Exhibit 10.1


            SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT


     This SECOND  AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of
March 17,  2004  (this  "Amendment"),  is by and among  AKI,  INC.,  a  Delaware
corporation  ("Borrower"),   HELLER  FINANCIAL,  INC.,  a  Delaware  corporation
("Heller"),  in its capacity as Agent for the benefit of all Lenders (Heller, in
such  capacity,  "Agent") and  individually  as a Lender,  and each of the other
Lenders signatories hereto, and each of the other Persons who are parties hereto
(individually, a "Loan Party" and collectively the "Loan Parties").

                                R E C I T A L S:

     A.  Borrower,  Agent and Lenders are  parties to that  certain  Amended and
Restated  Credit  Agreement  dated as of December 18, 2001 (as the same has been
and hereafter may be amended, restated,  supplemented or otherwise modified from
time to time, the "Credit Agreement").

     B.  Borrower,  Agent and  Lenders  wish to amend the  Credit  Agreement  as
provided herein.

         NOW, THEREFORE, the parties agree as follows:

     1. Definitions.  Capitalized terms used in this Amendment, unless otherwise
defined  herein,  shall have the  meanings  ascribed to such terms in the Credit
Agreement.

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

          (a).  subsection 4.6 of the Credit  Agreement is hereby deleted in its
     entirety and the following language is hereby substituted therefor:

               " 4.6.  Total  Indebtedness  to EBITDA Ratio.  Borrower shall not
          permit the ratio of Total  Indebtedness  calculated as of the last day
          of any month  during any of the  periods set forth below to EBITDA for
          the twelve (12) month period ending on such day to be greater than the
          ratio set forth below for such period.

                  Period                                           Ratio
                  ------                                           -----
                  January 1, 2004 through June 30, 2004             4.25
                  July 1, 2004 and thereafter                       4.00

               "Total   Indebtedness"   and  "EBITDA"   will  be  calculated  as
          illustrated on Exhibit 4.8(C).";

          (b).  Exhibit 4.8(C) to the Credit  Agreement is hereby deleted in its
     entirety and Annex A attached hereto is hereby substituted therefor.


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     3. Representations and Warranties. To induce Agent and the Lenders to enter
into this Amendment,  Borrower  represents and warrants to Agent and the Lenders
that:

          (a).  the  execution,  delivery  and  performance  by Borrower of this
     Amendment are within its corporate power,  have been duly authorized by all
     necessary  corporate  action and do not and will not contravene or conflict
     with any  provision of law  applicable  to  Borrower,  the  Certificate  of
     Incorporation  or Bylaws of Borrower,  or any order,  judgment or decree of
     any  court or other  agency of  government  or any  contractual  obligation
     binding upon Borrower;

          (b).  the Credit  Agreement  as  amended as of the date  hereof is the
     legal,  valid  and  binding  obligation  of  Borrower  enforceable  against
     Borrower in accordance with its terms;

          (c). each of the representations and warranties set forth in Section 5
     of  the  Credit   Agreement  (other  that  those  which,  by  their  terms,
     specifically  are made as of a certain  date prior to the date  hereof) are
     true and correct in all material respects as of the date hereof; and

          (d). no Default or Event of Default has occurred and is continuing.

     4. Conditions. The effectiveness of the amendments stated in this Amendment
is subject to each of the following conditions precedent or concurrent:

          (a).  no Default or Event of Default  under the Credit  Agreement,  as
     amended hereby, shall have occurred and be continuing;

          (b).  Borrower  and each  other Loan Party  shall  have  executed  and
     delivered this Amendment and such other  documents and instruments as Agent
     may require shall have been executed and/or delivered to Agent;

          (c).  Heller  shall have  received in  immediately  available  funds a
     fully-earned, non-refundable amendment fee for its own account in an amount
     equal to $25,000; and

          (d).  all  legal  matters   incident  to  this   Amendment   shall  be
     satisfactory to Agent and its legal counsel.

     5. Miscellaneous.

          (a).  Captions.  Section  captions  used  in  this  Amendment  are for
     convenience only, and shall not affect the construction of this Amendment.

          (b).  Governing Law. This Amendment shall be a contract made under and
     governed by the laws of the State of Illinois,  without  regard to conflict
     of laws  principles.  Whenever  possible each  provision of this  Amendment
     shall be  interpreted  in such  manner as to be  effective  and valid under
     applicable  law, but if any provision of this Amendment shall be prohibited
     by or invalid under such law, such  provision  shall be  ineffective to the
     extent  of  such  prohibition  or  invalidity,   without  invalidating  the
     remainder of such provision or the remaining provisions of this Amendment.


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          (c).  Counterparts.  This  Amendment  may be executed in any number of
     counterparts,  and each such counterpart shall be deemed to be an original,
     but all such counterparts  shall together  constituted but one and the same
     Amendment.

