within PSP, the Company  classifies its products in three main categories:  head
and face protection,  eyewear and other. The Company's  personal safety 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 ultra violet rays.

HEAD AND FACE  PROTECTION.  The  Company's  head  and face  protection  products
include welding helmets, auto-darkening welding filter lenses, safety caps, hard
hats,  face shields and visors.  The Company's line of face shields are designed
to protect against head injuries,  liquid splashes and flying  particles and are
worn in conjunction with other protective  equipment,  such as plano wear, which
is defined in the eye protection  section below.  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 Company's  auto-darkening welding filter
lenses  utilize a high speed  auto-darkening  surface mode device liquid crystal
filter.  The aquisition of Crystaloid allows the Company to further its in-house
knowledge base of liquid crystal technology.

EYE  PROTECTION.   The  Company  manufactures  and  sells  a  complete  line  of
non-prescription  safety  spectacles  and goggles.  Non-prescription  protective
spectacles,  which are  known  within  the  industry  as  "planos",  protect  an
individual's  eyes  from  flying  objects,  sparks  and in some  cases  chemical
splashes in a multitude of industrial and commercial  settings.  The Company has
historically   targeted  goggle  and  plano   end-users  in  the   construction,
manufacturing and healthcare industries.  Allsafe maintains the highest share of
the U.S. industrial safety goggle market. All of the Company's safety spectacles
have  been  designed  to comply  with  ANSI  Z-87.1-1989,  which  requires  each
spectacle  to  sustain  the impact of a  one-quarter  inch ball  traveling  at a
velocity of 150 feet per second and to resist melting at  temperatures up to 400
degrees, along with other optical quality tests.

OTHER. The Company produces other personal  protection  products,  which include
safety warning products and hearing protection  products.  The Company's line of
safety  warning  products  provide  visual  warnings  against  hazards and helps
prevent  costly  falls  on  slippery  surfaces  as well as a  variety  of  other
accidents.  These  products  include  sign stands and safety  cones.  Management
believes  the  Company has the number one market  share for  hearing  protection
products in the shooting sports, mass merchandise and government markets.  These
products include earmuffs, earplugs and electronic hearing protection products.

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.

Management  believes  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.  In turn, the heightened
social  awareness  regarding  worker  health and safety  stimulates  legislation
requiring and monitoring the use of safety products in commercial and industrial
environments, as government regulations which mandate the use of personal safety
products are  instituted and enforced by agencies like the  Occupational  Safety
and Health  Administration  ("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.  Also, as manufacturing  employment and safety
awareness grow outside of the U.S. and Europe, international demand for personal
safety products could increase.


                                       3
<PAGE>

PRODUCTS - HIGHWAY SAFETY PRODUCTS SEGMENT
------------------------------------------

Within HSP, the Company  classifies its products in four categories:  reflective
glass beads, traffic safety and work zone protection equipment, traffic coatings
and specialized coatings  applications  equipment.  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.

REFLECTIVE  GLASS  BEADS.  The Company  designs,  manufactures  and  distributes
industrial  and  reflective  glass beads,  which are used in  applications  that
require  enhanced  visibility.  Glass beads provide the  reflective  agent in an
extensive range of applications, such as highway striping, traffic signs, safety
vests  and  clothing,  aviation  runways,  traffic  signs and  reflective  tape.
Management  believes  the Company is the only North  American  manufacturer  and
distributor   of  high  index  glass  beads,   which  offer  a  high  degree  of
reflectivity,  required for applications such as reflective sheeting and signage
products.  The Blast-O-Lite line of glass beads is a specialized product sold to
the industrial cleaning and polishing market.

TRAFFIC SAFETY AND WORK ZONE PROTECTION EQUIPMENT.  Traffic safety and work zone
protection   equipment   includes   traffic  cones,   delineators,   barricades,
channelizers,  pavement  tape,  flags,  vests,  roll-up  signs,  sign stands and
barricade lights.

-    The Company  believes it is the largest  manufacturer  of traffic  cones in
     North  America.  Cones are available in various colors and sizes and may be
     purchased with reflective collars applied to enhance night visibility and a
     weighted  bottom to prevent  "creeping"  in high  speed  traffic  areas.  A
     growing,  value added part of the business is silk screening and stenciling
     cones with various legends.

-    The Company  manufactures  a full line of safety  flags,  vests and roll-up
     signs.  Management  believes the Company has the number one position in the
     U.S.  market  for  these  products.  Most  vests  and  flags  are made from
     lightweight,  vinyl-coated  nylon.  Reflective tape is typically applied to
     the front and back of the vest.  Roll-up signs are made from reflective and
     non-reflective  vinyl  and hung  from  aluminum  sign  stands  providing  a
     lightweight  alternative for temporary construction jobs, utility crews and
     various other  settings.  The signs roll up and the stands  collapse making
     storage and transport easy.

TRAFFIC  MARKINGS.  The Company  manufactures  primarily  low  volatile  organic
content (VOC) solvent based and waterborne  coatings for traffic  markings.  Low
VOC  products  are sold under trade names  Dura-Line,  Morline and  Dura-Stripe.
Dura-Line  2000,  Morline  and  Norline are  examples  of  conventional  traffic
markings  manufactured  by the  Company.  Dura-Line,  (a  thermoplastic  plastic
product) and Dura-Stripe (a methyl methacrylate coating) are examples of durable
traffic  markings  manufactured  by the Company.  Both Dura-Line and Dura-Stripe
markings  are  compliant  to federal  VOC  regulations  and have been  carefully
formulated to out-perform other durable coating types. These two durable systems
can be applied in smooth or  profiled  configurations  and  provide  outstanding
retroreflectivity performance over time.

SPECIALIZED  COATINGS  APPLICATION  EQUIPMENT.  A major portion of the Company's
coatings customers rely on the Company's  equipment for application and support.
The  quality  of the  equipment  and  the  level  of  professional  service  are
constantly  leveraged  to  increase  the  sales  of  coatings.  Using  precision
engineering and  computer-assisted  design capabilities,  the Company customizes
stripers to specific  requirements,  including custom designed enclosed cabs and
airless or air spray systems.  In addition,  numerous guidance systems including
mirrors,  booms,  camera  systems,  auxiliary  engine power and a complete parts
inventory are maintained for rapid customer response.  The equipment is designed
to apply all existing conventional and durable coating systems including solvent
based, waterborne, thermoplastic and plural component liquid systems.


                                       4
<PAGE>

The Company  believes that it has a leading market share in North America in the
majority of its primary  highway safety  categories.  Sales of HSP 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.
Management expects such government spending to increase in the future to address
the   deteriorating   and   increasingly   congested   North  American   highway
infrastructure.  According to the U.S.  Department of  Transporation's  web site
(www.ntweek.org),  fifty-nine  percent of the nation's  major roads are in poor,
mediocre or fair condition. The web site further discusses the investment needed
to maintain current highway  conditions is $211 billion over the next four years
and an  additional  $75 billion over the next four years for  improvements.  The
Federal  Highway  Administration  estimates  it  will  require  $80  billion  to
eliminate the backlog of bridge deficiencies and maintain current level repairs.
As a result,  management believes the U.S. highway industry is poised to benefit
from expected increases in infrastructure spending.

SALES AND DISTRIBUTION - PERSONAL SAFETY PRODUCTS
-------------------------------------------------

Primary  customers  for  personal  safety  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 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 and the
United  Kingdom.  The  Company's  products  can also be  purchased  through  the
Company's website (www.jackprod.com).

SALES AND DISTRIBUTION -HIGHWAY SAFETY PRODUCTS
-----------------------------------------------

Primary   customers  for  highway  safety  products   include  state  and  local
municipalities, independent contract road stripers, thermoplastic manufacturers,
and highway contractor supply and rental companies.  The Company distributes its
highway safety products through direct sales people and catalogs.  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  distribution via a
combined effort of in-house sales personnel,  manufacturers  representatives,  a
well-circulated  Company catalog,  the Company's Web sites  (www.servmat.com and
www.flex-o-lite.com) 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,  which it uses to produce liquid
crystal  displays  for  applications  within the  avionics  and  industrial  and
commercial markets.

Flex-O-Lite produces low index glass beads through a process by which cullet, or
scrap glass, is processed 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.

TMT-Pathway produces conventional traffic markings,  which consist of a carrier,
either water or organic  solvent,  resin,  pigment,  fillers and  additives  for
wetting,  flow,  stability  and drying rate. In addition,  TMT-Pathway  produces
durable traffic markings which are methyl methacrylate-based markings applied by
hand or machine to provide  extremely  durable  marking for traffic control edge
lines, legends and crosswalks.

                                       5
<PAGE>

RAW MATERIALS
-------------

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. Raw material prices fluctuate over time depending on supply, demand and
other  factors.  Increases  in raw  material  prices may  impact  the  Company's
financial performance.

INTELLECTUAL PROPERTY
---------------------

It is the Company's policy to protect its intellectual  property through a range
of measures,  including  trademark  registrations,  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 PSP
products  and  product  lines are  registered  in the  United  States:  Jackson,
Morsafe, Aden, EQC, American Allsafe Co., Team Silencio, Huntsman and Lamba. The
following  brand names of certain HSP products and product lines are  registered
in  the  United   States:   Flex-O-Lite,   Blast-O-Lite,   Morline,   Dura-Line,
Dura-Stripe, Norline, TMT-Traffic Marking Technologies and Legend-Build.

The Company generally protects its material intellectual property rights through
the filing of applications for and  registrations of trademarks and patents.  In
addition,  the Company requires 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.  The  Company  also relies upon  unpatented  trade  secrets for the
protection of certain intellectual property rights.

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.

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 in all material
respects.  The  Company  does  not  believe  it will  incur  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.

                                       6
<PAGE>

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.

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,  1999,  the Company had 1,091  employees.  The Company has 14
employees  represented by a union pursuant to a collective bargaining agreement,
which expired at the end of 1999 for which collective bargaining is ongoing. The
Company has 13  employees in  California  represented  by a union  pursuant to a
collective  bargaining  agreement,  which will  expire,  at the option of either
party, at the end of 2002.

                                       7
<PAGE>

ITEM 2. PROPERTIES

In addition to its  executive  offices in  Chesterfield,  Missouri,  the Company
operates  24 major  facilities  in the United  States,  Canada and Europe with a
total area  (including the executive  offices) of  approximately  864,000 square
feet, of which the Company currently owns approximately  635,000 square feet and
leases approximately 229,000 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

Personal Safety Products
------------------------

Belmont, Michigan              Jackson         Manufacturing and Distribution      148,100     Owned            --
Tonawonda, New York            Allsafe         Manufacturing and Distribution      100,000     Owned            --
Sparks, Nevada                 Allsafe or
                               Silencio        Manufacturing and Distribution  2 buildings     Leased      12/31/01
                                                                               20,000 each
Salt Lake City, Utah           Allsafe         Manufacturing and Distribution       63,370     Owned            --
Salt Lake City, Utah           Allsafe         Manufacturing and Distribution        7,500     Owned            --
Salt Lake City, Utah           Allsafe         Manufacturing and Distribution        3,700     Owned            --
Hudson, Ohio                   Crystaloid      Manufacturing and Distribution       36,770     Owned            --
Alzenau, Germany               Lansec          Manufacturing and Distribution        5,895     Leased      10/31/02
Merignac, France               Lansec          Distribution                          2,592     Leased      08/31/01
Apeldoorn, Netherlands         Lansec          Distribution                          2,776     Leased      06/30/02
Worcestershire, U.K.           Lansec          Distribution                          3,900     Leased      12/31/01
Milan, Italy                   Lansec          Sales office                            540     Leased       Monthly

Highway Safety Products
-----------------------


Fenton, Missouri               SMC             Manufacturing and Distribution       84,414     Leased      12/31/00
Fenton, Missouri               Flex-O-Lite     Manufacturing and Distribution       20,400     Leased      03/31/03
Idabel, Oklahoma               Flex-O-Lite     Manufacturing and Distribution       24,000     Owned            --
Muscatine, Iowa                Flex-O-Lite     Manufacturing and Distribution       31,903     Owned            --
Paris, Texas                   Flex-O-Lite     Manufacturing and Distribution       91,363     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
Los Angeles, California        TMT-Pathway     Manufacturing and Distribution       24,100     Owned            --
Salem, Oregon                  TMT-Pathway     Manufacturing and Distribution       52,500     Owned            --
Salem, Oregon                  TMT-Pathway     Manufacturing and Distribution       30,800     Owned            --
</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. SUBMISSION 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, 1999.

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.

                                       8
<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 January
1, 1995 to August 16, 1995;  (ii) the Company for the periods August 17, 1995 to
December 31, 1995,  1996, 1997, 1998 and 1999; and (iii) the pro forma financial
data for the year ended December 31, 1999. The pro forma  financial  information
was prepared as if the TMT-Pathway Acquisition 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 1999 and does not purport to project 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>

                                                  The
                                               Predecessor
                                                 Company                                The Company
                                               ------------ --------------------------------------------------------------

                                                 January 1,  August 17,
                                                  1995 to      1995 to                                               Pro
                                                 August 16, December 31                                             Forma
                                                    1995       1995       1996       1997       1998       1999      1999
                                                    ----       ----       ----       ----       ----       ----      ----
<S>                                                            <C>         <C>       <C>      <C>         <C>        <C>

Statement of Operations Data:
     Net sales ...............................   $ 72,541   $ 37,558   $111,788   $123,417   $165,232   $213,208  $223,795
     Cost of sales ...........................     52,416     30,566     80,485     87,466    111,325    145,120   153,289
     Selling, general & administrative
      Expenses ...............................      9,640      4,965     14,440     15,205     27,566     35,261    36,961
     Asset sales .............................         --         --      1,050        335        576         --        --
     Amortization of intangibles .............      3,009      1,688     18,849     16,378      9,654     15,023    16,842
                                                    -----      -----     ------     ------      -----     ------    ------
     Operating income (loss) ................       7,476        339     (3,036)     4,033     16,111     17,804    16,703
     Other expenses:
        Interest expense ....................      (5,279)    (4,381)   (11,306)   (12,050)   (15,803)   (19,347)  (20,607)
        Amortization of deferred ............        (525)      (340)    (1,076)    (1,261)    (1,271)    (1,501)   (1,501)
         financing costs
        Other ...............................          14         14       (599)      (401)      (643)      (880)     (817)
        Sale of company expenses ............      (4,391)        --         --         --         --         --        --
                                                    -----      -----     ------     ------      -----     ------    ------
     Loss before income tax provision and...
      extraordinary item....................       (2,705)    (4,368)   (16,017)    (9,679)    (1,606)    (3,924)   (6,222)
     Income tax expense (benefit) ...........          --         --        429        684        224     (1,172)   (1,172)
                                                    -----      -----     ------     ------      -----     ------    ------
     Loss before extraordinary item .........      (2,705)    (4,368)   (16,446)   (10,363)    (1,830)    (2,752)   (5,050)
     Extraordinary item:
     Loss due to early  extinguishment ......
      of debt ...............................      (7,236)        --         --         --     (7,558)        --        --
                                                    -----      -----     ------     ------      -----     ------    ------
     Net loss ...............................    $ (9,941)  $ (4,368)  $(16,446)  $(10,363)  $ (9,338)  $ (2,752)  $(5,050)
                                                 =========  =========  =========  =========  =========  =========  ========
Other Data:
        EBITDA(1) ...........................    $ 13,219   $  7,209   $ 21,145   $ 24,660   $ 31,111   $ 39,542  $ 40,584
        Depreciation and amortization .......       5,548      3,141     23,131     20,292     15,793     23,239    25,321
        Capital expenditures ................       1,744        465      1,910      3,246      6,670      6,050     6,427
        Ratio of earnings to fixed charges(2)         --          --         --         --         --         --        --
        Cash  provided by  operating
         activities                                 2,774      7,410      6,833     10,313     15,417     15,144
        Cash used in investing
         activities .........................      (1,661)  (129,154)   (14,552)    (5,890)   (54,267)   (45,764)
        Cash (used in) provided by...........
        financing activities.................      (1,113)   121,619      7,719     (3,900)    38,654     30,537

Balance Sheet Data:
        Cash                                     $    --    $     --   $     --   $    523   $    327   $    244
        Total assets ........................     108,739    141,525    135,015    125,047    171,239    196,393
        Redeemable preferred stock and long-
         term debt, including current portion      80,953    122,771    134,194    133,452    190,389    221,027
        Total stockholder's equity (deficit)        4,329      1,517    (17,738)   (31,277)   (47,712)   (51,188)


</TABLE>

                                       9
<PAGE>


(1)  EBITDA   represents   net  income  plus  interest,   taxes,   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  and  because  certain
     financial  ratios are  calculated on a similar  basis.  EBITDA has not been
     reduced by management and directors fees, both of which are subordinated to
     the Company's obligations under its financing agreements.

(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  $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;  $1,606
     for 1998 and $3,924 for 1999.

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,  actual results could
differ materially from those contemplated by the forward-looking statements.

EBITDA represents net income plus interest,  taxes,  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  and because  certain  financial  ratios are  calculated  on a
similar  basis.  EBITDA has not been reduced by management  and directors  fees,
both of which are subordinated to the Company's  obligations under its financial
agreements.


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  wholly-owned  subsidiary,  Jackson
Acquisition, Inc., acquired 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 wholly-owned subsidiary,  Crystaloid Technologies,
Inc., acquired Crystaloid  Electronics,  Inc., for $6.0 million (the "Crystaloid
Acquisition").  On July 22, 1998,  American  Allsafe Company acquired all of the
outstanding capital stock of Kedman Company (the "Kedman  Acquisition") for $9.2
million.  The Allsafe  Acquisition,  the Crystaloid  Acquisition  and the Kedman
Acquisition are collectively referred to as the Acquisitions.

On January 25, 1999,  the Company  acquired  certain assets of OK Beads Inc. for
approximately  $1.0  million.  On  May  17,  1999,  the  Company,   through  its
wholly-owned  subsidiary,  TMT-Pathway,  L.L.C.,  acquired  the assets of Morton
Traffic  Markings,  a division of Morton  International,  Inc. for $36.3 million
(the  "TMT-Pathway   Acquisition"),   net  of  a  $1.7  million  purchase  price
adjustment.


                                       10
<PAGE>

RESULTS OF OPERATIONS (dollars in thousands unless otherwise noted)

Net Sales                                     1999        1998         1997
---------                                     ----        ----         ----

          PSP............................   $107,067     $93,596      $53,327
          HSP............................    106,141      71,636       70,090
                                             -------      ------       ------
          TOTAL..........................   $213,208    $165,232     $123,417
                                            ========    ========     ========

PSP net sales in 1999  increased  14.4% to $107.1  million from $93.6 million in
1998.  The increase in net sales for this period is primarily  attributed to the
Acquisitions.  Had the  Acquisitions  occurred on January 1, 1998, net sales for
the comparable  years would have reflected a decrease of $4.1 million,  or 3.7%.
The  Company  believes  that the  decline in PSP sales is  attributable  to soft
economic  conditions in the worldwide  welding market,  the continuing effect of
the strong dollar on the  Company's  sales within Europe along with a decline in
the Company's  avionic sales at its Crystaloid  division.  HSP net sales in 1999
increased  48.2% to $106.1  million from $71.6 million in 1998.  The increase in
net  sales  for  this  period  is  primarily  attributable  to  the  TMT-Pathway
Acquisition,  which provided $31.9 million in net sales and increased HSP demand
(pro  forma  increase  of  8.5%).  Had  the  Acquisitions  and  the  TMT-Pathway
Acquisition  occurred on January 1, 1998,  consolidated net sales for 1999 would
have reflected an increase of $5.0 million, or 2.3% over 1998.

PSP net sales in 1998  increased  75.5% to $93.6  million from $53.3  million in
1997.  The increase in net sales resulted from the  Acquisitions  and the Lansec
Acquisition. Had the Acquisitions and the Lansec Acquisition occurred on January
1, 1997,  PSP net sales would have declined  slightly to $111.2  million in 1998
from  $113.1  million  in 1997.  HSP net sales in 1998  increased  2.2% to $71.6
million from $70.1 million in 1997.

Cost of Sales                                  1999        1998         1997
-------------                                  ----        ----         ----

          PSP............................    $67,926     $57,986      $34,706
          HSP............................     77,194      53,339       52,760
                                              ------      ------       ------
          TOTAL..........................   $145,120    $111,325      $87,466
                                            ========    ========      =======

PSP cost of sales  increased  17.1% to $67.9 million from $58.0 million in 1998,
primarily  as a result  of the  increase  in net  sales.  PSP cost of sales as a
percentage of sales increased to 63.4% from 62.0%, as lower overhead  absorption
occurred at several  facilities on lower volume levels and reduced  inventories.
HSP cost of sales in 1999 increased 44.7% to $77.2 million from $53.3 million in
1998, primarily as a result of the increase in net sales. HSP cost of sales as a
percentage  of sales  decreased  to 72.7% from 74.5%,  as  TMT-Pathway  provides
favorable  gross margins  relative to the total HSP gross margin as well as cost
reduction programs within SMC.

PSP cost of sales in 1998 increased 67.1% to $58.0 million from $34.7 million in
1997, primarily as a result of the increase in net sales. PSP cost of sales as a
percentage of sales  decreased to 62.0% from 65.1% due to various cost reduction
programs and higher margins associated with the acquired companies.  HSP cost of
sales  remained  essentially  flat  from  1997 to  1998.  HSP cost of sales as a
percentage of net sales decreased slightly to 74.5% from 75.4%.

Selling, General and Administrative             1999        1998         1997
-----------------------------------             ----        ----         ----

          PSP............................    $26,065     $20,965       $8,142
          HSP............................      9,196       6,601        7,063
                                               -----       -----        -----
          TOTAL..........................    $35,261     $27,566      $15,205
                                             =======     =======      =======

PSP  selling,  general and  administrative  expenses in 1999  increased to $26.1
million from $21.0 million in 1998 due to the Acquisitions. PSP selling, general
and administrative expenses as a percentage of net sales increased to 24.3% from
22.4% due to a full year of expenses  associated  with the  Acquisitions  whose
selling,  general and  administrative  expenses as a percentage of net sales are
slightly higher than those of the original PSP divisions . HSP selling,  general
and administrative  expenses as a percentage of net sales decreased to 8.7% from
9.2% as  TMT-Pathway's  expenses are low relative to the other divisions  within
HSP.

PSP selling,  general and  administrative  expenses in 1998 increased  157.5% to
$21.0 million from $8.1 million in 1997 due to the  Acquisitions  and the Lansec
Acquisition.  PSP selling,  general & administrative expenses as a percentage of
net sales  increased  to 22.4% from 15.3% due to the  acquisition  of GmbH whose
expenses as a percentage of sales are high relative to the other  divisions.  At
the same time, the Company faced  increased  corporate  administrative  expenses
associated  with  the   Acquisitions  and  the  requirements  of  being  an  SEC
registrant.  HSP selling,  general and administrative expenses in 1998 decreased
6.5% to $6.6 million  from $7.1  million in 1997 due to various  cost  reduction
programs.  HSP selling,  general and administrative  expenses as a percentage of
net sales decreased to 9.2% from 10.1%.
                                       11
<PAGE>

EBITDA                                          1999        1998         1997
------                                          ----        ----         ----

          PSP............................    $18,650     $18,282      $13,029
          HSP............................     20,892      12,829       11,631
                                              ------      ------       ------
          TOTAL..........................    $39,542     $31,111      $24,660
                                             =======     =======      =======

EBITDA for the year ended  December 31, 1999  increased  27.1% to $39.5  million
from $31.1  million  during the year ended  December  31,  1998.  This growth is
primarily  attributable to the Acquisitions,  the TMT-Pathway  Acquisition,  and
increased HSP demand offset by a decline in PSP sales.  Had the Acquisitions and
the TMT-Pathway  Acquisition  taken place on January 1, 1998,  EBITDA would have
remained consistent.

EBITDA for the year ended  December 31, 1998  increased  26.2% to $31.1  million
from $24.7 million for the year ended December 31, 1997. The growth is primarily
attributable to the  Acquisitions  which provided $6.5 million in EBITDA in 1998
coupled  with a 10.3%  increase in HSP EBITDA as well as strong  demand and cost
reduction programs.

Operating Income                                1999        1998         1997
----------------                                ----        ----         ----

          PSP............................     $4,242      $7,784      $(4,887)
          HSP............................     13,562       8,327        8,920
                                              ------       -----        -----
          TOTAL..........................    $17,804     $16,111       $4,033
                                             =======     =======       ======

Consolidated  operating  income in 1999  increased  to $17.8  million from $16.1
million in 1998. As discussed  above,  this growth is primarily  attributable to
the Acquisitions,  the TMT-Pathway Acquisition,  and increased HSP demand offset
by a decline in PSP sales.

Consolidated  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                                      1999        1998         1997
----------                                      ----        ----         ----

          Benefit (expense)..............     $1,172       ($224)       ($684)
                                              ======       =====        =====

Income tax  benefit  in 1999  increased  to $1.2  million  from ($0.2  million),
primarily due to the  realization of $1.8 million in benefits from net operating
loss carryforwards.

Income tax expense in 1998  decreased to $0.2 million from $0.7 million due to a
state tax refund. The Company's effective income tax rate is substantially lower
than the  statutory  rate for 1998 and 1997 due to the increases in the deferred
tax asset valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Cash provided by operating  activities in 1999, 1998 and 1997 was $15.1 million,
$15.4  million and $10.3  million,  respectively.  Cash  provided  by  operating
activities remained consistent from 1998 to 1999. The increase in 1998 from 1997
is primarily attributable to an increase in operating income associated with the
Acquisitions.  Changes in working capital  resulted in sources (uses) of cash of
($5.5  million),  $0.9  million  and  ($1.0  million)  in 1999,  1998 and  1997,
respectively.  The increase in 1999 from 1998 stems from a reduction in payables
associated  with lower  inventory  levels  coupled with the  recognition of $1.8
million in  deferred  tax  assets.  The change in 1998 from 1997 is due to lower
receivables associated with increased collection activities.

Cash used in  investing  activities  in 1999,  1998 and 1997 was $45.8  million,
$54.3  million and $5.9 million  respectively.  The 1999 period  includes  $39.9
million expended for the TMT-Pathway Acquisition and certain assets of OK Beads.
The 1998 period  includes  $47.8  million  expended  for the  Acquisitions.  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.  Net capital expenditures
in 1999,  1998 and 1997  were  $5.8  million,  $6.7  million  and $3.2  million,
respectively.

Net cash  provided  (used) by financing  activities  in 1999,  1998 and 1997 was
$30.5  million,  $38.7 million and ($3.9  million),  respectively.  In 1999, the
proceeds were provided by the issuance of long-term debt and used principally to
finance the  TMT-Acquisition.  During 1998,  the proceeds  were  provided by the
issuance of long-term debt and the Credit Facility (see below) and used to repay
long-term   debt,   repay  the  premium  of  long-term   debt  and  finance  the
Acquisitions.  In 1997,  cash was  principally  used in financing  activities to
repay the long-term debt.

                                       12
<PAGE>

Effective  April 22,  1998,  the Company  entered into a credit  agreement  (the
"Credit   Facility")  with   BankBoston,   N.A.  and  Mercantile  Bank  National
Association,  which  provided  for a line of credit in the  aggregate  amount of
$125.0 million.  This credit  agreement was amended during the second quarter of
1999 to  increase  the  line of  credit  to  $135.0  million,  consisting  of an
acquisition  line  facility  in the  principal  amount of $105.0  million  and a
revolving  facility in the principal  amount of $30.0  million.  At December 31,
1999 there was (i) $5.1 million outstanding on the revolving credit facility and
$1.4  million of letters of credit  outstanding,  resulting in  availability  of
$23.5 million and (ii) $101.5 million  outstanding on the acquisition  facility,
resulting  in  availability  of  $3.5  million.  The  average  interest  rate on
outstanding borrowings under the Credit Facility was 8.4% at December 31, 1999.

On April 16, 1998, the Company offered $115.0 million aggregate principal amount
of Senior  Subordinated  Notes (the "Notes") due April 15, 2005.  The Notes 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").

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.  The
Company anticipates that its capital  expenditure  requirements for 2000 will be
approximately  $6.1 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  sovereign  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 begun to assess the  potential  impact to the Company  that may
result from the Euro conversion.  In addition to tax accounting  considerations,
the Company has  investigated  an upgrade to its current  software  package that
will accommodate Euro-denominated transactions and is in the process of engaging
a third party vendor to  determine  the cost of  implementation.  The Company is
also  considering 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. 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 was  amended  in June  1999 by SFAS No.  137,  which
deferred the effective date one year. SFAS No. 133, as amended, is effective for
fiscal  years  beginning  after  June 15,  2000;  however,  management  does not
anticipate  that the adoption of this statement  will have a material  impact on
the Company's financial statements.


YEAR 2000 COMPLIANCE
--------------------

To date, no significant  issues resulting from Year 2000 have been identified in
any of the Company's  facilities or  operations.  As of the date of this filing,
the  Company  has not  experienced  any  material  problems  with any of its key
customers or suppliers.  Management will continue to monitor for any impact that
may occur from Year 2000. Maintenance or modification costs associated with Year
2000 have been  expensed as incurred,  while the costs of new software have been
capitalized and amortized over the software's  useful life. The amounts incurred
have not had a material effect on the Company's financial  condition,  result of
operations or liquidity.

                                       13
<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.

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 exchange rates relative to
the  German  Deutsche  mark,   Italian  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.  These  exchange  rate  fluctuations  decreased
profitability by $0.7 million for the year ended December 31, 1999.

The Company's market risk exposure is primarily due to possible  fluctuations in
interest  rates.  The Company uses an interest  rate cap agreement to manage its
exposure on variable rate debt  obligations.  The Company uses a balanced mix of
fixed and variable  interest  rate debt to manage its exposure to interest  rate
changes.  For  additional   information  of  the  Company's  interest  rate  cap
agreement,  refer  to  Note  7 in the  Consolidated  Financial  Statements.  The
Company's outstanding long-term debt at December 31, 1999 is as follows:

(Dollars in thousands)

<TABLE>
<CAPTION>

                                         Principal     Notional                   Receive     Maturity
                                           Amount       Amount     Pay Rate        Rate         Date       Fair Value
                                           ------       ------     --------        ----         ----       ----------

<S>                                         <C>           <C>         <C>           <C>          <C>          <C>

Fixed Rate Debt:
Senior Subordinated Notes ........       $ 114,472        N/A         9.50%         N/A       April, 2005   $ 105,800

Variable Rate Debt:
Acquisition Facility ..............        101,500        N/A          (1)          N/A       April, 2004     101,500


Revolving Working Capital Facility           5,055        N/A         9.25%(2)      N/A       April, 2004       5,055
Interest Rate Cap Agreement ......             N/A     50,000         7.00%        7.00%   December, 2000          16
</TABLE>

(1)  The borrowings under the Acquisition Facility bear interest at the rate per
     annum  equal to the LIBOR rate (as  defined in the credit  agreement)  plus
     2.25%. In order to protect against  interest rate risk, the Company engages
     in LIBOR contracts.  As of December 31, 19 99 the following LIBOR contracts
     existed:  $50,000  outstanding at 8.29% due May 22, 2000;  $39,500 at 8.27%
     due May 16, 2000 and $12,000 at 8.42% due June 27, 2000.

(2)  The borrowings  under the Revolving  Working  Capital Credit  Facility bear
     interest  at the rate per annum  equal to the LIBOR rate (as defined in the
     credit agreement) plus 2.25%.

The fixed rate portion of the Company's long-term debt does not bear significant
interest  rate risk.  The variable  rate debt would be affected by interest rate
changes  to the  extent  the  debt is not  matched  with an  interest  rate  cap
agreement or, in the case of the revolving  credit  agreement,  to the extent of
the balances outstanding.


                                       14
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

1) Index to Financial Statements

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

Consolidated Balance Sheets-December 31, 1999 and 1998.....................   5

Consolidated Statement of Operations-Year Ended December 31, 1999 and 1998    6

Consolidated Statement of Stockholder's Deficit-Years Ended
December 31, 1999, 1998 and 1997...........................................   7

Notes to Consolidated Finacial Statements..................................   8



                                       15
<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, 1999 and 1998,
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,
1999. 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,  1999 and 1998,  and the
results  of their  operations  and their cash flows for each of the years in the
three-year period ended December 31, 1999, in conformity with generally accepted
accounting principles.

                                    KMPG LLP

February 11, 2000





                                       16
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1999 and 1998

<TABLE>
<CAPTION>

                                                                                            1999           1998
                                                                                            ----           ----
                                                                                                (In thousands,
                                                                                                     except
                                                                                                  share data)
                                     ASSETS
                                     ------
<S>                                                                                          <C>            <C>

Current assets:
     Cash ............................................................................   $     244    $     327

     Accounts receivable, net of allowance for doubtful accounts of $1,140 and $651 at
        December 31, 1999 and 1998, respectively .....................................      25,593       18,479
     Inventories .....................................................................      34,461       34,275
     Deferred tax assets .............................................................       1,823           --
     Prepaid expenses.................................................................         869          746
                                                                                         ----------   ----------
          Total current assets .......................................................      62,990       53,827

Property, plant and equipment, net ...................................................      44,521       34,362
Intangibles ..........................................................................      82,816       75,242
Deferred financing costs .............................................................       6,061        7,372
Other noncurrent assets ..............................................................           5          436
                                                                                         ----------   ----------

                                                                                         $ 196,393    $ 171,239
                                                                                         =========    =========

                           LIABILITIES AND STOCKHOLDERS' DEFICIT
                           -------------------------------------

Current liabilities:
     Accounts payable ................................................................   $  12,875    $  15,313
     Other accrued liabilities .......................................................       6,837        6,056
     Accrued interest ................................................................       3,315        3,044
     Accrued taxes ...................................................................         460        1,075
                                                                                         ----------   ----------
          Total current liabilities ..................................................      23,487       25,488
                                                                                         ----------   ----------
Long-term debt .......................................................................     221,027      190,389
Other noncurrent liabilities .........................................................       3,067        3,074

Stockholders' deficit:
     Class A common stock, $.01 par value; 100,000 shares authorized, 38,530
        shares issued and outstanding at December 31, 1999 and 1998 ..................          --           --
     Class C common stock, $.01 par value; 15,000 shares authorized, 8,526 shares
        issued and outstanding at December 31, 1999 and 1998 .........................          --           --
     Additional paid-in capital ......................................................       2,952        2,952
     Accumulated other comprehensive (loss) income ...................................        (679)          59
     Loans due on common stock .......................................................        (329)        (343)
     Accumulated deficit .............................................................     (53,132)     (50,380)
                                                                                         ----------   ----------
          Total stockholders' deficit ................................................     (51,188)     (47,712)
                                                                                         ----------   ----------
                                                                                         $ 196,393    $ 171,239
                                                                                         ==========   ==========

</TABLE>


                See accompanying notes to consolidated financial
                                  statements.


