EXHIBIT 10.6

                              AGREEMENT OF MERGER

                                     AMONG

                               WBT HOLDINGS LLC,

                                WB PARENT CORP.,

                              WB ACQUISITION CORP.

                                      AND

                         AMERICAN FILTRONA CORPORATION



                               February 19, 1997



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ARTICLE 1
<S> <C>
THE BUSINESS COMBINATION..........................................................................................2
         1.1      THE MERGER......................................................................................2
         1.2      CLOSING.........................................................................................2
         1.3      EFFECTIVE TIME OF THE MERGER....................................................................2
         1.4      ARTICLES OF INCORPORATION; BYLAWS...............................................................2
         1.5      DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.............................................2

ARTICLE 2

CONVERSION AND EXCHANGE OF SHARES; ADDITIONAL ACTION..............................................................3
         2.1      CONVERSION OF SHARES............................................................................3
                  (a)      AFC COMMON STOCK.......................................................................3
                  (b)      SUBCORP STOCK..........................................................................3
                  (c)      AFC COMMON STOCK HELD BY HOLDINGS......................................................3
         2.2      MERGER CONSIDERATION............................................................................3
         2.3      STOCK TRANSFER BOOKS............................................................................3
         2.4      SURRENDER AND EXCHANGE OF CERTIFICATES REPRESENTING  AFC COMMON STOCK...........................3
                  (a)      EXCHANGE AGENT.........................................................................3
                  (b)      SURRENDER OF CERTIFICATES..............................................................4
                  (c)      LOST CERTIFICATES......................................................................4
                  (d)      NO INTEREST............................................................................4
                  (e)      WITHHOLDING RIGHTS.....................................................................5

ARTICLE 3

AFC STOCK OPTIONS.................................................................................................5

ARTICLE 4

REPRESENTATIONS AND WARRANTIES....................................................................................5
         4.1      REPRESENTATIONS AND WARRANTIES BY AFC...........................................................5
                  (a)      ORGANIZATION AND QUALIFICATION.........................................................5
                  (b)      CAPITALIZATION.........................................................................6
                  (c)      AUTHORITY..............................................................................6
                  (d)      NON-CONTRAVENTION......................................................................6
                  (e)      GOVERNMENTAL CONSENTS..................................................................7
                  (f)      PERIODIC REPORTS.......................................................................7
                  (g)      SUBSIDIARIES...........................................................................8
                  (h)      FINANCIAL STATEMENTS...................................................................8
                  (i)      ABSENCE OF CERTAIN CHANGES OR EVENTS..................................................10

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                  (j)      GOVERNMENTAL AUTHORIZATION AND COMPLIANCE WITH LAWS...................................11
                  (k)      CONDUCT OF BUSINESS...................................................................12
                  (l)      TAX MATTERS...........................................................................12
                  (m)      PROPERTY..............................................................................12
                  (n)      MATERIAL CONTRACTS....................................................................14
                  (o)      LEGAL PROCEEDINGS.....................................................................16
                  (p)      LABOR RELATIONS.......................................................................16
                  (q)      INSIDER INTERESTS.....................................................................17
                  (r)      INTELLECTUAL PROPERTY.................................................................17
                  (s)      INSURANCE.............................................................................18
                  (t)      PROXY STATEMENT.......................................................................19
                  (u)      EMPLOYEE AND FRINGE BENEFIT PLANS.....................................................19
                  (v)      MAJOR CUSTOMERS.  ....................................................................22
                  (w)      SECTIONS 13.1-725 THROUGH 13.1-727.1..................................................23
                  (x)      ENVIRONMENTAL.........................................................................23
                  (y)      ACCURACY OF SCHEDULES, CERTIFICATES AND DOCUMENTS.....................................25
                  (z)      BROKERS, FINDERS AND INVESTMENT BANKERS...............................................25
                  (aa)     INVENTORIES AND RAW MATERIALS OF FIBERS BUSINESS......................................26
                  (bb)     RECEIVABLES OF THE FIBERS BUSINESS....................................................26
                  (cc)     EMPLOYEES OF FIBERS BUSINESS..........................................................26
                  (dd)     PRODUCTS OF THE FIBERS BUSINESS.......................................................26
                  (ee)     INTRACOMPANY ACCOUNTS.................................................................26
                  (ff)     FOREIGN CURRENCY EXPOSURES............................................................27
                  (gg)     COMPANY NAME..........................................................................27
                  (hh)     INDEBTEDNESS..........................................................................27
         4.2      REPRESENTATIONS AND WARRANTIES BY HOLDINGS, PARENT AND SUBCORP.................................27
                  (a)      ORGANIZATION AND QUALIFICATION, ETC...................................................27
                  (b)      CAPITALIZATION........................................................................28
                  (c)      AUTHORITY.............................................................................28
                  (d)      NON-CONTRAVENTION.....................................................................28
                  (e)      GOVERNMENTAL CONSENTS.................................................................29
                  (f)      ABSENCE OF CERTAIN CHANGES OR EVENTS..................................................29
                  (g)      PROXY STATEMENT.......................................................................29
                  (h)      ACTIVITIES OF SUBCORP.................................................................29
                  (i)      LEGAL PROCEEDINGS.....................................................................30
                  (j)      BROKERS, FINDERS AND INVESTMENT BANKERS...............................................30
                  (k)      OBLIGATIONS TO FUND...................................................................30

ARTICLE 5

ADDITIONAL COVENANTS AND AGREEMENTS..............................................................................30
         5.1      CONDUCT OF BUSINESS............................................................................30
                  (a)      OPERATION BY AFC IN THE ORDINARY COURSE OF BUSINESS...................................30

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                  (b)      FORBEARANCES BY AFC...................................................................31
                  (c)      CONDUCT OF THE FIBERS BUSINESS........................................................33
                  (d)      NOTICES OF CERTAIN EVENTS.............................................................33
         5.2      AFC SHAREHOLDERS MEETING.......................................................................34

         5.3      BEST EFFORTS; FURTHER ASSURANCES; COOPERATION..................................................34
                  (a)      REGULATORY ACTION.....................................................................34
                  (b)      CERTAIN LEGAL PROCEEDINGS.............................................................35
                  (c)      NOTICE................................................................................35
         5.4      INVESTIGATION; CONFIDENTIALITY.................................................................35
         5.5      EXPENSES.......................................................................................36
         5.6      PROXY STATEMENT................................................................................36
         5.7      PERIODIC REPORTS...............................................................................36
         5.8      PUBLIC ANNOUNCEMENTS...........................................................................36
         5.9      ANTITRUST CHALLENGES...........................................................................37
         5.10     EMPLOYEE MATTERS...............................................................................37
                  (a)     STAY BONUSES AND SEVERANCE AGREEMENTS..................................................37
                  (b)     EMPLOYEE BENEFIT PLAN MATTERS..........................................................37
                  (c)     LABOR MATTERS..........................................................................39
         5.11     ACCOUNTANT'S LETTERS...........................................................................39
         5.12     NON SOLICITATION; COMPETING OFFERS.............................................................39
         5.13      CONDITIONS IN FIBERS SALE AGREEMENT AND FINANCING.............................................39
         5.14      INVESTMENT SECURITIES.........................................................................39
         5.15     FILPAC INDEBTEDNESS............................................................................39
         5.16     ACCESS TO INFORMATION..........................................................................39
         5.17     SETTLEMENT OF LAWSUITS.........................................................................41
         5.18     ASSUMPTION OF LIABILITIES......................................................................41

ARTICLE 6

CONDITIONS TO THE MERGER.........................................................................................41
         6.1      CONDITIONS TO OBLIGATIONS OF EACH PARTY........................................................41
                  (a)      AFC SHAREHOLDER APPROVAL..............................................................41
                  (b)      HSR ACT...............................................................................41
                  (c)      PROXY STATEMENT.......................................................................41
                  (d)      INJUNCTION, ETC.......................................................................41
         6.2      CONDITIONS TO OBLIGATIONS OF HOLDINGS AND SUBCORP..............................................42
                  (a)      CONSENTS, AUTHORIZATIONS, ETC.........................................................42
                  (b)      REPRESENTATIONS AND WARRANTIES........................................................42
                  (c)      CERTIFICATE...........................................................................42
                  (d)      OPINION AND CONFIRMATION OF AFC'S COUNSEL.............................................42
                  (e)      LETTERS FROM ACCOUNTANTS..............................................................42
                  (f)      ADDITIONAL CERTIFICATES, ETC..........................................................42
                  (g)      RESIGNATIONS..........................................................................43

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                  (h)      FINANCING.............................................................................43
                  (i)      SATISFACTION OF CONDITIONS IN FIBERS SALE AGREEMENT...................................43
                  (j)      MORGAN CONSULTING AND NON-COMPETITION AGREEMENT.......................................43
                  (k)      MORGAN SEVERANCE AGREEMENT............................................................43
                  (l)      TRANSFER AGENT'S CERTIFICATE..........................................................43
         6.3      CONDITIONS TO OBLIGATIONS OF AFC...............................................................43
                  (a)      CONSENTS, AUTHORIZATIONS, ETC.........................................................43
                  (b)      REPRESENTATIONS AND WARRANTIES........................................................44
                  (c)      CERTIFICATE...........................................................................44
                  (d)      OPINION AND CONFIRMATION OF HOLDINGS', PARENT'S AND SUBCORP'S
                           COUNSEL...............................................................................44
                  (e)      ADDITIONAL CERTIFICATES, ETC..........................................................44
                  (f)      SATISFACTION OF CONDITIONS IN FIBERS SALE AGREEMENT...................................44
                  (g)      FAIRNESS OPINION......................................................................44

ARTICLE 7

TERMINATION AND ABANDONMENT......................................................................................45
         7.1      TERMINATION AND ABANDONMENT....................................................................45
         7.2      SPECIFIC PERFORMANCE...........................................................................46
         7.3      RIGHTS AND OBLIGATIONS UPON TERMINATION........................................................46
         7.4      CERTAIN FEES AND EXPENSES......................................................................47
                  (a)      EXPENSES..............................................................................47
                  (b)      FEE...................................................................................47
                  (c)      PAYMENT...............................................................................47
         7.5      EFFECT OF TERMINATION..........................................................................48

ARTICLE 8

GENERAL PROVISIONS...............................................................................................48
         8.1      WAIVER OF CERTAIN CONDITIONS...................................................................48
         8.2      NOTICES........................................................................................48
         8.3      TABLE OF CONTENTS; HEADINGS....................................................................49
         8.4      AMENDMENT......................................................................................49
         8.5      NO SURVIVAL OF REPRESENTATIONS, WARRANTIES OR COVENANTS........................................49
         8.6      SEVERABILITY...................................................................................49
         8.7      WAIVER.........................................................................................50
         8.8      NO THIRD PARTY BENEFICIARIES; ASSIGNMENT.......................................................50
         8.9      TIME OF THE ESSENCE; COMPUTATION OF TIME.......................................................50
         8.10     COUNTERPARTS...................................................................................50
         8.11     GOVERNING LAW..................................................................................50
         8.12     ENTIRE AGREEMENT...............................................................................51
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                                LIST OF EXHIBITS

Exhibit A                  Plan of Merger
Exhibit B                  Fibers Sale Agreement
Exhibit C                  Articles of Merger
Exhibit D                  Opinion and Confirmation of AFC's Counsel
Exhibit E                  Opinion and Confirmation of Holdings's and SubCorp's
                           Counsel
Exhibit F                  Wachovia Commitment Letter Dated _____________




                               LIST OF SCHEDULES

Schedule       3.1               AFC Stock Option Plans
               4.1(b)            Capitalization
               4.1(d)            Non-Contravention
               4.1(e)            Governmental Consents
               4.1(g)            AFC Subsidiaries
               4.1(h)(iii)       Fibers Business Liabilities
               4.1(i)            Certain Changes or Events
               4.1(j)            Governmental Authorizations and Compliance
                                    with Laws
               4.1(j)(ii)        Permits
               4.1(l)            Tax Matters
               4.1(m)(i)         Possession of Properties
               4.1(m)(ii)        Fibers Real Property
               4.1(m)(iii)       Fibers Personal Property
               4.1(m)(iv)        Headquarters Property
               4.1(n)            Material Contracts
               4.1(o)            Legal Proceedings
               4.1(p)            Labor Relations
               4.1(q)            Insider Interests
               4.1(r)            Intellectual Property
               4.1(s)            Insurance
               4.1(u)            Employee and Fringe Benefit Plans
               4.1(v)            Major Customers of AFC
               4.1(x)            Environmental
               4.1(cc)           Fibers Business Employees
               4.1(ee)           Intracompany Accounts
               4.1(ff)(i)        Foreign Currency - Products
               4.1(ff)(ii)       Foreign Currency - Raw Materials
               4.1(hh)           Indebtedness
               5.1               Conduct of Business

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               5.1(b)(vi)        Capital Expenditures
               5.10              Stay Bonuses and Severance Agreements


                                  DEFINED TERMS

AFC....................................................................Preamble
AFC Common Stock...........................................Background Statement
AFC Financial Statements.........................................Section 4.1(h)
AFC Quarterly Report.............................................Section 4.1(h)
AFC Stock Option Plans..............................................Section 3.1
AFC Stock Options...................................................Section 3.1
AFC Shareholders Meeting...........................................Section 4(t)
Affiliate........................................................Section 4.1(n)
Agreement..............................................................Preamble
Applicable Plan Year-End.........................................Section 4.1(u)
Articles of Merger..................................................Section 1.3
Associate........................................................Section 4.1(n)
best of AFC's knowledge..........................................Section 4.1(j)
best of Holdings', Parents and SubCorp's knowledge...............Section 4.2(i)
Bunzl......................................................Background Statement
Certificates.....................................................Section 2.4(b)
Closing.............................................................Section 1.2
Closing Date........................................................Section 1.2
Code.............................................................Section 2.4(e)
Commission..........................................................Section 1.3
Competing Transaction...............................................Section 7.1
Confidentiality Agreement...........................................Section 5.4
EEOC.............................................................Section 4.1(p)
Effective Time......................................................Section 1.3
Employee Plans...................................................Section 4.1(u)
Environmental Laws...............................................Section 4.1(x)
ERISA............................................................Section 4.1(u)
ERISA Affiliate..................................................Section 4.1(u)
Exchange Act.....................................................Section 4.1(f)
Exchange Agent...................................................Section 2.4(a)
Expenses.........................................................Section 7.4(a)
Fee..............................................................Section 7.4(b)
Fibers Balance Sheet.............................................Section 4.1(h)
Fibers Balance Sheet Date........................................Section 4.1(h)
Fibers Business............................................Background Statement
Fibers Financial Statements......................................Section 4.1(h)
Fibers Intellectual Property Agreement...........................Section 4.1(r)
Fibers Intellectual Property Rights.............................Section  4.1(r)
Fibers Material Adverse Effect...................................Section 4.1(i)

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Fibers Real Property.............................................Section 4.1(m)
Fibers Sale Agreement......................................Background Statement
FTC..............................................................Section 4.1(e)
Govermental Entity...............................................Section 4.1(e)
hazardous materials..............................................Section 4.1(x)
Hazardous Substance..............................................Section 4.1(x)
Holdings...............................................................Preamble
Holdings Material Contract.......................................Section 4.2(d)
HSR Act..........................................................Section 4.1(d)
"Immediate Family"...............................................Section 4.1(n)
Intellectual Property............................................Section 4.1(r)
Intellectual Property Agreement..................................Section 4.1(d)
Intellectual Property Agreements.................................Section 4.1(r)
IRS...........................................................Section 4.1(u)(i)
Justice..........................................................Section 4.1(e)
Lien.............................................................Section 4.1(d)
Material Adverse Change..........................................Section 4.1(i)
Material Adverse Effect..........................................Section 4.1(a)
Material Contract................................................Section 4.1(d)
Material Contracts...............................................Section 4.1(n)
Merger.....................................................Background Statement
Merger Consideration.............................................Section 2.1(a)
multi-employer plan..............................................Section 4.1(u)
NASDAQ...........................................................Section 2.4(b)
NLRB.............................................................Section 4.1(p)
Option Payment......................................................Section 3.1
Parent.................................................................Preamble
PBGC.............................................................Section 4.1(u)
Plan of Merger.............................................Background Statement
Plastics Business..........................................Background Statement
Performance Share Awards.........................................Section 4.1(b)
Permits..........................................................Section 4.1(j)
Permitted Liens..................................................Section 4.1(m)
Proxy Statement..................................................Section 4.1(t)
Registration Statement...........................................Section 4.1(u)
Rule 13e-3.......................................................Section 4.2(e)
second request...................................................Section 5.3(a)
SEC..............................................................Section 4.1(d)
Securities Act...................................................Section 4.1(f)
SubCorp................................................................Preamble
Subsidiary.......................................................Section 4.1(g)
Surviving Corporation...............................................Section 1.1
Super Fund........................................................Section 4.1(X)
Super Lien........................................................Section 4.1(X)


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Tax Returns......................................................Section 4.1(l)
Taxes............................................................Section 4.1(l)
toxic substances.................................................Section 4.1(x)
VSCA................................................................Section 1.1
Waste............................................................Section 4.1(x)


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                              AGREEMENT OF MERGER


         THIS AGREEMENT OF MERGER (this "Agreement") is made as of February 19,
1997 among AMERICAN FILTRONA CORPORATION, a Virginia corporation ("AFC"), WBT
HOLDINGS LLC, a Georgia limited liability company ("Holdings"), WB PARENT CORP.,
a Virginia corporation ("Parent"), which is a wholly-owned subsidiary of
Holdings, and WB ACQUISITION CORP., a Virginia corporation ("SubCorp"), which is
a wholly-owned subsidiary of Parent.


                              BACKGROUND STATEMENT

         Holdings and AFC desire to effect a business combination of AFC and
SubCorp pursuant to the Plan of Merger attached hereto as Exhibit A (the "Plan
of Merger"), by which SubCorp will merge with and into AFC, and the holders of
shares of AFC common stock, $1.00 par value ("AFC Common Stock"), other than
Holdings and any of its Subsidiaries (as hereinafter defined), will receive cash
in exchange for AFC Common Stock, as provided in this Agreement (the "Merger").
The respective Boards of Directors of Parent, SubCorp and AFC each has, the
Managers of Holdings have, and Parent as the sole shareholder of SubCorp has,
approved this Agreement and the Plan of Merger. The Board of Directors of AFC
has directed that this Agreement and the Plan of Merger be submitted to the
shareholders of AFC for their approval.

         The parties contemplate that shares of AFC Common Stock will be
acquired by Holdings from its affiliates and will be transferred by Holdings to
Parent.

         The parties contemplate that the Closing (as hereinafter defined) of
the Merger will take place contemporaneously with, but immediately before, the
sale by the surviving corporation in the Merger to FIL Acquisition Corp., a
Delaware corporation ("Bunzl"), of the assets used by AFC in conducting the
business consisting of AFC's Bonded Fibers Segment (the "Fibers Business")
pursuant to the Fibers Sale Agreement of even date herewith between SubCorp and
Bunzl attached hereto as Exhibit B (the "Fibers Sale Agreement"). Following the
Closing of the Merger and the transactions contemplated under the Fibers Sale
Agreement, the surviving corporation in the Merger shall continue to conduct
AFC's business consisting of its Plastic Products Segment (the "Plastics
Business").


