As filed with the Securities and Exchange Commission on , 1998
Registration No. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PARAGON CORPORATE HOLDINGS INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 5008 34-1845312
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)

CO-REGISTRANTS AND SUBSIDIARY GUARANTORS

A.B. DICK COMPANY DELAWARE 5084 04-3892065
CURTIS INDUSTRIES, INC. DELAWARE 5098 13-3583725
ITEK GRAPHIX CORP. DELAWARE 5084 04-2893064
CURTIS SUB, INC. DELAWARE 5098 34-1737529

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Paragon Corporate Holdings Inc. A.B. Dick Company Curtis Industries, Inc.
5700 WEST TOUHY AVENUE 5700 WEST TOUHY AVENUE 6140 PARKLAND BOULEVARD
NILES, ILLINOIS 60714 NILES, ILLINOIS 60714 MAYFIELD HEIGHTS, OHIO 44124
(847) 779-2500 (847) 779-1900 (440) 446-9700
Itek Graphix Corp. Curtis Sub, Inc.
5700 WEST TOUHY AVENUE 6140 PARKLAND BOULEVARD
NILES, ILLINOIS 60714 MAYFIELD HEIGHTS, OHIO 44124
(847) 779-1900 (440) 446-9700

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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GERALD J. MCCONNELL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PARAGON CORPORATE HOLDINGS INC.
5700 WEST TOUHY DRIVE
NILES, ILLINOIS 60714
(847) 779-2500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copy to:

JEFFREY J. MARGULIES, ESQ.
SQUIRE, SANDERS & DEMPSEY L.L.P.
4900 KEY TOWER, 127 PUBLIC SQUARE
CLEVELAND, OHIO 44114-1304
(216) 479-8500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

CALCULATION OF REGISTRATION FEE

=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED NOTE PRICE(1) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------

9 5/8% Series B Senior Notes due
2008(2)............................ $115,000,000 100% $115,000,000 $33,925
=================================================================================================================================

(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(f).
(2) A.B. Dick Company, Curtis Industries, Inc., Itek Graphix Corp. and Curtis
Sub, Inc. will guarantee the payment of the 9 5/8% Series B Senior Notes due
2008. Pursuant to Rule 457(n), no separate filing fee is required for the
guarantees.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
================================================================================
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PROSPECTUS
, 1998

PARAGON CORPORATE HOLDINGS INC.

OFFER TO EXCHANGE
9 5/8% SERIES B SENIOR NOTES DUE 2008
FOR ANY AND ALL OUTSTANDING
9 5/8% SERIES A SENIOR NOTES DUE 2008
(ALL SENIOR NOTES GUARANTEED BY THE SUBSIDIARY GUARANTORS)

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
1998, UNLESS EXTENDED.

Paragon Corporate Holdings Inc., a Delaware corporation (the "Company"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying letter of transmittal (the "Letter of
Transmittal"), to exchange its 9 5/8% Series B Senior Notes due 2008 (the
"Series B Notes") for an equal principal amount of its 9 5/8% Series A Senior
Notes due 2008 (the "Series A Notes"), of which $115 million principal amount is
outstanding (the "Exchange Offer"). The Series B Notes have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement (as defined) of which this Prospectus is a part. The
Series B Notes and the Series A Notes are collectively referred to herein as the
"Senior Notes."

Upon the terms and subject to the conditions set forth in this Prospectus
and the Letter of Transmittal, the Company will accept for exchange any and all
Series A Notes that are validly tendered and not withdrawn by 5:00 p.m., New
York City time, on , 1998, unless the Exchange Offer is
extended (the "Expiration Date"). Tenders of Series A Notes may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date. The
Exchange Offer is not conditioned upon any minimum principal amount of Series A
Notes being tendered for exchange. Series A Notes may be tendered only in
integral multiples of $1,000. See "The Exchange Offer."

The Series B Notes will evidence the same debt as the Series A Notes for
which they are exchanged, and will be entitled to the benefits of the same
indenture, dated as of April 1, 1998 (the "Indenture"), among the Company, the
Subsidiary Guarantors (as defined) and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"). The form and terms of the Series B
Notes are the same as the form and terms of the Series A Notes, except that the
Series B Notes have been registered under the Securities Act and the holders of
the Series B Notes will not be entitled to the benefit of certain registration
and exchange rights granted to the holders of the Series A Notes under the
Registration Rights Agreement (as defined), which rights will terminate upon the
consummation of the Exchange Offer. See "The Exchange Offer" and "Description of
Senior Notes."

(Cover continued on following page)

SEE "RISK FACTORS" BEGINNING ON PAGE 15 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES
B NOTES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
3

(Continued from previous page)

The Series B Notes will be senior unsecured obligations of the Company and
will rank pari passu in right of payment with all current and future unsecured
senior indebtedness (as defined) of the Company and senior to all subordinated
indebtedness of the Company. The Company's obligations under the Series B Notes
will be jointly and severally guaranteed by each direct and indirect Subsidiary
(as defined) of the Company (other than Foreign Subsidiaries (as defined))
existing on the closing date of the Exchange Offer and by certain other
Subsidiaries of the Company formed or acquired thereafter. The Subsidiary
Guarantees (as defined) will be senior unsecured obligations of the Subsidiary
Guarantors and will rank pari passu in right of payment with all current and
future unsecured senior indebtedness of the Subsidiary Guarantors and senior to
all subordinated indebtedness of the Subsidiary Guarantors. The Subsidiary
Guarantees will be limited as described herein. See "Description of Senior
Notes -- Subsidiary Guarantees." The Company and certain of the Company's
Subsidiaries are parties to the New Credit Agreement (as defined) and all
obligations thereunder are secured by a first priority lien on accounts
receivable and inventory of such Subsidiaries. The New Credit Agreement provides
for up to $32.0 million of revolving credit borrowings. On a pro forma basis, as
of December 31, 1997, after giving effect to the Series A Notes Offering (as
defined) and the application of the net proceeds therefrom, the aggregate
principal amount of secured indebtedness of the Company, secured indebtedness of
the Subsidiary Guarantors and indebtedness and other liabilities (including
trade payables) of the Company's Foreign Subsidiaries which would have
effectively ranked senior to the Senior Notes would have been approximately $3.9
million. The Indenture permits the Company and its Subsidiaries to incur
additional indebtedness, including secured indebtedness, subject to certain
limitations. See "Description of Senior Notes."

The Series B Notes will bear interest at the same rate and on the same
terms as the Series A Notes. Accordingly, interest on the Series B Notes will be
payable semiannually in cash in arrears on April 1 and October 1 of each year,
commencing October 1, 1998, accruing from April 1, 1998 (which was the date of
issuance of the Series A Notes) at the rate of 9 5/8% per annum, and the Series
B Notes will mature on April 1, 2008. Holders of Series A Notes whose Series A
Notes are accepted for exchange will be deemed to have waived the right to
receive any payment in respect of interest on the Series A Notes accrued up
until the date of the issuance of the Series B Notes. Because the Series B Notes
will bear interest from the issue date of the Series A Notes, such waiver will
not result in the loss of interest income to such holders.

The Series B Notes will be redeemable at the option of the Company, in
whole or in part, at any time on or after April 1, 2003 at the redemption prices
set forth herein, plus accrued and unpaid interest and Liquidated Damages (as
defined), if any, thereon to the date of redemption. In addition, at any time
prior to April 1, 2001, the Company may, on any one or more occasions, redeem up
to 33 1/3% of the aggregate principal amount of the Senior Notes originally
issued with the net cash proceeds of one or more offerings of common stock of
the Company at a redemption price equal to 109.625% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of redemption; provided, that at least 66 2/3% of the
aggregate principal amount of the Senior Notes originally issued remains
outstanding immediately after the occurrence of any such redemption. Upon the
occurrence of a Change of Control (as defined), each holder of Series B Notes
will have the right to require the Company to repurchase all or any part of such
holder's Series B Notes at an offer price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of purchase. See "Description of Senior Notes."

Based on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to third
parties, the Company believes that the Series B Notes issued pursuant to this
Exchange Offer in exchange for Series A Notes may be offered for resale, resold
and otherwise transferred by a holder thereof (other than (i) a person that is
an affiliate of the Company within the meaning of Rule 405 under the Securities
Act or (ii) a broker-dealer that purchases such Series B Notes directly from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that the holder is acquiring
the Series B Notes in the ordinary course of its business and is not
participating, and had no arrangement or understanding with any person to
participate, in the distribution of
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the Series B Notes. See Morgan Stanley & Co. Incorporated, SEC No-Action Letter
(available June 5, 1991) and Exxon Capital Holdings Corporation, SEC No-Action
Letter (available May 13, 1988). Holders of Series A Notes wishing to accept the
Exchange Offer must represent to the Company, as required by the Registration
Rights Agreement, that such conditions have been met. The Company believes that
none of the registered holders of the Series A Notes is an affiliate (as such
term is defined in Rule 405 under the Securities Act) of the Company. Each
broker-dealer that receives Series B Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such Series B Notes. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of Series B Notes
received in exchange for Series A Notes where such Series A Notes were acquired
by such broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed to make this Prospectus (as it may be amended
or supplemented) available to any broker-dealer for use in connection with any
such resale for a period of 120 days after the consummation of the Exchange
Offer. See "Plan of Distribution" and "The Exchange Offer -- Resale of the
Series B Notes."

There is no public market for the Senior Notes. The Company does not intend
to list the Series B Notes on any national securities exchange or to apply for
quotation of the Series B Notes through the National Association of Securities
Dealers Automated Quotation System. There can be no assurance that an active
public market for the Series B Notes will develop. If a market for the Series B
Notes should develop, the market value of the Series B Notes will depend on a
variety of factors and the Series B Notes could trade at a discount from their
principal amount. See "Risk Factors -- Absence of Established Public Market."

The Company will not receive any proceeds from this Exchange Offer. The
Company has agreed to bear the expenses of this Exchange Offer. No underwriter
is being used in connection with this Exchange Offer.

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
OR THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING
LETTER OF TRANSMITTAL, NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

The Series B Notes will be available initially only in book-entry form. The
Company expects that the Series B Notes issued pursuant to this Exchange Offer
will be issued in the form of one or more fully registered global notes which
will be deposited with, or on behalf of, DTC (as defined) and registered in its
name or in the name of Cede & Co., its nominee. Beneficial interests in the
global notes representing the Series B Notes will be shown on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants. After the initial issuance of such global notes, Series B Notes in
certificated form will be issued in exchange for the global notes only as set
forth in the Indenture. See "Description of Senior Notes -- Book Entry; Delivery
and Form."

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains statements which constitute forward-looking
statements. Those statements appear in a number of places in this Prospectus and
include statements regarding the intent, belief or current expectations of the
Company, primarily with respect to the future operating performance of the
Company or related industry developments. Prospective purchasers of the Series B
Notes are cautioned that any such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties, and that actual
results may differ from those described in the forward-looking statements as a
result of various factors, many of which are beyond the control of the Company.
The information contained in this Prospectus, including without limitation the
information set forth under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
identifies important factors that could cause such differences.

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AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-4 (together with all amendments, exhibits, schedules and supplements thereto,
the "Registration Statement") under the Securities Act with respect to the
Series B Notes offered hereby. This Prospectus, which forms a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company, and the Series B Notes offered hereby, reference is made
to the Registration Statement. Statements contained in this Prospectus as to the
contents of certain documents filed as exhibits to the Registration Statement
are not necessarily complete and, in each case, are qualified by reference to
the copy of the document so filed. The Registration Statement can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's regional offices at Suite 1400, Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661-2511 and 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material may be obtained
from the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
material also can be reviewed through the Commission's Electronic Data
Gathering, Analysis, and Retrieval System, which is publicly available through
the Commission's Web site (http://www.sec.gov).

As a result of the Exchange Offer, the Company will become subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Pursuant to the Indenture, the Company has agreed that,
whether or not required by the rules and regulations of the Commission, so long
as any Senior Notes are outstanding, the Company shall furnish to the registered
holders of Senior Notes copies of (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the Commission, the Company will
file a copy of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) within the
time periods that would have been applicable had the Company been subject to
such rules and regulations and make such information available to securities
analysts and prospective investors upon request. The Company has agreed further
that, for so long as any Senior Notes remain outstanding, it shall furnish to
the holders of the Senior Notes, to securities analysts, and to prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act. The Company also will furnish to
each registered holder of the Senior Notes such other reports as may be required
by applicable law.

The principal executive offices of the Company are located at 5700 West
Touhy Avenue, Niles, Illinois 60714 (telephone: (847) 779-2500). The principal
executive offices of A.B. Dick are located at 570 West Touhy Avenue, Niles,
Illinois 60714 (telephone: (847) 779-1900). The principal executive offices of
Curtis Industries, Inc. are located at 6140 Parkland Boulevard, Mayfield
Heights, Ohio 44124 (telephone: (440) 446-9700). The principal executive offices
of Curtis Sub, Inc. are located at 6140 Parkland Boulevard, Mayfield Heights,
Ohio 44124 (telephone (440) 446-9700). The principal executive offices of Itek
Graphix Corp. are located at 570 West Touhy Avenue, Niles, Illinois 60714
(telephone: (847) 779-1900).

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Holders of the Series A Notes are urged to read
this Prospectus in its entirety before exchanging their Series A Notes for
Series B Notes. The Company is a holding company, the principal assets of which
consist of the capital stock of its direct subsidiaries, A.B. Dick Company
("A.B. Dick") and Curtis Industries, Inc. ("Curtis"). See "The Company." Unless
the context indicates or otherwise requires, in this Prospectus, pro forma
income statement and other financial information for the period ended December
31, 1997 gives effect to (i) the Series A Notes Offering and the application of
the net proceeds therefrom and (ii) the Curtis Acquisition (as defined) as if
such transactions had taken place on January 1, 1997, and pro forma balance
sheet financial information as of December 31, 1997 gives effect to the Series A
Notes Offering and the application of the net proceeds therefrom as if such
transactions had taken place on December 31, 1997. The historical 1997 income
statement and other financial information for the Company refer to the 49-week
period ended December 31, 1997.