                                       17
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  Years ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>


                                                                                1999           1998          1997
                                                                                ----           ----          ----
                                                                                           (In thousands)
<S>                                                                               <C>            <C>         <C>
Net sales...................................................                  $213,208      $165,232      $123,417
Operating expenses:
     Cost of sales..........................................                   145,120       111,325        87,466
     Selling, general and administrative....................                    35,261        27,566        15,205
     Write-down of assets...................................                        --           576           335
     Amortization of intangibles............................                    15,023         9,654        16,378
                                                                               -------       -------       -------
Total operating expenses....................................                   195,404       149,121       119,384
                                                                               -------       -------       -------

Operating income............................................                    17,804        16,111         4,033

Other:
     Interest expense.......................................                   (19,347)      (15,803)      (12,050)
     Amortization of deferred financing costs...............                    (1,501)       (1,271)       (1,261)
     Other..................................................                      (880)         (643)         (401)
                                                                               -------       -------       -------
Loss before income tax (benefit)expense and
   extraordinary item.......................................                    (3,924)       (1,606)       (9,679)

Income tax (benefit) expense................................                    (1,172)          224           684
                                                                               -------       -------       -------
Loss before extraordinary item..............................                    (2,752)       (1,830)      (10,363)

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

Net loss....................................................                  $ (2,752)     $ (9,388)     $(10,363)
                                                                              ========      ========      ========

</TABLE>



                See accompanying notes to consolidated financial
                                  statements.


                                       18
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                  Years ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>


                                                                 Accumulated     Loans
                                   Class A  Class C  Additional      Other      Due On
                                   Common    Common   Paid-In    Comprehensive  Common   Accumulated
                                   Stock     Stock    Capital       Income       Stock     Deficit      Total
                                   -----     -----    -------       ------       -----     -------      -----
                                                              (In thousands)
<S>                                            <C>        <C>      <C>           <C>         <C>          <C>

Balance, December 31, 1996        $   --    $   --     $7,154     $  (22)     $ (375)    $(24,495)  $(17,738)

Comprehensive loss
     Net loss                         --        --         --         --          --      (10,363)   (10,363)
     Cumulative translation
      adjustment                      --        --         --        (84)         --           --        (84)
                                                                                                      -------
Comprehensive loss                                                                                   (10,447)
                                                                                                      -------
Repurchase of common stock            --        --        (52)        --          32           --        (20)
Accrued dividends--preferred
     stock                            --        --         --         --          --       (2,778)    (2,778)
Accretion of preferred stock          --        --         --         --          --         (294)      (294)
-------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997            --        --      7,102       (106)       (343)     (37,930)   (31,277)

Comprehensive loss
     Net loss                         --        --         --         --          --       (9,388)    (9,388)
     Cumulative translation
      adjustment                      --        --         --        165          --           --        165
                                                                                                      -------
Comprehensive loss                                                                                    (9,223)
                                                                                                      -------
Repurchase of common stock            --        --     (4,150)       --          --           --      (4,150)
Accrued dividends-preferred
     stock                            --        --        --         --          --        (2,609)    (2,609)
Accretion of preferred stock          --        --        --         --          --          (453)      (453)
-------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998            --        --      2,952         59        (343)     (50,380)   (47,712)

Comprehensive loss
     Net loss                         --        --         --         --          --       (2,752)    (2,752)
     Cumulative translation
      adjustment                      --        --         --       (738)          --           --      (738)
                                                                                                      -------
Comprehensive loss                                                                                    (3,490)
                                                                                                      -------
Repayment of loans on common
     stock                            --        --        --         --           14          --          14
-------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999        $   --    $   --     $2,952     $(679)      $ (329)    $(53,132)  $(51,188)
=============================================================================================================

</TABLE>


                See accompanying notes to consolidated financial
                                  statements.

                                       19
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years ended December 31, 1999, 1998 and 1997


<TABLE>
<CAPTION>


                                                                                   1999        1998          1997
                                                                                   ----        ----          ----
                                                                                           (In thousands)
<S>                                                                                <C>          <C>           <C>

Cash flows from operating activities:

   Loss before extraordinary item .....................................      $  (2,752)    $  (1,830)    $ (10,363)
   Adjustments to reconcile loss before extraordinary item to net cash
     provided by operating activities:
        Depreciation ..................................................          6,715         4,770         3,914
        Write-down of assets ..........................................             --           576           335
        Net gain on sale of assets ....................................             --            --          (298)
        Amortization of deferred financing costs, intangibles, and debt
          discount ....................................................         16,639        11,023        17,706
        Changes in operating assets and liabilities, net of effects of
          acquisitions:
             Accounts receivable ......................................            353         2,826          (409)
             Inventories ..............................................          3,142        (2,338)       (4,725)
             Accounts payable .........................................         (5,794)          855         3,169
             Accrued and other liabilities ............................            (42)         (478)          611
             Accrued interest .........................................           (344)          942            31
             Accrued taxes ............................................           (615)          (67)          459
             Other, net ...............................................         (2,158)         (862)         (117)
                                                                                ------        ------        ------
   Net cash provided by operating activities ..........................         15,144        15,417        10,313
                                                                                ------        ------        ------

Cash flows from investing activities:

   Acquisition of businesses including transaction costs, net of cash
     acquired .........................................................        (39,928)      (47,752)       (2,461)
   Deferral of acquisition price, net of payments .....................           --            (105)       (1,695)
   Capital expenditures ...............................................         (5,836)       (6,670)       (3,246)
   Proceeds from sale of assets .......................................           --             260         1,512
                                                                                ------      --------        ------
   Net cash used in investing activities ..............................        (45,764)      (54,267)       (5,890)
                                                                               -------       -------        ------

Cash flows from financing activities:

   Proceeds from issuance of long-term debt ...........................         39,491       204,332            --
   Repurchase of common stock, net of loan repayments .................             14        (4,150)          (20)
   Repurchase of preferred stock ......................................             --       (23,998)           --
   Financing costs ....................................................             --        (8,300)           --
   Repayment premium of long-term debt ................................             --        (2,210)           --
   Repayment of long-term debt ........................................         (8,968)     (127,020)       (3,880)
                                                                                ------      --------        ------
   Net cash provided by (used in) financing activities ................         30,537        38,654        (3,900)
                                                                                ------        ------        ------

(Decrease) increase  in cash ..........................................            (83)         (196)          523
Cash, beginning of year ...............................................            327           523            --
                                                                                ------      --------        ------
Cash, end of year .....................................................        $   244       $   327       $   523
                                                                               =======       =======       =======

</TABLE>


                See accompanying notes to consolidated financial
                                  statements.

                                       20
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1998 and 1999

                        (In thousands, except 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
Acquisition),   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 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);  Kedman Company (Kedman); and TMT-Pathway,  L.L.C.  (TMT-Pathway).
During 1999, OSD was merged into the Company and Kedman was merged into Allsafe.

     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 as well as state and local government  agencies.  The
Company has two reportable segments, the personal safety segment and the highway
safety segment.  The personal safety segment (the Company,  OSD, GmbH,  Allsafe,
Silencio, Crystaloid, and Kedman) offers consumable products designed to protect
the head, face, and eyes. The highway safety group (Flex-O-Lite and TMT-Pathway)
offering  includes  reflective glass beads,  traffic work zone safety equipment,
traffic coatings, and specialized coating applications equipment.

(2) Acquisitions

     On April 22,  1998,  the  Company,  through  its  wholly-owned  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 wholly-owned subsidiary, Crystaloid Technologies, Inc.,
acquired all of the outstanding capital stock of Crystaloid  Electronics,  Inc.,
for $6,000 (the Crystaloid Acquisition).  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  Company (the Kedman  Acquisition)  for a total purchase price of $9,200.
Intangible  assets  totaling  $6,197 were recorded in connection with the Kedman
Acquisition  and are being amortized over five years.  The Allsafe  Acquisition,
the  Crystaloid   Acquisition   and  the  Kedman   Acquisition  are  hereinafter
collectively referred to as the Acquisitions.

     On January  25,  1999,  the  Company  acquired  certain of the assets of OK
Beads, Inc. (OK Beads) for approximately $998. OK Beads manufactures  reflective
glass beads used in highway safety products such as road markers,  signs,  paint
and reflective  tape.  Intangible  assets in the amount of $438 were recorded in
connection with the acquisition and are being amortized over fifteen years.

     On  May  17,  1999,  the  Company,  through  its  wholly-owned  subsidiary,
TMT-Pathway,  acquired  the assets of Morton  Traffic  Markings,  a division  of
Morton International,  Inc. for $36,295 (the TMT-Pathway Acquisition),  net of a
$1,696  purchase price  adjustment.  TMT-Pathway  manufactures  and  distributes
traffic coatings and specialized coating applications  equipment for the highway
safety  industry.  Intangible  assets in the amount of $22,130 were  recorded in
connection  with the  acquisition  and are being  amortized  over  three to five
years.


                                       21
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

     All   acquisitions   were  accounted  for  using  the  purchase  method  of
accounting.  Accordingly,  total purchase cost for these  transactions  has been
allocated  to the  assets  and  liabilities  of the  companies  based  on  their
respective  fair values.  The results of operations  of the acquired  businesses
have  been  included  in  the  consolidated   financial   statements  since  the
acquisition date.

     Pro forma  consolidated net sales would have been $223,795 and $218,832 for
the years ended December 31, 1999 and 1998, respectively. Pro forma consolidated
net loss would have been $5,050 and $14,867  for the years  ended  December  31,
1999  and  1998,  respectively;  the pro  forma  consolidated  net  loss  before
extraordinary  items  would  have been  $5,050  and  $7,309,  respectively.  The
unaudited  proforma  results of  operations  of the  Company for the years ended
December 31, 1999 and 1998 gives effect to: (i) the  Acquisitions,  the OK Beads
acquisition  and the  TMT-Pathway  Acquisition  and  (ii)  the  refinancing,  as
discussed in Note 7, as if each had occurred on January 31, 1998.  These amounts
represent  unaudited data and, in  management's  opinion,  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,  1999,  1998  and  1997  totaled  $18,889,  $14,789  and  $11,952,
respectively.  Taxes paid for the years ended  December 31, 1999,  1998 and 1997
totaled $1,384, $215 and $224, 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, 1999, the Company had no
customers  whose  purchases  exceeded  10% of net sales,  nor did any  customers
account  receivable  balance  exceed  10% of  total  accounts  receivable  as of
December 31,  1999.  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,  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.  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.


                                       22
<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 refinancing,  as discussed
in Note 7, the Company recorded deferred financing fees totaling $8,300.

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 the 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, 1999, 1998 and 1997, the Company expensed $880, $775 and $699, 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 $329 is  outstanding as of December 31, 1999.
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.



                                       23
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

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
Company's  9.50% senior  subordinated  notes is estimated based on quoted market
prices for the same or similar  issues with the same  remaining  maturities  and
overall  financial  condition.  The fair value of the notes was  $105,800  as of
December 31, 1999 compared to the carrying value of $114,472. As of December 31,
1998,  the carrying value  approximated  the fair value of the notes as the debt
was negotiated late in the year.

     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.

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  resulted  in a $738  additional  loss  for the  year  ended
December 31, 1999.

(4) Inventories

     Inventories consist of the following:


                                                               1999      1998
                                                               ----      ----

          Raw materials...................................   $13,959   $13,319
          Work in process.................................     6,030     4,516
          Finished goods..................................    14,472    16,440
                                                              ------    ------
                                                             $34,461   $34,275
                                                             =======   =======




                                       24
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

(5) Property, Plant, and Equipment

     Property, plant, and equipment consist of the following:



                                                               1999      1998
                                                               ----      ----

          Land..........................................     $ 3,525   $ 1,418
          Buildings and improvements....................      15,426    12,149
          Machinery and equipment.......................      44,366    33,167
                                                              ------    ------
                                                              63,317    46,734
          Less accumulated depreciation.................      18,796    12,372
                                                              ------    ------
                                                             $44,521   $34,362
                                                             =======   =======

     Depreciation expense totaled $6,715,  $4,770 and $3,914 for the years ended
December 31, 1999, 1998 and 1997, respectively.

(6) Intangibles

     Intangibles consist of the following:


                                                               1999      1998
                                                               ----      ----

          Goodwill........................................  $113,480  $ 91,404
          Customer lists and unpatented technology .......    15,362    15,362
          Patents and other...............................    14,196    14,114
                                                              ------    ------
                                                             143,038   120,880
          Less accumulated amortization...................    60,222    45,638
                                                              ------    ------
                                                            $ 82,816  $ 75,242
                                                             =======  ========

(7) Long-term Debt

     Long-term obligations consist of the following:

                                                               1999      1998
                                                               ----      ----

          Acquisition facility............................. $101,500  $ 65,800
          Revolving working capital facility...............    5,055    10,231
          9.50% senior subordinated notes..................  115,000   115,000
          Unamortized debt discount........................     (528)     (642)
                                                             -------   -------
                                                            $221,027  $190,389
                                                            ========  ========

Credit Agreement
----------------

     In 1998,  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 ended 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.



                                       25
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

     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.  This  agreement was amended during the second
quarter of 1999 to increase the acquisition  facility to $105,000.  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.

     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
entire principal balance outstanding on the revolver is due upon maturity of the
Credit Agreement.

     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 8.4% as
of December 31, 1999.

     The Company is currently in compliance with all of the financial  covenants
contained in the Credit  Agreement.  As of December  31, 1999,  there was $5,055
outstanding  on the  revolving  credit  facility and $1,385 of letters of credit
outstanding resulting in availability of $23,560.

Senior Subordinated Notes
-------------------------

     On April 16, 1998, the Company offered $115,000 aggregate  principal amount
of Senior  Subordinated  Notes due April 15,  2005 (the  Notes).  The Notes bear
interest  at the rate of 9 1/2% per annum,  payable  semiannually  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,
1999.

     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 the seven-year term of the Notes.



                                       26
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

     In 1998, 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, 1999 and expires  December 1, 2000 and
entitles the Company to receive from a counterparty an amount,  if any, by which
the  three-month  LIBOR  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

     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).

     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 pursuant to a public equity
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  equity  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 1998, the Company  repurchased  $4,150 of Common Stock and warrants from
an institutional holder.

Warrants
--------

     In 1998,  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.


                                       27
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

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.  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>
                                                             1999                  1998                1997
                                                             ----                  ----                ----
<S>                                                <C>       <C>         <C>        <C>       <C>      <C>
                                                           Exercise              Exercise            Exercise
                                                Shares       Price      Shares     Price    Shares     Price
                                                ------       -----      ------     -----    ------    -------
Beginning of year.........................     3,198.04     $100.00    3,198.04   $100.00  1,704.14   $100.00
Granted...................................           --          --          --        --  1,503.90    100.00
Exercised.................................           --          --          --        --        --        --
Cancelled.................................      (335.05)     100.00          --    100.00    (10.00)   100.00
                                                 ------      ------       -----    ------     -----    ------
End of year...............................     2,862.99     $100.00    3,198.04   $100.00  3,198.04   $100.00
Exercisable at the end of year............     1,990.41     $100.00    1,488.81   $100.00    849.18   $100.00
                                               ========     =======    ========   =======    ======   =======
Weighted average fair value of options
   granted................................                  $ N/A                 $ N/A               $63.70
                                                            ======                ======              ======
</TABLE>


     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 10 years and expected  volatility  of 0%. The weighted
average  contractual life of the options outstanding as of December 31, 1999 was
6.5 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 for 1999 and 1998 and $34 for 1997.

(9) Income Taxes

     Income tax expense is comprised of the following:
<TABLE>
<CAPTION>

                                                               1999      1998      1997
<S>                                                             <C>       <C>       <C>
                                                               ----      ----      ----
          Current:
            Federal ................................         $   128    $  216   $    40
            State ..................................             243       221       310
            Foreign ................................             280      (213)      334
                                                                 ---      ----       ---
                                                                 651       224       684
          Deferred .................................          (1,823)      ---       ---
                                                              ------   -------   -------
                                                             $(1,172)   $  224   $   684
                                                              =======   ======   =======

</TABLE>


                                       28
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(continued)

     Reconciliation between the statutory income tax provision and effective tax
provision is summarized  below for the years ended  December 31, 1999,  1998 and
1997:

<TABLE>
<CAPTION>

                                                               1999      1998      1997
                                                               ----      ----      ----
<S>                                                             <C>       <C>       <C>

          Statutory rate (34%).......................        $(1,334)  $(3,116)  $(3,291)
          Amortization of goodwill and other.........          3,253     1,003     4,778
          State income tax (refunds).................            160      (213)       --
          Change in valuation allowance..............         (3,251)    2,550      (803)
                                                              ------     -----      ----
          Income tax (benefit) expense...............        $(1,172)  $   224   $   684
                                                             =======    ======     =====
</TABLE>

     The tax effects of significant temporary differences, representing deferred
tax assets and the deferred tax liability,  as of December 31, 1999 and 1998 are
as follows:
<TABLE>
<CAPTION>

                                                                         1999      1998
                                                                         ----      ----
<S>                                                                       <C>       <C>
          Deferred tax assets:
               Net operating loss carryforwards.....................   $ 7,759   $ 9,839
               Receivables..........................................       282       194
               Accrued liabilities..................................     1,364     1,588
               Postretirement benefits..............................       690       690
               Inventory............................................     1,127       642
               Intangibles..........................................     1,696     1,010
               AMT Credits..........................................       128        --
                                                                        ------    ------
                                                                        13,046    13,963
          Valuation allowance.......................................    (9,375)  (12,626)
                                                                        ------    ------
          Deferred tax assets, net of valuation allowance...........     3,671     1,337
          Deferred tax liability -  property, plant, and equipment..    (1,848)   (1,337)
                                                                        ------    ------
          Net deferred tax assets...................................   $ 1,823   $    --
                                                                        ======    ======
</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 ultimate
realization  of deferred tax assets is dependent  upon the  generation of future
taxable income.  Management  considers  projected  future taxable income and tax
planning strategies in assessing the adequacy of the valuation allowance.

     The  decrease  in the  valuation  allowance  during  1999 was a  result  of
utilizing net operating loss (NOL)  carryforwards in 1999 and anticipating using
a  portion  of the NOL  carryforward  in 2000.  The  increase  in the  valuation
allowance  during 1998 was a result of changes in temporary  differences  and an
increase in the NOL carryforwards.  The decrease during 1997 was the result of a
decrease  in NOLs  resulting  from  taxable  income  and  changes  in  temporary
differences.

At December  31, 1999,  the Company had net  deferred tax assets of $1,823.  The
Company will need to generate  taxable income of  approximately  $5,400 prior to
expiration of the net operating loss  carryforward  to fully realize the benefit
of the  deferred  tax  asset.  Based  upon  the  level  of  taxable  income  and
projections  for future taxable  income,  management  believes it is more likely
than not the Company will realize the benefit of the net deferred tax asset.  At
December 31, 1999, the Company had NOL  carryforwards of  approximately  $20,416
for U.S. federal income tax purposes which begin to expire in 2009 to the extent
not  previously  utilized.  Approximately  $11,092 of the NOL is  restricted  in
availability  to  offset  taxable  income  subject  to an annual  limitation  of
approximately  $1,236  under  Section  382 of the  Internal  Revenue  Code.  The
remaining balance of approximately $9,324 is available without restriction.


                                       29
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(continued)

     At December 31, 1999, the Company had NOL  carryforwards  of  approximately
$2,345  for  foreign  income  tax  purposes  which do not  expire.  The  Company
established a valuation  reserve allowance for the entire amount of the deferred
tax asset resulting from the foreign NOLs because management does not believe it
is more likely than not that the benefit  will be  realized.  The  deferred  tax
asset and the related valuation allowance are excluded from the above tables.

(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 the 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, 1999 and 1998 includes the following components:
<TABLE>
<CAPTION>


                                                               1999      1998       1997
                                                               ----      ----       ----
<S>                                                             <C>       <C>        <C>
          Service cost...................................       $ 58     $ 108      $ 78
          Interest cost..................................         57        70        58
          Amortizations of gain..........................        (91)      (50)      (57)
                                                                 ---       ---       ---
          NPPBC..........................................       $ 24     $ 128      $ 79
                                                                ====     =====      ====
</TABLE>

     The Plan's status as of December 31 is as follows:
<TABLE>
<CAPTION>

                                                                         1999      1998
                                                                         ----      ----
<S>                                                                       <C>       <C>

          Actuarial present value of benefit obligation:

               Fully eligible active participants....................   $   37    $   98
               Other active participants.............................      608       869
               Retirees..............................................      122        40
               Unrecognized net gain.................................    1,550       781
               Unrecognized prior service cost......................        21        29
                                                                        ------    ------
          Accrued benefit obligation................................    $2,338    $1,817
                                                                        ======    ======
</TABLE>

     The benefit  obligation  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 9.0% in 2000 down to
5.5% in 2004 and thereafter. The effect of a 1% annual increase in these assumed
rates would increase the APBO at December 31, 1999 by approximately $152 and the
service and interest cost  components of the NPPBC for the years ended  December
31,  1999 and 1998 by  approximately  $26.  The  assumed  discount  rate used in
determining  the  APBO  was  7.0%.  The APBO is  included  in  other  noncurrent
liabilities on the consolidated balance sheets.



                                       30
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(continued)

(11) Segment Reporting

     Effective  January 1, 1998,  the Company  adopted  Statement  of  Financial
Accounting  Standards  (SFAS)  No.  131,   "Disclosures  about  Segments  of  an
Enterprise  and Related  Information".  Under the  provisions  of SFAS 131,  the
Company has two reportable segments,  which include the Personal Safety Products
segment ("PSP") and the Highway Safety Products  segment  ("HSP").  PSP includes
consumable  products  designed  to  protect  the head,  face and  eyes.  Primary
customers for these products are found in the welding, construction, janitorial,
healthcare,  sporting,  and food service  sectors.  HSP's broad product offering
includes  reflective  glass beads,  traffic  workzone safety  products,  traffic
coatings and specialized coating applications  equipment.  Primary customers for
these  products  consist  of local and  government  agencies,  private  contract
stripers and highway safety distributors.

     The Company  evaluates  segment  performance based upon a measure of profit
represented by earnings before  interest,  taxes,  depreciation and amortization
(EBITDA).  Accounting  policies for reportable  segments are consistent with the
policies described in Note 3 to the consolidated financial statements.

     Presented below is a summary of financial data for the Company's reportable
segments.  EBITDA  represents  net income plus  interest,  taxes,  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  and because  certain  financial  ratios are  calculated  on a
similar  basis.  EBITDA has not been reduced by management  and directors  fees,
both of which are  subordinated  to the Company's  obligations  under the Notes.
Information  presented below for total assets exclude  intercompany  receivables
and investments in wholly-owned subsidiaries.

               Net Sales To External Customers By Business Segment

<TABLE>
<CAPTION>

                                                               1999      1998      1997
                                                               ----      ----      ----
<S>                                                             <C>       <C>      <C>
          PSP..................................             $132,726  $106,371  $ 60,702
          HSP..................................              106,367    71,636    70,090
          Eliminations.........................              (25,885)  (12,775)   (7,375)
                                                             -------   -------   -------
          TOTAL................................             $213,208  $165,232  $123,417
                                                            ========  ========  ========
</TABLE>

     EBITDA By Business Segment And Reconciliation To Loss Before Provision
                     For Income Taxes And Extraordinary Item
<TABLE>
<CAPTION>

                                                               1999      1998      1997
                                                               ----      ----      ----
<S>                                                             <C>       <C>       <C>
          PSP..................................              $18,650   $18,282   $13,029
          HSP..................................               20,892    12,829    11,631
                                                              ------    ------    ------
          TOTAL................................               39,542    31,111    24,660

          Depreciation and amortization........               23,239    15,695    21,553
          Other                                                  880     1,219       736
          Interest, net........................               19,347    15,803    12,050
                                                              ------    ------    ------
          Loss before provision for
          Income taxes and extraordinary item..              $(3,924)  $(1,606)  $(9,679)
                                                             =======   =======   =======

</TABLE>

                                       31
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(continued)

                        Depreciation By Business Segment
<TABLE>
<CAPTION>

                                                               1999      1998      1997
                                                               ----      ----      ----
<S>                                                             <C>       <C>       <C>
          PSP..................................               $4,404    $2,958    $2,176
          HSP..................................                2,311     1,812     1,738
                                                               -----     -----     -----
          TOTAL................................               $6,715    $4,770    $3,914
                                                              ======    ======    ======
</TABLE>

                    Capital Expenditures By Business Segment

<TABLE>
<CAPTION>
                                                              1999       1998      1997
                                                              ----       ----      ----
<S>                                                            <C>        <C>       <C>
          PSP..................................               $4,319    $3,215    $2,346
          HSP..................................                1,517     3,455       900
                                                               -----     -----     -----
          TOTAL................................               $5,836    $6,670    $3,246
                                                              ======    ======    ======
</TABLE>

                     Net Sales By Principal Geographic Area
<TABLE>
<CAPTION>

<S>                                                             <C>       <C>       <C>
                                                               1999      1998      1997
                                                               ----      ----      ----

          United States........................             $225,220  $163,317  $124,920
          All Other............................               13,873    14,690     5,872
                                                              ------    ------     -----
                                                             239,093   178,007   130,792
          Eliminations.........................              (25,885)  (12,775)   (7,375)
                                                             -------   -------   -------
          TOTAL................................             $213,208  $165,232  $123,417
                                                            ========  ========  ========
</TABLE>

                    Total Assets By Principal Geographic Area

                                                               1999      1998
                                                               ----      ----
          United States........................             $187,189  $161,839
          All Other............................                9,204     9,400
                                                               -----     -----
          TOTAL................................             $196,393  $171,239
                                                            ========  ========

(12) 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.


                                       32
<PAGE>

                     JACKSON PRODUCTS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(continued)

     Future minimum lease  payments  under all operating  leases with initial or
remaining  noncancelable  lease terms in excess of one year at December 31, 1999
are as follows:

          2000...........................................     $1,560
          2001...........................................        949
          2002...........................................        751
          2003...........................................        304
          2004 and thereafter............................        272
          ====                                                 =====

     Rent expense for the years ended December 31, 1999, 1998 and 1997 totaled
$1,977, $1,547 and $1,462, respectively.

(13) Sale of Assets

     During 1998, the Company decided to consolidate  certain  production lines,
thereby  closing its Elwood,  Indiana  facility  resulting in a loss of $576. On
December 30, 1998, the Company completed the sale of this facility for $260. The
Company  incurred  $503 of  expenses  related to the  closure of this  facility,
primarily related to severance costs.

     During  1999,  the  Company  sold Aden  Ophthalmic  Product's  ("AOP")  for
approximately  $1,200,  which approximated the cost of inventory sold, severance
costs and other disposal expenses.

(14) Condensed Consolidating Financial Information

     Financial information regarding the Guarantors for the years ended December
31, 1999,  1998 and 1997 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.  Morton  Traffic  Markings  was  acquired  in  1999  and  renamed
TMT-Pathway,  a  limited  liability  company,  formed in May  1999.  Kedman  was
acquired in 1998 and  incorporated  by its  predecessors  in September  1961. In
1999, Kedman was merged into American Allsafe. 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 acquired in 1996 and  incorporated  in October  1996. In
1999, OSD was merged into the Company.  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 were not material.



                                       33
<PAGE>

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

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


                     CONDENSED CONSOLIDATING BALANCE SHEETS
                                December 31, 1999
<TABLE>
<CAPTION>



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

Current assets:
    Cash                                               $      --      $      --     $    244      $      --      $     244
    Accounts receivable, net                               4,315         19,972        1,306             --         25,593
    Inventories                                            6,208         27,120        1,650           (517)        34,461
    Deferred tax asset                                     1,823             --           --             --          1,823
    Prepaid expenses                                         222            543          104             --            869
                                                       ----------     ----------    ---------     ----------     ----------
      Total current assets                                12,568         47,635        3,304           (517)        62,990

    Property, plant and equipment                         11,235         33,012          274             --         44,521
    Intangibles                                           12,604         67,896        2,316             --         82,816
    Note receivable from subsidiaries                     84,613          9,229           --        (93,842)            --
    Deferred financing costs                               6,061             --           --             --          6,061
    Investment in subsidiaries                            20,025             --           --        (20,025)            --
    Other noncurrent assets                                   --              5           --             --              5
                                                       ----------     ----------    ---------     ----------     ----------
                                                       $ 147,106      $ 157,777     $  5,894      $(114,384)     $ 196,393
                                                       ==========     ==========    =========     ==========     ==========


    LIABILITIES AND
    STOCKHOLDERS' DEFICIT
    ---------------------

Current liabilities:
    Notes payable to parent                            $      --      $  90,265     $  3,577      $ (93,842)     $      --
    Accounts payable                                       2,482         10,078          315             --         12,875
    Accrued and other liabilities                          2,811          3,583          443             --          6,837
    Accrued interest                                       3,315             --           --             --          3,315
    Accrued taxes                                            460             --           --             --            460
                                                       ----------     ----------    ---------     ----------     ----------
          Total current liabilities                        9,068        103,926        4,335        (93,842)        23,487

Long-term debt                                           221,027             --           --             --        221,027
Other noncurrent liabilities                               3,067             --           --             --          3,067
Due to parent                                            (36,062)        31,779        4,283             --             --

Stockholders' deficit:

    Common stock                                              --              1           --             (1)            --
    Additional paid-in capital                             2,951         34,499           --        (34,498)         2,952
    Accumulated other comprehensive income                    --           (204)        (475)            --           (679)
    Loans due on common stock                               (329)            --           --             --           (329)
    Accumulated deficit                                  (52,616)       (12,224)      (2,249)        13,957        (53,132)
                                                       ----------     ----------    ---------     ----------     ----------
          Total stockholders' deficit                    (49,994)        22,072       (2,724)       (20,542)       (51,188)
                                                       ----------     ----------    ---------     ----------     ----------
                                                       $ 147,106     $  157,777      $  5,894      $(114,384)     $ 196,393
                                                       ==========     ==========    =========     ==========     ==========

</TABLE>


                                       34
<PAGE>

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

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


                CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                          Year ended December 31, 1999

<TABLE>
<CAPTION>


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

   Net sales                                           $  54,339      $ 177,364     $  7,390      $ (25,885)     $ 213,208
   Operating expenses:
       Cost of sales                                      39,111        127,101        4,620        (25,712)       145,120
       Selling, general and administrative                11,084         20,335        3,842             --         35,261
       Amortization of intangibles                         1,101         13,755          167             --         15,023
                                                       ----------     ----------    ---------     ----------     ----------
                                                          51,296        161,191        8,629        (25,712)       195,404
                                                       ----------     ----------    ---------     ----------     ----------
   Operating income (loss)                                 3,043         16,173       (1,239)          (173)        17,804

   Other
       Interest expense, net                             (13,990)        (5,357)          --             --        (19,347)
       Amortization of deferred financing costs           (1,501)            --           --             --         (1,501)
       Intercompany interest and other                    12,484        (13,364)          --             --           (880)
                                                       ----------     ----------    ---------     ----------     ----------
   Income (loss) before income tax expense
       and equity in (loss)earnings of subsidiaries           36         (2,548)      (1,239)          (173)        (3,924)

   Income tax (benefit) expense                           (1,452)           295          (15)            --         (1,172)

   Equity in earnings (loss) of subsidiaries              (4,067)            --           --          4,067             --
                                                       ----------     ----------    ---------     ----------     ----------
   Net income (loss)                                   $  (2,579)     $  (2,843)    $ (1,224)     $   3,894      $  (2,752)
                                                       ==========     ==========    =========     ==========     ==========

</TABLE>



                                       35
<PAGE>

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

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

                 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW
                          Year ended December 31, 1999
<TABLE>
<CAPTION>


                                                                                     Non
                                                        Parent      Guarantor     Guarantor
                                                        Company    Subsidiaries   Subsidiary    Eliminations   Consolidated
                                                      ----------   ------------  -----------    ------------   ------------
<S>                                                      <C>           <C>           <C>           <C>               <C>
Cash flows from operating activities:
Net cash (used in) provided by operating
    activities:                                         $  (1,394)     $  14,314     $ (1,843)      $   4,067      $  15,144
                                                       ----------     ----------    ---------      ----------     ----------
Cash flows from investing activities:
    Acquisition of businesses, including
      transaction costs, net of cash acquired            (39,928)            --           --              --        (39,928)
    Capital expenditures                                  (1,793)        (3,848)        (195)             --         (5,836)
                                                       ----------     ----------    ---------      ----------     ----------
Net cash used in investing activities                    (41,721)        (3,848)        (195)             --        (45,764)
                                                       ----------     ----------    ---------      ----------     ----------
Cash flows from financing activities:
    Proceeds from issuance of long-term debt              39,491             --           --              --         39,491
    Repayment of loans on common stock                        14             --           --              --             14
    Repayment of long-term debt                           (8,968)            --           --              --         (8,968)
                                                       ----------     ----------    ---------      ----------     ----------
Net cash provided by financing activities                 30,537             --           --              --         30,537
                                                       ----------     ----------    ---------      ----------     ----------
Net increase (decrease) in cash                        $ (12,578)     $  10,466     $ (2,038)      $   4,067            (83)
                                                       ==========     ==========    =========      ==========
Cash, beginning of year                                                                                                 327
                                                                                                                  ----------
Cash, end of year                                                                                                     $ 244
                                                                                                                  ==========



</TABLE>


                                       36
<PAGE>

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

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


                     CONDENSED CONSOLIDATING BALANCE SHEETS
                                December 31, 1998

<TABLE>
<CAPTION>
                                                                                       Non
                                                          Parent      Guarantor     Guarantor
          ASSETS                                          Company    Subsidiaries   Subsidiary    Eliminations  Consolidated
          ------                                        ----------   ------------  -----------   ------------   ------------
<S>                                                          <C>          <C>            <C>           <C>            <C>
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 from subsidiaries                     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>




                                       37
<PAGE>

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

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


                CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                          Year ended December 31, 1998
<TABLE>
<CAPTION>

                                                                                       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)
    Intercompany interest and other                        8,962         (9,687)          82               -           (643)
                                                       ----------     ----------    ---------      ----------     ----------
Income (loss) before income tax expense,
    equity in earnings (loss) of subsidiaries
    and extraordinary item                                  (424)           160       (1,025)           (317)        (1,606)


Income tax expense                                             3            221            -               -            224

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

Extraordinary item-loss due to early
    extinguishment of debts                               (7,558)             -            -               -         (7,558)
                                                       ----------     ----------    ---------      ----------     ----------
Net income (loss)                                      $  (9,071)     $     (61)    $ (1,025)      $     769      $  (9,388)
                                                       ==========     ==========    =========      ==========     ==========


</TABLE>


                                       38
<PAGE>


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

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

                 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW
                          Year ended December 31, 1998

<TABLE>
<CAPTION>

                                                                                       Non
                                                          Parent      Guarantor     Guarantor
                                                          Company    Subsidiaries   Subsidiary    Eliminations   Consolidated
                                                        ----------   ------------  -----------    ------------   ------------
<S>                                                         <C>           <C>           <C>           <C>             <C>
Cash flows from operating activities:
Net cash (used in) provided by operating activities
                                                       $   8,630      $  10,246     $ (1,966)      $  (1,493)     $  15,417
Cash flows from investing activities:                  ----------     ----------    ---------      ----------     ----------
    Acquisition of businesses, including
      transaction costs, net of cash acquired            (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 debt .........   204,332             --           --              --        204,332
    Repurchase of common stock, net of loan
      payment                                             (4,150)            --           --              --         (4,150)
    Repurchase of preferred stock ....................   (23,998)            --           --              --        (23,998)
    Financing costs ..................................    (7,903)          (397)          --              --         (8,300)
    Prepayment premium of long-term debt .............    (2,210)            --           --              --         (2,210)
    Repayment of long-term debt ......................  (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>


                                       39
<PAGE>


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

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

                CONDENSED CONSOLIDATING STATEMENTS 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)
    Intercompany interest and other                        6,996         (7,397)          --              --           (401)
                                                       ----------     ----------    ---------      ----------     ----------
Income (loss) before income tax provision and
    equity in earnings (loss) of subsidiaries            (12,874)         3,185           --              10         (9,679)

Income tax expense                                           540            144           --              --            684

Equity in earnings (loss) of subsidiaries                  3,041             --                       (3,041)            --
                                                       ----------     ----------    ---------      ----------     ----------
Net income (loss)                                      $ (10,373)     $   3,041     $     --       $  (3,031)    $  (10,363)
                                                       ==========     ==========    =========      ==========    ===========



</TABLE>



                                       40
<PAGE>

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

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

                 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW
                          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 businesses, including
      transaction costs, net of cash acquired                                         (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 debt                                                       (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>



                                       41
<PAGE>

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

None

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

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

         Name                       Age                 Position with Company
         ----                       ---                 ---------------------
<S>     <C>                         <C>                            <C>

         Robert H. Elkin............54      Director, Chairman and Chief Executive Officer
         Christopher T. Paule.......36      President and Chief Operating Officer
         Lincoln M. Kennedy         63      Senior Vice President and Chief Operating Officer - PSP Group
         Robert J. Currell          61      Senior Vice President and Chief Operating Officer - HSP Group
         Mark A. Kolmer.............38      Vice President-Finance
         F.H. Joe Gay               43      Vice President-Human Resources
         John W. Jordan II..........53      Director
         David W. Zalaznick.........46      Director
         A. Richard Caputo, Jr......34      Director and Vice President
         Jonathan F. Boucher........43      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, Kennedy and Currell,  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 July 1995, Mr. Elkin served as President and Chief
Operating  Officer of Clarke  Industries (a division of  Thermadyne  Industries,
Inc. ( "Thermadyne ").