                             STATEMENT OF AGREEMENT

         NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:

                                       1

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                                   ARTICLE 1

                            THE BUSINESS COMBINATION

         1.1 THE MERGER. Subject to the terms and conditions of this Agreement
and the Plan of Merger, at the Effective Time (as defined in Section 1.3
hereof), SubCorp shall be merged with and into AFC in accordance with the
provisions of this Agreement and the Virginia Stock Corporation Act (the
"VSCA"), and the separate existence of SubCorp shall thereupon cease, and AFC,
as the surviving corporation in the Merger (hereinafter sometimes referred to as
the "Surviving Corporation"), shall continue its corporate existence under the
laws of the Commonwealth of Virginia as a wholly-owned subsidiary of Parent. The
Plan of Merger provides for the terms and conditions of the Merger, which terms
and conditions are incorporated herein and made a part of this Agreement by
reference. The Merger shall have the effects provided under the applicable laws
of the Commonwealth of Virginia including, but not limited to, Section 13.1-721
of the VSCA.

         1.2 CLOSING. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Hunton & Williams,
Riverfront Plaza, 951 East Byrd Street, Richmond, Virginia 23219-4074, as soon
as possible after all conditions set forth in Article 6 have been satisfied or
waived in writing but in no event later than the third business day after all
such conditions shall have been satisfied or waived (the "Closing Date") or on
such other date or time as the parties shall agree.

         1.3 EFFECTIVE TIME OF THE MERGER. If all the conditions set forth in
Article 6 shall have been fulfilled or waived in accordance with this Agreement
and provided that this Agreement and the Plan of Merger have not been terminated
pursuant to Article 7, the parties shall cause the articles of merger attached
hereto as Exhibit C (the "Articles of Merger") to be executed, delivered and
filed with the State Corporation Commission of the Commonwealth of Virginia (the
"Commission") in accordance with the provisions of the VSCA. The Merger shall
become effective at the time a certificate of merger is issued by the Commission
with respect to the Merger unless a later effective time and date is specified
in the Articles of Merger pursuant to the VSCA (the "Effective Time").

         1.4 ARTICLES OF INCORPORATION; BYLAWS.  The Articles of Incorporation
and Bylaws of SubCorp as in effect immediately prior to the Effective Time shall
be the Articles of Incorporation and Bylaws of the Surviving Corporation at the
Effective Time.

         1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the
Effective Time, the persons who are directors and officers of SubCorp at the
Effective Time will become the directors and officers of the Surviving
Corporation.


                                       2

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                                   ARTICLE 2

              CONVERSION AND EXCHANGE OF SHARES; ADDITIONAL ACTION

         2.1 CONVERSION OF SHARES. In accordance with the Plan of Merger, at the
Effective Time, by virtue of the Merger and without any further action on the
part of any holder thereof:

                 (a) AFC COMMON STOCK. Each issued and outstanding share of AFC
         Common Stock, excluding any such shares held by any of AFC's
         Subsidiaries and excluding any such shares held by Holdings or any of
         its Subsidiaries, shall automatically be converted into only the right
         to receive the consideration for the Merger as set forth in Sections
         2.2 and 2.4 (the "Merger Consideration").

                 (b) SUBCORP STOCK. Each share of AFC Common Stock held by any
         of AFC's Subsidiaries and each issued and outstanding share of SubCorp
         at the Effective Time shall be automatically canceled and extinguished,
         and no payment shall be made in respect thereof.

                 (c) AFC COMMON STOCK HELD BY HOLDINGS. Each issued and
         outstanding share of AFC Common Stock held by Holdings or any of its
         Subsidiaries at the Effective Time shall thereafter continue to
         represent one validly issued, fully paid and nonassessable share of
         common stock of the Surviving Corporation.

         2.2  MERGER CONSIDERATION.  In accordance with the Plan of Merger and
this Agreement, the Merger Consideration to be paid for each share of AFC Common
Stock shall be Forty Six Dollars and 52 cents ($46.52) in cash.

         2.3 STOCK TRANSFER BOOKS. From and after the Effective Time, no
transfer of AFC Common Stock outstanding prior to the Effective Time shall be
registered on the stock transfer books of the Surviving Corporation. If, after
the Effective Time, certificates for AFC Common Stock other than shares held by
Holdings and its Subsidiaries are presented to the Surviving Corporation for
transfer, such certificates shall be canceled and exchanged for the
consideration as described in Sections 2.1 and 2.2 and in accordance with the
Plan of Merger.

         2.4 SURRENDER AND EXCHANGE OF CERTIFICATES REPRESENTING  AFC COMMON
STOCK.

                 (a) EXCHANGE AGENT. Prior to the mailing of the Proxy Statement
         (as hereinafter defined) to the holders of record of AFC Common Stock,
         Holdings shall appoint Wachovia Bank of North Carolina, N.A. to act as
         exchange agent for the Merger (the "Exchange Agent") pursuant to an
         exchange agent agreement reasonably acceptable to AFC and Holdings. At
         the Effective Time, Holdings shall deposit with the Exchange Agent cash
         in the amount of the Merger Consideration less the amount of cash and

                                       3

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         cash-equivalents held by AFC at the Effective Time and, pursuant to
         irrevocable instructions, direct the Exchange Agent to pay the Merger
         Consideration.

                 (b) SURRENDER OF CERTIFICATES. Promptly after the Effective
         Time, Holdings shall cause the Exchange Agent to mail and otherwise
         make available to each record holder as of the Effective Time of an
         outstanding certificate or certificates that immediately prior to the
         Effective Time represented shares of AFC Common Stock (the
         "Certificates"), a letter of transmittal (which shall specify that
         delivery shall be effected, and risk of loss and title to the
         Certificates shall pass, only upon proper delivery of the Certificates
         to the Exchange Agent) and instructions for use in effecting the
         surrender of the Certificates for payment therefor and conversion
         thereof, which letter of transmittal shall comply with all applicable
         rules and regulations of the NASDAQ Stock Market ("NASDAQ"). Upon
         surrender to the Exchange Agent of the Certificates, together with such
         letter of transmittal duly executed, the holder of such Certificates
         shall be entitled to receive promptly in exchange therefor a check
         representing the Merger Consideration to which such holder shall have
         become entitled pursuant to Section 2.2 and the Plan of Merger, and the
         Certificates so surrendered shall forthwith be canceled. If any portion
         of the Merger Consideration to be received upon exchange of a
         Certificate is to be paid to a person other than the person in whose
         name the Certificate surrendered and exchanged therefor is registered,
         it shall be a condition of such payment that the Certificate so
         surrendered shall be properly endorsed or otherwise in proper form for
         transfer and that the person requesting such exchange shall pay in
         advance any transfer or other taxes required by reason of the issuance
         of a check representing cash to such other person, or establish to the
         reasonable satisfaction of the Exchange Agent that such tax has been
         paid or that no such tax is applicable. From the Effective Time until
         surrender in accordance with the provisions of this Section 2.4 and the
         Plan of Merger, each Certificate (other than Certificates held by
         Holdings or any of its Subsidiaries) shall represent for all purposes
         only the right to receive the Merger Consideration. All payments in
         respect of AFC Common Stock that are made in accordance with the terms
         hereof shall be deemed to have been made in full satisfaction of all
         rights pertaining to such securities.

                 (c) LOST CERTIFICATES. In the case of any lost, misplaced,
         stolen or destroyed Certificate, the holder thereof may be required, as
         a condition precedent to delivery to such holder of the Merger
         Consideration, to deliver to Holdings an indemnity agreement and a bond
         in such reasonable sum as Holdings may direct as indemnity against any
         claim that may be made against the Exchange Agent, Holdings, Parent or
         the Surviving Corporation with respect to the Certificate alleged to
         have been lost, misplaced, stolen or destroyed.

                 (d)    NO INTEREST.  No interest shall be paid or accrued on
         any portion of the Merger Consideration regardless of the cause for
         delay in payment of the Merger Consideration.


                                       4

<PAGE>



                 (e) WITHHOLDING RIGHTS. Holdings or the Exchange Agent shall be
         entitled to deduct and withhold from the Merger Consideration otherwise
         payable pursuant to this Agreement to any holder of shares of AFC
         Common Stock and pay to the appropriate tax authority such amounts as
         Holdings or the Exchange Agent is required to deduct, withhold and pay
         with respect to the making of such payment under the Internal Revenue
         Code of 1986, as amended, (the "Code"), or any provision of state,
         local or foreign tax law. To the extent that amounts are so withheld by
         Holdings or the Exchange Agent, such withheld amounts shall be treated
         for all purposes of this Agreement as having been paid to the holder of
         the shares of AFC Common Stock in respect of which such deduction and
         withholding was made by Holdings or the Exchange Agent.


                                   ARTICLE 3

                                AFC STOCK OPTIONS

         3.1 Schedule 3.1 lists all plans for the issuance of options to acquire
AFC Common Stock (the "AFC Stock Option Plans") and plans for awards of
performance shares, together with a list of all outstanding and unexercised
options and all awards of performance shares under those plans, including as to
each option or performance share award, the number of shares of AFC Common Stock
covered by such option or performance share award, the date of grant of such
option or performance share award and the date of expiration of such option.
True and correct copies of all plans, and a copy of each form of option and
performance share award listed on Schedule 3.1 have been delivered to Holdings.
All outstanding options to purchase AFC Common Stock granted pursuant to the AFC
Stock Option Plans shall be amended to provide that each such option shall
become exercisable at the Effective Time and that each holder shall receive, as
soon as practicable after the Effective Time, a payment equal to the per share
Merger Consideration less the applicable option exercise price for each share
subject to an outstanding option (each such payment an "Option Payment").

                                    ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

         4.1 REPRESENTATIONS AND WARRANTIES BY AFC. AFC represents and warrants
to and agrees with Holdings, Parent and SubCorp as of the date of this Agreement
and as of the Closing as follows:

                 (a) ORGANIZATION AND QUALIFICATION. AFC is a corporation duly
         organized, validly existing and in good standing under the laws of the
         Commonwealth of Virginia, has the corporate power and authority to own
         all of its properties and assets and to carry on its business as it is
         now being conducted, and is duly qualified to do business and is in
         good standing in each of the jurisdictions in which the failure to be
         so qualified would

                                       5

<PAGE>



         have a material adverse effect on the consolidated financial condition,
         results of operations or business of AFC and its Subsidiaries, taken as
         a whole (a "Material Adverse Effect"). The copies of AFC's Articles of
         Incorporation and Bylaws, as amended to date, that have been delivered
         to Holdings, are complete and correct, and such instruments, as so
         amended, are in full force and effect at the date hereof.

                 (b) CAPITALIZATION. The authorized capital stock of AFC
         consists of 10,000,000 shares of AFC Common Stock. All of the issued
         and outstanding shares of AFC Common Stock are duly authorized, validly
         issued, fully paid and nonassessable, and were not issued in violation
         of any preemptive rights. As of the date hereof: (i) 3,816,629 shares
         of AFC Common Stock are issued and outstanding; (ii) 258,800 shares of
         AFC Common Stock are subject to outstanding options pursuant to the AFC
         Stock Option Plans ; and (iii) there are no outstanding performance
         share awards under the 1988 Performance Share Plan (the "Performance
         Share Awards"). Except as set forth on Schedule 3.1 or Schedule 4.1(b)
         and in this Section 4.1(b), there are no shares of capital stock of AFC
         outstanding, and there are no subscriptions, options, convertible
         securities, calls, rights, warrants, performance share awards or other
         agreements, claims or commitments of any nature whatsoever obligating
         AFC to issue, transfer, register with any securities commission or
         other authority, deliver or sell or cause to be issued, transferred, so
         registered, delivered or sold, additional shares of the capital stock
         or other securities of AFC or obligating AFC to grant, extend or enter
         into any such agreement or commitment.

                 (c) AUTHORITY. AFC has the corporate power and authority to
         execute and deliver this Agreement and, subject to the receipt of the
         approval of this Agreement and the Plan of Merger by the affirmative
         vote of more than two-thirds of the outstanding shares of AFC Common
         Stock, to consummate the Merger. The execution and delivery by AFC of
         this Agreement and the consummation by AFC of the Merger in accordance
         with the Plan of Merger have been duly authorized by its Board of
         Directors. Except for the approval of this Agreement and the Plan of
         Merger by the holders of AFC Common Stock, no other corporate action on
         the part of AFC is necessary to authorize the execution and delivery of
         this Agreement by AFC or the consummation by AFC of the Merger in
         accordance with the Plan of Merger. This Agreement has been duly
         executed and delivered by AFC and is a valid, binding and enforceable
         agreement of AFC.

                 (d) NON-CONTRAVENTION. The execution and delivery of this
         Agreement by AFC do not and, subject to the approval of this Agreement
         and the Plan of Merger by the holders of AFC Common Stock, the filing
         of all necessary forms with the Securities and Exchange Commission (the
         "SEC") and the expiration of all applicable waiting periods after the
         filings required by the Hart-Scott-Rodino Antitrust Improvements Act of
         1976 (the "HSR Act") referred to in paragraph (e) below, the
         consummation by AFC of the Merger, will not (A) violate or conflict
         with any provision of the Articles of Incorporation or Bylaws of AFC or
         any of its Subsidiaries, or (B) except as set forth on Schedule

                                       6

<PAGE>



 4.1(d)(i) and except insofar as it would not have a Material Adverse Effect,
violate or conflict with, or result (with the giving of notice or the lapse of
time or both) in a violation of or constitute a default under any provision of,
or result in the acceleration or termination of or entitle any party to
accelerate or terminate (whether after the giving of notice or lapse of time or
both), any obligation or benefit under, or result in the creation or imposition
of any Lien (as hereinafter defined) upon any of the assets or properties of AFC
or any of its Subsidiaries or require consent, authorization or approval of any
person or entity pursuant to any provision of any "Material Contract" (as
hereinafter defined), "Intellectual Property Agreement" (as hereinafter
defined), or law, ordinance, regulation, order, arbitration award, judgment or
decree to which AFC or any of its Subsidiaries is a party or by which it or its
assets or properties are bound and will not constitute an event permitting
termination of any Material Contract or Intellectual Property Agreement to which
AFC or any of its Subsidiaries is a party or require any additional payment or
expense to avoid any such event. As used herein, a "Lien" with respect to any
property refers to any mortgage, lien, pledge, charge, security interest,
encumbrance or other adverse claim of any kind (including the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement) relating to such property. Except for violations,
conflicts, defaults, accelerations, terminations, entitlements, creations or
impositions of Liens or other encumbrances, conflicts or events described on
Schedule 4.1(d), no such event shall cause a Material Adverse Effect or cause
any material damage, additional cost or expense (including any payments or
expenses incurred to obtain consents or waivers) to Holdings or the Surviving
Corporation.

                 (e) GOVERNMENTAL CONSENTS. Except for the consents described in
         Schedule 4.1(e), other than the filing of the Proxy Statement (as
         hereinafter defined) with the SEC and, to the extent required, any
         filings with or approvals by any state securities commissions or
         authorities, filings with the Federal Trade Commission (the "FTC") and
         the Department of Justice ("Justice") under the HSR Act and the filing
         of the Articles of Merger with the Commission, no consent,
         authorization, clearance, order or approval of, or filing or
         registration with, any executive, judicial or other public authority,
         agency, department, bureau, division, unit or court or other public
         person or entity (any of which is hereinafter referred to as a
         "Governmental Entity") is required for or in connection with the
         execution and delivery of this Agreement by AFC and the consummation by
         AFC of the Merger.

                 (f) PERIODIC REPORTS. Since January 1, 1993, AFC has timely
         filed all forms and reports with the SEC required to be filed by it
         pursuant to the Securities Act of 1933 (the "Securities Act") and the
         Securities Exchange Act of 1934, as amended (the "Exchange Act") and
         the SEC rules and regulations thereunder, all of which have complied as
         of their respective filing dates in all material respects with all
         applicable requirements of the Securities Act and the Exchange Act, and
         the rules promulgated thereunder, except for such statements, if any,
         as have been modified by subsequent filings. AFC has delivered

                                        7
<PAGE>


         all such forms and reports to Holdings. None of such forms or reports
         at the time filed contained any untrue statement of a material fact or
         omitted to state a material fact required to be stated therein or
         necessary in order to make the statements therein, in light of the
         circumstances under which they were made, not misleading, except for
         such statements, if any, as have been modified by subsequent filings.

                 (g) SUBSIDIARIES. AFC owns, directly or indirectly, all the
         outstanding capital stock of each of its Subsidiaries, free and clear
         of all Liens and all such capital stock is duly authorized, validly
         issued and outstanding, fully paid and nonassessable, and except as set
         forth in Schedule 4.1(g), neither AFC nor any of its Subsidiaries has
         made any material investment in, or material advance of cash or other
         extension of credit to, any person, corporation or other entity other
         than its Subsidiaries. None of such Subsidiaries has any commitment to
         issue or sell any shares of its capital stock or any securities or
         obligations convertible into or exchangeable for, or giving any person
         (other than AFC) any right to acquire from such Subsidiary, any shares
         of its capital stock, and no such securities or obligations are
         outstanding. Each of AFC's Subsidiaries is a corporation duly organized
         and validly existing in good standing under the laws of its
         jurisdiction of incorporation and has the corporate power and authority
         to own all of its properties and assets and to carry on its business as
         it is now being conducted. Each of AFC's Subsidiaries is duly qualified
         to do business and is in good standing in all jurisdictions where such
         qualification is required and where failure to so qualify would have a
         Material Adverse Effect. As used in this Agreement, the term
         "Subsidiary" means, with respect to any person, corporation or other
         entity, any corporation or other organization, whether incorporated or
         unincorporated, of which at least a majority of the securities or
         interests having by the terms thereof voting power to elect a majority
         of the board of directors or others performing similar functions with
         respect to such corporation or other organization is at that time
         directly or indirectly owned or controlled by such person, corporation
         or other entity, or by any one or more of its Subsidiaries, or by such
         person, corporation or other entity, and one or more of its
         Subsidiaries.

                 (h) FINANCIAL STATEMENTS.

                        (i) AFC has previously furnished Holdings with a true
                 and complete copy of the balance sheets of AFC as of December
                 31, 1994, 1995 and 1996 and the related statements of income,
                 shareholders' equity and cash flows for the years then ended,
                 including the notes thereto, certified or to be certified by
                 Coopers & Lybrand L.L.P., independent certified public
                 accountants, and the financial statements of AFC, including the
                 notes thereto, contained in the AFC Quarterly Report on Form
                 10-Q for the quarter ended September 30, 1996 in the form last
                 delivered to Holdings on or prior to the date of this Agreement
                 (the "AFC Quarterly Report"). AFC will furnish to Holdings as
                 soon as available true and complete copies of the comparable
                 financial statements of AFC as of March 31, 1997 and the fiscal
                 quarter then ended. All of the foregoing financial statements
                 are referred to


                                       8

<PAGE>

                 hereunder as the "AFC Financial Statements." The AFC Financial
                 Statements have been or will be prepared from, and are or will
                 be in accordance with, the books and records of AFC and present
                 or will present fairly the consolidated financial position,
                 results of operations and cash flows of AFC and its
                 Subsidiaries taken as a whole as of the dates and for the
                 periods indicated, in each case in conformity with generally
                 accepted accounting principles, consistently applied, except as
                 otherwise stated in the AFC Financial Statements and, for
                 statements covering interim periods, include or will include
                 all adjustments (consisting only of normal recurring accruals)
                 that are necessary for the fair presentation of the
                 consolidated financial position, results of operations and cash
                 flows of AFC and its Subsidiaries.