THE COMPANY

The Company, through its two wholly-owned subsidiaries, is engaged in (i)
the distribution of automotive and industrial supplies (the "distribution
business") and (ii) the manufacture and distribution of printing equipment and
supplies. The Company's distribution business supplies consumable, high margin,
multiple-purpose products used in the automotive and industrial markets, with an
increasing focus on providing value-added logistics services. The distribution
business supplies a wide range of products including (i) automotive security
products, including key cutting equipment and key blanks, and non-model specific
automotive parts and (ii) maintenance, repair and operating ("MRO") supplies,
including fasteners, connectors, chemicals and tools. The Company's printing
equipment and supplies business is a leading manufacturer and marketer of
printing products for the global quick print and small commercial graphics
markets. The Company's printing equipment and supplies include (i) pre-press
equipment, including imagers, cameras and digital platemakers, (ii) offset
printing equipment, from duplicators to two-color portrait presses, (iii) other
equipment, including post-press equipment and digital duplicators and (iv)
supplies and replacement parts for pre-press and offset printers, including
inks, plates and plate chemistry materials. Approximately 46% of the Company's
pro forma 1997 net revenue was attributable to the sale of supplies,
after-market repair services (primarily under annual contracts) and replacement
parts to its installed printing equipment customer base. For the fiscal year
ended December 31, 1997, the Company generated pro forma net revenue and EBITDA
(as defined) of $267.4 million and $22.2 million, respectively. Of the Company's
pro forma 1997 net revenue, approximately 30.3% was attributable to the
distribution business and approximately 69.7% was attributable to the printing
equipment and supplies business.

Automotive and Industrial Supplies Distribution. The Company's distribution
business supplies approximately 29,000 stock-keeping units ("SKUs"), which it
purchases from approximately 750 suppliers and then typically repackages in
smaller quantities more compatible with the needs of its customers. The Company
generally markets its products under its proprietary brand names, Curtis(R) and
Mechanics Choice(R), which the Company believes enjoy wide industry recognition.
The Company's distribution business sells its products to approximately 55,000
customers principally through its network of over 600 sales representatives who
use state-of-the-industry information systems to meet their customers' needs.
Customers of the Company's distribution business include Hertz Corporation, the
fleet operations of Pepsi-Cola Company and Continental Airlines, Inc.,
independent auto dealerships and industrial accounts throughout the United
States, Canada and the United Kingdom.

The Company's distribution business is able to generate high margins by
offering certain value-added inventory management services in connection with
the sale of its products. The Company's sales representatives proactively
monitor inventory levels and assist in bin restocking and labelling at many of
its customers' facilities to ensure adequate supplies are maintained, and to
provide technical assistance to customers. The vast majority of the products
that the Company supplies have low unit costs and, although used by customers to
support their operations, are typically not on a bill of materials. The
Company's products represent a

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relatively small part of the total cost of its customers' operations; however,
the lack of availability of such products when needed, immediately and on site,
can have a high impact on its customers' operations. The Company consistently
maintains a level of inventory such that, on average, 96% to 98% of a customer's
order is in stock at the location from which products are normally sent to that
customer at the time the order is entered ("fill rate"). The Company thereby
reduces its customers' total procurement costs, improves their operational
up-time, and enables them to focus on their core businesses. The Company's
distribution business' extensive product line allows customers to reduce the
administrative burden of dealing with many suppliers for their product needs.
The Company is also able to provide large corporations with consistent pricing
and service across multiple operating locations through facilities and sales
representatives located strategically throughout the United States.

Printing Equipment and Supplies. The Company's printing equipment and
supplies business can be classified into four broad categories: (i) pre-press
equipment, (ii) offset presses, (iii) other related equipment and (iv) supplies,
after-market repair services and replacement parts. The printing equipment and
supplies business serves exclusively the market for small print equipment
(defined as equipment suitable for printing up to 11" x 17" finished stock). The
Company also provides significant after-market service that maintains much of
the large installed base of the Company's printing equipment operated by its
customers. The Company's printing equipment and supplies business manufactures
its own products, which are principally sold under the A.B. Dick(R) and Itek
Graphix(R) labels, and distributes certain products manufactured by third
parties. The Company's printing equipment and supplies products are marketed to
commercial, franchise and independent print shops, in-plant print shops and
governmental and educational institutions in the U.S. through a network of 25
branches and approximately 100 independent distributors. In addition, the
printing equipment and supplies business sells a full line of products through
its subsidiaries in Canada, the United Kingdom, the Netherlands and Belgium, and
through a network of independent dealers in other countries. Customers for
printing supplies include franchisees of national quick print chains, such as
Alphagraphics(R), Sir Speedy(R) and Kwik Kopy(R), independent quick print and
small commercial shops, and check printers.

The Company believes that it offers its customers reliable, flexible
printing systems well-suited to their needs. The majority of the customers of
the printing equipment and supplies business are relatively small quick print
shops, specializing in items such as business cards, sales materials and headed
stationery. Because these customers have a limited amount of equipment, the
Company believes they value the high degree of reliability and flexibility that
the Company's products can provide. In addition, the Company believes its
products are highly competitive from a cost standpoint on projects of the scope
that its customers undertake. The Company believes its products offer greater
flexibility and superior print quality as compared to alternative printing
technologies, particularly for the high speed, long print runs typically
required by its customers.

COMPETITIVE STRENGTHS

The Company believes its two businesses maintain strong competitive
positions in their respective markets as a result of a number of factors,
including:

- - Substantial Installed Equipment Base. The Company estimates that it currently
sells products to approximately 75% of all U.S. auto dealers. A large
proportion of these products consists of key cutting equipment, which creates
a natural market for the sale of the Company's key blanks and a base from
which to increase sales of other consumable products distributed by the
Company. Similarly, the Company estimates, based on industry sources, that in
1997 it had an approximately 40% market share in the offset press equipment
market that it serves. The Company attributes its leading market position not
only to the reputation of its products for quality and flexibility, but also
to the substantial base of installed equipment built up over A.B. Dick's
114-year history, which the Company believes provides a significant
competitive advantage in marketing its supplies and after-market service.

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business carries a complete range of pre-press and offset press equipment and
supplies and replacement parts, as well as equipment service, thereby offering
its customers one-stop shopping. Both businesses distribute their products
through dedicated sales organizations and distribution networks that have
long-standing relationships with their customers. The Company believes its
breadth of supplier relationships, the depth of its product offerings and its
sales relationships with its customers provide it with a significant advantage
relative to potential competitors.

- - Commitment to Customer Service. The Company believes that a key to its
continued success in its market is its total commitment to customer service.
This commitment is evidenced in the printing equipment and supplies business
by, among other things, (i) generally providing next-day delivery for its
printing supplies, (ii) offering service contracts for its installed base of
printing equipment and (iii) offering its customers flexible, non-recourse
financing options for the purchase of its printing equipment. In its
distribution business, the Company's commitment to customer service is
evidenced by, among other things, (i) providing a range of on-site inventory
management services through its extensive sales force in the field, (ii)
maintaining a fill rate in the range of 96% to 98% and generally shipping its
products within a day after an order is received and (iii) providing customers
computerized access for technical information, catalog and order capabilities.

- - Broad Customer Base. The Company's automotive and industrial distribution
products are sold to more than 55,000 customers and its printing products to
more than 10,000 customers, with no one customer accounting for more than 2%
of the Company's 1997 pro forma net revenue. The Company believes that this
diversity in its client base minimizes its reliance on any one customer.

- - Experienced, Proven Management Team. The Company's senior management has an
average of approximately 19 years of relevant industry experience. In addition
to their relevant industry experience, these managers have extensive
experience in acquiring and integrating businesses, as well as growing
revenues and reducing costs in businesses they have acquired and managed.

BUSINESS STRATEGY

The Company seeks to grow sales and profitability through the successful
implementation of its business strategy, the key elements of which include:

- - Increase Penetration of Existing Customers. The Company's primary strategy to
grow net revenue and profitability in the distribution business is to obtain
incremental sales from existing customers. For example, the Company seeks to
leverage its relationships with the approximately 75% of all U.S. auto dealers
it currently serves to increase the percentage of these auto dealers' total
supply needs provided by the Company. The Company believes that new marketing
efforts, including its recently commenced "Dealer One Source" program, which
offers incentive-based pricing in exchange for volume commitments, offer
potential for significant growth for the Company's distribution business.

- - Expand Customer Base. The Company believes there are substantial opportunities
for both the distribution business and the printing equipment and supplies
business to expand their existing customer bases. The total United States
market for MRO supplies of the categories of industrial products sold by the
Company is estimated to be in excess of $30 billion annually. The Company
intends to focus on this market, in which it currently has only a small
presence, through acquisitions, strategic alliances with other distributors
and direct selling efforts. In addition, the printing equipment and supplies
business plans to leverage its nationwide network of service technicians to
offer customers an integrated equipment service capability for equipment not
manufactured or currently serviced by the Company.

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9

overlap. Likewise, the Company believes that opportunities exist to broaden
the printing equipment and supplies business' product range, especially in the
area of digital pre-press technology, to further grow its distribution network
and to increase its share of the commercial printing market. There can be no
assurance that the Company will be able to identify desirable acquisition
candidates or will be successful in consummating any acquisition on terms
favorable to the Company, if at all. See "Risk Factors -- Risks Attendant to
Acquisition Strategy."

The Company's senior management has a track record of improving the results of
acquired companies. For example, Curtis' current management team, which joined
Curtis in 1992, has grown the net revenue of Curtis at a compound annual rate
of 4.5% from $65.1 million in 1992 to $81.1 million in 1997. During the same
period, EBITDA has increased at a compound annual rate of 20.3%, from $3.3
million in 1992 to $8.3 million in 1997. Such improvements have been made
through significant operating expense reductions resulting from factors such
as improved labor efficiency and customer relations, investments in
technology, improved vendor relationships and more effective asset utilization
and management practices, as well as increased access to capital.

- - Exploit Operating Leverage. The Company has designed the processing systems
and facilities of its distribution business to handle a large number of low
dollar-value transactions. Consequently, the Company believes that it would be
able to handle substantially increased sales of its existing SKUs without a
commensurate increase in operating costs. In addition, since the distribution
business' sales are characterized by a relatively large number of orders (in
excess of 450,000 in 1997) with an average order size of approximately $170,
the Company believes that with an increase in the average order size, it could
further enhance its operating margins.

* * *

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10

THE EXCHANGE OFFER

THE EXCHANGE OFFER............ The Company is offering to exchange $1,000
principal amount of Series B Notes for each
$1,000 principal amount of Series A Notes
validly tendered pursuant to the Exchange
Offer. As of the date hereof, there is $115
million aggregate principal amount of Series A
Notes outstanding. The Company will issue the
Series B Notes to tendering holders of Series A
Notes promptly after the Expiration Date. See
"The Exchange Offer -- Background" and
" -- General."

REGISTRATION RIGHTS
AGREEMENT..................... The Series A Notes were issued and sold by the
Company to Donaldson, Lufkin & Jenrette
Securities Corporation and CIBC Oppenheimer
Corp., the initial purchasers of the Series A
Notes (the "Initial Purchasers"), on April 1,
1998 pursuant to a Purchase Agreement (the
"Purchase Agreement") dated as of March 27,
1998 by and among the Company, the Subsidiary
Guarantors and the Initial Purchasers (the
"Series A Notes Offering"). Pursuant to the
Purchase Agreement, the Company, the Subsidiary
Guarantors and the Initial Purchasers entered
into a Registration Rights Agreement dated as
of April 1, 1998 (the "Registration Rights
Agreement") which grants the holders of the
Series A Notes registration and exchange
rights, certain of which terminate upon the
consummation of the Exchange Offer. The
Exchange Offer is intended to satisfy certain
obligations of the Company and the Subsidiary
Guarantors under the Registration Rights
Agreement. See "The Exchange Offer" and
"Description of Senior Notes -- Registration
Rights; Liquidated Damages."

EXPIRATION DATE............... The Exchange Offer will expire at 5:00 p.m.,
New York City time, on , 1998,
unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the
latest date and time to which the Exchange
Offer is extended. See "The Exchange
Offer -- Expiration Date; Delay, Extension,
Amendment, and Termination."

ACCRUED INTEREST ON THE SERIES
B NOTES AND SERIES A NOTES.... The Series B Notes will bear interest from
April 1, 1998. Holders of Series A Notes whose
Series A Notes are accepted for exchange will
be deemed to have waived the right to receive
any interest accrued on such Series A Notes.
See "The Exchange Offer -- Interest on the
Series B Notes."

CONDITIONS TO THE EXCHANGE
OFFER......................... The Exchange Offer is subject to certain
customary conditions which may be waived by the
Company. The conditions are limited and relate
in general to proceedings which have been
instituted or laws which have been adopted that
might impair the ability of the Company to
proceed with the Exchange Offer. As of the date
of this Prospectus, none of these events has
occurred, and the Company believes their
occurrence to be unlikely. The Exchange Offer
is not conditioned upon any minimum aggregate
principal amount of Series A Notes being
tendered for exchange. See "The Exchange
Offer -- Conditions."

