Document:

<PAGE>
                                                                   Exhibit 10.16

                             STOCKHOLDERS AGREEMENT

                                  by and among

                             PCA INTERNATIONAL, INC.

                                       and

                   CERTAIN OF THE HOLDERS OF ITS COMMON STOCK

                           Dated as of August 25, 1998

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                       ----
<S>                                                                                                    <C>
Section 1.  Certain Definitions     2

Section 2.  Restrictions on Transfer        11
2.1      Common Stock Subject To This Agreement .........................................................11
2.2      General Restriction ............................................................................12
2.3      Transfers of Common Stock and Option Shares by Management Stockholders .........................13
2.4      Tag-Along Right ................................................................................14
2.5      Drag-Along Right ...............................................................................16
2.6      Transfers Following Initial Public Offering and Other Transfers ................................17

Section 3.  Call Options   20
3.1      Call Options of the Company and the Principal Stockholder ......................................20
3.2      Closing ........................................................................................25
3.3      Termination of Call Options ....................................................................25

Section 4.  Registration Rights     26

Section 5.  Changes in Common Stock; Option Plan; Other       26
5.1      Changes in Common Stock ........................................................................26
5.2      Registration of Option Shares. .................................................................26

Section 6.  Transferees Subject to Agreement        27

Section 7.  Legends        27

Section 8.  Miscellaneous  28
8.1      Amendment ......................................................................................28
8.2      Governing Law ..................................................................................28
8.3      Execution in Counterparts ......................................................................28
8.4      Notices ........................................................................................29
8.5      Entire Agreement; Headings; Gender .............................................................29
8.6      Copy of Agreement with Company .................................................................30
8.7      Specific Performance ...........................................................................30
8.8      Assignment .....................................................................................30
8.9      Third Party Beneficiary ........................................................................31
</TABLE>

Exhibit A         Parties
Exhibit B         Repurchase Percentages
Exhibit C         Form of Registration Rights Agreement

                                       i

<PAGE>

                             STOCKHOLDERS AGREEMENT

                  STOCKHOLDERS AGREEMENT (the "Agreement"), dated as of August
25, 1998, by and among PCA INTERNATIONAL, INC., a North Carolina corporation
(the "Company"), JUPITER PARTNERS II L.P., a Delaware limited partnership
("Jupiter"), and the other parties listed on Exhibit A hereto under the caption
"Management Stockholders" (Jupiter and the Management Stockholders are
collectively referred to herein as the "Stockholders," which term shall also
include any Person who hereafter becomes a party to this Agreement in accordance
with the terms hereof). Capitalized terms used herein and not otherwise defined
shall have the meanings specified in Section 1.

                               W I T N E S S E T H :
                               - - - - - - - - - -

                  WHEREAS, the Stockholders are the holders of a substantial
portion of the issued and outstanding shares of Common Stock of the Company;

                  WHEREAS, the Company has entered into employment and
non-competition agreements with each of the Management Stockholders (each, a
"Employment Agreement");

                  WHEREAS, concurrently with the execution of this Agreement,
pursuant to that certain Stock Option Plan of the Company (the "Option Plan")
(i) the Company is granting to the Management Stockholders options to purchase
shares of Common Stock ("Management Options") at a per share exercise price of
$26.50 per share, and (ii) the

<PAGE>

                                                                               2

Management Stockholders are "rolling over" previously outstanding options to
purchase shares of Common Stock ("Management Roll-over Options"), subject to the
terms and conditions set forth in the Option Plan; and

                  WHEREAS, the parties hereto wish to provide for certain rights
and obligations of the Stockholders with respect to the transfer, purchase and
other rights affecting the Common Stock.

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:

                  Section 1. Certain Definitions. For the purposes of this
Agreement, the following terms and phrases have the following meanings:

                  "Affiliate" means, (i) with respect to any natural Person, the
spouse of such Person, either parent of such Person or of such Person's spouse,
any descendant of any such parent, or any relative of such Person who has the
same home as such Person, and (ii) with respect to any other Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such Person. For purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

<PAGE>
                                                                               3

                  "Affiliated Transferee," with respect to the Principal
Stockholder, means (i) any Affiliate of the Principal Stockholder, (ii) any
employee or partner of the Principal Stockholder or (iii) any employee or
partner of any Affiliate of the Principal Stockholder.

                  "Board" means the Board of Directors of the Company.

                  "business day" shall mean any day except a Saturday, Sunday or
other day on which commercial banks in New York, New York, are authorized by law
to close.

                  "Call for Breach" shall have the meaning specified in Section
                  3.1.4.

                  "Call for Cause" shall have the meaning specified in Section
3.1.1.

                  "Call for Resignation" shall have the meaning specified in
Section 3.1.2.

                  "Call Option" shall mean any right of the Company or the
Principal Stockholder to purchase Call Shares from a Management Stockholder
under Section 3.

                  "Call Shares" shall mean any Option Shares (or any outstanding
Management Options or Management Roll-over Options held by a Management
Stockholder but not yet exercised) with respect to which the Company or the
Principal Stockholder would have a purchase right if a Management Stockholder
ceased to be employed by the Company or any of its subsidiaries for any of the
reasons specified in Section 3.1.

                  "Call Without Cause" shall have the meaning specified in
Section 3.1.3.

                  "Cause," with respect to any Management Stockholder, shall
mean (i) a reasonable good faith determination by the Board that the Management
Stockholder has, in any material respect, willfully failed to follow any of the
Company's written policies or any written directives of the Board (other than by
reason of a voluntary resignation or resignation for Good Reason) and, if such
failure is susceptible of being cured as

<PAGE>

                                                                               4

determined by the Board in good faith, the failure of the Management Stockholder
to cure such failure within 10 business days after receiving written notice
(stating with specificity the nature of such failure) from the Board; or (ii)
any act of willful misconduct, fraud or personal dishonesty by the Management
Stockholder involving the assets of the Company or any of its Affiliates
resulting in material economic or material reputational harm to the Company; or
(iii) the conviction of, or a plea of guilty or nolo contendere by, the
Management Stockholder to a charge of any crime involving a felony; or (iv) the
breach by the Management Stockholder in any material respect of any contract or
other agreement between the Company or any of its Affiliates and the Management
Stockholder and, if such breach is susceptible of being cured as determined by
the Board in good faith, the failure of the Management Stockholder to cure such
breach within 10 business days after receiving written notice (stating with
specificity the nature of such failure) from the Board; notwithstanding the
foregoing, with respect to those Management Stockholders who are parties to
employment agreements with the Company, and such agreements contain a definition
of "Cause," the term "Cause" herein shall be deemed to have the meaning set
forth in such employment agreement.

                  "Change in Control" shall mean (i) such time as the Principal
Stockholder has disposed of at least one-half of the shares of Common Stock
owned by the Principal Stockholder as of the date of this Agreement (as set
forth on Exhibit A) and no longer owns at least a majority of the outstanding
Common Stock of the Company or (ii) the consummation of a sale of all or
substantially all of the assets of the Company and its subsidiaries (other than
to the Principal Stockholder or any Affiliate of the Company);

<PAGE>
                                                                               5

provided, that a Change in Control shall only be deemed to have occurred if
after the event specified in clause (i) the Company does not have any
publicly-traded securities.

                  "Common Stock" means the common stock, par value $.20 per
share, of the Company and any other shares of capital stock of the Company
classified as common stock hereafter authorized.

                  "Company" means PCA International, Inc., a North Carolina
corporation.

                  "Disability," with respect to a Management Stockholder, shall
be defined in the long-term disability plan maintained by the Company.

                  "Drag-Along Right" shall have the meaning specified in Section
2.5.

                  "Employment Agreement" shall have the meaning specified in the
recitals to this Agreement.

                  "Encumbrance" means any mortgage, lien, security interest,
pledge, claim, option, right of first refusal or other like encumbrance with
respect to any share of Common Stock, and "Encumber" shall have a correlative
meaning.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Fair Market Value" shall mean (A) after the Initial Public
Offering, the average of the last reported sales price of the Common Stock for
the 30 consecutive trading days immediately preceding the date on which any such
determination is to be made, as reported by NASDAQ National Market System or a
national securities exchange, and (B) prior to the Initial Public Offering, the
fair market value per share of Common Stock as determined in good faith by the
Board.

