AKI HOLDING CORP
FIFTH AMENDMENT TO CREDIT AGREEMENT
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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>FIFTH AMENDMENT TO CREDIT AGREEMENT
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                       FIFTH AMENDMENT TO CREDIT AGREEMENT


     This FIFTH  AMENDMENT  TO CREDIT  AGREEMENT  dated as of May 17, 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  3.1 of the Credit  Agreement is amended by adding the
     following as clause (H) thereto:

               "(H) the AHC Subordinated Indebtedness."

          (b)  Subsection  3.5 of the Credit  Agreement is amended by adding the
     following as clause (J) thereto:

               "(J) Borrower may make scheduled  interest and principal payments
               on account of the AHC Subordinated  Indebtedness  provided all of
               the following conditions are satisfied:

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

                         (ii) after giving effect to any such payment,  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

                         (iii)  after  giving  effect to any such  payment,  the
                    Maximum   Revolving  Loan  Balance   exceeds  the  aggregate
                    outstanding principal balance of Revolving Loans by not less
                    than   $3,000,000."
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          (c) Subsection  10.1 of the Credit  Agreement is amended by adding the
     following definition thereto:

               "AHC Subordinated  Indebtedness" means Subordinated  Indebtedness
               of  Borrower  owing  to  AHC  I  Acquisition   Corp.  a  Delaware
               corporation  ("AHC"),  evidenced  by  that  certain  Subordinated
               Promissory Note dated as of May 17, 2000, made by Borrower to the
               order of AHC, up to an aggregate  principal  amount not to exceed
               $10,000,000.

     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;

          (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,  the
     Subordination and Intercreditor  Agreement by and among,  Borrower, AHC and
     Heller (which AHC also shall have executed and  delivered),  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.
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          (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  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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     Delivered at Chicago, Illinois, as of the day and year first above written.

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

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


                                     HELLER FINANCIAL, INC., a
                                     Delaware corporation

                                     By:      /s/ Susan Koehnlein
                                              -----------------------------
                                     Print Name:    Susan Koehnlein
                                     Title:         Assistant Vice President


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