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11

PROCEDURES FOR TENDERING
SERIES A NOTES................ Each holder of Series A Notes wishing to accept
the Exchange Offer must complete, sign and date
the Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal,
or such facsimile, together with the Series A
Notes to be exchanged and any other required
documentation to the Exchange Agent (as
defined) at the address set forth herein and
therein by 5:00 p.m., New York City time, on
the Expiration Date. See "The Exchange
Offer -- Procedures for Tendering." By
executing the Letter of Transmittal, each
holder will represent to the Company that,
among other things, (i) it is not an
"affiliate," as defined under Rule 405 of the
Securities Act, of the Company, (ii) it is not
engaged in, and does not intend to engage in,
and has no arrangement or understanding with
any person to participate in, a distribution of
the Series B Notes, and (iii) it is acquiring
the Series B Notes in the ordinary course of
business. See "The Exchange Offer -- Procedures
for Tendering."

SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS............. Any beneficial owner whose Series A Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and who wishes to tender in the Exchange Offer
should contact such registered holder promptly
and instruct such registered holder to tender
the Series A Notes on such beneficial owner's
behalf. See "The Exchange Offer -- Procedures
for Tendering."

GUARANTEED DELIVERY
PROCEDURES.................... Holders of Series A Notes who wish to tender
their Series A Notes and whose Series A Notes
are not immediately available or who cannot
deliver their Series A Notes and a properly
completed Letter of Transmittal or any other
documents required by the Letter of Transmittal
to the Exchange Agent prior to the Expiration
Date may tender their Series A Notes according
to the guaranteed delivery procedures set forth
in "The Exchange Offer -- Guaranteed Delivery
Procedures."

ACCEPTANCE OF SERIES A NOTES
AND DELIVERY OF SERIES B
NOTES....................... Subject to the satisfaction or waiver of the
conditions of the Exchange Offer, the Company
will accept for exchange any and all Series A
Notes which are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York
City time, on the Expiration Date. The Series B
Notes issued pursuant to the Exchange Offer
will be delivered on the earliest practicable
date after the Expiration Date. See "The
Exchange Offer -- General."

WITHDRAWAL RIGHTS............. Tenders of Series A Notes may be withdrawn at
any time prior to 5:00 p.m., New York City
time, on the Expiration Date. See "The Exchange
Offer -- Withdrawal of Tenders."

CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS.............. For a discussion of certain federal income tax
considerations relating to the exchange of the
Series B Notes for the Series A Notes, see
"Certain Federal Income Tax Considerations."

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12

EXCHANGE AGENT................ Norwest Bank Minnesota, National Association is
serving as the exchange agent (the "Exchange
Agent") in connection with the Exchange Offer.
See "The Exchange Offer -- Exchange Agent."

THE SERIES B NOTES

The Series B Notes will be obligations of the Company evidencing the same
indebtedness as the Series A Notes for which they are exchanged, and will be
entitled to the benefit of the same Indenture. The form and terms of the Series
B Notes are the same as the form and terms of the Series A Notes, except that
the Series B Notes have been registered under the Securities Act and the holders
of the Series B Notes will not be entitled to the benefit of certain
registration and exchange rights granted to the holders of the Series A Notes
under the Registration Rights Agreement, which rights will terminate upon the
consummation of the Exchange Offer. See "The Exchange Offer" and "Description of
Senior Notes."

MATURITY DATE................. April 1, 2008.

INTEREST...................... The Series B Notes will bear interest at a rate
of 9 5/8% per annum, payable semiannually in
cash in arrears on each April 1 and October 1,
commencing October 1, 1998. See "The Exchange
Offer -- Interest on the Series B Notes" and
"Description of Senior Notes -- Principal,
Maturity and Interest."

OPTIONAL REDEMPTION........... The Series B Notes will be redeemable at the
option of the Company, in whole or in part, at
any time on or after April 1, 2003, in cash at
the redemption prices set forth herein, plus
accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of
redemption. In addition, at any time prior to
April 1, 2001, the Company may, on any one or
more occasions, redeem up to 33 1/3% of the
aggregate principal amount of the Series B
Notes originally issued with the net cash
proceeds of one or more offerings of common
stock of the Company at a redemption price
equal to 109.625% of the principal amount
thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date
of redemption; provided, that at least 66 2/3%
of the aggregate principal amount of the Series
B Notes originally issued remains outstanding
immediately after the occurrence of any such
redemption. See "Description of Series B
Notes -- Optional Redemption."

CHANGE OF CONTROL............. Upon the occurrence of a Change of Control,
each holder of Series B Notes will have the
right to require the Company to repurchase all
or any part of such holder's Series B Notes at
an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus
accrued and unpaid interest and Liquidated
Damages, if any, to the date of purchase. See
"Description of Senior Notes -- Repurchase at
the Option of Holders -- Change of Control."

SUBSIDIARY GUARANTEES......... The Company's obligations under the Series B
Notes will be jointly and severally guaranteed
by each direct and indirect Subsidiary of the
Company (other than Foreign Subsidiaries)
existing on the closing date of the Exchange
Offer and by certain other Subsidiaries of the
Company formed or acquired thereafter
(collectively, the "Subsidiary Guarantors").
The Subsidiary Guarantors' liability

11
13

under the Subsidiary Guarantees will be limited
as described herein and the Subsidiary
Guarantees will be automatically released in
connection with certain Asset Sales (as
defined) and dispositions. See "Description of
Senior Notes -- Subsidiary Guarantees."

RANKING....................... The Series B Notes will be senior unsecured
obligations of the Company and will rank pari
passu in right of payment with all current and
future unsecured senior indebtedness of the
Company and senior to all subordinated
indebtedness of the Company. The Subsidiary
Guarantees will be senior unsecured obligations
of the Subsidiary Guarantors and will rank pari
passu in right of payment with all current and
future unsecured senior indebtedness of the
Subsidiary Guarantors and senior to all
subordinated indebtedness of the Subsidiary
Guarantors. The Company and certain of its
Subsidiaries are parties to the New Credit
Agreement, and all obligations thereunder are
secured by a first priority lien on the
accounts receivable and inventory of such
Subsidiaries. The New Credit Agreement provides
for up to $32.0 million of revolving credit
borrowings. On a pro forma basis, as of
December 31, 1997, after giving effect to the
Series A Notes Offering and the application of
the net proceeds therefrom, the aggregate
principal amount of secured indebtedness of the
Company, secured indebtedness of the Subsidiary
Guarantors and indebtedness and other
liabilities (including trade payables) of the
Company's Foreign Subsidiaries which would have
effectively ranked senior to the Senior Notes
would have been approximately $3.9 million. The
Indenture will permit the Company and its
Subsidiaries (including the Company's Foreign
Subsidiaries) to incur additional indebtedness,
including secured indebtedness, subject to
certain limitations.

CERTAIN COVENANTS............. The Indenture governing the Senior Notes
contains certain covenants that, among other
things, limit the ability of the Company and
its Subsidiaries (i) to pay dividends and make
other Restricted Payments (as defined) or
investments, (ii) to incur additional
indebtedness and issue preferred stock, (iii)
to enter into sale and leaseback transactions
with Affiliates (as defined), (iv) to merge or
consolidate with any other entity, (v) to
transfer all or substantially all of their
assets and (vi) to incur certain liens. In
addition, under certain circumstances, the
Company will be required to offer to purchase
Senior Notes at a price equal to 100% of the
principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase with the
proceeds of certain Asset Sales. See
"Description of Senior Notes -- Certain
Covenants."

RESALES....................... Based on an interpretation by the staff of the
Commission set forth in no-action letters
issued to third parties, the Company believes
that the Series B Notes issued pursuant to this
Exchange Offer in exchange for Series A Notes
may be offered for resale, resold and otherwise
transferred by a holder thereof (other than (i)
a broker-dealer that purchases such Series B
Notes directly from the Company to resell
pursuant to Rule 144A or any other available
exemption under the Securities Act or (ii) a
person that is an

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14

affiliate of the Company within the meaning of
Rule 405 under the Securities Act) without
compliance with the registration and prospectus
delivery provisions of the Securities Act,
provided that the holder is acquiring the
Series B Notes in the ordinary course of its
business and is not participating, and had no
arrangement or understanding with any person to
participate, in the distribution of the Series
B Notes. See Morgan Stanley & Co. Incorporated,
SEC No-Action Letter (available June 5, 1991)
and Exxon Capital Holdings Corporation, SEC
No-Action Letter (available May 13, 1988). Each
broker-dealer that receives the Series B Notes
for its own account in exchange for the Series
A Notes, where such Series A Notes were
acquired by such broker-dealer as a result of
market-making activities or other trading
activities, must acknowledge that it will
deliver a prospectus in connection with any
resale of such Series B Notes. The Company has
agreed to make this Prospectus (as it may be
amended or supplemented) available to any
broker-dealer for use in connection with any
such resale for a period of 120 days after
consummation of the Exchange Offer. See "The
Exchange Offer -- Resale of the Series B Notes"
and "Plan of Distribution."

RISK FACTORS

For a discussion of certain factors that should be considered by holders of
the Series A Notes and by prospective investors in connection with an investment
in the Series B Notes, see "Risk Factors."

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15

SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The following table presents summary unaudited pro forma consolidated
financial data of the Company. The unaudited pro forma consolidated financial
data give effect to the Series A Notes Offering, the application of the net
proceeds therefrom and the Curtis Acquisition as if such transactions had taken
place on January 1, 1997, with respect to the Income Statement and Other Data,
and give effect to the Series A Notes Offering and the application of the net
proceeds therefrom as if such transactions had taken place on December 31, 1997,
with respect to the Balance Sheet Data. The pro forma data do not purport to
represent what the consolidated results of operations or consolidated financial
position of the Company would have been had the Series A Notes Offering, the
application of the net proceeds therefrom and the Curtis Acquisition actually
occurred at the beginning of the relevant period, and do not purport to project
the consolidated financial position or the consolidated results of operations of
the Company for the current year or any future date or period. The summary
financial data set forth below should be read in conjunction with "Selected
Historical Financial Data," "Unaudited Pro Forma Consolidated Financial
Statements," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the consolidated financial statements of the Company,
A.B. Dick and Curtis and the related notes thereto (the "Consolidated Financial
Statements") included elsewhere in this Prospectus.

PERIOD FROM
JANUARY 17, 1997
THROUGH
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT RATIOS)

INCOME STATEMENT DATA:
Net revenue............................................... $267,419
Gross profit.............................................. 106,627
Operating income.......................................... 16,494
Total interest expense.................................... 11,652
Net income................................................ 4,633
OTHER DATA:
EBITDA(1)................................................. $ 22,239
Depreciation and amortization............................. 4,345
Capital expenditures...................................... 4,402
Cash interest expense(2).................................. 11,169
Ratio of EBITDA to cash interest expense(3)............... 2.0x
Ratio of net debt to EBITDA(1)(3)......................... 3.5

AS OF
DECEMBER 31, 1997
(IN THOUSANDS)

BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments......... $ 37,885
Total assets.............................................. 172,642
Long-term debt, including current portion................. 116,182

- ---------------

(1) EBITDA represents earnings before interest, income taxes, depreciation,
amortization, miscellaneous income (expenses) and for 1997 excludes $1.4
million of acquisition costs incurred in connection with the Curtis
Acquisition. EBITDA gives effect, on a pro forma basis, to $1.2 million in
management fees to be paid pursuant to the Management Agreement (as
defined). See "Related Transactions -- Management Agreement." EBITDA should
not be considered as an alternative to cash provided by operations as a
measure of liquidity, or to net income as a measure of profitability. EBITDA
and related ratios have been included because the Company uses them as one
means of analyzing its ability to service its debt, the Company's lenders
use them for the purpose of analyzing the Company's performance with respect
to the New Credit Agreement and the Indenture and the Company understands
that they are used by certain investors as one measure of a company's
historical ability to service debt. Not all companies calculate EBITDA in
the same fashion and therefore EBITDA as presented may not be comparable to
other similarly titled measures of other companies.

(2) Cash interest expense excludes non-cash amortization of deferred financing
costs.

(3) Net debt represents total debt, net of cash, cash equivalents and short-term
investments as of December 31, 1997 on an as adjusted basis.

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RISK FACTORS

Holders of the Series A Notes and prospective purchasers of the Series B
Notes should consider carefully the risk factors set forth below, as well as the
other information set forth in this Prospectus.

LEVERAGE AND DEBT SERVICE REQUIREMENTS

The Company's high degree of leverage could have important consequences to
the holders of the Series B Notes including, without limitation, (i) a
substantial portion of the Company's cash provided from operations will be
committed to the payment of debt service and will not be available to the
Company for other purposes, (ii) the Company's ability to obtain additional
financing in the future for working capital, capital expenditures or
acquisitions may be limited and (iii) the Company's levels of indebtedness may
limit the Company's flexibility in reacting to changes in its business
environment. See "Description of New Credit Agreement" and "Description of
Senior Notes."

The Company's ability to pay principal and interest on the Series B Notes
and to satisfy its other debt obligations will depend upon the future operating
performance of its Subsidiaries, which will be affected by prevailing economic
conditions in the markets they serve and financial, business and other factors,
certain of which are beyond their control, as well as the availability of
borrowings under the New Credit Agreement or successor facilities. The Company
may be required to refinance all or a portion of its existing indebtedness at or
prior to maturity, including the Series B Notes, or sell assets or seek to raise
additional equity capital. No assurance can be given that any such debt or
equity financing will be available to the Company on acceptable terms, if at
all.

HOLDING COMPANY STRUCTURE; RANK OF SERIES B NOTES

The Company is a holding company that conducts all of its operations
exclusively through its Subsidiaries. The Company's only significant assets are
the capital stock of its wholly-owned Subsidiaries, A.B. Dick and Curtis. As a
holding company, the Company is dependent on dividends or other distributions of
funds from its Subsidiaries to meet the Company's debt service and other
obligations, including its obligations under the Series B Notes. The New Credit
Agreement and all obligations thereunder are secured by a first priority lien on
all accounts receivable and inventory of the Company's Subsidiaries and thus the
Series B Notes will be effectively subordinated to all indebtedness under the
New Credit Agreement. See "Description of New Credit Agreement." The Company's
obligations under the Series B Notes will be jointly and severally guaranteed by
the Subsidiary Guarantors. The Series B Notes will not, subject to certain
exceptions, be guaranteed by the Company's Foreign Subsidiaries and will be
effectively subordinated to all current and future indebtedness and other
liabilities (including trade payables) of such Foreign Subsidiaries. The
Indenture restricts, but does not prohibit, the incurrence of indebtedness by
Foreign Subsidiaries.

