Document:

<PAGE>

                                                                    EXHIBIT 10.7

                               SEVERANCE AGREEMENT

         THIS AGREEMENT is entered as of October 1, 1991, by and between Robert
Half International Inc., a Delaware corporation (the "Company") and Paul F.
Gentzkow (the "Employee").

         WHEREAS, the Employee currently serves as Director of Field Operations,
Eastern Region; and

         WHEREAS, the Company believes that it is in the best interest of the
Company and its shareholders to enter into this Agreement.

         NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions set forth herein, the Company and the Employee hereby agree as
follows:

         1.       DEFINITIONS

                  1.1.     BOARD means the Board of Directors of the Company.

                  1.2.     CHANGE OF CONTROL means any one of the following
events:

                           1.2.1. SCHEDULE 13D OR 13G FILING. A Schedule 13D or
13G is filed pursuant to the Securities Exchange Act of 1934 ("Exchange
Act")indicating that any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act) has become the holder of more than forty percent
(40%) of the outstanding Voting Shares. For purposes of calculating the
percentage of Voting Shares, such person or group shall be deemed the owner of
any Voting Shares which such person or group may acquire upon conversion of
securities or upon the exercise of options, warrants or rights.

                           1.2.2. CERTAIN CHANGES IN DIRECTS. As a result of or
in connection with any cash tender offer, merger, or other business combination,
sale of assets or contested election, or combination of the foregoing, the
persons who were directors of the Company just prior to such event shall cease
within one year to constitute a majority of the Board.

                           1.2.3. CERTAIN CORPORATE TRANSACTIONS. The
stockholders of the Company approve a definitive agreement (i) to merge or
consolidate the Company with or into another corporation in which the holders of
Voting Shares immediately before such merger or reorganization will not,
immediately following such merger or reorganization, hold as a group on a
fully-diluted basis both the ability to elect at least a majority of the
directors of the surviving corporation and at least a majority in value of
<PAGE>

the surviving corporation's outstanding equity securities, or (ii) to sell or
otherwise dispose of all or substantially all of the assets of the Company.

                           1.2.4. TENDER OR EXCHANGE OFFER. An Offer is made by
a person or group (as such terms are defined in Section 13(d)(3) of the Exchange
Act) and such Offer has resulted in such person or group holding an aggregate of
forty percent (40%) or more of the outstanding Voting Shares. For purposes of
this Section 1.2.4, Voting Shares held by such person or group shall be
calculated in accordance with the last sentence of Section 1.2.1 hereof.

                  1.3.     OFFER means a tender offer or an exchange offer for
shares of the Company's Stock.

                  1.4.     STOCK means the Common Stock, $1.00 par value, of the
Company.

                  1.5.     TERMINATION DATE means the date on which Employee's
employment with the Company is terminated.

                  1.6.     TERMINATION FOR CAUSE means termination by the
Company of Employee's employment by the Company and its subsidiaries by reason
of (i) the commission of any criminal act by Employee (other than minor traffic
violations), (ii) gross misconduct or gross negligence by the Employee in the
performance of his duties, or (iii) material willful violation by Employee of
any of the policies of Employer.

                  1.7.     TERMINATION WITHOUT CAUSE means termination of
Employee's employment by the Company other than pursuant to a Termination For
Cause.

                  1.8.     VOTING SHARES means the outstanding shares of the
Company entitled to vote for the election of directors.

         2.      PAYMENTS AND BENEFITS UPON TERMINATION WITHOUT CAUSE. In the
event of a Termination Without Cause within twelve months following a Change
of Control, the Employee shall be entitled to receive the following:

                  2.1.    CONTINUATION OF BASE SALARY. For a period of twelve
(12) months following the Termination Date, Employee shall receive monthly
payments ("Severance Payments") at a rate equal to 150% of the highest monthly
base salary (exclusive of bonus, fringe benefits and other non-cash
compensation) paid to Employee within the six (6) months preceding the
Termination Date. The foregoing Severance Payments are in lieu of any salary,
bonus or compensation that would otherwise have been paid with respect to
services subsequent to the Termination Date, including, but not limited to, any
bonus payments relating to the year in which the termination occurs or to any
subsequent year. At the option of the Company, all or part of such Severance
Payments may be paid in a lump sum.
<PAGE>

                  2.2.    BENEFITS. So long as Employee would be entitled to
receive Severance Payments pursuant to Section 2.1 (whether or not the Company
has elected to pay the entire amount in a lump sum) or until Employee is
reemployed, whichever first occurs, Employee also shall be entitled to all
employee benefits, including medical and life insurance, pension, retirement and
other benefits to which Employee was entitled on the Termination Date.