<PAGE>
                                                                               6

                  "50% Disposition Date" shall mean such time as the Principal
Stockholder has disposed of at least one-half of the shares of Common Stock
owned by the Principal Stockholder as of the date hereof (as set forth on
Exhibit A).

                  "Fully Diluted Shares" shall mean the total number of the
Company's outstanding shares of Common Stock on a fully diluted, fully converted
basis (assuming the exercise of all options and other securities convertible or
exchangeable into or exercisable for Common Stock).

                  "Good Reason," with respect to a Management Stockholder, means
(i) a material reduction of such Management Stockholder's base salary payable
during any fiscal year by the Company and its Subsidiaries or the requirement by
the Company that the Management Stockholder perform tasks which would be
demeaning or degrading to one in his position, (ii) the failure of the Company
to pay such Management Stockholder his base salary or any of his material
benefits to which he is entitled to be paid during any fiscal year, if such
failure is not cured within ten days of written notice thereof to the Company,
or (iii) material breach by the Company of any material contract or agreement
between the Company and such Management Stockholder.

                  "Initial Public Offering" means the first Public Offering
after the date of this Agreement which yields gross proceeds to the Company in
excess of $25,000,000 pursuant to an effective registration statement under the
Securities Act and which results in the listing or continual listing of such
Common Stock on a national securities exchange or the quotation of such Common
Stock on the NASDAQ National Market System.

<PAGE>
                                                                               7

                  "in-the-money," with respect to options or other securities
convertible into Common Stock, shall mean any options or other such securities
the Fair Market Value of whose underlying shares of Common Stock exceeds the
then applicable exercise price.

                  "Involuntary Transfer," with respect to any shares of Common
Stock, means any involuntary Transfer, proceeding or action (other than a
Transfer on the death of a Management Stockholder) by or in which a Stockholder
(or his Permitted Transferee) shall be deprived or divested of any right, title
or interest in or to any of its shares of Common Stock, including, without
limitation, any seizure under levy of attachment or execution, any Transfer in
connection with bankruptcy (whether pursuant to the filing of a voluntary or an
involuntary petition under any applicable bankruptcy law) or other court
proceeding to a debtor-in-possession, trustee in bankruptcy or receiver or other
officer or agency, any Transfer to a state or to a public officer or agency
pursuant to any statute pertaining to escheat or abandoned property, any
Transfer pursuant to a divorce action or any Transfer upon or occasioned by the
legal incompetence of any Stockholder (or his Permitted Transferee) or any
Transfer to a legal representative of any Stockholder (or his Permitted
Transferee).

                  "Management Options" shall have the meaning specified in the
recitals to this Agreement.

                  "Management Roll-over Options" shall have the meaning
specified in the recitals to this Agreement.

                  "Management Stockholders" means the individuals listed on
Exhibit A under the caption

                  "Management Stockholders," any Stockholder who acquires Common
Stock from a Management Stockholder and who becomes a party to this Agreement,
and

<PAGE>
                                                                               8

any other Stockholder (including any Person who acquires Option Shares) who
hereafter becomes a party to this Agreement and is denominated as a "Management
Stockholder."

                  "Notice" shall have the meaning specified in Section 2.4.

                  "Option Plan" shall have the meaning specified in the recitals
to this Agreement.

                  "Option Shares" shall mean any shares of Common Stock issued
pursuant to the exercise of a Management Option or a Management Roll-over
Option.

                  "Option Share Restriction Period" shall mean any time prior to
August 21, 2006.

                  "Permitted Transferee" means, with respect to a Stockholder
who is a natural person, (a) the spouse, parents, parents-in-law or siblings (by
blood or adoption) of such Stockholder or the lineal descendants (by blood or
adoption) of such Stockholder or such Stockholder's spouse, parents or siblings,
(b) a trust, the beneficiaries of which include only such Stockholder or spouse,
parents, or siblings (by blood or adoption) of such Stockholder or the lineal
descendants (by blood or adoption) of such Stockholder, spouse, parents or
siblings, or a charitable trust that is an Affiliate of such Stockholder, or (c)
upon such Stockholder's death, executors, administrators, testamentary trustees,
legatees or beneficiaries of such Stockholder.

                  "Person" shall mean an individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.

                  "Potential Participant" shall have the meaning specified in
Section 2.4.

<PAGE>
                                                                               9

                  "Principal Stockholder" shall mean Jupiter and, where the
context refers to the ownership by the Principal Stockholder of Common Stock,
shall also mean its Affiliated Transferees who own Common Stock.

                  "Prospective Seller" shall have the meaning specified in
Section 2.4. "Prospective Transferee" shall have the meaning specified in
Section 6.

                  "Public Offering" means a public offering of Common Stock
pursuant to an effective registration statement under the Securities Act.

                  "Public Sale" means a Transfer of Common Stock pursuant to a
Public Offering or under Rule 144 (or any successor rule) under the Securities
Act.

                  "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, in the form of Exhibit C.

                  "Repurchase Price" shall mean, with respect to a share of
Common Stock, the Fair Market Value thereof; provided, that if at the time of
any determination of the Repurchase Price, the Company has not completed an
Initial Public Offering, then in determining the Repurchase Price for
transactions involving a Management Stockholder who owns Call Shares with a
value in excess of $500,000, if the Management Stockholder disagrees with the
Board's determination of Fair Market Value, such Fair Market Value shall be
determined by an independent appraiser selected jointly by the Company and such
Management Stockholder, which appraiser shall determine the fair market value
per share of Common Stock (taking into consideration the lack of liquidity and
non-control nature of the Call Shares). The Management Stockholder who disagrees
with the Board's determination of Fair Market Value will pay the cost of such
appraisal unless it is

<PAGE>
                                                                              10

determined by the appraiser that the Board's determination was more than 10%
lower than the appraiser's determination, in which case the Company will pay
such cost.

                  "Restricted Shares" means all shares of Common Stock other
than (i) shares that have been registered under a registration statement
pursuant to the Securities Act, (ii) shares with respect to which a sale has
been made pursuant to Rule 144 promulgated under the Securities Act (or any
successor rule), (iii) shares with respect to which a sale may be made pursuant
to Rule 144(k) promulgated under the Securities Act (or any successor rule), or
(iv) shares with respect to which the holder thereof shall have delivered to the
Company an opinion of counsel, in form and substance reasonably satisfactory to
the Company, to the effect that the Transfer of such shares may be effected
without registration under the Securities Act.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Stockholders" shall have the meaning specified in the
introductory paragraph of this Agreement.

                  "Subsidiary," with respect to any Person, means any other
Person of which such Person owns or controls, directly or indirectly, more than
50% of the outstanding voting shares or other voting interests or equity
interests.

                  "Substitute Purchase Offer" shall have the meaning specified
in Section 2.4.

                  "Tag-Along Common Stock" shall have the meaning specified in
Section 2.4.

                  "Tag-Along Notice" shall have the meaning specified in Section
2.4.

                  "Tag-Along Right" shall have the meaning specified in Section
2.4.

<PAGE>
                                                                              11

                  "Threshold Amount" shall mean the number of shares of Common
Stock which is equal to 20% of (i) the shares of Common Stock owned by the
Principal Stockholder on the date hereof, plus (to the extent not included in
(i)) (ii) any shares purchased by the Principal Stockholder after the date
hereof pursuant to Section 4.2 of the Agreement and Plan of Merger dated as of
April 20, 1998 by and among the Company and Jupiter Acquisition Corp.

                  "Transfer," with respect to any shares of Common Stock, means
any transfer, assignment, sale, gift, pledge, hypothecation or other disposition
of Common Stock or of all or part of the voting power (other than the granting
of a revocable proxy) associated with the Common Stock whatsoever, or any other
transfer of beneficial ownership of Common Stock, including, without limitation,
any Involuntary Transfer; and "Transferee" shall have a correlative meaning.