As of December 31, 1997, on a pro forma basis after giving effect to the
Series A Notes Offering and the application of the net proceeds therefrom, the
aggregate principal amount of secured indebtedness of the Company, secured
indebtedness of the Subsidiary Guarantors and indebtedness and other liabilities
(including trade payables) of the Company's Foreign Subsidiaries which would
have effectively ranked senior to the Series B Notes would have been
approximately $3.9 million. In addition, on a pro forma basis as of December 31,
1997, the Company would have had aggregate undrawn availability under the New
Credit

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Agreement of approximately $32.0 million which, if drawn, would be fully secured
and would, therefore, effectively rank senior to the Senior Notes.

CYCLICAL INDUSTRY CUSTOMER BASE

Many of the end users of the Company's products typically experience
cyclical fluctuations in revenues and earnings. Such fluctuations will from time
to time adversely affect the demand for certain of the Company's products, and
general recessionary or slow economic growth conditions would likely have an
adverse effect on the Company's revenues. No assurance can be given that the
Company will not experience declining revenues in the future.

EFFECT OF NEW TECHNOLOGIES IN THE PRINTING INDUSTRY

The pre-press and offset printing markets generally have been subject to
rapid technological change in recent years. For example, the commercialization
of digital pre-press technology by the Company and certain of its competitors
has substantially reduced the demand for optical pre-press equipment of the type
supplied by the Company. If the Company does not succeed in introducing products
that incorporate new technologies, its results of operations and financial
condition may be negatively impacted in the future.

RISKS RELATED TO THE AUTOMOTIVE INDUSTRY

The security products segment of the automotive industry is currently
undergoing significant technological change. High security digital locking
systems have met with widespread acceptance in Europe and are beginning to do so
in the United States and Canada. If the Company does not succeed in introducing
products which incorporate these new technologies, its results of operations and
financial condition may be negatively impacted in the future. In addition, in
recent years the automobile dealership business has undergone substantial
consolidation in the United States. The Company cannot predict the effect this
consolidation, or any continuation of this consolidation, will have on its
results of operations and financial condition.

CONTROL BY SOLE STOCKHOLDER

The Company is a wholly-owned subsidiary of NES Group, Inc., the capital
stock of which is beneficially owned by Robert J. Tomsich. As a result of his
control of NES Group, Inc., Mr. Tomsich will be able to control the election of
directors of the Company and to determine the corporate and management policies
of the Company, including decisions relating to any mergers or acquisitions of
the Company, sales of all or substantially all of the Company's assets and other
significant corporate transactions, which transactions may result in a Change of
Control under the Indenture governing the Senior Notes. The Company's board of
directors is expected to be comprised entirely of designees of NES Group, Inc.
See "Sole Stockholder."

DEPENDENCE UPON MANAGEMENT PERSONNEL

The Company's success depends to a significant extent upon its management
personnel as well as the management personnel of its operating subsidiaries. The
loss of the services of certain of such personnel could have a material adverse
effect upon a particular operating subsidiary or the Company, or both. Certain
officers of the Company are parties to employment and/or severance arrangements
with operating subsidiaries of the Company. See "Management -- Employment,
Severance and Bonus Agreements." The Company will be dependent on NESCO, Inc.,
an affiliate of the Company, for certain management oversight services. NESCO,
Inc. also provides management oversight services for certain affiliates of the
Company. See "Related Transactions -- Management Agreement."

INTERNATIONAL OPERATIONS; LIMITATIONS ON SUBSIDIARY GUARANTEES

The Company has significant operations in foreign countries. During the
year ended December 31, 1997, $77.6 million of the Company's pro forma net
revenue was attributable to customers outside the United States, representing
approximately 29.0% of the Company's total pro forma net revenue during the
period.

The dollar value of the Company's foreign sales and earnings varies with
currency exchange rate fluctuations. Changes in currency exchange rates could
have an adverse effect upon the Company's results of operations, which in turn
could adversely affect the Company's ability to meet its interest and principal
obligations on its indebtedness, including the Series B Notes. Furthermore,
international manufacturing and

16
18

sales are subject to other inherent risks including labor unrest, political and
economic instability, restrictions on transfer of funds, export duties and
quotas, domestic and foreign customs and tariffs, current and changing
regulatory environments and difficulty in obtaining distribution and support.
There can be no assurance that these factors will not have a material adverse
effect on the Company's international operations or sales or upon its financial
condition and results of operations.

In addition, the cost of printing equipment and supplies manufactured by
third parties outside the United States and purchased by the Company for resale
varies with currency exchange rate fluctuations, primarily with respect to the
Japanese yen.

The Company's Foreign Subsidiaries are not guarantors of the Company's
obligations under the Senior Notes. In 1997, the Company's Foreign Subsidiaries
accounted for 19.2% of the Company's pro forma net revenue.

RISKS ATTENDANT TO ACQUISITION STRATEGY

The Company regularly considers the acquisition of other companies engaged
in related businesses. At any given time, the Company may be in various stages
of considering such opportunities. Such acquisitions are subject to the
negotiation of definitive agreements and to conditions typical in acquisition
transactions, certain of which conditions may be beyond the Company's control.
There is no assurance that the Company will be able to identify desirable
acquisition candidates or will be successful in entering into any definitive
agreements with respect to desirable acquisitions. Moreover, even if definitive
agreements are entered into, there is no assurance that any future acquisition
will thereafter be completed or, if completed, that the anticipated benefits of
the acquisition will be realized. The process of integrating acquired operations
into the Company's operations may result in unforeseen operating difficulties,
may absorb significant management attention and may require significant
financial resources that would otherwise be available for the ongoing
development or expansion of the Company's existing operations. Future
acquisitions by the Company could result in the incurrence of additional debt
and contingent liabilities, which could have a material adverse effect on the
Company's financial condition and results of operations.

NO OPERATING HISTORY ON A COMBINED BASIS; LIMITED COMPARABILITY OF HISTORICAL
FINANCIAL INFORMATION

The Company has no prior history of operating A.B. Dick and Curtis on a
combined basis. The Company's prospects should be considered in light of the
numerous risks commonly encountered in business acquisitions. The pro forma
financial statements presented elsewhere in this Prospectus may not necessarily
be indicative of the results that would have been attained had the Company
operated on a combined basis for such periods.

In connection with the A.B. Dick Acquisition, the Company eliminated
certain positions and costs that had impacted the historical financial results
of A.B. Dick. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- A.B. Dick." Accordingly, the historical financial
statements of A.B. Dick may not necessarily be indicative of the results that
would have been attained had A.B. Dick been a subsidiary of the Company during
the historical years presented.

YEAR 2000 ISSUES

The Company is currently engaged in a process of evaluating the actions
necessary in order to ensure that its computer systems will be able to function
without disruption with respect to the application of dating systems in the Year
2000. The assessment includes the Company's information systems as well as
digital controls embedded into items such as elevators and fax machines. There
can be no assurance that the Company will be able to complete whatever remedial
actions may be required to successfully operate its computer systems in the Year
2000 by the time necessary to avoid dating systems problems or that the cost of
doing so will not be material. In addition, disruptions with respect to the
computer systems of the Company's vendors or customers, which systems are
outside the control of the Company, could operate so as to negatively affect the
Company's ability to obtain necessary materials or products or to sell to or
service its customers. Disruptions of the Company's computer systems, or the
computer systems of the Company's vendors or customers, as well as the cost of
avoiding such disruption, could have a material adverse effect upon the
Company's financial condition and results of operations.

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COMPETITION

The Company's products are sold in highly competitive markets. The Company
competes throughout the world with a significant number of companies of varying
sizes in a wide variety of markets, on the basis of service, quality, price,
reliability, availability and timing. A number of the Company's competitors have
financial and other resources that are substantially greater than those of the
Company. Competitive pressures could cause the Company to lose market share or
could result in significant price erosion, either of which could have a material
adverse effect upon the Company's results of operations.

PURCHASE OF SERIES B NOTES UPON A CHANGE OF CONTROL

Upon a Change of Control, each holder of Series B Notes will have the right
to require the Company to purchase all or any part of such holder's Series B
Notes at an offer price of 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase. The source of funds for any such purchase would be the Company's
available cash or cash generated from other sources, including borrowings, sales
of assets, sales of equity or funds provided by a new controlling person. The
New Credit Agreement prohibits the payment of dividends to the Company for
purposes of purchasing Series B Notes upon a Change of Control. A Change of
Control would likely constitute an event of default under the New Credit
Agreement that would permit the lenders to accelerate the debt under such New
Credit Agreement. In such event, the Company would likely attempt to refinance
the indebtedness outstanding under the New Credit Agreement and the Series B
Notes. There can be no assurance that sufficient funds will be available at the
time of any Change of Control to make any required purchases of Series B Notes
tendered and to repay indebtedness under the New Credit Agreement. See
"Description of New Credit Agreement" and "Description of Senior
Notes -- Repurchase at the Option of Holders -- Change of Control."

ABSENCE OF ESTABLISHED PUBLIC MARKET

There is no established public market for the Series A Notes. The Series B
Notes will constitute a new issue of securities for which there is no
established trading market. The Company does not intend to list the Series B
Notes on any national securities exchange or to seek the admission of the Series
B Notes for quotation through the National Association of Securities Dealers
Automated Quotation System. Although the Initial Purchasers have advised the
Company that they currently intend to make a market in the Senior Notes, they
are not obligated to do so and may discontinue such market making activity at
any time without notice. Accordingly, there can be no assurance as to the
development or liquidity of any market for the Series B Notes, the ability of
the holders of the Series B Notes to sell their Series B Notes, or the price at
which such holders would be able to sell their Series B Notes. Future trading
prices of the Series B Notes will depend on many factors, including prevailing
interest rates, the Company's operating results and the market for similar
securities.

To the extent that Series A Notes are tendered and accepted in the Exchange
Offer, any trading market for untendered and tendered but unaccepted Series A
Notes could be adversely affected.

CONSEQUENCES OF FAILURE TO EXCHANGE

The Series A Notes were sold pursuant to an exemption from the registration
requirements of the Securities Act and their transfer is subject to certain
restrictions under the Securities Act. In general, Series A Notes may not be
offered or sold, unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. Holders of Series A Notes who do not exchange
their Series A Notes for Series B Notes pursuant to the Exchange Offer will
continue to be subject to such restrictions on transfer of the Series A Notes.
The Company currently does not anticipate that it will register the Series A
Notes under the Securities Act.

The Series B Notes will be issued in exchange for Series A Notes only after
timely receipt by the Exchange Agent of such Series A Notes, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of Series A Notes desiring to tender such Series A
Notes in exchange for Series B Notes should allow sufficient time to ensure
timely delivery. Neither the Exchange Agent nor the Company is under any duty to
give notification of defects or irregularities with respect to tenders

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of Series A Notes for exchange. Series A Notes that are not tendered or are
tendered but not accepted will, following consummation of the Exchange Offer,
continue to be subject to the existing restrictions upon transfer thereof. In
addition, any holder of Series A Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the Series B Notes will be
required to comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. Each broker-
dealer that receives Series B Notes for its own account in exchange for Series A
Notes, where such Series A Notes were acquired by such broker-dealer as a result
of market-making activities or any other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such Series B
Notes. See "Plan of Distribution." To the extent that Series A Notes are
tendered and accepted in the Exchange Offer, any trading market for untendered
and tendered but unaccepted Series A Notes could be adversely affected. See "The
Exchange Offer -- Consequences of Failure to Exchange."

FRAUDULENT TRANSFER CONSIDERATIONS

Under federal or state fraudulent transfer laws, if a court were to find
that, at the time any of the Senior Notes or Subsidiary Guarantees were issued,
the Company or a Subsidiary Guarantor, as the case may be, (i) issued such
Senior Notes or Subsidiary Guarantee with the intent of hindering, delaying or
defrauding current or future creditors or (ii) (A) received less than fair
consideration or reasonably equivalent value for incurring the indebtedness
represented by such Senior Notes or Subsidiary Guarantee, and (B) (1) was
insolvent or was rendered insolvent by reason of the issuance of such Senior
Notes or Subsidiary Guarantee, (2) was engaged, or about to engage, in a
business or transaction for which its assets were unreasonably small or (3)
intended to incur, or believed (or should have believed) it would incur, debts
beyond its ability to pay as such debts mature (as all of the foregoing terms
are defined in or interpreted under such fraudulent transfer statutes), such
court could avoid all or a portion of the Company's or a Subsidiary Guarantor's
obligations to the holders of Senior Notes, subordinate the Company's or a
Subsidiary Guarantor's obligations to the holders of the Senior Notes to other
existing and future indebtedness of the Company or such Subsidiary Guarantor, as
the case may be, the effect of which would be to entitle such other creditors to
be paid in full before any payment could be made on the Senior Notes, and take
other action detrimental to the holders of the Senior Notes, including in
certain circumstances, invalidating the Senior Notes. In that event, there would
be no assurance that any repayment on the Senior Notes would ever be recovered
by the holders of the Senior Notes.