                  2.3.    VESTING. If, on the Termination Date, Employee holds
any Stock or options or other rights to acquire Stock which are subject to
restrictions or vesting based on continued employment with the Company, such
restrictions shall lapse and such vesting shall occur effective as of the
Termination Date. In addition, if Employee is a participant in the Company's
Deferred Compensation Plan, all amounts credited under such plan to Employee
shall become fully vested and nonforfeitable.

                  2.4.    MULTIPLE BENEFITS. To the extent that any other
agreement ("Other Agreement") between the Employee and the Company would provide
for cash payments, including but not limited to salary continuation (or a lump
sum payment in lieu of salary continuation) or bonus payments, under the same or
similar circumstances as such benefits would be provided pursuant to Section 2.1
hereof, then Employee shall not receive such benefits under both the Other
Agreement and Section 2.1, but shall instead receive the greater of the cash
benefit payable under either Section 2.1 or the Other Agreement. Except as
provided by the foregoing sentence, the benefits payable under this Agreement
shall be in addition to, and not in lieu of, any other benefits that may be
provided under any plan, program or agreement.

         3.       EMPLOYMENT. The sole purpose of this Agreement is to provide
Employee with severance benefits in the event Employee is Terminated Without
Cause within twelve months following a Change of Control. This Agreement is not
an employment agreement.

         4.       HEADINGS. The headings used in this Agreement are for
convenience only, and shall not be used to construe the terms and conditions of
the Agreement.

         5.       GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the State of California. The terms of this
Agreement shall bind and shall inure to the benefit of the successors and
assigns of the parties hereto.

         6.       ENTIRE AGREEMENT. This agreement constitutes the entire
agreement between the parties with respect to the matters covered hereby and
supersedes all prior agreements, arrangements or understandings, whether written
or verbal, with respect to such matters.

         7.       COUNTERPARTS. This agreement may be executed in counterparts,
all of which shall constitute only one agreement.
<PAGE>

         IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first set forth above.

                                            ROBERT HALF INTERNATIONAL INC.

                                            HAROLD M. MESSMER, JR.
                                            ----------------------
                                            Harold M. Messmer, Jr.
                                            Chairman and Chief
                                            Executive Officer

                                            PAUL F. GENTZKOW
                                            ----------------
                                            Paul F. Gentzkow
                                            Director of Field Operations
                                            Eastern Region<PAGE>

                                                                    Exhibit 10.1

         THIS TEMPORARY WAIVER AND SECOND AMENDMENT (this "WAIVER AND
AMENDMENT"), dated as of October 11, 2000, is entered into by and among DIAMOND
BRANDS OPERATING CORP., a Delaware corporation (the "COMPANY"), the several
financial institutions (the "LENDERS") listed on the signature pages hereof, DLJ
CAPITAL FUNDING, INC., as Syndication Agent (the "SYNDICATION AGENT"), and WELLS
FARGO BANK, N.A., as Swing Line Lender and Administrative Agent (the
"ADMINISTRATIVE AGENT").

                                    RECITALS

         A. The Company, the lenders party thereto, the Syndication Agent, the
Swing Line Lender and the Administrative Agent are parties to the Credit
Agreement dated as of April 21, 1998 (as amended by the First Amendment thereto
dated as of March 5, 1999, the "CREDIT AGREEMENT"), pursuant to which the
lenders party thereto have extended credit under various facilities to the
Company.

         B. The Company has requested that such lenders waive the applicability
of the financial covenants in the Credit Agreement for a limited time and make
certain amendments with respect to the Credit Agreement. The Lenders now wish to
grant a waiver and make such amendments under the Credit Agreement as set forth
in greater detail below.

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

                  1. DEFINED TERMS. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings assigned to them in the Credit
Agreement.

                  2. WAIVER

                              (a) The Lenders hereby temporarily waive
compliance by the Company with Section 7.06 of the Credit Agreement from the
Effective Date through March 31, 2001. The parties hereto acknowledge and
agree that should the financial statements delivered by the Company for the
fiscal quarters ending either September 30, 2000 or December 31, 2000
evidence that the Company would not be in compliance with Section 7.06 with
respect to either of such fiscal quarters but for this Waiver and Amendment,
and such financial covenants are not hereafter further waived or amended, an
Event of Default shall exist on April 1, 2001. From the period commencing on
the Effective Date until the expiration of this waiver on March 31, 2001, no
Event of Default or Potential Event of Default shall exist solely on account
of the fact that the Company has not complied with, and is not likely to
comply with, the covenants set forth in Section 7.06 of the Credit Agreement.

