AKI HOLDING CORP
SIXTH AMENDMENT TO CREDIT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>SIXTH AMENDMENT TO CREDIT AGREEMENT
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                       SIXTH AMENDMENT TO CREDIT AGREEMENT


     This SIXTH AMENDMENT TO CREDIT AGREEMENT dated as of December 1, 2000 (this
"Amendment"),  is by and between  AKI,  INC., a Delaware  corporation,  formerly
known as Arcade,  Inc.  ("Borrower")  and  HELLER  FINANCIAL,  INC.,  a Delaware
corporation ("Lender").

                                R E C I T A L S:

     A. Borrower and Lender are parties to that certain Credit  Agreement  dated
as of April  30,  1996 (as the same  has  been  and  hereafter  may be  amended,
restated,  supplemented  or otherwise  modified  from time to time,  the "Credit
Agreement").

     B.  Borrower  and Lender  wish to amend the Credit  Agreement  as  provided
herein.

     NOW, THEREFORE, the parties agree as follows:

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

     2. Amendments to the Credit Agreement.

          (a) Subsection  1.2(A) of the Credit  Agreement is amended by deleting
     the first  sentence  thereto and  substituting  therefor the  following two
     sentences:

               "(A) Interest.  From the date the  Loans  are made and the  other
                    Obligations  become due and payable in  accordance  with the
                    terms of this  Agreement and the other Loan  Documents,  the
                    Obligations  shall bear interest at the sum of the Base Rate
                    plus three-quarters of one percent (0.75%) per annum and/or,
                    with  respect to any LIBOR  Rate Loan,  the sum of the LIBOR
                    Rate  plus  two and  one-half  percent  (2.50%)  per  annum.
                    Notwithstanding the foregoing,  commencing February 1, 2001,
                    the Loans and the other  Obligations  as they become due and
                    payable in accordance  with the terms of this  Agreement and
                    the other Loan Documents,  shall bear interest at the sum of
                    the Base Rate plus one  percent  (1.00%)  per annum  and/or,
                    with  respect to any LIBOR  Rate Loan,  the sum of the LIBOR
                    Rate plus two and three-quarters percent (2.75%) per annum."

          (b) Subsection  1.2(C) of the Credit  Agreement is amended by deleting
     the phrase "two and one-half percent (2.50%)" and substituting therefor the
     phrase "two and three-quarters percent (2.75%)."

          (c) Clause (E) of  subsection  3.1 of the Credit  Agreement is deleted
     and the following clause (E) of subsection 3.1(E) is substituted  therefor:
                "(E) the Refinanced Bridge Indebtedness;"
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          (d)  Subsection  3.5 of the Credit  Agreement is amended by adding the
     following as clauses (J) and (K) thereto:

               "(J) Borrower  may  use  proceeds  of  Revolving   Loans  to  (1)
                    repurchase  certain notes  evidencing the Refinanced  Bridge
                    Indebtedness and (2) make dividend payments or distributions
                    to Holdings solely to permit Holdings to repurchase  certain
                    13 1/2% senior discount  debentures due 2009 issued pursuant
                    to that  certain  Indenture  dated  June  25,  1998  between
                    Holdings and State Street Bank and Trust  Company,  provided
                    that,  in each case,  all of the  following  conditions  are
                    satisfied:

                         (i) Borrower  shall  provide  written  notice to Heller
                    that  the  proceeds  of a  Revolving  Loan are to be used to
                    repurchase,  directly  or  indirectly,  any of the  notes or
                    debentures referred to in this clause (J) of subsection 3.5,
                    and the aggregate amount of all such repurchases  under this
                    clause (J) of subsection 3.5 shall not exceed $4,000,000;

                         (ii) no Default or Event of Default has occurred and is
                    continuing   or  would   arise  as  a  result  of  any  such
                    repurchase;

                         (iii)  after  giving  effect  to any  such  repurchase,
                    Borrower  is in  compliance  on a pro forma  basis  with the
                    covenants  set  forth  in  subsections  4.3,  4.4  and  4.5,
                    recomputed  for the most  recent  month for which  financial
                    statements have been delivered; and