The definition of insolvency for purposes of the foregoing considerations
varies among jurisdictions depending upon the federal or state law that is being
applied in any such proceeding. However, the Company or a Subsidiary Guarantor
generally would be considered insolvent at the time it incurs the indebtedness
constituting any of the Senior Notes or any Subsidiary Guarantee, as the case
may be, if (i) the fair market value (or fair saleable value) of its assets is
less than the amount required to pay its total existing debts and liabilities
(including the probable liability on contingent liabilities) as they become
absolute or matured or (ii) it is incurring debts beyond its ability to pay as
such debts mature. There can be no assurance as to what standard a court would
apply in order to determine whether the Company or a Subsidiary Guarantor was
"insolvent" as of the date any of the Senior Notes or Subsidiary Guarantees were
issued, or that, regardless of the method of valuation, a court would not
determine that the Company or a Subsidiary Guarantor was insolvent on that date.
Nor can there be any assurance that a court would not determine, regardless of
whether the Company or a Subsidiary Guarantor was insolvent on the date any
Senior Note or Subsidiary Guarantee was issued, that the payments constituted
fraudulent transfers on another ground. To the extent that proceeds from the
sale of the Senior Notes are used to make a distribution to the stockholder of
the Company on account of the ownership of capital stock, a court may find that
the Company or a Subsidiary Guarantor did not receive fair consideration or
reasonably equivalent value for the incurrence of the indebtedness represented
by such Senior Notes or any related Subsidiary Guarantee, as the case may be.

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THE COMPANY

The Company is a holding company organized in September 1996 under the
Delaware General Corporation Law. Its principal assets consist of all of the
capital stock of A.B. Dick and Curtis, each of which is a Delaware corporation.

The Company acquired all of the capital stock of A.B. Dick from GEC
Incorporated on January 17, 1997 for approximately $6.0 million (the "A.B. Dick
Acquisition"). As part of the A.B. Dick Acquisition, A.B. Dick transferred to
GEC Incorporated $19.5 million of domestic accounts receivable, which were
remitted to GEC Incorporated as collected by A.B. Dick after the closing of the
A.B. Dick Acquisition. The Company incurred $6.0 million of indebtedness in
connection with the A.B. Dick Acquisition, which indebtedness was discharged
with a portion of the net proceeds of the Series A Notes Offering. In connection
with the A.B. Dick Acquisition, the Company also agreed to pay to GEC
Incorporated 50% of all gross proceeds received from the sale, rental or lease
of any inventory relating to the Century 3500 series of printing presses, up to
a maximum amount of approximately $5.4 million. As of March 31, 1998, the
Company had paid GEC Incorporated approximately $2.2 million under this
arrangement. GEC Incorporated has agreed to fully indemnify the Company against
costs and liabilities in connection with certain claims that are pending or may
be brought against A.B. Dick and arise out of events occurring prior to the
closing of the A.B. Dick Acquisition. See "Business -- Legal Proceedings." A.B.
Dick is a manufacturer and marketer of printing products for the global quick
print and small commercial graphics markets.

The Company acquired all of the capital stock of Curtis from Noel Group,
Inc. and certain other shareholders on December 5, 1997 for approximately $22.2
million (the "Curtis Acquisition"). Curtis had approximately $29.2 million of
indebtedness at the time of the consummation of the Curtis Acquisition, which
indebtedness was assumed by the Company. The Company incurred $15.7 million of
indebtedness in connection with the Curtis Acquisition, which indebtedness was
discharged with a portion of the net proceeds of the Series A Notes Offering.
Curtis supplies consumable, high margin, multiple-purpose products used in the
automotive and industrial markets, with an increasing focus on providing
value-added logistics services.

NES Group, Inc., the sole stockholder of the Company, is a Cleveland,
Ohio-based holding company with subsidiaries engaged in the manufacture and sale
of industrial products, equipment and machinery, the provision of engineering,
industrial and computer personnel services and the development and management of
real estate.

The Company's principal executive offices are located at 5700 West Touhy
Avenue, Niles, Illinois 60714 and its telephone number is (847) 779-2500.

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THE EXCHANGE OFFER

BACKGROUND

Upon the respective terms and conditions of the Indenture and the Purchase
Agreement, the Series A Notes were issued and sold by the Company to the Initial
Purchasers on April 1, 1998 (the "Series A Issue Date"). Thereafter, the Series
A Notes were resold by the Initial Purchasers to certain purchasers in reliance
upon one or more exemptions from the registration requirements of the Securities
Act. Pursuant to the Registration Rights Agreement entered into by the Company,
the Subsidiary Guarantors and the Initial Purchasers as a condition to the
obligations of the Initial Purchasers under the Purchase Agreement, the Company
and the Subsidiary Guarantors agreed that, unless the Exchange Offer is not
permitted by applicable law, they would (i) cause to be filed with the
Commission, on or prior to 60 days after the Series A Issue Date, a Registration
Statement under the Securities Act relating to the Series B Notes, (ii) use
their reasonable best efforts to cause the Registration Statement to become
effective at the earliest possible time, but in no event later than 150 days
after the Series A Issue Date and (iii) upon effectiveness of the Registration
Statement, commence the Exchange Offer, maintain the effectiveness of the
Registration Statement for at least 20 business days (or a longer period if
required by law) and deliver to the Exchange Agent Series B Notes in the same
aggregate principal amount as the Series A Notes that were tendered by the
holders thereof pursuant to the Exchange Offer. A copy of the Registration
Rights Agreement has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The Registration Statement of which this
Prospectus is a part is intended to satisfy certain of the obligations of the
Company and the Subsidiary Guarantors under the Registration Rights Agreement
and the Purchase Agreement.

GENERAL

This Prospectus, together with the Letter of Transmittal, is being sent to
all beneficial owners of Series A Notes who are known to the Company as of the
date hereof. Upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal, the Company will
accept all Series A Notes properly tendered and not withdrawn prior to 5:00
p.m., New York City time, on the Expiration Date. The Company will issue $1,000
principal amount of Series B Notes in exchange for each $1,000 principal amount
of outstanding Series A Notes accepted in the Exchange Offer. Holders may tender
some or all of their Series A Notes pursuant to the Exchange Offer, but Series A
Notes may be tendered only in integral multiples of $1,000.

The form and terms of the Series B Notes are the same as the form and terms
of the Series A Notes, except that the Series B Notes have been registered under
the Securities Act and holders of the Series B Notes will not be entitled to
certain registration and exchange rights granted to the holders of the Series A
Notes under the Registration Rights Agreement, which rights will terminate upon
the consummation of the Exchange Offer. The Series B Notes will evidence the
same debt as the Series A Notes for which they are exchanged and will be issued
under, and be entitled to the benefits of, the Indenture, which also authorized
the issuance of the Series A Notes, such that both series will be treated as a
single class of debt securities under the Indenture.

As of the date of this Prospectus, $115 million aggregate principal amount
of the Series A Notes are outstanding and registered in the name of Cede & Co.,
as nominee for the Depository Trust Company ("DTC"). Only a registered holder of
the Series A Notes, as reflected on the records of the Trustee under the
Indenture, or such holder's legal representative or attorney-in-fact (including
any beneficial owner of Series A Notes that obtains a properly completed bond
power and proxy from the registered holder of such Series A Notes), may
participate in the Exchange Offer. There will be no fixed record date for
determining registered holders of the Series A Notes entitled to participate in
the Exchange Offer.

Holders of the Series A Notes do not have any appraisal or dissenters'
rights under the Indenture in connection with the Exchange Offer. The Company
intends to conduct the Exchange Offer in accordance with the provisions of the
Registration Rights Agreement and the applicable requirements of the Securities
Act, the Exchange Act and the rules and regulations of the Commission
thereunder.

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23

The Company shall be deemed to have accepted validly tendered Series A
Notes when, as and if the Company has given oral or written notice thereof to
the Exchange Agent. The Exchange Agent will act as agent for the tendering
holders of Series A Notes for the purposes of receiving the Series B Notes from
the Company and delivering Series B Notes to such holders. If any tendered
Series A Notes are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer or if Series A Notes are withdrawn or are
submitted for a greater principal amount than the holders desire to exchange,
such unaccepted, withdrawn or non-exchanged Series A Notes will be returned
without expense to the tendering holder thereof (or, in the case of Series A
Notes tendered by book-entry transfer into the Exchange Agent's account at DTC
pursuant to the book-entry transfer procedures described below, such Series A
Notes will be credited to an account maintained with DTC) as promptly as
practicable after the Expiration Date.

Holders of Series A Notes who tender in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of Series
A Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes described below in connection with
the Exchange Offer. See " -- Fees and Expenses."

The Company will not receive any proceeds from the Exchange Offer. The
Company has agreed to bear the expenses of the Exchange Offer pursuant to the
Registration Rights Agreement. No underwriter is being used in connection with
the Exchange Offer.

EXPIRATION DATE; DELAY, EXTENSION, AMENDMENT AND TERMINATION

The term "Expiration Date" shall mean the expiration date set forth on the
cover page of this Prospectus, unless the Company, in its sole discretion,
extends the Exchange Offer, in which case the term "Expiration Date" shall mean
the latest date to which the Exchange Offer is extended.

The Company reserves the right, in its sole discretion, (i) to delay
accepting any Series A Notes, (ii) to extend the Exchange Offer, (iii) to amend
the terms of the Exchange Offer or (iv) to terminate the Exchange Offer.
However, in all cases, the Exchange Offer will remain open for at least 20
business days and, in the event the Company decreases the percentage of Series A
Notes being sought, the Exchange Offer will remain open for at least ten
business days from the date notice of such decrease is first published or sent
or given to the holders of the Series A Notes. Any delay, extension, amendment
or termination will be followed as promptly as practicable by oral or written
notice to the Exchange Agent and a public announcement thereof. In the case of
an extension, such public announcement shall include disclosure of the
approximate number of Series A Notes deposited to date and shall be made prior
to 9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which the Company may
choose to make a public announcement of any extension, amendment or termination
of the Exchange Offer, the Company shall have no obligation to publish,
advertise, or otherwise communicate any such public announcement, other than by
making a timely release to the Dow Jones News Service.

INTEREST ON THE SERIES B NOTES

The Series B Notes will bear interest from April 1, 1998, payable
semiannually on April 1 and October 1 of each year, commencing October 1, 1998,
at the rate of 9 5/8% per annum. Holders of Series A Notes whose Series A Notes
are accepted for exchange will receive interest, as interest on the Series B
Notes, accrued from the Series A Issue Date and will be deemed to have waived
the right to receive interest accrued on the Series A Notes.

PROCEDURES FOR TENDERING

To tender in the Exchange Offer, a holder of Series A Notes must properly
complete, sign and date the Letter of Transmittal, or a facsimile thereof, have
the signatures thereon guaranteed if required by the Letter of Transmittal, and
mail or otherwise deliver such Letter of Transmittal or such facsimile to the
Exchange Agent. In addition, either (i) certificates for such Series A Notes
must be received by the Exchange Agent along with the Letter of Transmittal, or
(ii) a timely confirmation of a book-entry transfer (a "Book-Entry
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Confirmation") of such Series A Notes, if such procedure is available, into the
Exchange Agent's account at DTC pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date, or (iii) the holder must comply with the guaranteed delivery
procedures described below.

The tender by a holder of Series A Notes will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal.

THE METHOD OF DELIVERY OF SERIES A NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK
OF THE HOLDER. SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY TO
THE EXCHANGE AGENT BY 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR SERIES A NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS
MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES
OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.

Any beneficial owner whose Series A Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering such
owner's Series A Notes, either make appropriate arrangements to register
ownership of the Series A Notes in such owner's name or obtain a properly
completed bond power from the registered holder and a proxy which authorizes
such owner to tender the Series A Notes on behalf of the registered holder, in
each case signed by the registered holder as the name of such registered holder
appears on the Series A Notes. The transfer of record ownership may take
considerable time.

Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States (an "Eligible Institution") unless the Series A Notes tendered pursuant
thereto are tendered (i) by a registered holder who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" on
the Letter of Transmittal or (ii) for the account of an Eligible Institution. In
the event that signatures on a Letter of Transmittal or a notice of withdrawal,
as the case may be, are required to be guaranteed, such guarantee must be by an
Eligible Institution.

If the Letter of Transmittal or any Series A Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or other acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority so to act must
be submitted with the Letter of Transmittal.

The Exchange Agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may utilize DTC's Automated Tender Offer
Program to tender Series A Notes.

All questions as to the validity, form, eligibility (including time of
receipt), and withdrawal of the tendered Series A Notes will be determined by
the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Series A
Notes not properly tendered or any Series A Notes the Company's acceptance of
which would, in the opinion of counsel for the Company, be unlawful. The Company
also reserves the right to waive any defects, irregularities or conditions of
tender as to particular Series A Notes. The Company's interpretation of the
terms and conditions of the Exchange Offer (including the instructions in the
Letter of Transmittal) will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Series A Notes must
be cured within such time as the Company shall determine. Although the Company
presently intends to notify holders of defects or irregularities with respect to
tenders of Series A Notes, neither the Company, the Exchange Agent nor any other
person shall be under any duty to give such notification, nor shall any of them

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incur any liability for failure to give such notification. Tenders of Series A
Notes will not be deemed to have been made until such irregularities have been
cured or waived. Any Series A Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned without cost to such holder by the Exchange
Agent to the tendering holders of Series A Notes, unless otherwise provided in
the Letter of Transmittal, as soon as practicable following the Expiration Date.

While the Company has no present plan to acquire any Series A Notes which
have not been tendered in the Exchange Offer or to file a registration statement
to permit resales of Series A Notes which are not tendered pursuant to the
Exchange Offer, subject to the terms of the Indenture, the Company reserves the
right in its sole discretion to (i) purchase or make offers for any Series A
Notes that remain outstanding subsequent to the Expiration Date and (ii) to the
extent permitted by applicable law, terminate the Exchange Offer and purchase
Series A Notes in the open market, in privately negotiated transactions or
otherwise. The term of any such purchases or offers will differ from the terms
of the Exchange Offer.