                        (ii) AFC has previously furnished Holdings with a true
                 and complete copy of the balance sheets of the Fibers Business
                 as of December 31, 1995, September 30, 1996 and December 31,
                 1996 and the related statements of income for the periods then
                 ended and will furnish to Holdings true and complete copies of
                 the comparable financial statements of the Fibers Business as
                 of March 31, 1997 and the fiscal quarter then ended (the
                 "Fibers Financial Statements"). The Fibers Financial Statements
                 have been or will be prepared from, and are or will be in
                 accordance with, the books and records of AFC and present or
                 will present fairly the financial position and results of
                 operations of the Fibers Business as of the dates and for the
                 periods indicated, in each case in conformity with generally
                 accepted accounting principles, consistently applied, except
                 that:

                              (A) The statements do not or will not contain
                                  disclosure notes.

                              (B) The statements do not or will not reflect any
                                  income taxes.

                              (C) The statements do not or will not reflect any
                                  allocations of corporate overhead.

                 The Fibers Financial Statements covering interim periods
                 include or will include all adjustments (consisting only of
                 normal recurring accruals) that are necessary for the fair
                 presentation of the financial position and the results of
                 operations of the Fibers Business.

                        (iii) There are no liabilities of the Fibers Business of
                 any kind whatsoever, whether accrued, contingent, absolute,
                 determined, determinable or otherwise, other than:

                              (A) liabilities provided for in the balance sheet
                        of the Fibers Business (the "Fibers Balance Sheet") at
                        September 30, 1996 (the "Fibers Balance Sheet Date")
                        included in the Fibers Financial Statements;


                                            9

    <PAGE>

                              (B) liabilities disclosed or described on Schedule
                        4.1(h)(iii); and

                              (C) other liabilities incurred in the ordinary
                        course of business of the Fibers Business since the
                        Fibers Balance Sheet Date that, individually or in the
                        aggregate, are not material to the business, financial
                        condition or results of operations of the Fibers
                        Business, taken as a whole.

                 (i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
         in Schedule 4.1(i) or in any report filed by AFC with the SEC prior to
         the date of this Agreement, since December 31, 1995, there has not
         been: (i) any Material Adverse Change (as used in this Agreement,
         "Material Adverse Change" means any material adverse change in the
         business, financial condition or results of operations of AFC and its
         Subsidiaries taken as a whole); (ii) any damage, destruction, loss or
         casualty to property or assets of AFC or any of its Subsidiaries,
         whether or not covered by insurance, that would have a Material Adverse
         Effect; (iii) any strike, work stoppage or slowdown or other labor
         trouble involving AFC or any of its Subsidiaries that would have a
         Material Adverse Effect; (iv) any declaration, setting aside or payment
         of any dividend or distribution (whether in cash, capital stock or
         property) with respect to the capital stock of AFC other than regular
         quarterly cash dividends at the rate of $0.28 per share on AFC Common
         Stock; (v) any redemption or other acquisition by AFC of any of the
         capital stock of AFC (except for the acquisition of AFC Common Stock in
         payment of the exercise price upon the exercise of AFC Stock Options
         and payment of performance share related withholding taxes); (vi) any
         split, combination, reclassification or other similar change in the
         outstanding AFC Common Stock; (vii) any incurrence, assumption or
         guarantee of any indebtedness for borrowed money with respect to the
         Fibers Business; (viii) creation of any Lien involving an amount in
         excess of $10,000 with respect to any assets of the Fibers Business;
         (ix) any damage, destruction or other casualty loss (whether or not
         covered by insurance) affecting the Fibers Business or any asset of the
         Fibers Business that, individually or in the aggregate, has had or
         could reasonably be expected to have a material adverse effect of the
         financial condition, results of operations or business of the Fibers
         Business (a "Fibers Material Adverse Effect"); (x) any transaction or
         commitment made, or any contract or agreement entered into, by AFC
         relating to the Fibers Business or any asset of the Fibers Business
         (including the acquisition or disposition of any assets) or any
         relinquishment by AFC of any contract or other right, in either case
         involving an amount in excess of $25,000, other than transactions and
         commitments in the ordinary course of business consistent with past
         practices and those contemplated by this Agreement; (xi) any change in
         any method of accounting or accounting practice by AFC with respect to
         the Fibers Business except for any such change required by reason of a
         concurrent change in GAAP; (xii) any (A) employment, deferred
         compensation, severance, retirement or other similar agreement entered
         into with any employee of the Fibers Business (or any amendment to any
         such existing agreement), (B) grant of any severance or termination pay
         to any such employee or (C) change in compensation or other benefits
         payable to any such employee pursuant to any severance or retirement
         plans or policies, other than in the ordinary course


                                       10
<PAGE>

         of business consistent with past practice; (xiii) any labor dispute,
         other than routine individual grievances, or any activity or proceeding
         by a labor union or representative thereof to organize any employees of
         the Fibers Business, or any lockouts, strikes, slowdowns, work
         stoppages or threats thereof by or with respect to such employees;
         (xiv) any capital expenditure, or commitment for a capital expenditure,
         for additions or improvements to property, plant and equipment with
         respect to the Fibers Business exceeding $100,000 in the aggregate;
         (xv) any disposition of any capital asset of the Fibers Business
         involving an amount in excess of $25,000; (xvi) with respect to the
         Fibers Business, any loss of any significant customer or customer
         accounts or any significant decrease in the sales volume to any
         significant customer; or (xvii) any agreement to do any of the
         foregoing. Since December 31, 1995, there has not been any issuance by
         AFC of any shares, or options, calls or commitments relating to shares
         of its capital stock, or any securities or obligations convertible into
         or exchangeable for, or giving any person any right to acquire from it,
         any shares of its capital stock other than the issuance of stock
         options, performance shares or shares of AFC Common Stock pursuant to
         the AFC Stock Option Plans and except as set forth on Schedule 4.1(b).

                 (j) GOVERNMENTAL AUTHORIZATION AND COMPLIANCE WITH LAWS. Except
         as set forth on Schedule 4.1(j) and except insofar as the failure to do
         so would not have a Material Adverse Effect, AFC and its Subsidiaries
         (i) are in compliance with all laws, orders, regulations, policies and
         guidelines of all Governmental Entities applicable to AFC and its
         Subsidiaries or their businesses or properties and assets, and (ii)
         have all permits, certificates, licenses, approvals and other
         authorizations required in connection with the operation of their
         businesses. Schedule 4.1(j)(ii) correctly describes each license,
         franchise, permit or other similar authorization affecting, or relating
         in any way to the Fibers Business or, with respect to the business,
         assets, or operations of AFC or any of its Subsidiaries, required by
         any Environmental Law (as defined below), together with the name of the
         Governmental Entity issuing such license or permit or requiring such
         notice (the "Permits") with an indication of which Permits affect or
         relate in any way to the Fibers Business. Except as set forth on
         Schedule 4.1(j)(ii), such Permits are valid and in full force and
         effect, and none of the Permits will be terminated or impaired or
         become invalid, in whole or in part, as a result of the Merger. As of
         the date hereof, no notice has been issued and, to the best of AFC's
         knowledge (as defined below), no investigation or review is pending or
         is contemplated or threatened by any Governmental Entity (Y) with
         respect to any alleged violation by AFC or any Subsidiary of any law,
         order, regulation, policy or guideline of any Governmental Entity, or
         (Z) with respect to any alleged failure to have all permits,
         certificates, licenses, approvals and other authorizations required in
         connection with the operation of the business of AFC and its
         Subsidiaries. Neither AFC nor any Subsidiary is in violation of any
         judgment, decree, injunction, ruling or order of Governmental Entity
         binding on AFC or such Subsidiary the violation of which would have a
         Material Adverse Effect. As used in this Agreement, the "best of AFC's
         knowledge" and any other reference to the knowledge of AFC or its
         officers or directors shall mean the actual knowledge, without
         independent investigation, of John L. Morgan,

                                       11
<PAGE>

         Leo C. Drozeski, Jr., John D. Barlow Jr., Randall L. Hagan, Anthony M.
         Vincent and Bruce A. Nylander.

                 (k) CONDUCT OF BUSINESS. Since December 31, 1995, AFC and its
         Subsidiaries have conducted their businesses in the ordinary and usual
         course consistent with prior practice.

                 (l) TAX MATTERS. Except as set forth on Schedule 4.1(l), (i)
         all material Taxes (as defined below) due and payable by AFC and its
         Subsidiaries have been paid and are not delinquent; (ii) to the extent
         required by GAAP, estimates for all Taxes due but not yet payable for
         all periods through December 31, 1996 have been accrued on the books of
         AFC, and adequate reserves have been established therefor as of the end
         of such periods; (iii) all material Taxes due and payable by AFC and
         its Subsidiaries for all periods through December 31, 1996 have been
         paid or provided for in the AFC Financial Statements and are not
         delinquent; (iv) as of the date hereof, there are no pending claims
         asserted for Taxes against AFC or any of its Subsidiaries or
         outstanding agreements or waivers extending the statutory period of
         limitation applicable to any tax return of AFC or any of its
         Subsidiaries for any period; (v) AFC and each of its Subsidiaries have
         duly and timely filed all material federal, state, local and foreign
         tax returns and all other returns heretofore required to be filed ("Tax
         Returns") with respect to all Taxes. AFC has delivered to Holdings true
         and correct copies of all federal income Tax Returns for the 1994 and
         1995 taxable periods. AFC has not filed a consent to the application of
         Section 341(f) of the Code. AFC has made all estimated federal income
         tax deposits and, for all currently open taxable periods, has complied
         in all material respects with the tax withholding provisions and
         employment tax provisions of all applicable federal, state, local and
         other laws. "Taxes" shall mean all taxes arising under the Code or
         arising under any federal, state, local or foreign law, rule,
         regulation or order including, without limitation, any income, profits,
         employment, sales, gross receipts, use, occupation, excise, real
         property, personal property or ad valorem taxes or any license or
         franchise fee or tax and all penalties and interest related thereto.

                 (m) PROPERTY. (i) AFC or one of its Subsidiaries has good and
         marketable title to all properties and assets reflected in the balance
         sheet dated December 31, 1995 (or acquired after that date), and valid
         leasehold interests in all properties and assets not reflected on such
         balance sheet but used by AFC or a Subsidiary in its business, free and
         clear of any title defects, liens, charges, pledges, security
         interests, adverse claims, or other encumbrances, except (A) mortgages
         and liens securing debt reflected as liabilities on such balance sheet,
         (B) liens for current taxes and assessments not in default, (C)
         mechanics', carriers', workmen's, repairman's, statutory or common law
         liens either not delinquent or being contested in good faith and (D)
         Liens, encumbrances, covenants, rights-of-way, minor imperfections of
         title, building or use restrictions, easements, exceptions, variances,
         reservations and other matters or limitations of any kind, if any, that
         do not have a Material Adverse Effect. Except as set forth on Schedule
         4.1(m)(i), no person other than


                                     12
<PAGE>

         AFC or one of its Subsidiaries is currently entitled to possession of
         any of the properties of AFC, whether owned, leased or used by AFC or
         one of its  Subsidiaries. To the best of AFC's knowledge, the real
         property, buildings, structures and improvements owned, leased or used
         by AFC or any of its Subsidiaries conform to all applicable laws,
         ordinances and regulations, including zoning regulations, none of which
         would upon consummation of the Merger materially adversely interfere
         with the use of such properties, buildings, structures or improvements
         for the purposes for which they are now utilized. The properties and
         assets owned or leased by AFC are adequate in all material respects for
         the conduct of its businesses as presently conducted.

                 (ii) Schedule 4.1(m)(ii) correctly describes all real property
         used in the Fibers Business (the "Fibers Real Property"), that AFC
         owns, leases or subleases, any title insurance policies and surveys
         with respect thereto, and any Liens thereon, specifying in the case of
         leases or subleases, the name of the lessor or sublessor, the lease
         term and the basic annual rent.

                 (iii) Schedule 4.1(m)(iii) constitutes a depreciation schedule
         at December 31, 1996 of all machinery, equipment, furniture, vehicles,
         storage tanks and other trade fixtures and fixed assets that are owned
         by AFC and used in the Fibers Business.

                 (iv) Schedule 4.1.(m)(iv) constitutes a depreciation schedule
         at December 31, 1996 of all machinery, equipment, furniture, vehicles,
         storage tanks and other trade fixtures and fixed assets that are owned
         by AFC and located in the headquarters building.

                 (v) AFC has good and marketable, indefeasible, fee simple title
         (subject only to Permitted Liens) to, or in the case of leased property
         has valid leasehold interests in, all property used in the Fibers
         Business (whether real, personal, tangible or intangible) and reflected
         on the Fibers Balance Sheet of AFC at December 31, 1995, or acquired
         after that date, except for assets sold since that date in the ordinary
         course of business consistent with past practices.

                 (vi)   No property used in the Fibers Business is subject to
                 any Lien, except:

                        (A)   Liens disclosed on the Fibers Balance Sheet;

                        (B) Liens for taxes not yet due or being contested in
                 good faith (and for which adequate accruals or reserves have
                 been established on the Fibers Balance Sheet); and

                        (C) Liens, covenants, rights-of-way, zoning restrictions
                 and other encumbrances or restrictions of record that do not
                 materially detract from the value of such assets as now used in
                 the Fibers Business, or materially interfere with any

                                            13

<PAGE>
                 present or intended use of such assets (clauses (A), (B) and
                 (C) are, collectively, the "Permitted Liens").

                 (vii) No violation of any law, regulation or ordinance
         (including, without limitation, laws, regulations or ordinances
         relating to zoning, city planning or similar matters) relating to the
         Fibers Business or any asset used in the Fibers Business currently
         exists or has existed at any time, except for violations which have not
         had and would not reasonably be expected to have, individually or in
         the aggregate, a Fibers Material Adverse Effect.

                 (n)    MATERIAL CONTRACTS.  Schedule 4.1(n) contains a correct
         and complete list as of the date hereof, of the following (hereinafter
         referred to as the "Material Contracts"):

                            (i) except for investment securities held by AFC or
                 any of its Subsidiaries, all bonds, debentures, loan
                 agreements, notes, mortgages, deeds to secure debt, deeds of
                 trust and guaranties to which AFC or any Subsidiary is a party
                 or by which AFC or any Subsidiary or its properties or assets
                 are bound;

                           (ii) all leases (whether capital or operating)
                 involving an annual commitment or annual payments of $25,000 or
                 more under which AFC or any Subsidiary is the lessee of real or
                 personal property, and all leases of property used in the
                 Fibers Business with a (A) book value in excess of $10,000 or
                 (B) fair market value in excess of $25,000, specifying the name
                 of the lessor or sublessor, the lease term and basic annual
                 rent;

                          (iii) all employment and consulting agreements between
                 AFC or any Subsidiary and any person or entity;

                           (iv) all existing contracts and commitments (other
                 than those described in subparagraphs (i), (ii) or (iii), and
                 any Employee Plans (as hereinafter defined) to which AFC or any
                 Subsidiary is a party or by which AFC or any Subsidiary or its
                 properties or assets may be bound involving either (A) annual
                 payments of $25,000 or more or (B) aggregate payments of
                 $50,000 or more;

                            (v) any collective bargaining agreements;

                           (vi) any agreement for the purchase of materials,
                 supplies, goods, services, equipment or other assets for the
                 Fibers Business providing for (A) annual payments of $25,000 or
                 more, (B) aggregate payments of $25,000 or more or (C) the
                 purchase of more than 90 days usage of raw materials;

                          (vii) any sales, distribution or other similar
                 agreement providing for the sale of materials, supplies, goods,
                 services, equipment or other assets of the Fibers


                                          14

<PAGE>

                 Business that provides for either (A) annual payments of
                 $25,000 or more or (B) aggregate payments of $50,000 or more;

                           (viii) any partnership, joint venture or other
                 similar agreement or arrangement with respect to the Fibers
                 Business;

                           (ix) any agreement relating to the deferred purchase
                 price of property of the Fibers Business (whether incurred,
                 assumed, guaranteed or secured by any asset), except any such
                 agreement with an aggregate outstanding principal amount not
                 exceeding $25,000 and which may be prepaid on not more than 30
                 days notice without the payment of any penalty;

                            (x) any option, license, franchise or similar
                 agreement with respect to the Fibers Business or any assets
                 used in the Fibers Business;

                           (xi) any agency, dealer, sales representative,
                 marketing or other similar agreement with respect to the Fibers
                 Business;

                          (xii) any agreement that limits the freedom of AFC to
                 compete in any line of business or with any person or entity or
                 in any area or to own, operate, sell, transfer, pledge or
                 otherwise dispose of or encumber any asset used in the Fibers
                 Business or that would so limit the freedom of AFC or Bunzl
                 after the Closing Date;

                         (xiii) any agreement providing for any purchase or sale
                 obligations with respect to the Fibers Business with a duration
                 of such obligations in excess of six months;

                          (xiv) any agreement with or for the benefit of (A) any
                 Affiliate (as defined below) of AFC; (B) any person or entity
                 directly or indirectly owning, controlling or holding with
                 power to vote, 5% or more of the outstanding voting securities
                 of AFC or any of its Affiliates, (C) any person or entity 5% or
                 more of whose outstanding voting securities are directly or
                 indirectly owned, controlled or held with power to vote by AFC
                 or any of its Affiliates or (D) any director or officer of AFC
                 or any of their respective Affiliates or any "Associates" or
                 members of the "Immediate Family" (as used herein, the terms
                 "Affiliate", "Associate" or "Member of the Immediate Family"
                 being respectively defined in Rule 12b-2 or Rule 16a-1 of the
                 Exchange Act) of such person or entity; and

                           (xv) any other agreement, commitment, arrangement or
                 plan with respect to the Fibers Business not made in the
                 ordinary course of business that is material to the business,
                 financial condition, results of operations or properties of the
                 Fibers Business.

                                          15
<PAGE>

         True and complete copies of all Material Contracts, including all
         amendments thereto, have been delivered to Holdings.  Except as set
         forth on Schedule 4.1(n):  (i) all Material Contracts are in full force
         and effect and constitute the valid and binding obligations of AFC and,
         to the best of AFC's knowledge, the other parties thereto; (ii) there
         has not been and there currently is no breach of any Material Contract
         by AFC or any of its Subsidiaries or, to the best of AFC's knowledge,
         any other party thereto in any material respect; (iii) no event has
         occurred that (whether with or without notice, lapse of time or the
         happening or occurrence of any other event) would constitute a default
         by AFC or any of its Subsidiaries thereunder entitling another party to
         terminate a Material Contract; and (iv) the continuation, validity and
         effectiveness of all such Material Contracts under the current terms
         thereof and the current rights and obligations of AFC or any of its
         Subsidiaries thereunder will in no way be affected, altered or impaired
         by the consummation of the Merger. Except as disclosed in Schedule
         4.1(n), there are no contracts or options to sell or lease any material
         properties or material assets of AFC or any of its Subsidiaries other
         than in the ordinary course of business.