                  Section 2.  Restrictions on Transfer.

                  2.1 Common Stock Subject To This Agreement. Unless otherwise
provided herein, all shares of Common Stock of the Company (including, without
limitation, any Option Shares or Call Shares) now owned or hereafter acquired by
any of the Stockholders or any Transferee thereof (including any Person who
acquires Common Stock by means of an Involuntary Transfer, but not including any
Person who acquires Common Stock pursuant to a Public Sale) shall be subject to
the terms of this Agreement.

                  2.2 General Restriction.

                           2.2.1 General. Each Stockholder agrees that he or it
will not, directly or indirectly, make any Transfer of any Common Stock, except
in compliance with the Securities Act. Each Management Stockholder further
agrees to the restrictions on

<PAGE>
                                                                              12

Transfer set forth in Section 2.3. Each Stockholder agrees (i) that any direct
or indirect Transfer of Common Stock held by it will be made only in compliance
with Section 6 (Transferees Subject to Agreement), to the extent applicable, and
(ii) to be bound by the provisions of Section 2.4 (Tag-Along Right) with respect
to its Common Stock. Any Transfer effected, or purported or attempted to be
effected, not in accordance with the terms and conditions of this Agreement
shall be void and of no effect. In connection with any voided Transfer, the
Company may hold and refuse to transfer any Common Stock or certificate therefor
tendered for transfer, in addition and without prejudice to any and all other
rights and remedies which may be available.

                           2.2.2 Involuntary Transfer. Any Person who acquires
Common Stock from a Stockholder by means of an Involuntary Transfer shall be
deemed to have become a party to this Agreement in the place and stead of the
transferring Stockholder and shall be bound by the terms hereof; provided, that
prior to the Company transferring such Common Stock on its books and records to
such Person and prior to the exercise by such Person of any rights hereunder,
such Person shall have delivered an appropriate document, in form and substance
reasonably satisfactory to the Company, confirming that such Person takes such
shares subject to the terms and conditions of this Agreement, and such Person
thereupon shall be deemed to be a Permitted Transferee of such Stockholder.

                  2.3 Transfers of Common Stock and Option Shares by Management
Stockholders.

                           2.3.1 Each Management Stockholder agrees that he will
not, directly or indirectly, Transfer any shares of Common Stock except, subject
to compliance with Section 6 (Transferees Subject to Agreement), (i) Transfers
of Common Stock

<PAGE>
                                                                              13

pursuant to the procedures, and subject to the limitations, set forth in Section
2.4 (Tag-Along Right), Section 2.5 (Drag-Along Right), Section 2.6 (Transfers
Following Initial Public Offering and Other Transfers) or transfers under the
Registration Rights Agreement, or (ii) Transfers of Common Stock to the Company
or the Principal Stockholder pursuant to the provisions of Section 3 (Call
Options) or otherwise, or (iii) Transfers of Common Stock to any Permitted
Transferee of such Management Stockholder, or (iv) Transfers consisting of
pledges of Common Stock to the Company, or (v) Transfers of Common Stock to any
Person pursuant to an Involuntary Transfer or (vi) Transfers after February 21,
2006 (which shall not require compliance with Section 6); provided that, in the
case of this clause (v), such Person shall have delivered an appropriate
document, in form and substance reasonably satisfactory to the Company,
confirming that such Person takes such shares subject to the terms and
conditions of this Agreement, and such Person thereupon shall be deemed to be a
Permitted Transferee of such Management Stockholder. Each Management Stockholder
further agrees that, notwithstanding the foregoing, he will not, directly or
indirectly, Transfer any Option Shares or Call Shares during the Option Share
Restriction Period other than pursuant to Section 2.4 (Tag-Along Right), Section
2.5 (Drag-Along Right) or Section 2.6 (Transfers Following Initial Public
Offering and Other Transfers); thereafter, such Option Shares and Call Shares
will continue to be subject to the other provisions of this Agreement.

                  2.4 Tag-Along Right. Other than in connection with the
exercise of the Drag-Along Right or a Call Option or pursuant to a Public Sale
permitted hereunder, in the event that any Stockholder (as used in this Section,
a "Prospective Seller") shall receive a bona fide offer to purchase shares of
Common Stock (a "Purchase Offer") from any Person

<PAGE>
                                                                              14

(including, without limitation, any offer by a Management Stockholder, but not
including (a) an offer by a Permitted Transferee of such Prospective Seller or
(b) an offer by the Principal Stockholder), the Prospective Seller shall either
decline such Purchase Offer or, if the Prospective Seller determines to accept
such Purchase Offer, then, prior to accepting any Purchase Offer, arrange for
the proposed purchaser to make, in lieu of the Purchase Offer, a substitute bona
fide offer to purchase the same number of shares of Common Stock that were the
subject of the Purchase Offer, and upon the same terms as the Purchase Offer,
from the Stockholders owning Common Stock as a group in the relative proportions
and otherwise as described in the second succeeding sentence (the "Substitute
Purchase Offer"). In the event a Substitute Purchase Offer is made, the
Prospective Seller shall give the other Stockholders written notice thereof (the
"Notice") specifying (i) the number of shares of Common Stock that is the
subject of such Substitute Purchase Offer, (ii) the terms (including the
proposed date of consummation thereof, which shall be not less than 30 days
following the date of the Notice) of such Substitute Purchase Offer, and (iii)
the identity of the proposed purchaser. Upon receipt of the Notice, each
Stockholder (a "Potential Participant") shall have the right (the "Tag-Along
Right") to sell that number of shares of Common Stock equal to the product of
(a) the total number of shares of Common Stock proposed to be purchased and (b)
a fraction, the numerator of which shall be the number of shares of Tag-Along
Common Stock (as defined below) owned by such Potential Participant and the
denominator of which shall be the number of shares of Tag-Along Common Stock
owned by all Potential Participants (including the Prospective Seller) electing
to participate in such sale. For purposes of the foregoing, "Tag-Along Common
Stock" shall mean all shares of Common Stock, including shares issuable

<PAGE>
                                                                              15

pursuant to options which, at the time of the Notice, are capable of being
exercised in accordance with the terms of the Option Plan or the related option
agreement and are "in-the-money." The Tag-Along Right may be exercised by a
Potential Participant by delivery, not later than 15 days after receipt of the
Notice, of a written notice (the "Tag-Along Notice") to the Prospective Seller,
which shall state the number of shares of Common Stock that such Potential
Participant wishes to include in such sale to the purchaser. The Prospective
Seller, together with any electing Potential Participants, shall participate in
any purchase made by the purchaser specified in the Notice on the terms set
forth therein (or on terms no less favorable to the purchaser) and as provided
in the Tag-Along Notice during the 90-day period following the date of the
Notice. Any purchases by such purchaser following such 90-day period shall
require a new Notice. To the extent a Potential Participant does not participate
in such sale, the Prospective Seller and the other Potential Participants may
sell that number of shares of Common Stock (in addition to the shares of Common
Stock otherwise permitted to be sold by them hereunder) equal to their
proportionate share of the number of shares with respect to which such Potential
Participant had the opportunity to sell hereunder. All Transfers made pursuant
to this Section 2.4 shall be subject to the provisions of Section 6 (Transferees
Subject to Agreement). The provisions of this Section 2.4 shall terminate when
both of the following conditions have been satisfied: (i) an Initial Public
Offering has occurred; and (ii) the Principal Stockholder no longer owns Common
Stock in excess of the Threshold Amount.