                         (iv) after giving  effect to any such  repurchase,  the
                    Maximum   Revolving  Loan  Balance   exceeds  the  aggregate
                    outstanding principal balance of Revolving Loans by not less
                    than $3,000,000; and

               (K)  upon  Borrower's  repurchase of notes and  debentures in the
                    aggregate  amount  permitted under the foregoing clause (J),
                    Borrower  may  use  proceeds  of  Revolving   Loans  to  (1)
                    repurchase  certain notes  evidencing the Refinanced  Bridge
                    Indebtedness and (2) make dividend payments or distributions
                    to Holdings solely to permit Holdings to repurchase  certain
                    13 1/2% senior discount  debentures due 2009 issued pursuant
                    to that  certain  Indenture  dated  June  25,  1998  between
                    Holdings and State Street Bank and Trust  Company,  provided
                    that,  in each case,  all of the  following  conditions  are
                    satisfied:

                         (i) Borrower  shall  provide  written  notice to Heller
                    that  the  proceeds  of a  Revolving  Loan are to be used to
                    repurchase,
<PAGE>

                    directly  or  indirectly,  any of the  notes  or  debentures
                    referred to in this clause (K) of subsection 3.5;

                         (ii) Borrower  shall provide  Heller with a twelve (12)
                    month forecast of Borrower's balance sheet, income statement
                    and  statement of cash flows on a monthly basis after giving
                    effect to the proposed  Revolving Loan draw pursuant to this
                    clause  (K)  of  subsection   3.5,   which   forecast  shall
                    demonstrate  that the Maximum  Revolving  Loan Balance shall
                    exceed  the  aggregate   outstanding  principal  balance  of
                    Revolving Loans by not less than  $3,000,000  during each of
                    the twelve (12) months listed in the forecast;

                         (iii) no Default or Event of Default has  occurred  and
                    is  continuing  or  would  arise  as a  result  of any  such
                    repurchase;

                         (iv)  after  giving  effect  to  any  such  repurchase,
                    Borrower  is in  compliance  on a pro forma  basis  with the
                    covenants  set  forth  in  subsections  4.3,  4.4  and  4.5,
                    recomputed  for the most  recent  month for which  financial
                    statements have been delivered; and

                         (v) after  giving  effect to any such  repurchase,  the
                    Maximum   Revolving  Loan  Balance   exceeds  the  aggregate
                    outstanding principal balance of Revolving Loans by not less
                    than $3,000,000."

          (e) Subsection 10.1 of the Credit Agreement is amended by deleting the
     definition  of  "Refinanced  Bridge  Indebtedness"  contained  therein  and
     substituting therefor the following definition:

                    "Refinanced Bridge Indebtedness" means those certain 10 1/2%
                    senior notes due 2008 in the aggregate  principal  amount of
                    $115,000,000 issued pursuant to that certain Debenture dated
                    June 25, 1998,  between  Borrower  and IBJ  Schroder  Bank &
                    Trust Company, as trustee.

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

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

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

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

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

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

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

          (b) Borrower shall have executed and delivered this Amendment and such
     other  documents  and  instruments  as Lender may  require  shall have been
     executed and/or delivered to Lender; and

          (c) All legal matters incident to this Amendment shall be satisfactory
     to Lender and its legal counsel.

     5. Miscellaneous.

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

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

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

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

          (e) References. Any reference to the Credit Agreement contained in any
     notice, request,  certificate, or other document executed concurrently with
     or after the
<PAGE>

     execution and  delivery of this  Amendment  shall be deemed to include this
     Amendment unless the context shall otherwise require.

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

          (g) Costs,  Expenses and Taxes. Borrower affirms and acknowledges that
     subsection 1.3(B) of the Credit Agreement applies to this Amendment and the
     transactions and Agreements and document contemplated hereunder.

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<PAGE>


   Delivered at Chicago, Illinois, as of the day and year first above written.


                               AKI, INC., a Delaware corporation, formerly
                               known as Arcade, Inc.

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


                               HELLER FINANCIAL, INC., a Delaware corporation

                               By:      /s/ Susan Koehnlein
                                        --------------------------
                                        Susan Koehnlein
                                        Assistant Vice President


                               AKI HOLDING CORP., a Delaware corporation

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



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