Christopher  T. Paule.  Mr. Paule began serving as the  Company's  President and
Chief Operating  Officer in January 2000. From August 1995 to December 1999, Mr.
Paule  served as the  Company's  Vice  President,  Chief  Financial  Officer and
Secretary.  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.

Lincoln  M.  Kennedy.  Mr.  Kennedy  has  served as the  Company's  Senior  Vice
President  and Chief  Operating  Officer  of the PSP Group  since May 1999.  Mr.
Kennedy was appointed  President of American Allsafe in 1981. From 1975 to 1981,
he 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, Reading, Pennsylvania.

Robert J. Currell. Mr. Currell has served as the Senior Vice President and Chief
Operating  Officer of the HSP Group since September 1999. From 1993 to 1999, Mr.
Currell  served as Vice  President  and  General  Manager  of  Traffic  Markings
Operations.  From 1990 to 1993,  Mr.  Currell served as Senior Vice President of
the Industrial  Coatings Group for Morton  International.  From 1978 to 1990, he
served in several capacities with the coatings group of Whittaker Corporation.

Mark A.  Kolmer.  Mr.  Kolmer began  serving as the  Company's  Vice  President,
Finance in January 2000.  From December 1997 to December 1999, Mr. Kolmer served
as Corporate  Controller  and from March 1996 to November  1997 as Controller of
Flex-O-Lite,  Inc. From 1990 to 1995,  he served as  Controller of  Thermadyne's
Coyne Cylinder Company  subsidiary and various other financial  positions within
Thermadyne.

F.H. Joe Gay. Mr. Gay has served as the Vice President of Human  Resources since
January 1999.  From 1997 to 1999, Mr. Gay served as Director of Human  Resources
for Foamex  International.  Prior to 1997,  Mr. Gay served as  Director of Human
Resources for Crain Industries.

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 co-founded in 1982. Mr. Jordan is also a
director of Jordan Industries,  Inc., Jordan  Telecommunication  Products, Inc.,
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.

                                       42
<PAGE>

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., 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.

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. and Motors and Gears, Inc. 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, President and Chief Operating Officer, Lincoln M.
Kennedy,  Senior Vice President and Chief Operating Officer - PSP Group,  Robert
J. Currell  Senior Vice  President and Chief  Operating  Officer - HSP Group and
F.H. Joe Gay, Vice President Human Resources.

<TABLE>
<CAPTION>


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

Robert H. Elkin.............................         1999          466,754      120,000      20,195
Chairman and Chief Executive Officer........         1998          401,086      248,400      21,847
                                                     1997          347,591      222,507      20,195

Christopher T. Paule........................         1999          207,323       80,000      10,098
President and Chief Operating Officer.......         1998          167,850       84,480      10,923
                                                     1997          126,363       83,151       6,326

Lincoln M. Kennedy (2)......................         1999          192,915        -----      56,716
Senior Vice President and Chief Operating...         1998          111,240       50,000       5,309
Officer - PSP Group.........................         1997            -----        -----       -----

Robert J. Currell (3).......................         1999          103,889       40,833      60,499
Senior Vice President and Chief Operating...         1998            -----        -----       -----
Officer - HSP Group.........................         1997            -----        -----       -----

F.H. Joe Gay (4)............................         1999           96,058        -----      61,832
Vice President Human Resources..............         1998            -----        -----       -----
                                                     1997            -----        -----       -----

 ----------

(1)  Other annual compensation consists of car allowance, tax reimbursements for
     relocation  compensation  and  defined  contribution  payments  paid by the
     Company.
(2)  Lincoln M. Kennedy was employed as of April 22, 1998.
(3)  Robert J.  Currell was  employed as of May 17, 1999.
(4)  F.H. Joe Gay was employed as of January 18, 1999.
</TABLE>


                                       43
<PAGE>

EMPLOYMENT/NON-INTERFERENCE AGREEMENTS
--------------------------------------

Elkin  Employment  Agreement.  Mr. Elkin has an employment and  non-interference
agreement  with the Company  which  provides for his  employment as Chairman and
Chief  Executive  Officer of the  Company.  The initial  term of the  employment
agreement  terminates on August 15, 2000,  (which was  subsequently  extended to
December  31,  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.  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  (which  was  subsequently
increased, as of January 1, 1999, to $450,000) and he may be awarded a bonus, at
the sole  discretion of the Board,  of up to 75% of Mr.  Elkin's  annual salary,
which amounts are inclusive of any compensation,  fees, salary, bonuses or other
payments to Mr. Elkin by any of the subsidiaries or affiliates of the Company or
affiliates of The Jordan  Company.  Mr.  Elkin's base salary (which is increased
annually  based on a CPI  formula)  was  $450,000  for 1999 and he was awarded a
bonus of $120,000.  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 the 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.

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.  In 1999, Mr. Paule was promoted to President
and Chief  Operating  Officer.  The  initial  term of the  employment  agreement
terminates on August 15, 2000, (which was subsequently  extended to December 31,
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.  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 (which was subsequently  increased, as of
January  1,  1999,  to  $200,000)  and he may be  awarded  a bonus,  at the sole
discretion  of the  Board,  of up to 60% of Mr.  Paule's  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.  Mr.  Paule's base salary (which is increased
annually  based on a CPI  formula)  was  $200,000  for 1999 and he was awarded a
bonus of $80,000.  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 the 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. In 1999, Mr. Kennedy was promoted to Senior Vice President
and Chief Operating Officer of the PSP Group. 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.  Mr. Kennedy's base salary was $200,000 for 1999, 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 (as defined in the  employment  agreement),  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.

                                       44
<PAGE>

Currell Employment Agreement. Mr. Currell has an employment and non-interference
agreement with the Company which provides for Mr.  Currell's  employment as Vice
President and General Manager of TMT-Pathway.  In 1999, Mr. Currell was promoted
to Senior  Vice  President  and Chief  Operating  Officer of the HSP Group.  The
initial term of the  employment  agreement  terminates on May 17, 2002, 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.  Mr.  Currell's  base salary was $175,000
for 1999 and he received a bonus of $40,833,  which may be awarded,  at the sole
discretion of the Board, which amounts are inclusive of any compensation,  fees,
salary,  bonuses or other payments to Mr. Currell by any of the  subsidiaries or
affiliates  of the  Company  or  affiliates  of The  Jordan  Company.  Under the
employment  agreement,  if Mr.  Currell'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. Currell's  employment is terminated  voluntarily or for reasons of Cause (as
defined in the employment  agreement),  no severance  payment is made. Under the
terms of the agreement, Mr. Currell 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 and Paule 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 Mr. Paule 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, 1999  options  have been granted for
2,863.01  shares of the Class C Common Stock of the  Company.  These shares vest
over a five-year  period,  and as of  December  31,  1999  1,417.81  shares were
vested. In addition, up to 572.602 shares will vest in 2000, up to 150.00 shares
will vest in 2001 and up to 150.00 shares will vest in 2002.

                                       45
<PAGE>

ITEM 12. SECURITY OWNERSHIP AND CERTAIN BENEFICAL OWNERS AND MANAGEMENT

The table  below  sets forth  certain  information,  as of  December  31,  1999,
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."

                                               Amount of Beneficial Ownership(1)
                                               ---------------------------------
                                                       Number of    Percentage
                                                         Shares        Owned
                                                         ------        -----
  Directors and Executive Officers:
  Robert H. Elkin (2)...............................      5,164        10.7%
  John W. Jordan II (3)(4)..........................      4,631         9.8
  David W. Zalaznick (4)............................      4,631         9.8
  Jonathan F. Boucher (4)...........................      3,970         8.4
  Christopher T. Paule (5)..........................      1,695         3.6
  A. Richard Caputo, Jr. (4)........................      1,453         3.1
  Allan A. Huning (6)...............................        902         1.9
  Jack L. Bortle (7)................................        758         1.6
  John L. Garavaglia III (8)........................        350           *
  All directors and executive officers as a group
    (11 persons)(2)(3)(4)(5)(6)(7)(8)                    23,733        48.4%


  Other Principal Stockholders:.....................
  Massachusetts Mutual Life Insurance Company (9)        13,168        22.8%

  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 (4)................................      2,905         6.2
  Adam E. Max (4)...................................      2,905         6.2
--------
* 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, 1999, there were 47,056 shares of common
     stock of the Company issued and outstanding.

(2)  Includes immediately exercisable options to purchase 1,210 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.

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

(4)  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.

                                       46
<PAGE>

(5)  Includes  immediately  exercisable options to purchase 421 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 28 shares of common
     stock. Mr. Huning's address is 2997 Clarkson Road,  Chesterfield,  Missouri
     63017.

(7)  Includes  immediately  exercisable  options to  purchase 8 shares of common
     stock. Mr. Bortle's address is 2997 Clarkson Road,  Chesterfield,  Missouri
     63017.

(8)  Includes  immediately  exercisable options to purchase 100 shares of common
     stock.  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.

(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. The
     beneficial  owners of Safety  Partners,  L.P.  are  comprised  entirely  of
     Jefferies & Company, Inc. as the sole 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 Investors.

                                       47
<PAGE>

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

MANAGEMENT  AGREEMENT
----------  ---------

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 TJC 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.  Such fees are
subject to board of director's 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.

EMPLOYEE STOCKHOLDER LOANS
--------------------------

In 1995, the Company made loans to certain  employees,  including Messrs.  Elkin
and Paule, 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,  1999  there was
$329,000 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, 1999, 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.

                                       48
<PAGE>



                                  EXHIBIT INDEX
<TABLE>
<CAPTION>

                                                                                                  Sequentially
Exhibit                                                                                             Numbered
Number                             Description                                                        Page
------                             -----------                                                        ----
<S>                                    <C>                                                             <C>

1         Purchase Agreement, dated as of April 16, 1998, by and among Jackson Products,                *
          Inc. (the "Company"), 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
2.8       Asset Purchase Agreement, dated as of April 20, 1999 by and among TMT-Pathway,                ***
          L.L.C. and Morton International, Inc.++
2.9       First Amendment to Asset Purchase Agreement, dated as of May 17, 1999 by and among            ***
          TMT-Pathway, L.L.C. and Morton International, Inc.
3.1       Amended and Restated Certificate of Incorporation of the Company                              *
3.2       Bylaws of the Company                                                                         *
4.1       Indenture, dated as of April 22, 1998, between the Company 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                   *
          Company, Jefferies & Company, Inc. and Goldman, Sachs & Co.
4.5       Supplemental Indenture, dated as of April 24, 1998, between the Company and State             *
          Street Bank and Trust Company, as Trustee
4.6       Stockholders Agreement, dated as of August 16, 1995, by and among the Company and             *
          its stockholders
4.7       First Amendment to Stockholders Agreement, dated as of March 1, 1996, by and among            *
          the Company and its stockholders
4.8       Second Amendment to Stockholders Agreement, dated as of July 1, 1996, by and among            *
          the Company and its stockholders
4.9       Third Amendment to Stockholders Agreement, dated as of June 1, 1997, by and among             *
          the Company 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 Company and certain stockholders named therein
4.14      Advisor Subscription Agreement, dated as of August 16, 1995, between the Company              *
          and Safety Partners, L.P
4.15      Management Subscription Agreement, dated as of August 16, 1995, by and among the              *
          Company and certain stockholders named therein
4.16      First Amendment to Management Subscription Agreement, dated March 1, 1996, by and             *
          among the Company and certain stockholders named therein
4.17      Second Amendment to Management Subscription Agreement, dated as of December 1,                *
          1996, by and among the Company and certain stockholders named therein
4.18      Form of Non-Recourse Promissory Note between the Company and certain of its                   *
          stockholders

                                       49
<PAGE>

4.19      Form of Stock Pledge Agreement between the Company and certain of its stockholders            *
4.20      Securities Purchase Agreement, dated as of August 16, 1995, by and among the                  *
          Company and certain stockholders named therein
4.21      First Amendment to Securities Purchase Agreement, dated as of July 1, 1996, by and            *
          among the Company and certain stockholders named therein
4.22      Form of Warrant of the Company                                                                *
10.1(a)   Credit Agreement, dated as of April 22, 1998, by and among the Company,                       *
          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
          Company, 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(c)   Amendment No. 2 to Credit Agreement, dated as of May 17, 1999, by and among the
          Company, 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(a)   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
10.6(b)   Guaranty, dated as of May 17, 1999,  by and between TMT-Pathway, L.L.C. and
          BankBoston, N.A., as Agent

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

10.7(b)   Pledge Agreement, dated as of May 17, 1999, by and between the Company 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 Company and                *
          BankBoston, N.A., as Agent

10.11(a)  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
10.11(b)  Security Agreement (Subsidiaries), dated as of May 17, 1999, by and between
          TMT-Pathway, L.L.C. and BankBoston, N.A., as Agent
10.12     Patent Collateral Assignment and Security Agreement, dated as of April 22, 1998,              *
          by and between the Company 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
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 Company 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
10.22     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

                                       50
<PAGE>

10.23(a)  Trademark Collateral Assignment and Security Agreement, dated as of April 22,                 *
          1998, by and between Crystaloid Technologies, Inc. and BankBoston, N.A., as Agent
10.23(b)  Trademark Collateral Security and Pledge Agreement, dated as of May 17, 1999, by
          and between TMT-Pathway, L.L.C. and BankBoston, N.A., as Agent
10.24     Form of Indemnification Agreement, dated as of August 16, 1995, between the                   *
          Company and its directors
10.25(a)  TJC Management Consulting Agreement, dated as of August 16, 1995, by and among,               *
          the Company, Flex-O-Lite, Inc. and TJC Management Corporation
10.25(b)  Amended and Restated TJC Management Consulting Agreement, dated as of October 21,
          1996, by and among the Company, Flex-O-Lite, Inc. and TJC Management Corporation
10.25(c)  Second Amended and Restated TJC Management  Consulting Agreement,
          dated as of April 22,  1998,  by and  between the Company and TJC
          Management Corporation

10.26     Employment and Non-Interference Agreement, dated as of August 16, 1995, by and                *
          between the Company and Robert H. Elkin
10.27     Amendment to Employment Agreement, dated as of April 22, 1998, by and between the             *
          Company and Robert H. Elkin

10.28     Employment and Non-Interference Agreement, dated as of August 16, 1995, by and                *
          between the Company and Christopher T. Paule
10.29     Amendment to Employment Agreement, dated as of April 22, 1998, by and between the             *
          Company 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 Company and Mark R. Hefty
10.32     Employment and Non-Interference Agreement, dated as of April 22, 1998, by and                 *
          between the Company, 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 Company, Crystaloid Technologies, Inc. and Edward M. Stiles
10.34     Employment and Non-Interference Agreement, dated as of April 22, 1998, by and                 *
          between the Company, Crystaloid Technologies, Inc. and Michael A. Fout
10.35     Employment and Non-Interference Agreement, dated as of April 22, 1998, by and                 *
          between the Company, 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                  *
          Company and Robert H. Elkin
10.38     Stock Appreciation Rights Agreement, dated as of April 22, 1998, between the                  *
          Company and Christopher T. Paule
10.39     Stock Appreciation Rights Agreement, dated as of April 22, 1998, between the                  *
          Company and Mark R. Hefty
10.40     Stock Appreciation Rights Agreement, dated as of April 22, 1998, between the                  *
          Company, Crystaloid Technologies, Inc. and Edward D. Surjan, Jr.
10.41     Stock Appreciation Rights Agreement, dated as of April 22, 1998, between the                  *
          Company, Crystaloid Technologies, Inc. and Edward M. Stiles
10.42     Stock Appreciation Rights Agreement, dated as of April 22, 1998, between the                  *
          Company, Crystaloid Technologies, Inc. and Michael A. Fout
10.43(a)  Intercompany Management Consulting Agreement, dated as of August 16, 1995, by and             *
          among the Company and its subsidiaries
10.43(b)  Amended and Restated Intercompany Management Consulting Agreement, dated as of
          October 21, 1996, by and among the Company and its subsidiaries
12        Statements regarding computation of ratios
21        List of Subsidiaries of the Company
25        Statement on Form T-1 of eligibility of the Trustee under the Trust Indenture Act             *
27        Financial Data Schedule

---------------
</TABLE>

++     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  supplementary  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 Company 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 Company  with the  Securities  and Exchange  Commission  on
     August 6, 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 Company with the Securities and Exchange  Commission on May
     21, 1999 (Commission File No. 333-53987) and all supplements thereto.

**** Incorporated  by reference to the exhibits  filed with the Annual Report on
     Form 10-K of the Company with the  Securities  and Exchange  Commission  on
     March 26, 1999 (Commission File No. 333-53987) and all supplements thereto.

                                       51
<PAGE>

                                                                 Exhibit 10.1(c)

                            AMENDMENT AGREEMENT NO. 2

                                 to that certain

                 REVOLVING CREDIT AND ACQUISITION LOAN AGREEMENT

This AMENDMENT  AGREEMENT NO. 2 (this  "Amendment") dated as of May 17, 1999, is
by and among (a) Jackson  Products,  Inc.  (the  "Borrower"),  (b) the  Domestic
Subsidiaries (as defined in the Credit Agreement,  as hereinafter defined),  (c)
BankBoston,  N.A. and the other lending institutions listed on Schedule 1 to the
Credit  Agreement (as  hereinafter  defined)  (collectively,  the "Banks"),  (d)
BankBoston,  N.A. as agent (the "Agent") for itself and the other Banks, and (e)
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:

          ss.1.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.

          ss.2.Amendments  to the  Credit  Agreement.  The Credit  Agreement  is
               hereby amended as follows:

               (a)  Amendment to ss.1.1 of the Credit Agreement.  Section 1.1 of
                    the Credit  Agreement  is hereby  amended by  inserting  the
                    following   new   definition   in  the  order   required  by
                    alphabetical order:

                    "Second Amendment Effective Date. May 17, 1999."

               (b)  Amendment to ss.4.4 of the Credit Agreement.  Section 4.4 of
                    the Credit Agreement is hereby amended by deleting the first
                    sentence  thereof  and  substituting  in  lieu  thereof  the
                    following sentence:

                    "The   Acquisition  Loan  shall  be  evidenced  by  separate
                    restated  promissory  notes of the Borrower in substantially
                    the form of Exhibit D hereto (each an  "Acquisition  Note"),
                    dated as of April 22, 1998 and  amended  and  restated as of
                    the Second  Amendment  Effective  Date, if  applicable,  and
                    completed with appropriate insertions."

               (c)  Schedule 1 to the Credit  Agreement  is hereby  deleted  and
                    replaced with the Schedule 1 attached hereto.

               (d)  Schedule 8.3 to the Credit  Agreement is hereby  deleted and
                    replaced with the Schedule 8.3 attached hereto.

               (e)  Schedule 8.6 to the Credit  Agreement is hereby  deleted and
                    replaced with the Schedule 8.6 attached hereto.

               (f)  Schedule 8.18 to the Credit  Agreement is hereby deleted and
                    replaced with the Schedule 8.18 attached hereto.

               (g)  Schedule 8.19 to the Credit  Agreement is hereby deleted and
                    replaced with Schedule 8.19 attached hereto.

               (h)  Schedule 9.13 to the Credit  Agreement is hereby deleted and
                    replaced with the Schedule 9.13 attached hereto.

                                       52
<PAGE>

          ss.3.Consent   to    Acquisition.    Subject   to   the    conditions,
               representations,  acknowledgments  and  affirmations set forth in
               this  Amendment,  the Banks hereby consent to the  acquisition of
               the  Morton   Traffic   Markings   Division   ("MTM")  of  Morton
               International,   Inc.   by   TMT-Pathway,   L.L.C.   ("TMT"),   a
               wholly-owned   subsidiary   of  the   Borrower   (the   "Proposed
               Acquisition"), pursuant to the Asset Purchase Agreement, dated as
               of April 20, 1999, by and between Morton International,  Inc. and
               TMT and in the form delivered to the Agent and the Co-Agent prior
               to  the  date  hereof  (the  "Purchase  Agreement"),   and  waive
               ss.10.5.1(c)(ix)  of the  Credit  Agreement  with  respect to the
               Proposed Acquisition,  provided that the aggregate purchase price
               of the Proposed  Acquisition  shall not exceed  $38,000,000.  The
               Banks' consent given herein is limited  strictly to its terms and
               shall apply only to the specific provisions described herein. The
               consent  contained herein shall not extend to or affect any other
               obligations of the Borrower or its Subsidiaries  contained in the
               Credit Agreement or any other Loan Documents and shall not impair
               or prejudice any rights consequent thereon.

          ss.4.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 to which it is a party.  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.

          ss.5.Representations  and Warranties.  The Borrower hereby  represents
               and warrants 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 and except to the extent that availability
                    of the remedy of specific  performance or injunctive  relief
                    is subject to the  discretion  of the court before which any
                    proceeding therefor may be brought.

               (c)  Other than  approvals or consents  which have been obtained,
                    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.

                                       53
<PAGE>

               (d)  The representations and warranties  contained in ss.8 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.

          ss.6.Effectiveness.  This Amendment shall be deemed to be effective as
               of May 14, 1999, subject to:

               (a)  the delivery to the Agent, the Co-Agent and the Banks by (or
                    on behalf of) the Borrower  and the  Domestic  Subsidiaries,
                    contemporaneously   with  the  execution   hereof,   of  the
                    following documents, each in form and substance satisfactory
                    to the Agent, the Co-Agent and the Banks:

                    (i)  this  Amendment  signed by the  Borrower,  the Domestic
                         Subsidiaries,  the Agent,  the Co-Agent and each of the
                         Banks;

                    (ii) Amended and  Restated  Acquisition  Notes  executed and
                         delivered   by  the   Borrower  in  favor  of  each  of
                         BankBoston, N.A., Mercantile Bank National Association,
                         Antares  Leveraged  Capital  Corp.,  Comerica Bank, Key
                         Corporate Capital, Inc. and Deutsche Financial Services
                         Corporation;

                    (iii)certificates of an appropriate  officer of the Borrower
                         and each of the Domestic Subsidiaries,  dated as of the
                         date hereof,  (i) certifying that the charter documents
                         and by-laws have not been amended  since April 22, 1998
                         (or attaching the same if amended),  (ii) and attaching
                         the  corporate   actions   authorizing  the  execution,
                         delivery,  and  performance  of  this  Amendment,   the
                         Amended and  Restated  Acquisition  Notes and the other
                         Loan Documents, as applicable, and (iii) certifying the
                         incumbency  and  signatures  of  the  officers  of  the
                         Borrower and each  Domestic  Subsidiary  authorized  to
                         sign this Amendment on behalf of such entity;

                    (iv) legal existence and good standing  certificates  issued
                         by the appropriate  public officials as to the Borrower
                         and  each   Domestic   Subsidiary,   and   such   other
                         certificates, documents, or instruments with respect to
                         this  Amendment  and the other  Loan  Documents  as the
                         Agent,   the  Co-Agent  or  the  Banks  may  reasonably
                         request;

                    (v)  a legal opinion from Mayer,  Brown & Platt, in form and
                         substance  satisfactory  to the Agent and the Co-Agent,
                         issued in connection  with this Amendment and the other
                         Loan Documents as the Agent, the Co-Agent and the Banks
                         may reasonably request;

                    (vi) a Guaranty, dated the date hereof, duly executed by TMT
                         in favor of the Agent, pursuant to which TMT guaranties
                         to the Banks,  the Agent and the  Co-Agent  the payment
                         and the performance of the Obligations;

                    (vii)a  Security  Agreement,  dated  the date  hereof,  duly
                         executed  by TMT in favor  of the  Agent,  pursuant  to
                         which  TMT  grants  to the  Banks,  the  Agent  and the
                         Co-Agent  a security  interest  in all of the assets of
                         TMT, whether now owned or hereafter acquired;

                    (viii) a  Pledge  Agreement,  dated  the date  hereof,  duly
                         executed  by  the  Borrower  in  favor  of  the  Agent,
                         pursuant  to which the  Borrower  pledges,  grants  and
                         assigns  to  the  Agent  all of its  right,  title  and
                         interest in and to its membership interests in TMT;

                                       54
<PAGE>

                    (ix) a Trademark  Assignment,  dated the date  hereof,  duly
                         executed  by TMT in favor  of the  Agent,  pursuant  to
                         which  TMT  grants  to the  Banks,  the  Agent  and the
                         Co-Agent  a  security  interest  in all of the  Pledged
                         Trademarks (as defined in the Trademark Assignment);

                    (x)  a Collateral Assignment of Acquisition Documents, dated
                         the date hereof,  duly  executed by TMT in favor of the
                         Agent,  pursuant  to which  TMT  pledges,  assigns  and
                         grants to the Agent a security  interest  in all of its
                         right, title and interest in the Purchase Agreement and
                         all agreements and documents required to be executed or
                         delivered in connection therewith;

                    (xi) a Perfection  Certificate,  dated the date hereof, duly
                         executed by TMT and all other documentation required to
                         grant the Agent a first priority  perfected lien in all
                         of  the  assets  acquired   pursuant  to  the  Proposed
                         Acquisition, each in form and substance satisfactory to
                         the Agent and the Banks;

                    (xii)evidence,  in form and  substance  satisfactory  to the
                         Agent and the Co-Agent, that all consents and approvals
                         necessary to complete the Proposed  Acquisition and the
                         transactions  contemplated  hereby,  including  but not
                         limited to all consents and approvals  contemplated  by
                         ss.7.5 of the Purchase Agreement, have been obtained;

                    (xiii) a Solvency  Certificate,  dated the date hereof, from
                         each of the Borrower and TMT;

                    (xiv)a Borrowing  Base Report,  dated the date hereof,  from
                         the Borrower;

                    (xv) an  executed  copy of the  Purchase  Agreement  and all
                         agreements  and  documents  required  to be executed or
                         delivered in connection therewith; and

                    (xvi)the  Borrower  shall  have  paid  a fee  pursuant  to a
                         letter  agreement  dated  as of  the  Second  Amendment
                         Effective Date.

               (b)  the completion of the following acts:

                    (i)  within  five  (5)  days  after  the  completion  of the
                         Proposed  Acquisition,  the delivery of certificates of
                         insurance  with the  Agent and the  Co-Agent  listed as
                         Additional  Insured and Loss Payee from an  independent
                         insurance  broker,   identifying  insurers,   types  of
                         insurance,  insurance  limits,  and policy  terms,  and
                         otherwise   describing   the   insurance   obtained  in
                         accordance  with  the  provisions  of the TMT  Security
                         Agreement and sound business  practices,  and certified
                         copies of all policies  evidencing  such  insurance (or
                         certificates therefor signed by the insurer or an agent
                         authorized to bind the insurer);

                    (ii) TMT shall deliver to the Agent and the Co-Agent  within
                         sixty  (60) days  after  the  closing  of the  Proposed
                         Acquisition,  a Mortgage  for any Real Estate  acquired
                         pursuant to the Purchase  Agreement  together  with the
                         legal opinion of Gallop,  Johnson & Neuman,  L.C. as to
                         such Mortgaged  Property and any local counsel opinions
                         as are  reasonably  requested  by  the  Agent  and  the
                         Co-Agent; and

                    (iii)TMT shall use its best  efforts to deliver to the Agent
                         and the  Co-Agent  within  sixty  (60)  days  after the
                         closing of the Proposed  Acquisition,  Landlord Waivers
                         for  2490  Ewald  Avenue  SE,  Salem,  Oregon  and 1044
                         Richmond Street, Los Angeles, California; and

                    (iv) TMT shall,  within  ten (10) days after the  closing of
                         the Proposed Acquisition,  take all such steps, in each
                         case, as shall be reasonably necessary or advisable, in
                         the  reasonable  opinion of the Agent,  to grant to the
                         Agent,  for the  benefit of the Banks and the Agent,  a
                         first priority perfected security interest in each item
                         of  Collateral  which is  subject to a  certificate  of
                         title registration.

                                       55
<PAGE>

          ss.7. 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).

                  [Remainder of Page Left Intentionally Blank]


                                       56
<PAGE>

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:

                                                     TMT-PATHWAY, L.L.C.

                                                     By:_______________________
                                                     Title:

                                                     OSD ENVIZION, INC.

                                                     By:_______________________
                                                     Title:

                                                     CRYSTALOID TECHNOLOGIES,
                                                     INC.

                                                     By:_______________________
                                                     Title:

                                                     AMERICAN ALLSAFE COMPANY

                                                     By:_______________________
                                                     Title:

                                                     SILENCIO/SAFETY DIRECT,
                                                     INC.

                                                     By:_______________________
                                                     Title:

                                                     KEDMAN COMPANY

                                                     By:_______________________
                                                     Title:


                                                     BANKBOSTON, N.A.,
                                                     individually and as Agent


                                                     By:_______________________
                                                     Title:

                                                     MERCANTILE BANK NATIONAL
                                                     ASSOCIATION, individually
                                                     and as Co-Agent

                                                     By:_______________________
                                                     Title:

                                                     FLEET  CAPITAL  CORPORATION
                                                     (f/k/a    Sanwa    Business
                                                     Credit Corp.)

                                                     By:_______________________
                                                     Title:



                                                     BHF-BANK AKTIENGESELLSCHAFT



                                                     By:_______________________
                                                     Title:



                                                     ANTARES LEVERAGED CAPITAL
                                                     CORP.



                                       57
<PAGE>

                                                     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 CORPORATION



                                                     By:_______________________
                                                     Title:



                                       58
<PAGE>
                                                                 Exhibit 10.6(b)
                                    GUARANTY

GUARANTY,  dated as of May 17, 1999, by TMT-Pathway,  l.l.c., a Delaware limited
liability company (the "Guarantor") in favor of (a) BANKBOSTON, N.A., a national
banking association,  as agent (hereinafter,  in such capacity, the "Agent") for
itself  and the  other  lending  institutions  (hereinafter,  collectively,  the
"Banks") which are or may become parties to the Revolving Credit and Acquisition
Loan Agreement dated as of April 22, 1998 (as amended and in effect from time to
time,  the  "Credit  Agreement"),  among  JACKSON  PRODUCTS,  INC.,  a  Delaware
corporation (the "Borrower"),  the Banks, the Agent and MERCANTILE BANK NATIONAL
ASSOCIATION as Co-Agent and (b) each of the Banks.

WHEREAS,  the  Borrower  and the  Guarantor  are  members  of a group of related
corporations,  the  success  of any one of  which  is  dependent  in part on the
success of the other members of such group;

WHEREAS,  the Borrower has requested  that the Agent and the Banks amend certain
provisions of the Credit Agreement;

WHEREAS,  upon the terms and subject to the  conditions  contained  in Amendment
Agreement  No. 2 dated as of May 17, 1999 (the  "Second  Amendment"),  among the
Borrower,  the Domestic  Subsidiaries (as defined in the Credit Agreement),  the
Banks,  the Agent and the  Co-Agent,  the Agent,  the Co-Agent and the Banks are
willing to amend such provisions of the Credit Agreement;

WHEREAS,  the  Guarantor  expects to  receive  substantial  direct and  indirect
benefits from further extensions of credit to the Borrower by the Banks pursuant
to the Credit Agreement (which benefits are hereby acknowledged);

WHEREAS,  it is a  condition  precedent  to the Banks  entering  into the Second
Amendment  that TMT  execute  and  deliver to the Agent,  for the benefit of the
Banks and the Agent, a guaranty substantially in the form hereof; and

WHEREAS,  the Guarantor  wishes to guaranty the  Borrower's  Obligations  to the
Banks and the Agent  under or in  respect of the Credit  Agreement  as  provided
herein;

NOW,  THEREFORE,  the  Guarantor  hereby  agrees with the Banks and the Agent as
follows:

     1.   Definitions.  The term  "Obligations"  and all other capitalized terms
          used herein  without  definition  shall have the  respective  meanings
          provided therefor in the Credit Agreement.

     2.   Guaranty of Payment and Performance.  The Guarantor hereby  guarantees
          to the  Banks and the Agent  the full and  punctual  payment  when due
          (whether at stated maturity,  by required prepayment,  by acceleration
          or otherwise),  as well as the performance,  of all of the Obligations
          including all such which would become due but for the operation of the
          automatic  stay pursuant to ss.362(a) of the Federal  Bankruptcy  Code
          and the operation of ss.ss.502(b) and 506(b) of the Federal Bankruptcy
          Code.  This  Guaranty is an  absolute,  unconditional  and  continuing
          guaranty  by the  Guarantor  of the  full  and  punctual  payment  and
          performance of all of the Obligations and not of their  collectibility
          only and is in no way conditioned  upon any requirement that the Agent
          or any Bank first attempt to collect any of the  Obligations  from the
          Borrower  or  resort  to any  collateral  security  or other  means of
          obtaining  payment.  Should the  Borrower  default  in the  payment or
          performance  of  any  of  the  Obligations,  the  obligations  of  the
          Guarantor hereunder with respect to such Obligations in default shall,
          upon demand by the Agent,  become  immediately  due and payable to the
          Agent,  for the benefit of the Banks and the Agent,  without demand or
          notice  of any  nature,  all of  which  are  expressly  waived  by the
          Guarantor.  Payments by the Guarantor hereunder may be required by the
          Agent on any  number  of  occasions.  All  payments  by the  Guarantor
          hereunder  shall be made to the Agent,  in the manner and at the place
          of payment specified therefor in the Credit Agreement, for the account
          of the  Banks  and the  Agent  and  shall be made  without  setoff  or
          counterclaim  and free  and  clear of and  without  deduction  for any
          taxes,   levies,   imposts,   duties,   charges,   fees,   deductions,
          withholdings,  compulsory  loans,  restrictions  or  conditions of any
          nature now or hereafter  imposed or levied by the United States or any
          jurisdiction or any political  subdivision  thereof or taxing or other
          authority  therein  unless the  Guarantor  is compelled by law to make
          such deduction or withholding.