                  2.5 Drag-Along Right. If the Principal Stockholder proposes to
make a bona fide sale of its shares of Common Stock to a third party
un-Affiliated with the Principal Stockholder (which may include another
Stockholder) in an amount equal to at

<PAGE>
                                                                              16

least 10% of the Fully Diluted Shares (which amount shall be calculated based on
the transaction in question or a series of transactions related thereto), the
Principal Stockholder shall have the right (the "Drag-Along Right"), exercisable
upon 15 days' prior written notice, to require the other Stockholders to sell a
corresponding percentage (as the percentage being sold by the Principal
Stockholder) of the number of shares of Common Stock held by such other
Stockholders to such third party upon terms no less favorable to the other
Stockholders than those that apply to the Principal Stockholder with respect to
such third party sale. For purposes of calculating such corresponding
percentage, there shall be included in such calculation (without duplication)
(i) shares of Common Stock, (ii) shares issuable pursuant to the exercise of
Management Options and Management Roll-over Options that are exercisable in
accordance with the Option Plan or the related option agreement and are
in-the-money, even if such sale is during the Option Share Restriction Period,
and (iii) Call Shares. Each Stockholder hereby agrees to cooperate with the
Principal Stockholder and to take any and all action reasonably required in
connection with the consummation of such third party sale. Without limiting the
foregoing, at the closing of any sale under this Section 2.5, each Stockholder
shall deliver certificates representing the shares of Common Stock to be sold,
duly endorsed for transfer and accompanied by all requisite stock transfer
taxes, and each Stockholder shall represent and warrant that it is the
beneficial owner of such shares free and clear of any Encumbrances, with full
authority and power to transfer such shares. All Transfers made pursuant to this
Section 2.5 shall be subject to the provisions of Section 6 (Transferees Subject
to Agreement) unless the Principal Stockholder otherwise determines. The
provisions of this Section 2.5 shall terminate when both of the following
conditions have been satisfied:

<PAGE>
                                                                              17

(i) an Initial Public Offering has occurred; and (ii) the Principal Stockholder
no longer owns Common Stock in excess of the Threshold Amount.

                  2.6 Transfers Following Initial Public Offering and Other
Transfers.

                           2.6.1 From and after the date of the Initial Public
Offering, and provided that at the time of the Transfer by a Management
Stockholder referred to below the Principal Stockholder continues to own Common
Stock in excess of the Threshold Amount, a Management Stockholder and his
Permitted Transferees may Transfer shares of Common Stock held by them (other
than, until the fifth anniversary of the date hereof, any Call Shares) (x)
pursuant to the exercise of their rights under the Registration Rights
Agreement, (y) pursuant to a sale under Rule 144 of the Securities Act which is
subject to the volume limitations set forth in subparagraph (e)(1) of such Rule;
provided, that a Management Stockholder and his Permitted Transferees as a group
may only Transfer their Common Stock under clauses (x) and (y) in an aggregate
amount equal to the product of (i)(A) prior to the 50% Disposition Date,
one-half of, and (B) after the 50% Disposition Date, 100% of, the total number
of shares of Public Sale Stock (as defined below) held by such Management
Stockholder as of the date hereof (or, if such Management Stockholder and his
Permitted Transferees as a group have acquired additional Common Stock after the
date hereof in a manner that was not in violation of this Agreement, such
greater number) multiplied by (ii) a fraction, the numerator of which shall be
the aggregate number of shares of Common Stock that have been Transferred by the
Principal Stockholder prior to the date of the proposed Transfer by such
Management Stockholder, and the denominator of which shall be the total number
of shares of Common Stock held by the Principal Stockholder as of the date
hereof (or, if the Principal Stockholder has acquired additional

<PAGE>
                                                                              18

Common Stock after the date hereof in a manner that was not in violation of this
Agreement, such greater number), or (z) pursuant to an exemption from the
registration requirements of the Securities Act, but only if at the time of such
Transfer by such Management Stockholder the Principal Stockholder is also
Transferring Common Stock; provided that a Management Stockholder and his
Permitted Transferees as a group may only Transfer their Common Stock under this
clause (z) in an aggregate amount equal to the product of (i)(A) prior to the
50% Disposition Date, one-half of, and (B) after the 50% Disposition Date, 100%
of, the total number of shares of Public Sale Stock held by such Management
Stockholder as of the date hereof (or, if such Management Stockholder and his
Permitted Transferees as a group have acquired additional Common Stock after the
date hereof in a manner that was not in violation of this Agreement, such
greater number) multiplied by (ii) a fraction, the numerator of which shall be
the aggregate number of shares of Common Stock then being Transferred by the
Principal Stockholder, and the denominator of which shall be the total number of
shares of Common Stock held by the Principal Stockholder as of the date hereof
(or, if the Principal Stockholder has acquired additional Common Stock after the
date hereof in a manner that was not in violation of this Agreement, such
greater number). For purposes of the foregoing, "Public Sale Stock" shall mean
all shares of Common Stock, plus all shares of Common Stock issuable pursuant to
Management Options and Management Roll-over Options, which at the time of such
proposed Transfer, are capable of being exercised in accordance with the terms
of the Option Plan or the related option agreement and are "in-the-money," but
until the fifth anniversary of the date hereof, Public Sale Stock shall not
include any Management Roll-over Options that are subject to a Call Option
pursuant to Section 3.1.3.

<PAGE>
                                                                              19

                           2.6.2 From and after the date of the Initial Public
Offering, and provided that at the time of the Transfer referred to below the
Principal Stockholder does not continue to own Common Stock in excess of the
Threshold Amount, a Management Stockholder and his Permitted Transferees may
Transfer shares of Common Stock held by them (other than, until the fifth
anniversary of the date hereof, any Call Shares) pursuant to the exercise of
their rights under the Registration Rights Agreement or pursuant to an
applicable exemption from the registration requirements of the Securities Act.

                           2.6.3 At any time after the Principal Stockholder
does not continue to own Common Stock in excess of the Threshold Amount, and
there has not occurred an Initial Public Offering, a Management Stockholder and
his Permitted Transferees may transfer shares of Common Stock held by them
pursuant to an applicable exemption from the registration requirements of the
Securities Act.

                           2.6.4 Any shares of Common Stock Transferred pursuant
to a Public Sale or pursuant to Section 2.6.3 shall no longer be subject to the
provisions of this Agreement.

                  Section 3.  Call Options.

                  3.1 Call Options of the Company and the Principal Stockholder.

                           3.1.1  Termination for Cause.  Subject to Section 3.3
(Termination of Call Options), if the employment by the Company of any
Management Stockholder shall be terminated by the Company or any of its
subsidiaries for Cause, then (A) all Management Options held by the applicable
Management Stockholder and his Permitted Transferees shall be cancelled without
consideration and (B) the Company and the Principal Stockholder shall have the
right, but not the obligation, to purchase (the "Call for

<PAGE>
                                                                              20

Cause") from the applicable Management Stockholder and his Permitted
Transferees, and if the Company and/or the Principal Stockholder exercises such
right, such Management Stockholder and his Permitted Transferees shall have the
obligation to sell to the Company and/or the Principal Stockholder, all or any
portion of the Call Shares held by such Management Stockholder and his Permitted
Transferees (it being agreed that the number of shares subject to the Call for
Cause shall be the maximum number of Call Shares that may be held by such
Management Stockholder and his Permitted Transferees during the 180-day period
during which such Call for Cause may be exercised), at a price per share (but
not less than zero) equal to the lower of (i) $26.50 per share (less, in the
case of options, the exercise price thereof) and (ii) the Repurchase Price
(less, in the case of options, the exercise price thereof). Notwithstanding the
foregoing, following the fifth anniversary of the date hereof, the Company's
call rights under this Section 3.1.1 shall apply only to Call Shares
representing Management Options or Option Shares issued pursuant to the exercise
of Management Options and shall not apply to Call Shares representing Management
Roll-over Options or Option Shares issued pursuant to the exercise of Management
Roll-over Options. For purposes of this Section 3.1.1, a termination for Cause
shall be deemed to have occurred with respect to a Management Stockholder if
such Management Stockholder resigns from his employment with the Company after
committing any act which, with notice or lapse of time or both, would constitute
an event of Cause under the definition of "Cause."