                 (o) LEGAL PROCEEDINGS. Except as set forth in Schedule 4.1(o):
         (i) there is no claim, action, suit, proceeding or investigation
         pending or, to the best of AFC's knowledge, contemplated or threatened
         against AFC or any Subsidiary or any of its properties or assets (or
         any of its officers or directors in connection with the business of AFC
         and its Subsidiaries) before any arbitrator or Governmental Entity,
         domestic or foreign, that, in the event of a final adverse
         determination as to any claim made therein, considered individually or
         in the aggregate with all such other unscheduled claims, actions, suits
         or proceedings, would have a Material Adverse Effect, or that seeks
         treble damages, seeks damages in connection with the Merger or the
         Fibers Sale Agreement or seeks to prohibit, restrict or delay
         consummation of the Merger or the Fibers Sale Agreement or any of the
         conditions to consummation of the Merger or the Fibers Sale Agreement
         or to limit in any material manner the right of Holdings or Parent to
         control the Surviving Corporation or any aspect of the business of AFC
         or its Subsidiaries after the Effective Time, nor is there any
         judgment, decree, injunction, ruling or order of any Governmental
         Entity, arbitrator or any other person outstanding against AFC or any
         Subsidiary having any such effect; and (ii) neither AFC nor any
         Subsidiary is a party to or bound by any judgment, decree, injunction,
         ruling or order of any Governmental Entity, arbitrator or any other
         person against AFC or any Subsidiary that, when considered individually
         or in the aggregate with all such other judgments, decrees,
         injunctions, rulings or orders, would have a Material Adverse Effect.

                 (p) LABOR RELATIONS. AFC is in compliance in all material
         respects with all federal and state laws respecting employment and
         employment practices, terms and conditions of employment, wages and
         hours, and is not engaged in any unfair labor or unlawful employment
         practice. Except as set forth in Schedule 4.1(p), (i) there is no
         unlawful employment practice or discrimination charge pending before
         the Equal Employment Opportunity Commission ("EEOC") or any EEOC
         recognized state
                                   16

<PAGE>

        "referral agency;" (ii) there is no unfair labor practice charge or
         complaint against AFC or any Subsidiary pending before the National
         Labor Relations Board ("NLRB"); (iii) there is no labor strike,
         dispute, slowdown or stoppage actually pending or, to the best of AFC's
         knowledge, threatened against or involving or affecting AFC or any
         Subsidiary; (iv) there is no NLRB representation question respecting
         any of its employees; (v) there is no grievance or arbitration
         proceeding pending and no written claim therefor exists; and (vi) there
         is no collective bargaining agreement that is binding on AFC or any
         Subsidiary. Except for any Material Contract disclosed pursuant to
         Section 4.1(n), neither AFC nor any Subsidiary is a party to or bound
         by any agreement, arrangement or understanding with any employee or
         consultant that cannot be terminated on notice of ninety (90) or fewer
         days without liability to AFC or a Subsidiary or that entitles the
         employee or consultant to receive any salary continuation or severance
         payment or retain any specified position with AFC or a Subsidiary.

                 (q) INSIDER INTERESTS. Except for this Agreement and as
         disclosed or incorporated by reference in the AFC's 1995 Annual Report
         on Form 10-K, AFC's proxy statement for its 1995 annual meeting of
         shareholders, or on Schedule 4.1(q), no known affiliate, officer or
         director of AFC or any Subsidiary (i) has any agreement with AFC or any
         Subsidiary or any interest in any property, real or personal, tangible
         or intangible, including without limitation trade names or trademarks
         used in or pertaining to the business of AFC or any Subsidiary, except
         for the normal rights as a shareholder or (ii) as of the date hereof,
         to the best of AFC's knowledge, has any claim or cause of action
         against AFC or any Subsidiary, except for accrued compensation and
         benefits, expenses and similar obligations incurred in the ordinary
         course of business (including reimbursement of medical expenses
         pursuant to Employee Plans) with respect to directors or employees of
         AFC or any Subsidiary.

                 (r) INTELLECTUAL PROPERTY. Schedule 4.1(r) lists all patents,
         trademarks, service marks, trade names, copyrights, or applications for
         the foregoing and all computer programs, firmware and documentation
         relating thereto used in the Fibers Business (other than computer
         software generally available to the public and having a purchase price
         of less than $1,000 per application) used by AFC or a Subsidiary
         ("Intellectual Property") with an indication of any that are owned or
         licensed by or to AFC or any affiliate of AFC or used or held for use
         in the Fibers Business currently (the "Fibers Intellectual Property
         Rights"). AFC or a Subsidiary owns or, to the extent disclosed on
         Schedule 4.1(r), has adequate rights to use all Intellectual Property
         that is material to the operation of AFC's or any of its Subsidiaries'
         businesses as of the date hereof (the Agreements relating thereto are
         referred to as the "Intellectual Property Agreements", all of which are
         listed on Schedule 4.1(r) with an indication of any such agreements
         that relate to the Fibers Intellectual Property Rights, which
         agreements are referred to herein as the "Fibers Intellectual Property
         Agreements"). As to any Intellectual Property owned by AFC or any
         Subsidiary, such Intellectual Property is owned free and clear of all
         material claims of
                                      17

<PAGE>

         others, including employees, former employees or independent
         contractors of AFC or any Subsidiary, and neither AFC nor any
         Subsidiary has received notice that the use of such Intellectual
         Property in the business of AFC or the Subsidiaries violates or
         infringes upon the claimed rights of others. As to the Intellectual
         Property Agreements, except as set forth in Schedule 4.1(r), (i) all
         such agreements are in full force and effect, (ii) neither AFC nor any
         Subsidiary, nor to the best of AFC's knowledge any other party thereto,
         is in material default under any such agreement, (iii) neither AFC nor
         any Subsidiary is obligated to make any royalty or similar payments
         under any such agreements except as stated therein, and (iv) the rights
         of AFC or any Subsidiary under such agreements will not be affected by
         the consummation of the Merger. Except as set forth in Schedule 4.1(r),
         neither AFC nor any Subsidiary has granted to any person any license or
         other right to use in any manner any of the Intellectual Property owned
         by AFC or any Subsidiary or has granted any sublicense or right to use
         any Intellectual Property licensed to AFC or any Subsidiary under the
         Intellectual Property Agreements. Schedule 4.1(r) specifies as to each
         Fibers Intellectual Property Right, as applicable: (i) the nature of
         such Fibers Intellectual Property Right; (ii) the owner of such
         Intellectual Property Right; (iii) the jurisdictions by or in which
         such Fibers Intellectual Property Right is recognized without regard to
         registration or has been issued or registered or in which an
         application for such issuance or registration has been filed, including
         the respective registration or application numbers; and (iv) licenses,
         sublicenses and other agreements as to which AFC or any of its
         affiliates is a party and pursuant to which any person or entity is
         authorized to use such Fibers Intellectual Property Right, including
         the identity of all parties thereto, a description of the nature and
         subject matter thereof, the applicable royalty and the term thereof.
         With respect to the Fibers Intellectual Property Rights, AFC has not
         during the three years preceding the date of this Agreement been a
         defendant in any action, suit, investigation or proceeding relating to,
         or otherwise been notified of, any alleged claim or infringement of any
         patents, trademarks, service marks or copyrights, and to the best of
         AFC's knowledge there are no other claims or infringements by AFC or
         any person or entity of any Fibers Intellectual Property Rights. No
         Fibers Intellectual Property Right is subject to any outstanding
         judgment, injunction, order, decree or agreement restricting the use
         thereof by AFC with respect to the Fibers Business or restricting the
         licensing thereof to any person or entity. AFC has not entered into any
         agreement to indemnify any other person or entity against any charge of
         infringement of any patent, trademark, service mark or copyright.

                 (s) INSURANCE. Schedule 4.1(s) lists all insurance policies or
         contracts and fidelity bonds providing coverage to AFC and its
         Subsidiaries as of the date hereof with an indication of any that
         relate to the business, operations, employees or assets of the Fibers
         Business. All such policies or contracts of insurance have been
         provided to Holdings and are, in the opinion of AFC's Chief Financial
         Officer, of a scope and in an amount usual and customary for businesses
         engaged in the businesses of AFC and the Subsidiaries and are
         sufficient for compliance with all requirements of law and of all
         agreements to which AFC or any Subsidiary is a party as of the date
         hereof. All insurance policies and fidelity bonds or other policies and
         bonds providing substantially similar insurance coverage pursuant to

                                    18
<PAGE>

         which any such insurance is provided have been in effect since 1992
         and remain in full force and effect, and no effective notice of
         cancellation or termination of any such insurance policies
         has been given to AFC or any Subsidiary by the carrier of any such
         policy or comparable insurance. Through the date hereof, all premiums
         required to be paid in connection therewith have been timely paid in
         full. There is no claim pending under any of such policies or bonds as
         to which coverage has been questioned, denied or disputed by the
         underwriters of such policies or bonds or in respect of which such
         underwriters have reserved their rights.

                 (t) PROXY STATEMENT. The information in the definitive proxy
         statement ("Proxy Statement") that will be distributed to shareholders
         of AFC in connection with the meeting of such shareholders to approve
         this Agreement and the Plan of Merger (the "AFC Shareholders Meeting"),
         other than information supplied by Holdings or its authorized
         representatives for use in the Proxy Statement will not, on the date or
         dates the Proxy Statement is first mailed to shareholders of AFC and at
         the time of the AFC Shareholders Meeting, as the Proxy Statement is
         then amended or supplemented, contain any untrue statement of a
         material fact or omit to state a material fact required to be stated
         therein or necessary to make the statements therein, in light of the
         circumstances under which they are made, not misleading or necessary to
         correct any statement in any earlier filing with the SEC of the Proxy
         Statement or amendment thereto or any earlier communication in the
         preparation of which AFC participated (including the Proxy Statement)
         to shareholders of AFC with respect to the Merger.

                 (u)    EMPLOYEE AND FRINGE BENEFIT PLANS.

                            (i) SCHEDULE OF PLANS. Schedule 4.1(u) to this
                 Agreement lists each of the following plans that AFC or any of
                 its Subsidiaries or any ERISA Affiliate (as defined below)
                 either maintains, is required to contribute to or otherwise
                 participates in (or at any time during the preceding three
                 years maintained, contributed to or otherwise participated in)
                 or as to which AFC or any of its Subsidiaries or any ERISA
                 Affiliate has any unsatisfied liability or obligation, whether
                 accrued, contingent or otherwise:

                              (A) any employee pension benefit plan (as such
                        term is defined in the Employee Retirement Income
                        Security Act of 1974, as amended ("ERISA")),

                              (B)   any "multi-employer plan" (as such term is
                              defined in ERISA), or

                              (C) any other generally applicable compensation
                        plan, written welfare or fringe benefit plan or any
                        stock, retirement or retiree medical plan, of any kind
                        whatsoever, not included in the foregoing and providing
                        for benefits for, or the welfare of, any or all of the
                        current or former employees or agents of

                                            19

<PAGE>

                        AFC or any of its Subsidiaries or any ERISA Affiliate or
                        their beneficiaries or dependents,

                 (all of the foregoing in items (A), (B), and (C) being referred
                 to as "Employee Plans"). "ERISA Affiliate" means each trade or
                 business (whether or not incorporated) which together with AFC
                 or any of its Subsidiaries is treated as a single employer
                 pursuant to Code Section 414(b), (c), (m) or (o). AFC has
                 provided to Holdings copies of the following: (1) each written
                 Employee Plan, as amended (including either the original plan
                 or the most recent restatement and all subsequent amendments);
                 (2) the most recent Internal Revenue Service ("IRS")
                 determination letter issued, if applicable; (3) the most recent
                 annual report on the Form 5500 series; (4) each trust
                 agreement, insurance contract or document setting forth any
                 other funding arrangement, if any, with respect to each
                 Employee Plan; (5) the most recent ERISA summary plan
                 description or other summary of plan provisions distributed to
                 participants or beneficiaries for each Employee Plan; (6) each
                 opinion or ruling from the IRS, the Department of Labor or the
                 Pension Benefit Guaranty Corporation ("PBGC") concerning any
                 Employee Plan; and (7) each current Registration Statement,
                 amendment thereto and prospectus relating thereto filed with
                 the SEC or furnished to participants in connection with any
                 Employee Plan if applicable.

                           (ii) QUALIFICATION. Except as set forth in Schedule
                 4.1(u), each Employee Plan that is intended to be a qualified
                 Plan under Code Section 401 or 501: (A) has received a current
                 favorable determination letter from the IRS to the effect that
                 the form of the plan satisfies Code Section 401(a) and that its
                 trust is tax-exempt under Code Section 501(a); (B) is not
                 currently subject to any assertion by any governmental agency
                 that it is not so qualified; and (C) to the best of AFC's
                 knowledge has been operated substantially in accordance with
                 its terms.

                          (iii) ACCRUALS; FUNDING.

                              (A) EMPLOYEE PENSION BENEFIT PLANS. AFC has
                        provided to Holdings copies of actuarial valuation
                        reports as of the end of each Employee Plan's most
                        recently ended fiscal year (or, each Employee Plan's
                        second most recently ended fiscal year if the required
                        information is not yet available for such Employee
                        Plan's most recently ended fiscal year) (such year end,
                        as applicable, being referred to as the "Applicable Plan
                        Year-End"), for each Employee Plan subject to ERISA
                        Title IV (including those for retired, terminated or
                        other former employees and agents). Except as set forth
                        in Schedule 4.1(u), none of the Employee Plans subject
                        to ERISA Title IV has: (I) incurred any "accumulated
                        funding deficiency" (as such term is defined in ERISA);
                        (II) incurred employer liability with respect to any of
                        such Plans as determined in accordance with ERISA
                        Sections 4062 or 4063; (III) become

                                              20
<PAGE>

                        subject to a Lien under Section 4.12(n); or (IV) been
                        the subject of a minimum funding waiver. Except as set
                        forth in Schedule 4.1(u), the actuarially computed
                        present value of the benefits of each such Employee
                        Plan, accrued to the Applicable Plan Year-End, does not
                        exceed the value of the assets of such Employee Plan.
                        There have been no material changes in the financial
                        condition of any of the Employee Plans since the
                        Applicable Plan Year-End.

                              (B) OTHER PLANS. AFC has provided to Holdings
                        information describing any liabilities under any retiree
                        medical, dental or life insurance arrangement.

                              (C) CONTRIBUTIONS. Except as disclosed in Schedule
                        4.1(u): (I) AFC, and its Subsidiaries and each ERISA
                        Affiliated have in all material respects made full and
                        timely payment of all amounts required to be contributed
                        under the terms of each Employee Plan and applicable
                        law, or required to be paid as expenses under such
                        Employee Plan, including PBGC premiums and amounts
                        required to be contributed under Code Section 412; and
                        (II) no excise taxes or Liens are assessable against
                        AFC, its Subsidiaries or any ERISA Affiliate as a result
                        of any nondeductible or other contributions made or not
                        made to an Employee Plan or any other plan of an ERISA
                        Affiliate.

                        (iv) REPORTING AND DISCLOSURE. Summary plan descriptions
                 and all other returns, reports, registration statements,
                 prospectuses, documents, statements and communications which
                 are required to have been filed, published or disseminated
                 under ERISA or other federal law and the rules and regulations
                 promulgated by the Department of Labor under ERISA and the
                 Treasury Department or by the SEC with respect to the Employee
                 Plans have been so filed, published or disseminated or if not
                 so filed, published or disseminated, such failure to file,
                 publish or disseminate will not result in a Material Adverse
                 Effect.

                            (v) PROHIBITED TRANSACTIONS; TERMINATIONS; OTHER
                 REPORTABLE EVENTS. Except as set forth in Schedule 4.1(u), with
                 respect to the Employee Plans neither AFC, any Subsidiary of
                 AFC, any ERISA Affiliate, any of the Employee Plans, any trust
                 or arrangement created under any of them, nor any trustee,
                 fiduciary, custodian, administrator nor any person or entity
                 holding or controlling assets of any of the Employee Plans has
                 engaged in any "prohibited transaction" (as such term is
                 defined in ERISA or the Code) for which there is no exception
                 which could subject any of the foregoing persons or entities,
                 or any person or entity dealing with them, to any tax, penalty
                 or other cost or liability of any kind except for any tax,
                 penalty, cost or liability that would not have a Material
                 Adverse Effect; and no "reportable event" (as such term is
                 defined in ERISA) has occurred with respect to any Employee
                 Plan subject to Title IV of ERISA; and no investigation by a

                                           21

<PAGE>

                 Governmental Entity is currently underway or threatened with
                 respect to any Employee Plan.

                          (vi) CLAIMS FOR BENEFITS. Except as set forth in
                 Schedule 4.1(u), with respect to the Employee Plans, other than
                 claims for benefits arising in the ordinary course of the
                 administration and operation of the Employee Plans, as of the
                 date hereof, no claims, investigations or arbitrations are
                 pending or threatened against any Employee Plan or against AFC,
                 any Subsidiary of AFC, any ERISA Affiliate, any trust or
                 arrangement created under or as part of any Employee Plan, any
                 trustee, fiduciary, custodian, administrator or other person or
                 entity holding or controlling assets of any Employee Plan, and
                 to the best of AFC's knowledge, no basis to anticipate any such
                 claim or claims exists.

                          (vii) OTHER. With respect to the Employee Plans, each
                 of AFC, each Subsidiary of AFC and all ERISA Affiliates have
                 substantially complied with all of their obligations under each
                 of the Employee Plans and with all provisions of ERISA and the
                 Code and any and all other law applicable to the Employee Plans
                 except insofar as a failure to comply would not have a Material
                 Adverse Effect. No written notice has been received by AFC or
                 any Subsidiary of AFC of any claim by any participant in the
                 Employee Plans of any violations of such laws, and to the best
                 of AFC's knowledge, no such claims are pending or threatened.

                         (viii) CREATION OF OBLIGATIONS BY REASON OF MERGER.
                 Except as set forth in such Schedule 4.1(u), the execution of
                 this Agreement or the consummation of the Merger will not
                 constitute an event under any Employee Plan that will or may
                 result in any payment (whether of severance pay or otherwise),
                 acceleration, forgiveness of indebtedness, vesting,
                 distribution, increase in benefits or obligation to fund
                 benefits with respect to any employee, including any obligation
                 to make a payment that would be nondeductible under Code
                 Section 280G or any other Code provision.

                           (ix) NO MULTI-EMPLOYER PLANS. Except as set forth in
                 Schedule 4.1(u), none of the Employee Plans is a Multi-Employer
                 Plan, and neither AFC, any Subsidiary of AFC nor any ERISA
                 Affiliate has any liability, joint or otherwise, for any
                 withdrawal liability (potential, contingent or otherwise) under
                 ERISA Title IV for a complete or partial withdrawal from any
                 Multi-Employer Plan.