                                       59
<PAGE>

     3.   Guarantor's  Agreement to Pay  Enforcement  Costs,  etc. The Guarantor
          further agrees,  as the principal obligor and not as a guarantor only,
          to pay to the Agent,  on  demand,  all costs and  expenses  (including
          court costs and reasonable legal expenses) incurred or expended by the
          Agent or any Bank in connection  with the  Obligations,  this Guaranty
          and  the  enforcement  thereof,  together  with  interest  on  amounts
          recoverable under this ss.3 from the time when such amounts become due
          until  payment,  whether  before  or  after  judgment,  at the rate of
          interest  for  overdue  principal  set forth in the Credit  Agreement,
          provided that if such interest exceeds the maximum amount permitted to
          be paid under  applicable  law, then such interest shall be reduced to
          such maximum permitted amount.

     4.   Waivers by Guarantor; Bank's Freedom to Act. The Guarantor agrees that
          the Obligations will be paid and performed strictly in accordance with
          their respective terms, regardless of any law, regulation or order now
          or hereafter in effect in any jurisdiction affecting any of such terms
          or the  rights  of the  Agent or any Bank with  respect  thereto.  The
          Guarantor waives promptness, diligences, presentment, demand, protest,
          notice of acceptance, notice of any Obligations incurred and all other
          notices of any kind,  all defenses which may be available by virtue of
          any  valuation,  stay,  moratorium  law or  other  similar  law now or
          hereafter in effect, any right to require the marshalling of assets of
          the  Borrower  or any  other  entity  or  other  person  primarily  or
          secondarily  liable with  respect to any of the  Obligations,  and all
          suretyship defenses generally.  Without limiting the generality of the
          foregoing,  the Guarantor  agrees to the  provisions of any instrument
          evidencing,  securing or  otherwise  executed in  connection  with any
          Obligation and agrees that the obligations of the Guarantor  hereunder
          shall not be released or discharged, in whole or in part, or otherwise
          affected  by (a) the  failure  of the Agent or any Bank to assert  any
          claim or demand or to enforce any right or remedy against the Borrower
          or any other entity or other person  primarily or  secondarily  liable
          with  respect  to  any  of  the   Obligations;   (b)  any  extensions,
          compromise, refinancing,  consolidation or renewals of any Obligation;
          (c) any  change in the time,  place or manner of payment of any of the
          Obligations  or any  rescissions,  waivers,  compromise,  refinancing,
          consolidation or other amendments or modifications of any of the terms
          or  provisions  of the Credit  Agreement,  the  Notes,  the other Loan
          Documents  or any other  agreement  evidencing,  securing or otherwise
          executed in connection with any of the Obligations,  (d) the addition,
          substitution  or release of any entity or other  person  primarily  or
          secondarily liable for any Obligation;  (e) the adequacy of any rights
          which the Agent or any Bank may have against any  collateral  security
          or other means of obtaining  repayment of any of the Obligations;  (f)
          the  impairment  of any  collateral  securing any of the  Obligations,
          including  without  limitation  the failure to perfect or preserve any
          rights  which  the  Agent or any Bank  might  have in such  collateral
          security or the substitution,  exchange,  surrender,  release, loss or
          destruction of any such collateral  security;  or (g) any other act or
          omission  which  might in any manner or to any extent vary the risk of
          the  Guarantor or  otherwise  operate as a release or discharge of the
          Guarantor,  all of which may be done without  notice to the Guarantor.
          To the fullest extent permitted by law, the Guarantor hereby expressly
          waives  any and all  rights or  defenses  arising by reason of (i) any
          "one action" or  "anti-deficiency"  law which would otherwise  prevent
          the Agent or any Bank from  bringing any action,  including  any claim
          for a deficiency,  or exercising any other right or remedy  (including
          any  right of  set-off),  against  the  Guarantor  before or after the
          Agent's or such Bank's  commencement  or completion of any foreclosure
          action, whether judicially, by exercise of power of sale or otherwise,
          or (ii) any other law which in any other way would  otherwise  require
          any election of remedies by the Agent or any Bank.

     5.   Unenforceability  of Obligations  Against Borrower.  If for any reason
          the Borrower has no legal existence or is under no legal obligation to
          discharge any of the  Obligations,  or if any of the Obligations  have
          become  irrecoverable  from the  Borrower by reason of the  Borrower's
          insolvency,  Bankruptcy or reorganization or by other operation of law
          or for any other reason,  this Guaranty shall  nevertheless be binding
          on the  Guarantor to the same extent as if the  Guarantor at all times
          had been the principal obligor on all such  Obligations.  In the event
          that acceleration of the time for payment of any of the Obligations is
          stayed  upon  the  insolvency,  Bankruptcy  or  reorganization  of the
          Borrower,  or for any other reason, all such amounts otherwise subject
          to acceleration  under the terms of the Credit  Agreement,  the Notes,
          the other Loan Documents or any other agreement  evidencing,  securing
          or  otherwise  executed in  connection  with any  Obligation  shall be
          immediately due and payable by the Guarantor.

                                       60
<PAGE>

     6.   Subrogation; Subordination.

          6.1. Waiver of Rights  Against  Borrower.  Until the final payment and
               performance  in full  of all of the  Obligations,  the  Guarantor
               shall not exercise  and the  Guarantor  hereby  waives any rights
               against  the  Borrower  arising  as a result  of  payment  by the
               Guarantor  hereunder,  by  way  of  subrogation,   reimbursement,
               restitution,    indemnification,    contribution   or   otherwise
               (including without  limitation,  all rights and defenses that are
               or may become  available  to the  Guarantor by reason of Sections
               2787 to 2855, inclusive,  of the California Civil Code), and will
               not prove any claim in competition  with the Agent or any Bank in
               respect of any payment hereunder in any Bankruptcy, insolvency or
               reorganization  case or proceedings of any nature;  the Guarantor
               will not claim any setoff, recoupment or counterclaim against the
               Borrower  in respect of any  liability  of the  Guarantor  to the
               Borrower;  and the Guarantor  waives any benefit of and any right
               to participate  in any  collateral  security which may be held by
               the Agent or any Bank.

          6.2. Additional Waiver of Rights.  The Guarantor waives all rights and
               defenses  that it may have  because the  Obligations  are now, or
               hereinafter will be, secured by real property.  This means, among
               other  things,  that (a) the Agent may collect from the Guarantor
               without  first  foreclosing  on any  real  or  personal  property
               collateral  pledged  by  the  Borrower,  and  (b)  if  the  Agent
               forecloses  on  any  real  property  collateral  pledged  by  the
               Borrower  to  secure  the  Obligations,  (i)  the  amount  of the
               outstanding  Obligations  may be  reduced  only by the  price for
               which such real property  collateral  is sold at the  foreclosure
               sale,  even if such real  property  collateral is worth more than
               the sale price, and (ii) the Agent may collect from the Guarantor
               even  if  the  Agent,   by   foreclosing  on  the  real  property
               collateral,  has  destroyed  any right the  Guarantor may have to
               collect  from  the  Borrower.   This  is  an  unconditional   and
               irrevocable  waiver of any rights and defenses the  Guarantor may
               have because the Obligations are secured by real property.  These
               rights and defenses  include,  but are not limited to, any rights
               or defenses  based upon Section 580a,  580b,  580d, or 726 of the
               California  Code of Civil  Procedure.  The  Guarantor  waives all
               rights and defenses arising out of an election of remedies by the
               Agent,  even  though  that  election  of  remedies,   such  as  a
               nonjudicial foreclosure with respect to security for a guaranteed
               obligation,  has destroyed the Guarantor's  rights of subrogation
               and  reimbursement  against  the  Borrower  by the  operation  of
               Section  580d  of the  California  Code  of  Civil  Procedure  or
               otherwise.

          6.3. Subordination. The payment of any amounts due with respect to any
               indebtedness  of  the  Borrower  for  money  borrowed  or  credit
               received  now or  hereafter  owed  to  the  Guarantor  is  hereby
               subordinated  to  the  prior  payment  in  full  of  all  of  the
               Obligations.  The Guarantor  agrees that, after the occurrence of
               any  default  in  the  payment  or  performance  of  any  of  the
               Obligations,  the Guarantor will not demand, sue for or otherwise
               attempt to collect any such  indebtedness  of the Borrower to the
               Guarantor  until all of the  Obligations  shall have been paid in
               full. If,  notwithstanding the foregoing sentence,  the Guarantor
               shall collect,  enforce or receive any amounts in respect of such
               indebtedness  while any Obligations are still  outstanding,  such
               amounts  shall  be  collected,   enforced  and  received  by  the
               Guarantor as trustee for the Banks and the Agent and be paid over
               to the Agent,  for the  benefit  of the Banks and the  Agent,  on
               account of the  Obligations  without  affecting in any manner the
               liability of the  Guarantor  under the other  provisions  of this
               Guaranty.

          6.4. Provisions  Supplemental.  The  provisions  of this ss.6 shall be
               supplemental  to and not in derogation of any rights and remedies
               of the  Banks  and the Agent  under  any  separate  subordination
               agreement  which  the Agent may at any time and from time to time
               enter into with the  Guarantor  for the  benefit of the Banks and
               the Agent.

                                       61
<PAGE>

     7.   Security;  Setoff.  The Guarantor  grants to each of the Agent and the
          Banks,  as security for the full and punctual  payment and performance
          of all of the Guarantor's  obligations hereunder, a continuing lien on
          and security interest in all securities or other property belonging to
          the Guarantor  now or hereafter  held by the Agent or such Bank and in
          all  deposits  (general or  special,  time or demand,  provisional  or
          final) and other sums  credited  by or due from the Agent or such Bank
          to the Guarantor or subject to withdrawal by the Guarantor. Regardless
          of the adequacy of any collateral security or other means of obtaining
          payment of any of the Obligations,  each of the Agent and the Banks is
          hereby authorized at any time and from time to time, without notice to
          the  Guarantor  (any  such  notice  being  expressly   waived  by  the
          Guarantor) and to the fullest extent  permitted by law, to set off and
          apply such  deposits  and other sums  against the  obligations  of the
          Guarantor  under this Guaranty,  whether or not the Agent or such Bank
          shall  have made any demand  under this  Guaranty  and  although  such
          obligations may be contingent or unmatured.

     8.   Further  Assurances.  The  Guarantor  agrees that it will from time to
          time, at the request of the Agent,  do all such things and execute all
          such  documents  as the Agent may  consider  necessary or desirable to
          give full  effect to this  Guaranty  and to perfect and  preserve  the
          rights and powers of the Banks and the Agent hereunder.  The Guarantor
          acknowledges  and confirms that the Guarantor  itself has  established
          its own adequate  means of obtaining from the Borrower on a continuing
          basis  all  information  desired  by  the  Guarantor   concerning  the
          financial  condition of the Borrower and that the Guarantor  will look
          to the  Borrower  and not to the  Agent or any  Bank in order  for the
          Guarantor  to keep  adequately  informed of changes in the  Borrower's
          financial condition.

     9.   Termination;  Reinstatement.  This Guaranty shall remain in full force
          and effect until the Agent is given written notice of the  Guarantor's
          intention  to   discontinue   this   Guaranty,   notwithstanding   any
          intermediate  or temporary  payment or  settlement of the whole or any
          part of the  Obligations.  No such notice  shall be  effective  unless
          received and acknowledged by an officer of the Agent at the address of
          the Agent for notices set forth in ss.21 of the Credit  Agreement.  No
          such  notice  shall  affect  any  rights  of the  Agent  or  any  Bank
          hereunder,  including  without  limitation  the  rights  set  forth in
          ss.ss.4  and 6, with  respect to any  Obligations  incurred or accrued
          prior to the  receipt of such  notice or any  Obligations  incurred or
          accrued  pursuant to any contract or commitment in existence  prior to
          such receipt,  including,  without limitation the Credit Agreement and
          the  Notes.  This  Guaranty  shall  continue  to  be  effective  or be
          reinstated,  notwithstanding  any  such  notice,  if at any  time  any
          payment  made or value  received  with  respect to any  Obligation  is
          rescinded or must  otherwise be returned by the Agent or any Bank upon
          the  insolvency,  Bankruptcy or  reorganization  of the  Borrower,  or
          otherwise,  all as  though  such  payment  had not been  made or value
          received.

     10.  Successors  and  Assigns.  This  Guaranty  shall be  binding  upon the
          Guarantor,  its successors and assigns, and shall inure to the benefit
          of  the  Agent  and  the  Banks  and  their   respective   successors,
          transferees  and  assigns.  Without  limiting  the  generality  of the
          foregoing  sentence,  each Bank may assign or  otherwise  transfer the
          Credit  Agreement,  the Notes,  the other Loan  Documents or any other
          agreement  or  note  held  by it  evidencing,  securing  or  otherwise
          executed in connection with the Obligations, or sell participations in
          any interest  therein,  to any other entity or other person,  and such
          other entity or other person shall  thereupon  become  vested,  to the
          extent set forth in the agreement evidencing such assignment, transfer
          or  participation,  with all the rights in respect  thereof granted to
          such  Bank  herein,  all  in  accordance  with  ss.20  of  the  Credit
          Agreement.  The  Guarantor  may  not  assign  any of  its  obligations
          hereunder.

     11.  Amendments  and Waivers.  No  amendment or waiver of any  provision of
          this Guaranty nor consent to any departure by the Guarantor  therefrom
          shall be  effective  unless the same shall be in writing and signed by
          the  Agent.  No  failure  on the  part  of the  Agent  or any  Bank to
          exercise,  and no delay  in  exercising,  any  right  hereunder  shall
          operate as a waiver thereof;  nor shall any single or partial exercise
          of any right hereunder  preclude any other or further exercise thereof
          or the exercise of any other right.

                                       62
<PAGE>

     12.  Notices.  All notices and other  communications  called for  hereunder
          shall be made in writing and, unless otherwise  specifically  provided
          herein, shall be deemed to have been duly made or given when delivered
          by hand or mailed first  class,  postage  prepaid,  or, in the case of
          telegraphic or telexed notice, when transmitted, answer back received,
          addressed  as  follows:  if to a  Guarantor,  at the address set forth
          beneath its signature hereto,  and if to the Agent, at the address for
          notices to the Agent set forth in ss.20 of the Credit Agreement, or at
          such address as either party may designate in writing to the other.

     13.  Governing Law;  Consent to  Jurisdiction.  THE GUARANTY IS INTENDED TO
          TAKE  EFFECT AS A SEALED  INSTRUMENT  AND SHALL BE  GOVERNED  BY,  AND
          CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  COMMONWEALTH  OF
          MASSACHUSETTS.  The Guarantor agrees that any suit for the enforcement
          of this Guaranty may be brought in the courts of The  Commonwealth  of
          Massachusetts or any federal court sitting therein and consents to the
          nonexclusive  jurisdiction  of such court and to service of process in
          any such suit being  made upon the  Guarantor  by mail at the  address
          specified by  reference  in ss.12.  The  Guarantor  hereby  waives any
          objection  that it may now or hereafter  have to the venue of any such
          suit  or  any  such  court  or  that  such  suit  was  brought  in  an
          inconvenient court.

     14.  Waiver of Jury Trial.  THE GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY
          TRIAL WITH  RESPECT TO ANY ACTION OR CLAIM  ARISING OUT OF ANY DISPUTE
          IN CONNECTION WITH THIS GUARANTY,  ANY RIGHTS OR OBLIGATIONS HEREUNDER
          OR THE  PERFORMANCE  OF ANY OF SUCH RIGHTS OR  OBLIGATIONS.  Except as
          prohibited by law, the Guarantor  hereby waives any right which it may
          have  to  claim  or  recover  in  any  litigation  referred  to in the
          preceding sentence any special,  exemplary,  punitive or consequential
          damages or any damages other than, or in addition to, actual  damages.
          The Guarantor (a) certifies that neither the Agent or any Bank nor any
          representative,  agent  or  attorney  of the  Agent  or any  Bank  has
          represented,  expressly or otherwise, that the Agent or any Bank would
          not, in the event of litigation, seek to enforce the foregoing waivers
          and (b)  acknowledges  that, in entering into the Credit Agreement and
          the other  Loan  Documents  to which the Agent or any Bank is a party,
          the Agent and the Banks are  relying  upon,  among other  things,  the
          waivers and certifications contained in this ss.14.

     15.  Miscellaneous.  This Guaranty  constitutes the entire agreement of the
          Guarantor with respect to the matters set forth herein. The rights and
          remedies  herein  provided  are  cumulative  and not  exclusive of any
          remedies  provided by law or any other  agreement,  and this  Guaranty
          shall be in addition to any other  guaranty of or collateral  security
          for any of the Obligations.  The invalidity or unenforceability of any
          one or more sections of this Guaranty shall not affect the validity or
          enforceability of its remaining provisions.  Captions are for the ease
          of  reference  only and shall not affect the  meaning of the  relevant
          provisions.  The meanings of all defined  terms used in this  Guaranty
          shall be equally  applicable  to the  singular and plural forms of the
          terms defined.

                                       63
<PAGE>

IN WITNESS  WHEREOF,  the  Guarantor has caused this Guaranty to be executed and
delivered as of the date first above written.

                                                     TMT-PATHWAY, L.L.C.



                                                     By: ______________________
                                                     Name:
                                                     Title:

                                                     Address:
                                                     ______________________
                                                     ______________________


                                       64
<PAGE>
                                                                 Exhibit 10.7(c)

                                PLEDGE AGREEMENT

PLEDGE AGREEMENT (this  "Agreement"),  dated as of May 17, 1999, between JACKSON
PRODUCTS,  INC. a Delaware  corporation  (the "Pledgor") in favor of BANKBOSTON,
N.A., a national banking association,  as agent (hereinafter,  in such capacity,
the  "Agent")  for  itself  and the  other  lending  institutions  (hereinafter,
collectively, the "Banks") which are or may become parties to a Revolving Credit
and  Acquisition  Loan  Agreement  dated as of April 22, 1998 (as amended and in
effect from time to time, the "Credit Agreement"),  among the Pledgor, the Banks
and the Agent.

WHEREAS,  the Pledgor is the legal and beneficial  owner of certain units of the
outstanding membership interests in TMT-Pathway, L.L.C. (the "Company");

WHEREAS, pursuant to the terms of the Credit Agreement, the Banks have, upon the
terms and subject to the conditions  contained therein,  agreed to make loans to
the Pledgor; and

WHEREAS,  it is a condition  precedent to the Banks making any further  loans to
the Pledgor under the Credit  Agreement that the Pledgor  execute and deliver to
the Agent,  for the benefit of the Banks and the Agent,  a pledge  agreement  in
substantially the form hereof;

NOW, THEREFORE,  in consideration of the premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1.   DEFINITIONS.

          All capitalized  terms used herein without  definitions shall have the
          respective  meanings provided  therefor in the Credit  Agreement.  All
          terms defined in the Uniform  Commercial  Code of the  Commonwealth of
          Massachusetts  and used herein shall have the same definitions  herein
          as specified  therein.  The  following  terms shall have the following
          meanings herein:

               Agent. See preamble.

               Banks. See preamble.

               Cash Collateral. Seess.4.2.

               Cash Collateral Account. Seess.4.2.

               Collateral.  The Pledged Interests, the Cash Collateral, the Cash
               Collateral  Account,  and all  other  property  now or  hereafter
               pledged or assigned to the Agent by the  Pledgor  hereunder,  and
               all income therefrom, increases therein and proceeds thereof.

               Company. See preamble.

               Credit Agreement. See preamble.

               Event of Default. Seess.5.

               Operating  Agreement.  The Limited Liability Company Agreement of
               TMT-Pathway, L.L.C. dated as of February 11, 1999 (the "Operating
               Agreement").

               Pledged Interests. Seess.2.1 hereof.

               Pledgor. See preamble.

               Time Deposits. Seess.4.2.

                                       65
<PAGE>

     2.   PLEDGE OF MEMBERSHIP INTERESTS.

          2.1. Grant of Security Interest. The Pledgor hereby pledges,  grants a
               security  interest in,  mortgages,  and collaterally  assigns and
               transfers  to the  Agent,  for the  benefit  of the Banks and the
               Agent,  as security for the payment and  performance in full when
               due of all of the Obligations,  all the right, title and interest
               of the Pledgor in and to the  Pledgor's  membership  interests in
               the Company,  wherever located and whether now owned or hereafter
               acquired  or  arising,  including,  without  limitation,  (i) all
               payments  or   distributions,   whether  in  cash,   property  or
               otherwise, at any time owing or payable to the Pledgor on account
               of its  interest as a member in the Company or in the nature of a
               management,  investment  banking  or other fee paid or payable by
               the Company to the Pledgor,  (ii) all of the Pledgor's rights and
               interests under the Operating Agreement, including all voting and
               management rights and all rights to grant or withhold consents or
               approvals,  (iii) all rights of access and  inspection to and use
               of  all  books  and  records,  including  computer  software  and
               computer  software  programs,  of the  Company,  (iv)  all  other
               rights, interests, property or claims to which the Pledgor may be
               entitled in its capacity as a member of the Company,  and (v) all
               proceeds  and  products  of  any  of the  foregoing  (all  of the
               foregoing rights,  title and interest  described in the foregoing
               clauses (i) through (v) being herein  referred to collectively as
               the "Pledged Interests").

          2.2. Pledge  of Cash  Collateral  Account.  The  Pledgor  also  hereby
               pledges  and  assigns to the Agent,  for the benefit of the Banks
               and the Agent,  and grants to the Agent,  for the  benefit of the
               Banks and the Agent, a security  interest in, the Cash Collateral
               Account and all of the Cash  Collateral,  subject to the terms of
               this Agreement.

          2.3. Waiver of Certain  Operating  Agreement  Provisions.  The Pledgor
               irrevocably  waives  any  and  all  provisions  of the  Operating
               Agreement  that (i)  prohibit,  restrict,  condition or otherwise
               affect the grant  hereunder  of any lien,  security  interest  or
               encumbrance  on any of the Collateral or any  enforcement  action
               which may be taken in respect of any such lien, security interest
               or encumbrance, or (ii) otherwise conflict with the terms of this
               Agreement.

     3.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR.

          3.1. Representations and Warranties. The Pledgor hereby represents and
               warrants to,  Agent,  for the benefit of the Banks and the Agent,
               as follows:

               (a)  The  Operating  Agreement  is in full force and effect;  the
                    Pledgor is a duly constituted member of the Company pursuant
                    to the Operating Agreement;  the persons and entities listed
                    as members in the  Operating  Agreement are the only members
                    of the  Company  as of the  date  hereof;  and  the  Pledged
                    Interests are validly issued,  non-assessable and fully paid
                    membership interests in the Company.

               (b)  The Pledgor has full right, power and authority to make this
                    Agreement  (including the  provisions  enabling the Agent or
                    its nominee,  upon the occurrence of an Event of Default, to
                    exercise  the voting or other  rights  provided for herein),
                    under the  Operating  Agreement  and under  applicable  law,
                    without the consent, approval or authorization of, or notice
                    to, any other person,  including any regulatory authority or
                    any person  having any interest in the  Company,  other than
                    any consents to this  Agreement  required to be given by the
                    other members under the Operating Agreement, which consents,
                    if any, have been duly received.

               (c)  The execution,  delivery,  and performance of this Agreement
                    and the transactions  contemplated hereby (i) have been duly
                    authorized by all necessary  membership or other proceedings
                    on  behalf  of the  Pledgor,  (ii) do not  conflict  with or
                    result in any breach or contravention of any applicable law,
                    regulation,  judicial  order or decree to which such Pledgor
                    is  subject,  (iii)  do not  conflict  with or  violate  any
                    provision of the operating agreement of the Pledgor or other
                    organizational  document  of the  Pledgor,  and  (iv) do not
                    violate,  conflict  with,  constitute  a default or event of
                    default  under,  or result in any  rights to  accelerate  or
                    modify  any  obligations  under any  agreement,  instrument,
                    lease,  mortgage or indenture to which such Pledgor is party
                    or subject, or to which any of its assets are subject.

                                       66
<PAGE>

               (d)  This  Agreement  has been duly executed and delivered by the
                    Pledgor and is the legal,  valid, and binding  obligation of
                    the Pledgor  enforceable  against it in accordance  with the
                    terms  hereof  except  as   enforceability   is  limited  by
                    bankruptcy, insolvency, reorganization, moratorium, or other
                    laws relating to or affecting  generally the  enforcement of
                    creditors' rights and except to the extent that availability
                    of the remedy of specific  performance or injunctive  relief
                    is subject to the  discretion  of the court before which any
                    case or proceeding therefor may be brought.

               (e)  The Pledgor is the sole, direct,  legal and beneficial owner
                    of all Pledged Interests, which Pledged Interests consist of
                    all membership interests,  and has good and marketable title
                    thereto,  free and  clear of any  lien,  security  interest,
                    mortgage  or other  encumbrance,  other  than the  liens and
                    security  interest  granted to the Agent, for the benefit of
                    the  Banks  and the  Agent,  hereunder;  and the  liens  and
                    security interests hereunder  constitute valid and perfected
                    first priority liens and security interests.

               (f)  The Pledgor's  principal place of business,  chief executive
                    office,  and the place  where  its  records  concerning  the
                    Collateral  are kept are located at those places  identified
                    in ss.20 of the Credit Agreement.

               (g)  The Pledgor has no obligation  outstanding as of the date of
                    this  Agreement  to make any  contribution,  capital call or
                    other  payment to the  Company  with  respect to the Pledged
                    Interests.

               (h)  The  copy of the  Operating  Agreement  attached  hereto  as
                    Exhibit A is a true, correct, and complete copy thereof, and
                    the Operating  Agreement has not been amended or modified in
                    any respect,  except for such amendments or modifications as
                    are attached to the copy thereof delivered to the Agent.

               (i)  The membership interest of the Pledgor in the Company is not
                    evidenced by any certificate issued by the Company.

          3.2. Covenants. The Pledgor covenants to the Agent as follows:

               (a)  The  Pledgor  will not permit or agree to any  amendment  or
                    modification of the Operating  Agreement as in effect on the
                    date hereof (or other governing document with respect to the
                    Pledged  Interests),  or waive any rights or benefits  under
                    the Operating Agreement (or such other governing  document),
                    without the prior  written  consent of the  Majority  Banks;
                    provided,  that, subject to the provisions of this Agreement
                    and each of the other Loan Documents, so long as 100% of the
                    issued and outstanding  membership or other equity interests
                    of the Company  shall be pledged in favor of the Agent,  for
                    the  benefit of the Banks and the  Agent,  and so long as no
                    Event of Default  shall have  occurred and be  continuing or
                    would result after giving  effect  thereto,  the Pledgor may
                    agree to amend the Operating  Agreement solely to the extent
                    necessary  to provide  for the  issuance  by the  Company of
                    additional membership interests.

               (b)  Without the prior written consent of the Majority Banks, and
                    except  as  expressly   permitted  pursuant  to  the  Credit
                    Agreement,  the Pledgor will not sell, dispose of or assign,
                    beneficially  or of  record,  or  grant,  create,  permit or
                    suffer  any  lien  or  encumbrance  on,  any of the  Pledged
                    Interests, or withdraw as a member of the Company.

               (c)  Without the prior written consent of the Majority Banks, the
                    Pledgor  shall  not  cast  any  vote or give  or  grant  any
                    consent,  waiver or  ratification  or take any other  action
                    which could reasonably be expected to (i) have the result of
                    materially and adversely affecting any of the Agent's or the
                    Banks' rights under this Agreement or under any of the other
                    Loan Documents,  (ii) violate the terms of this Agreement or
                    any of the  other  Loan  Documents,  which  violation  could
                    reasonably  be expected to have a Material  Adverse  Effect,
                    (iii) have the effect of impairing the validity,  perfection
                    or priority of the security  interest of the Agent,  for the
                    benefit  of  the  Banks  and  the   Agent,   in  any  manner
                    whatsoever, or (iv) cause an Event of Default.

                                       67
<PAGE>

               (d)  The Pledgor will comply with all laws, regulations, judicial
                    orders  or  decrees  applicable  to  the  Collateral  or any
                    portion  thereof,  and perform and observe its duties  under
                    the Operating  Agreement or other  governing  documents with
                    respect to the Pledged Interests.

               (e)  The Pledgor  will (i) keep and  maintain at its own cost and
                    expense at its principal place of business  satisfactory and
                    complete records of the Collateral including a record of all
                    payments  received  and all  other  dealings  of a  material
                    nature  with the  Collateral,  and (ii)  mark its  books and
                    records  pertaining  to the  Collateral  and its  books  and
                    records kept in its jurisdiction of organization to evidence
                    this Agreement and the liens and security  interests granted
                    hereby.

               (f)  The  Pledgor   will  pay   promptly   when  due  any  taxes,
                    assessments, and governmental charges or levies imposed upon
                    the  Collateral  or in  respect  of its  income  or  profits
                    therefrom,  as well as all claims of any kind, in the manner
                    set forth in the Credit Agreement.

               (g)  The Pledgor will advise the Agent  promptly,  in  reasonable
                    detail, and in the manner set forth in the Credit Agreement,
                    of (i) any lien, charge,  claim or other encumbrance made or
                    asserted  against any of the  Collateral;  (ii) any material
                    change  in the  composition  of the  Collateral;  (iii)  the
                    occurrence  of any  other  event or  condition  which to its
                    knowledge  would  have a  material  effect on the  validity,
                    perfection  or priority of the liens and security  interests
                    granted  hereunder;  and (iv) any  bankruptcy  or litigation
                    case or proceeding relating to any of the Collateral.

               (h)  The  Pledgor  will not (i)  change  its  principal  place of
                    business or chief  executive  office or the  location of the
                    records  concerning  the  Collateral  without  giving  prior
                    written  notice to the Agent and taking such  actions as may
                    be necessary or appropriate in the reasonable opinion of the
                    Agent duly to perfect and  continue  the  perfection  of the
                    Agent's first priority lien and security  interest,  for the
                    benefit  of the  Banks  and  the  Agent,  in the  Collateral
                    pursuant  to the laws of any  jurisdiction  into  which such
                    place of business,  chief executive office, or records is or
                    are  transferred,  and (ii)  change its name,  identity,  or
                    organizational  structure  in any matter that might make any
                    financing  statement filed  hereunder  misleading or invalid
                    unless the Pledgor shall have notified the Agent thereof and
                    taken all such actions as may be necessary or appropriate in
                    the  reasonable  opinion of the Agent to make any  financing
                    statement  filed in favor of the  Agent  not  misleading  or
                    invalid.

               (i)  The  Pledgor  shall  do or  cause  to  be  done  all  things
                    necessary  to  preserve,  renew  and keep in full  force and
                    effect its legal  existence,  the power and authority of the
                    Pledgor to own its property and carry on its  business,  the
                    qualification   of  the   Pledgor  to  do  business  in  its
                    jurisdiction of organization,  and the  qualification of the
                    Pledgor to do business in each other jurisdiction where such
                    qualification  is  necessary  except where the failure so to
                    qualify  would  not have a  material  adverse  effect on the
                    rights  and  interests  of the  Agent  or  any of the  Banks
                    hereunder.

     4.   RIGHTS OF AGENT.

          4.1. Agent Appointed Attorney-in-Fact.  The Pledgor hereby irrevocably
               constitutes  and appoints the Agent,  its successors and assigns,
               its  true  and  lawful  attorney-in-fact,  with  full  power  and
               authority and with full power of substitution,  at the expense of
               the Pledgor, either in the Agent's own name or in the name of the
               Pledgor,  at any time and from time to time,  in each case as the
               Agent  in its  sole  discretion  may  determine  (i) to  execute,
               deliver and file financing  statements with respect hereof and to
               execute, deliver and file amendments to and continuations of such
               financing   statements  as  the  Agent  may  deem   necessary  or
               appropriate,   and  (ii)  upon  the  occurrence  and  during  the
               continuance of an Event of Default:



                                       68
<PAGE>

               (A)  to take any action and  execute  any  instruments  that such
                    attorney-in-fact   may  deem   necessary   or  advisable  to
                    accomplish the purposes hereof;

               (B)  to ask,  demand,  collect,  receive,  receipt  for, sue for,
                    compound,  and  give  acquittance  for any  and all  sums or
                    properties   that  may  be  or  become  due,   payable,   or
                    distributable   in  respect  of  the   Collateral   or  that
                    constitute  a part  thereof,  with  full  power  to  settle,
                    adjust,  or compromise  any claim  thereunder or therefor as
                    fully as the Pledgor could do;

               (C)  to  endorse  or  sign  the  name  of  the   Pledgor  on  all
                    instruments  given in payment or in part payment thereof and
                    all  documents  of  satisfaction,   discharge,   or  receipt
                    required or requested in connection therewith; and

               (D)  to  file  or  take  any  action  or  institute  any  case or
                    proceeding  that the Agent may deem necessary or appropriate
                    to  collect  or  otherwise  realize  upon  any or all of the
                    Collateral,  or effect a  transfer  thereof,  or that may be
                    necessary or  appropriate to protect and preserve the right,
                    title,  and  interest  of the Agent,  for the benefit of the
                    Banks  and  the  Agent,  in and to the  Collateral  and  the
                    security intended to be afforded hereby.

          4.2. Cash  Collateral   Account.   Unless  applied  by  the  Agent  to
               Obligations then due and payable, all sums of money that are paid
               to the Agent pursuant to this  Agreement  shall be deposited into
               an interest  bearing account with the Agent or another  financial
               institution  selected  by the Agent in its sole  discretion  (the
               "Cash Collateral Account"). Some or all of the funds from time to
               time in the  Cash  Collateral  Account  may be  invested  in time
               deposits,  including  certificates of deposit issued by the Agent
               or another  financial  institution  selected  by the Agent in its
               sole  discretion  (such  certificates  of  deposit  or other time
               deposits being hereinafter  referred to,  collectively,  as "Time
               Deposits") that are satisfactory to the Agent,  provided,  in any
               such  case,  arrangements  satisfactory  to the Agent are made to
               perfect,  and to  ensure  the  first  priority  of,  its lien and
               security  interest in such Time Deposits.  Interest earned on the
               Cash  Collateral  Account  and  on the  Time  Deposits,  and  the
               principal of the Time  Deposits at maturity  that is not invested
               in new Time Deposits,  shall be deposited in the Cash  Collateral
               Account.  The Cash Collateral Account, all sums from time to time
               standing to the credit of the Cash  Collateral  Account,  any and
               all Time  Deposits,  any and all  instruments  or other  writings
               evidencing Time Deposits, and any and all proceeds of any thereof
               are hereinafter referred to as the "Cash Collateral."

          4.3. Distributions,  Conversion,  Voting,  etc. So long as no Event of
               Default shall have  occurred and be continuing  and to the extent
               permitted  under  the  Credit  Agreement,  the  Pledgor  shall be
               entitled to

               (i)  receive all cash and other  distributions paid in respect of
                    the Pledged  Interests  not made in  violation of the Credit
                    Agreement;

               (ii) exercise any  management  or voting  rights  relating to the
                    Pledged Interests; and

               (iii)give consents,  waivers,  approvals,  and  ratifications  in
                    respect of the Pledged Interests.

               All  such  rights  of the  Pledgor  to  receive  cash  and  other
               distributions  shall  cease  if an Event of  Default  shall  have
               occurred  and be  continuing,  and in each such case the  Pledgor
               shall  (A)  at  the  request  of  the  Agent,  issue  appropriate
               instructions that any such  distributions be paid directly to the
               Agent or to such account as the Agent may designate, and (B) hold
               in trust for the Agent and  immediately pay over to the Agent any
               such  distributions  received by the Pledgor.  All such rights of
               the Pledgor  referred to in clauses (ii) and (iii) shall,  at the
               Agent's sole option,  as evidenced by the Agent's  notifying  the
               Pledgor in writing of its exercise of such option,  cease in case
               an Event of Default shall have occurred and be continuing.