                              (b) The Lenders hereby waive any Event of
Default as may have occurred as a result of the failure of the Company to
provide written notice to the Administrative Agent for distribution to the
Lenders pursuant to Section 6.1(x) of the Credit Agreement of Empire
Manufacturing Company v. Empire Candle, Inc. District

                                       1
<PAGE>

Court, Wyandotte County, Kansas, a lawsuit in which Kent Meisemer, prior owner
of Empire Manufacturing Company, alleges that Diamond Brands did not fully
comply with required actions from the sales contract and alleges damages of
$1,200,000.

                  3. INTERIM COVENANTS. The Company covenants and agrees that
from the Effective Date through March 31, 2001, unless the Requisite Lenders
waive compliance in writing, the Company shall perform and comply with the
following covenants. The Company's failure to observe the following covenants
shall constitute an Event of Default without notice to the Company or any
grace period.

                           (a) MINIMUM FIXED CHARGE COVERAGE RATIO. The Company
shall not permit the ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed
Charges for any consecutive four-Fiscal Quarter period ending on the dates set
forth below to be less than the correlative ratio indicated:

<TABLE>
<CAPTION>

       Fiscal Quarter                            Minimum Fixed Charge
        Ending Date                               Coverage Ratio
       --------------                            --------------------

<S>                                              <C>
       September 30, 2000                           0.80 to 1.0
       December 31, 2000                            0.70 to 1.0

</TABLE>

                           (b) MAXIMUM LEVERAGE RATIO. The Company shall not
permit the Consolidated Ratio at any time during any of the periods set forth
below to exceed the correlative ratio indicated:

<TABLE>
<CAPTION>

       Period                                    Maximum Leverage Ratio
       ------                                    ----------------------
<S>                                              <C>
       September 30, 2000                           8.00 to 1.0
       December 31, 2000                            8.85 to 1.0

</TABLE>

                           (c) INTEREST COVERAGE RATIO. The Company shall not
permit the ratio of (i) Consolidated EBITDA to (ii) Consolidated Interest
Expense for any consecutive four-Fiscal Quarter period ending on the dates set
forth below to be less than the correlative ratio indicated:

<TABLE>
<CAPTION>

       Fiscal Quarter                            Minimum Interest
         Ending Date                              Coverage Ratio
       --------------                            ----------------
<S>                                              <C>
       September 30, 2000                           1.20 to 1.0
       December 31, 2000                            1.0 to 1.0

</TABLE>

                           (d) COMPLIANCE CERTIFICATE. The Company shall deliver
to the Administrative Agent and each Lender, together with the financial
statements it delivers pursuant to Section 6.1(i) for the monthly period ending
December 31, 2000, a Compliance Certificate demonstrating in reasonable detail
compliance at the end of such accounting period with the restrictions contained
in Sections 3(a) through (c) above. The Company agrees that the Administrative
Agent and the Lenders may conclusively rely upon such Compliance Certificate in
determining whether an Event of Default exists under those Sections for such
accounting period.

                                       2
<PAGE>

                  4. REVOLVING LOANS. Pursuant to Section 2.4(B)(ii) of the
Credit Agreement and commencing on the Effective Date, the Revolving Loan
Commitments shall be permanently reduced from $25,000,000 to $17,500,000 and
such reduction shall reduce the Revolving Loan Commitment of each Revolving
Lender proportionately to its Pro Rata Share. Notwithstanding the foregoing, the
Company shall not permit the Total Utilization of Revolving Loan Commitments (i)
from the Effective Date through December 31, 2000, to exceed $15,000,000 and
(ii) thereafter, to exceed $12,500,000. The Company acknowledges and agrees that
the foregoing shall not in any way limit the Company's obligation to pay
commitment fees on the entire amount of the unutilized Revolving Loan Commitment
as reduced by the first sentence of this Section.

                  5. SWING LINE LOANS. The Company and the Swing Line Lender
hereby agree that, from the Effective Date until otherwise agreed in writing by
the Swing Line Lender, the Swing Line Lender shall have no obligation to make
any Swing Line Loans under the Credit Agreement.