By tendering, each holder will represent to the Company that, among other
things, (i) it is not an "affiliate," as defined under Rule 405 of the
Securities Act, of the Company, (ii) it is not engaged in, and does not intend
to engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Series B Notes, and (iii) it is acquiring
the Series B Notes in the ordinary course of business.

Each broker-dealer that receives Series B Notes for its own account in
exchange for Series A Notes, where such Series A Notes were acquired by such
broker-dealer as a result of market-making or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Series B Notes. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Series B Notes received in
exchange for Series A Notes where such Series A Notes were acquired by such
broker-dealer as result of market-making activities or other trading activities.
The Company has agreed that, for a period of 120 days after the consummation of
the Exchange Offer, it will make this Prospectus, as it may be amended or
supplemented from time to time, available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution."

GUARANTEED DELIVERY PROCEDURES

Holders who wish to tender their Series A Notes and (a) whose Series A
Notes are not immediately available or (b) who cannot deliver their Series A
Notes, the Letter of Transmittal or any other required documents to the Exchange
Agent prior to the Expiration Date, may effect a tender if:

(i) the tender is made through an Eligible Institution;

(ii) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand
delivery) setting forth the name and address of the holder of the
Series A Notes, the certificate number or numbers of such Series A
Notes and the principal amount of Series A Notes tendered, stating
that the tender is being made thereby, and guaranteeing that, within
three business days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof) together with the certificate(s)
representing the Series A Notes to be tendered in proper form for
transfer or a Book-Entry Confirmation, as the case may be, and any
other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent; and

(iii) such properly completed and executed Letter of Transmittal (or
facsimile thereof) together with the certificate(s) representing all
tendered Series A Notes in proper form for transfer and all other
documents required by the Letter of Transmittal are received by the
Exchange Agent within three business days after the Expiration Date.

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WITHDRAWAL OF TENDERS

Except as otherwise provided herein, tenders of Series A Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date, unless previously accepted for exchange.

To withdraw a tender of Series A Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Series A Notes to be withdrawn (the
"Depositor"), (ii) identify the Series A Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Series A Notes),
(iii) be signed by the Depositor in the same manner as the original signature on
the Letter of Transmittal by which such Series A Notes were tendered (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Series A Notes register the
transfer of such Series A Notes into the name of the Depositor withdrawing the
tender and (iv) specify the name in which any such Series A Notes are to be
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such withdrawal
notices will be determined by the Company, whose determination shall be final
and binding on all parties. Any Series A Notes so withdrawn will be deemed not
to have been validly tendered for purposes of the Exchange Offer and no Series B
Notes will be issued with respect thereto unless the Series A Notes so withdrawn
are validly retendered. Properly withdrawn Series A Notes may be retendered by
following one of the procedures described above under " -- Procedures for
Tendering" at any time prior to the Expiration Date.

CONDITIONS

The Exchange Offer is subject to certain customary conditions which may be
waived by the Company. The conditions are limited and relate in general to
proceedings which have been instituted or laws which have been adopted that
might impair the ability of the Company to proceed with the Exchange Offer.
Notwithstanding any other term of the Exchange Offer, if the Exchange Offer
violates applicable law, rule or regulation or an applicable interpretation of
the staff of the Commission, (i) the Company will not be required to accept for
exchange, or exchange Series B Notes for, any Series A Notes not theretofore
accepted for exchange and (ii) the Company may delay accepting any Series A
Notes, amend the terms of the Exchange Offer, or extend or terminate the
Exchange Offer, as provided herein. All conditions (other than certain necessary
government approvals, if any, required to consummate the offer) must be
satisfied or waived prior to the Expiration Date. See "Expiration Date; Delay,
Extension, Amendment and Termination."

EXCHANGE AGENT

Norwest Bank Minnesota, National Association has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance and requests
for additional copies of this Prospectus or the Letter of Transmittal and
deliveries of completed Letters of Transmittal with tendered Series A Notes
should be directed to the Exchange Agent addressed as follows:

By Registered or Certified Mail: By Overnight Courier:
Norwest Bank Minnesota, National Association Norwest Bank Minnesota, National Association
Corporate Trust Operations Corporate Trust Operations
P.O. Box 1517 Norwest Center
Minneapolis, MN 55480-1517 Sixth and Marquette
Minneapolis, MN 55479-0069
By Hand: By Facsimile:
Norwest Bank Minnesota, National Association Norwest Bank Minnesota, National Association
Corporate Trust Operations Corporate Trust Operations
Northstar East, 12th Floor (612) 667-4927
608 2nd Avenue Confirm by telephone:
Minneapolis, MN 55479-0113 (612) 667-9764

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FEES AND EXPENSES

The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional solicitations may be made by
officers and regular employees of the Company and its affiliates in person, by
telephone or facsimile.

The Company will not make any payments to brokers, dealers, or other
persons soliciting acceptances of the Exchange Offer. The Company, however, will
pay the Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith. The Company may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus, Letters of Transmittal
and related documents to the beneficial owners of the Series A Notes, and in
handling or forwarding tenders for exchange.

The expenses to be incurred in connection with the Exchange Offer,
including registration fees, fees and expenses of the Exchange Agent and
Trustee, accounting and legal fees and expenses, and printing costs, will be
paid by the Company and are estimated in the aggregate to be approximately
$200,000.

The Company will pay all transfer taxes, if any, applicable to the exchange
of the Series A Notes pursuant to the Exchange Offer. If, however, a transfer
tax is imposed for any reason other than the exchange of Series A Notes pursuant
to the Exchange Offer, then the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.

CONSEQUENCE OF FAILURE TO EXCHANGE

Participation in the Exchange Offer is voluntary. Holders of the Series A
Notes are urged to consult their financial and tax advisors prior to determining
whether or not to tender their Series A Notes.

Series A Notes which are not exchanged for the Series B Notes pursuant to
the Exchange Offer will remain restricted securities. Accordingly, such Series A
Notes may be resold only (i) to a person whom the seller reasonably believes is
a qualified institutional buyer (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, (ii) in a
transaction meeting the requirements of Rule 144 under the Securities Act, (iii)
in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S
under the Securities Act, (iv) to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act that, prior to such transfer, furnishes the trustee a signed letter
containing certain representations and agreements relating to the transfer of
the Senior Notes and, if such transfer is in respect of an aggregate principal
amount of Senior Notes less than $250,000, an opinion of counsel, (v) in
accordance with another exemption from the registration requirements of the
Securities Act, (vi) to the Company or (vii) pursuant to an effective
registration statement and, in each case, in accordance with any applicable
securities laws of any state of the United States.

RESALE OF THE SERIES B NOTES

With respect to the Series B Notes, based upon an interpretation by the
staff of the Commission set forth in certain no-action letters issued to third
parties, the Company believes that a holder (other than (i) a broker-dealer that
purchases such Series B Notes directly from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act or (ii) a
person that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) who exchanges the Series A Notes for the Series B
Notes in the ordinary course of business and who is not participating, does not
intend to participate, and has no arrangement with any person to participate, in
the distribution of the Series B Notes, will be allowed to resell the Series B
Notes to the public without further registration under the Securities Act and
without delivering to the purchasers of the Series B Notes a prospectus that
satisfies the requirements of

26
28

Section 10 of the Securities Act. However, if any holder acquires the Series B
Notes in the Exchange Offer for the purpose of distributing or participating in
the distribution of the Series B Notes or is a broker-dealer, such holder cannot
rely on the position of the staff of the Commission enumerated in certain
no-action letters issued to third parties and must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any resale transaction, unless an exemption from registration is otherwise
available. Each broker-dealer that receives Series B Notes for its own account
in exchange for Series A Notes, where such Series A Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Series B Notes. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of Series B Notes
received in exchange for Series A Notes where such Series A Notes were acquired
by such broker-dealer as a result of market-making or other trading activities.
Pursuant to the Registration Rights Agreement, the Company has agreed to make
this Prospectus, as it may be amended or supplemented from time to time,
available to broker-dealers for use in connection with any resale for a period
of 120 days after consummation of the Exchange Offer. See "Plan of
Distribution."

ACCOUNTING TREATMENT

The Company will not recognize any gain or loss for accounting purposes
upon the consummation of the Exchange Offer. The expenses of the Exchange Offer
will be amortized by the Company over the term of the Series B Notes.

27
29

CAPITALIZATION

The following table sets forth the (i) actual consolidated cash and
capitalization of the Company at December 31, 1997 and (ii) the consolidated
cash and capitalization of the Company at December 31, 1997 as adjusted to give
effect to the Series A Notes Offering and the application of the net proceeds
therefrom, as if the same had occurred as of such date. The table should be read
in conjunction with the Unaudited Pro Forma Consolidated Financial Statements of
the Company and the related notes thereto and the Consolidated Financial
Statements included elsewhere in this Prospectus. See "Selected Historical
Financial Data," "Unaudited Pro Forma Consolidated Financial Statements" and the
Consolidated Financial Statements included elsewhere in this Prospectus.

AS OF DEC. 31, 1997
---------------------
(IN THOUSANDS)
ACTUAL AS ADJUSTED
------- -----------

Cash, cash equivalents and short term investments........... $ 7,459 $ 37,885
======= ========
Long-term obligations (including current portion):
9 5/8% Senior Notes offered hereby........................ $ -- $115,000
New Credit Agreement(1)................................... -- 0
Promissory note payable to GEC(2)......................... 6,000 --
Promissory notes payable to former Curtis
shareholders(3)........................................ 15,700 --
Curtis term loan.......................................... 12,000 --
Curtis revolving credit agreement......................... 12,085 --
Curtis subordinated debentures............................ 9,189 --
A.B. Dick revolving credit agreement...................... 14,000 --
Note payable to Lander (4)................................ 460 --
Capital lease obligations................................. 1,182 1,182
------- --------
Total long-term obligations............................ 70,616 116,182
Total stockholder's equity (deficit)................... 7,131 (3,468)
------- --------
Total capitalization........................................ $77,747 $112,714
======= ========

- ---------------

(1) As of the closing of the Series A Notes Offering, $32.0 million was
available for borrowing under the New Credit Agreement.

(2) Promissory note issued to GEC Incorporated in connection with the A.B. Dick
Acquisition. The note was paid in full from the net proceeds of the Series A
Notes Offering.

(3) Promissory notes issued to Curtis shareholders in connection with the Curtis
Acquisition. The notes were paid in full from the net proceeds of the Series
A Notes Offering.

(4) The note payable to Lander Enterprises Co. L.P. was issued by Curtis in
connection with a $0.5 million build-out allowance for Curtis' corporate
headquarters and was paid in full from the net proceeds of the Series A
Notes Offering. See "Related Transactions -- Curtis Office Lease."

28
30

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents: (i) unaudited historical consolidated
financial data of A.B Dick for the two years ended March 31, 1994 and 1995,
which have been derived from unaudited consolidated financial statements of A.B.
Dick; (ii) historical consolidated financial data of A.B. Dick for the year
ended March 31, 1996 and for the period from April 1, 1996 through January 16,
1997, which have been derived from the audited consolidated financial statements
of A.B. Dick; (iii) historical consolidated financial data of the Company for
the period from January 17, 1997 through December 31, 1997 which have been
derived from the audited consolidated financial statements of the Company; and
(iv) historical consolidated financial data of Curtis for each of the four years
during the period ended December 28, 1996 and for the eleven month period ended
December 5, 1997, which have been derived from the audited consolidated
financial statements of Curtis. In the opinion of management, the unaudited
financial data of A.B. Dick for the two years ended March 31, 1994 and 1995
include all adjustments, consisting of normal recurring adjustments, necessary
for a fair presentation of such data. The information presented below should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial Statements
as described elsewhere herein.

29
31

A.B. DICK THE COMPANY
-------------------------------------------- -----------
APRIL 1, JAN. 17,
1996 1997
FISCAL YEAR ENDED MARCH 31, THROUGH THROUGH
-------------------------------- JAN. 16, DEC. 31,
1994 1995 1996 1997 1997
(IN THOUSANDS, EXCEPT RATIOS)

STATEMENT OF OPERATIONS DATA:
Net revenue....................... $273,888 $245,755 $215,363 $157,414 $193,216
Cost of revenue................... 193,509 174,013 152,837 115,058 129,651
-------- -------- -------- -------- --------
Gross profit...................... 80,379 71,742 62,526 42,356 63,565
Sales and marketing expenses...... 41,779 36,661 32,500 23,574 26,386
General and administrative
expenses........................ 24,597 24,080 24,272 15,248 17,603
Pension credit(1)................. (4,512) (6,596) (5,057) (7,013)
Research and development.......... 7,371 7,708 7,923 4,111 3,755
Depreciation and
amortization.................... 9,385 7,856 8,922 7,053 1,481
Management fee.................... 1,941
Acquisition costs(2).............. 1,400
-------- -------- -------- -------- --------
Operating income (loss)........... 1,759 2,033 (6,034) (617) 10,999
Interest income................... 747 1,585 1,620 998 789
Interest expense.................. (134) (162) (205) (2,598)
Other income (expense)............ (374) (807) (887) (631) 139
-------- -------- -------- -------- --------
Income before income taxes........ 2,132 2,677 (5,463) (455) 9,329
Foreign income taxes.............. 714 613 941 651 775
-------- -------- -------- -------- --------
Net income (loss)................. $ 1,418 $ 2,064 $ (6,404) $ (1,106) $ 8,554
======== ======== ======== ======== ========
OTHER DATA:
EBITDA(3)......................... $ 6,632 $ 3,293 $ (2,169) $ (577) $ 13,880
Cash provided by operating
activities...................... N/A N/A 8,523 7,481 15,085
Cash used in investing
activities...................... N/A N/A (5,528) (3,960) (28,684)
Cash provided by (used in)
financing activities............ N/A N/A (4,468) (26,479) 15,253
Depreciation and amortization..... 9,385 7,856 8,922 7,053 1,481
Capital expenditures.............. 2,783 3,277 5,528 3,960 1,860
Ratio of earnings to fixed
charges(4)...................... 2.2x 3.2x -- -- 3.8x

A.B. DICK THE COMPANY
-------------------------------- -----------------------
AS OF MARCH 31, AS OF AS OF
-------------------------------- JAN. 17, DEC. 31,
1994 1995 1996 1997 1997
(IN THOUSANDS, EXCEPT RATIOS)

BALANCE SHEET DATA:
Cash, cash equivalents and short
term investments................ $ 28,018 $ 27,039 $ 25,912 $ 8,280 $ 7,459
Total assets...................... 140,857 132,837 116,561 58,041 138,075
Long-term debt, including current
portion......................... 1,619 2,298 2,007 8,016 70,616
Stockholders' equity.............. 97,081 90,151 77,138 48 7,131

- ---------------

(1) A.B. Dick (Predecessor) maintained a defined benefit pension plan (the
"Plan") for its manufacturing employees. The Plan was significantly
overfunded as of March 31, 1993 and, accordingly, in accordance with FASB
Statement No. 87, "Employers' Accounting for Pensions," pension credits were
recognized for each of the three years in the period ended March 31, 1996
and for the period from April 1, 1996 through January 16, 1997. In
connection with the sale of A.B. Dick on January 16, 1997, GEC Incorporated
assumed all obligations existing under the Plan.

