<PAGE>

                                                                   Exhibit 10.19

(Multicurrency - Cross Border)

                                     ISDA(R)

                   International Swap Dealers Association Inc.

                                MASTER AGREEMENT

                          dated as of December 4, 1998

ABN AMRO BANK N.V.                    and            PACKAGING DYNAMICS, L.L.C.

have entered and/or anticipate entering into the one or more transactions (each
a "Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows: -

1.   Interpretation

(a)  Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b)  Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c)  Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.

2.   Obligations

(a)  General Conditions.

<PAGE>


     (i)  Each party will make each payment or delivery specified in each
     Confirmation to be made by it subject to the other provisions of this
     Agreement.


     (ii)  Payments under this Agreement will be made on the due date for value
     on that date in the place of the account specified in the relevant
     Confirmation or otherwise pursuant to this Agreement, in freely
     transferable funds and in the manner customary for payments in the required
     currency. Where settlement is by delivery (that is, other than by payment),
     such delivery will be made for receipt on the due date in the manner
     customary for the relevant obligation unless otherwise specified in the
     relevant Confirmation or elsewhere in this Agreement.

     (iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
     the condition precedent that no Event of Default or Potential Event of
     Default with respect to the other party has occurred and is continuing, (2)
     the condition precedent that no Early Termination Date in respect of the
     relevant Transaction has occurred or been effectively designated and (3)
     each other applicable condition precedent specified in this Agreement.

(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c)  Netting. If on any date amounts would otherwise be payable:-

     (i)   in the same currency; and

     (ii)  in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make.
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been. payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to . the
election, together . with the starting date (in .which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties make
and receive payments or deliveries.

(d)  Deduction or Withholding for Tax

     (i) Gross-Up. All payments under this Agreement will be made without any
     deduction or withholding for or on account of any Tax unless such deduction
     or withholding is required by any applicable law, as modified by the
     practice of any relevant governmental revenue authority, then in effect. If
     a party is so required to deduct or withhold, then that party ("X") will:
     --

          (1) promptly notify the other party ("Y") of such requirement;

          (2) pay to the relevant authorities the full amount required to be
          deducted or withheld (including the full amount required to be
          deducted or withheld from any additional amount paid by X to Y under
          this Section 2(d)) promptly upon the earlier of determining that such
          deduction or withholding is required or receiving notice that such
          amount has been assessed against Y;

          (3) promptly forward to Y an official receipt (or a certified copy),
          or other documentation reasonably acceptable to Y. evidencing such
          payment to such. authorities; and

          (4) if such Tax is an Indemnifiable- Tax, pay to Y, in addition to the
          payment to which Y is otherwise entitled under this Agreement, such
          additional amount as is necessary to ensure that the net amount
          actually received by Y (free and clear of Indemnifiable Taxes, whether
          assessed against X or Y) will equal the full amount Y would have
          received had no such deduction or withholding been required. However,
          X will not be required to pay any additional amount to Y to the extent
          that it would not be required to be paid but for:

               (A) the failure by Y to comply with or perform any agreement
               contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

               (B) the failure of a representation made by Y pursuant to Section
               3(f) to be accurate and true unless such failure would not have
               occurred but for (I) any action taken by a taxing authority, or
               brought in a court of competent jurisdiction, on or after the
               date on which a Transaction is entered into (regardless of
               whether such action is taken or brought with respect to a party
               to this Agreement) or (II) a Change in Tax Law.

<PAGE>

     (ii)  Liability. If: --

          (1)  X is required by any applicable law, as modified by the practice
          of any relevant governmental revenue authority, to make any deduction
          or withholding in respect of which X would not be required to pay an
          additional amount to Y under Section 2(d)(i)(4);

          (2)  X does not so deduct or withhold; and

          (3)  a liability resulting from such Tax is assessed directly against
          X,

     then, except to the extent Y has satisfied or then satisfies the liability
     resulting from such Tax, Y will promptly pay to X the amount of such
     liability (including any related liability for interest, but including any
     related liability for penalties only if Y has failed to comply with or
     perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)  Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3.   Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that: --

(a)  Basic Representations.

     (i)  Status. It is duly organised and validly existing under the laws of
     the jurisdiction of its organisation or incorporation and, if relevant
     under such laws, in good standing;

<PAGE>

     (ii)  Powers. It has the power to execute this Agreement and any other
     documentation relating to this Agreement to which it is a party, to deliver
     this Agreement and any other documentation relating to this Agreement that
     it is required by this Agreement to deliver and to perform its obligations
     under this Agreement and any obligations it has under any Credit Support
     Document to which it is a party and has taken all necessary action to
     authorise such execution, delivery and performance;

     (iii) No Violation or Conflict. Such execution, delivery and performance do
     not violate or conflict with any law applicable to it, any provision of its
     constitutional documents, any order or judgment of any court or other
     agency of government applicable to it or any of its assets or any
     contractual restriction binding on or affecting it or any of its assets;

     (iv)  Consents. All governmental and other consents that are required to
     have been obtained by it with respect to this Agreement or any Credit
     Support Document to which it is a party have been obtained and are in full
     force and effect and all conditions of any such consents have been complied
     with; and

     (v)  Obligations Binding. Its obligations under this Agreement and any
     Credit Support Document to which it is a party constitute its legal, valid
     and binding obligations, enforceable in accordance with their respective
     terms (subject to applicable bankruptcy, reorganisation, insolvency,
     moratorium or similar laws affecting creditors' rights generally and
     subject, as to enforceability, to equitable principles of general
     application (regardless of whether enforcement is sought in a proceeding in
     equity or at law)).

(b)  Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.