                 (v) MAJOR CUSTOMERS. Schedule 4.1(v) sets forth (i) the name of
         each customer of AFC or any of its Subsidiaries that during the year
         ended December 31, 1996, generated revenue of $1,000,000 or more of
         tobacco filters or $250,000 or more of medical diagnostic kit
         components or other bonded fibers products or $1,000,000 or more of any
         other products, (ii) the volume of such revenue from such customer for
         such year, and (iii) the name of each such customer as to which AFC has
         received a termination

                                       22

<PAGE>



         notice or a notice of a decrease or intended decrease in sales volume
         22 or any intent to terminate or adversely modify in any material
         respect its contractual or business relationship with the relationship
         with the Fibers Business as a result of the consummation of the Merger
         or the Fibers Sale Agreement.

                 (w) SECTIONS 13.1-725 THROUGH 13.1-727.1. The Board of
         Directors of AFC has taken all action necessary to make the provisions
         of Sections 13.1-725 through 13.1- 727.1 of the VSCA inapplicable to
         the Merger, including approval of the Merger and the acquisition, after
         execution of the Agreement, by Holdings and by Parent of beneficial
         ownership of more than 10% of the outstanding shares of AFC Common
         Stock by a majority of AFC's "disinterested directors" (as defined in
         Section 13.1-725 of the VSCA with respect to such acquisition by
         Holdings and by Parent of beneficial ownership of more than 10% of the
         outstanding shares of AFC Common Stock).

                 (x) ENVIRONMENTAL.   Except as set forth in Schedule 4.1(x):

                            (i) no generation, storage, presence, contamination,
         transport, emission, discharge or "release" (as such term is defined in
         42 U.S.C. ss. 9601(22)) of any Hazardous Substance (as defined below)
         exists or is occurring (or has existed or occurred) from, or upon, any
         property owned, leased, used or controlled at any time by AFC or any
         Subsidiary in any manner that constituted or constitutes a violation
         of, or that reasonably could be expected to give rise to liabilities or
         obligations under any applicable Environmental Law;

                           (ii) there is no past or present action, activity,
         event, condition or circumstance (A) that could be reasonably expected
         to require AFC or any Subsidiary to incur costs of removal,
         remediation, response or corrective action (and the terms "removal,"
         "remediation," "response" and "corrective action" include the types of
         activities covered by CERCLA (as defined below) pursuant to any
         Environmental Laws (as defined below) with respect to any Hazardous
         Substances or Waste (as defined below) or (B) that could be reasonably
         expected to give rise to any common law or statutory liability
         (including punitive or exemplary damages and whether assessed with
         respect to personal injury or property damage, damage to the natural
         resources or the environment or otherwise) on the part of AFC or any of
         its Subsidiaries;

                          (iii) Either AFC or a Subsidiary of AFC has obtained,
         maintained and complied with all permits, registrations, licenses, and
         other authorizations, has maintained all records and has made all
         filings required by applicable Environmental Laws (as defined below)
         with respect to storage, presence, contamination, generation,
         transport, emission, discharge or release into the environment of any
         substance (including solids, liquids and gases) and the proper disposal
         of such materials (including solid waste materials and petroleum or any
         fractions or by-products of it) required for AFC's or any of its
         Subsidiary's operations at past or present operating levels;

                                       23

<PAGE>

                           (iv) Neither AFC nor any of its Subsidiaries has
         received any notice of any action, activity, event, condition or
         circumstance covered by any of clauses (i), (ii) or (iii) above or
         otherwise alleging any liability under any Environmental Law;

                            (v) without limiting or being limited by the
         foregoing, AFC and each of its Subsidiaries is (and has been) otherwise
         in compliance with all Environmental Laws in respect of any of the
         properties owned, leased, used or controlled at any time by AFC, of any
         of the products, business operations or other activities of AFC and its
         Subsidiaries, and no facts or circumstances exist that could be
         reasonably expected to interfere with AFC's compliance with
         Environmental Laws;

                        (vi) no polychlorinated biphenyls, radioactive material,
         lead, asbestos-containing material, incinerator, surface impoundment,
         lagoon, landfill, septic, wastewater treatment or other disposal system
         or underground storage tank (active or abandoned) is or has been
         present at any real property owned or leased by AFC or any of its
         Subsidiaries in any manner that constituted or constitutes a violation
         of, or that reasonably could be expected to give rise to liabilities or
         obligations under any applicable Environmental Law;

                        (vii) no Hazardous Substance has been discharged,
         disposed of, dumped, injected, deposited, spilled, leaked, emitted or
         released at, on or under any real property owned or leased by AFC or
         any of its Subsidiaries;

                        (viii) no real property owned or leased by AFC or any of
         its Subsidiaries, nor any property to which Hazardous Substances
         located on or resulting from the use of any asset or real property
         owned or leased by AFC or any of its Subsidiaries have been transported
         is listed or, to AFC's knowledge, proposed for listing on the National
         Priorities List promulgated pursuant to CERCLA, on CERCLIS (as defined
         in CERCLA) or on any similar federal, state, local or foreign list of
         sites requiring investigation or cleanup;

                        (ix) there are no permits under Environmental Laws that
         are either nontransferable or require consent, notification or other
         action to remain in full force and effect following the consummation of
         the transactions contemplated hereby;

                        (x) there has been no environmental investigation,
         study, audit, test, review or other analysis conducted of which AFC has
         knowledge in relation to the business or assets of AFC or any of its
         Subsidiaries that has not been delivered to Holdings at least ten days
         prior to the date hereof; and

                        (xi) none of the assets owned by AFC or any of its
         Subsidiaries is located in New Jersey or Connecticut.

                        Schedule 4.1(x) lists all environmental site
         assessments, internal audits, phase I audits, and tests and reports
         regarding significant remediation or disposal activities, with respect
         to the business, assets or operations of AFC or any of its Subsidiaries
         or with
                                    24

<PAGE>

         respect to any real property owned or operated at any time by
         AFC or any of its Subsidiaries. "Environmental Laws" means and includes
         all applicable laws relating to protection of the environment,
         prevention or minimization of pollution, control and tracking of
         Hazardous Substances and Wastes, protection of human health or similar
         matters, including those relating to the generation, use, collection,
         treatment, storage, transportation, recovery, removal, discharge or
         disposal of Hazardous Substances and any record keeping, notification
         and reporting requirements of them. "Hazardous Substance" means and
         includes: [1] any toxic or hazardous wastes, materials, pollutants or
         substances, including petroleum or petroleum-based or related products
         and its fractions and by-products, flammables, explosives, radioactive
         materials, asbestos, polychlorinated byphenyls, pesticides, herbicides,
         pesticide or herbicide containers, untreated sewage, and industrial
         process sludge; [2] any substances defined as "hazardous substances" or
         "toxic substances" or similarly identified in or pursuant to the
         Comprehensive Environmental Response, Compensation and Liability Act of
         1980, 42 U.S.C. ss. 9601 et seq., as amended; [3] "hazardous materials"
         as identified in or pursuant to the Hazardous Materials Transportation
         Act, 49 U.S.C. ss. 1801 et seq., as amended; [4] "hazardous wastes" and
         "regulated substances" as identified in or pursuant to the Resource
         Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., as amended;
         [5] any chemical substance or mixture regulated under the Toxic
         Substance Control Act of 1976, 15 U.S.C. ss. 2601 et seq., as amended;
         [6] any "toxic pollutant" under the Clean Water Act, 33 U.S.C. ss. 466
         et seq., as amended; [7] any hazardous air pollutant under the Clean
         Air Act, 42, U.S.C. ss. 7401 et seq., as amended; and [8] any toxic or
         hazardous wastes, materials, pollutants or substances regulated under
         any other applicable law, including any so-called "Super Fund" or
         "Super Lien" legislation relating to environmental, pollution or
         similar matters. "Waste" means and includes any garbage, refuse or
         waste, whether or not involving Hazardous Substances. For purposes of
         this Section, the term "AFC" shall include any entity which is, in
         whole or in part, a predecessor of AFC.

                 (y) ACCURACY OF SCHEDULES, CERTIFICATES AND DOCUMENTS. All
         information concerning AFC and its Subsidiaries contained in this
         Agreement, in any certificate furnished to Holdings pursuant hereto and
         in each schedule attached hereto is both complete (in that, except as
         otherwise stated therein, it represents all the information called for
         by the description of the respective schedule in this Agreement and
         does not omit to state any material fact necessary to make the
         statements contained therein not misleading) and accurate in all
         material respects; and all documents furnished to Holdings pursuant to
         this Agreement as being documents described in this Agreement or in any
         schedule attached hereto are true and complete copies of the documents
         that they purport to represent.

                 (z) BROKERS, FINDERS AND INVESTMENT BANKERS.  None of AFC or
         any of its Subsidiaries or any of its officers, directors or employees
         have employed any broker, finder or investment banker or incurred any
         liability for any investment banking fees, financial advisory fees,
         brokerage fees or finders' fees in connection with the transactions
         contemplated by this Agreement, except that AFC has arrangements with
         Goldman, Sachs & Co., the complete terms of which have been disclosed
         to Holdings.

                                      25

<PAGE>


                 (aa) INVENTORIES AND RAW MATERIALS OF FIBERS BUSINESS. The
         inventories set forth in the Fibers Balance Sheet were properly stated
         therein (after making provisions for obsolescent, obsolete, slow-moving
         and similar items) at the lesser of cost or fair market value
         determined in accordance with GAAP consistently maintained and applied.
         Since the Fibers Balance Sheet Date, the level of inventories related
         to the Fibers Business has been maintained in the ordinary course of
         business. All of the inventories recorded on the Fibers Balance Sheet
         consist of, and all inventories related to the Fibers Business on the
         Closing Date will consist of, items of a quality usable or saleable in
         the normal course of the Fibers Business consistent with past practices
         and are and will be in quantities sufficient for the normal operation
         of the Fibers Business in accordance with past practice. The level of
         raw materials held for use in the Fibers Business as of the Closing
         Date will not exceed the normal requirements of the Fibers Business for
         such raw materials for a period of 90 days.

                 (bb) RECEIVABLES OF THE FIBERS BUSINESS. All accounts, notes
         receivable and other receivables (other than receivables collected
         since the Fibers Balance Sheet Date) reflected on the Fibers Balance
         Sheet are, and all accounts and notes receivable arising from or
         otherwise relating to the Fibers Business at the Closing Date will be,
         valid and genuine. All accounts, notes receivable and other receivables
         arising out of or relating to the Fibers Business at the Fibers Balance
         Sheet Date have been included in the Fibers Balance Sheet in accordance
         with GAAP applied on a consistent basis.

                 (cc) EMPLOYEES OF FIBERS BUSINESS. Schedule 4.1(cc) sets forth
         a true and complete list of the names and titles of all employees of
         the Fibers Business as of January 31, 1997 and the annual salaries and
         other compensation of such employees as of December 31, 1996. No key
         employee of the Fibers Business has indicated to AFC that he intends to
         resign or retire as a result of the transactions contemplated by this
         Agreement or otherwise within one year after the Closing Date.

                 (dd) PRODUCTS OF THE FIBERS BUSINESS. Each of the products
         produced or sold in connection with the Fibers Business is, and at all
         times up to and including the sale thereof has been, (i) in compliance
         in all material respects with all applicable federal, state, local and
         foreign laws and regulations and (ii) fit for the ordinary purposes for
         which it is intended to be used and conforms in all material respects
         to any promises or affirmations of fact made on the container or label
         for such product or in connection with its sale. Each of such products
         contains adequate warnings, presented in a reasonably prominent manner,
         in accordance with applicable laws, rules and regulations and current
         industry practice with respect to its contents and use.

                 (ee) INTRACOMPANY ACCOUNTS. Schedule 4.1(ee) contains a
         complete list of all intracompany balances as of the Fibers Balance
         Sheet Date between AFC and its respective Affiliates, on the one hand,
         and the Fibers Business, on the other hand. Except as set forth on
         Schedule 4.1(ee), since the Fibers Balance Sheet Date there has not
         been any accrual of liability by the Fibers Business to AFC or any of
         its respective Affiliates or other transaction between the Fibers
         Business, on the one hand, and AFC or any of its

                                      26

<PAGE>

         respective Affiliates on the other hand, except in the ordinary
         course of business of the Fibers Business and on terms no less
         favorable to the Fibers Business than obtainable on an arm's-length
         basis.
                (ff)   FOREIGN CURRENCY EXPOSURES.

                       (i) Except as disclosed on Schedule 4.1(ff)(i), there
                 has been no sales within the three years ending on December 31,
                 1996 of the products of the Business to any person or entity
                 that denominated its pricing for such products in any currency
                 other than the United States dollar (other than any sales not
                 exceeding $50,000 per annum in the aggregate).

                        (ii) Except as disclosed on Schedule 4.1(ff)(ii), there
                 have been no purchases within the three years ending on
                 December 31, 1996, of any raw materials or inventory used in
                 the Fibers Business from any person or entity that denominated
                 its pricing for such raw materials or inventory in any currency
                 other than the United States dollar (other than any purchases
                 not exceeding $50,000 per annum in the aggregate).

                 (gg) COMPANY NAME.  To the best of AFC's knowledge, AFC has the
         exclusive right to use the name "Filtrona" and any derivations thereof
         in the United States of America and Canada.

                 (hh) INDEBTEDNESS. Except as disclosed on Schedule 4.1(hh), AFC
         does not have any Indebtedness, which in any case represents any lien,
         encumbrance, obligation or other liability to which any asset of the
         Fibers Business is subject or which was incurred in the operation of
         the Fibers Business. As used in this Agreement, Indebtedness means, at
         any date, without duplication, (i) all obligations of AFC for borrowed
         money, (ii) all obligations of AFC evidenced by bonds, debentures,
         notes or other similar instruments, (iii) all obligations of AFC to pay
         the deferred purchase price of property or services, except trade
         accounts payable arising in the ordinary course of business, (iv) all
         obligations of AFC as lessee which are capitalized in accordance with
         GAAP, (v) all non-contingent obligations of AFC to reimburse any bank
         or other person or entity in respect of amounts paid under a letter of
         credit or similar instrument, (vi) all indebtedness secured by a Lien
         on any asset of AFC, whether or not such indebtedness is otherwise an
         obligation of AFC and (vii) all guarantees by AFC of indebtedness of
         another person or entity (each such guarantee to constitute
         indebtedness in an amount equal to the amount of such other person's or
         entity's indebtedness guaranteed thereby).

         4.2 REPRESENTATIONS AND WARRANTIES BY HOLDINGS, PARENT AND SUBCORP.
Holdings, Parent and SubCorp, jointly and severally, represent and warrant to,
and agree with, AFC as of the date hereof and as of the Closing as follows:

                 (a) ORGANIZATION AND QUALIFICATION, ETC. Holdings is a limited
         liability company validly existing and in good standing under the laws
         of the State of Georgia and has the

                                        27

<PAGE>

         necessary power and authority to own all its properties and assets and
         to carry on its business as it is now being conducted. SubCorp and
         Parent are corporations duly organized, validly existing and in good
         standing under the laws of the Commonwealth of Virginia and have the
         corporate power and authority to own all their properties and assets
         and to carry on their businesses as they are now being conducted. The
         copies of Holdings's Articles of Organization and Parent's and
         SubCorp's Articles of Incorporation and Bylaws, in each case, as
         amended to date, which have been delivered to AFC, are complete and
         correct, and such instruments, as so amended, are in full force and
         effect at the date hereof.

                 (b) CAPITALIZATION. The authorized equity of Holdings consists
         of percentage interests totaling 100%. The authorized capital stock of
         Parent consists of 1,000 shares of common stock, no par value, of which
         100 shares are validly issued and outstanding, fully paid and
         non-assessable. The authorized capital stock of SubCorp consists of
         1,000 shares of common stock, no par value, of which 100 shares are
         validly issued and outstanding, fully paid and non-assessable. Holdings
         owns all of the outstanding shares of Parent, and Parent owns all of
         the outstanding shares of SubCorp.

                 (c) AUTHORITY. Each of Holdings, Parent and SubCorp has the
         power and authority to execute and deliver this Agreement. SubCorp has
         the power and authority to consummate the Merger. The execution and
         delivery by Holdings of this Agreement has been duly authorized by its
         Managers (or a duly authorized committee thereof). The execution and
         delivery by each of Parent and SubCorp of this Agreement and the
         consummation by SubCorp of the Merger in accordance with the Plan of
         Merger has been duly authorized by its Board of Directors (or a duly
         authorized committee thereof). No other action on the part of Holdings,
         Parent or SubCorp is necessary to authorize the execution and delivery
         of this Agreement by Holdings, Parent or SubCorp or the consummation by
         SubCorp of the Merger in accordance with the Plan of Merger. This
         Agreement has been duly executed and delivered by Holdings, Parent and
         SubCorp and is a valid, binding and enforceable agreement of each of
         Holdings, Parent and SubCorp. Parent as the sole shareholder of SubCorp
         has approved this Agreement and the Plan of Merger.

                 (d) NON-CONTRAVENTION. The execution and delivery of this
         Agreement by Holdings, Parent and SubCorp do not and, subject to the
         expiration of the applicable waiting periods after the filings required
         by the HSR Act referred to in paragraph (e) below, the consummation by
         SubCorp of the Merger does not and will not (i) violate or conflict
         with any provision of the Articles of Incorporation or Bylaws of Parent
         or SubCorp or the Articles of Organization of Holdings or (ii) violate
         or conflict with, or result (with the giving of notice or the lapse of
         time or both) in a violation of or constitute a default under, any
         provision of, or result in the acceleration or termination of or
         entitle any party to accelerate or terminate (whether after the giving
         of notice or lapse of time or both) any obligation or benefit under, or
         result in the creation or imposition of any Lien upon any of the assets
         or property of Holdings, Parent or SubCorp pursuant to any provision of
         any contract, agreement, commitment, undertaking, arrangement or

                                        28

<PAGE>


         understanding to which Holdings or any of its Subsidiaries is a party
         or bound or to which any of their assets or properties are subject (a
         "Holdings Material Contract"), law, ordinance, regulation, order,
         arbitration award, judgment or decree to which Holdings, Parent or
         SubCorp is a party or by which either of them or their respective
         assets or properties is bound and do not and will not violate or
         conflict with any other restriction of any kind or character to which
         Holdings, Parent or SubCorp is subject or by which any of their assets
         or properties may be bound, and the same does not and will not
         constitute an event permitting termination of any Holdings Material
         Contract, if such violation, conflict, default, acceleration,
         termination, entitlement, creation or imposition of Liens would, when
         taken together with all other such violations, conflicts, defaults,
         accelerations, terminations, entitlements to accelerate, creations and
         impositions of Liens and events, affect materially and adversely the
         financial condition or results of operations of Holdings and its
         Subsidiaries taken as a whole.

                 (e) GOVERNMENTAL CONSENTS. Except for the filing of the Proxy
         Statement and filings under Rule 13e-3 promulgated by the SEC under the
         Exchange Act ("Rule 13e-3") with the SEC and any required filings with
         state securities commissions, filings with the FTC and Justice as
         required by the HSR Act, and the filing of the Articles of Merger with
         the Commission, no consent, authorization, order or approval, or filing
         or registration with, any Governmental Entity is required for or in
         connection with the execution and delivery of this Agreement by
         Holdings, Parent or SubCorp and the consummation by SubCorp of the
         Merger.