(2) Represents nonrecurring compensation awards granted to certain executives in
connection with the Curtis acquisition.

30
32

(3) EBITDA represents earnings before interest, income taxes, depreciation,
amortization, miscellaneous income (expenses), pension credit and for 1997
excludes $1,400 of acquisition costs incurred in connection with the Curtis
acquisition. EBITDA should not be considered as an alternative to cash
provided by operations as a measure of liquidity, or to net income as a
measure of profitability. EBITDA and related ratios have been included
because the Company uses them as one means of analyzing its ability to
service its debt, the Company's lenders use them for the purpose of
analyzing the Company's performance with respect the New Credit Agreement
and the Indenture and the Company understands that they are used by certain
investors as one measure of a company's historical ability to service debt.
Not all companies calculate EBITDA in the same fashion and therefore EBITDA
as presented may not be comparable to other similarly titled measures of
other companies.

(4) Earnings consist of income before income taxes plus fixed charges. Fixed
charges consist of interest expense, amortization of deferred financing
costs and one-third of the rent expense from operating leases, which
management believes is a reasonable approximation of an interest factor.
Earnings were inadequate to cover fixed charges in the fiscal year ended
March 31, 1996 and the period from April 1, 1996 through January 16, 1997 by
$5,463 and $455, respectively.

31
33

CURTIS
------------------------------------------------------------------------
FISCAL YEAR ENDED ELEVEN MONTHS
------------------------------------------------------- ENDED
JANUARY 1, DECEMBER 31, DECEMBER 30, DECEMBER 28, DECEMBER 5,
1994 1994 1995 1996 1997
(IN THOUSANDS, EXCEPT RATIOS)

STATEMENT OF OPERATIONS DATA:
Net revenue.................... $ 65,594 $ 66,614 $ 68,842 $ 77,072 $ 74,203
Cost of revenue................ 24,555 25,843 26,886 31,175 31,141
-------- -------- -------- -------- --------
Gross profit................... 41,039 40,771 41,956 45,897 43,062
Direct selling expenses........ 15,697 15,239 16,685 17,713 16,199
Selling, general and
administrative expenses...... 20,930 19,345 18,451 21,201 19,274
Depreciation and
amortization................. 2,906 2,528 2,460 2,053 1,624
Nonrecurring charges(1)........ 2,215 1,707
-------- -------- -------- -------- --------
Operating income from
continuing
operations................... 1,506 1,444 2,653 4,930 5,965
Interest expense, net.......... 3,285 3,621 3,678 3,687 3,511
Other expense, net............. 13 83
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income
tax.......................... (1,779) (2,177) (1,025) 1,230 2,371
Foreign income taxes........... 65 123 15 63 50
-------- -------- -------- -------- --------
Income (loss) from
continuing operations........ $ (1,844) $ (2,300) $ (1,040) $ 1,167 $ 2,321
======== ======== ======== ======== ========
OTHER DATA:
EBITDA(2)...................... $ 4,412 $ 6,187 $ 6,820 $ 6,983 $ 7,589
Cash provided by operating
activities................... N/A N/A 919 3,336 4,031
Cash provided by (used in)
investing activities......... N/A N/A 7,630 (7,943) (2,542)
Cash provided by (used in)
financing activities......... N/A N/A (9,929) 3,466 (500)
Depreciation and
amortization................. 2,906 2,528 2,460 2,053 1,624
Capital expenditures........... 2,016 1,018 743 3,120 2,542
Ratio of earnings to fixed
charges(3)................... -- -- -- 1.3x 1.6x

CURTIS
------------------------------------------------------------------------
AS OF AS OF AS OF AS OF AS OF
JANUARY 1, DECEMBER 31, DECEMBER 30, DECEMBER 28, DECEMBER 5,
1994 1994 1995 1996 1997
(IN THOUSANDS)

BALANCE SHEET DATA:

Cash, cash equivalents and
short term investments....... $ 959 $ 1,021 $ 1,207 $ 715 $ 1,680
Total assets................... 42,274 41,757 28,468 34,504 33,633
Long-term debt, including
current portion.............. 31,665 33,835 24,226 28,038 27,870
Redeemable preferred stock..... 23,024 24,507 25,991 27,475 28,856
Stockholders' (deficit)........ (29,271) (34,396) (38,358) (38,530) (37,614)

- ---------------

(1) Nonrecurring charges in 1994 include $1,500 to reflect a postretirement
liability for UAW employees as the result of a strike settlement and $715
for costs incurred in a business combination that was not completed.
Nonrecurring charges in 1995 include $732 related to severance and other
benefit costs and the write-down of an intangible asset to net realizable
value in connection with the shutdown of manufacturing operations and $975
related to a payroll tax assessment.

(2) EBITDA represents earnings before interest, income taxes, depreciation,
amortization, other income (expense), and excludes nonrecurring charges of
$2,215 in 1994 and $1,707 in 1995. EBITDA should not be considered as an
alternative to cash provided by operations as a measure of liquidity, or to
net income as a measure of profitability. EBITDA and related ratios have
been included because the Company uses them as one means of analyzing its
ability to service its debt, the Company's lenders use them for the purpose
of analyzing the Company's performance with respect to the New Credit
Agreement and the

32
34

Indenture and the Company understands they are used by certain investors as
one measure of a company's historical ability to service debt. Not all
companies calculate EBITDA in the same fashion and therefore EBITDA as
presented may not be comparable to other similarly titled measures of other
companies.

(3) Earnings consist of income before income taxes plus fixed charges. Fixed
charges consist of interest expense, amortization of deferred financing
costs and one-third of the rent expense from operating leases, which
management believes is a reasonable approximation of an interest factor.
Earnings were inadequate to cover fixed charges in the fiscal years ended
January 1, 1994, December 31, 1994 and December 30, 1995 by $1,779, $2,177
and $1,025, respectively.

33
35

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The following Unaudited Pro Forma Consolidated Financial Statements are
based upon the historical Consolidated Financial Statements included elsewhere
in this Prospectus.

The Unaudited Pro Forma Consolidated Balance Sheet at December 31, 1997 is
adjusted to give effect to (i) the Series A Notes Offering and (ii) the
application of the net proceeds therefrom as if such transactions had taken
place on December 31, 1997. The Unaudited Pro Forma Consolidated Statement of
Income for the year ended December 31, 1997 is adjusted to give effect to (i)
the Series A Notes Offering, (ii) the application of the net proceeds therefrom
and (iii) the acquisition of Curtis as if such transactions had occurred on
January 1, 1997.

The unaudited pro forma adjustments are based on available information and
certain assumptions which management believes are factually supportable. The
Unaudited Pro Forma Consolidated Financial Statements do not purport to
represent what the Company's consolidated results of operations or consolidated
financial position would have been had the transactions described above actually
occurred on the dates presented. In addition, the Unaudited Pro Forma
Consolidated Financial Statements do not purport to project the Company's
consolidated results of operations or the consolidated financial position for
the current year or any future date or period.

The Unaudited Pro Forma Consolidated Financial Statements should be read in
conjunction with the historical Consolidated Financial Statements included
elsewhere in this Prospectus.

34
36

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 1997
--------------------------------------
THE OFFERING AS
COMPANY ADJUSTMENTS(1) ADJUSTED
(IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents............................. $ 3,283 $ 30,426(a) $ 33,709
Short-term investments................................ 4,176 4,176
Accounts receivable, net.............................. 37,821 37,821
Inventories........................................... 48,068 48,068
Prepaid assets........................................ 1,535 1,535
-------- -------- --------
Total current assets............................... 94,883 30,426 125,309
Property, plant and equipment, net...................... 9,998 9,998
Goodwill................................................ 32,072 32,072
Other assets............................................ 1,122 4,500(b) 5,263
(359)(c)
-------- -------- --------
$138,075 $ 34,567 $172,642
======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable...................................... $ 14,143 $ -- $ 14,143
Accrued expenses...................................... 28,599 (400)(c) 28,199
Deferred service revenue.............................. 6,960 6,960
Amounts to GEC........................................ 945 945
Restructuring and severance reserves.................. 3,121 3,121
Current maturities of capital lease obligations....... 746 746
Current maturities of long-term debt.................. 2,749 (2,749)(d)
-------- -------- --------
Total current liabilities.......................... 57,263 (3,149) 54,114
Long-term debt, less current maturities:
9 5/8% Senior Notes.................................. 115,000(e) 115,000
Revolving credit agreements........................... 26,084 (26,084)(d)
Notes payable to former shareholders.................. 20,700 (20,700)(d)
Term loan............................................. 10,286 (10,286)(d)
Subordinated debentures............................... 9,189 (9,189)(d)
Capital lease obligations............................. 436 436
Other notes........................................... 426 (426)(d)
-------- -------- --------
67,121 48,315 115,436
Retirement obligations.................................. 3,451 3,451
Other long-term liabilities............................. 3,109 3,109
-------- -------- --------
Total liabilities.................................. 130,944 45,166 176,110
-------- -------- --------
Total stockholder's equity (deficit).................... 7,131 (10,000)(f) (3,468)
(359)(c)
(640)(c)
400(c)
-------- -------- --------
$138,075 $ 34,567 $172,642
======== ======== ========

35
37

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1997
(IN THOUSANDS)

(1) Adjustments to reflect the Series A Notes Offering:

(a) Represents the excess of the cash proceeds received from the Series A
Notes Offering.

(b) Represents estimated capitalized financing costs associated with the
Series A Notes Offering.

(c) Represents write-off of $359 in capitalized financing costs and early
termination charge of $640 associated with the termination of the
existing A.B. Dick revolving credit agreement, offset by $400 reduction
in accrued dividend for stockholders' income taxes.

(d) Represents repayment of existing indebtedness with a portion of the net
proceeds of the Series A Notes Offering.

(e) Represents the gross proceeds of the Series A Notes Offering.

(f) Represents payment of a dividend to the sole stockholder of the
Company.

36
38

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

YEAR ENDED DECEMBER 31, 1997
----------------------------------------------------------------------------------
ACQUISITION PRO FORMA OFFERING
THE ADJUSTMENTS FOR ADJUSTMENTS PRO
COMPANY CURTIS (1) ACQUISITION (2) FORMA
(IN THOUSANDS, EXCEPT RATIOS)

Net revenue:
Equipment............... $ 64,620 $ -- $ -- $64,620 $ -- $ 64,620
Service................. 27,808 27,808 27,808
Repair parts............ 15,976 15,976 15,976
Supplies................ 77,911 77,911 77,911
Automotive and
industrial............ 6,901 74,203 81,104 81,104
-------- ------- ------- ------- -------- --------
Total net revenue......... 193,216 74,203 267,419 267,419
Cost of revenue:
Equipment............... 46,559 46,559 46,559
Service................. 20,596 20,596 20,596
Repair parts............ 6,695 6,695 6,695
Supplies................ 52,967 52,967 52,967
Automotive and
industrial............ 2,834 31,141 33,975 33,975
-------- ------- ------- ------- -------- --------
Total cost of revenue..... 129,651 31,141 160,792 160,792
-------- ------- ------- ------- -------- --------
Gross profit.............. 63,565 43,062 106,627 106,627
Costs and expenses:
Sales and marketing
expenses.............. 26,386 16,199 42,585 42,585
General and
administrative
expenses.............. 17,603 19,274 36,877 36,877
Research and
development........... 3,755 3,755 3,755
Depreciation and
amortization.......... 1,481 1,624 1,240(a) 4,345 4,345
Management fee.......... 1,941 1,941 (770)(a) 1,171
Acquisition costs....... 1,400 1,400 1,400
-------- ------- ------- ------- -------- --------
Total costs and
expenses................ 52,566 37,097 1,240 90,903 (770) 90,133
Operating income.......... 10,999 5,965 (1,240) 15,724 770 16,494
Interest income........... 789 (229)(b) 560 560
Interest expense.......... (2,598) (3,511) (706)(c) (6,815) (4,837)(b) (11,652)
Other income (expense).... 139 (83) 56 56
-------- ------- ------- ------- -------- --------
Income before income
taxes................... 9,329 2,371 (2,175) 9,525 (4,067) 5,458
Foreign income taxes...... 775 50 825 825
-------- ------- ------- ------- -------- --------
Net income................ $ 8,554 $ 2,321 $(2,175) $ 8,700 $ (4,067) $ 4,633
======== ======= ======= ======= ======== ========
OTHER DATA:
EBITDA(3)............... $ 13,880 $ 7,589 $ -- $21,469 $ 770 $ 22,239
Depreciation and
amortization.......... 1,481 1,624 1,240 4,345 4,345
Capital expenditures.... 1,860 2,542 4,402 4,402
Total interest
expense............... 11,652
Cash interest
expense(4)............ 11,169
Ratio of EBITDA to cash
interest expense...... 2.0x
Ratio of net debt to
EBITDA(5)............. 3.5
Ratio of earnings to
fixed charges(6)...... 1.4

37
39

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS)

(1) Adjustments to reflect the Curtis Acquisition:

(a) Reflects increased depreciation expense of $264 related to the write-up
of property, plant and equipment acquired in the acquisition and
increased amortization expense of $976 related to goodwill incurred in
connection with the acquisition. The goodwill is being amortized over
30 years.