                           3.1.2 Termination by Resignation. Subject to Section
3.3 (Termination of Call Options), if prior to the fifth anniversary of the date
hereof any Management Stockholder shall cease to be employed by the Company or
any of its

<PAGE>
                                                                              21

subsidiaries as a result of his resignation (other than for Good Reason and
other than a resignation which occurs after committing any act which, with
notice or lapse of time or both, would constitute an event of Cause under the
definition of such term), then the Company and the Principal Stockholder shall
have the right, but not the obligation, to purchase (the "Call for Resignation")
from the applicable Management Stockholder and his Permitted Transferees, and if
the Company and/or the Principal Stockholder exercises such right, such
Management Stockholder and his Permitted Transferees shall have the obligation
to sell to the Company and/or the Principal Stockholder, all or any portion of
the Call Shares held by such Management Stockholder and his Permitted
Transferees (it being agreed that the number of shares referred to above shall
be the maximum number of shares of Call Shares that may be held by such
Management Stockholder and his Permitted Transferees during the 180-day period
during which such Call for Resignation may be exercised) multiplied by the
percentage specified on Exhibit B opposite the relevant period in which such
resignation occurs, at a price per share (but not less than zero) equal to the
lower of (i) $26.50 per share (less, in the case of options, the exercise price
thereof) and (ii) the Repurchase Price (less, in the case of options, the
exercise price thereof).

                           3.1.3  Termination Without Cause.  Subject to Section
3.3 (Termination of Call Options), if prior to the fifth anniversary of the date
hereof any Management Stockholder shall cease to be employed by the Company or
any of its subsidiaries for any reason whatsoever, except due to death,
Disability, termination for Cause or resignation (other than resignation for
Good Reason and resignation deemed to be a termination for Cause under Section
3.1.1), the Company and the Principal Shareholder shall have the right, but not
the obligation, to purchase (the "Call Without Cause") from

<PAGE>
                                                                              22

the applicable Management Stockholder and his Permitted Transferees, and if the
Company and/or the Principal Stockholder exercises such right, such Management
Stockholder and his Permitted Transferees shall have the obligation to sell to
the Company and/or the Principal Stockholder, all or any portion of the Call
Shares held by such Management Stockholder and his Permitted Transferees (it
being agreed that the number of shares referred to above shall be the maximum
number of Call Shares that may be held by such Management Stockholder and his
Permitted Transferees during the 180-day period during which such Call Without
Cause may be exercised) multiplied by the percentage specified on Exhibit B
opposite the relevant period in which such cessation occurs, at a price per
share equal to the Repurchase Price (less, in the case of options, the exercise
price thereof).

                           3.1.4 Management Stockholder Breach of Employment
Agreement. Subject to Section 3.3 (Termination of Call Options), if any
Management Stockholder materially breaches any provision of Section 6
(Noncompetition, Secrecy and Inventions) of his Employment Agreement (or any
successor provision of any successor agreement) and, if such breach is
susceptible of being cured as determined by the Board in good faith, such breach
is not cured within ten business days after receiving written notice (stating
with specificity the nature of the breach) from the Board, then (A) all
Management Options held by the applicable Management Stockholder and his
Permitted Transferees shall be cancelled without consideration and (B) the
Company, among the other rights and remedies set forth in the Employment
Agreement, and the Principal Stockholder shall have the right, but not the
obligation, to purchase (the "Call for Breach") from the applicable Management
Stockholder and his Permitted Transferees, and if the Company and/or the

<PAGE>
                                                                              23

Principal Stockholder exercises such right, the Management Stockholder and his
Permitted Transferees shall have the obligation to sell to the Company and/or
the Principal Stockholder, all or any portion of the Call Shares held by such
Management Stockholder and his Permitted Transferees (it being agreed that the
number of shares subject to the Call for Breach shall be the maximum number of
Call Shares held by such Management Stockholder and his Permitted Transferees
during the 180-day period during which such Call for Breach may be exercised) at
a price per share (but not less than zero) equal to the lower of (i) $26.50 per
share (less, in the case of options, the exercise price thereof) and (ii) the
Repurchase Price (less, in the case of options, the exercise price thereof).
Notwithstanding the foregoing, following the fifth anniversary of the date
hereof, the Company's call rights under this Section 3.1.4 shall apply only to
Call Shares representing Management Options or Option Shares issued pursuant to
the exercise of Management Options and shall not apply to Call Shares
representing Management Roll-over Options or Option Shares issued pursuant to
the exercise of Management Roll-over Options.

                           3.1.5 Procedure. The Company may exercise its rights
pursuant to this Section 3.1 by providing written notice to the relevant
Management Stockholder and the Principal Stockholder not later than 90 days
after written notice (the "Company Notice") from the Company to the Management
Stockholder (with a copy to the Principal Stockholder) of the event triggering
such rights, indicating the amount of Call Shares subject to the relevant Call
Option. Any portion of such Call Option not exercised within such 90-day period
shall expire with respect to the Company and be void and of no further force and
effect. Provided that the Company has not exercised its rights in full with
respect to such relevant Call Option under this Section 3.1, the Principal
Stockholder may

<PAGE>
                                                                              24

exercise the rights of the Company (with respect to that portion of the Call
Option not exercised by the Company) under this Section 3.1 on its own behalf by
providing written notice to the relevant Management Stockholder not later than
180 days after the date of the Company Notice. Any portion of the relevant Call
Option not exercised within such 180-day period shall expire with respect to the
Principal Stockholder and be void and of no further force and effect.

                  3.2 Closing. The closing of any purchase by the Company or the
Principal Stockholder under this Section 3 shall be held at the principal office
of the Company on the 45th day after the date on which a notice of exercise of a
Call Option is given hereunder or at such other time and place as the parties to
the transaction may agree upon. At the closing of any purchase under this
Section 3, the applicable Stockholder and his Permitted Transferees shall
deliver certificates representing the Call Shares to be sold, duly endorsed for
transfer and accompanied by all requisite stock transfer taxes, and the
Stockholder and his Permitted Transferees shall represent and warrant that each
is the beneficial owner of such shares free and clear of any Encumbrances, with
full authority and power to transfer such shares. Payment for any Call Shares
shall be made by the Company in cash or, in the event that the Company's Board
determines in good faith that it would not be advisable to make such payment in
cash because the Company is constrained by financing or other arrangements, by a
subordinated note (subordinated to all indebtedness of the Company for money
borrowed) with interest at the prime rate of NationsBank, N.A., and a maturity
of two years. At such closing, the parties shall execute and/or deliver such
additional documents as are otherwise reasonably necessary or appropriate to
consummate the transfers.

<PAGE>
                                                                              25

                  3.3 Termination of Call Options. Upon the occurrence of a
Change in Control, any theretofore unexercised Call Options shall terminate and
be of no further force or effect. Any shares of Common Stock Transferred in
accordance with the provisions of Section 2.4 (Tag-Along Right), Section 2.5
(Drag-Along Right) or Section 2.6 (Transfers Following Initial Public Offering)
(other than to a Person who is a Management Stockholder on the date hereof or to
any Permitted Transferee of such Management Stockholder) shall no longer be
subject to the Call Options.

                  Section 4. Registration Rights. The Company hereby grants to
the Principal Stockholder, the Management Stockholders and each of their
Permitted Transferees, registration rights with respect to the Common Stock on
the terms and subject to the conditions set forth in the Registration Rights
Agreement.

                  Section 5.  Changes in Common Stock; Option Plan; Other.

                  5.1 Changes in Common Stock. If there is any change in the
Common Stock by way of stock split, reverse stock split, stock dividend,
reclassification, merger, consolidation, reorganization, recapitalization or any
similar means, then all appropriate adjustments to the provisions hereof shall
be made so that the rights and obligations of the parties hereto under this
Agreement shall continue with respect to the Common Stock as so changed.

                  5.2 Registration of Option Shares. At all times during which
the Company is subject to the requirements to file reports pursuant to Section
13 or 15(d) of the Exchange Act, the Company shall cause all Option Shares, at
any time when the options with respect thereto are exercisable, to be registered
under the Securities Act on Form S-8 (or any successor form). Nothing in this
Section 5.2 will provide any

<PAGE>
                                                                              26

Management Stockholder the right to make any transfer unless such transfer is
otherwise expressly permitted by this Agreement.