                  6. AMENDMENTS. The parties hereto hereby agree that the Credit
Agreement shall be amended as follows:

                           (a) Section 1 is amended by deleting the definition
of "Asset Sale" therein in its entirety and replacing it with the following new
definition:

                  "Asset Sale" means the sale by Company or any of its
         Subsidiaries to any Person other than Company or any of its
         wholly-owned Subsidiaries of (i) any of the equity ownership of any of
         Company's Subsidiaries (other than directors' qualifying shares), (ii)
         substantially all of the assets of any division or line of business of
         Company or of its Subsidiaries, or (iii) any other assets (whether
         tangible or intangible) of Company or any of its Subsidiaries (other
         than (a) inventory sold in the ordinary course of business, (b) Cash
         Equivalents, and (c) any such other assets to the extent that (i) the
         aggregate value of such assets sold in any single transaction or
         related series of transactions is equal to $500,000 or less and (ii)
         the aggregate value of such assets sold in any Fiscal Year is equal to
         $1,000,000 or less).

                           (b) Section 2.2(A) is amended by:

                           (i) deleting subsection (i)(a)(I) and (II) thereof in
their entireties and replacing them with the following:

                           (I) if a Base Rate Loan, then the sum of the Base
Rate PLUS 2.50%;

                           (II) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate PLUS 3.50%.

                           AND

                                       3
<PAGE>

                           (ii) deleting subsections (i)(b)(I) and (II) thereof
in their entireties and replacing them with the following:

                           (I) if a Base Rate Loan, then the sum of the Base
Rate PLUS 3.00%;

                           (II) if a Eurodollar Rate Loan, then at the sum of
         the Adjusted Eurodollar Rate PLUS 4.00%.

                           (c) Section 2.4(B)(iii) is amended by:

                           (i) deleting subsection (a) thereof in its entirety
and replacing it with the following:

                           (a) PREPAYMENTS AND REDUCTIONS FROM NET ASSET SALE
         PROCEEDS. No later than the fifth Business Day following the date of
         receipt by Company or any of its Subsidiaries of any Net Asset Sale
         Proceeds in respect of any Asset Sale, Company shall prepay the Loans
         and/or the Revolving Loan Commitments shall be permanently reduced in
         an aggregate amount equal to the amount of such Net Asset Sale
         Proceeds.

                           AND

                           (ii) deleting the second proviso in subsection (d)
thereof and replacing it with the following: "PROVIDED FURTHER that none of the
Net Securities Proceeds from the issuance of Subordinated Indebtedness permitted
hereunder shall be applied to the mandatory prepayment of the Loans pursuant to
this subsection 2.4(B)(iii)(d) to the extent that it is used to make scheduled
payments of principal and interest on the Senior Subordinated Notes".

                           AND

                           (iii) deleting the second paragraph of subsection (g)
thereof in its entirety.

                           AND

                           (iv) deleting the reference to "$5,000,000" in the
third paragraph of subsection (g) thereof and replacing it with the following:
"$1,000,000".

                           (d) Section 7.1(vi) is amended by inserting the
following at the end thereof: "or other Subordinated Indebtedness in an
aggregate principal amount not in excess of $10,000,000".

                           (e) Section 7.3 is amended by:

                                       4
<PAGE>

                           (i) inserting the following after subsection (i)
thereof: "so long as the Administrative Agent holds a perfected first priority
security interest in such Investments in Cash Equivalents and either takes
possession of such Investments in Cash Equivalents or enters into an account
control agreement with Company or its applicable Subsidiary and the entity in
possession of such Investments in Cash Equivalents in form and substance
satisfactory to the Administrative Agent".

                           AND

                           (ii) deleting the reference to "$8,000,000" in
subsection (vi) thereof and replacing it with the following "$500,000".

                           (f) Section 7.4(iv) is amended by deleting the
reference to "$5,000,000" therein and replacing it with the following
"$1,000,000".

                           (g) Section 7.7 is amended by deleting subsection
(ii) thereof therefrom in its entirety and replacing the same with the following
"[Intentionally omitted]".

                           (h) Section 7.8 is amended by deleting such Section
in its entirety and replacing it with the following:

                           7.8      CONSOLIDATED CAPITAL EXPENDITURES.

                           Holdings shall not, and shall not permit its
         Subsidiaries to make or incur Consolidated Capital Expenditures in an
         amount in excess of (x) $5,500,000 for Fiscal Year ending December 31,
         2000 and (y) $4,000,000 for Fiscal Year ending December 31, 2001 and
         each Fiscal Year thereafter.