                                       69
<PAGE>

          4.4. No Assignment of Duties. This Agreement  constitutes a collateral
               assignment of the Pledged Interests and the other Collateral only
               and not an assignment of any duties or obligations of the Pledgor
               with respect thereto, and by its acceptance hereof and whether or
               not the Agent shall have  exercised any of its rights or remedies
               hereunder,  none of the Agent or the Banks  undertakes to perform
               or  discharge,  and  none of the  Agent  or the  Banks  shall  be
               responsible  or liable for the  performance  or discharge of, any
               such duties or responsibilities,  including,  without limitation,
               for capital calls. The Pledgor agrees that,  notwithstanding  the
               exercise by the Agent of any of its rights hereunder, the Pledgor
               shall remain liable for the full and prompt performance of all of
               the Pledgor's  obligations  and  liabilities  under the Operating
               Agreement.  Under no  circumstances  shall the Agent,  any of the
               Banks or any holder of any of the  Obligations  as such be deemed
               to be a member of the Company by virtue of the provisions of this
               Agreement  unless  expressly agreed to in writing by the Agent or
               such Bank or  holder.  Without  limiting  the  generality  of the
               foregoing,  none  of  the  Agent  or the  Banks  shall  have  any
               fiduciary duty to the Pledgor,  whether by virtue of the security
               interests  and  liens  hereunder,  or any  enforcement  action in
               respect of such security  interests  and liens,  unless and until
               the Agent or such Bank is admitted to the Company as a substitute
               member after  exercising  enforcement  rights  under  ss.9-504 or
               ss.9-505  of  the  Uniform  Commercial  Code  in  effect  in  the
               Commonwealth of Massachusetts, or otherwise.

     5.   EVENTS OF DEFAULT.

          Any one or more of the following  events shall constitute an "Event of
          Default" hereunder:

          (a)  The  Pledgor  shall fail to comply  with,  observe or perform any
               obligation, covenant or term of this Agreement;

          (c)  The Pledgor  shall fail to perform any of its  obligations  under
               the Operating Agreement; or

          (d)  The  occurrence  of any  "Event  of  Default"  under  the  Credit
               Agreement or any of the other Loan Documents.

     6.   REMEDIES.

          6.1. Remedies.  During the  continuance  of an Event of  Default,  the
               Agent  shall  have,  in  addition  to  the  rights,   powers  and
               authorizations to collect the sums assigned hereunder, all rights
               and remedies of a secured party under the Uniform Commercial Code
               and  under  other  applicable  law with  respect  to the  Pledged
               Interests and any other Collateral hereunder,  including, without
               limitation, the following rights and remedies:

               (a)  if the Agent so  elects  and  gives  written  notice of such
                    election  to  the  Pledgor,  the  Agent  may,  in  its  sole
                    discretion,  (i) exercise any  management  or voting  rights
                    relating to the Pledged  Interests  (whether or not the same
                    shall have been transferred into its name or the name of its
                    nominee or nominees) for any lawful  purpose,  including for
                    the amendment or modification of the Operating  Agreement or
                    other  governing  documents or the liquidation of the assets
                    of the Company, (ii) give all consents,  waivers, approvals,
                    and ratifications in respect of such Pledged Interests,  and
                    (iii)  otherwise act with respect  thereto as though it were
                    the outright owner thereof (the Pledgor  hereby  irrevocably
                    constituting   and   appointing  the  Agent  the  proxy  and
                    attorney-in-fact  of  the  Pledgor,   with  full  power  and
                    authority of substitution, to do so);

               (b)  the Agent  may,  in its sole  discretion,  demand,  sue for,
                    collect,  compromise,  or  settle  any  rights  or claims in
                    respect of any Collateral,  as attorney-in-fact  pursuant to
                    ss.4(a) or otherwise;

               (c)  the Agent may, in its sole discretion, sell, resell, assign,
                    deliver,   or  otherwise  dispose  of  any  or  all  of  the
                    Collateral,  for cash or credit or both and upon such terms,
                    in such  manner,  at such place or  places,  at such time or
                    times,  and to such  persons or entities as the Agent thinks
                    expedient, all without demand for performance by the Pledgor
                    or  any  notice  or  advertisement   whatsoever   except  as
                    expressly provided herein or as may otherwise be required by
                    applicable law;

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<PAGE>

               (d)  the Agent may, in its sole discretion, cause all or any part
                    of the Pledged  Interests held by it to be transferred  into
                    its name or the name of its nominee or nominees; and

               (e)  the Agent may, in its sole  discretion,  set off against the
                    Obligations or place an administrative hold or freeze on any
                    and all sums deposited with it or held by it,  including any
                    sums standing to the credit of the Cash  Collateral  Account
                    and  any  Time  Deposits  issued  by  the  Agent,  with  any
                    withdrawal  penalty  relating  to  Time  Deposits  being  an
                    expense of collection.

          6.2. Remedies  Not  Exclusive.  No single or partial  exercise  by the
               Agent of any right,  power or remedy hereunder shall preclude any
               other or further  exercise  thereof or the  exercise of any other
               right,  power or remedy.  Each  right,  power and  remedy  herein
               specifically  granted to the Agent or  otherwise  available to it
               shall be  cumulative,  and shall be in  addition  to every  other
               right,  power,  and remedy  herein  specifically  given or now or
               hereafter  existing at law, in equity,  or  otherwise.  Each such
               right, power and remedy,  whether  specifically granted herein or
               otherwise existing, may be exercised at any time and from time to
               time and as often and in such order as may be deemed expedient by
               the Agent in its sole discretion.

          6.3. Public Sale. In the event of any disposition of the Collateral as
               provided  in  ss.6.1(c),  the Agent  shall give to the Pledgor at
               least five (5) Business Days prior written notice of the time and
               place of any public sale of the  Collateral  or of the time after
               which any private sale or any other intended disposition is to be
               made. The Pledgor hereby acknowledges that five (5) Business Days
               prior  written  notice of such sale or sales shall be  reasonable
               notice.  The Agent may enforce its rights  hereunder  without any
               other  notice and  without  compliance  with any other  condition
               precedent now or hereafter imposed by law,  regulation,  judicial
               order or decree or otherwise  (all of which are hereby  expressly
               waived by the Pledgor,  to the fullest extent  permitted by law).
               The Agent may buy any part or all of the Collateral at any public
               sale  and if any  part  or  all  of the  Collateral  is of a type
               customarily sold in a recognized  market or is of a type which is
               the subject of widely-distributed  standard price quotations, the
               Agent may buy at private  sale and may make  payments  thereof by
               any  means.  The  Agent  may  apply  the cash  proceeds  actually
               received  from any sale or other  disposition  to the  reasonable
               expenses of retaking,  holding,  preparing for sale, selling, and
               the like, to reasonable  attorneys' fees,  travel,  and all other
               expenses  which may be  incurred  by the Agent in  attempting  to
               collect the  Obligations  or to enforce this  Agreement or in the
               prosecution or defense of any case or proceeding  related to this
               Agreement,  and then to the  Obligations  in accordance  with the
               requirements of the Credit  Agreement.  To the extent that any of
               the Obligations are to be paid or performed by a person or entity
               other than the Pledgor,  to the extent  permitted  by  applicable
               law,  the  Pledgor  waives and agrees not to assert any rights or
               privileges  which  it may  have  under  ss.9-112  of the  Uniform
               Commercial Code of the Commonwealth of Massachusetts.

          6.4. Private Sale. The Pledgor recognizes that the Agent may be unable
               to effect a public sale of the  Collateral  by reason of the lack
               of a ready market for the  Collateral,  of the limited  number of
               potential  buyers of the  Collateral  or of certain  prohibitions
               contained in the Securities Act of 1933,  state  securities laws,
               federal  banking laws,  and other  applicable  laws, and that the
               Agent may be  compelled  to resort to one or more  private  sales
               thereof to a restricted  group of purchasers.  The Pledgor agrees
               that any such private sales may be at prices and other terms less
               favorable  to the  seller  than if sold at public  sales and that
               such private  sales shall not solely by reason  thereof be deemed
               not to have been made in a commercially  reasonable  manner.  The
               Agent shall be under no obligation hereunder or otherwise (except
               as  provided  by  applicable  law) to  delay a sale of any of the
               Collateral  for  the  period  of time  necessary  to  permit  the
               registration  of  such  securities  for  public  sale  under  the
               Securities Act of 1933 and applicable  state securities laws. Any
               such sale of all or a portion of the  Collateral  may be for cash
               or on credit or for future  delivery  and may be  conducted  at a
               private sale where the Agent or any other person or entity may be
               the  purchaser  of all or part of the Pledged  Interests so sold.


                                       71
<PAGE>

               The  Pledgor  agrees  that to the extent  notice of sale shall be
               required by law, at least five (5) Business  Days prior notice to
               the  Pledgor of the time and place of any public sale or the time
               after  which  any  private  sale is to be made  shall  constitute
               reasonable  notification.  Subject  to the  foregoing,  the Agent
               agrees that any sale of the Pledged  Interests shall be made in a
               commercially   reasonable   manner.  The  Agent  shall  incur  no
               liability  as a result of the sale of any of the  Collateral,  or
               any part  thereof,  at any private sale which  complies  with the
               requirements  of this ss.6.4.  The Pledgor hereby waives,  to the
               extent  permitted by applicable law, any claims against the Agent
               arising  by reason of the fact that the price at which any of the
               Collateral,  or any  part  thereof,  may have  been  sold at such
               private  sale was less  than  the  price  that  might  have  been
               obtained at a public  sale,  even if the Agent  accepts the first
               offer deemed by the Agent in good faith deemed to be commercially
               reasonable under the  circumstances and does not offer any of the
               Collateral to more than one offeree.

          6.5. No Further Action.  Nothing  contained in this Agreement shall be
               construed to require the Agent to take any action with respect to
               the Pledged Interests, whether by way of foreclosure or otherwise
               and except as required by the  Operating  Agreement,  in order to
               permit  the Agent to become a  substitute  member of the  Company
               under the Operating Agreement.

     7.   ASSIGNMENT NOT AFFECTED BY OTHER ACTS; WAIVERS BY PLEDGOR.

          The Pledgor  acknowledges  and agrees that the security  interests and
          collateral  assignments herein provided for shall remain in full force
          and effect and shall not be impaired by any acceptance by the Agent of
          any  other  collateral   security  for  or  guaranty  of  any  of  the
          Obligations,  or by any  failure or neglect or omission on the part of
          the Agent to realize upon,  collect or protect any  Obligations or any
          Collateral.  The security interests and collateral  assignments herein
          provided  for shall not in any manner be  affected  or impaired by any
          renewal, extension, modification, amendment, waiver, or restatement of
          any of the Obligations or of any collateral  security therefor,  or of
          any guaranty thereof.  In order to sell,  dispose or otherwise realize
          upon  the  security  interests  and  assignments  herein  granted  and
          provided for, and exercise the rights granted the Agent  hereunder and
          under  applicable law, there shall be no obligation on the part of the
          Agent at any time to first resort for payment to any guarantors of the
          Obligations  or any part thereof or to resort to any other  collateral
          security,  property, liens or other rights or remedies whatsoever, and
          the Agent shall have the right to enforce the security  interests  and
          collateral  assignments herein provided for irrespective of whether or
          not other  proceedings are pending for realization upon or from any of
          the foregoing.  Except to the extent  required by applicable law or by
          the Credit  Agreement,  the  Pledgor  waives  promptness,  diligences,
          presentment,  demand,  protest,  notice of  acceptance,  notice of any
          Obligations  incurred and all other notices of any kind,  all defenses
          which may be available by virtue of any  valuation,  stay,  moratorium
          law or other  similar  law now or  hereafter  in effect,  any right to
          require the  marshalling  of assets of the Company or any other entity
          or other person primarily or secondarily liable with respect to any of
          the  Obligations,  and  all  suretyship  defenses  generally.  Without
          limiting the  generality of the  foregoing,  the Pledgor agrees to the
          provisions  of  any  instrument  evidencing,   securing  or  otherwise
          executed  in  connection  with  any  Obligation  and  agrees  that the
          obligations  of  the  Pledgor  hereunder  shall  not  be  released  or
          discharged,  in whole or in part,  or  otherwise  affected  by (i) the
          failure  of the Agent or any Bank to assert  any claim or demand or to
          enforce any right or remedy against the Company or any other entity or
          other person  primarily or  secondarily  liable with respect to any of
          the  Obligations;  (ii)  any  extensions,   compromise,   refinancing,
          consolidation  or renewals of any Obligation;  (iii) any change in the
          time,  place or manner of  payment  of any of the  Obligations  or any
          rescissions, waivers, compromise, refinancing,  consolidation or other
          amendments or  modifications  of any of the terms or provisions of the
          Credit  Agreement,  the other Loan  Documents  or any other  agreement
          evidencing,  securing or otherwise  executed in connection with any of
          the  Obligation,  (iv) the  addition,  substitution  or release of any
          entity  or  other  person  primarily  or  secondarily  liable  for any
          Obligation; (v) the adequacy of any rights which the Agent or any Bank
          may have against any  collateral  security or other means of obtaining
          repayment  of any of  the  Obligations;  (vi)  the  impairment  of any
          collateral   securing  any  of  the  Obligations,   including  without
          limitation  the  failure to perfect or preserve  any rights  which the
          Agent  or any  Bank  might  have in such  collateral  security  or the
          substitution, exchange, surrender, release, loss or destruction of any


                                       72
<PAGE>

          such  collateral  security;  or (vii) any other act or omission  which
          might in any manner or to any extent  vary the risk of the  Pledgor or
          otherwise  operate as a release or discharge  of the  Pledgor,  all of
          which may be done without notice to the Pledgor. To the fullest extent
          permitted  by law,  the Pledgor  hereby  expressly  waives any and all
          rights  or  defenses  arising  by reason  of (A) any "one  action"  or
          "anti-deficiency"  law which would otherwise  prevent the Agent or any
          Bank from bringing any action or exercising  any other right or remedy
          against  the  Pledgor  before  or after  the  Agent's  or such  Bank's
          commencement  or  completion  of  any  foreclosure   action,   whether
          judicially,  by  exercise  of power of sale or  otherwise,  or (B) any
          other law which in any other way would otherwise  require any election
          of remedies by the Agent or any Bank.

     8.   REGISTRATION AND FILING.

          The Pledgor (i) has caused the Company to duly  register  the security
          interests granted hereby on the books of the Company and has furnished
          the Agent with evidence thereof, (ii) has duly executed and caused any
          financing statements with respect to the Pledged Interests to be filed
          in such a manner and in such places as may be required by law in order
          to fully protect the rights of the Agent and the Banks hereunder,  and
          (iii) will cause any financing  statements with respect to the Pledged
          Interests at all times to be kept  recorded and filed at the Company's
          expense in such a manner and in such  places as may be required by law
          in order to fully  perfect the interests and protect the rights of the
          Agent and the Banks hereunder; provided, that the sole recourse of the
          Agent and the Banks as against  the  Pledgor as a result of any breach
          by  the  Pledgor  of the  provisions  of  this  ss.8  shall  be to the
          Collateral in accordance with the provisions of this Agreement.

     9.   MISCELLANEOUS.

          9.1. Additional Instruments and Assurances. The Pledgor hereby agrees,
               at its own expense,  to execute and  deliver,  from time to time,
               any and all further, or other,  instruments,  and to perform such
               acts, as the Agent may reasonably  request to effect the purposes
               of this  Agreement and to secure to the Agent the benefits of all
               rights and remedies conferred upon the Agent by the terms of this
               Agreement.

          9.2. Release.  If and only if all of the  Obligations  shall have been
               indefeasibly paid, performed, and discharged in full in cash, any
               commitments  to lend under the Credit  Agreement  shall have been
               canceled, the Agent shall, upon demand and at the sole expense of
               the Pledgor, release this Agreement and the lien hereof by proper
               instrument  or  instruments,  at the  request  and expense of the
               Pledgor.

          9.3. Agent's  Exoneration.  Under no circumstances  shall the Agent be
               deemed to assume any  responsibility  for or  obligation  or duty
               with respect to any part or all of the  Collateral  of any nature
               or kind or any matter or  proceeding  arising  out of or relating
               thereto,  other  than  (i) to  exercise  reasonable  care  in the
               physical  custody  of the  Collateral  and  (ii) if an  Event  of
               Default  shall  have  occurred  and  be  continuing,  to act in a
               commercially  reasonable  manner in  exercising  its  rights  and
               remedies  with  respect  to  the   Collateral.   Subject  to  the
               foregoing,  the Agent shall not be required to take any action of
               any kind to collect,  preserve  or protect  its or the  Pledgor's
               rights in the Collateral.

          9.4. No  Waiver,  etc.  Any term of this  Agreement  may be amended or
               modified with,  but only with, the written  consent of the Agent,
               with the consent of the Majority Banks, and the Pledgor. Any term
               of this  Agreement  may be waived by a  writing  executed  by the
               party to be charged with such waiver. No act,  failure,  or delay
               by the Agent shall constitute a waiver of its rights and remedies
               hereunder or otherwise.  No single or partial waiver by the Agent
               of any default,  right,  or remedy that it may have shall operate
               as a waiver of any other default, right, or remedy or of the same
               default, right, or remedy on a future occasion.

          9.5. Waiver By Pledgor. The Pledgor hereby waives presentment,  notice
               of  dishonor,  and  protest  of all  instruments  included  in or
               evidencing any of the Obligations or the Collateral,  and any and
               all other  notices and demands  whatsoever  (except as  expressly
               provided  herein  or in  the  Credit  Agreement  or  for  notices
               required in connection with judicial proceedings).

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<PAGE>

          9.6. Notice,  etc. All  notices,  requests,  and other  communications
               hereunder  shall be made and effective in the manner set forth in
               ss.20 of the Credit  Agreement,  in the case of the Agent, at the
               address set forth in such section of the Credit Agreement, and in
               the case of the  Pledgor,  at the address set forth in  ss.3.1(f)
               hereof,  or at such  other  address  as may be set  forth or in a
               notice from the notifying party to the other parties hereto.

          9.7. Overdue  Amounts.  Until paid, all amounts due and payable by the
               Pledgor  hereunder  shall be a debt secured by the Collateral and
               shall bear,  whether  before or after  judgment,  interest at the
               rate of interest  for overdue  principal  set forth in the Credit
               Agreement.

          9.8. Governing  Law;  Consent  to  Jurisdiction.   This  Agreement  is
               intended  to take  effect  as a sealed  instrument  and  shall be
               governed by, and  construed in accordance  with,  the laws of the
               Commonwealth  of  Massachusetts.  The  Pledgor  agrees  that  any
               proceeding  for the  enforcement of this Agreement may be brought
               in the courts of the Commonwealth of Massachusetts or any federal
               court   sitting   therein  and  consents  to  the   non-exclusive
               jurisdiction  of such court and to service of process in any such
               proceeding  being made upon the  Pledgor  by mail at the  address
               specified in ss.3.1(f).  The Pledgor  hereby waives any objection
               that  it may  now or  hereafter  have to the  venue  of any  such
               proceeding  or any such court or that such  proceeding is brought
               in an inconvenient court.

          9.9. Waiver of Jury Trial.  THE PLEDGOR  HEREBY  WAIVES ITS RIGHT TO A
               JURY TRIAL  WITH  RESPECT TO ANY  PROCEEDING  ARISING  OUT OF ANY
               DISPUTE  IN  CONNECTION  WITH  THIS  AGREEMENT,   ANY  RIGHTS  OR
               OBLIGATIONS  HEREUNDER,  OR THE PERFORMANCE OF ANY SUCH RIGHTS OR
               OBLIGATIONS.

          9.10.Limitation of Liability.  Except as prohibited by applicable law,
               the  Pledgor  waives  any  right  which  it may  have to claim or
               recover in any proceeding  referred to in the preceding  sentence
               any special, exemplary,  punitive or consequential damages or any
               damages  other  than,  or in addition  to,  actual  damages.  The
               Pledgor (i) certifies  that neither the Agent or any Bank nor any
               representative,  agent,  or attorney of the Agent or any Bank has
               represented,  expressly or otherwise, that the Agent or such Bank
               would not,  in the event of any  proceeding,  seek to enforce the
               foregoing  waivers and (ii)  acknowledges  that, in entering into
               the Credit Agreement and the other Loan Documents to which any of
               the Agent  and the Banks is a party,  the Agent and the Banks are
               relying upon, among other things,  the waivers and certifications
               contained in this ss.9.10.

          9.11.Severability  and  Enforceability.   All  provisions  hereof  are
               severable and the invalidity or  unenforceability  of any of such
               provisions  shall in no manner  affect or impair the validity and
               enforceability of the remaining provisions hereof.

          9.12.Successors and Assigns.  This Agreement shall be binding upon the
               Pledgor  and  upon  the  legal  representatives,  successors  and
               assigns  of the  Pledgor  and shall  inure to the  benefit of the
               Agent, the Banks and their respective successors and assigns.

          9.13.Counterparts.  This  Agreement  may be  executed in any number of
               counterparts, each constituting an original, but all together one
               and the same instrument.

          9.14.Entire  Agreement.  This Agreement and the Loan Documents and any
               other  document  executed in  connection  herewith  or  therewith
               express the entire  understanding  of the parties with respect to
               the transactions  contemplated hereby. Neither this Agreement nor
               any terms hereof may be changed, waived or terminated except by a
               writing signed by each party hereto.

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<PAGE>

          IN WITNESS  WHEREOF,  the  Pledgor  and the Agent have  executed  this
          Agreement as of the date first above written,  as an instrument  under
          seal.

                                                     PLEDGOR:  JACKSON PRODUCTS,
                                                                 INC.


                                                     By:_______________________
                                                     Name:
                                                     Title:



                                                     AGENT:  BANKBOSTON, N.A.,
                                                     as Agent



                                                     By:_______________________
                                                     Name:
                                                     Title:

The  undersigned  hereby consent to the  transactions  contemplated by the above
Agreement.

                                                     TMT-PATHWAY L.L.C.

                                                     By: Jackson Products, Inc.,
                                                     its sole managing member



                                                     By:_______________________
                                                     Name:
                                                     Title:






                                       75
<PAGE>


                                    EXHIBIT A

                               Operating Agreement


                                       76
<PAGE>
                                                                Exhibit 10.11(B)
                               SECURITY AGREEMENT

SECURITY  AGREEMENT,  dated as of May 17, 1999,  among  TMT-Pathway,  L.L.C.,  a
Delaware  limited  liability  company ("TMT") and  BANKBOSTON,  N.A., a national
banking association,  as agent (hereinafter,  in such capacity, the "Agent") for
itself  and the  other  lending  institutions  (hereinafter,  collectively,  the
"Banks") which are or may become parties to the Credit Agreement (as hereinafter
defined).

WHEREAS,  Jackson Products,  Inc., a Delaware corporation (the "Borrower"),  has
entered into a Revolving  Credit and  Acquisition  Loan  Agreement,  dated as of
April  22,  1998 (as  amended  and in  effect  from  time to time,  the  "Credit
Agreement"), with the Banks, the Agent and Mercantile Bank National Association,
as Co-Agent,  pursuant to which the Banks,  subject to the terms and  conditions
contained therein, provide certain financial accommodations to the Borrower;

WHEREAS,  the Borrower has requested  that the Agent and the Banks amend certain
provisions of the Credit Agreement;

WHEREAS,  upon the terms and subject to the  conditions  contained  in Amendment
Agreement  No. 2 dated as of May 17, 1999 (the  "Second  Amendment"),  among the
Borrower,  the Domestic  Subsidiaries (as defined in the Credit Agreement),  the
Banks,  the Agent and the  Co-Agent,  the Agent,  the Co-Agent and the Banks are
willing to amend such provisions of the Credit Agreement;

WHEREAS,  TMT has  executed and  delivered to the Agent,  for the benefit of the
Banks and the Agent,  a Guaranty  dated as of the date hereof (as amended and in
effect from time to time, the  "Guaranty"),  pursuant to which TMT guaranteed to
the  Agent  and  the  Banks  the  payment  and  performance  of  the  Borrower's
Obligations  to the  Banks  and the  Agent  under or in  respect  of the  Credit
Agreement;

WHEREAS,  it is a  condition  precedent  to the Banks  entering  into the Second
Amendment  that TMT  execute  and  deliver to the Agent,  for the benefit of the
Banks and the Agent, a security agreement in substantially the form hereof; and

WHEREAS,  TMT wishes to grant  security  interests in favor of the Agent for the
benefit of the Banks and the Agent, as herein provided;

NOW, THEREFORE,  in consideration of the promises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1.   Definitions.  All  capitalized  terms used herein without  definitions
          shall have the  respective  meanings  provided  therefor in the Credit
          Agreement.  All terms  defined in the Uniform  Commercial  Code of The
          Commonwealth  of  Massachusetts  and used  herein  shall have the same
          definitions herein as specified therein;  provided,  however, that the
          term  "instrument"  shall be such term is  defined in Article 9 of the
          Uniform Commercial Code of such jurisdiction rather than Article 3.

     2.   Grant of Security Interest.

          2.1. Collateral  Granted.  TMT  hereby  grants to the  Agent,  for the
               benefit of the Banks and the Agent,  to secure  the  payment  and
               performance in full of all of the  Obligations (as defined in the
               Credit  Agreement),  including all of TMT's Obligations under the
               Guaranty (collectively,  the "Obligations"),  a security interest
               in and so pledges  and  assigns to the Agent,  for the benefit of
               the Banks and the Agent,  the  following  properties,  assets and
               rights of TMT, wherever  located,  whether now owned or hereafter
               acquired or arising,  and all proceeds and products  thereof (all
               of the same being hereinafter called the "Collateral"):

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               All  personal  and  fixture  property  of every  kind and  nature
               including without limitation all furniture,  fixtures, equipment,
               raw materials, inventory, other goods, accounts, contract rights,
               rights to the payment of money,  insurance  refund claims and all
               other insurance claims and proceeds,  tort claims, chattel paper,
               documents, instruments, securities and other investment property,
               deposit accounts, rights to proceeds of letters of credit and all
               general intangibles including, without limitation, all tax refund
               claims, license fees, patents,  patent applications,  trademarks,
               trademark  applications,   trade  names,  copyrights,   copyright
               applications,  rights to sue and recover for past infringement of
               patents,  trademarks and copyrights,  computer programs, computer
               software,  engineering  drawings,  service marks, customer lists,
               goodwill,  and all licenses,  permits,  agreements of any kind or
               nature pursuant to which TMT possesses,  uses or has authority to
               possess or use  property  (whether  tangible  or  intangible)  of
               others or others possess, use or have authority to possess or use
               property  (whether  tangible  or  intangible)  of  TMT,  and  all
               recorded data of any kind or nature,  regardless of the medium of
               recording including,  without limitation, all software, writings,
               plans, specifications and schematics.

          2.2. Delivery of Instruments, etc.

               (a)  Pursuant to the terms hereof, TMT has endorsed, assigned and
                    delivered  to the Agent  all  negotiable  or  non-negotiable
                    instruments,   certificated  securities  and  chattel  paper
                    pledged  by  it  hereunder,  together  with  instruments  of
                    transfer or  assignment  duly executed in blank as the Agent
                    may have specified.  In the event that TMT shall,  after the
                    date of this  Agreement,  acquire  any other  negotiable  or
                    non-negotiable   instruments,   certificated  securities  or
                    chattel  paper to be  pledged  by it  hereunder,  TMT  shall
                    forthwith endorse, assign and deliver the same to the Agent,
                    accompanied  by such  instruments  of transfer or assignment
                    duly  executed  in blank as the  Agent may from time to time
                    specify.

               (b)  To the extent that any securities now or hereafter  acquired
                    by TMT  are  uncertificated  and  are  issued  to TMT or its
                    nominee directly by the issuer thereof,  TMT shall cause the
                    issuer  to note on its books the  security  interest  of the
                    Agent  in  such  securities  and  shall  cause  the  issuer,
                    pursuant to an agreement in form and substance  satisfactory
                    to the Agent, to agree to comply with  instructions from the
                    Agent as to such securities,  without further consent of TMT
                    or such nominee. To the extent that any securities,  whether
                    certificated or  uncertificated,  or other financial  assets
                    now or  hereafter  acquired  by TMT  are  held by TMT or its
                    nominee  through a  securities  intermediary,  TMT shall use
                    reasonable efforts to (i) cause such securities intermediary
                    to note on its books the  security  interest of the Agent in
                    such  securities  or other  financial  assets and to confirm
                    such notation promptly to the Agent and (ii), at the request
                    of the Agent, cause such securities  intermediary,  pursuant
                    to an agreement in form and  substance  satisfactory  to the
                    Agent, to agree to comply with  entitlement  orders or other
                    instructions  from the Agent as to such  securities or other
                    financial  assets,  without  further  consent of TMT or such
                    nominee.  The Agent agrees with TMT that the Agent shall not
                    give any such entitlement orders or instructions to any such
                    issuer or securities intermediary unless an Event of Default
                    has occurred and is continuing  and the Agent has elected to
                    exercise its rights and remedies as contemplated by ss.14.

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               (c)  To the extent  that TMT is a  beneficiary  under any written
                    letter of credit  now or  hereafter  issued in favor of TMT,
                    TMT shall  deliver  such letter of credit to the Agent.  The
                    Agent shall from time to time, at the request and expense of
                    TMT, make such  arrangements  with TMT as are in the Agent's
                    reasonable  judgment  necessary and  appropriate so that TMT
                    may make any  drawing  to which TMT is  entitled  under such
                    letter  of  credit,   without   impairment  of  the  Agent's
                    perfected  security  interest in TMT's rights to proceeds of
                    such  letter  of credit or in the  actual  proceeds  of such
                    drawing.  At the Agent's request,  TMT shall, for any letter
                    of credit,  whether or not written,  now or hereafter issued
                    in favor of TMT as  beneficiary,  execute and deliver to the
                    issuer  and  any  confirmer  of such  letter  of  credit  an
                    assignment  of  proceeds  form,  in favor of the  Agent  and
                    satisfactory  to the Agent  and such  issuer or (as the case
                    may  be)  such  confirmer,  requiring  the  proceeds  of any
                    drawing  under such letter of credit to be paid  directly to
                    the  Agent  for   application  as  provided  in  the  Credit
                    Agreement.

          2.3. Excluded Collateral.  Notwithstanding the foregoing provisions of
               this ss.2,  such grant of security  interest shall not extend to,
               and the term  "Collateral"  shall not include,  any chattel paper
               and general intangibles which are now or hereafter held by TMT as
               licensee,  lessee  or  otherwise,  to the  extent  that  (a) such
               chattel  paper and  general  intangibles  are not  assignable  or
               capable of being encumbered as a matter of law or under the terms
               of the license,  lease or other agreement applicable thereto (but
               solely  to  the  extent  that  any  such  restriction   shall  be
               enforceable  under  applicable  law),  without the consent of the
               licensor or lessor thereof or other  applicable party thereto and
               (b) such consent has not been obtained;  provided,  however, that
               the foregoing grant of security interest shall extend to, and the
               term "Collateral" shall include, (i) any and all proceeds of such
               chattel  paper and  general  intangibles  to the extent  that the
               assignment or  encumbering  of such proceeds is not so restricted
               and (ii) upon any such licensor, lessor or other applicable party
               consent with respect to any such otherwise excluded chattel paper
               or general  intangibles  being obtained,  thereafter such chattel
               paper  or  general  intangibles  as well as any and all  proceeds
               thereof that might have  theretofore have been excluded from such
               grant of a security interest and the term "Collateral".

          2.4. Trademark   Assignments.   Concurrently   herewith  TMT  is  also
               executing  and  delivering  to the Agent,  for the benefit of the
               Banks and the Agent, the Trademark  Assignment  pursuant to which
               TMT is assigning  to the Agent,  for the benefit of the Banks and
               the Agent,  certain  Collateral  consisting  trademarks,  service
               marks and  trademark  and service mark rights,  together with the
               goodwill  appurtenant  thereto.  The  provisions of the Trademark
               Assignment are  supplemental to the provisions of this Agreement,
               and nothing contained in the Trademark  Assignment shall derogate
               from any of the  rights  or  remedies  of the Agent or any of the
               Banks  hereunder.  Nor shall anything  contained in the Trademark
               Assignment  be deemed to prevent or extend the time of attachment
               or perfection of any security interest in such Collateral created
               hereby.

     3.   Title to Collateral, etc. TMT is the owner of the Collateral free from
          any adverse lien,  security interest or other encumbrance,  except for
          the  security  interest  created  by this  Agreement  and other  liens
          permitted by the Credit  Agreement.  TMT has received a certificate of
          title, or the equivalent thereof, for each piece of Collateral that is
          required to be titled under any state or federal  statute.  Within ten
          (10) days of the Second  Amendment  Effective  Date (as defined in the
          Second  Amendment)  TMT shall,  for each piece of  Collateral  that is
          covered by a certificate of title under any state or federal  statute,
          request  from  (and  in  accordance  with  the  requirements  of)  the
          appropriate state or federal agency a new certificate of title, or the
          equivalent thereof, that identifies the Agent's security interest, for
          the benefit of the Banks and the Agent, in the Collateral. None of the
          Collateral  constitutes,  or is the proceeds  of,  "farm  products" as
          defined  in  ss.9-109(3)  of  the  Uniform   Commercial  Code  of  The
          Commonwealth of Massachusetts.  None of the account debtors in respect
          of any accounts,  chattel paper or general intangibles and none of the
          obligors in respect of any instruments included in the Collateral is a
          governmental  authority  subject to the Federal  Assignment  of Claims
          Act.

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     4.   Continuous  Perfection.  TMT's place of business or, if more than one,
          chief  executive  office is  indicated on the  Perfection  Certificate
          delivered to the Agent by TMT herewith (collectively,  the "Perfection
          Certificate").  TMT will not change the same, or the name, identity or
          corporate  structure of TMT in any manner,  without providing at least
          thirty (30) days prior written notice to the Agent. The Collateral, to
          the extent not delivered to the Agent pursuant to ss.2.2, will be kept
          at those locations  listed on the Perfection  Certificate and TMT will
          not remove the Collateral  from such locations,  without  providing at
          least thirty (30) days prior written notice to the Agent.

     5.   No Liens.  Except for the security  interest  herein granted and liens
          permitted  by the  Credit  Agreement,  TMT  shall be the  owner of its
          respective  Collateral free from any lien,  security interest or other
          encumbrance,  and TMT shall  defend  the same  against  all claims and
          demands of all persons at any time  claiming the same or any interests
          therein  adverse  to the  Agent or any of the  Banks.  TMT  shall  not
          pledge,  mortgage or create, or suffer to exist a security interest in
          the  Collateral  in favor of any person other than the Agent,  for the
          benefit of the Banks and the Agent,  except for liens permitted by the
          Credit Agreement.

     6.   No Transfers. TMT will not sell or offer to sell or otherwise transfer
          the  Collateral  or  any  interest  therein  except  as  permitted  by
          ss.10.5.2 of the Credit Agreement.