                 (f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30,
         1996, there has not been any material adverse change in the business,
         financial condition or results of operations of Holdings, Parent and
         its Subsidiaries, taken as a whole.

                 (g) PROXY STATEMENT. The information with respect to Holdings,
         its managers, officers, and Subsidiaries (including Parent and SubCorp)
         and its negotiations with Bunzl that shall have been supplied by
         Holdings or its respective authorized representatives in writing for
         use in the Proxy Statement will not, on the date or dates the Proxy
         Statement is first mailed to shareholders of AFC and at the time of the
         AFC Shareholders Meeting, as the Proxy Statement is then amended or
         supplemented, contain any untrue statement of a material fact or omit
         to state a material fact required to be stated therein or necessary to
         make the statements therein, in light of the circumstances under which
         they are made, not misleading or necessary to correct statements in any
         earlier filing with the SEC or amendment thereto or any earlier
         communication (in the preparation of which Holdings participated) to
         shareholders of AFC with respect to the Merger.

                 (h) ACTIVITIES OF SUBCORP. SubCorp was formed solely for the
         purpose of engaging in the transactions contemplated in this Agreement.
         Except for obligations or liabilities incurred in connection with its
         incorporation or organization or the negotiation and consummation of
         this Agreement and the transactions contemplated hereby, SubCorp has
         neither incurred any obligations or liabilities nor engaged in any
         business or activities

                                      29

<PAGE>

         of any type or kind whatsoever or entered into any agreements or
         arrangements with any person or entity.

                 (i) LEGAL PROCEEDINGS. There is no claim, action, suit,
         proceeding or investigation pending or, to the best of Holdings',
         Parent's and SubCorp's knowledge, contemplated or threatened against
         Holdings, Parent's, SubCorp or any of their respective Subsidiaries (or
         any of their respective officers, directors or managers) before any
         arbitrator or Governmental Entity, foreign or domestic, that seeks to
         prohibit, restrict or delay consummation of the Merger or any of the
         conditions to consummation of the Merger nor is there any judgment,
         decree, injunction, ruling or order of any Governmental Entity,
         arbitrator or other person outstanding against Holdings, Parent,
         SubCorp or any of their respective Subsidiaries having any such effect.
         As used in this Agreement, the "best of Holdings', Parent's and
         SubCorp's knowledge" and any other reference to the knowledge of
         Holdings or its officers or managers or of Parent or SubCorp or their
         officers or directors shall mean the actual knowledge, without
         independent investigation, of Frances B. Bunzl and Bennett L. Kight.

                 (j) BROKERS, FINDERS AND INVESTMENT BANKERS. None of Holdings,
         Parent, SubCorp or any of their respective Subsidiaries or any of their
         respective officers, directors, managers or employees have employed any
         broker, finder or investment banker or incurred any liability for any
         investment banking fees, financial advisory fees, brokerage fees or
         finders' fees in connection with the transactions contemplated by this
         Agreement, except that SubCorp has arrangements with First Union
         Capital Markets Corp., the complete terms of which have been disclosed
         to AFC. SubCorp is solely responsible for and shall pay all of the fees
         and expenses to which First Union Capital Markets Corp. is entitled in
         connection with such arrangements.

                 (k) OBLIGATIONS TO FUND. Pursuant to the commitment referenced
         in Section 6.2(h), SubCorp will have as of the Closing Date cash in an
         amount sufficient to pay in U.S. dollars the Merger Consideration for
         each share of AFC Common Stock upon surrender of all the shares of AFC
         Common Stock after the consummation of the Merger and to fund the
         payment of the Option Payments.


                                   ARTICLE 5

                      ADDITIONAL COVENANTS AND AGREEMENTS

         5.1 CONDUCT OF BUSINESS. During the period from the date hereof to the
Effective Time (except as required by law or as set forth on Schedule 5.1 and
except for the transactions contemplated by this Agreement):

                 (a) OPERATION BY AFC IN THE ORDINARY COURSE OF BUSINESS. AFC
         shall, and shall cause each of its Subsidiaries to, (i) conduct its
         operations according to its ordinary and usual course of business in
         substantially the same manner as heretofore conducted and (ii) use its
         reasonable efforts to preserve intact its business organization as
         appropriate in

                                    30

<PAGE>


         the ordinary course of business consistent with past practice, to keep
         available the services of its officers and employees and to maintain
         satisfactory relationships with licensors, suppliers, distributors,
         customers and others having business relationships with it. AFC shall
         prepare and file all federal, state, local and foreign Tax Returns and
         other tax reports, filings and amendments thereto required to be filed
         by it, and allow Holdings, at its request, to review all such returns,
         reports, filings and amendments relating to income taxes at AFC's
         offices prior to the filing thereof, which review shall not interfere
         with the timely filing of such returns.

                 (b) FORBEARANCES BY AFC. Except as contemplated by this
         Agreement, neither AFC nor any of its Subsidiaries shall, without the
         prior written consent of Holdings, which consent shall not be
         unreasonably withheld:

                            (i) except as otherwise permitted pursuant to clause
                 (vi) below, intentionally incur any debt, liability or
                 obligation, direct or indirect, whether accrued, absolute,
                 contingent or otherwise, other than current liabilities
                 incurred in the ordinary and usual course of business, pay any
                 debt, liability or obligation of any kind other than such
                 current liabilities and current maturities of existing
                 long-term debt (including interest when due) in each case only
                 in accordance with the terms of the document creating and
                 evidencing such debt, fail to pay any debt when due or take or
                 fail to take any action, the taking of which, or the failure to
                 take of which, would permit any debt to be accelerated;

                           (ii) assume, guarantee, endorse or otherwise become
                 responsible for the obligations of any other individual, firm
                 or corporation, or make any loans or advances to any
                 individual, firm or corporation other than a Subsidiary
                 notwithstanding the foregoing, AFC and each of its Subsidiaries
                 shall be entitled to endorse checks and to make cash advances
                 to, and reimburse the business expenses of, their respective
                 directors, officers, employees and agents, all in the ordinary
                 course of business consistent with past practice;

                          (iii) other than regular quarterly cash dividends at
                 the rate of $.28 per share on the AFC Common Stock consistent
                 with past practice, declare, set aside or pay any dividend
                 (whether in cash, capital stock or property) with respect to
                 its capital stock, or declare or make any distribution on,
                 redeem or purchase or otherwise acquire (other than the
                 acquisition of AFC Common Stock from optionees in payment of
                 the exercise price or withholding taxes upon the exercise of
                 employee stock options outstanding on the date hereof), any AFC
                 Common Stock, or split, combine or otherwise similarly change
                 the outstanding AFC Common Stock, or authorize the creation or
                 issuance of or issue or sell any shares of its capital stock or
                 any securities or obligations convertible into or exchangeable
                 for, or giving any person any right to acquire from it, any
                 shares of its capital stock, or agree to take any such action,
                 except for the issuance of AFC Common Stock upon the exercise
                 of options described in Section 4.1(b);

                                           31


<PAGE>

                           (iv) mortgage, pledge or otherwise encumber any
                 property or asset, except in the ordinary and usual course of
                 business;

                            (v) sell, lease, transfer or dispose of any of its
                 properties or assets, waive or release any rights or cancel,
                 compromise, release or assign any indebtedness owed to it or
                 any claims held by it, except that AFC in the ordinary and
                 usual course of business may make such sales, leases,
                 transfers, dispositions, waivers, releases, cancellations,
                 compromises or assignments other than with respect to the
                 Fibers Business;

                           (vi) make any capital expenditure or any investment
                 of a capital nature (other than to any of its Subsidiaries)
                 except as described in Schedule 5.1(b)(vi), either by purchase
                 of stock or securities, contributions to capital, property
                 transfers or otherwise, or by the purchase of any property or
                 assets of any other individual, firm or corporation; provided,
                 however, that AFC may make capital expenditures in the Fibers
                 Business not in excess of $50,000 per instance or in excess of
                 $200,000 in the aggregate and may make capital expenditures
                 other than in the Fibers Business not in excess of $50,000 per
                 instance or in excess of $300,000 in the aggregate.

                          (vii) fail to use commercially reasonable efforts to
                 perform in all material respects its obligations under Material
                 Contracts (except those being contested in good faith) or enter
                 into, assume or amend any contract or commitment that would
                 have been a Material Contract in effect on the date hereof
                 other than contracts to provide goods or services entered into
                 in the ordinary and usual course of business;

                         (viii) except for regularly scheduled increases in
                 accordance both as to timing and amount with normal prior
                 practice, increase in any manner the compensation or fringe
                 benefits of any of its officers or employees or pay or agree to
                 pay any pension or retirement allowance not required by any
                 existing plan or agreement to any such officers or employees,
                 or commit itself to or enter into any employment agreement or
                 any incentive compensation, deferred compensation, profit
                 sharing, stock option, stock appreciation rights, performance
                 shares, stock purchase, savings, consulting, severance,
                 retirement, pension or other "fringe benefit" plan, award or
                 arrangement with or for the benefit of any officer, employee or
                 other person or material consulting agreement;

                        (ix) permit any insurance policy naming it as a
                 beneficiary or a loss payable payee to be canceled or
                 terminated or any of the coverage thereunder to lapse, unless
                 AFC makes reasonable efforts to obtain simultaneously with such
                 termination or cancellation replacement policies on
                 commercially reasonable terms providing substantially the same
                 coverage;

                        (x)   amend its Articles of Incorporation or Bylaws;
                        (xi)  enter into any union, collective bargaining or
                 similar agreement;

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<PAGE>

                        (xii) purchase or sell any raw materials, inventory or
                 product used in, or produced by, the Fibers Business in any
                 transaction where the pricing for such raw materials, inventory
                 or product is in any currency other than the United States
                 dollar;

                 (xiii)purchase any intangible assets, including, without
                 limitation, patents or trademarks;

                          (xiv) enter into an agreement to do any of the things
                 described in clauses (i) through (xiii);

provided, however, that notwithstanding any other provision of this Section
5.1(b), AFC will not enter into a contract for construction of a building in
connection with the proposed capital expenditures for a new facility at A&B
Plastics or the purchase or renovation of any building for Tri-Lite Plastics
without the prior written consent of Holdings, unless the chairman of the
Special Committee of the AFC Board determines otherwise after requesting, and
allowing a period of time determined by the chairman to receive, the views of
Holdings.

In connection with the continued operation of the business of AFC and its
Subsidiaries between the date of this Agreement and the Effective Time, AFC
shall confer in good faith on a regular basis with one or more representatives
of Holdings designated in writing to receive reports on operational matters of
materiality and the general status of ongoing operations. AFC acknowledges that
Holdings does not thereby waive any rights it may have under this Agreement as a
result of this covenant to engage in consultations nor shall Holdings be
responsible for any decisions made by AFC's officers and directors with respect
to matters that are the subject of such consultation. Any act or failure to act
by AFC or any of its Subsidiaries consented to in writing by Holdings shall not
constitute a breach by AFC of any representation, warranty, covenant or
agreement contained in this Agreement.

                 (c) CONDUCT OF THE FIBERS BUSINESS. From the date hereof until
         the Closing Date, AFC will promptly notify Holdings of any development
         or occurrence relating to the Fibers Business not in the ordinary
         course of business consistent with past practices or that contravenes
         or is reasonably likely to contravene the provisions of Section 4.1(i).

                 (d) NOTICES OF CERTAIN EVENTS.  AFC shall promptly notify
         Holdings of each of the following of which it has notice:

                        (i) any notice or other communication from any person or
                 entity alleging that the consent of such person or entity is or
                 may be required in connection with the Merger or the Fibers
                 Sale Agreement;

                        (ii)  any notice or other communication from any
                 Governmental Entity in connection with the Merger or the Fibers
                 Sales Agreement;


                                       33

<PAGE>

                        (iii) any actions, suits, claims, investigations or
                 proceedings commenced or, to its knowledge threatened against,
                 relating to or involving or otherwise affecting AFC or the
                 Fibers Business that, if pending on the date of this Agreement,
                 would have been required to have been disclosed pursuant to any
                 provision of this Agreement or that relate to the consummation
                 of the Merger or the Fibers Sale Agreement; and

                        (iv) the damage or destruction by fire or other casualty
                 of any asset of the Fibers Business or in the event that any
                 asset of the Fibers Business becomes the subject of any
                 proceeding or, to the knowledge of AFC, threatened proceeding
                 for the taking thereof or any part thereof or of any right
                 relating thereto by condemnation, eminent domain or other
                 similar governmental action.

         5.2 AFC SHAREHOLDERS MEETING. Subject to the provisions of Article 7,
AFC covenants and agrees that its Board of Directors shall (a) cause the AFC
Shareholders Meeting to be duly called and held in accordance with AFC's
Articles of Incorporation, its Bylaws and applicable law as soon as reasonably
practicable to consider and vote upon the approval of this Agreement and the
Plan of Merger; (b) recommend approval of this Agreement and the Plan of Merger
to the holders of the AFC Common Stock; and (c) use commercially reasonable
efforts to cause such meeting to take place and to obtain the approval by the
holders of the AFC Common Stock of this Agreement and the Plan of Merger in
accordance with its Articles of Incorporation, Bylaws and the VSCA.

         5.3 BEST EFFORTS; FURTHER ASSURANCES; COOPERATION. Subject to the other
provisions in this Agreement, the parties hereto shall each use commercially
reasonable efforts to perform their respective obligations herein and to take,
or cause to be taken or do, or cause to be done, all things necessary, proper or
advisable under applicable law to obtain all regulatory approvals, consents,
authorizations and orders and satisfy all conditions to the obligations of the
parties under this Agreement and to cause the Merger to be carried out promptly
in accordance with the terms hereof and shall cooperate fully with each other
and their respective officers, directors, employees, agents, counsel,
accountants and other designees in connection with any steps required to be
taken as part of their respective obligations under this Agreement, including
without limitation:

                 (a) REGULATORY ACTION. AFC and Holdings shall each promptly,
         but in no event later than 15 days after the date of this Agreement,
         make the respective filings and submissions required under the
         provisions of the HSR Act relating to the Merger and to the Fibers Sale
         Agreement, and thereafter shall comply fully and promptly with any
         request for additional information ("second request"), voluntary
         request to submit information, third party subpoena or civil
         investigative demand that might be issued to or served on such party in
         connection with any investigation under the HSR Act. AFC and Holdings
         shall each use commercially reasonably efforts to take, or cause to be
         taken, all actions and do, or cause to be done, all things necessary,
         proper or advisable under applicable law or regulations to obtain any
         required approval, action, or inaction of any

                                         34


<PAGE>

         Governmental Entity with jurisdiction over the Merger or the Fiber
         Sales Agreement, so that the Merger may be permitted to close in
         accordance with its terms.

                 (b) CERTAIN LEGAL PROCEEDINGS. In the event any claim, action,
         suit, investigation or other proceeding by any Governmental Entity or
         other person is commenced which questions the validity or legality of
         the Merger or seeks damages in connection therewith, the parties agree
         to cooperate and use their best efforts to defend against such claim,
         action, suit, investigation or other proceeding and, if an injunction
         or other order is issued in any such action, suit or other proceeding,
         to use commercially reasonable efforts to have such injunction or other
         order lifted or appealed and to cooperate reasonably regarding any
         other impediment to the consummation of the Merger; provided, however,
         that nothing in this subsection (b) shall require either Holdings,
         Bunzl or AFC to divest any assets or business as a requirement of
         consummating the Merger.

                 (c) NOTICE. Each party shall give prior written notice to the
         other of (i) the occurrence, or failure to occur, of any event which
         occurrence or failure would cause, or any assertion or threatened
         assertion of a claim that if pursued would cause any representation or
         warranty of AFC, Holdings, Parent or SubCorp, as the case may be,
         contained in this Agreement to be untrue or inaccurate in any material
         respect at any time from the date hereof to the Closing Date or that
         will result in the failure to satisfy any of the conditions specified
         in Article 6 and (ii) any failure of AFC, Holdings or SubCorp, as the
         case may be, to comply with or satisfy any covenant, condition or
         agreement to be complied with or satisfied by it hereunder.

         5.4     INVESTIGATION; CONFIDENTIALITY.

                 (a) AFC agrees to permit Holdings, Bunzl and their authorized
         representatives to have or cause them to be permitted to have, after
         the date hereof and until the Effective Time, reasonable access to the
         premises, books and records of AFC and its Subsidiaries at reasonable
         hours, and the officers of AFC and its Subsidiaries will furnish
         Holdings and Bunzl with such financial and operating data and other
         information with respect to AFC's and its Subsidiaries' businesses and
         properties and permit Holdings and Bunzl to meet with such AFC
         employees as Holdings or Bunzl shall from time to time reasonably
         request; provided that AFC shall be permitted to restrict Bunzl's
         access to commercially sensitive information regarding any business of
         AFC. AFC will request its auditing firm to permit Holdings and its
         representatives, including its auditing firm, to review the work papers
         of the auditing firm of AFC relating to their examination of the AFC
         Financial Statements. No investigation by Holdings heretofore or
         hereafter made shall affect the representations and warranties of AFC,
         and each such representation and warranty shall survive any such
         investigation, subject to Section 7.5.

                 (b) Holdings agrees to permit AFC and its authorized
         representatives to have or cause them to be permitted to have, after
         the date hereof and until the Effective Time, such information with
         respect to Holdings' business as AFC shall from time to time reasonably
         request.

                                      35

<PAGE>


                 (c) Except as contemplated by this Agreement or as necessary to
         carry out the transactions contemplated hereby, all information or
         documents furnished hereunder shall be subject to the Confidentiality
         Agreement between Holdings and AFC dated June 25, 1996, and the letter
         agreement between Goldman, Sachs & Co., on behalf of AFC and Bunzl
         dated December 13, 1996 (collectively, the "Confidentiality
         Agreement").

         5.5 EXPENSES. Except as otherwise provided in this Agreement, whether
or not the Merger is consummated, all costs and expenses (including any
brokerage commissions or any finder's or investment banker's fees and including
attorney's and accountants' fees) incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
expenses.

         5.6 PROXY STATEMENT. Holdings and AFC shall cooperate in taking steps
to (a) prepare and file with the SEC as soon as is practicable the Proxy
Statement, including all information required by Rule 13e-3 and (b) use
reasonable efforts to have the Proxy Statement cleared by the SEC as promptly as
practicable. Promptly after the Proxy Statement has been cleared by the SEC, AFC
shall mail the Proxy Statement to the holders of AFC Common Stock and AFC shall
use reasonable efforts to solicit proxies in favor of the approval of this
Agreement and the Plan of Merger. Holdings shall also take any action required
to be taken pursuant to Rule 13e-3 or under state blue sky or other securities
laws in connection with the Merger. If at any time prior to the AFC Shareholders
Meeting, Holdings or AFC reasonably believes that the Proxy Statement includes
an untrue statement of a material fact or omits a material fact required to be
stated therein, the parties shall cooperate to distribute any required
supplement or amendment to the Proxy Statement, and to comply with any
resolicitation requirements, and shall provide to each other all necessary
information for such amendment or supplement, all of which shall be true and
correct in all material respects and shall not omit any material fact required
to be included in such amendment or supplement.