                  7. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants as follows:

                           (a) The execution, delivery and performance by the
Company of this Waiver and Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any registration
with, consent or approval of, notice to or action by, any person (including any
governmental agency) in order to be effective and enforceable. The Credit
Agreement, as amended by this Waiver and Amendment, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its respective terms, without defense, counterclaim or offset,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

                           (b) Except as set forth on Annex I, all
representations and warranties of the Company contained in the Credit Agreement
are true and correct in all

                                       5
<PAGE>

material respects as though made on and as of the Effective Date (except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true and correct as of such earlier date).

                           (c) The Company is entering into this Waiver and
Amendment on the basis of its own investigation and for its own reasons, without
reliance upon the Administrative Agent and the Lenders or any other person.

                  8. EFFECTIVE DATE. This Waiver will become effective as of
date that each of the following conditions precedent is satisfied (the
"EFFECTIVE DATE"):

                           (a) the Administrative Agent or its counsel has
received from the Company and the Requisite Lenders a duly executed original or
facsimile of this Waiver and Amendment;

                           (b) the Company has paid all amounts described in
Section 9 below;

                           (c) each of the Company and its Subsidiaries has
executed and delivered account control agreements in form and substance
satisfactory to the Administrative Agent with respect to each of its deposit
accounts; and

                           (d) to the extent that the Administrative Agent has
been advised by its counsel in the relevant states that such action is customary
and reasonable for a waiver and amendment of this general nature, the Company
shall have caused the title company or companies that issued policies of title
insurance in connection with the Credit Agreement to issue endorsements
substantially in the form of CLTA endorsements 110.5 and 111.10 to assure the
Lenders of the continuing priority of the Liens securing the Loans made after
the Effective Date hereunder and shall have taken such additional steps as are
necessary to enable such endorsements to be issued.

                  9. WAIVER FEE. The Company shall pay to the Administrative
Agent for the account of each Lender that has delivered to the Administrative
Agent or its counsel a duly executed original or facsimile of this Waiver and
Amendment by 12:00 Noon California time on October 11, 2000 a nonrefundable
waiver fee equal to 0.125% of such Lender's Commitment.

                  10. RESERVATION OF RIGHTS. The Company acknowledges and agrees
that neither the Administrative Agent's nor the Lenders' execution and delivery
of this Waiver and Amendment shall be deemed to create a course of dealing or
otherwise obligate the Administrative Agent or the Lenders or any other party
hereto to execute similar waivers under the same or similar circumstances in the
future.

                  11. MISCELLANEOUS.

                                       6
<PAGE>

                           (a) Except as expressly set forth herein, this Waiver
and Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights or remedies of the Administrative
Agent or the Lenders under the Credit Agreement or any of the other Loan
Documents, and shall not alter, modify, amend, or in any way affect the terms,
conditions, obligations, covenants, or agreements contained in the Credit
Agreement or the other Loan Documents, all of which are hereby ratified and
affirmed in all respects and shall continue in full force and effect.

                           (b) This Waiver and Amendment shall be binding upon
and inure to the benefit of the parties hereto and thereto and their respective
successors and assigns. No third party beneficiaries are intended in connection
with this Waiver and Amendment.

                           (c) This Waiver and Amendment shall be governed by
and construed in accordance with the law of the State of New York.

                           (d) This Waiver and Amendment may be executed in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.

                           (e) This Waiver and Amendment, together with the
Credit Agreement, contains the entire and exclusive agreement of the parties
hereto with reference to the matters discussed herein and therein. This Waiver
and Amendment supersedes all prior drafts and communications with respect
thereto. This Waiver and Amendment may not be amended except in accordance with
the provisions of Section 10.6 of the Credit Agreement.

                           (f) If any term or provision of this Waiver and
Amendment shall be deemed prohibited by or invalid under any applicable law,
such provision shall be invalidated without affecting the remaining provisions
of this Waiver and Amendment or the Credit Agreement, respectively.

                           (g) The Company hereby covenants to pay or to
reimburse the Administrative Agent, upon demand, for all reasonable costs and
expenses (including reasonable attorney costs) incurred in connection with the
development, preparation, negotiation, execution and delivery of this Waiver and
Amendment.