(c)  Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d)  Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this

<PAGE>


Section 3(d) in the Schedule is, as of the date of the information, true,
accurate and complete in every material respect.

(e)  Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f)  Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.

4.   Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--

(a)  Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

     (i) any forms, documents or certificates relating to taxation specified in
     the Schedule or any Confirmation;

     (ii) any other documents specified in the Schedule or any Confirmation; and

     (iii) upon reasonable demand by such other party, any form or document that
     may be required or reasonably requested in writing in order to allow such
     other party or its Credit Support Provider to make a payment under this
     Agreement or any applicable Credit Support Document without any deduction
     or withholding for or on account of any Tax or with such deduction or
     withholding at a reduced rate (so long as the completion, execution or
     submission of such form or document would not materially prejudice the
     legal or commercial position of the party in receipt of such demand), with
     any such form or document to be accurate and completed in a manner
     reasonably satisfactory to such other party and to be executed and to be
     delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b)  Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

<PAGE>

(c)   Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d)   Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.

(e)   Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.

5.    Events of Default and Termination Events

(a)   Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--

     (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
     payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
     required to be made by it if such failure is not remedied on or before the
     third Local Business Day after notice of such failure is given to the
     party;

     (ii) Breach of Agreement. Failure by the party to comply with or perform
     any agreement or obligation (other than an obligation to make any
     payment under this Agreement or delivery under Section 2(a)(i) or  2(e)
     or to give notice of a Termination Event or any agreement or obligation
     under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied  with or
     performed by the party in accordance with this Agreement if such
     failure is not remedied on or before the thirtieth day after  notice of
     such failure is given to the party;

     (iii) Credit Support Default.

         (1) Failure by the party or any Credit Support Provider of such party
         to comply with or perform any agreement or obligation to be complied
         with or performed by it in accordance with any Credit Support Document
         if such failure is continuing after any applicable grace period has
         elapsed;

<PAGE>

          (2) the expiration or termination of such Credit Support Document or
          the failing or ceasing of such Credit Support Document to be in full
          force and effect for the purpose of this Agreement (in either case
          other than in accordance with its terms) prior to the satisfaction of
          all obligations of such party under each Transaction to which such
          Credit Support Document relates without the written consent of the
          other party; or

          (3) the party or such Credit Support Provider disaffirms, disclaims,
          repudiates or rejects, in whole or in part, or challenges the validity
          of, such Credit Support Document;

     (iv) Misrepresentation. A representation (other than a representation under
     Section 3(e) or (f)) made or repeated or deemed to have been made or
     repeated by the party or any Credit Support Provider of such party in this
     Agreement or any Credit Support Document proves to have been incorrect or
     misleading in any material respect when made or repeated or deemed to have
     been made or repeated;

     (v)  Default under Specified Transaction. The party, any Credit Support
     Provider of such party or any applicable Specified Entity of such party (1)
     defaults under a Specified Transaction and, after giving effect to any
     applicable notice requirement or grace period, there occurs a liquidation
     of, an acceleration of obligations under, or an early termination of, that
     Specified Transaction, (2) defaults, after giving effect to any applicable
     notice requirement or grace period, in making any payment or delivery due
     on the last payment, delivery or exchange date of, or any payment on early
     termination of, a Specified Transaction (or such default continues for at
     least three Local Business Days if there is no applicable notice
     requirement or grace period) or (3) disaffirms, disclaims, repudiates or
     rejects, in whole or in part, a Specified Transaction (or such action is
     taken by any person or entity appointed or empowered to operate it or act
     on its behalf);

     (vi) Cross Default. If "Cross Default" is specified in the Schedule as
     applying to the party, the occurrence or existence of (1) a default, event
     of default or other similar condition or event (however described) in
     respect of such party, any Credit Support Provider of such party or any
     applicable Specified Entity of such party under one or more agreements or
     instruments relating to Specified Indebtedness of any of them (individually
     or collectively) in an aggregate amount of not less than the applicable
     Threshold Amount (as specified in the Schedule) which has resulted in such
     Specified Indebtedness becoming, or becoming capable at such time of being
     declared, due and payable under such agreements or instruments, before it
     would otherwise have been due and payable or (2) a default by such party,
     such Credit Support Provider or such Specified

<PAGE>

Entity (individually or collectively) in making one or more payments on the due
date thereof in an aggregate amount of not less than the applicable Threshold
Amount under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);

(vii)  Bankruptcy. The party, any Credit Support Provider of such party or any
applicable Specified Entity of such party:--


     (1) is dissolved (other than pursuant to a consolidation, amalgamation or
     merger); (2) becomes insolvent or is unable to pay its debts or fails or
     admits in writing its inability generally to pay its debts as they become
     due; (3) makes a general assignment, arrangement or composition with or for
     the benefit of its creditors; (4) institutes or has instituted against it a
     proceeding seeking a judgment of insolvency or bankruptcy or any other
     relief under any bankruptcy or insolvency law or other similar law
     affecting creditors' rights, or a petition is presented for its winding-up
     or liquidation, and, in the case of any such proceeding or petition
     instituted or presented against it, such proceeding or petition (A) results
     in a judgment of insolvency or bankruptcy or the entry of an order for
     relief or the making of an order for its winding-up or liquidation or (B)
     is not dismissed, discharged, stayed or restrained in each case within 30
     days of the institution or presentation thereof; (5) has a resolution
     passed for its winding-up, official management or liquidation (other than
     pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes
     subject to the appointment of an administrator, provisional liquidator,
     conservator, receiver, trustee, custodian or other similar official for it
     or for all or substantially all its assets; (7) has a secured party take
     possession of all or substantially all its assets or has a distress,
     execution, attachment, sequestration or other legal process levied,
     enforced or sued on or against all or substantially all its assets and such
     secured party maintains possession, or any such process is not dismissed,
     discharged, stayed or restrained, in each case within 30 days thereafter;
     (8) causes or is subject to any event with respect to it which, under the
     applicable laws of any jurisdiction, has an analogous effect to any of the
     events specified in clauses (1) to (7) (inclusive); or (9) takes any action
     in furtherance of, or indicating its consent to, approval of, or
     acquiescence in, any of the foregoing acts; or