         5.7 PERIODIC REPORTS. Each of AFC and Holdings covenants that it will
file with the SEC on a timely basis all periodic reports and other filings
required to be filed by it by the federal securities laws and regulations of the
SEC thereunder from the date of this Agreement through the Effective Time, and
that each such report or filing will comply in all material respects with the
federal securities laws and regulations of the SEC and will not contain any
untrue statement of material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

         5.8 PUBLIC ANNOUNCEMENTS. The timing and content of all public
announcements regarding any aspect of this Agreement or the Merger to the
financial community, government agencies, employees or the general public shall
be mutually agreed upon in advance unless Holdings or AFC is advised in writing
by legal counsel that any such announcement or other disclosure not mutually
agreed upon in advance is required to be made by applicable law or applicable
NASDAQ rules or regulations and then only after making a reasonable attempt to
comply with provisions of this Section 5.8.

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<PAGE>

         5.9 ANTITRUST CHALLENGES. In the event a suit is instituted challenging
the Merger as violative of the antitrust laws, each of Holdings and AFC will use
commercially reasonable efforts to defend against such suit. Holdings and AFC
will use commercially reasonable efforts to take such action as may be required
by any federal or state court of the United States, in any suit brought by a
private party or Governmental Entity challenging the Merger or the Fibers Sale
Agreement as violative of the antitrust laws, in order to avoid the entry of, or
to effect the dissolution of, any injunction, temporary restraining order or
other order that has the effect of preventing the consummation of the Merger or
the Fibers Sale Agreement, including pursuing an appeal thereof; provided,
however, that nothing in this Section 5.9 shall require either Holdings or AFC
to divest any assets or business as a requirement of consummating the Merger or
the Fibers Sale Agreement.

         5.10    EMPLOYEE MATTERS.

                 (a)     STAY BONUSES AND SEVERANCE AGREEMENTS.  Stay bonuses
         and severance agreements for employees other than John Morgan will be
         limited to those described on Schedule 5.10.

                 (b)     EMPLOYEE BENEFIT PLAN MATTERS.

                        (i) Holdings agrees that AFC will continue in effect,
                 without amendment (except with respect to any amendment
                 required by the Code, ERISA or other applicable law or required
                 to carry out Holdings' undertakings hereinafter set out), until
                 December 31, 1997, the Employee Plans (other than the Employee
                 Stock Ownership Plan of American Filtrona Corporation (the
                 "ESOP")) covering employees who continue employment with
                 Holdings or an affiliate of Holdings.

                        (ii) With respect to the American Filtrona Corporation
                 401(k) Savings and Profit Sharing Plan (the "Profit Sharing
                 Plan"), Holdings will obtain and enforce an agreement by
                 Purchaser to make a contribution for 1997 to a substantially
                 comparable profit sharing plan for the employees of the Fibers
                 Business (the "Purchaser Profit Sharing Plan") equal to the
                 amount accrued on the books of the Fibers Business as of the
                 Closing Date as a liability (computed in accordance with past
                 practices) for a profit sharing contribution with respect to
                 the employees who accept employment with the purchaser of the
                 Fibers Business (the "Purchaser") (the "Transferred AFC
                 Employees") (such liability is hereafter referred to as the
                 "Fibers Profit Sharing Liability"). Holdings agrees that AFC
                 will make a profit sharing contribution to the Profit Sharing
                 Plan equal to at least the excess of (A) the amount accrued on
                 the books of AFC as of the Closing Date as a liability
                 (computed in accordance with past practices) for a profit
                 sharing contribution to the Profit Sharing Plan over (B) the
                 amount of the Fibers Profit Sharing Liability and will make a
                 total contribution comparable to the 1996 contribution for
                 employees of the Plastics Business if the 1997 earnings before
                 interest and taxes of the Plastics Business approximate such
                 earnings in 1996. Holdings agrees to obtain and enforce an
                 agreement by Purchaser that the Purchaser Profit Sharing Plan
                 shall have a salary
                                          37

<PAGE>

                 reduction arrangement under which all Transferred AFC Employees
                 will have all service credited under the Profit Sharing Plan
                 credited under the Purchaser Profit Sharing Plan for all plan
                 purposes, including eligibility and vesting, and to cause AFC
                 to transfer to the Purchaser Profit Sharing Plan the account
                 balances under the Profit Sharing Plan of all Transferred AFC
                 Employees.

                      (iii) Holdings agrees to obtain and enforce an agreement
                 by Purchaser to contribute to the Purchaser Profit Sharing Plan
                 an amount equal to the liability (computed in accordance with
                 past practices) accrued on the books of the Fibers Business as
                 of the Closing Date for a contribution to the ESOP with respect
                 to Transferred AFC Employees (the "Purchaser ESOP
                 Contribution"). Holdings agrees to cause AFC to contribute to
                 the ESOP an amount equal to the excess of (A) the liability
                 (computed in accordance with past practices) accrued on the
                 books of AFC as of the Closing Date over (B) the amount of the
                 Purchaser ESOP Contribution, and to amend the ESOP to provide
                 that all AFC employees, including all Transferred AFC
                 Employees, are 100% vested in their accrued benefits
                 thereunder.

                        (iv)  Holdings agrees to use its best efforts to cause
                 Purchaser to assume sponsorship of the following plans covering
                 employees employed in the Fibers Business:  the American
                 Filtrona Corporation Pension Plan for Hourly Employees and the
                 American Filtrona Corporation 401(k) Plan for Hourly Employees.
                 Holdings agrees to use its best efforts to cause Purchaser to
                 establish a defined benefit plan that (A) covers AFC's salaried
                 employees who become salaried Transferred AFC Employees; (B)
                 meets the requirements of Section 401(a) of the Code (the
                 "Purchaser Retirement Plan"); and (C) provides that all service
                 of such salaried Transferred AFC Employees credited with the
                 American Filtrona Corporation Retirement Plan (the "AFC
                 Retirement Plan") shall be credited under the Purchaser
                 Retirement Plan for all plan purposes, including eligibility,
                 vesting and benefit accrual. Holdings agrees to cause an amount
                 to be transferred from the trust maintained under the AFC
                 Retirement Plan to the trust under the Purchaser Retirement
                 Plan calculated pursuant to the applicable provisions of
                 Section 414(l) of the Code, with respect to salaried
                 Transferred AFC Employees.

                        (v) Holdings agrees to use its best efforts to cause
                 Purchaser (A) to establish and maintain through December 31,
                 1997 employee benefit plans (as defined in Section 3(3) of
                 ERISA) for Purchaser's employees that are in the aggregate
                 approximately equal to the Employee Plans sponsored and
                 maintained by AFC for its salaried and hourly employees; and
                 (B) to ensure that any of Purchaser's employee welfare benefit
                 plans (as defined in Section 3(1) of ERISA) credit Transferred
                 AFC Employees with any internal limits, deductibles or co-
                 payments satisfied by such employees under AFC's employee
                 welfare benefit plans.

                        (vi) Holdings will use its best efforts to cause
                 Purchaser to offer employment to all AFC employees who are
                 active employees at the Closing Date.

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<PAGE>

                        (c) LABOR MATTERS. Holdings agrees to use its best
         efforts to cause Purchaser to assume any collective bargaining
         agreement with respect to employees of the Fibers Business in effect as
         of the date of the sale of the Fibers Business.

         5.11 ACCOUNTANT'S LETTERS. AFC agrees to use commercially reasonable
efforts to cause to be delivered to Holdings a letter of Coopers & Lybrand
L.L.P., independent auditors for AFC, dated the date of the Proxy Statement and
the Closing Date (or such other dates reasonably acceptable to the parties) with
respect to certain financial statements and other financial information included
in the Proxy Statement, which letter shall be in form reasonably satisfactory to
Holdings.

         5.12 NON SOLICITATION; COMPETING OFFERS. From the date of this
Agreement until the Closing Date, neither AFC nor its officers, directors or
agents shall be entitled to solicit or encourage, in any manner, including by
way of furnishing information, any merger, acquisition, or takeover proposal or
offer for AFC or its shares or any significant portion of its assets or
businesses, however structured or to be effected, unless the Board of Directors
of AFC concludes in good faith, after receiving the advice of its counsel, that
the failure to take such action would violate the fiduciary obligation of the
directors of AFC under applicable law; provided, however, that Holdings and
Bunzl shall be notified promptly of the principal terms of all bona fide
competing offers made to AFC, and AFC shall be subject to any applicable
obligation to pay the Expenses and the Fee set forth in Section 7.4 in the event
this Agreement is terminated.

         5.13 CONDITIONS IN FIBERS SALE AGREEMENT AND FINANCING. Holdings shall
use its commercially reasonable efforts to have satisfied all conditions to the
obligations of Bunzl in the Fibers Sale Agreement and to the financing
obligations of Wachovia Bank of North Carolina, N.A. and other banks pursuant to
the commitment letter referenced in Section 6.2(h) except for such conditions
that are not within the control of Holdings and its Affiliates.

         5.14 INVESTMENT SECURITIES.  AFC agrees that at the Effective Time all
of its investment securities will be redeemable at par for cash within seven
days or in a form traded in established securities markets.

         5.15    FILPAC INDEBTEDNESS.  AFC agrees to document the indebtedness
of Filpac, Inc. to AFC to the reasonable satisfaction of Holdings promptly after
execution of this Agreement.

         5.16    ACCESS TO INFORMATION.

                 (a) From the date hereof until the Closing Date, AFC (i) will
         give Bunzl, its counsel, financial advisors, auditors and other
         authorized representatives full access to the offices, properties,
         books and records of AFC relating to the Fibers Business, (ii) will
         furnish to Bunzl, its counsel, financial advisors, auditors and other
         authorized representatives such financial and operating data and other
         information relating to the Fibers Business as such persons or entities
         may reasonably request and (iii) will instruct the employees, counsel
         and financial advisors of AFC to cooperate with Bunzl in its
         investigation of the Fibers Business. Any investigation pursuant to
         this Section shall be
                                   39

<PAGE>

         conducted in such manner as not to interfere unreasonably with the
         conduct of the business of AFC.

                 (b) AFC will furnish, to Bunzl and its counsel copies of those
         agreements, contracts and commitments of AFC relating to the Fibers
         Business (and, if such agreements, contracts and commitments are not
         reduced to writing, reasonable written details of the same) which (i)
         have previously been withheld from Bunzl or (ii) include obligations of
         confidentiality or impose restrictions on disclosure by AFC (clauses
         (i) and (ii), collectively, the "Confidential Agreements") no less than
         5 business days prior to the Closing. The Confidential Agreements shall
         include, without limitation, agreements, contracts and commitments
         relating to research and/or development work and projects or contracts
         or agreements with or commitments to or understandings with suppliers
         or customers of the Fibers Business. Bunzl shall, if requested, enter
         into confidentiality undertakings with regard to such Confidential
         Agreements on such terms as Bunzl may agree, with the counterparties to
         such Confidential Agreements.

                 (c) AFC will disclose to Bunzl, its counsel, auditors and other
         authorized representatives and/or give Bunzl, its counsel, auditors and
         other authorized representatives, access to, not less than 5 business
         days before the Closing:

                        (i) The commercial terms upon which products, goods,
                 materials and services are supplied by the Fibers Business to
                 its customers including, but not limited to, the price at which
                 such products, goods, materials and services are sold and
                 details of any rebates, discounts, commissions and extended
                 credit terms paid or given to customers;

                        (ii) The commercial terms upon which products, goods,
                 materials and devices are supplied to the Fibers Business by
                 its suppliers including, but not limited to, the price at which
                 such products, goods, materials and services are supplied to
                 the Fibers Business and details of any rebates, discounts and
                 commissions paid or given to the Fibers Business;

                        (iii) The financial budgets and forecasts and business
                 plans of or relating to the Fibers Business including, but not
                 limited to, full details of the 1997 forecast and budget and
                 the 1997 to 1999 plan and any notes and commentaries forming
                 part of or relating to such forecasts, budgets and plans;

                        (iv) The Jefferson Davis and White Pine facilities and
                 the Pine Glen warehouse and the Fibers Business; research and
                 development facilities;

                        (v) Written details of any significant business or
                 commercial arrangement, commitments or understandings (whether
                 or not reduced to writing and whether or not legally binding)
                 related to the Fibers Business; and

                        (vi) Such access to the employees and advisors of AFC as
                 may be necessary or useful in connection with any of the
                 foregoing.

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<PAGE>

         5.17 SETTLEMENT OF LAWSUITS. In 1994, the Office of Federal Compliance
Programs issued a Notice of Violation in which it alleged that two employment
screening tests used by AFC were unlawful. AFC will not settle this matter
without the prior written consent of Holdings, and will not admit any liability
in connection therewith.

         5.18 ASSUMPTION OF LIABILITIES. AFC acknowledges and agrees that, upon
the consummation of the Merger, the Surviving Corporation shall be the successor
to, and assume, all the obligations of SubCorp under the Fibers Sale Agreement.

                                    ARTICLE 6

                            CONDITIONS TO THE MERGER

         6.1     CONDITIONS TO OBLIGATIONS OF EACH PARTY.  The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing of each of the following conditions:

                 (a) AFC SHAREHOLDER APPROVAL. This Agreement and the Plan of
         Merger shall have been adopted at the AFC Shareholders Meeting duly
         called and held in accordance with AFC's Articles of Incorporation and
         Bylaws and the VSCA, by the holders of more than two-thirds of the
         shares of AFC Common Stock outstanding and entitled to vote thereon.

                 (b) HSR ACT. All applicable waiting periods under the HSR Act
         shall have expired or been terminated.

                 (c) PROXY STATEMENT. No proceedings under the proxy rules or
         Rule 13e-3 of the SEC pursuant to the Exchange Act and with respect to
         the Merger shall be pending before or threatened by the SEC.

                 (d) INJUNCTION, ETC. The consummation of the Merger will not
         violate the provisions of any injunction, order, judgment, decree, law
         or regulation applicable or effective with respect to AFC, Holdings,
         Parent, SubCorp or their respective officers, managers and directors.
         No suit or proceeding shall have been instituted by any person, or, to
         the best AFC's or Holdings' knowledge, shall have been threatened by
         any Governmental Entity, that seeks to (i) prohibit, restrict or delay
         consummation of the Merger or to limit in any material respect the
         right of Holdings to control any material aspect of the business of
         Holdings and its Subsidiaries or AFC and its Subsidiaries after the
         Effective Time, or (ii) to subject Holdings or AFC or their respective
         directors or officers to material liability on the ground that it or
         they have breached any law or regulation or otherwise acted improperly
         in relation to the Merger; provided, however, that in the case of any
         action, suit or proceeding instituted by a person other than a
         Governmental Entity, such action, suit or proceeding has a substantial
         likelihood of success in the opinion of legal counsel for the party
         invoking this provision.

                                         41

<PAGE>


         6.2     CONDITIONS TO OBLIGATIONS OF HOLDINGS AND SUBCORP. Consummation
of the Merger is subject to the fulfillment to the reasonable satisfaction of
Holdings, prior to or at the Closing, of each of the following conditions:

                 (a) CONSENTS, AUTHORIZATIONS, ETC. The consents required under
         the items listed on Schedule 4.1(e) and all consents, authorizations,
         orders and approvals of, and filings and registrations with, any
         Governmental Entity or any nongovernmental third party (other than the
         filing of the Articles of Merger with the Commission) that are required
         for or in connection with the execution and delivery by AFC of this
         Agreement and the consummation by AFC of the Merger shall have been
         obtained or made, except where the failure to obtain such consent,
         authorization, order or approval would not have a Material Adverse
         Effect.

                 (b) REPRESENTATIONS AND WARRANTIES. The representations and
         warranties of AFC contained in this Agreement shall have been true and
         correct in all respects at the date hereof and, except for changes
         contemplated in this Agreement, shall also be true and correct in all
         respects at and as of the Closing Date, with the same force and effect
         as if made at and as of the Closing Date, except in either case as such
         representations and warranties by their terms relate only to dates or
         periods of time prior to the Closing Date, or, in any event, except
         where the failure of representations or warranties to be true and
         correct (determined for this purpose without taking into consideration
         any materiality qualifier contained in such representation or warranty)
         in the aggregate would not have a Material Adverse Effect, and AFC
         shall have performed or complied in all material respects with all
         agreements and covenants required by this Agreement to be performed or
         complied with by it at or prior to the Closing Date.

                 (c) CERTIFICATE. (i) AFC shall have delivered to Holdings a
         certificate, dated as of the Closing Date, of the Chief Executive
         Officer, the Chief Operating Officer, the Chief Financial Officer and
         the Vice President, Bonded Fiber Products of AFC to the effect that to
         the best of such officer's knowledge the conditions specified in
         paragraph (b) of this Section 6.2 have been satisfied. Such certificate
         shall also specify the number of issued and outstanding shares of AFC
         Common Stock as of the Closing Date.

                 (d) OPINION AND CONFIRMATION OF AFC'S COUNSEL. Holdings, Parent
         and SubCorp shall have received an opinion and confirmation, dated as
         of the Closing Date, of Hunton & Williams, counsel to AFC,
         substantially to the effect set forth in Exhibit E hereto, with such
         exceptions and limitations as shall be reasonably satisfactory to
         Holdings.

                 (e) LETTERS FROM ACCOUNTANTS.  Holdings shall have received the
         letter of Coopers & Lybrand L.L.P. contemplated by Section 5.11.

                 (f) ADDITIONAL CERTIFICATES, ETC. AFC shall have furnished to
         Holdings such additional certificates, opinions and other documents as
         Holdings may have reasonably requested as to any of the conditions set
         forth in Sections 6.1 and 6.2.

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<PAGE>

                 (g) RESIGNATIONS.  AFC shall have delivered to Holdings, to the
         extent requested by Holdings, the written resignations of the directors
         of AFC.

                 (h) FINANCING. All conditions in the commitment of financing
         for the Merger from Wachovia Bank of North Carolina, N.A. and, if
         applicable, other banks as set forth in that certain commitment letter
         dated February ___, 1997 and attached hereto as Exhibit F that are not
         within the control of SubCorp and its Affilliates shall have been
         satisfied, all of which conditions SubCorp agrees to use its best
         commercial efforts to have satisfied.

                 (i) SATISFACTION OF CONDITIONS IN FIBERS SALE AGREEMENT.  All
         conditions to the obligations of Bunzl in the Fibers Sale Agreement
         that are not within the control of Holdings and its Affiliates shall
         have been satisfied.

                  (j) MORGAN CONSULTING AND NON-COMPETITION AGREEMENT.  John L.
         Morgan shall have executed and delivered a Consulting and
         Non-Competition Agreement with Bunzl in the form of Exhibit B to the
         Fibers Sale Agreement.