                           (h) Hereafter, all references to the Credit Agreement
or any Loan Document contained in the Credit Agreement or any Loan Document or
any certificate delivered pursuant to the Credit Agreement or any Loan Document
shall be deemed to refer to the Credit Agreement and each Loan Document after
giving effect to the provisions of this Waiver and Amendment.

                                       7
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Waiver and Amendment as of the
date first above written.

                            DIAMOND BRANDS OPERATING CORP.

                            By: _______________________________________________
                            Name:
                            Title:

                            WELLS FARGO BANK, N.A., individually and as Swing
                            Line Lender and Administrative Agent

                            By: _______________________________________________
                            Name:
                            Title:

                            DLJ CAPITAL FUNDING, INC., individually and as
                            Syndication Agent

                            By: _______________________________________________
                            Name:
                            Title:

                            PARIBAS CAPITAL FUNDING LLC

                            By: _______________________________________________
                            Name:
                            Title:

                            EATON VANCE MANAGEMENT

                            By: _______________________________________________
                            Name:
                            Title:

                                       8
<PAGE>

                            CAPTIVA III FINANCE LIMITED

                            By: _______________________________________________
                            Name:
                            Title:

                            ATHENA CDO, LIMITED

                            By: _______________________________________________
                            Name:
                            Title:

                            BLACK DIAMOND INTERNATIONAL

                            By: _______________________________________________
                            Name:
                            Title:

                            BLACK DIAMOND CLO

                            By: _______________________________________________
                            Name:
                            Title:

                            DELANO COMPANY

                            By: _______________________________________________
                            Name:
                            Title:

                                       9
<PAGE>

                            SENIOR DEBT PORTFOLIO

                            By: _______________________________________________
                            Name:
                            Title:

                            BHF-BANK AKTIENGESELLSCHAFT

                            By: _______________________________________________
                            Name:
                            Title:

                            BANK OF AMERICA, N.A. (formerly Bank of America
                            National Trust and Savings Association)

                            By: _______________________________________________
                            Name:
                            Title:

                            U.S. BANK, NATIONAL ASSOCIATION

                            By: _______________________________________________
                            Name:
                            Title:

                                       10
<PAGE>

                            BANQUE PARIBAS

                            By: _______________________________________________
                            Name:
                            Title:

                            CREDIT AGRICOLE INDOSUEZ

                            By: _______________________________________________
                            Name:
                            Title:

                            FREMONT INVESTMENT

                            By: _______________________________________________
                            Name:
                            Title:

                            CANADIAN IMPERIAL BANK OF COMMERCE

                            By: _______________________________________________
                            Name:
                            Title:

                                       11
<PAGE>

                                     ANNEX I

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF THE COMPANY, PURSUANT TO SECTION
         7(B) OF THIS WAIVER AND AMENDMENT

1.       With respect to Section 5.4 of the Credit Agreement, the Company notes
         that resin costs have escalated from prior years, adversely affecting
         operating earnings.

2.       With respect to Section 5.4 of the Credit Agreement, the Company notes
         that, in December 1999, the Company divested their holdings in Empire
         Candle Inc., with an associated loss on sale of assets.

                                       12
<PAGE>

                           ACKNOWLEDGMENT AND CONSENT

              The undersigned, each a guarantor or third-party pledgor or
mortgagor with respect to the Company's Obligations to the Lenders under the
Credit Agreement, each hereby (i) acknowledge and consent to the execution,
delivery and performance by Company of the foregoing Amendment, (ii) reaffirm
and agree that the respective guaranty, third-party pledge or security
agreement, deed of trust, or mortgage to which the undersigned is party and all
other documents and agreements executed and delivered by the undersigned to the
Administrative Agent or the Lenders in connection with the Credit Agreement are
in full force and effect, without defense, offset or counterclaim and continue
to guaranty or secure the full amount of the Obligations to the extent provided
in the Loan Documents, and (iii) confirm that this Acknowledgment and Consent is
not required by the terms of the Loan Documents and need not be obtained in
connection with any prior or future waivers of or amendments to the Loan
Documents. (Capitalized terms used herein have the meanings specified in the
Amendment.)

Dated:  October __, 2000    DIAMOND BRANDS INCORPORATED

                            By:      __________________________________________
                                     Name:
                                     Title:

                            EMPIRE CANDLE, INC.

                            By:      __________________________________________
                                     Name:
                                     Title:

                            FORSTER, INC.

                            By:      __________________________________________
                                     Name:
                                     Title:

                                       13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]