                  Section 6. Transferees Subject to Agreement. Each Stockholder
agrees that it will not make any Transfer (including, without limitation, to a
Permitted Transferee but excluding a Transfer in a Public Sale) unless, prior to
the consummation of any such Transfer, the Person (other than any then current
Stockholder) to whom such Transfer will be made (a "Prospective Transferee")
executes and delivers to the Company an agreement, in form and substance
reasonably satisfactory to the Company, whereby such Prospective Transferee
confirms that it shall be deemed to be a Stockholder for the purposes of, and
shall be subject to, this Agreement.

                  Section 7.  Legends.

                  7.1 Each certificate evidencing shares of Common Stock shall
         bear a legend in substantially the following form:

                  "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
                  REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON
                  THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS MADE PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR
                  PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
                  SUCH ACT. THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE
                  SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, ALL AS SET FORTH
                  IN A

<PAGE>
                                                                              27

                  STOCKHOLDERS AGREEMENT, A COPY OF WHICH IS ON FILE AT THE
                  PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER."

                  7.2 In the event that any shares of Common Stock shall cease
to be Restricted Shares, the Company shall, upon the written request of the
holder thereof, promptly issue to such holder a new certificate evidencing such
shares without the first two sentences of the legend required by Section 7.1. In
the event any shares of Common Stock shall cease to be subject to the
restrictions on transfer and repurchase set forth in this Agreement, the Company
shall, upon the written request of the holder thereof, promptly issue to such
holder a new certificate evidencing such shares without the third sentence of
the legend required by Section 7.1.

                  Section 8.  Miscellaneous.

                  8.1 Amendment. This Agreement cannot be amended orally, but
only by an agreement in writing signed by the Company, the Principal Stockholder
and the holders of at least 50% of the shares of Common Stock held by all of the
Management Stockholders and their Permitted Transferees as a group, except that
the Company may amend Exhibit A of this Agreement to reflect changes made in
accordance with this Agreement.

                  8.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE, AND TO BE PERFORMED ENTIRELY, IN NEW YORK.

<PAGE>
                                                                              28

                  8.3 Execution in Counterparts. This Agreement may be signed in
one or more counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

                  8.4 Notices. All communications provided for herein shall be
in writing and,

                           (i) if addressed to a Stockholder, shall be delivered
or mailed or telecopied to such Stockholder at its address specified on Exhibit
A (or an annex thereto, if such Stockholder shall have become a party hereto
pursuant to Section 6), or to such other address as such Stockholder shall have
notified the Company in writing, or

                           (ii) if addressed to the Company, shall be delivered
or mailed or telecopied to it at PCA International, Inc., 815 Matthews-Mint Hill
Road, Matthews, NC 28105, Attention: John Grosso, Fax (704) 847-1548, with a
copy to the Principal Stockholder, c/o Jupiter Partners II L.P., 30 Rockefeller
Plaza, Suite 4525, New York, New York 10112, Attention: John A. Sprague, Fax:
(212) 332-2829, or to such other address as the Company or the Principal
Stockholder, as the case may be, shall have notified all Stockholders in
writing. Except as otherwise expressly provided herein, any communication shall
be deemed to have been given when delivered (if delivered by hand or by
reputable overnight courier service), in the case of facsimile transmission,
when telecopied with confirmation of transmission, or if mailed, shall be deemed
to have been given three days after having been so mailed.

                  8.5 Entire Agreement; Headings; Gender. This Agreement
(including the Exhibits hereto) and the Agreements referred to herein embody the
entire agreement and understanding among the parties and supersede all prior
agreements and

<PAGE>
                                                                              29

understandings relating to the subject matter hereof. The headings in and date
of this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof. The term "its" is used in this Agreement
for convenience only and shall be deemed to include, where applicable, "her or
his," and vice versa. Similarly, the pronoun "it" when referring to a
Stockholder shall be deemed to include, where applicable, "her or she" or "him
or he," and vice versa.

                  8.6 Copy of Agreement with Company. A counterpart of this
Agreement shall be filed with the Company at its principal office.

                  8.7 Specific Performance. The parties recognize that the
obligations imposed on them in this Agreement are special, unique and of
extraordinary character, and that in the event of breach by any party, damages
will be an insufficient remedy; consequently, it is agreed that the parties
hereto may have specific performance (in addition to damages) as a remedy for
the enforcement hereof, without proving damages. No party shall raise any
argument as to the sufficiency of money damages.

                  8.8 Assignment. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns;
provided, however, that this Agreement may not be assigned by the Company or any
of the Management Stockholders without the prior written consent of the Company,
the Principal Stockholder and the holders of at least 50% of the shares of
Common Stock held by all of the Management Stockholders and their Permitted
Transferees as a group, except that (i) the Company may assign its rights herein
to any successor to all or substantially all of its assets (by merger or
otherwise); (ii) subject to Section 6 (Transferees Subject to Agreement), any
Management

<PAGE>
                                                                              30

Stockholder may assign its rights under this Agreement to any Permitted
Transferee of its shares of Common Stock; and (iii) each Stockholder's rights
under the Registration Rights Agreement shall inure to the benefit of any holder
of Registrable Securities (as defined in the Registration Rights Agreement). Any
purported assignment made in violation of this Agreement shall be void and of no
force and effect.

                  8.9 Third Party Beneficiary. Nothing in this Agreement,
express or implied, is intended or shall confer upon anyone other than the
parties hereto (and their respective permitted successors and assigns) any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

                  IN WITNESS WHEREOF, the parties hereto have hereunder signed
their names or have caused this Agreement to be duly executed by their officers
thereunder duly authorized as of the date first above written.

                           PCA INTERNATIONAL, INC.

                           By:   /s/ John Grosso
                                ------------------------------------------------
                                   Authorized Officer

                           STOCKHOLDERS:

                            /s/ John Grosso
                           -----------------------------------------------------
                           Name:  John Grosso

                            /s/ Bruce Fisher
                           -----------------------------------------------------
                           Name:  Bruce Fisher

                            /s/ R. Michael Spencer
                           -----------------------------------------------------
                           Name: R. Michael Spencer

<PAGE>
                                                                              31

                            /s/ Lawrence W. Stalvey
                           -----------------------------------------------------
                           Name: Lawrence W. Stalvey

                            /s/ John F. Perry
                           -----------------------------------------------------
                           Name: John F. Perry

                            /s/ James Robert Wren, Jr.
                           -----------------------------------------------------
                           Name: James Robert Wren, Jr.

                            /s/ Leslie E. Miller, Jr.
                           -----------------------------------------------------
                           Name:  Leslie E. Miller, Jr.

                            /s/ John M. Davis
                           -----------------------------------------------------
                           Name: John M. Davis

                            /s/ John W. Beaty
                           -----------------------------------------------------
                           Name: John W. Beaty

                            /s/ David J. Withington
                           -----------------------------------------------------
                           Name: David J. Withington

                            /s/ Gary W. Ingle
                           -----------------------------------------------------
                           Name: Gary W. Ingle

                            /s/ Eric H. Jeltrup
                           -----------------------------------------------------
                           Name: Eric H. Jeltrup

                           /s/ Jim Mattox
                           -----------------------------------------------------
                           Name:  Jim Mattox

<PAGE>
                                                                              32

                            /s/ Bruce Stroncek
                           ----------------------------------------------------
                           Name: Bruce Stroncek

                            /s/ Mark A. Hughes
                           ----------------------------------------------------
                           Name: Mark A. Hughes

<PAGE>
                                                                              33

                                        JUPITER PARTNERS II, L.P.