(viii) Merger Without Assumption. The party or any Credit Support Provider of
such such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer:--

     (1) the resulting, surviving or transferee entity fails to assume all the
     obligations of such party or such Credit Support Provider under this

<PAGE>

     Agreement or any Credit Support Document to which it or its predecessor was
     a party by operation of law or pursuant to an agreement reasonably
     satisfactory to the other party to this Agreement; or

     (2) the benefits of any Credit Support Document fail to extend (without the
     consent of the other party) to the performance by such resulting, surviving
     or transferee entity of its obligations under this Agreement.

(b)  Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--

     (i)  Illegality. Due to the adoption of, or any change in, any applicable
     law after the date on which a Transaction is entered into, or due to the
     promulgation of, or any change in, the interpretation by any court,
     tribunal or regulatory authority with competent jurisdiction of any
     applicable law after such date, it becomes unlawful (other than as a result
     of a breach by the party of Section 4(b)) for such party (which will be the
     Affected Party):--

          (1) to perform any absolute or contingent obligation to make a payment
          or delivery or to receive a payment or delivery in respect of such
          Transaction or to comply with any other material provision of this
          Agreement relating to such Transaction; or

          (2) to perform, or for any Credit Support Provider of such party to
          perform, any contingent or other obligation which the party (or such
          Credit Support Provider) has under any Credit Support Document
          relating to such Transaction;

     (ii)  Tax Event. Due to (x) any action taken by a taxing authority, or
     brought in a court of competent jurisdiction, on or after the date on which
     a Transaction is entered into (regardless of whether such action is taken
     or brought with respect to a party to this Agreement) or (y) a Change in
     Tax Law, the party (which will be the Affected Party) will, or there is a
     substantial likelihood that it will, on the next succeeding Scheduled
     Payment Date (1) be required to pay to the other party an additional amount
     in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
     respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
     payment from which an amount is required to be deducted or withheld for or
     on account of a Tax (except in respect of interest under Section 2(e),
     6(d)(ii) or 6(e)) and no additional amount is required to be paid in
     respect of such

<PAGE>

     such Tax under Section 2(d)(i)(4) (other than by reason of Section
     2(d)(i)(4)(A) or (B));

     (iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
     succeeding Scheduled Payment Date will either (1) be required to pay an
     additional amount in respect of an Indemnifiable Tax under Section
     2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
     6(e)) or (2) receive a payment from which an amount has been deducted or
     withheld for or on account of any Indemnifiable Tax in respect of which the
     other party is not required to pay an additional amount (other than by
     reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
     party consolidating or amalgamating with, or merging with or into, or
     transferring all or substantially all its assets to, another entity (which
     will be the Affected Party) where such action does not constitute an event
     described in Section 5(a)(viii);

     (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
     in the Schedule as applying to the party, such party ("X"), any Credit
     Support Provider of X or any applicable Specified Entity of X consolidates
     or amalgamates with, or merges with or into, or transfers all or
     substantially all its assets to, another entity and such action does not
     constitute an event described in Section 5(a)(viii) but the
     creditworthiness of the resulting, surviving or transferee entity is
     materially weaker than that of X, such Credit Support Provider or such
     Specified Entity, as the case may be, immediately prior to such action
     (and, in such event, X or its successor or transferee, as appropriate, will
     be the Affected Party); or

     (v) Additional Termination Event. If any "Additional Termination Event" is
     specified in the Schedule or any Confirmation as applying, the occurrence
     of such event (and, in such event, the Affected Party or Affected Parties
     shall be as specified for such Additional Termination Event in the Schedule
     or such Confirmation).

(c)  Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not. constitute an
Event of Default.

6.   Early Termination

(a)  Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified

<PAGE>

in the Schedule as applying to a party, then an Early Termination Date in
respect of all outstanding Transactions will occur immediately upon the
occurrence with respect to such party of an Event of Default specified in
Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8),
and as of the time immediately preceding the institution of the relevant
proceeding or the presentation of the relevant petition upon the occurrence with
respect to such party of an Event of Default specified in Section 5(a)(vii)(4)
or, to the extent analogous thereto, (8).

(b)  Right to Terminate Following Termination Event.

     (i) Notice. If a Termination Event occurs, an Affected Party will, promptly
     upon becoming aware of it, notify the other party, specifying the nature of
     that Termination Event and each Affected Transaction and will also give
     such other information about that Termination Event as the other party may
     reasonably require.

     (ii) Transfer to Avoid Termination Event. If either an Illegality under
     Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
     Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
     Affected Party, the Affected Party will, as a condition to its right to
     designate an Early Termination Date under Section 6(b)(iv), use all
     reasonable efforts (which will not require such party to incur a loss,
     excluding immaterial, incidental expenses) to transfer within 20 days after
     it gives notice under Section 6(b)(i) all its rights and obligations under
     this Agreement in respect of the Affected Transactions to another of its
     Offices or Affiliates so that such Termination Event ceases to exist.

     If the Affected Party is not able to make such a transfer it will give
     notice to the other party to that effect within such 20 day period,
     whereupon the other party may effect such a transfer within 30 days after
     the notice is given under Section 6(b)(i).