     7.   Insurance.

          7.1. Maintenance  of Insurance.  TMT will  maintain  with  financially
               sound  and  reputable  insurers  insurance  with  respect  to its
               properties and business against such casualties and contingencies
               as shall be in  accordance  with general  practices of businesses
               engaged in similar  activities in similar  geographic areas. Such
               insurance  shall be in such minimum  amounts that TMT will not be
               deemed a co-insurer under applicable insurance laws,  regulations
               and policies and otherwise shall be in such amounts, contain such
               terms,  be in  such  forms  and be  for  such  periods  as may be
               reasonably  satisfactory  to the  Agent.  In  addition,  all such
               insurance  shall be payable  to the Agent as loss  payee  under a
               "standard" or "New York" loss payee clause for the benefit of the
               Banks and the Agent. Without limiting the foregoing, TMT will (a)
               keep  all of its  physical  property  insured  with  casualty  or
               physical  hazard  insurance on an "all risks"  basis,  with broad
               form  flood  and  earthquake   coverages  and   electronic   data
               processing coverage, with a full replacement cost endorsement and
               an "agreed  amount" clause in an amount equal to 100% of the full
               replacement cost of such property, (b) maintain all such workers'
               compensation  or similar  insurance as may be required by law and
               (c)  maintain,  in amounts  and with  deductibles  equal to those
               generally  maintained by businesses engaged in similar activities
               in similar geographic areas,  general public liability  insurance
               against  claims  of  bodily  injury,  death  or  property  damage
               occurring,  on,  in or  about  the  properties  of TMT;  business
               interruption insurance; and product liability insurance.

          7.2. Insurance  Proceeds.  The proceeds of any  casualty  insurance in
               respect  of any  casualty  loss of any of the  Collateral  shall,
               subject to the  rights,  if any,  of other  parties  with a prior
               interest in the property covered thereby, (a) so long as no Event
               of Default has  occurred and is  continuing,  be disbursed to TMT
               for direct application by TMT in accordance with ss.10.5.2 of the
               Credit Agreement and (b) in all other  circumstances,  be held by
               the Agent as cash collateral for the Obligations.  The Agent may,
               at its sole option, disburse from time to time all or any part of
               such  proceeds  so held as cash  collateral,  upon such terms and
               conditions  as the Agent may  reasonably  prescribe,  for  direct
               application  by TMT solely to the repair or  replacement of TMT's
               property so damaged or  destroyed,  or the Agent may apply all or
               any part of such  proceeds  to the  Obligations  with  the  Total
               Commitment (if not then  terminated)  being reduced by the amount
               so applied to the Obligations.

          7.3. Notice of  Cancellation,  etc. All  policies of  insurance  shall
               provide for at least thirty (30) days prior written  cancellation
               notice to the  Agent.  In the event of  failure by TMT to provide
               and maintain insurance as herein provided,  the Agent may, at its
               option,  provide such  insurance and charge the amount thereof to
               TMT. TMT shall furnish the Agent with  certificates  of insurance
               and policies  evidencing  compliance with the foregoing insurance
               provision.

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     8.   Maintenance  of  Collateral;  Compliance  with Law.  TMT will keep the
          Collateral  in good  order  and  repair  and  will not use the same in
          violation of law or any policy of insurance thereon. The Agent, or its
          designee,  may inspect the Collateral at any reasonable time, wherever
          located.  TMT  will pay  promptly  when  due all  taxes,  assessments,
          governmental  charges  and levies upon the  Collateral  or incurred in
          connection with the use or operation of such Collateral or incurred in
          connection  with this  Agreement,  (other than such items contested in
          good faith in accordance with ss.9.8 of the Credit Agreement). TMT has
          at all times operated,  and TMT will continue to operate, its business
          in compliance with all applicable provisions of the federal Fair Labor
          Standards  Act,  as amended,  and with all  applicable  provisions  of
          federal,  state and local  statutes  and  ordinances  dealing with the
          control,  shipment,  storage or disposal  of  hazardous  materials  or
          substances.

     9.   Collateral Protection Expenses; Preservation of Collateral.

          9.1. Expenses  Incurred  by Agent.  In its  discretion,  the Agent may
               discharge  taxes and  other  encumbrances  at any time  levied or
               placed  on  any  of the  Collateral  (other  than  any  taxes  or
               encumbrances  contested  in good  faith  and in  accordance  with
               ss.9.8 of the Credit Agreement),  make repairs thereto (after any
               Event of  Default  has  occurred  and is  continuing  or if TMT's
               failure to make such  repairs will result in an Event of Default)
               and pay any  necessary  filing fees.  TMT agrees to reimburse the
               Agent on demand for any and all  expenditures  so made. The Agent
               shall have no  obligation  to TMT to make any such  expenditures,
               nor shall the making thereof relieve TMT of any default.

     9.2. Agent's  Obligations  and  Duties.  Anything  herein  to the  contrary
          notwithstanding,  TMT shall  remain  liable  under  each  contract  or
          agreement  comprised in the  Collateral to be observed or performed by
          TMT  thereunder.  Neither  the  Agent  nor any  Bank  shall  have  any
          obligation or liability under any such contract or agreement by reason
          of or arising out of this Agreement or the receipt by the Agent or any
          Bank of any payment  relating to any of the Collateral,  nor shall the
          Agent or any Bank be  obligated  in any manner to  perform  any of the
          obligations  of  TMT  under  or  pursuant  to  any  such  contract  or
          agreement,  to make  inquiry  as to the nature or  sufficiency  of any
          payment received by the Agent or any Bank in respect of the Collateral
          or as to the  sufficiency  of any  performance  by any party under any
          such contract or agreement,  to present or file any claim, to take any
          action to enforce  any  performance  or to collect  the payment of any
          amounts  which  may have  been  assigned  to the Agent or to which the
          Agent or any Bank may be  entitled  at any time or times.  The Agent's
          sole duty with  respect to the  custody,  safe  keeping  and  physical
          preservation  of the Collateral in its  possession,  under ss.9-207 of
          the Uniform  Commercial Code of The  Commonwealth of  Massachusetts or
          otherwise, shall be to deal with such Collateral in the same manner as
          the Agent deals with similar property for its own account.

     10.  Securities  and  Deposits.  The Agent may at any time,  at its option,
          transfer  to  itself  or  any  nominee  any  securities   constituting
          Collateral,  receive  any  income  thereon  and hold  such  income  as
          additional  Collateral or apply it to the Obligations.  Whether or not
          any Obligations are due, the Agent may demand,  sue for,  collect,  or
          make any  settlement  or  compromise  which it  deems  desirable  with
          respect to the Collateral. Regardless of the adequacy of Collateral or
          any other security for the Obligations,  any deposits or other sums at
          any time  credited  by or due from the Agent or any Bank to TMT may at
          any time be applied to or set off against any of the Obligations.

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     11.  Notification to Account Debtors and Other Obligors. If a Default or an
          Event of Default shall have occurred and be continuing,  TMT shall, at
          the request of the Agent, notify account debtors on accounts,  chattel
          paper and general  intangibles of TMT and obligors on instruments  for
          which TMT is an obligee of the  security  interest of the Agent in any
          account,  chattel  paper,  general  intangible or instrument  and that
          payment  thereof  is to be  made  directly  to  the  Agent  or to  any
          financial  institution  designated  by the Agent as the Agent's  agent
          therefor,  and the  Agent  may  itself,  if a  Default  or an Event of
          Default shall have occurred and be  continuing,  without  notice to or
          demand upon TMT, so notify  account  debtors and  obligors.  After the
          making of such a request or the giving of any such  notification,  TMT
          shall hold any  proceeds of  collection  of accounts,  chattel  paper,
          general intangibles and instruments received by TMT as trustee for the
          Agent, for the benefit of the Banks and the Agent, without commingling
          the same with  other  funds of TMT and shall turn the same over to the
          Agent in the  identical  form  received,  together  with any necessary
          endorsements  or  assignments.  The Agent shall apply the  proceeds of
          collection  of  accounts,   chattel  paper,  general  intangibles  and
          instruments received by the Agent to the Obligations, such proceeds to
          be immediately  entered after final payment in cash or solvent credits
          of the items giving rise to them.

     12.  Further Assurances.  TMT, at its own expense,  shall do, make, execute
          and  deliver all such  additional  and further  acts,  things,  deeds,
          assurances and  instruments  as the Agent may reasonably  require more
          completely  to vest in and  assure to the  Agent  and the Banks  their
          respective  rights  hereunder or in any of the Collateral,  including,
          without limitation, (a) executing,  delivering and, where appropriate,
          filing  financing  statements and  continuation  statements  under the
          Uniform  Commercial  Code, (b) obtaining  governmental and other third
          party consents and approvals, including without limitation any consent
          of any  licensor,  lessor or other  applicable  party  referred  to in
          ss.2.3,  (c) obtaining  waivers from  mortgagees and landlords and (d)
          taking all actions required by Sections 8-313 and 8-321 of the Uniform
          Commercial  Code, as applicable  in each relevant  jurisdiction,  with
          respect to certificated and uncertificated securities.

     13.  Power of Attorney.

          13.1.Appointment   and  Powers  of  Agent.   TMT  hereby   irrevocably
               constitutes  and  appoints  the  Agent and any  officer  or agent
               thereof, with full power of substitution,  as its true and lawful
               attorneys-in-fact  with full  irrevocable  power and authority in
               the place and stead of TMT or in the  Agent's  own name,  for the
               purpose of carrying out the terms of this Agreement,  to take any
               and all  appropriate  action and to execute any and all documents
               and instruments  that may be necessary or desirable to accomplish
               the  purposes  of  this  Agreement  and,   without  limiting  the
               generality  of the  foregoing,  hereby gives said  attorneys  the
               power and right, on behalf of TMT, without notice to or assent by
               TMT, to do the following:

               (a)  upon the occurrence  and during the  continuance of an Event
                    of Default,  generally to sell,  transfer,  pledge, make any
                    agreement  with respect to or otherwise deal with any of the
                    Collateral in such manner as is consistent  with the Uniform
                    Commercial Code of The Commonwealth of Massachusetts  and as
                    fully and  completely  as though the Agent were the absolute
                    owner thereof for all purposes,  and to do at TMT's expense,
                    at any time, or from time to time, all acts and things which
                    the Agent deems  necessary  to protect,  preserve or realize
                    upon  the  Collateral  and  the  Agent's  security  interest
                    therein,  in order to effect the  intent of this  Agreement,
                    all as fully and  effectively  as TMT  might do,  including,
                    without  limitation,  (i)  the  filing  and  prosecuting  of
                    registration and transfer  applications with the appropriate
                    federal or local  agencies or  authorities  with  respect to
                    trademarks,   copyrights  and   patentable   inventions  and
                    processes,  (ii) upon written notice to TMT, the exercise of
                    voting  rights  with  respect  to voting  securities,  which
                    rights may be exercised, if the Agent so elects, with a view
                    to causing  the  liquidation  in a  commercially  reasonable
                    manner of assets of the  issuer of any such  securities  and
                    (iii) the execution,  delivery and recording,  in connection
                    with any sale or other disposition of any Collateral, of the
                    endorsements, assignments or other instruments of conveyance
                    or transfer with respect to such Collateral; and

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               (b)  to file such financing  statements with respect hereto, with
                    or without TMT's signature, or a photocopy of this Agreement
                    in substitution for a financing statement,  as the Agent may
                    deem appropriate and to execute in TMT's name such financing
                    statements   and   amendments   thereto   and   continuation
                    statements which may require TMT's signature.

          13.2.Ratification  by TMT. To the extent  permitted by law, TMT hereby
               ratifies all that said attorneys shall lawfully do or cause to be
               done by virtue hereof.  This power of attorney is a power coupled
               with an interest and shall be irrevocable.

          13.3.No Duty on Agent. The powers conferred on the Agent hereunder are
               solely to protect the interests of the Agent and the Banks in the
               Collateral  and  shall  not  impose  any duty  upon the  Agent to
               exercise any such powers. The Agent shall be accountable only for
               the amounts that it actually receives as a result of the exercise
               of such powers and neither it nor any of its officers, directors,
               employees  or agents shall be  responsible  to TMT for any act or
               failure to act,  except for the Agent's own gross  negligence  or
               willful misconduct.

     14.  Remedies.   If  an  Event  of  Default  shall  have  occurred  and  be
          continuing,  the Agent  may,  without  notice  to or demand  upon TMT,
          declare  this  Agreement  to  be  in  default,  and  the  Agent  shall
          thereafter  have in any  jurisdiction in which  enforcement  hereof is
          sought,  in addition to all other rights and remedies,  the rights and
          remedies  of a  secured  party  under  the  Uniform  Commercial  Code,
          including,  without  limitation,  the right to take  possession of the
          Collateral, and for that purpose the Agent may, so far as TMT can give
          authority  therefor,  enter upon any premises on which the  Collateral
          may be situated  and remove the same  therefrom.  The Agent may in its
          discretion  require TMT to assemble all or any part of the  Collateral
          at such location or locations  within the state(s) of TMT's  principal
          office(s)  or at such  other  locations  as the Agent  may  designate.
          Unless the  Collateral is perishable or threatens to decline  speedily
          in value or is of a type customarily sold on a recognized  market, the
          Agent shall give to TMT at least five (5) Business  Days prior written
          notice of the time and place of any public  sale of  Collateral  or of
          the  time  after  which  any  private  sale  or  any  other   intended
          disposition  is to be made.  TMT  hereby  acknowledges  that  five (5)
          Business  Days  prior  written  notice of such sale or sales  shall be
          reasonable notice. In addition,  TMT waives any and all rights that it
          may have to a judicial hearing in advance of the enforcement of any of
          the Agent's rights hereunder, including, without limitation, its right
          following  an Event of Default  to take  immediate  possession  of the
          Collateral  and to exercise  its rights with respect  thereto.  To the
          extent that any of the  Obligations  are to be paid or  performed by a
          person  other than TMT, TMT waives and agrees not to assert any rights
          or  privileges  which  it may  have  under  ss.9-112  of  the  Uniform
          Commercial Code of The Commonwealth of Massachusetts.

     15.  No  Waiver,  etc.  TMT  waives  demand,  notice,  protest,  notice  of
          acceptance of this Agreement,  notice of loans made,  credit extended,
          Collateral  received or  delivered  or other  action taken in reliance
          hereon and all other  demands  and  notices of any  description.  With
          respect to both the Obligations and the Collateral, TMT assents to any
          extension  or  postponement  of the  time  of  payment  or  any  other
          indulgence, to any substitution,  exchange or release of or failure to
          perfect any security  interest in any  Collateral,  to the addition or
          release of any party or person primarily or secondarily liable, to the
          acceptance of partial payment thereon and the settlement, compromising
          or adjusting  of any  thereof,  all in such manner and at such time or
          times as the Agent may deem advisable. The Agent shall have no duty as
          to the  collection  or  protection  of the  Collateral  or any  income
          thereon,  nor as to the  preservation of rights against prior parties,
          nor as to the preservation of any rights pertaining thereto beyond the
          safe  custody  thereof as set forth in ss.9.2.  The Agent shall not be
          deemed to have waived any of its rights upon or under the  Obligations
          or the Collateral unless such waiver shall be in writing and signed by
          the Agent with the consent of the Majority Banks. No delay or omission
          on the part of the Agent in  exercising  any right shall  operate as a
          waiver of such right or any other right.  A waiver on any one occasion
          shall  not be  construed  as a bar to or  waiver  of any  right on any
          future occasion.  All rights and remedies of the Agent with respect to
          the Obligations or the Collateral,  whether evidenced hereby or by any
          other  instrument or papers,  shall be cumulative and may be exercised
          singularly,  alternatively,  successively or concurrently at such time
          or at such times as the Agent deems expedient.


                                       83
<PAGE>

     16.  Marshalling.  Neither  the Agent  nor any Bank  shall be  required  to
          marshal any present or future collateral  security  (including but not
          limited to this Agreement and the Collateral) for, or other assurances
          of  payment  of, the  Obligations  or any of them or to resort to such
          collateral  security or other  assurances of payment in any particular
          order,  and all of the rights of the Agent  hereunder and of the Agent
          or  any  Bank  in  respect  of  such  collateral  security  and  other
          assurances of payment shall be cumulative and in addition to all other
          rights,  however  existing or arising.  To the extent that it lawfully
          may, TMT hereby agrees that it will not invoke any law relating to the
          marshalling  of  collateral  which  might cause delay in or impede the
          enforcement  of the Agent's  rights under this  Agreement or under any
          other  instrument  creating or evidencing  any of the  Obligations  or
          under which any of the  Obligations  is outstanding or by which any of
          the  Obligations is secured or payment  thereof is otherwise  assured,
          and, to the extent that it lawfully may, TMT hereby irrevocably waives
          the benefits of all such laws.

     17.  Proceeds  of  Dispositions;  Expenses.  TMT  shall pay to the Agent on
          demand  any  and  all  reasonable   expenses,   including   reasonable
          attorneys'  fees and  disbursements,  incurred or paid by the Agent in
          protecting,  preserving  or enforcing  the Agent's  rights under or in
          respect  of any of the  Obligations  or any of the  Collateral.  After
          deducting  all of  said  expenses,  the  residue  of any  proceeds  of
          collection  or sale of the  Obligations  or Collateral  shall,  to the
          extent  actually  received  in cash,  be applied to the payment of the
          Obligations  in such order or  preference as is provided in the Credit
          Agreement,   proper   allowance  and  provision  being  made  for  any
          Obligations  not then due. Upon the final payment and  satisfaction in
          full of all of the Obligations and after making any payments  required
          by  Section   9-504(1)(c)  of  the  Uniform  Commercial  Code  of  The
          Commonwealth  of  Massachusetts,  any excess shall be returned to TMT.
          TMT shall  remain  liable  for any  deficiency  in the  payment of the
          Obligations after all proceeds of Collateral have been applied.

     18.  Overdue  Amounts.  Until  paid,  all  amounts  due and  payable by TMT
          hereunder  shall be a debt secured by the  Collateral  and shall bear,
          whether before or after judgment, interest at the rate of interest for
          overdue principal set forth in the Credit Agreement.

     19.  Governing Law; Consent to Jurisdiction.  THIS AGREEMENT IS INTENDED TO
          TAKE  EFFECT AS A SEALED  INSTRUMENT  AND SHALL BE  GOVERNED  BY,  AND
          CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  COMMONWEALTH  OF
          MASSACHUSETTS.  TMT agrees that any suit for the  enforcement  of this
          Agreement  may  be  brought  in the  courts  of  The  Commonwealth  of
          Massachusetts or any federal court sitting therein and consents to the
          non-exclusive  jurisdiction of such court and to service of process in
          any such suit  being  made upon TMT by mail at the  address  set forth
          below  its  signature  hereto  or at  such  other  address  as TMT may
          designate  in writing to the Agent.  TMT hereby  waives any  objection
          that it may now or hereafter have to the venue of any such suit or any
          such court or that such suit is brought in an inconvenient court.

     20.  Waiver  of Jury  Trial.  TMT  WAIVES  ITS RIGHT TO A JURY  TRIAL  WITH
          RESPECT  TO  ANY  ACTION  OR  CLAIM  ARISING  OUT OF  ANY  DISPUTE  IN
          CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
          THE  PERFORMANCE  OF  ANY  SUCH  RIGHTS  OR  OBLIGATIONS.   Except  as
          prohibited  by law, TMT waives any right which it may have to claim or
          recover in any  litigation  referred to in the preceding  sentence any
          special,  exemplary,  punitive or consequential damages or any damages
          other than, or in addition to, actual damages.  TMT (a) certifies that
          neither  the  Agent  or any  Bank  nor any  representative,  agent  or
          attorney  of the  Agent  or any  Bank has  represented,  expressly  or
          otherwise,  that the  Agent or any Bank  would  not,  in the  event of
          litigation, seek to enforce the foregoing waivers and (b) acknowledges
          that,  in  entering  into the  Credit  Agreement  and the  other  Loan
          Documents to which the Agent or any Bank is a party, the Agent and the
          Banks  are  relying  upon,   among  other  things,   the  waivers  and
          certifications contained in this ss.20.

     21.  Concerning  Revised  Article 9 of the  Uniform  Commercial  Code.  The
          parties  acknowledge  and agree to the  following  provisions  of this
          Agreement in anticipation of the possible application,  in one or more
          jurisdictions to the transactions  contemplated hereby, of the revised
          Article 9 of the Uniform  Commercial Code in the form or substantially
          in the form  approved in 1998 by the  American Law  Institute  and the
          National  Conference of  Commissioners  on Uniform State Law ("Revised
          Article 9").

                                       84
<PAGE>

          21.1.Attachment.  In  applying  the law of any  jurisdiction  in which
               Revised  Article 9 is in effect,  the Collateral is all assets of
               TMT,  whether or not  within the scope of Revised  Article 9. The
               Collateral  shall  include,  without  limitation,  the  following
               categories  of assets as  defined  in  Revised  Article  9: goods
               (including  inventory,  equipment  and any  accessions  thereto),
               instruments  (including  promissory notes),  documents,  accounts
               (including  health-care-insurance   receivables),  chattel  paper
               (whether    tangible   or    electronic),    deposit    accounts,
               letter-of-credit  rights  (whether or not the letter of credit is
               evidenced by a writing),  commercial tort claims,  securities and
               all other investment  property,  general  intangibles  (including
               payment intangibles and software), supporting obligations and any
               and all proceeds of any thereof,  wherever  located,  whether now
               owned and hereafter  acquired.  If TMT shall at any time, whether
               or  not  Revised  Article  9  is  in  effect  in  any  particular
               jurisdiction,  acquire a  commercial  tort  claim,  as defined in
               Revised  Article 9, TMT shall  immediately  notify the Agent in a
               writing  signed by TMT of the brief details  thereof and grant to
               the Agent in such writing a security  interest therein and in the
               proceeds thereof, all upon the terms of this Agreement, with such
               writing to be in form and substance satisfactory to the Agent.

          21.2.Perfection by Filing.  The Agent may at any time and from time to
               time,  pursuant  to  the  provisions  of  ss.13,  file  financing
               statements,  continuation  statements and amendments thereto that
               describe the  Collateral as all assets of TMT or words of similar
               effect and which contain any other information required by Part 5
               of  Revised  Article  9 for  the  sufficiency  or  filing  office
               acceptance of any financing statement,  continuation statement or
               amendment,  including whether TMT is an organization, the type of
               organization and any organization identification number issued to
               TMT.  TMT agrees to  furnish  any such  information  to the Agent
               promptly   upon   request.   Any   such   financing   statements,
               continuation  statements or amendments may be signed by the Agent
               on behalf of TMT, as  provided in ss.13,  and may be filed at any
               time in any jurisdiction whether or not Revised Article 9 is then
               in effect in that jurisdiction.

          21.3.Other  Perfection,  etc.  TMT  shall at any time and from time to
               time,  whether  or not  Revised  Article  9 is in  effect  in any
               particular  jurisdiction,  take  such  steps  as  the  Agent  may
               reasonably   request   for   the   Agent   (a)   to   obtain   an
               acknowledgement, in form and substance satisfactory to the Agent,
               of any bailee having possession of any of the Collateral that the
               bailee  holds  such  Collateral  for  the  Agent,  (b) to  obtain
               "control"  of  any   investment   property,   deposit   accounts,
               letter-of-credit  rights  or  electronic  chattel  paper (as such
               terms  are  defined  in  Revised  Article  9  with  corresponding
               provisions in Rev. ss.ss.  9-104, 9-105, 9-106 and 9-107 relating
               to what constitutes "control" for such items of Collateral), with
               any agreements  establishing  control to be in form and substance
               satisfactory  to the  Agent,  and (c)  otherwise  to  insure  the
               continued   perfection  and  priority  of  the  Agent's  security
               interest in any of the Collateral and of the  preservation of its
               rights  therein,   whether  in  anticipation  and  following  the
               effectiveness of Revised Article 9 in any jurisdiction.

          21.4.Other  Provisions.  In applying  the law of any  jurisdiction  in
               which Revised Article 9 is in effect, the following references to
               sections  in  this  Agreement  to  existing  Article  9  of  that
               jurisdiction  shall be to the  Revised  Article 9 Section of that
               jurisdiction indicated below:


 -------------------- --------------------------- -----------------------------
 Agreement Section    Existing Article 9          Revised Article 9
 -------------------- --------------------------- -----------------------------
 3                    ss. 9-103(3)                Rev.ss.9-102(a)(34)
 -------------------- --------------------------- -----------------------------
 -------------------- --------------------------- -----------------------------
 9.2                  ss. 9-207                   Rev.ss.9-207
 -------------------- --------------------------- -----------------------------
 -------------------- --------------------------- -----------------------------
 12                   ss.ss.8-106 and 9-115 (1994)Rev.ss.ss.8-106 and 9-106
 -------------------- --------------------------- -----------------------------
 -------------------- --------------------------- -----------------------------
 17                   ss. 9-504(1)(c)             Rev.ss.ss.9-608(a)(1)(C) and
                                                  9-615(a)(3)
 -------------------- --------------------------- -----------------------------


                                       85
<PAGE>

          21.5.Savings  Clause.   Nothing  contained  in  this  ss.21  shall  be
               construed to narrow the scope of the Agent's security interest in
               any of the Collateral or the perfection or priority thereof or to
               impair or otherwise limit any of the rights,  powers,  privileges
               or remedies of the Agent or any Bank  hereunder  except (and then
               only to the extent)  mandated by Revised  Article 9 to the extent
               then applicable.

     22.  Miscellaneous.  The headings of each section of this Agreement are for
          convenience only and shall not define or limit the provisions thereof.
          This  Agreement  and all rights  and  obligations  hereunder  shall be
          binding upon TMT and its respective  successors and assigns, and shall
          inure to the  benefit  of the  Agent,  the Banks and their  respective
          successors and assigns. If any term of this Agreement shall be held to
          be invalid, illegal or unenforceable,  the validity of all other terms
          hereof shall in no way be affected  thereby,  and this Agreement shall
          be  construed  and be  enforceable  as if  such  invalid,  illegal  or
          unenforceable  term had not been  included  herein.  TMT  acknowledges
          receipt of a copy of this Agreement.

                  [Remainder of Page Left Intentionally Blank]


                                       86
<PAGE>

IN WITNESS WHEREOF, intending to be legally bound, TMT has caused this Agreement
to be duly executed as of the date first above written.

                                                     TMT-PATHWAY, L.L.C.



                                                     By:_______________________
                                                     Name:
                                                     Title:

                                                     Address:
                                                         _______________________
                                                         _______________________


Accepted:
BANKBOSTON, N.A.,
as Agent

By:________________________________________
      Peter van der Horst
      Vice President

                                       87
<PAGE>

                          CERTIFICATE OF ACKNOWLEDGMENT

COMMONWEALTH OR STATE OF ______________________________________________)
                                                                       )  ss.
COUNTY OF _____________________________________________________________)

Before me, the undersigned,  a Notary Public in and for the county aforesaid, on
this  __ day of May,  1999,  personally  appeared  _______________  to me  known
personally,  and who,  being by me duly  sworn,  deposes and says that he is the
__________  of  TMT-Pathway,  L.L.C.,  and that said  instrument  was signed and
sealed on behalf of said corporation by authority of its Board of Directors, and
said __________ acknowledged said instrument to be the free act and deed of said
corporation.

                                                     --------------------------
                                                     Notary Public
                                                     My commission expires:




                          CERTIFICATE OF ACKNOWLEDGMENT

COMMONWEALTH OR STATE OF ______________________________________________)
                                                                       )  ss.
COUNTY OF _____________________________________________________________)

Before me, the undersigned,  a Notary Public in and for the county aforesaid, on
this __ day of May, 1999,  personally  appeared Peter van der Horst, to me known
personally,  and who, being by me duly sworn, deposes and says that he is a Vice
President of BankBoston, N.A. (the "Agent"), and that said instrument was signed
and sealed on behalf of said Agent by authority of its Board of  Directors,  and
said Peter van der Horst  acknowledged  said  instrument  to be the free act and
deed of the Agent.

                                                     --------------------------
                                                     Notary Public
                                                     My commission expires:



                                       88
<PAGE>
                                                                Exhibit 10.23(b)
                              TRADEMARK COLLATERAL

                          SECURITY AND PLEDGE AGREEMENT

TRADEMARK  COLLATERAL  SECURITY AND PLEDGE AGREEMENT,  dated as of May 17, 1999,
between  TMT-PATHWAY,  L.L.C., a Delaware limited  liability  company having its
principal place of business at 2997 Clarkson Road, Chesterfield,  Missouri 63017
(the "Assignor"), and BANKBOSTON, N.A., as agent (hereinafter, in such capacity,
the  "Agent")   for  itself  and  other   lending   institutions   (hereinafter,
collectively,  the "Banks") which are, or may in the future become, parties to a
Revolving  Credit and Acquisition  Loan Agreement dated as of April 22, 1998 (as
amended and in effect from time to time, the "Credit Agreement"),  among Jackson
Products,  Inc.  (the  "Borrower"),  the Banks,  the Agent and  Mercantile  Bank
National Association, as Co-Agent.

WHEREAS,  the Borrower has requested  that the Agent and the Banks amend certain
provisions of the Credit Agreement;

WHEREAS,  upon the terms and subject to the  conditions  contained  in Amendment
Agreement  No. 2 dated as of May 17, 1999 (the  "Second  Amendment"),  among the
Borrower,  the Domestic  Subsidiaries (as defined in the Credit Agreement),  the
Banks,  the Agent and the  Co-Agent,  the Agent,  the Co-Agent and the Banks are
willing to amend such provisions of the Credit Agreement;

WHEREAS,  the Assignor has executed and delivered to the Agent,  for the benefit
of the Banks and the  Agent,  a  Security  Agreement  (as  defined in the Credit
Agreement),  pursuant to which the  Assignor  has granted to the Agent,  for the
benefit of the Banks and the Agent, a security interest in all of the Assignor's
personal  property  and  fixture  assets,  including,  without  limitation,  the
trademarks,  service  marks,  trademark  and  service  mark  registrations,  and
trademark  and  service  mark  registration  applications  listed on  Schedule A
attached  hereto,  all to secure the payment and  performance of the Obligations
(as defined in the Credit Agreement);

WHEREAS,  it is a  condition  precedent  to the Banks  entering  into the Second
Amendment  that TMT  execute  and  deliver to the Agent,  for the benefit of the
Banks and the Agent, a trademark agreement in substantially the form hereof;

WHEREAS, the Assignor wishes to grant to the Agent, for the benefit of the Banks
and the Agent,  security  interests in the Pledged Trademarks (as defined below)
in order  to  secure  the  Obligations  under  and with  respect  to the  Credit
Agreement; and

WHEREAS, this Trademark Agreement is supplemental to the provisions contained in
the Security Agreement;

NOW, THEREFORE,  in consideration of the premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     ss.1.DEFINITIONS.  Capitalized  terms used herein and not otherwise defined
          herein shall have the  respective  meanings  provided  therefor in the
          Credit  Agreement  and  the  Security  Agreement.   In  addition,  the
          following  terms  shall  have the  meanings  set forth in this ss.1 or
          elsewhere in this Trademark Agreement referred to below:

               Assignment of Marks. Seess.2.1 hereof.

               Associated  Goodwill.  All  goodwill  of  the  Assignor  and  its
               business,  products and services  appurtenant to, associated with
               or symbolized by the Trademarks and the use thereof.

               Pledged  Trademarks.  All  of the  Assignor's  right,  title  and
               interest  in  and  to  all  of  the  Trademarks,   the  Trademark
               Registrations,   the  Trademark  License  Rights,  the  Trademark
               Rights,  the Associated  Goodwill,  the Related  Assets,  and all
               accessions  to,  substitutions  for,  replacements  of,  and  all
               products and proceeds of any and all of the foregoing.

               PTO. The United States Patent and Trademark Office.

               Related Assets. All assets,  rights and interests of the Assignor
               that  uniquely   reflect  or  embody  the  Associated   Goodwill,
               including the following:

          (a)  all patents, inventions,  copyrights, trade secrets, confidential
               information,  formulae, methods or processes, compounds, recipes,
               know-how, methods and operating systems, drawings,  descriptions,
               formulations,   manufacturing   and   production   and   delivery
               procedures,  quality  control  procedures,  product  and  service
               specifications, catalogs, price lists, and advertising materials,
               relating to the manufacture,  production, delivery, provision and
               sale of goods or services under or in association with any of the
               Trademarks; and


                                       89
<PAGE>



          (b)  the following documents and things in the possession or under the
               control of the Assignor,  or subject to its demand for possession
               or control,  related to the production,  delivery,  provision and
               sale by the Assignor, or any affiliate,  franchisee,  licensee or
               contractor,  of  products  or  services  sold  by  or  under  the
               authority of the Assignor in  connection  with the  Trademarks or
               Trademark Rights,  whether prior to, on or subsequent to the date
               hereof:

               (i)  all  lists,   contracts,   ancillary   documents  and  other
                    information that identify,  describe or provide  information
                    with respect to any customers,  dealers or  distributors  of
                    the Assignor,  its affiliates or franchisees or licensees or
                    contractors,  for  products  or  services  sold  under or in
                    connection   with  the   Trademarks  or  Trademark   Rights,
                    including  all lists and  documents  containing  information
                    regarding each customer's,  dealer's or  distributor's  name
                    and address, credit, payment,  discount,  delivery and other
                    sale terms,  and history,  pattern and total of purchases by
                    brand, product, style, size and quantity;

               (ii) all agreements (including franchise agreements), product and
                    service  specification  documents and operating,  production
                    and  quality  control  manuals  relating  to or  used in the
                    design,  manufacture,  production,  delivery,  provision and
                    sale of products or services under or in connection with the
                    Trademarks or Trademark Rights;

               (iii)all  documents and  agreements  relating to the identity and
                    locations  of all  sources of supply,  all terms of purchase
                    and delivery, for all materials,  components,  raw materials
                    and other  supplies  and services  used in the  manufacture,
                    production,  provision,  delivery  and sale of  products  or
                    services  under  or in  connection  with the  Trademarks  or
                    Trademark Rights; and

               (iv) all agreements and documents  constituting or concerning the
                    present  or  future,  current or  proposed  advertising  and
                    promotion  by  the  Assignor  (or  any  of  its  affiliates,
                    franchisees,   licensees  or  contractors)  of  products  or
                    services sold under or in connection  with the Trademarks or
                    Trademark Rights.

               Trademark  Agreement.  This  Trademark  Collateral  Security  and
               Pledge Agreement, as amended and in effect from time to time.

               Trademark  License  Rights.  Any and all past,  present or future
               rights and  interests  of the  Assignor  pursuant  to any and all
               past, present and future  franchising or licensing  agreements in
               favor of the  Assignor,  or to  which  the  Assignor  is a party,
               pertaining  to  any  Trademarks,   Trademark  Registrations,   or
               Trademark  Rights  owned or used by third  parties  in the  past,
               present or future,  including the right (but not the  obligation)
               in the name of the Assignor or the Agent to enforce,  and sue and
               recover for,  any breach or  violation  of any such  agreement to
               which the Assignor is a party.

               Trademark  Registrations.  All past,  present or future  federal,
               state,  local and foreign  registrations  of the Trademarks,  all
               past, present and future  applications for any such registrations
               (and  any  such  registrations  thereof  upon  approval  of  such
               applications),  together with the right (but not the  obligation)
               to apply for such registrations (and prosecute such applications)
               in the name of the Assignor or the Agent, and to take any and all
               actions  necessary or appropriate to maintain such  registrations
               in effect and renew and extend such registrations.