          (d).  Successors  and Assigns.  This  Amendment  shall be binding upon
     Borrower,  each other Loan Party,  each Lender,  Agent and their respective
     successors  and  assigns,  and shall inure to the sole benefit of Borrower,
     each other Loan Party, each Lender,  Agent and their respective  successors
     and assigns.

          (e).  References.  Any reference to the Credit Agreement  contained in
     any notice, request,  certificate, or other document executed in connection
     with,  concurrently  with or  after  the  execution  and  delivery  of this
     Amendment  shall be deemed to include  this  Amendment  unless the  context
     shall otherwise require.

          (f). Continued Effectiveness. The Credit Agreement, as amended hereby,
     and each of the other Loan Documents, remain in full force and effect.

          (g). Costs, Expenses and Taxes. Borrower affirms and acknowledges that
     the  terms of  subsection  1.3(E)  of the  Credit  Agreement  apply to this
     Amendment  and the  transactions,  agreements  and  documents  contemplated
     hereunder and hereby.

     6. Ratification. The terms and provisions set forth in this Amendment shall
modify  and  supersede  all  inconsistent  terms and  provisions  of the  Credit
Agreement and shall not be deemed to be a consent to the  modification or waiver
of any other term or  condition  of the Credit  Agreement.  Except as  expressly
modified and  superseded  by this  Amendment,  the terms and  provisions  of the
Credit Agreement are ratified and confirmed and shall continue in full force and
effect.

     7.  Reaffirmation.  Each of the Loan Parties as debtor,  grantor,  pledgor,
guarantor,  assignor,  or in other any other similar capacity in which such Loan
Party  grants liens or security  interests in its property or otherwise  acts as
accommodation  party or guarantor,  as the case may be, hereby: (i) ratifies and
reaffirms  all  of  its  payment  and  performance  obligations,  contingent  or
otherwise, under each of the Loan Documents to which it is a party (after giving
effect  hereto)  and (ii) to the  extent  such Loan  Party  granted  liens on or
security  interests in any of its property pursuant to any such Loan Document as
security for or otherwise  guaranteed the Borrower's  Obligations  under or with
respect to the Loan  Documents,  ratifies and reaffirms such guarantee and grant
of security  interests  and liens and  confirms  and agrees  that such  security
interests and liens  hereafter  secure all of the Obligations as amended hereby.
Each of the Loan Parties hereby consents to this Amendment and acknowledges that
each of the Loan  Documents  remains  in full  force  and  effect  and is hereby
ratified and reaffirmed.  The execution of this Amendment shall not operate as a
waiver of any  right,  power or remedy of the  Agent or  Lenders,  constitute  a
waiver  of any  provision  of any of the Loan  Documents  or  serve to  effect a
novation of the Obligations.

     8.  Ratification of Liability;  Acknowledgment  of Rights.  Each Loan Party
hereby  ratifies  and  confirms  its  respective  liabilities,  obligations  and
agreements under the Credit Agreement and the other Loan Documents and the liens
and security  interests  created thereby,  and acknowledges  that: (i) it has no
defenses,  claims or set-offs to the  enforcement by the Lenders or the Agent of
such  liabilities,  obligations and  agreements;  (ii) the Lenders and the Agent
have fully  performed  all  undertakings  owed to it as of the date hereof;  and
(iii) the


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Lenders  and the Agent do not  waive,  diminish  or limit any term or  condition
contained in the Credit  Agreement  (as amended  hereby) or, in any of the other
Loan Documents.

                 - Remainder of Page Intentionally Left Blank -
                            [Signature Page Follows]


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     IN WITNESS  WHEREOF,  this  Amendment has been duly executed as of the date
first written above.


BORROWER:                           AKI, INC., a Delaware corporation
--------
                                    By:      /s/ Kenneth A. Budde
                                             --------------------
                                    Name:    Kenneth A. Budde
                                    Title:   Chief Financial Officer


AGENT AND LENDER:                   HELLER FINANCIAL, INC., a Delaware
----------------                    corporation, as Agent and as a Lender

                                    By:      /s/ Paul McDonnell
                                             ------------------
                                    Name:    Paul McDonnell
                                    Its:     Duly Authorized Signatory

OTHER LOAN PARTIES:
------------------

AKI HOLDING CORP., a Delaware corporation

By:      /s/ Kenneth A. Budde
         --------------------
Name:    Kenneth A. Budde
Title:   Chief Financial Officer


IST, CORP., a Delaware corporation

By:      /s/ Kenneth A. Budde
         --------------------
Name:    Kenneth A. Budde
Title:   Chief Financial Officer


ENCAPSULATION SERVICES, INC., a New Jersey corporation

By:      /s/ Kenneth A. Budde
         --------------------
Name:    Kenneth A. Budde
Title:   Chief Financial Officer