     Any such transfer by a party under this Section 6(b)(ii) will be subject to
     and conditional upon the prior written consent of the other party, which
     consent will not be withheld if such other party's policies in effect at
     such time would permit it to enter into transactions with the transferee on
     the terms proposed.

     (iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
     Tax Event occurs and there are two Affected Parties, each party will use
     all reasonable efforts to reach agreement within 30 days after notice
     thereof is given under Section 6(b)(i) on action to avoid that Termination
     Event.

     (iv) Right to Terminate. If:--

<PAGE>

     (1) a transfer under Section 6(b)(ii) or an agreement under Section
     6(b)(iii), as the case may be, has not been effected with respect to all
     Affected Transactions within 30 days after an Affected Party gives notice
     under Section 6(b)(i); or

     (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or
     an Additional Termination Event occurs, or a Tax Event Upon Merger occurs
     and the Burdened Party is not the Affected Party,

either party in the case of an Illegality, the Burdened Party in the case of a
Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may, by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier than the day
such notice is effective as an Early Termination Date in respect of all Affected
Transactions.

(c)  Effect of Designation.

     (i) If notice designating an Early Termination Date is given under Section
     6(a) or (b), the Early Termination Date will occur on the date so
     designated, whether or not the relevant Event of Default or Termination
     Event is then continuing.

     (ii) Upon the occurrence or effective designation of an Early Termination
     Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
     respect of the Terminated Transactions will be required to be made, but
     without prejudice to the other provisions of this Agreement. The amount, if
     any, payable in respect of an Early Termination Date shall be determined
     pursuant to Section 6(e).

(d)  Calculations.

     (i) Statement. On or as soon as reasonably practicable following the
     occurrence of an Early Termination Date, each party will make the
     calculations on its part, if any, contemplated by Section 6(e) and will
     provide to the other party a statement (1) showing, in reasonable detail,
     such calculations (including all relevant quotations and specifying any
     amount payable under Section 6(e)) and (2) giving details of the relevant
     account to which any amount payable to it is to be paid. In the absence of
     written confirmation from the source of a quotation obtained in determining
     a Market Quotation, the records of the party obtaining such quotation will
     be conclusive evidence of the existence and accuracy of such quotation.

<PAGE>

     (ii) Payment Date. An amount calculated as being due in respect of any
     Early Termination Date under Section 6(e) will be payable on the day that
     notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated or occurs as a result of an Event of
     Default) and on the day which is two Local Business Days after the day on
     which notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated as a result of a Termination Event).
     Such amount will be paid together with (to the extent permitted under
     applicable law) interest thereon (before as well as after judgment) in the
     Termination Currency, from (and including) the relevant Early Termination
     Date to (but excluding) the date such amount is paid, at the Applicable
     Rate. Such interest will be calculated on the basis of daily compounding
     and the actual number of days elapsed.

(e)  Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

     (i)  Events of Default. If the Early Termination Date results from an Event
     of Default:--

          (1) First Method and Market Quotation. If the First Method and Market
          Quotation apply, the Defaulting Party will pay to the Non-defaulting
          Party the excess, if a positive number, of (A) the sum of the
          Settlement Amount (determined by the Non-defaulting Party) in respect
          of the Terminated Transactions and the Termination Currency Equivalent
          of the Unpaid Amounts owing to the Non-defaulting Party over (B) the
          Termination Currency Equivalent of the Unpaid Amounts owing to the
          Defaulting Party.

          (2) First Method and Loss. If the First Method and Loss apply, the
          Defaulting Party will pay to the Non-defaulting Party, if a positive
          number, the Non-defaulting Party's Loss in respect of this Agreement.

          (3) Second Method and Market Quotation. If the Second Method and
          Market Quotation apply, an amount will be payable equal to (A) the sum
          of the Settlement Amount (determined by the Non-defaulting Party) in
          respect of the Terminated Transactions and the Termination Currency
          Equivalent of the Unpaid Amounts owing to the Non-defaulting Party
          less (B) the Termination Currency Equivalent of the Unpaid Amounts
          owing to the Defaulting Party. If that amount is a positive number,
          the Defaulting Party

<PAGE>

     will pay it to the Non-defaulting Party; if it is a negative number, the
     Non-defaulting Party will pay the absolute value of that amount to the
     Defaulting Party.

     (4) Second Method and Loss. If the Second Method and Loss apply, an amount
     will be payable equal to the Non-defaulting Party's Loss in respect of this
     Agreement. If that amount is a positive number, the Defaulting Party will
     pay it to the Non-defaulting Party; if it is a negative number, the
     Non-defaulting Party will pay the absolute value of that amount to the
     Defaulting Party.

(ii)  Termination Events. If the Early Termination Date results from a
Termination Event:--

     (1)  One Affected Party. If there is one Affected Party, the amount payable
     will be determined in accordance with Section 6(e)(i)(3), if Market
     Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in
     either case, references to the Defaulting Party and to the Non-defaulting
     Party will be deemed to be references to the Affected Party and the party
     which is not the Affected Party, respectively, and, if Loss applies and
     fewer than all the Transactions are being terminated, Loss shall be
     calculated in respect of all Terminated Transactions.

     (2)  Two Affected Parties. If there are two Affected Parties:--

          (A) if Market Quotation applies, each party will determine a
          Settlement Amount in respect of the Terminated Transactions, and an
          amount will be payable equal to (I) the sum of (a) one-half of the
          difference between the Settlement Amount of the party with the higher
          Settlement Amount ("X") and the Settlement Amount of the party with
          the lower Settlement Amount ("Y") and (b) the Termination Currency
          Equivalent of the Unpaid Amounts owing to X less (II) the Termination
          Currency Equivalent of the Unpaid Amounts owing to Y; and

          (B) if Loss applies, each party will determine its Loss in respect of
          this Agreement (or, if fewer than all the Transactions are being
          terminated, in respect of all Terminated Transactions) and an amount
          will be payable equal to one-half of the difference between the Loss
          of the party with the higher Loss ("X") and the Loss of the party with
          the lower Loss ("Y").