                                       90
<PAGE>

               Trademark Rights.  Any and all past, present or future rights in,
               to and  associated  with the  Trademarks  throughout  the  world,
               whether arising under federal law, state law, common law, foreign
               law or  otherwise,  including  the  following:  all  such  rights
               arising out of or associated  with the  Trademark  Registrations;
               the right (but not the  obligation) to register  claims under any
               state, federal or foreign trademark law or regulation;  the right
               (but  not  the   obligation)  to  sue  or  bring   opposition  or
               cancellation proceedings in the name of the Assignor or the Agent
               for  any  and all  past,  present  and  future  infringements  or
               dilution of or any other damages or injury to the Trademarks, the
               Trademark Rights, or the Associated  Goodwill,  and the rights to
               damages or profits due or accrued arising out of or in connection
               with any such  past,  present or future  infringement,  dilution,
               damage or injury; and the Trademark License Rights.

               Trademarks. All of the trademarks, service marks, designs, logos,
               indicia,  trade names,  corporate names, company names,  business
               names,  fictitious  business  names,  trade  styles,  elements of
               package or trade  dress,  and other source and product or service
               identifiers,  used  or  associated  with  or  appurtenant  to the
               products,  services and businesses of the Assignor,  that (i) are
               set  forth on  Schedule  A hereto,  or (ii)  have  been  adopted,
               acquired,  owned,  held or used by the Assignor or are now owned,
               held or used by the Assignor, in the Assignor's business, or with
               the  Assignor's  products and services,  or in which the Assignor
               has any  right,  title or  interest,  or (iii) are in the  future
               adopted,  acquired,  owned,  held and used by the Assignor in the
               Assignor's business or with the Assignor's products and services,
               or in which the Assignor in the future acquires any right,  title
               or interest.

               use. With respect to any  Trademark,  all uses of such  Trademark
               by, for or in connection with the Assignor or its business or for
               the direct or indirect  benefit of the Assignor or its  business,
               including  all such uses by the  Assignor  itself,  by any of the
               affiliates of the  Assignor,  or by any  franchisee,  licensee or
               contractor of the Assignor.

               Unless otherwise provided herein, the rules of interpretation set
               forth in ss.1.2 of the Credit  Agreement  shall be  applicable to
               this Trademark Agreement.

     ss.2. GRANT OF SECURITY INTEREST.

          ss.2.1. Security Interest; Assignment of Marks. As collateral security
               for  the  payment  and   performance   in  full  of  all  of  the
               Obligations,  the Assignor hereby  unconditionally  grants to the
               Agent,  for the benefit of the Banks and the Agent,  a continuing
               security  interest  in and  first  priority  lien on the  Pledged
               Trademarks,  and pledges  and  mortgages  (but does not  transfer
               title to) the Pledged  Trademarks to the Agent for the benefit of
               the Banks and the Agent.  In addition,  the Assignor has executed
               in blank and  delivered to the Agent an  assignment  of federally
               registered  trademarks  in  substantially  the form of  Exhibit 1
               attached hereto (the "Assignment of Marks").  The Assignor hereby
               authorizes  the Agent to complete as assignee and record with the
               PTO the  Assignment of Marks upon the  occurrence  and during the
               continuance of an Event of Default and the proper exercise of the
               Agent's remedies under this Trademark  Agreement and the Security
               Agreement.

          ss.2.2.  Conditional  Assignment.  In  addition  to, and not by way of
               limitation  of, the grant,  pledge and  mortgage  of the  Pledged
               Trademarks  provided  in  ss.2.1  hereof,  the  Assignor  grants,
               assigns,  transfers,  conveys and sets over to the Agent, for the
               benefit of the Banks and the Agent, the Assignor's  entire right,
               title and  interest  in and to the Pledged  Trademarks;  provided
               that such grant, assignment, transfer and conveyance shall be and
               become of force and effect only (i) upon or after the  occurrence
               and during the continuance of an Event of Default and (ii) either
               (A) upon the written  demand of the Agent at any time during such
               continuance or (B) immediately and automatically  (without notice
               or action of any kind by the Agent)  upon an Event of Default for
               which  acceleration  of the Loans is  automatic  under the Credit
               Agreement or upon the sale or other disposition of or foreclosure
               upon  the  Collateral  pursuant  to the  Security  Agreement  and
               applicable law  (including  the transfer or other  disposition of
               the  Collateral  by the  Assignor  to the Agent or its nominee in
               lieu of foreclosure).

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<PAGE>

          ss.2.3. Supplemental to Security  Agreement.  Pursuant to the Security
               Agreement the Assignor has granted to the Agent,  for the benefit
               of the Banks and the Agent, a continuing security interest in and
               lien on the Collateral  (including the Pledged  Trademarks).  The
               Security Agreement,  and all rights and interests of the Agent in
               and  to  the  Collateral   (including  the  Pledged   Trademarks)
               thereunder, are hereby ratified and confirmed in all respects. In
               no event shall this Trademark Agreement,  the grant,  assignment,
               transfer and conveyance of the Pledged Trademarks  hereunder,  or
               the  recordation  of this  Trademark  Agreement  (or any document
               hereunder) with the PTO,  adversely affect or impair,  in any way
               or to any extent, the Security  Agreement,  the security interest
               of the Agent in the Collateral (including the Pledged Trademarks)
               pursuant to the Security Agreement and this Trademark  Agreement,
               the attachment and perfection of such security interest under the
               Uniform  Commercial Code (including the security  interest in the
               Pledged  Trademarks),   or  any  present  or  future  rights  and
               interests  of the  Agent  in and to the  Collateral  under  or in
               connection with the Security Agreement,  this Trademark Agreement
               or the Uniform  Commercial Code. Any and all rights and interests
               of the Agent in and to the  Pledged  Trademarks  (and any and all
               obligations   of  the  Assignor   with  respect  to  the  Pledged
               Trademarks)   provided  herein,   or  arising   hereunder  or  in
               connection herewith,  shall only supplement and be cumulative and
               in  addition  to the rights and  interests  of the Agent (and the
               obligations  of the  Assignor)  in,  to or  with  respect  to the
               Collateral  (including  the  Pledged  Trademarks)  provided in or
               arising  under or in connection  with the Security  Agreement and
               shall not be in derogation thereof.

     ss.3.REPRESENTATIONS,  WARRANTIES AND COVENANTS.  The Assignor  represents,
          warrants and covenants that:

          (a)  to the best of the  Assignor's  knowledge,  Schedule  A  attached
               hereto sets forth a true and complete list of all  Trademarks and
               Trademark  Registrations now owned, licensed,  controlled or used
               by the Assignor;

          (b)  to the  best of the  Assignor's  knowledge,  the  Trademarks  and
               Trademark Registrations are subsisting and have not been adjudged
               invalid or  unenforceable,  in whole or in part,  and there is no
               litigation  or  proceeding  pending  concerning  the  validity or
               enforceability of the Trademarks or Trademark Registrations;

          (c)  to the best of the Assignor's  knowledge,  each of the Trademarks
               and Trademark Registrations is valid and enforceable;

          (d)  to the best of the Assignor's knowledge, there is no infringement
               by others of the Trademarks, Trademark Registrations or Trademark
               Rights;

          (e)  to the best of the Assignor's  knowledge,  no claim has been made
               that the use of any of the  Trademarks  does or may  violate  the
               rights of any third person,  and there is no  infringement by the
               Assignor of the trademark rights of others;

          (f)  the  Assignor is the sole and  exclusive  owner of the entire and
               unencumbered  right,  title  and  interest  in and to each of the
               Trademarks  (other than  ownership  and other rights  reserved by
               third party owners with respect to  Trademarks  that the Assignor
               is  licensed  to use),  free and  clear  of any  liens,  charges,
               encumbrances and adverse claims, including pledges,  assignments,
               licenses,   registered  user  agreements  and  covenants  by  the
               Assignor  not to sue  third  persons,  other  than  the  security
               interest and  assignment  created by the Security  Agreement  and
               this Trademark Agreement;

          (g)  the  Assignor  has the  unqualified  right  to  enter  into  this
               Trademark Agreement and to perform its terms and will comply with
               the covenants herein contained;

          (h)  the Assignor has used, and will continue to use, proper statutory
               and other appropriate  proprietary notices in connection with its
               use of the Trademarks;

          (i)  the Assignor has used,  and will continue to use for the duration
               of this Trademark  Agreement,  consistent standards of quality in
               its  manufacture  and  provision of products and services sold or
               provided under the Trademarks;


                                       92
<PAGE>

          (j)  this Trademark  Agreement,  together with the Security Agreement,
               will  create in favor of the Agent a valid  and  perfected  first
               priority security interest in the Pledged  Trademarks upon making
               the filings referred to in clause (k) of this ss.3; and

          (k)  except for the filing of financing  statements  under the Uniform
               Commercial  Code and the  recording of this  Trademark  Agreement
               with the PTO, no authorization,  approval or other action by, and
               no notice to or  filing  with,  any  governmental  or  regulatory
               authority,  agency or office is required either (A) for the grant
               by the Assignor or the effectiveness of the security interest and
               assignment  granted  hereby or for the  execution,  delivery  and
               performance of this Trademark  Agreement by the Assignor,  or (B)
               for the  perfection of or the exercise by the Agent of any of its
               rights and remedies hereunder.

     ss.4.INSPECTION RIGHTS. The Assignor hereby grants to each of the Agent and
          the  Banks  and its  employees  and  agents  the  right to  visit  the
          Assignor's  plants and facilities that  manufacture,  inspect or store
          products sold under any of the Trademarks, and to inspect the products
          and quality  control  records  relating  thereto at  reasonable  times
          during regular business hours.

     ss.5.NO  TRANSFER OR  INCONSISTENT  AGREEMENTS.  Without the Agent's  prior
          written consent, the Assignor will not (a) mortgage,  pledge,  assign,
          encumber, grant a security interest in, transfer,  license or alienate
          any of the Pledged  Trademarks,  or (b) enter into any agreement  (for
          example, a license agreement) that is inconsistent with the Assignor's
          obligations under this Trademark Agreement or the Security Agreement.

     ss.6. AFTER-ACQUIRED TRADEMARKS, ETC.

          ss.6.1.  After-acquired  Trademarks.  If, before the Obligations shall
               have been finally paid and satisfied in full,  the Assignor shall
               obtain any  right,  title or  interest  in or to any other or new
               Trademarks,  Trademark  Registrations  or Trademark  Rights,  the
               provisions of this Trademark  Agreement shall automatically apply
               thereto  and the  Assignor  shall  promptly  provide to the Agent
               notice  thereof in writing  and  execute and deliver to the Agent
               such documents or instruments as the Agent may reasonably request
               further to implement,  preserve or evidence the Agent's  interest
               therein.

          ss.6.2.  Amendment to Schedule.  The Assignor  authorizes the Agent to
               modify this  Trademark  Agreement  and the  Assignment  of Marks,
               without  the  necessity  of the  Assignor's  further  approval or
               signature, by amending Exhibit A attached hereto and the Annex to
               the   Assignment   of  Marks  to  include  any  future  or  other
               Trademarks,  Trademark  Registrations  or Trademark  Rights under
               ss.ss.2 or 6 hereof.

     ss.7. TRADEMARK PROSECUTION.

          ss.7.1.  Assignor  Responsible.  The  Assignor  shall  assume full and
               complete responsibility for the prosecution, defense, enforcement
               or any other  necessary or desirable  actions in connection  with
               the Pledged Trademarks,  and shall hold each of the Agent and the
               Banks harmless from any and all costs,  damages,  liabilities and
               expenses  that  may be  incurred  by the  Agent  or any  Bank  in
               connection with the Agent's interest in the Pledged Trademarks or
               any  other  action  or  failure  to act in  connection  with this
               Trademark Agreement or the transactions  contemplated  hereby. In
               respect  of  such  responsibility,   the  Assignor  shall  retain
               trademark counsel reasonably acceptable to the Agent.

          ss.7.2. Assignor's Duties,  Etc. The Assignor shall have the right and
               the duty, through trademark counsel reasonably  acceptable to the
               Agent,  to  prosecute   diligently  any  trademark   registration
               applications  of the  Trademarks  pending  as of the date of this
               Trademark  Agreement or thereafter,  to preserve and maintain all
               rights in the Trademarks and Trademark  Registrations,  including
               the  filing  of  appropriate   renewal   applications  and  other
               instruments to maintain in effect the Trademark Registrations and
               the payment when due of all  registration  renewal fees and other
               fees,  taxes and other  expenses  that shall be  incurred or that
               shall accrue with respect to any of the  Trademarks  or Trademark
               Registrations.  Any  expenses  incurred in  connection  with such
               applications  and  actions  shall be borne by the  Assignor.  The
               Assignor  shall  not  abandon  any filed  trademark  registration
               application, or any Trademark Registration or Trademark,  without
               the consent of the Agent, which consent shall not be unreasonably
               withheld.

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<PAGE>

          ss.7.3.  Assignor's  Enforcement  Rights.  The Assignor shall have the
               right  and  the  duty  to  bring  suit  or  other  action  in the
               Assignor's own name to maintain and enforce the  Trademarks,  the
               Trademark  Registrations and the Trademark  Rights.  The Assignor
               may require the Agent to join in such suit or action as necessary
               to assure the  Assignor's  ability to bring and maintain any such
               suit or action in any proper  forum if (but only if) the Agent is
               completely satisfied that such joinder will not subject the Agent
               or  any  Bank  to any  risk  of  liability.  The  Assignor  shall
               promptly, upon demand,  reimburse and indemnify the Agent for all
               damages,  costs and expenses,  including legal fees,  incurred by
               the Agent pursuant to this ss.7.3.

          ss.7.4. Protection of Trademarks,  Etc. In general, the Assignor shall
               take  any  and  all  such  actions  (including   institution  and
               maintenance of suits, proceedings or actions) as may be necessary
               or appropriate to properly maintain,  protect, preserve, care for
               and enforce the Pledged  Trademarks.  The Assignor shall not take
               or fail to take any action,  nor permit any action to be taken or
               not  taken by others  under its  control,  that  would  adversely
               affect  the  validity,   grant  or  enforcement  of  the  Pledged
               Trademarks.

          ss.7.5.  Notification by Assignor.  Promptly upon obtaining  knowledge
               thereof,  the  Assignor  will  notify the Agent in writing of the
               institution  of,  or any  final  adverse  determination  in,  any
               proceeding  in the PTO or any  similar  office  or  agency of the
               United States or any foreign country, or any court, regarding the
               validity of any of the Trademarks or Trademark  Registrations  or
               the Assignor's  rights,  title or interests in and to the Pledged
               Trademarks,  and of any  event  that  does  or  reasonably  could
               materially  adversely  affect  the  value  of any of the  Pledged
               Trademarks,  the ability of the  Assignor or the Agent to dispose
               of any of the Pledged  Trademarks  or the rights and  remedies of
               the Agent in relation  thereto  (including but not limited to the
               levy of any legal process against any of the Pledged Trademarks).

     ss.8.REMEDIES.  Upon the occurrence and during the  continuance of an Event
          of Default,  the Agent shall have, in addition to all other rights and
          remedies  given it by this  Trademark  Agreement  (including,  without
          limitation,  those set forth in ss.2.2 hereof,  the Credit  Agreement,
          the Security Agreement and the other Loan Documents), those allowed by
          law and the rights and  remedies of a secured  party under the Uniform
          Commercial Code as enacted in the Commonwealth of Massachusetts,  and,
          without  limiting  the  generality  of the  foregoing,  the  Agent may
          immediately,  without demand of  performance  and without other notice
          (except as set forth next below) or demand whatsoever to the Assignor,
          all of which are hereby expressly waived, sell or license at public or
          private sale or otherwise  realize upon the whole or from time to time
          any part of the Pledged Trademarks,  or any interest that the Assignor
          may have  therein,  and after  deducting  from the proceeds of sale or
          other  disposition of the Pledged  Trademarks all expenses incurred by
          the Agent in attempting to enforce this Trademark Agreement (including
          all reasonable  expenses for broker's fees and legal services),  shall
          apply  the  residue  of  such  proceeds  toward  the  payment  of  the
          Obligations as set forth in or by reference in the Security Agreement.
          Notice  of any  sale,  license  or other  disposition  of the  Pledged
          Trademarks  shall be given to the Assignor at least  fifteen (15) days
          before  the  time  that  any  intended  public  sale or  other  public
          disposition of the Pledged Trademarks is to be made or after which any
          private sale or other private  disposition  of the Pledged  Trademarks
          may be made,  which the Assignor  hereby  agrees  shall be  reasonable
          notice of such  public or private  sale or other  disposition.  At any
          such sale or other disposition, the Agent may, to the extent permitted
          under applicable law, purchase or license the whole or any part of the
          Pledged  Trademarks or interests  therein sold,  licensed or otherwise
          disposed of.

     ss.9.COLLATERAL  PROTECTION.  If the Assignor shall fail to do any act that
          it  has  covenanted  to do  hereunder,  or if  any  representation  or
          warranty of the Assignor shall be breached, the Agent, in its own name
          or that of the Assignor  (in the sole  discretion  of the Agent),  may
          (but shall not be obligated  to) do such act or remedy such breach (or
          cause  such act to be done or such  breach  to be  remedied),  and the
          Assignor  agrees  promptly  to  reimburse  the  Agent  for any cost or
          expense incurred by the Agent in so doing.


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<PAGE>

     ss.10. POWER OF ATTORNEY.  If any Event of Default  shall have occurred and
          be continuing,  the Assignor does hereby make,  constitute and appoint
          the  Agent  (and any  officer  or agent of the  Agent as the Agent may
          select in its exclusive  discretion) as the Assignor's true and lawful
          attorney-in-fact,  with full power of substitution  and with the power
          to endorse the Assignor's name on all applications,  documents, papers
          and instruments necessary for the Agent to use the Pledged Trademarks,
          or to grant or issue any exclusive or  nonexclusive  license of any of
          the Pledged  Trademarks  to any third  person,  or to take any and all
          actions necessary for the Agent to assign, pledge, convey or otherwise
          transfer  title in or dispose of any of the Pledged  Trademarks or any
          interest of the Assignor therein to any third person, and, in general,
          to execute and deliver any  instruments  or documents and do all other
          acts that the Assignor is obligated to execute and do  hereunder.  The
          Assignor  hereby  ratifies all that such attorney shall lawfully do or
          cause to be done by virtue  hereof and releases  each of the Agent and
          the Banks from any  claims,  liabilities,  causes of action or demands
          arising out of or in connection with any action taken or omitted to be
          taken by the  Agent  under  this  power of  attorney  (except  for the
          Agent's  gross  negligence  or  willful  misconduct).  This  power  of
          attorney is coupled with an interest and shall be irrevocable  for the
          duration of this Trademark Agreement.

     ss.11. FURTHER ASSURANCES. The Assignor shall, at any time and from time to
          time, and at its expense, make, execute,  acknowledge and deliver, and
          file and record as  necessary  or  appropriate  with  governmental  or
          regulatory   authorities,   agencies  or  offices,   such  agreements,
          assignments,  documents and instruments, and do such other and further
          acts and things (including, without limitation,  obtaining consents of
          third  parties),  as the Agent may request or as may be  necessary  or
          appropriate  in order to implement  and effect  fully the  intentions,
          purposes and provisions of this Trademark Agreement,  or to assure and
          confirm to the Agent the grant, perfection and priority of the Agent's
          security interest in the Pledged Trademarks.

     ss.12.  TERMINATION.  At such  time  as all of the  Obligations  have  been
          finally paid and satisfied in full,  this  Trademark  Agreement  shall
          terminate  and the Agent  shall,  upon the written  request and at the
          expense of the  Assignor,  execute  and  deliver to the  Assignor  all
          deeds, assignments and other instruments as may be necessary or proper
          to reassign  and  reconvey to and re-vest in the  Assignor  the entire
          right,  title  and  interest  to  the  Pledged  Trademarks  previously
          granted,  assigned,  transferred  and  conveyed  to the  Agent  by the
          Assignor  pursuant to this  Trademark  Agreement,  as fully as if this
          Trademark  Agreement had not been made,  subject to any disposition of
          all or any part thereof that may have been made by the Agent  pursuant
          hereto or the Security Agreement.

     ss.13. COURSE OF DEALING. No course of dealing between the Assignor and the
          Agent,  nor any failure to exercise,  nor any delay in exercising,  on
          the part of the Agent,  any right,  power or  privilege  hereunder  or
          under the Security Agreement or any other agreement shall operate as a
          waiver thereof; nor shall any single or partial exercise of any right,
          power or  privilege  hereunder  or  thereunder  preclude  any other or
          further exercise thereof or the exercise of any other right,  power or
          privilege.

     ss.14. EXPENSES.  Any and all fees, costs and expenses, of whatever kind or
          nature, including the reasonable attorneys' fees and expenses incurred
          by the Agent in  connection  with the  preparation  of this  Trademark
          Agreement and all other documents relating hereto, the consummation of
          the transactions  contemplated  hereby or the enforcement  hereof, the
          filing  or  recording  of  any  documents   (including  all  taxes  in
          connection  therewith) in public offices,  the payment or discharge of
          any taxes, counsel fees, maintenance or renewal fees, encumbrances, or
          otherwise   protecting,   maintaining   or   preserving   the  Pledged
          Trademarks,  or in defending or prosecuting any actions or proceedings
          arising  out of or related to the Pledged  Trademarks,  shall be borne
          and paid by the Assignor.

     ss.15. OVERDUE  AMOUNTS.  Until  paid,  all  amounts due and payable by the
          Assignor  hereunder shall be a debt secured by the Pledged  Trademarks
          and other Collateral and shall bear, whether before or after judgment,
          interest at the rate of interest  for overdue  principal  set forth in
          the Credit Agreement.

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<PAGE>

     ss.16.  NO  ASSUMPTION  OF  LIABILITY;   INDEMNIFICATION.   NOTWITHSTANDING
          ANYTHING TO THE CONTRARY  CONTAINED HEREIN,  NEITHER THE AGENT NOR ANY
          BANK ASSUMES ANY LIABILITIES OF THE ASSIGNOR WITH RESPECT TO ANY CLAIM
          OR CLAIMS  REGARDING THE ASSIGNOR'S  OWNERSHIP OR PURPORTED  OWNERSHIP
          OF, OR RIGHTS OR PURPORTED  RIGHTS  ARISING  FROM,  ANY OF THE PLEDGED
          TRADEMARKS OR ANY USE, LICENSE OR SUBLICENSE THEREOF,  WHETHER ARISING
          OUT OF  ANY  PAST,  CURRENT  OR  FUTURE  EVENT,  CIRCUMSTANCE,  ACT OR
          OMISSION OR OTHERWISE.  ALL OF SUCH  LIABILITIES  SHALL BE EXCLUSIVELY
          THE  RESPONSIBILITY OF THE ASSIGNOR,  AND THE ASSIGNOR SHALL INDEMNIFY
          THE AGENT AND THE BANKS FOR ANY AND ALL COSTS,  EXPENSES,  DAMAGES AND
          CLAIMS,  INCLUDING LEGAL FEES,  INCURRED BY THE AGENT OR ANY BANK WITH
          RESPECT TO SUCH LIABILITIES.

     ss.17. NOTICES. All notices and other communications made or required to be
          given  pursuant to this  Trademark  Agreement  shall be in writing and
          shall be  delivered in hand,  mailed by United  States  registered  or
          certified  first-class  mail,  postage prepaid,  or sent by telegraph,
          telecopy  or telex and  confirmed  by  delivery  via courier or postal
          service,  addressed as set forth in ss.20 of the Credit Agreement. Any
          such notice or demand  shall be deemed to have been duly given or made
          and to have become effective (a) if delivered by hand to a responsible
          officer  of the  party  to which  it is  directed,  at the time of the
          receipt  thereof  by  such  officer,  (b) if  sent  by  registered  or
          certified  first-class  mail,  postage prepaid,  two (2) Business Days
          after the posting thereof, and (c) if sent by telegraph,  telecopy, or
          telex,  at the time of the  dispatch  thereof,  if in normal  business
          hours in the  country  of  receipt,  or  otherwise  at the  opening of
          business on the following Business Day.

     ss.18.  AMENDMENT  AND  WAIVER.  This  Trademark  Agreement  is  subject to
          modification  only by a writing  signed by the Agent (with the consent
          of the Banks or Majority  Banks as  provided in the Credit  Agreement)
          and the Assignor, except as provided in ss.6.2 hereof. The Agent shall
          not be deemed to have  waived any right  hereunder  unless such waiver
          shall be in writing  and signed by the Agent and the Banks or Majority
          Banks  as  provided  in the  Credit  Agreement.  A  waiver  on any one
          occasion  shall not be construed as a bar to or waiver of any right on
          any future occasion.

     ss.19. GOVERNING LAW; CONSENT TO JURISDICTION.  THIS TRADEMARK AGREEMENT IS
          INTENDED TO TAKE EFFECT AS A SEALED  INSTRUMENT  AND SHALL BE GOVERNED
          BY, AND CONSTRUED IN ACCORDANCE  WITH, THE LAWS OF THE COMMONWEALTH OF
          MASSACHUSETTS.  The Assignor  agrees that any suit for the enforcement
          of this  Trademark  Agreement  may be  brought  in the  courts  of the
          Commonwealth of Massachusetts or any federal court sitting therein and
          consents  to the  non-exclusive  jurisdiction  of  such  court  and to
          service of process  in any such suit being made upon the  Assignor  by
          mail at the address  specified in ss.17  hereof.  The Assignor  hereby
          waives any objection that it may now or hereafter have to the venue of
          any such suit or any such  court or that such  suit is  brought  in an
          inconvenient court.

     ss.20. WAIVER OF JURY TRIAL.  THE ASSIGNOR WAIVES ITS RIGHT TO A JURY TRIAL
          WITH  RESPECT TO ANY  ACTION OR CLAIM  ARISING  OUT OF ANY  DISPUTE IN
          CONNECTION  WITH THIS TRADEMARK  AGREEMENT,  ANY RIGHTS OR OBLIGATIONS
          HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except
          as prohibited by law, the Assignor  waives any right which it may have
          to claim or recover in any  litigation  referred  to in the  preceding
          sentence any special, exemplary,  punitive or consequential damages or
          any  damages  other than,  or in  addition  to,  actual  damages.  The
          Assignor  (a)  certifies  that  neither  the Agent or any Bank nor any
          representative,  agent  or  attorney  of the  Agent  or any  Bank  has
          represented,  expressly or otherwise, that the Agent or any Bank would
          not,  in the  event  of  litigation,  seek to  enforce  the  foregoing
          waivers,  and (b)  acknowledges  that,  in  entering  into the  Credit
          Agreement and the other Loan  Documents to which the Agent or any Bank
          is a party,  the Agent and the Banks are  relying  upon,  among  other
          things, the waivers and certifications contained in this ss.20.


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<PAGE>

     ss.21.  MISCELLANEOUS.  The  headings  of each  section  of this  Trademark
          Agreement are for  convenience  only and shall not define or limit the
          provisions  thereof.  This  Trademark  Agreement  and all  rights  and
          obligations  hereunder  shall be  binding  upon the  Assignor  and its
          respective  successors and assigns,  and shall inure to the benefit of
          the Agent, the Banks and their respective  successors and assigns.  In
          the event of any  irreconcilable  conflict  between the  provisions of
          this  Trademark  Agreement and the Credit  Agreement,  or between this
          Trademark Agreement and the Security Agreement,  the provisions of the
          Credit Agreement or the Security Agreement,  as the case may be, shall
          control.  If any term of this Trademark  Agreement shall be held to be
          invalid,  illegal or  unenforceable,  the  validity of all other terms
          hereof  shall  in no way  be  affected  thereby,  and  this  Trademark
          Agreement  shall be construed and be  enforceable  as if such invalid,
          illegal  or  unenforceable  term had not  been  included  herein.  The
          Assignor acknowledges receipt of a copy of this Trademark Agreement.


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               IN WITNESS WHEREOF, this Trademark Collateral Security and Pledge
               Agreement  has been  executed  as of the day and year first above
               written.

                                                     TMT-PATHWAY, L.L.C.



                                                     By:_______________________
                                                            Title:

                                                     BANKBOSTON, N.A., as Agent



                                                     By:_______________________
                                                     Peter van der Horst
                                                     Vice President


                                       98
<PAGE>

                          CERTIFICATE OF ACKNOWLEDGMENT

COMMONWEALTH OR STATE OF ______________________________________________)
__________________                                                     )  ss.
COUNTY OF _____________________________________________________________)

     Before  me,  the  undersigned,  a  Notary  Public  in and  for  the  county
aforesaid,    on   this   ____   day   of   May,   1999,   personally   appeared
______________________ to me known personally,  and who, being by me duly sworn,
deposes and says that he is the _______________________ of TMT-Pathway,  L.L.C.,
and that said instrument was signed and sealed on behalf of said  corporation by
authority  of  its  Board  of  Directors,  and  said   _________________________
acknowledged said instrument to be the free act and deed of said corporation.

                                                     --------------------------
                                                     Notary Public
                                                     My commission expires:



                                       99
<PAGE>

                          CERTIFICATE OF ACKNOWLEDGMENT

COMMONWEALTH OR STATE OF ______________________________________________)
__________________                                                     )  ss.
COUNTY OF _____________________________________________________________)

         Before  me,  the  undersigned,  a Notary  Public in and for the  county
aforesaid,  on this ____ day of May,  1999,  personally  appeared  Peter van der
Horst to me known personally,  and who, being by me duly sworn, deposes and says
that he is a Vice  President of BankBoston,  N.A. (the  "Agent"),  and that said
instrument  was signed and  sealed on behalf of said Agent by  authority  of its
Board of Directors,  and said Peter van derHorst acknowledged said instrument to
be the free act and deed of said Agent.

                                                     --------------------------
                                                     Notary Public
                                                     My commission expires:




                                      100
<PAGE>

                                  UNITED STATES

                     Trademarks and Trademark Registrations

  Trademark Registrations --
            or                    United States Patent and Trademark Office
       Service Mark           Registration No.             Registration Date
       ------------           ----------------             -----------------

MORLINE                            2038597                        2/18/97
DURA-STRIPE SYSTEM                 1904836                        7/11/95
DURA-LINE                          1700076                        7/14/92
MORLINE                            1711016                        9/01/92
TMT                                1565503                       11/14/89
DURA-STRIPE                        1508744                       10/18/88

        Trademark                          Pending Applications --
            or                    United States Patent and Trademark Office
       Service Mark                         Serial No. Filing Date
STORM-LINE                            ---                         5/04/99
LEGEND-BUILD                    75/559,289                        9/24/98

                                     FOREIGN

                      Trademarks and Trademark Regulations

                                                               REGISTRATIONS
                                                               -------------
                   TRADEMARK OR
 COUNTRY           SERVICE MARK           REGISTRATION NO    REGISTRATION DATE
 -------           ------------           ---------------    -----------------

 Canada               MORLINE                  414038             6/25/93
 Mexico              DURA-LINE                 425041             11/9/92

                              Pending Applications

                            Trademark or Service Mark

 Country           Mark                   Application No.       Filing Date
 -------           ----                   ---------------       -----------

 Canada            DURA-LINE                   699652             2/25/92

                             Unregistered Trademarks

                                     TMT-5D

                                     TMT-25D

                                     TMT-63P

                                    TMT-127P

                                    TMT-201T

                                    TMT-257D

                                    TMT-707P

                                    TMT-1003T

                                 Dura-Line 2000

                           The "Traffic Marking" Logo


                                      101
<PAGE>

                                    EXHIBIT 1

                ASSIGNMENT OF TRADEMARKS AND SERVICE MARKS (U.S.)


WHEREAS, TMT-PATHWAY, L.L.C., a company organized and existing under the laws of
the State of Delaware,  having a place of business at ____________________  (the
"Assignor"),  has adopted and used and is using the trademarks and service marks
(the "Marks")  identified on the Annex attached hereto,  and is the owner of the
registrations  of and pending  registration  applications  for such Marks in the
United States Patent and Trademark Office identified on such Annex; and

WHEREAS,  _________________,  a __________________  organized and existing under
the  laws of the  _________________  of  ________________,  having  a  place  of
business at  ______________________  (the "Assignee"),  is desirous of acquiring
the Marks and the registrations thereof and registration applications therefor;

NOW, THEREFORE, for good and valuable consideration,  receipt of which is hereby
acknowledged,  the  Assignor  does hereby  assign,  sell and  transfer  unto the
Assignee all right,  title and interest in and to the Marks,  together  with (a)
the  registrations  of and  registration  applications  for the  Marks,  (b) the
goodwill of the business  symbolized  by and  associated  with the Marks and the
registrations  thereof,  and (c) the right to sue and recover for, and the right
to profits or damages due or accrued  arising out of or in connection  with, any
and all past, present or future infringements or dilution of or damage or injury
to the Marks or the registrations thereof or such associated goodwill.

This  Assignment of Trademarks and Service Marks (U.S.) is intended to and shall
take effect as a sealed  instrument at such time as the Assignee  shall complete
this instrument by inserting its name in the second  paragraph above and signing
its acceptance of this Assignment of Trademarks and Service Marks (U.S.) below.

IN WITNESS WHEREOF,  the Assignor,  by its duly authorized officer, has executed
this assignment, as an instrument under seal, as of the __ day of ___,

----.

                                                     TMT-PATHWAY, L.L.C.



                                                     By:_______________________
                                                     Title:



                                      102
<PAGE>

The  foregoing  assignment  of the  Marks  and  the  registrations  thereof  and
registration  applications  therefor by the  Assignor to the  Assignee is hereby
accepted as of the ___ day of ___________________, ___.

                                                     By:_______________________
                                                     Title:




                                      103
<PAGE>

                          CERTIFICATE OF ACKNOWLEDGMENT

COMMONWEALTH OR STATE OF ______________________________________________)
                                                                       )  ss.
COUNTY OF _____________________________________________________________)

         On   this   the   ____   day  of  May,   1999,   before   me   appeared
__________________, the person who signed this instrument, who acknowledged that
he is the  ______________________  of  TMT-Pathway,  L.L.C.  and that being duly
authorized (s)he signed such instrument as a free act on behalf of corporation.

                                                     ---------------------------
                                                     Notary Public

         [Seal]
                                                     My commission expires:



                                      104
<PAGE>


                                      ANNEX

                     Trademarks and Trademark Registrations

  Trademark                                   Registrations --
     or                           United States Patent and Trademark Office
 Service Mark                         Registration No. Registration Date












  Trademark                                   Pending Applications --
     or                           United States Patent and Trademark Office
  Service Mark                               Serial No. Filing Date




                                      105
<PAGE>
                                                                Exhibit 10.25(b)

              AMENDED AND RESTATED MANAGEMENT CONSULTING AGREEMENT

THIS AMENDED AND RESTATED  MANAGEMENT  CONSULTING  AGREEMENT  ("Agreement"),  is
executed  as of the ____ day of  October,  1996,  by and  among  TJC  MANAGEMENT
CORPORATION,  a Delaware  corporation (the  "Consultant")  and JACKSON PRODUCTS,
INC., a Delaware corporation ("Jackson"), FLEX-O-LITE, INC. ("Flex-O-Lite"), OSD
HOLDINGS, INC., a Delaware corporation  ("Holdings"),  and OSD ENVIZION, INC., a
Delaware  corporation  ("Envizion")  (together  with  Jackson,  Flex-O-Lite  and
Holdings the  "Company").  Flex-O-  Lite,  Holdings and Envizion are also herein
referred to as the Subsidiaries.