                 (k) MORGAN SEVERANCE AGREEMENT. AFC and John L. Morgan shall
         have executed a severance agreement providing for termination of his
         employment by AFC and its Subsidiaries as of the Effective Time
         providing for (i) a severance payment of $800,000 at Closing (in lieu
         of all salary and bonuses payable after the Effective Time and all
         additional accruals or contributions that would be payable after the
         Effective Time with respect to his interest in the AFC Pension Plan,
         SERP and Profit-Sharing and 401(k) Plan and in lieu of continued
         participation in welfare plans other than health insurance plans); and
         (ii) continued participation until December 31, 1999 as a retiree, in
         AFC's medical insurance plan (if generally available for retirees
         thereunder) on the same contributing basis as now in effect; provided,
         however, that Mr. Morgan will pay any premiums in excess of $9,000 for
         such medical insurance coverage during 1997 through 1999; and (iii)
         indemnification holding Mr. Morgan harmless with respect to the
         application of the provisions of Sections 280G and 4999 of the Code,
         respectively, including indemnification for any excise tax obligations
         and any federal, state or local income, employment-related and excise
         tax obligations with respect to the indemnification payments.

                 (l) TRANSFER AGENT'S CERTIFICATE. AFC shall have delivered to
         Holdings a certificate of the Transfer Agent for the AFC Common Stock
         specifying the number of issued and outstanding shares as of the
         Closing Date.

         6.3 CONDITIONS TO OBLIGATIONS OF AFC. Consummation of the Merger is
subject to the fulfillment to the reasonable satisfaction of or waiver by AFC,
prior to or at the Effective Time, of each of the following conditions:

                 (a) CONSENTS, AUTHORIZATIONS, ETC. All consents,
         authorizations, orders and approvals of, and filings and registrations
         with, any Governmental Entity or non-governmental third party (other
         than the filing of the Articles of Merger with the Commission), which
         are required for or in connection with the execution and delivery of


                                      43

<PAGE>

         this Agreement by Holdings, Parent and SubCorp and the consummation by
         SubCorp of the Merger shall have been obtained or made except where the
         failure to obtain such consent, authorization, or approval would not
         have a material adverse effect on the consolidated financial condition,
         results of operations, business or prospects of Holdings and its
         Subsidiaries taken as a whole.

                 (b) REPRESENTATIONS AND WARRANTIES. The representations and
         warranties of Holdings, Parent and SubCorp contained in this Agreement
         shall have been true and correct in all respects at the date hereof and
         shall also be true and correct in all respects at and as of the Closing
         Date, except for changes contemplated in this Agreement, with the same
         force and effect as if made at and as of the Closing Date or except as
         such representations and warranties by their terms relate only to
         periods of time prior to the Closing Date or except where the failure
         of any representation or warranty to be true and correct would not have
         a material adverse effect on the consolidated financial condition,
         results of operation, business or prospects of Holdings and its
         Subsidiaries taken as a whole; and Holdings shall have performed or
         complied in all material respects with all agreements and covenants
         required by this Agreement to be performed or complied with by it at or
         prior to the Closing Date.

                 (c) CERTIFICATE. Holdings shall have delivered to AFC a
         certificate, dated as of the Closing Date, of the Chief Executive
         Officer of Holdings to the effect that the conditions specified in
         paragraph (b) of this Section 6.3 have been satisfied.

                 (d) OPINION AND CONFIRMATION OF HOLDINGS', PARENT'S AND
         SUBCORP'S COUNSEL. AFC shall have received an opinion and confirmation,
         dated as of the Closing Date, of Sutherland, Asbill & Brennan, L.L.P.
         counsel to Holdings, Parent and SubCorp, to the effect set forth in
         Exhibit E hereto, with such exceptions and limitations as shall be
         reasonably satisfactory to AFC.

                 (e) ADDITIONAL CERTIFICATES, ETC. Holdings shall have furnished
         to AFC such additional certificates, opinions and other documents as
         AFC may have reasonably requested as to any of the conditions set forth
         in Sections 6.1 and 6.3.

                 (f) SATISFACTION OF CONDITIONS IN FIBERS SALE AGREEMENT. All
         conditions to the obligations of Bunzl in the Fibers Sale Agreement
         shall have been satisfied, and the cash consideration payable
         thereunder to the Surviving Corporation at Closing shall have been made
         available to the Surviving Corporation.

                 (g)    FAIRNESS OPINION.  The fairness  opinion of Goldman,
         Sachs & Co. with respect to the Merger shall not have been withdrawn.

                                     44

<PAGE>

                                   ARTICLE 7

                          TERMINATION AND ABANDONMENT

         7.1 TERMINATION AND ABANDONMENT.  This Agreement and the Merger may be
terminated and abandoned at any time prior to the Effective Time:

                 (a) By mutual action of the Board of Directors of AFC and the
         Managers of Holdings, whether before or after any action by AFC's
         shareholders.

                 (b)    By Holdings:

                            (i) if any event shall have occurred as a result of
                 which any condition set forth in Section 6.2 is no longer
                 capable of being satisfied;

                           (ii) if there has been a breach by AFC of any
                 representation or warranty contained in this Agreement that
                 would have a Material Adverse Effect, or there has been a
                 material breach of any of the covenants or agreements set forth
                 in this Agreement on the part of AFC, which breach is not
                 curable, or, if curable, is not cured within 15 days after
                 written notice of such breach is given by Holdings to AFC;

                          (iii) if AFC (or its Board of Directors) shall have
                 authorized, recommended, proposed or publicly announced its
                 intention to enter into a Competing Transaction (as defined
                 below) that has not been consented to in writing by Holdings;
                 or

                           (iv) if the Board of Directors of AFC shall have
                 withdrawn or materially modified its authorization, approval or
                 favorable recommendation to the shareholders of AFC with
                 respect to the Plan of Merger or this Agreement in a manner
                 adverse to Holdings or shall have failed to make such favorable
                 recommendation.

                 (c)    By AFC:

                            (i) if any event shall have occurred as a result of
                 which any condition set forth in Section 6.3 is no longer
                 capable of being satisfied; or

                           (ii) if there has been a breach by Holdings, Parent
                 or SubCorp of any representation or warranty contained in this
                 Agreement which would have or would be reasonably likely to
                 have a material adverse effect on the consolidated financial
                 condition, results of operations or business of Holdings and
                 its Subsidiaries taken as a whole or the ability of Holdings,
                 Parent or SubCorp to consummate the Merger, or there has been a
                 material breach of any of the covenants or agreements set forth
                 in this Agreement on the part of Holdings, Parent or SubCorp,
                 which breach is not

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<PAGE>

                 curable or, if curable, is not cured within 15 days after
                 written notice of such breach is given by AFC to Holdings.

                 (d) By AFC if because of its receipt of a proposal with respect
         to a Competing Transaction, the Board of Directors concludes, in good
         faith, after receiving advice of its legal counsel that such
         termination is in the best interests of AFC and its shareholders.

                 (e) By Holdings or AFC if there shall have occurred (i) any
         general suspension of, or limitation on, trading in securities
         generally on NASDAQ continuing for a period of fifteen (15) business
         days, or (ii) a declaration of a banking moratorium or any suspension
         of payments in respect of banks in the United States continuing for a
         period of fifteen (15) business days.

                 (f) By either Holdings or AFC if (i) any event shall have
         occurred as a result of which any condition set forth in Section 6.1 is
         no longer capable of being satisfied or (ii) the Merger shall not have
         been consummated by June 30, 1997; provided, however, that, in either
         case, the terminating party shall not have breached in any material
         respect its obligations under this Agreement in any manner that
         proximately contributed to the failure of any such condition to be
         satisfied or the failure to consummate the Merger.

As used herein, a "Competing Transaction" shall mean (i) any merger,
consolidation, share exchange, business combination, or other similar
transaction involving AFC or a significant Subsidiary of AFC; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 25% or more
of the assets of AFC, taken as a whole, in a single transaction or series of
transactions; (iii) any tender or exchange offer for 25% or more of the
outstanding shares of AFC Common Stock or the filing of a registration statement
under the Securities Act in connection therewith; or (iv) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.

         7.2 SPECIFIC PERFORMANCE. The parties acknowledge that the rights of
each party to consummate Merger are special, unique, and of extraordinary
character, and that, in the event that either violates or fails and refuses to
perform any covenant made by it herein, the other party or parties will be
without adequate remedy at law. Each party agrees, therefore, that, in the event
that it violates or fails and refuses to perform any covenant made by it herein,
the other party or parties so long as it or they are not in breach hereof, may,
in addition to any remedies at law, institute and prosecute an action in a court
of competent jurisdiction to enforce specific performance of such covenant or
seek any other equitable relief.

         7.3 RIGHTS AND OBLIGATIONS UPON TERMINATION. If this Agreement is not
consummated for any reason, each party will redeliver all documents, work
papers, and other materials of any party relating to the Merger, whether
obtained before or after the execution hereof, to the party furnishing the same,
except to the extent previously delivered to third parties in connection with
the Merger, and no information received by any party hereto with respect to the
business of any other party shall be used for the advantage of, or disclosed to
third parties by, such party to the detriment of the party furnishing such
information; provided, however, that this Section 7.3 shall

                                     46

<PAGE>

not apply to any documents, work papers, material, or information that, through
no act or failure to act by any other party hereto (a) is a matter of public
knowledge or (b) heretofore has been or hereafter is published in any
publication for public distribution or filed as public information with any
Governmental Entity.

         7.4 CERTAIN FEES AND EXPENSES. AFC acknowledges that Holdings has
spent, and will be required to spend, substantial time and effort in examining
the business, properties, affairs, financial condition and prospects of AFC and
its Subsidiaries and has incurred, and will continue to incur, substantial fees
and expenses in connection with such examination, the preparation of this
Agreement and the accomplishment of the Merger.  Therefore, to induce
Holdings to enter this Agreement:

                 (a) EXPENSES. In the event that AFC terminates this Agreement
         pursuant to Section 7.1(d) or Holdings terminates this Agreement
         pursuant to Section 7.1(b)(iii) or Section 7.1(b)(iv) and at the time
         there exists a Competing Transaction, then AFC shall reimburse Holdings
         for the total amount of the Expenses. For purposes of this Section 7.4,
         "Expenses" shall include all reasonable out-of-pocket expenses and fees
         (including, without limitation, fees and expenses payable to all
         investment banking firms and their respective agents and counsel, and
         all reasonable fees of counsel, accountants, experts and consultants to
         Holdings) actually incurred by Holdings or on its behalf or by Bunzl or
         on its behalf in connection with the Merger and all transactions
         contemplated by this Agreement, including the sale of the Fibers
         Business to Bunzl; provided, however, that Expenses shall be limited to
         1% of the product of the Merger Consideration multiplied by the total
         number of shares of outstanding AFC Common Stock. The Expenses, if due,
         shall be paid promptly after such termination.

                 (b) FEE. If this Agreement is terminated pursuant to Section
         7.1(d) by AFC or pursuant to Section 7.1(b)(iii) or 7.1(b)(iv) by
         Holdings and a Competing Transaction is consummated on or before
         February 28, 1998, then AFC shall pay to Holdings promptly after the
         consummation of the Competing Transaction a fee in the amount of 2% of
         the product of the Merger Consideration multiplied by the total number
         of shares of outstanding AFC Common Stock in addition to the amount of
         any Expenses paid or payable under subsection (a) above (the "Fee"),
         not as a penalty but as full and complete liquidated damages.

The Expenses and the Fee shall be payable to Holdings notwithstanding that any
action taken by the Board of Directors of AFC that may give rise to the
obligation to pay the Expenses and the Fee may have been taken in accordance
with the fiduciary duties of the Board of Directors.

                 (c) PAYMENT. Any payment required pursuant to this Section 7.4
         shall be made as promptly as practicable, but in no event later than
         three business days after Holdings' delivery to AFC of a statement
         setting forth the amount payable and the facts causing such amount to
         be payable, including (if applicable) the Expenses in reasonable
         detail, and shall be made by wire transfer of immediately available
         funds to an account designated by Holdings. In the event that Holdings
         is entitled to the Expenses or the Fee, AFC shall

                                          47

<PAGE>

         also pay to Holdings interest at the rate of 8.0% per year on any
         amounts that are not paid when due, plus all costs and expenses in
         connection with or arising out of the enforcement of the obligation of
         AFC to pay the Expenses, the Fee or such interest.

         7.5 EFFECT OF TERMINATION. Except for the provisions of Sections 5.4,
5.5, 5.12, 7.3, 7.4, this Section 7.5 and Article 8, which shall survive any
termination of this Agreement, in the event of the termination and abandonment
of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become
void and have no further effect, without any liability on the part of any party
hereto or its respective officers, directors or shareholders; provided, however,
that except as expressly set forth in Section 7.4(b), nothing in this Section
7.5 shall relieve any party from liability for the knowing and intentional
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement.


                                   ARTICLE 8

                               GENERAL PROVISIONS

         8.1 WAIVER OF CERTAIN CONDITIONS. Any party may, at its option, waive
in writing any or all of the conditions herein contained to which its
obligations hereunder are subject, except that the conditions contained in
Section 6.1, and Section 6.2(a) (with respect to consents and authorizations,
orders and approvals of, and filings and registrations with, any Governmental
Entity) and Section 6.3(a) (with respect to consents and authorizations, orders
and approvals of, and filings and registrations with, any Governmental Entity)
may not be so waived.

         8.2 NOTICES. All notices and other communications under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service
requiring acknowledgment of receipt. Any such notice or communication shall be
sent to the appropriate party at its address or facsimile number given below (or
at such other address or facsimile number for such party as shall be specified
by notice given hereunder):

                           If to Holdings, Parent or SubCorp, to:

                                WBT Holdings LLC
                                999 Peachtree Street, N.E. Suite 2300
                                Atlanta, Georgia  30309-3996
                                Telecopier: (404) 853-8806
                                Attention: Bennett L. Kight, President

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<PAGE>

                                with a copy to:

                                Sutherland, Asbill & Brennan, L.L.P.
                                999 Peachtree Street, N.E., Suite 2300
                                Atlanta, Georgia 30309-3996
                                Fax No. (404) 853-8806
                                Attention: George L. Cohen, Esq.


                           If to AFC, to:

                                3951 Westerre Parkway, Suite 300
                                Richmond, Virginia 23233
                                Fax No. (804) 346-0164
                                Attention:  John L. Morgan

                                with a copy to:

                                Hunton & Williams
                                951 East Byrd Street
                                Richmond, Virginia 23219-4074
                                Fax No. (804) 788-8218
                                Attention: C. Porter Vaughan, III, Esquire

All such notices and communications shall be deemed received upon (i) actual
receipt thereof by the addressee, (ii) actual delivery thereof to the
appropriate address as evidenced by an acknowledged receipt, or (iii) in the
case of a facsimile transmission, upon transmission thereof by the sender and
confirmation of receipt. In the case of notices or communications sent by
facsimile transmission, the sender shall contemporaneously mail or deliver a
copy of the notice or communication to the addressee at the address provided for
above. However, such mailing shall in no way alter the time at which the
facsimile notice or communication is deemed received.

         8.3 TABLE OF CONTENTS; HEADINGS. The Table of Contents, cross reference
pages and headings contained herein are for convenience of reference only, do
not constitute a part of this Agreement, and shall not be deemed to limit or
affect any of the provisions hereof.

         8.4 AMENDMENT. Except as otherwise provided in Section 13.1-718(I) of
the VSCA, this Agreement or the Plan of Merger may be amended, at any time
before or after the approval of this Agreement and the Plan of Merger by the
holders of AFC Common Stock, by action of the respective Boards of Directors of
AFC, Parent and SubCorp and the Managers of Holdings, without action by the
shareholders or members thereof. Any variation, modification or amendment to
this Agreement must be made in writing and executed by each of the parties
hereto.

         8.5 NO SURVIVAL OF REPRESENTATIONS, WARRANTIES OR COVENANTS.  None of
the representations or warranties made in Article 4 or the covenants made in
Article 5 shall survive the Closing Date.

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<PAGE>


         8.6 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the Merger is not affected in any manner adverse to any party hereto. Upon any
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the Merger as
contemplated by the Plan of Merger is consummated.

         8.7  WAIVER.  The failure of any party hereto at any time or times to
require performance of any provision hereof shall in no manner affect the right
to enforce the same.  No waiver by any party of any condition, or the breach of
any term, provision, warranty, representation, agreement or covenant contained
in this Agreement or the other agreements contemplated hereby, whether by
conduct or otherwise, in any one or more instances shall be deemed or construed
as a further or continuing waiver of any such condition or breach or a waiver of
any other condition or of the breach of any other term, provision, warranty,
representation, agreement or covenant herein or therein contained.

         8.8 NO THIRD PARTY BENEFICIARIES; ASSIGNMENT. This Agreement shall
inure to the benefit of the parties and their respective successors and
permitted assignees. Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any person or entity; provided,
however, that all persons who are beneficiaries of Sections 5.4(a), 5.10 or 5.12
shall be entitled to enforce the provisions of those sections, respectively.
Except for assignments to wholly-owned subsidiaries (direct or indirect) of
Holdings, in which event Holdings shall remain liable for the performance of
this Agreement, no transfer or assignment (including by operation of law) of
this Agreement or of any rights or obligations under this Agreement may be made
by any party without the prior written consent of the other parties and any
attempted transfer or assignment without that required consent shall be void. No
transfer or assignment by a party of its rights under this Agreement shall
relieve it of any of its obligations to the other parties under this Agreement.

         8.9 TIME OF THE ESSENCE; COMPUTATION OF TIME. Time is of the essence of
each and every provision of this Agreement. Whenever the last day for the
exercise of any right or the discharge of any duty under this Agreement shall
fall upon Saturday, Sunday or a public or legal holiday, the party having such
right or duty shall have until 5:00 p.m. Atlanta, Georgia time on the next
succeeding regular business day to exercise such right or to discharge such
duty.

         8.10 COUNTERPARTS. This Agreement may be executed by each party upon a
separate copy, and in such case one counterpart of this Agreement shall consist
of enough of such copies to reflect the signatures of all of the parties. This
Agreement may be executed in two or more counterparts, each of which shall be an
original, and each of which shall constitute one and the same agreement. Any
party may deliver an executed copy of this Agreement and of any documents
contemplated hereby by facsimile transmission to another party and such delivery
shall have the same force and effect as any other delivery of a manually signed
copy of this Agreement or of such other documents.

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<PAGE>

         8.11  GOVERNING LAW.  This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Virginia, without giving
effect to the conflicts of law principles thereof.

         8.12 ENTIRE AGREEMENT. This Agreement (with its Schedules and Exhibits)
and the Confidentiality Agreement contain, and are intended as, a complete
statement of all the terms of the arrangements among the parties with respect to
the matters provided for, supersede any previous agreements and understandings
between the parties with respect to those matters and cannot be changed or
terminated orally.

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<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.


                                      AMERICAN FILTRONA CORPORATION

                                       /s/ JOHN L. MORGAN
                                      -----------------------------------------
                                      Name  John L. Morgan
                                      Title Chairman



                                      WBT HOLDINGS LLC

                                       /s/ BENNETT L. KIGHT
                                      -----------------------------------------
                                      Name  Bennett L. Kight
                                      Title President




                                      WB PARENT CORP.

                                       /s/ BENNETT L. KIGHT
                                      -----------------------------------------
                                      Name  Bennett L. Kight
                                      Title President




                                      WB ACQUISITION CORP.

                                        /s/ BENNETT L. KIGHT
                                      -----------------------------------------
                                      Name  Bennett L. Kight
                                      Title President