     If the amount payable is a positive number, Y will pay it to X; if it is a
     negative number, X will pay the absolute value of that amount to Y.

<PAGE>

     (iii) Adjustment for Bankruptcy. In circumstances where an Early
     Termination Date occurs because "Automatic Early Termination" applies in
     respect of a party, the amount determined under this Section 6(e) will be
     subject to such adjustments as are appropriate and permitted by law to
     reflect any payments or deliveries made by one party to the other under
     this Agreement (and retained by such other party) during the period from
     the relevant Early Termination Date to the date for payment determined
     under Section 6(d)(ii).

     (iv) Pre-Estimate. The parties agree that if Market Quotation applies an
     amount recoverable under this Section 6(e) is a reasonable pre-estimate of
     loss and not a penalty. Such amount is payable for the loss of bargain and
     the loss of protection against future risks and except as otherwise
     provided in this Agreement neither party will be entitled to recover any
     additional damages as a consequence of such losses.

7.   Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--

(a)  a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b)  a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.   Contractual Currency

(a)  Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the

<PAGE>

extent permitted by applicable law, immediately pay such additional amount in
the Contractual Currency as may be necessary to compensate for the shortfall. If
for any reason the amount in the Contractual Currency so received exceeds the
amount in the Contractual Currency payable in respect of this Agreement, the
party receiving the payment will refund promptly the amount of such excess.

(b)  Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c)  Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d)  Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

9.   Miscellaneous

(a)  Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

<PAGE>

(b)  Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c)  Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)  Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)  Counterparts and Confirmations.

     (i)  This Agreement (and each amendment, modification and waiver in respect
     of it) may be executed and delivered in counterparts (including by
     facsimile transmission), each of which will be deemed an original.

     (ii)  The parties intend that they are legally bound by the terms of each
     Transaction from the moment they agree to those terms (whether orally or
     otherwise). A Confirmation shall be entered into as soon as practicable and
     may be executed and delivered in counterparts (including by facsimile
     transmission) or be created by an exchange of telexes or by an exchange of
     electronic messages on an electronic messaging system, which in each case
     will be sufficient for all purposes to evidence a binding supplement to
     this Agreement. The parties will specify therein or through another
     effective means that any such counterpart, telex or electronic message
     constitutes a Confirmation.

(f)  No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)  Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.  Offices; Multibranch Parties

(a)  If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of

<PAGE>

incorporation or organisation of such party, the obligations of such party are
the same as if it had entered into the Transaction through its head or home
office. This representation will be deemed to be repeated by such party on each
date on which a Transaction is entered into.

(b)  Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c)  If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11.  Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.

12.  Notices

(a)  Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--

     (i) if in writing and delivered in person or by courier, on the date it is
     delivered;

     (ii) if sent by telex, on the date the recipient's answerback is received;

     (iii) if sent by facsimile transmission, on the date that transmission is
     received by a responsible employee of the recipient in legible form (it
     being agreed that the burden of proving receipt will be on the sender and
     will not be met by a transmission report generated by the sender's
     facsimile machine);

<PAGE>

     (iv) if sent by certified or registered mail (airmail, if overseas) or the
     equivalent (return receipt requested), on the date that mail is delivered
     or its delivery is attempted; or

     (v) if sent by electronic messaging system, on the date that electronic
     message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)  Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13.  Governing Law and Jurisdiction

(a)  Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)  Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--

     (i) submits to the jurisdiction of the English courts, if this Agreement is
     expressed to be governed by English law, or to the non-exclusive
     jurisdiction of the courts of the State of New York and the United States
     District Court located in the Borough of Manhattan in New York City, if
     this Agreement is expressed to be governed by the laws of the State of New
     York; and

     (ii) waives any objection which it may have at any time to the laying of
     venue of any Proceedings brought in any such court, waives any claim that
     such Proceedings have been brought in an inconvenient forum and further
     waives the right to object, with respect to such Proceedings, that such
     court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

<PAGE>

(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.

(d)  Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14.  Definitions

As used in this Agreement:--

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Applicable Rate" means:--

(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

<PAGE>

(b)  in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c)  in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and

(d)  in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without

<PAGE>

limitation, a connection arising from such recipient or related person being or
having been a citizen or resident of such jurisdiction, or being or having been
organised, present or engaged in a trade or business in such jurisdiction, or
having or having had a permanent establishment or fixed place of business in
such jurisdiction, but excluding a connection arising solely from such recipient
or related person having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or a Credit Support
Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

<PAGE>

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations ate to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

"Office" means a branch or office of a party, which may be such party's head or
home office.

<PAGE>

"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-off " means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--

(a)  the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)  such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meaning specified in the Schedule.

"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable

<PAGE>

Specified Entity of such other party) which is a rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of these transactions), (b) any combination of these transactions
and (c) any other transaction identified as a Specified Transaction in this
Agreement or the relevant confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to

<PAGE>

make a determination under Section 6(e), be selected in good faith by that party
and otherwise will be agreed by the parties.

"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery in each case together
with (to the extent permitted under applicable law) interest in the currency of
such amounts from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding) such
Early Termination Date at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e)or if each party is so obliged it shall be the average of the
Termination Currency Equivalents of the fair market values reasonably determined
by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.


     ABN AMRO BANK N.V.                         PACKAGING DYNAMICS,
                                                L.L.C.