                              W I T N E S S E T H:

WHEREAS,  the  Consultant,  Jackson and  Flex-O-Lite are parties to a management
consulting agreement, dated August 16, 1995 (the "Prior Consulting Agreement");

WHEREAS,  the Company and  Consultant  desire to terminate the Prior  Consulting
Agreement in its entirety simultaneously with execution of this Agreement; and

WHEREAS,  the  Consultant  continues to have and/or have access to personnel who
are highly skilled in the field of rendering  advice to businesses and financial
advice;

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

          1.   The  Company   hereby   retains  the   Consultant,   through  the
               Consultant's own personnel or through personnel  available to the
               Consultant,  to render  consulting  services from time to time to
               the  Company  and  its  Subsidiaries  (whether  now  existing  or
               hereafter  acquired),  in  connection  with their  financial  and
               business  affairs,   their   relationships  with  their  lenders,
               stockholders and other third-party associates or affiliates,  and
               the  expansion of their  businesses.  The term of this  Agreement
               shall  commence the date hereof and continue  until  December 31,
               2005,  unless  extended,  or sooner  terminated,  as  provided in
               paragraph 3 below. The Consultant's personnel shall be reasonably
               available to the Company's managers, auditors and other personnel
               for consultation and advice,  subject to Consultant's  reasonable
               convenience  and  scheduling.  Services  may be  rendered  at the
               Consultant's  offices or at such other locations  selected by the
               Consultant as the Company and the  Consultant  shall from time to
               time agree.

               2.   (a) The Company  shall pay the  Consultant a management  fee
                    equal to, on a per annum  basis,  the higher of (i) $550,000
                    or (ii) 2.5% of the  Company's  EBITDA  (as  defined  in the
                    Second Amended and Restated  Credit  Agreement,  dated as of
                    August 16,  1995,  among  Jackson  Products,  Inc.,  Jackson
                    Holding  Company,  the  Lenders  named  therein  and  Heller
                    Financial,  Inc. as Agent,  as in effect on the date hereof;
                    the "Credit  Agreement")  for the fiscal  year.  The Company
                    shall pay the  Consultant  such  management fee in quarterly
                    installments  equal to the  higher of (i)  $137,500  or (ii)
                    0.625% of EBITDA for such  quarter on each of March 31, June
                    30,  September 30 and  December 31 of each year,  commencing
                    September  30,  1995,  provided  that the amount of such fee
                    payable on September  30, 1995 shall accrue from the date of
                    this Agreement at the annual rate of $550,000 per annum. The
                    management fee will be recalculated, as set forth in clauses
                    (i) and (ii) above, promptly and as soon as practicable,  as
                    of the beginning of each fiscal quarter.

               (b)  In addition  to the above  quarterly  payments,  the Company
                    shall pay to the Consultant,  (i) an investment  banking and
                    sponsorship  fee of up to two percent (2%) of the  aggregate
                    consideration   paid   (including   assumed  or   refinanced
                    indebtedness,  non-competition, earnout, contingent purchase
                    price,  incentive  arrangements and similar payments) (A) by
                    the  Company  in  connection  with  the  acquisition  by the
                    Company  of all  or  substantially  all  of the  outstanding
                    capital stock, warrants,  options or other rights to acquire
                    or sell capital stock,  or all or  substantially  all of the
                    business  or  assets  of  another  individual,  corporation,
                    partnership or other  business  entity or (B) to the Company
                    in  connection  with  the  sale  by  the  Company  of all or
                    substantially  all  of  the  Company's  outstanding  capital
                    stock, warrants, options, or other rights to acquire or sell

                                      106
<PAGE>

                    stock, or all or substantially all of the business or assets
                    of the  Company  or one of  its  Subsidiaries  (each  of the
                    transactions   described   in   clauses   (A)  and  (B),   a
                    "Transaction"),   including,   but  not   limited   to,  any
                    Transaction   negotiated  for  the  Company   involving  any
                    affiliate of the Company or the Consultant,  including,  but
                    not  limited  to,  any  Transaction  involving,  The  Jordan
                    Company,  Jordan/Zalaznick Capital Company or any affiliates
                    of  any  of  the   foregoing   (collectively,   the  "Jordan
                    Affiliates");  and (ii) a financial  consulting fee of up to
                    one percent  (1%) of the amount  obtained or made  available
                    pursuant to any debt,  equity or other financing  (including
                    without limitation, any refinancing) by the Company with the
                    assistance of Consultant, including, but not limited to, any
                    financing  obtained  for the Company from one or more of the
                    Jordan Affiliates, provided, that in no event shall a fee be
                    payable under Section 2(b)(ii) hereunder (x) with respect to
                    borrowings under the Credit Agreement or (y) with respect to
                    financings   referred  to  in  Section   2(b)(ii)   made  in
                    connection  with  the  consummation  of  a  Transaction.  In
                    addition, prior to paying any fee pursuant to this paragraph
                    (b) the Board of  Directors  of the Company  (including  the
                    disinterested   directors)   must  approve  the   applicable
                    Transaction  or  financing  and in payment of such fee as in
                    the best interests of the Corporation.

               (c)  In addition, the Company shall have paid to the Consultant a
                    closing fee of $2.75  million upon the  consummation  of the
                    merger of Jackson  Acquisition  Corp.  and  Jackson  Holding
                    Company in lieu of any fee  otherwise  payable under Section
                    2(a) and Section 2(b).

               3.   The  Company  shall  reimburse   Consultant  for  reasonable
                    out-of-pocket expenses and any reasonable, direct, allocable
                    costs  incurred  by the  Consultant  and  its  personnel  in
                    performing   services  hereunder  to  the  Company  and  its
                    Subsidiaries upon the Consultant's  rendering of a statement
                    therefor, together with supporting data as the Company shall
                    reasonably require.

               4.   Notwithstanding the foregoing, the Company shall not pay the
                    fees under Section 2 and such fees shall accrue  pursuant to
                    the second sentence of this Section 4, (a) if any payment or
                    financial  covenant  default  under  either  (i) the  Credit
                    Agreement or (ii) the Note  Agreement of even date  herewith
                    by and among the Company and the other parties listed on the
                    signature  pages  thereto,  has occurred  and is  continuing
                    (regardless of whether such  Agreements are then in effect),
                    (b)  if  and  to  the  extent  expressly  prohibited  by the
                    provisions  of  any  credit,   stock,   financing  or  other
                    agreements  or  instruments  binding upon the  Company,  its
                    Subsidiaries or properties,  (c) if the Company has not paid
                    interest on any interest  payment  date or has  postponed or
                    not made any principal payments with respect to any of their
                    indebtedness  on any scheduled  payment dates, or (d) if the
                    Company has not paid dividends on any dividend  payment date
                    as set  forth  in its  certificate  of  incorporation  or as
                    declared by its Board of Directors,  or has postponed or not
                    made any  redemptions on any redemption date as set forth in
                    its  certificate  of  incorporation  or any  certificate  of
                    designation with respect to its preferred stock, if any. Any
                    payments  otherwise owed  hereunder,  which are not made for
                    any of the above-mentioned  reasons,  shall not be cancelled
                    but rather  shall  accrue,  without  interest,  and shall be
                    payable by the  Company  promptly  when,  and to the extent,
                    that the  Company is no longer  prohibited  from making such
                    payments  and when  the  Company  has  become  current  with
                    respect to such principal or interest  payments,  has become
                    current  with  respect to such  dividends  and has made such
                    redemptions  with respect to such preferred  stock,  if any.
                    This Section 4 will not, in any event, restrict or limit the
                    Company's  obligations  under Section 3, 8 and 9, which will
                    be absolute and not subject to set-off.

               5.   This Agreement shall be automatically renewed for successive
                    one-year  terms  starting  December  31, 2005 unless  either
                    party hereto,  within sixty (60) days prior to the scheduled
                    renewal date, notifies the other party as to its election to
                    terminate  this  Agreement.  Notwithstanding  the foregoing,
                    this  Agreement  may be  terminated  by not less than ninety


                                      107
<PAGE>

                    (90) days'  prior  written  notice  from the  Company to the
                    Consultant  at any time after (a)  substantially  all of the
                    stock or substantially  all of the assets of the Company are
                    sold to any entity unaffiliated with the Consultant and/or a
                    majority of the Company's stockholders  immediately prior to
                    such sale or (b) the Company is merged or consolidated  into
                    another entity  unaffiliated  with the  Consultant  and/or a
                    majority of the Company's stockholders  immediately prior to
                    such  merger  and the  Company is not the  survivor  of such
                    transaction.

               6.   The  Consultant  shall have no  liability  to the Company on
                    account of (a) any advice  which it renders to the  Company,
                    provided  the  Consultant  believed  in good faith that such
                    advice was useful or  beneficial  to the Company at the time
                    it was rendered, or (b) the Consultant's inability to obtain
                    financing or achieve other results desired by the Company or
                    Consultant's  failure to render  services  to the Company at
                    any particular time or from time to time, or (c) the failure
                    of any transaction to meet the financial, operating or other
                    expectations  of the Company.  The Company's sole remedy for
                    any claim under this Agreement  shall be termination of this
                    Agreement.

               7.   Notwithstanding  anything contained in this Agreement to the
                    contrary,  the  Company  agrees  and  acknowledges  that the
                    Consultant,  the Jordan  Affiliates and their  shareholders,
                    employees,  directors  and  affiliates  intend to engage and
                    participate  in  acquisitions   and  business   transactions
                    outside  of the scope of the  relationship  created  by this
                    Agreement  and  neither  the  Consultant,  any of the Jordan
                    Affiliates  nor  any  of  their   shareholders,   employees,
                    directors  or  affiliates  shall  be  under  any  obligation
                    whatsoever   (except  to  the  extent  that  fiduciary  duty
                    principles under Delaware corporate law may be applicable to
                    individual  directors  and  officers of the Company) to make
                    such   acquisitions,    business   transactions   or   other
                    opportunities    through   the   Company   or   offer   such
                    acquisitions,  business  transactions or other opportunities
                    to the Company.

               8.   The  Company  will,  to  the  fullest  extent  permitted  by
                    applicable law,  indemnify and hold harmless the Consultant,
                    its   affiliates   and   associates,   each  of  the  Jordan
                    Affiliates,  and each of the  respective  owners,  partners,
                    officers,  directors,  employees  and  agents of each of the
                    foregoing,  from and  against any loss,  liability,  damage,
                    claim  or  expenses  (including  the fees  and  expenses  of
                    counsel)  arising  as a result  or in  connection  with this
                    Agreement or the Consultant's services hereunder.

               9.   Any payments paid by the Company under this Agreement  shall
                    not be  subject  to set-off  and shall be  increased  by the
                    amount,  if any, of any taxes  (other than income  taxes) or
                    other  governmental   charges  levied  in  respect  of  such
                    payments,  so that the  Consultant  is made  whole  for such
                    taxes or charges.

               10.  This  Agreement sets forth the entire  understanding  of the
                    parties  with  respect  to  the  Consultant's  rendering  of
                    services to the Company. This Agreement may not be modified,
                    waived,   terminated  or  amended  except  expressly  by  an
                    instrument  in  writing  signed  by the  Consultant  and the
                    Company.

                    (1)  This  Agreement  may be assigned by either party hereto
                         without  the  consent  of the  other  party,  provided,
                         however,  such assignment  shall not relieve such party
                         from its obligations hereunder.  Any assignment of this
                         Agreement  shall  be  binding  upon  and  inure  to the
                         benefit of the parties and their respective  successors
                         and assigns.

                    (2)  In the event that any provision of this Agreement shall
                         be  held to be void or  unenforceable  in  whole  or in
                         part,  the remaining  provisions of this  Agreement and
                         the  remaining  portion of any  provision  held void or
                         unenforceable  in part shall continue in full force and
                         effect.

                                      108
<PAGE>

                    (3)  Except  as  otherwise   specifically  provided  herein,
                         notice given  hereunder  shall be deemed  sufficient if
                         delivered personally or sent by registered or certified
                         mail to the  address of the party for whom  intended at
                         the principal  executive  offices of such party,  or at
                         such  other  address  as  such  party  may  hereinafter
                         specify by written notice to the other party.

                    (4)  Subsidiaries  will be jointly and severally  liable and
                         obligated  hereunder  with respect to each  obligation,
                         responsibility  and  liability of the Company,  as if a
                         direct obligation of the Subsidiaries.

                    (5)  No  waiver  by  either  party  of  any  breach  of  any
                         provision   of  this   Agreement   shall  be  deemed  a
                         continuing  waiver  or a  waiver  of any  preceding  or
                         succeeding  breach  of such  provision  or of any other
                         provision herein contained.

                    (6)  The Consultant and its personnel shall, for purposes of
                         this Agreement, be independent contractors with respect
                         to the Company.

                    (7)  This  Agreement  shall be governed by the internal laws
                         (and  not the law of  conflicts)  of the  State  of New
                         York.

                                      109
<PAGE>

IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
day and year first above written.

                                                  TJC MANAGEMENT CORPORATION


                                                  By:__________________________
                                                  Name:
                                                  Title:


                                                  JACKSON PRODUCTS, INC.


                                                  By:__________________________
                                                  Name:
                                                  Title:


                                                  FLEX-O-LITE, INC.


                                                  By:__________________________
                                                  Name:
                                                  Title:

                                                  OSD HOLDINGS, INC.


                                                  By:__________________________
                                                  Name:
                                                  Title:


                                                  OSD ENVIZION, INC.


                                                  By:__________________________
                                                  Name:
                                                  Title:

                                      110
<PAGE>

                                                                Exhibit 10.25(c)

           SECOND AMENDED AND RESTATED MANAGEMENT CONSULTING AGREEMENT


THIS SECOND AMENDED AND RESTATED MANAGEMENT CONSULTING AGREEMENT  ("Agreement"),
is  executed  as of  the  22nd  day  of  April,  1998,  between  TJC  MANAGEMENT
CORPORATION,  a Delaware  corporation (the  "Consultant")  and JACKSON PRODUCTS,
INC.,  a  Delaware  corporation   ("Jackson"  and,  together  with  all  of  its
subsidiaries, whether now or hereafter acquired, the "Company").

                              W I T N E S S E T H:

WHEREAS,  the  Consultant and the Company  entered into a management  consulting
agreement, dated as of August 16, 1995 (the "Original Consulting Agreement");

WHEREAS,  the  Consultant  and the Company  entered into an amended and restated
management  consulting  agreement,  dated as of  October  21,  1996 (the  "Prior
Consulting  Agreement")  which  amended and  restated  the  Original  Consulting
Agreement; and

WHEREAS,  the  Company  and  Consultant  desire to amend and  restate  the Prior
Consulting Agreement in its entirety; and

WHEREAS,  the  Consultant  continues to have and/or have access to personnel who
are highly skilled in the field of rendering  advice to businesses and financial
advice;

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

     1.   The Company hereby retains the  Consultant,  through the  Consultant's
          own personnel or through  personnel  available to the  Consultant,  to
          render  consulting  services  from  time to time  to the  Company,  in
          connection with its financial and business affairs,  its relationships
          with its lenders,  stockholders  and other  third-party  associates or
          affiliates,  and the  expansion  of its  businesses.  The term of this
          Agreement  commenced  on  August  16,  1995 and shall  continue  until
          December 31, 2005, unless extended, or sooner terminated,  as provided
          in Section 5 below.  The  Consultant's  personnel  shall be reasonably
          available to the Company's managers,  auditors and other personnel for
          consultation   and   advice,   subject  to   Consultant's   reasonable
          convenience   and   scheduling.   Services  may  be  rendered  at  the
          Consultant's  offices  or at  such  other  locations  selected  by the
          Consultant as the Company and the  Consultant  shall from time to time
          agree.

          2.   (a) The Company shall pay the  Consultant a management  fee equal
               to, on a per annum basis, the higher of (i) $600,000 or (ii) 2.5%
               of the Company's  EBITDA (as defined in the Revolving  Credit and
               Acquisition  Loan  Agreement,  dated as of April 22, 1998,  among
               Jackson, the Lenders named therein and BankBoston, N.A. as Agent,
               as in effect on the date hereof; the "Credit  Agreement") for the
               fiscal year. The Company shall pay the Consultant such management
               fee in quarterly installments equal to the higher of (i) $150,000
               or (ii)  0.625% of EBITDA  for such  quarter on each of March 31,
               June 30,  September 30 and  December 31 of each year,  commencing
               June 30,  1998,  provided  that the amount of such fee payable on
               June 30, 1998 shall accrue from the date of this Agreement at the
               annual rate of $600,000  per annum.  The  management  fee will be
               recalculated,  as set  forth  in  clauses  (i)  and  (ii)  above,
               promptly and as soon as practicable,  as of the beginning of each
               fiscal quarter.

          (b)  In addition to the above  quarterly  payments,  the Company shall
               pay to the Consultant,  (i) an investment banking and sponsorship
               fee of up to two percent (2%) of the aggregate consideration paid
               (including assumed or refinanced indebtedness,  non- competition,
               earnout,  contingent purchase price,  incentive  arrangements and
               similar  payments)  (A) by the  Company  in  connection  with the
               acquisition  by the  Company of all or  substantially  all of the
               outstanding capital stock,  warrants,  options or other rights to
               acquire or sell capital stock, or all or substantially all of the
               business   or  assets   of   another   individual,   corporation,
               partnership  or other  business  entity or (B) to the  Company in
               connection  with the sale by the Company of all or  substantially
               all  of  the  Company's  outstanding  capital  stock,   warrants,
               options,  or other  rights to  acquire or sell  stock,  or all or
               substantially  all of the business or assets of the Company (each
               of  the  transactions   described  in  clauses  (A)  and  (B),  a
               "Transaction"),  including,  but not limited to, any  Transaction


                                      111
<PAGE>

               negotiated for the Company involving any affiliate of the Company
               or the Consultant, including, but not limited to, any Transaction
               involving,  The Jordan Company,  Jordan/Zalaznick Capital Company
               or any  affiliates  of any of the  foregoing  (collectively,  the
               "Jordan  Affiliates");  and (ii) a financial consulting fee of up
               to one  percent  (1%) of the amount  obtained  or made  available
               pursuant  to any  debt,  equity  or  other  financing  (including
               without  limitation,  any  refinancing)  by the Company  with the
               assistance  of  Consultant,  including,  but not  limited to, any
               financing obtained for the Company from one or more of the Jordan
               Affiliates,  provided,  that in no event  shall a fee be  payable
               under Section  2(b)(ii)  hereunder (x) with respect to borrowings
               under the Credit  Agreement  or (y) with  respect  to  financings
               referred  to in  Section  2(b)(ii)  made in  connection  with the
               consummation of a Transaction.  In addition,  prior to paying any
               fee pursuant to this  paragraph (b) the Board of Directors of the
               Company (including the disinterested  directors) must approve the
               applicable Transaction or financing and in payment of such fee as
               in the best interests of the Corporation.

     (c)  In addition,  the Company shall have paid to the  Consultant a closing
          fee of $1.65  million upon the  consummation  of the  acquisitions  of
          American Allsafe Company,  Silencio/Safety Direct, Inc. and Crystaloid
          Electronics Company the execution and delivery of the Credit Agreement
          and the  offering by Jackson of its 9 1/2% Senior  Subordinated  Notes
          due 2005 in lieu of any fee  otherwise  payable under Section 2(a) and
          Section 2(b).

     3.   The Company shall reimburse  Consultant for reasonable  out-of- pocket
          expenses and any reasonable,  direct,  allocable costs incurred by the
          Consultant and its personnel in performing  services  hereunder to the
          Company and its  Subsidiaries  upon the  Consultant's  rendering  of a
          statement therefor, together with supporting data as the Company shall
          reasonably require.

     4.   Notwithstanding  the  foregoing,  the  Company  shall not pay the fees
          under  Section  2  (without  limiting  the  fees,  reimbursements  and
          payments  provided under Sections 3, 8, and 9 of this Agreement  which
          shall be due and  payable in all  events)  and such fees shall  accrue
          pursuant to the second  sentence of this  Section 4, (a) if and to the
          extent  expressly  prohibited by the provisions of any credit,  stock,
          financing or other agreements or instruments  binding upon the Company
          or its  properties,  (b) if the Company  has not paid  interest on any
          interest  payment  date or has  postponed  or not made  any  principal
          payments  with  respect to any of its  indebtedness  on any  scheduled
          payment  dates,  or (c) if the Company has not paid  dividends  on any
          dividend payment date as set forth in its certificate of incorporation
          (unless  such  dividends  are  accrued) or as declared by its Board of
          Directors,  or  has  postponed  or not  made  any  redemptions  on any
          redemption  date as set forth in its certificate of  incorporation  or
          any certificate of designation with respect to its preferred stock, if
          any. Any payments otherwise owed hereunder, which are not made for any
          of the above-mentioned reasons, shall not be canceled but rather shall
          accrue, without interest, and shall be payable by the Company promptly
          when, and to the extent, that the Company is no longer prohibited from
          making such  payments,  the Company has become current with respect to
          such  principal or interest  payments,  the Company has become current
          with  respect to such  dividends  and has made such  redemptions  with
          respect  to  such  preferred  stock,  if  any.  Any  payment  required
          hereunder  which is not paid when due shall bear  interest at the rate
          of seven percent (7.0%) per annum.

     5.   This Agreement shall be automatically renewed for successive one- year
          terms  starting  December 31, 2005 unless either party hereto,  within
          sixty (60) days prior to the  scheduled  renewal  date,  notifies  the
          other  party  as  to  its  election  to  terminate   this   Agreement.
          Notwithstanding the foregoing, this Agreement may be terminated by not
          less than ninety (90) days' prior  written  notice from the Company to
          the Consultant at any time after (a) substantially all of the stock or
          substantially  all of the assets of the Company are sold to any entity
          unaffiliated  with the  Consultant  and/or a majority of the Company's
          stockholders  immediately  prior to such  sale or (b) the  Company  is
          merged or  consolidated  into  another  entity  unaffiliated  with the
          Consultant and/or a majority of the Company's stockholders immediately
          prior to such  merger  and the  Company  is not the  survivor  of such
          transaction.

                                      112
<PAGE>

     6.   The  Consultant  shall have no  liability to the Company on account of
          (a)  any  advice  which  it  renders  to  the  Company,  provided  the
          Consultant  believed  in good  faith  that such  advice  was useful or
          beneficial  to the  Company  at the time it was  rendered,  or (b) the
          Consultant's  inability to obtain  financing or achieve  other results
          desired by the Company or  Consultant's  failure to render services to
          the Company at any  particular  time or from time to time,  or (c) the
          failure of any  transaction to meet the financial,  operating or other
          expectations  of the Company.  The Company's sole remedy for any claim
          under this Agreement shall be termination of this Agreement.

     7.   Notwithstanding  anything contained in this Agreement to the contrary,
          the Company agrees and  acknowledges  that the Consultant,  the Jordan
          Affiliates and their shareholders, employees, directors and affiliates
          intend  to  engage  and  participate  in  acquisitions   and  business
          transactions  outside of the scope of the relationship created by this
          Agreement and neither the Consultant, any of the Jordan Affiliates nor
          any of their shareholders, employees, directors or affiliates shall be
          under any obligation  whatsoever  (except to the extent that fiduciary
          duty  principles  under  Delaware  corporate  law may be applicable to
          individual  directors  and  officers  of the  Company)  to  make  such
          acquisitions, business transactions or other opportunities through the
          Company or offer such  acquisitions,  business  transactions  or other
          opportunities to the Company.

     8.   The Company will, to the fullest extent  permitted by applicable  law,
          indemnify  and  hold  harmless  the  Consultant,  its  affiliates  and
          associates,  each of the Jordan Affiliates, and each of the respective
          owners, partners, officers, directors, employees and agents of each of
          the foregoing, from and against any loss, liability,  damage, claim or
          expenses  (including  the fees and expenses of counsel)  (collectively
          "Damages") arising as a result or in connection with this Agreement or
          the Consultant's  services  hereunder or other activities on behalf of
          the Company,  unless such Damages resulted from  Consultant's  lack of
          good faith at the time it rendered any advice to the Company.

     9.   Any payments  paid by the Company  under this  Agreement  shall not be
          subject to set-off and shall be  increased  by the amount,  if any, of
          any taxes  (other than  income  taxes) or other  governmental  charges
          levied in respect of such  payments,  so that the  Consultant  is made
          whole for such taxes or charges.

     10.  (a) This Agreement sets forth the entire  understanding of the parties
          with respect to the Consultant's rendering of services to the Company.
          This  Agreement  may not be modified,  waived,  terminated  or amended
          except  expressly by an instrument in writing signed by the Consultant
          and the Company.

          (b)  This Agreement may be assigned by either party hereto without the
               consent of the other party,  provided,  however,  such assignment
               shall not relieve such party from its obligations hereunder.  Any
               assignment of this  Agreement  shall be binding upon and inure to
               the benefit of the parties and their  respective  successors  and
               assigns.

          (c)  In the event that any provision of this  Agreement  shall be held
               to be void or  unenforceable  in whole or in part,  the remaining
               provisions of this  Agreement  and the  remaining  portion of any
               provision  held void or  unenforceable  in part shall continue in
               full force and effect.

          (d)  Except as otherwise  specifically  provided herein,  notice given
               hereunder shall be deemed  sufficient if delivered  personally or
               sent by registered or certified  mail to the address of the party
               for whom  intended  at the  principal  executive  offices of such
               party,  or at such other  address  as such party may  hereinafter
               specify by written notice to the other party.

          (e)  No waiver by either party of any breach of any  provision of this
               Agreement shall be deemed a continuing  waiver or a waiver of any
               preceding or succeeding  breach of such provision or of any other
               provision herein contained.

          (f)  The  Consultant  and its  personnel  shall,  for purposes of this
               Agreement,   be  independent  contractors  with  respect  to  the
               Company.

          (g)  This  Agreement  shall be governed by the internal  laws (and not
               the law of conflicts) of the State of New York.


                                      113
<PAGE>

IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
day and year first above written.

                                                 TJC MANAGEMENT CORPORATION


                                                 By:__________________________
                                                 Name:
                                                 Title:


                                                 JACKSON PRODUCTS, INC.


                                                 By:__________________________
                                                 Name:  Christopher T. Paule
                                                 Title: Vice President




                                      114
<PAGE>
                                                                Exhibit 10.43(b)
                              AMENDED AND RESTATED

                  INTERCOMPANY MANAGEMENT CONSULTING AGREEMENT

THIS AMENDED AND RESTATED  MANAGEMENT  CONSULTING  AGREEMENT  ("Agreement"),  is
executed  as of the  _____  day of  October,  1996,  between  FLEX-O-LITE,  INC.
("Flex-O-Lite"),  a Delaware corporation,  OSD HOLDINGS,  INC.  ("Holdings"),  a
Delaware  corporation,   and  OSD  ENVIZION,   Inc.  ("Envizion"),   a  Delaware
corporation  (collectivley,   Flex-O-Lite,  Holdings  and  Envizion  are  herein
referred  to  as  the  "Company"),   and  JACKSON  PRODUCTS,  INC.,  a  Delaware
corporation ("Consultant").

                              W I T N E S S E T H:

WHEREAS,  the Consultant and Flex-O-Lite are parties to a management  consulting
agreement, dated August 16, 1995 (the "Prior Consulting Agreement"); and

WHEREAS,  the Company and  Consultant  desire to terminate the Prior  Consulting
Agreement in its entirety simultaneously with execution of this Agreement; and

WHEREAS,  the  Consultant  continues to have and/or have access to personnel who
are highly skilled in the field of rendering  advice to businesses and financial
advice;

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

     1.   The Company hereby retains the  Consultant,  through the  Consultant's
          own personnel or through  personnel  available to the  Consultant,  to
          render  consulting  services  from time to time to the Company and its
          subsidiaries   (whether  now  existing  or  hereafter  acquired),   in
          connection   with  their   financial  and  business   affairs,   their
          relationships  with their lenders,  stockholders and other third-party
          associates or affiliates,  and the expansion of their businesses.  The
          term of this  Agreement  shall  commence  the date hereof and continue
          until August 16,  2005,  unless  extended,  or sooner  terminated,  as
          provided in paragraph 4 below.  The  Consultant's  personnel  shall be
          reasonably  available to the  Company's  managers,  auditors and other
          personnel  for  consultation  and  advice,   subject  to  Consultant's
          reasonable convenience and scheduling. Services may be rendered at the
          Consultant's  offices  or at  such  other  locations  selected  by the
          Consultant as the Company and the  Consultant  shall from time to time
          agree.

     2.   The Company shall pay the  Consultant an annual fee as shall be agreed
          to by the parties  (and,  in the event of no agreement by the parties,
          the  amount  paid in the  immediately  preceding  year),  in each case
          payable  in  quarterly  installments  on the 30th day of March,  June,
          September and December of each year, starting September 30, 1995.

     3.   Out-of-pocket  expenses (including,  without limitation,  an allocable
          amount of the  Consultant's  overhead  expenses,  as determined by the
          Consultant in its sole discretion)  incurred by the Consultant and its
          personnel  in  performing  services  hereunder  to the Company and its
          subsidiaries  shall be promptly  reimbursed  to it by the Company upon
          the  Consultant's  rendering of a statement  therefor,  together  with
          supporting data as the Company shall reasonably require.

     4.   Notwithstanding  the  foregoing,  the Company shall not be required to
          pay the fees under  Section 3 (without  limiting  the  obligation  for
          payment  of the  fees,  reimbursements  and  payments  provided  under
          Sections 7 and 8 of this  Agreement  which shall be due and payable in
          all  events),  (a) if and to the extent  expressly  prohibited  by the
          provisions  of any credit,  stock,  financing or other  agreements  or
          instruments binding upon the Company,  its subsidiaries or properties,
          (b) if the Company, or any of its subsidiaries,  has not paid interest
          on any  interest  payment  date  or has  postponed  or  not  made  any
          principal  payments with respect to any of their  indebtedness  on any
          scheduled  payment dates, or (c) if the Company has not paid dividends
          on any  dividend  payment  date as set  forth  in its  certificate  of
          incorporation  or as  declared  by  its  Board  of  Directors,  or has
          postponed or not made any  redemptions on any  redemption  date as set
          forth  in its  certificate  of  incorporation  or any  certificate  of
          designation  with respect to its preferred stock, if any. Any payments
          otherwise  owed  hereunder,   which  are  not  made  for  any  of  the
          above-mentioned  reasons,  shall not be  cancelled  but  rather  shall
          accrue,  and shall be payable by the Company promptly when, and to the
          extent,  that the  Company is no longer  prohibited  from  making such
          payments and when the Company has become  current with respect to such
          principal  or interest  payments,  has become  current with respect to


                                      115
<PAGE>

          such  dividends  and has made such  redemptions  with  respect to such
          preferred stock, if any. Any payment  required  hereunder which is not
          paid when due shall bear interest at the rate of ten percent (10%) per
          annum.

     5.   This Agreement shall be automatically  renewed for successive one-year
          terms  starting  August 16, 2005 unless  either party  hereto,  within
          sixty (60) days prior to the  scheduled  renewal  date,  notifies  the
          other  party  as  to  its  election  to  terminate   this   Agreement.
          Notwithstanding the foregoing, this Agreement may be terminated by not
          less than ninety (90) days' prior  written  notice from the Company to
          the Consultant at any time after (i) substantially all of the stock or
          substantially  all of the assets of the Company are sold to any entity
          unaffiliated  with the  Consultant  and/or a majority of the Company's
          stockholders  immediately  prior to such sale,  or (ii) the Company is
          merged or  consolidated  into  another  entity  unaffiliated  with the
          Consultant and/or a majority of the Company's stockholders immediately
          prior to such  merger  and the  Company  is not the  survivor  of such
          transaction.

     6.   The  Consultant  shall have no  liability to the Company on account of
          (i)  any  advice  which  it  renders  to  the  Company,  provided  the
          Consultant  believed  in good  faith  that such  advice  was useful or
          beneficial  to the  Company at the time it was  rendered,  or (ii) the
          Consultant's  inability to obtain  financing or achieve  other results
          desired by the Company or  Consultant's  failure to render services to
          the Company at any particular  time or from time to time, or (iii) the
          failure of any  transaction to meet the financial,  operating or other
          expectations  of the Company.  The Company's sole remedy for any claim
          under this Agreement shall be termination of this Agreement.

     7.   The Company will, to the fullest extent  permitted by applicable  law,
          indemnify  and  hold  harmless  the  Consultant,  its  affiliates  and
          associates,  and each of the respective  owners,  partners,  officers,
          directors,  employees  and agents of each of the  foregoing,  from and
          against any loss, liability,  damage, claim or expenses (including the
          fees and  expenses  of counsel)  arising as a result or in  connection
          with this  Agreement,  the  Consultant's  services  hereunder or other
          activities on behalf of the Company and its subsidiaries.

     8.   The amount of any payments  paid by the Company  under this  Agreement
          shall be  increased  by the amount,  if any, of any taxes  (other than
          income taxes) or other governmental  charges levied in respect of such
          payments,  so that the  Consultant  is made  whole  for such  taxes or
          charges.

     9.   a. This Agreement sets forth the entire  understanding  of the parties
          with respect to the Consultant's rendering of services to the Company.
          This  Agreement  may not be modified,  waived,  terminated  or amended
          except  expressly by an instrument in writing signed by the Consultant
          and the Company.

     b.   This Agreement may not be assigned by the Company  without the consent
          of the  Consultant,  but  may be  assigned  by the  Consultant  to any
          affiliate of the  Consultant,  as the term  "affiliate" is used in the
          federal  securities  laws,  and  may be  assigned  or  pledged  by the
          Consultant to any financial institution or other lender. Any permitted
          assignment  of this  Agreement  shall be binding upon and inure to the
          benefit of the parties and their respective successors and assigns.

     c.   In the event that any provision of this Agreement  shall be held to be
          void or unenforceable in whole or in part, the remaining provisions of
          this Agreement and the remaining portion of any provision held void or
          unenforceable in part shall continue in full force and effect.

     d.   Except  as  otherwise   specifically  provided  herein,  notice  given
          hereunder shall be deemed  sufficient if delivered  personally or sent
          by registered  or certified  mail to the address of the party for whom
          intended at the principal  executive offices of such party, or at such
          other address as such party may hereinafter  specify by written notice
          to the other party.

     e.   No  waiver  by any  party  of any  breach  of any  provision  of  this
          Agreement  shall be  deemed a  continuing  waiver  or a waiver  of any
          preceding  or  succeeding  breach  of such  provision  or of any other
          provision herein contained.

     f.   The  Consultant  and  its  personnel   shall,  for  purposes  of  this
          Agreement, be independent contractors with respect to the Company.

     g.   This Agreement shall be governed by the internal laws (and not the law
          of conflicts) of the State of New York.


                                      116
<PAGE>


IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
day and year first above written.

                                                 FLEX-O-LITE, INC.


                                                 By
                                                    Name:
                                                    Title:


                                                 OSD HOLDINGS, INC.


                                                 By
                                                    Name:
                                                    Title:


                                                 OSD ENVIZION, INC.


                                                 By
                                                    Name:
                                                    Title:


                                                 JACKSON PRODUCTS, INC.


                                                 By
                                                    Name:
                                                    Title:



                                      117
<PAGE>
                                                                      Exhibit 21

                   LIST OF SUBSIDIARIES OF THE COMPANY

Personal Safety Products Group
--------------------------------

American Allsafe Company

Silencio/Safety Direct, Inc.

Crystaloid Technologies, Inc.

Lansec Holding GmbH


Highway Safety Products Group
-------------------------------

Flex-O-Lite, Inc.

TMT-Pathway, L.L.C.












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)


                                       By:/s/ Christopher T. Paule
                                       ---------------------------
                                       Christopher T. Paule
                                       President and Chief Operating Officer
 Date: 3/16/00
                                       By:/s/ Mark A. Kolmer
                                       ---------------------
                                       Mark A. Kolmer
                                       Vice President - Finance



                                      118
<PAGE>