                                        By:  Ganymede LLC, its general partner

                                             By: /s/ John A. Sprague
                                                 -------------------------------
                                                  Name: John A. Sprague
                                                  Title: Managing Member

<PAGE>
                                                                              34

         EXHIBIT A

                                     PARTIES

 I.    PRINCIPAL STOCKHOLDER:                  NUMBER OF COMMON SHARES
                                               OWNED AS OF DATE HEREOF:
       Name and Address
       [To Come]

 II.   MANAGEMENT STOCKHOLDERS:

       Name and Address

       [To Come]

<PAGE>
                                                                              35

         EXHIBIT B

                             REPURCHASE PERCENTAGES

                      Anniversary from             Repurchase Percentage
                      Date of Agreement            ----------------------
                      -----------------

              On or before 1st Anniversary                             100%

              Between 1st and on or before 2nd                          80%
              Anniversary

              Between 2nd and on or before 3rd                          60%
              Anniversary

              Between 3rd and on or before 4th                          40%
              Anniversary

              Between 4th and on or before 5th                          20%
              Anniversary

              On or After 5th Anniversary                                0%<PAGE>

                                                                   Exhibit 10.28

(Multicurrency --Cross Border)

                                     ISDA(R)

                   International Swap Dealers Association Inc

                                MASTER AGREEMENT

                          dated as of January 27, 1997

NationsBank, N.A.                           and      PCA International, Inc.

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

Accordingly, the parties agree as follows:--

1.  Interpretation

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

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

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

2. Obligations

(a) General Conditions.

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

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

<PAGE>

     the due date in the manner customary for the relevant obligation unless
     otherwise specified in the relevant Confirmation or elsewhere in this
     Agreement.

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

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

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

     (i) in the same currency; and

     (ii) in respect of the same Transaction,

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

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

(d) Deduction or Withbol4ingfor Tax.

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

                                       2

<PAGE>

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

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

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

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

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

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

     (ii) Liability. If:--

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

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

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

     then, except to the extent Y has satisfied or then satisfies the liability
     resulting from such Tax, Y will promptly pay to X the amount of such
     liability (including any related liability for interest, but including any
     related liability for penalties

                                       3

<PAGE>

     only if Y has failed to comply with or perform any agreement contained in
     Section 4(a)(i), 4(a)(iii) or 4(d)).

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

3. Representations

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

(a) Basic Representations.

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

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

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

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

                                       4

<PAGE>

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

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

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

(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) In the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

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

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

4. Agreements

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

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

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

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

                                       5

<PAGE>

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

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

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

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

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

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,

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

5. Events of Default and Termination Events

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

     (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
     payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
     required

                                       6

<PAGE>

     to be made by it if such failure is not remedied on or before the third
     Local Business Day after notice of such failure is given to the party;

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

     (iii) Credit Support Default.

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

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

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

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

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

                                       7

<PAGE>

     rejects, in whole or in part, a Specified Transaction (or such action is
     taken by any person or entity appointed or empowered to operate it or act
     on its behalf);

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

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

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

                                       8

<PAGE>

          jurisdiction, has an analogous effect to any of the events specified
          in clauses (1) to (7) (inclusive); or (9) takes any action in
          furtherance of, or indicating its consent to, approval of, or
          acquiescence in, any of the foregoing acts; or

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

          (1) the resulting, surviving or transferee entity fails to assume all
          the obligations of such party or such Credit Support Provider under
          this Agreement or any Credit Support Document to which it or its
          predecessor was a party by operation of law or pursuant to an
          agreement reasonably satisfactory to the other party to this
          Agreement; or

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

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

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

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

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

     (ii) Tax Event. Due to (x) any action taken by a taxing authority, or
     brought in a court of competent jurisdiction, on or after the date on which
     a Transaction is

                                      9

<PAGE>

     entered into (regardless of whether such action is taken or brought with
     respect to a party to this Agreement) or (y) a Change in Tax Law, the party
     (which will be the Affected Party) will, or there is a substantial
     likelihood that it will, on the next succeeding Scheduled Payment Date (1)
     be required to pay to the other party an additional amount in respect of an
     Identifiable Tax under Section 2(d)(i)(4) (except in respect of interest
     under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which
     an amount is required to be deducted or withheld for or on account of a Tax
     (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
     additional amount is required to be paid in respect of such Tax under
     Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

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

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

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

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

                                       10

<PAGE>

6. Early Termination

(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

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

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

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

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

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

                                       11

<PAGE>

     (iv) Right to Terminate. If:--

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

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

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

(c) Effect of Designation.

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

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

(d) Calculations.

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

                                       12

<PAGE>

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

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

     (i) Events of Default. If the Early Termination Date results from an Event
     of Defau1t:--

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

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

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

                                       13

<PAGE>

          Non-defaulting Party will pay the absolute value of that amount to the
          Defaulting Party.

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

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

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

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

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

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

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

     (iii) Adjustment for Bankruptcy. In circumstances where an Early
     Termination Date occurs because "Automatic Early Termination" applies in
     respect of a party, the amount determined under this Section 6(e) will be
     subject to such adjustments as are appropriate and permitted by law to
     reflect any

                                       14

<PAGE>

     payments or deliveries made by one party to the other under this Agreement
     (and retained by such other party) during the period from the relevant
     Early Termination Date to the date for payment determined under Section
     6(d)(ii).

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

7. Transfer

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

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

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

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

8. Contractual Currency

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

     (b) Judgments. To the extent permitted by applicable law, if any judgment
     or order expressed in a currency other than the Contractual Currency is
     rendered (i) for the payment of any amount owing in respect of this
     Agreement, (ii) for the payment of any

                                       15

<PAGE>

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

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

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

9. Miscellaneous

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

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

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

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

                                       16

<PAGE>

(e) Counterparts and Confirmations.

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

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

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

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

10. Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

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

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

                                       17

<PAGE>

11. Expenses

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

12. Notices

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

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

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

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

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

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

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

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

13. Governing Law and Jurisdiction

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

                                       18

<PAGE>

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

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

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

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

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

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

14. Definitions

As used in this Agreement:--

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

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

                                       19

<PAGE>

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

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

"Applicable Rate" means:--

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       20

<PAGE>

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but (or a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

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

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

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

                                       21

<PAGE>

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

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

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

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

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

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at

                                       22

<PAGE>

the time in deciding whether to offer or to make an extension of credit and (b)
to the extent practicable, from among such dealers having an office in the same
city.

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

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

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

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

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

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

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

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

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant continuation.

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

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any

                                       23

<PAGE>

government or other taxing authority in respect of any payment under this
Agreement other than a stamp, registration, documentation or similar tax.

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

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

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

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

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(c), be selected in
good faith by that party and otherwise will be agreed by the parties.

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

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

"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would

                                       24

<PAGE>

have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.

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

NationsBank, N.A.                            PCA International, Inc.
---------------------------------            -----------------------------------
(Name of Party)                              (Name of Party)

/s/ R. Vaughan Dodd                          /s/ Bruce A. Fisher
---------------------------------            -----------------------------------
Name:  R. Vaughan Dodd                       Name:  Bruce A. Fisher
Title: Senior Vice President                 Title: Senior Vice President
Date:  Feb. 25, 1997                         Date:  2/14/97

                                      25

<PAGE>

                        SCHEDULE to the MASTER AGREEMENT
                      dated as of January 27, 1997 between
                        NATIONSBANK, N.A. ("Party A") and
                       PCA INTERNATIONAL, INC. ("Party B")

            PART 1: Termination Provisions and Certain Other Matters
                    ------------------------------------------------

(a) "Credit Agreement" means the Credit Agreement dated as of January 27, 1997
among PCA International, Inc. as Borrower, and Certain Subsidiaries and
Affiliates of the Borrower as Guarantors, the Lenders Named therein and
NationsBank, N.A. as agent as amended, modified, restated, or replaced from time
to time.

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

     Section 5(a)(v), none;
     Section 5(a)(vi), none;
     Section 5(a)(vii), none; and
     Section 5(b)(iv), none;

              in relation to Party B for the purpose of:-

     Section 5(a)(v), none;
     Section 5(a)(vi), none;
     Section 5(a)(vii), none; and
     Section 5(b)(iv), none.

(c) "Specified Transaction" will have the meaning specified in Section 14.

(d) The "Cross-Default" provisions of Section 5(a)(vi) will apply to Party A and
Party B. In connection therewith, "Specified Indebtedness" will have the meaning
specified in Section 14, except that such term shall not include obligations in
respect of deposits received in the ordinary course of a party's banking
business, and "Threshold Amount" means with respect to Party A, an amount equal
to three percent of Party A's shareholders' equity, determined in accordance
with generally accepted accounting principles in such party's jurisdiction of
incorporation or organization, consistently applied, as at the end of such
party's most recently completed fiscal year and with respect to Party B,
$250,000.