By:                                        By:  /s/ Richard R. Cote
     ------------------------------             --------------------------------
     Name:                                      Name:  R.R. Cote
     Title:                                     Title:  Vice President

<PAGE>

                                    SCHEDULE
                                     to the
                                Master Agreement
                          dated as of December 4, 1998

                                     Between

                         ABN AMRO BANK N.V. ("Party A")

                                       and

                     PACKAGING DYNAMICS, L.L.C. ("Party B")


                                     Part 1
                             Termination Provisions

In this Agreement:-

(a)  "Specified Entity" means in relation to Party A for the purpose of:-

     Section 5(a)(v),           Inapplicable
     Section 5(a)(vi),          Inapplicable
     Section 5(a)(vii),         Inapplicable
     Section 5(b)(iv),          Inapplicable

                          in relation to Party B for the purpose of:-

     Section 5(a)(v),           Affiliates
     Section 5(a)(vi),          Affiliates
     Section 5(a)(vii),         Affiliates
     Section 5(b)(iv),          Affiliates

(b)  "Specified Transaction" will have the meaning specified in Section 14 of
     this Agreement.

(c)  The "Cross Default" provisions of Section 5(a)(vi) will apply to Party A
     and Party B; provided, however, that it shall not constitute an Event of
                  --------  -------
     Default under this Section 5(a)(vi) if (A) such event, condition or failure
     arises in the ordinary course of business by mistake, oversight or transfer
     difficulties in the payment of money, (B) such event, condition or failure
     is remedied on or before the third Business Day after the occurrence or
     existence of such event, condition or failure, and (C) no Specified
     Indebtedness in an aggregate amount equal to or in excess of the Threshold
     Amount is accelerated as a result of such event, condition or failure.

     "Specified Indebtedness" will have the meaning set forth in Section 14 and
     with respect to Party B shall include, without limitation, and without
     regard to the Threshold Amount the obligations of Party B under that
     certain Credit Agreement dated as of November 18, 1998

<PAGE>

     between Packaging Dynamics, L.L.C., as Borrower, Packaging Holdings, L.L.C.
     and The Subsidiaries of the Borrower, as Guarantors, The Lenders Identified
     Herein, and NationsBank, N.A., as Agent, as the same may be amended,
     modified or supplemented from time to time (the "Credit Agreement").

     "Threshold Amount" means with respect to Party A, an amount equal to three
     percent (3%) of its total equity share capital (as specified from time to
     time in its most recently published audited annual statement in accordance
     with generally accepted accounting principles), or its equivalent in any
     other currency and with respect to Party B, means U.S.$500,000 or its
     equivalent in any other currency.

(d)  "Termination Currency" means United States Dollars.

(e)  The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will apply to
     Party A and Party B; provided, however, that with respect to Party A,
                          --------  -------
     "Credit Event Upon Merger" shall not have its meaning as defined in Section
     5(b)(iv), but shall mean, that (i) such Party ("X") consolidates or
     amalgamates with, or merges into, or transfers all or substantially all its
     assets to, another entity ("Y") or Y merges into X, (ii) such action does
     not constitute an event described in Section 5(a)(viii), and (iii) Standard
     and Poor's Ratings Services, Inc., a division of The McGraw Hill Companies,
     Inc. ("S&P") or Moody's Investor Services, Inc. ("Moody's") rates the
     creditworthiness of the resulting, surviving or transferee entity (which
     shall be the Affected Party) immediately after such action at least three
     modifiers (a modifier being 1, 2, or 3 for Moody's; plus, neutral or minus
     for S&P) lower than that of X immediately prior to such action or such
     rating is below investment grade (investment grade being at least BBB- for
     S&P and Baa3 for Moody's).

(f) The "Automatic Early Termination" provision of Section 6(a) will not apply
     to either party.

(g) Payments on Early Termination. For the purpose of Section 6(e) of this
     Agreement:-

     (i)  Market Quotation will apply.

     (ii)  The Second Method will apply.

(h) Additional Termination Event will not apply.

                                     Part 2
                               Tax Representations

Representations of Party A

(a) Payer Tax Representation. For the purpose of Section 3(e), Party A will
     make the following representation:

<PAGE>

     It is not required by any applicable law, as modified by the practice of
     any relevant governmental revenue authority, of any Relevant Jurisdiction
     to make any deduction or withholding for or on account of any Tax from any
     payment (other than interest under Sections 2(e), 6(d)(ii) or 6(e)) to be
     made by it to the other party under this Agreement. In making this
     representation, it may rely on:--

     (i)  the accuracy of any representation made by the other party pursuant to
          Section 3(f);
     (ii)  the satisfaction of the agreement of the other party contained in
          Sections 4(a)(i) and 4(a)(iii) and the accuracy and effectiveness of
          any document provided by the other party pursuant to Sections 4(a)(i)
          and 4(a)(iii); and
     (iii) the satisfaction of the agreement of the other party contained in
          Section 4(d); provided that it shall not be a breach of this
          representation where reliance is placed on clause (ii) and the other
          party does not deliver a form or document under Section 4(a)(iii) by
          reason of material prejudice to its legal or commercial position.

(b) Payee Tax Representations. For the purpose of Section 3(f), Party A will
     make the following representation:

     The following representations will apply:-

     (i) It is a resident of The Netherlands for the purpose of the application
     of the existing tax treaties between The Netherlands and those countries
     where offices of Party B are located.

     (ii) Each payment received or to be received by it in connection with this
     Agreement will be effectively connected with its conduct of a trade or
     business in the United States.

Representations of Party B

(a) Payer Tax Representation. For the purpose of Section 3(e), Party B will
     make the following representation:

     It is not required by any applicable law, as modified by the practice of
     any relevant governmental revenue authority, of any Relevant Jurisdiction
     to make any deduction or withholding for or on account of any Tax from any
     payment (other than interest under Sections 2(e), 6(d)(ii) or 6(e)) to be
     made by it to the other party under this Agreement. In making this
     representation, it may rely on:-

     (i)  the accuracy of any representation made by the other party pursuant to
          Section 3(f); (iii) the satisfaction of the agreement of the other
          party contained in Sections 4(a)(i) and 4(a)(iii) and the accuracy and
          effectiveness of any document provided by the other party pursuant to
          Sections 4(a)(i) and 4(a)(iii); and

     (ii)  the satisfaction of the agreement of the other party contained in
          Section 4(d);

<PAGE>

     provided that it shall not be a breach of this representation where
     reliance is placed on clause (ii) and the other party does not deliver a
     form or document under Section 4(a)(iii) by reason of material prejudice to
     its legal or commercial position.

(b) Payee Tax Representations. For the purpose of Section 3(f), Party B will
     make the following representation:

     The following representations will apply:-

     (i) It is a limited liability company organized or formed under the laws of
     the State of Delaware

     (ii) Each payment received or to be received by it in connection with this
     Agreement will be effectively connected with its conduct of a trade or
     business in the United States.

                                     Part 3
                            Documents to be delivered

For the purpose of Section 4(a):-

(a) Tax forms, documents or certificates to be delivered are:

     Each party agrees to complete, accurately and in a manner reasonably
     satisfactory to the other party, and to execute, arrange for any required
     certification of, and deliver to the other party (or to such government or
     taxing authority as the other party reasonably directs), any form or
     document that may be required or reasonably requested in order to allow the
     other party to make a payment under this Agreement without any deduction or
     withholding for or on account of any Tax or with such deduction or
     withholding at a reduced rate, promptly upon the earlier of (i) reasonable
     demand by the other party and (ii) learning that the form or document is
     required.

(b) Other documents to be delivered are:

     (i)  Each party shall promptly deliver to the other party, certified
          evidence of the authority, incumbency and specimen signature of each
          authorized person executing any document on its behalf in connection
          with this Agreement upon execution of each document by any person.
          Covered by Section 3(d) representation.

     (ii) Party B shall promptly deliver to Party A, an opinion of counsel in
          form and substance satisfactory to counsel for Party A and such other
          information with respect to its condition, or operations, financial or
          otherwise, as Party A may reasonably request from time to time.
          Covered by Section 3(d) representation.


                                     Part 4
                                  Miscellaneous

<PAGE>

(a)   Governing Law. This Agreement will be governed by and construed in
     accordance with the laws of the State of New York without reference to
     choice of law doctrine.

(b) "Affiliate" will have the meaning specified in Section 14.

(c) Offices. The provisions of Section 10(a) will apply to this Agreement.

(d) Multibranch Party. For the purpose of Section 10:-

     Party A is not a Multibranch Party and may act through its Chicago office
     only.

     Party B is not a Multibranch Party.

(e) Addresses for Notices. For the purpose of Section 12(a):-

     Address for notices or communications to Party A:

     Address:       ABN AMRO Bank, N.V., Chicago Branch
                    181 W. Madison Street
                    Chicago, Illinois 60602
     Attention:     Treasury Operations
     Telex No.:     62734 Answerback: ABN UW
     Facsimile No.: 312-904-5778
     Telephone No.: 312-904-5925

     Electronic Messaging System Details: ABN AUS 33a XXX
     Account for payment: Account No. 026009580 at the Federal Reserve Bank of
     New York for the account of ABN AMRO Bank N.V., New York Branch in favor of
     ABN AMRO Bank N.V., Chicago.

     Address for notices or communications to Party B:-

     Address:       Packaging Dynamics, LLC
                    100 Tri-State Drive, Suite 200
                    Lincolnshire, IL 60069
     Attention:     Trisha Kelly
     Facsimile No.: (847) 945-9247
     Telephone No.: (847) 374-4313

(f) Calculation Agent. The Calculation Agent for purposes of the Definitions
     will be Party A.

(g) Credit Support Document. Details of any Credit Support Document: Not
     applicable

(h) Credit Support Provider. Not applicable.

<PAGE>

(i)   Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
     will not apply to any Transactions.

(j) Process Agent. For the purpose of Section 13(c):-

     Party A appoints no agent as its Process Agent.

     Party B appoints no agent as its Process Agent.

                                     Part 5
                                Other Provisions

(a) ISDA Definitions. The 1991 ISDA Definitions (the "Definitions") as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"),
shall be deemed a part of this Agreement as if fully set forth herein. The
Definitions and the provisions of Section 14 of this Agreement shall be deemed a
part of each Confirmation as if set forth in full therein.

(b) Interpretation. In the event of any inconsistency between the provisions of
this Schedule and the Definitions, this Schedule will prevail. In the event of
any inconsistency between the provisions of this Schedule and the printed
Agreement of which it forms a part, this Schedule will prevail. In the event of
any inconsistency between the provisions of any Confirmation and this Schedule,
such Confirmation will prevail for the purpose of the relevant Transaction.

(c) Financial Condition. Party B represents and warrants to Party A that there
has been no material adverse change in its financial condition since the last
day of the one year period covered by its most recently prepared year end
financial statement that is likely to affect its ability to perform its
obligations under this Agreement.

(d) Affected Parties. For the purposes of Section 6(e) (Payments on Early
Termination), both parties shall be deemed to be Affected Parties in connection
with the Termination Events described in Section 5(b)(i) and (ii), so that
payments on early termination shall be calculated as provided in Section
6(e)(ii).