With respect to Party B, an Event of Default (with Party B being the Defaulting
Party) shall also occur under this Agreement upon the occurrence of any Event of
Default specified in the Credit Agreement, as amended from time to time after
the date hereof.

(e) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will apply to
Party A and Party B.

(f) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Party A or Party B.

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

    (i)  Market Quotation will apply.
    (ii) The Second Method will apply.

                                       1

<PAGE>

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

(i) Additional Termination Event. Additional Termination Event will not apply.

                           PART 2: Tax Representations
                                   -------------------

                                 Not applicable.

                     PART 3: Agreement to Deliver Documents
                             ------------------------------

For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents:

(a)  Tax forms, documents or certificates to be delivered are: none.

(b)  Other documents to be delivered are:-

 Party required             Form/                 Date by           Covered by
   to deliver            Document/              which to be        Section 3(d)
    document             Certificate             delivered        Representation
-------------------  -------------------    ------------------    --------------
Party A and Party B  Certified copies       Upon execution and    Yes
                     of all corporate       delivery of this
                     authorizations and     Agreement
                     any other
                     documents with
                     respect to the
                     execution, delivery
                     and performance of
                     this Agreement

Party A and Party B  Certificate of         Upon execution and     Yes
                     authority and          delivery of this
                     specimen signatures    Agreement and
                     of individuals         thereafter upon
                     executing this         request of the other
                     Agreement and          party
                     Confirmations.

                                       2

<PAGE>

                              PART 4: Miscellaneous
                                      -------------

(a) Address for Notices. For the purpose of Section 12(a) of this Agreement:-
Address for notice or communications to Party A:

                  NationsBank, N.A.
                  100 N. Tryon St., NC1-007-13-01
                  Charlotte, North Carolina 28255
                  Attention: Derivatives Documentation Unit
                  (Telex No: 669959; Answerback: NATIONSBK CHA)
                  Facsimile No.: 704-386-4113

Address for notice or communications to Party B:

                  Attention: Bruce Fisher, Chief Financial Officer
                  PCA International, Inc.
                  815 Matthews-Mint Hill Road
                  Matthews, North Carolina 28105
                  Telephone No.: 704-847-8011
                  Facsimile No.: 704-847-8010

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

Party A appoints as its Process Agent: Not applicable.

Party B appoints as its Process Agent: Not applicable.

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

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

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e) Calculation Agent. The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.

(f) Credit Support Document. Details of any Credit Support Document:-

The Credit Agreement and the Collateral Documents (as defined in the Credit
Agreement).

(g) Credit Support Provider. Credit Support Provider means in relation to Party
A,

Not applicable.

Credit Support Provider means in relation to Party B,

Each Guarantor as defined in the Credit Agreement.

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

                                       3

<PAGE>

(i) Netting of Payments. Subparagraph (ii) of Section 2(c) will not apply to any
Transaction unless specified in the relevant Confirmation.

(j) "Affiliate" will have the meaning specified in Section 14 of this Agreement.

(k) Hedging Agreements. This Agreement is one of the Hedging Agreements as
defined in the Credit Agreement.

                            PART 5: Other Provisions
                                    ----------------

(a) Set-off. Nothing in this Agreement shall be treated as restricting or
negating any right of set-off, lien, counterclaim or other right or remedy which
might otherwise be available to either party.

(b) Payments. Notwithstanding the provisions of any Transaction, in the event an
Event of Default or an event that with the giving of notice or lapse of time (or
both) would become an Event of Default shall have occurred and be continuing
with respect to a party ("Party X"), or material adverse change in the business,
operations, assets or financial or other condition of Party X shall have
occurred, then, upon written notice being given to Party X by the other party
("Party Y") (or automatically, without any requirement for the giving of notice,
in the case of an Event of Default or Potential Event of Default described in
Section 5(a)(vii)), the following modifications shall be made, effective as of
the date such notice is given or deemed to be given, to each Transaction where
the originally-scheduled Payment Dates for Party Y occur more frequently than
the Payment Dates for Party X: (i) Compounding shall apply; (ii) Party Y's
Payment Dates shall be changed to coincide with Party X's Payment Dates; (iii)
the Compounding Dates shall be the same dates as Party Y's originally-scheduled
Payment Dates; and (iv) for purposes of calculating the amount of the payment to
be made by Party Y on the Payment Date for Party Y (as modified hereby) next
succeeding the effective date of the modifications provided for in this
paragraph, the Calculation Period in respect of which such payment is being made
will be deemed to have commenced on the date of the most recent payment made by
Party Y.

(c) Exchange of Confirmation. For each Transaction entered into hereunder, Party
A shall promptly send to Party B a Confirmation, via telex or facsimile
transmission. Party B agrees to respond to such Confirmation within three (3)
Business Days, either confirming agreement thereto or requesting a correction of
any error(s) contained therein. Failure by Party B to respond within such period
shall not affect the validity or enforceability of such Transaction and shall be
deemed to be an affirmation of the terms contained in such Confirmation, absent
manifest error. The parties agree that any such exchange of telexes or facsimile
transmissions shall constitute a Confirmation for all purposes hereunder.

(d) Notice by Facsimile Transmission. Section 12(a) is hereby amended by
inserting the words "or 13(c)" between the number "6" and the word. "may" in the
second line thereof.

                                       4

<PAGE>

(e) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury with respect to any legal proceeding arising out
of or relating to this Agreement or any Transaction contemplated hereby.

(f) Recording of Conversations. Each party to this Agreement acknowledges and
agrees to the tape or electronic recording of conversations between the parties
to this Agreement whether by one or other or both of the parties, and that any
such recordings may be submitted in evidence in any action or proceeding
relating to the Agreement or any Transaction.

(g) Eligible Swap Participant. Each party represents to the other that it is an
"eligible swap participant" as defined under the regulations of the Commodity
Futures Trading Commission, currently at 17 C.F.R.ss.35.1(b)(2).

(h) Relationship Between Parties. Each party represents to the other party and
will be deemed to represent to the other party on the date on which it enters
into a Transaction that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that
Transaction):-

     (i)   Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. Further, such party has not received from the other
party any assurance or guarantee as to the expected results of that Transaction.

     (ii)  Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the financial and
other risks of that Transaction.

     (iii) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.

(i) Incorporation by Reference of Terms of Credit Agreement. The covenants,
terms and provisions of, including all representations and warranties of Party B
contained in, the Credit Agreement, as in effect as of the date of this
Agreement, are hereby incorporated by reference in, and made part of, this
Agreement to the same extent as if such covenants, terms, and provisions were
set forth in full herein. Party B hereby agrees that, during the period
commencing with the date of this Agreement through and including such date on
which all of Party B's obligations under this Agreement are fully performed,
Party B will (a) observe, perform, and fulfill each and every such covenant,
term, and provision applicable to Party B, as such covenants, terms, and
provisions, may be amended from time to time after the date of this Agreement
and (b) deliver to Party A at the address for notices to Party A provided in
Part 4 each notice, document, certificate or other writing as Party B is
obligated to furnish to any other party to the Credit Agreement. In the event
the Credit Agreement terminates or becomes no longer binding

                                       5

<PAGE>

on Party B prior to the termination of this Agreement, such covenants, terms,
and provisions (other than those requiring payments in respect of amounts owed
under the Credit Agreement) will remain in force and effect for purposes of this
Agreement as though set forth in full herein until the date on which all of
Party B's obligations under this Agreement are fully performed, and this
Agreement is terminated.

Accepted and agreed:

NATIONSBANK, N.A.                           PCA INTERNATIONAL, INC.

/s/ R. Vaughan Dodd                         /s/ Bruce Fisher
---------------------------------           ------------------------------------
Name:  R. Vaughan Dodd                      Name:
Title: Senior Vice President                Title:

                                       6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]