(e) Additional Representations. Each party represents and warrants to the other
that (i) it shall maintain this Agreement, this Schedule and all Confirmations
issued pursuant hereto with its records of binding business transactions and
(ii) it is an "eligible swap participant" as defined in 17 C.F.R.ss.35.1(b)(2).

(f) Consent to Recording. Each party consents to the recording of the telephone
conversations of relevant personnel of the parties and their Affiliates in
connection with this Agreement or any potential Transaction and agrees that such
recording may take place.

(g) Transfer. Exception to the Transfer provisions of Section 7 is that consent
to transfer shall not be unreasonably withheld.

<PAGE>

(h) Waiver of Jury Trial. Each Party irrevocably waives any and all right to
trial by jury in any legal proceeding instituted in connection with this
Agreement or any Transaction to the fullest extent permitted by law. As to any
matter for which a jury trial cannot be waived, each party agrees not to assert
any such matter as a cross claim or counterclaim in, nor move to consolidate the
same with, any legal proceeding in which a jury trial is waived.

(i) Setoff. Each party agrees that the following provision shall be added as
Section 6(f) of this Agreement:

     "(f) Setoff. Any amount (the "Early Termination Amount") payable to one
party (the "Payee") by the other party (the "Payer") under Section 6(e) of this
Agreement, in circumstances where there is a Defaulting Party or one Affected
Party in the case where a Termination Event under Section 5(b)(iv) or 5(b)(iii)
of this Agreement has occurred, will, at the option of the party ("X") other
than the Defaulting Party or the Affected Party (and without prior notice to the
Defaulting Party or the Affected Party), be reduced by its setoff against any
amount(s) (the "Other Agreement Amount") payable (whether at such time or in the
future or upon the occurrence of a contingency) by the Payee to the Payer
(irrespective of the currency, place of payment or booking office of the
obligation) under any other agreement(s) between the Payee and the Payer or
instrument(s) or undertaking(s) issued or executed by one party to, or in favor
of, the other party (and the Other Agreement Amount will be discharged promptly
and in all respects to the extent it is so setoff). X will give notice to the
other party of any setoff effected under this Section 6(f).

     For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be converted by X
into the currency in which the other is denominated at the rate of exchange at
which such party would be able, acting in a reasonable manner and in good faith,
to purchase the relevant amount of such currency. The term "rate of exchange"
includes, without limitation, any premiums and costs of exchange payable in
connection with the purchase of or conversion into the relevant currency.

     If an obligation is unascertained, X may in good faith estimate that
obligation and setoff in respect of the estimate, subject to the relevant party
accounting to the other when the obligation is ascertained.

     Nothing in Section 6(f) shall be effective to create a charge or other
security interest. This Section shall be without prejudice and in addition to
any right of setoff, combination of accounts, lien or other right to which any
party is at any time otherwise entitled (whether by operation of law, contract
or otherwise)."

(j) Parties to Rely on Their Own Expertise. Each party shall enter into each
Transaction governed by this Agreement in reliance only upon its own judgment.
Neither party holds itself out as advising, or any of its employees or agents as
having the authority to advise, the other party as to whether or not it should
enter into any such Transaction or as to any subsequent actions relating thereto
or on any other commercial matters concerned with any Transaction governed by
this Agreement, and neither party shall have any responsibility or liability
whatsoever in respect of any

<PAGE>

advice of this nature given, or views expressed, by it or any of such persons to
the other party, whether or not such advice is given or such views are expressed
at the request of the other party.

(k) Incorporation by Reference of Covenants. Party B covenants and agrees that,
from after the date hereof and thereafter until all obligations of Party B
hereunder are paid in full and this Agreement is terminated, it shall duly keep,
perform and observe each and every covenant set forth in the Credit Agreement as
in effect as of the date hereof. All of such covenants, as in effect as of the
date hereof, together with related definitions and ancillary provisions, are
hereby incorporated into this Agreement by reference, mutatis mutandis, as if
                                                      ------- --------
such terms were set forth in this Agreement in full, without regard to any
termination of such Credit Agreement, without regard to any expiration of any
commitment thereunder and without regard to the final payment in full of any
obligations of Party B or any other person or entity thereunder, provided, that
                                                                 ---------
no such covenant set forth above shall be incorporated herein by reference if
such incorporation, by itself, would be a breach of the Credit Agreement. If an
event is the subject of both a covenant incorporated herein by reference and
another covenant set forth in this Agreement, Party B shall comply with the
covenant which imposes on it the stricter requirement. To the extent that any
covenant incorporated herein by reference is inconsistent with the other terms
of this Agreement, Party A shall not be deemed to have waived any rights
hereunder by virtue of such inconsistency. If the Credit Agreement requires
Party B to obtain the consent of any agent, lender or lenders, then, for
purposes of the Agreement, Party B shall be required to obtain the consent of
Party A.

(j) Incorporation of ISDA EMU Protocol. Party A and Party B agree that the
definitions and provisions contained in Annexes 1 to 5 and Section 6 of the ISDA
EMU Protocol published by May 6, 1998 by ISDA (the "Protocol") are incorporated
into this Agreement. References in those definitions and provisions to any "ISDA
Master Agreement" will be deemed to be references to this Agreement and
references to "the parties" will be deemed to be references to Party A and to
Party B.

<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers as of the date hereof.

     ABN AMRO BANK N.V.                         PACKAGING DYNAMICS, L.L.C.


By:                                        By:  /s/ Richard R. Cote
     --------------------------------           --------------------------------
     Name:                                      Name: R.R. Cote
     Title:                                     Title: Vice President


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