(b) Represents the reduction in interest income due to the use of $2,500 in
short-term investments to partially fund the Curtis Acquisition.

PRINCIPAL
AMOUNT INTEREST
OF DEBT EXPENSE

Curtis Seller Notes, interest at 7%......................... $15,700 $1,007
Borrowing on Line of Credit, interest at 9.25%.............. 4,000 339
Reduction of interest expense due to refinancing of Senior
Subordinated Notes (12% interest rate) with new Term Loan
(9.156% interest rate).................................... 12,000 (313)
Elimination of amortization of original issue discount on
Subordinated Notes........................................ (327)
------
$ 706
======

(2) Adjustments to reflect the Series A Notes Offering:

(a) To reflect the reduction in the management fees owed to NESCO, Inc.
Management fees are limited to 5% of EBITDA based upon the terms of the
Indenture governing the Senior Notes.

(b) To reflect the interest expense on a pro forma basis at the following
rates:

INTEREST
EXPENSE

Historical interest expense................................. $ 6,109
Curtis acquisition interest expense......................... 706
-------
Pro forma interest expense after Curtis acquisition......... $ 6,815
=======
9 5/8% Senior Notes......................................... $11,069
Other, at an assumed blended rate of 8.5%................... 100
-------
Cash interest expense..................................... 11,169
Amortization of financing fees.............................. 450
Amortization of letter of credit fees....................... 33
-------
Total pro forma interest expense............................ $11,652
-------
Pro forma interest adjustment............................... $ 4,837
=======

(3) EBITDA represents earnings before interest, income taxes, depreciation,
amortization, miscellaneous income (expenses) and for 1997 excludes $1,400
of acquisition costs incurred in connection with the Curtis acquisition.
EBITDA gives effect, on a pro forma basis, to $1,171 in management fees to
be paid pursuant to the Management Agreement. EBITDA should not be
considered as an alternative to cash provided by operations as a measure of
liquidity, or to net income as a measure of profitability. EBITDA and
related ratios have been included because the Company uses them as one means
of analyzing its ability to service its debt, the Company's lenders use them
for the purpose of analyzing the Company's performance with respect to the
New Credit Agreement and the Indenture and the Company understands that they
are used by certain investors as one measure of a company's historical
ability to service

38
40

debt. Not all companies calculate EBITDA in the same fashion and therefore
EBITDA as presented may not be comparable to other similarly titled measures
of other companies.

(4) Cash interest expense excludes amortization of deferred financing costs.

(5) Net debt represents total debt, net of cash and cash equivalents and
short-term investments as of December 31, 1997 on an as adjusted basis.

(6) Earnings consist of income before income taxes plus fixed charges. Fixed
charges consist of interest expense, amortization of deferred financing
costs and the portion of rental expense that is representative of interest
expense.

39
41

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company's distribution business generally markets its products under
its proprietary brand names, Curtis(R) and Mechanics Choice(R). The Company
acquired the Mechanics Choice(R) business in May 1996 from Avnet, Inc.,
resulting in an expansion of the Company's MRO product line and sales force. In
1996, the Company also introduced the PC+ code cutter, which can generate keys
on a computerized basis from code numbers. The Company believes the PC+ code
cutter has strengthened the Company's market share in sales to U.S. auto dealers
due to, among other things, its competitive price and product quality. The
Company's distribution products are sold to approximately 55,000 customers in
the automotive and industrial markets. The automotive market consists of
passenger car, truck and recreational vehicle dealers, business and government
entities performing internal automotive maintenance, rental car companies and
independent sales and service establishments. The industrial market is comprised
of businesses engaged in in-plant maintenance and repair, private fleet
maintenance and off-road equipment maintenance. A number of automotive and
industrial customers are classified by the Company as "national accounts," which
are multiple-location customers with centralized purchasing authority.

The Company's printing equipment and supplies business can be classified
into four broad categories: (i) pre-press equipment, (ii) offset presses, (iii)
other related equipment and (iv) supplies, after-market repair services and
replacement parts. The printing equipment and supplies business manufactures its
own products, which are principally sold under the A.B. Dick(R) and Itek
Graphix(R) labels, and also distributes products manufactured by third parties.
The Company also provides after-market maintenance and repair services for much
of the large installed base of its printing equipment operated by its customers.
The Company's printing equipment and supplies business principally serves the
small print equipment market. The Company's printing equipment and supplies
products are marketed to commercial, franchise and independent print shops,
in-plant print shops and governmental and educational institutions through
direct marketing by employees of the Company, as well as through the Company's
network of independent dealers and distributors.

CURTIS

RESULTS OF OPERATIONS

The following table sets forth, on a comparative basis, certain income
statement data as a percentage of net revenue for the 1995 and 1996 fiscal
years, the eleven months ended December 5, 1997, and the 1997 fiscal year.
Income statement data for the period ended December 5, 1997 has been included in
the table because

40
42

the Company acquired all of the capital stock of Curtis on such date. For
comparative purposes, unaudited income statement data for the full year ended
December 31, 1997 have also been included in the table.

PERIOD ENDED
------------------------------------------------------------
DECEMBER 30, DECEMBER 28, DECEMBER 5, DECEMBER 31,
1995 1996 1997(1) 1997

Net revenue............................. 100.0% 100.0% 100.0% 100.0%
Cost of revenue......................... 39.1% 40.4% 42.0% 41.9%
Gross profit............................ 60.9% 59.6% 58.0% 58.1%
Total expenses.......................... 57.1%(2) 53.2% 50.0% 50.4%
Operating income........................ 3.9% 6.4% 8.0% 7.7%
EBITDA(3)............................... 9.9% 9.1% 10.2% 10.2%

- ---------------

(1) The period ended December 5, 1997 represents an eleven-month period.

(2) Includes nonrecurring charges of $1.7 million.

(3) EBITDA represents earnings before interest, income taxes, depreciation,
amortization and miscellaneous income (expense).

Eleven months ended December 5, 1997 versus fiscal year ended December 28, 1996

Net Revenue. Net revenue decreased $2.9 million, or 3.8%, to $74.2 million
for the eleven-month period ended December 5, 1997, from $77.1 million in fiscal
year 1996. For the full year, net revenue increased $4.0 million, or 5.2%. This
resulted from an increase of $7.2 million in net revenue attributable to a full
year of sales relating to the Mechanics Choice(R) business that was acquired by
Curtis in May 1996 as well as increased sales to national accounts and of key
code cutting equipment, offset by a decrease of $3.2 million in net revenue
attributable primarily to the impact of the elimination of certain sales
representatives subsequent to the Mechanics Choice(R) acquisition.

Gross Profit. Gross profit decreased $2.8 million, or 6.1%, to $43.1
million for the eleven-month period ended December 5, 1997 from $45.9 million in
fiscal year 1996. This decrease was primarily attributable to a decrease of
gross margin to 58.0% in the eleven-month period ended December 5, 1997 from
59.6% in fiscal year 1996. This decline is primarily attributable to an increase
in sales to national accounts and to increased Mechanics Choice(R) and PC+ code
cutter sales, all of which have slightly lower gross margins.

Total Expenses. Total expenses decreased $3.9 million, or 9.5%, to $37.1
million for the eleven-month period ended December 5, 1997, from $41.0 million
in fiscal year 1996. For the full year, expenses decreased to 50.4% of sales
from 53.2% of sales in fiscal year 1996. An increase in direct selling costs to
support the additional Mechanics Choice(R) sales were more than offset by the
decrease in sales and overhead costs related to the elimination of redundant
sales representatives.

EBITDA. As a result of the above factors, EBITDA increased $0.6 million,
or 8.6%, to $7.6 million for the eleven-month period ended December 5, 1997 from
$7.0 million in fiscal year 1996. For the full year, EBITDA increased by $1.3
million, or 18.6% to $8.3 million from $7.0 million in fiscal year 1996.

Fiscal year ended December 28, 1996 versus fiscal year ended December 30, 1995

Net Revenue. Net revenue increased $8.2 million, or 12.1%, to $77.1
million in 1996 from $68.8 million in 1995. This increase was attributable to
the addition of the Mechanics Choice(R) business and to increased sales of key
code cutting equipment. Sales under the Mechanics Choice(R) name accounted for
an additional $8.3 million in revenue and sales of key code cutting equipment
contributed an additional $1.3 million. This increase in revenue was offset by
the elimination of redundant sales representatives and the related attrition of
such sales representatives' customer base.

Gross Profit. Gross profit increased $3.9 million, or 9.3%, to $45.9
million in 1996 from $42.0 million in 1995. This increase was primarily
attributable to the impact of additional sales related to the Mechanics

41
43

Choice(R) acquisition. Gross margin decreased to 59.6% in 1996 from 60.9% in
1995. The decline in gross margins was attributable to lower margins in the
Mechanics Choice(R) business, whose customer base had a greater concentration of
large accounts which are generally more price sensitive.

Total Expenses. Total expenses increased $1.7 million, or 4.3%, to $41.0
million in 1996 from $39.3 million in 1995. Of this increase, $2.5 million
represents increased selling and distribution costs related to the Mechanics
Choice(R) business. Total expenses as a percent of sales declined to 53.2% in
1996 from 57.1% in 1995 as a result of enhanced operating efficiency in
connection with greater product volumes obtained as a result of the Mechanics
Choice(R) acquisition and nonrecurring charges relating to the shut down of
certain manufacturing operations and settlement of certain tax matters.

EBITDA. As a result of the above factors, EBITDA increased $0.2 million,
or 2.9%, to $7.0 million in 1996 from $6.8 million in 1995.

A.B. DICK

RESULTS OF OPERATIONS

The Company believes that the historical financial information of A.B. Dick
for the periods prior to January 17, 1997, the date on which A.B. Dick was
acquired by the Company (the "Acquisition Date"), is not comparable in certain
respects with the financial data of A.B. Dick subsequent to such date. Prior to
the Acquisition Date, A.B. Dick maintained a defined benefit pension plan for
its manufacturing employees. This plan was overfunded as of March 31, 1995 and,
therefore, in accordance with FASB Statement No. 87, "Employers' Accounting for
Pensions," pension credits were recognized for the fiscal year ended March 31,
1996 and for the period from April 1, 1996 through January 16, 1997. In
connection with the sale of A.B. Dick on January 16, 1997, GEC Incorporated
assumed all existing obligations under this plan. Prior to the Acquisition Date,
A.B. Dick also provided post-retirement health care benefits to certain
retirees. Net periodic post-retirement benefits costs of approximately $4.7
million for the fiscal year ended March 31, 1996 and approximately $3.5 million
for the period from April 1, 1996 through January 16, 1997 were allocated to
A.B. Dick by GEC Incorporated based upon actuarial valuations in accordance with
FASB Statement No. 106, "Employers' Accounting for Post-retirement Benefits
Other Than Pensions." In connection with the sale of A.B. Dick on January 16,
1997, GEC Incorporated assumed all existing obligations under the
post-retirement health care benefits plan.

Subsequent to the Acquisition Date, the Company implemented a plan to
enhance the operating results and profitability of A.B. Dick. The principal
elements of this plan included the targeted reduction of approximately 160
employees, or 12.8% of the A.B. Dick workforce as of the Acquisition Date, which
the Company believes, based on historical levels of salaries and related
expenses, has the effect of reducing total costs and expenses by approximately
$6.3 million on an annual basis. In addition, the Company will terminate A.B.
Dick's occupancy of its existing 909,000 square foot facility by December 31,
1998 and intends to move to three leased facilities with an aggregate of
approximately 300,000 square feet. See Note A of Notes to Consolidated Financial
Statements of Paragon Corporate Holdings Inc. and A.B. Dick Company (The
Predecessor Company). These cost savings are based upon assumptions believed to
be reasonable by management of the Company and may be subject to adjustment.

During the periods presented, A.B. Dick sold a line of photocopiers
manufactured by Konica and provided service, repair parts and supplies related
thereto. In 1993, A.B. Dick determined that, due to the relatively low levels of
profitability attributable to such sales, it would discontinue equipment sales
of this product line. Total revenues attributable to Konica-related products
were approximately $27.5 million in the fiscal year ended March 31, 1995. For
the forty-nine week period ended December 31, 1997, revenues attributable to
such sales were approximately $6.3 million.

The following table sets forth, on a comparative basis, certain income
statement data for A.B. Dick and the Company for the periods ended March 31,
1996, January 16, 1997 and December 31, 1997. The data

42
44

presented for A.B. Dick for the 49-week periods have been computed from the
audited financial statements of A.B. Dick and the Company.

THE
A.B. DICK COMPANY
----------------------- ------------
52 42 49
WEEKS WEEKS WEEKS A.B. DICK 49-WEEK BASIS ENDED
ENDED ENDED ENDED ----------------------------------
MARCH 31, JANUARY 16, DECEMBER 31, MARCH 31, % OF JANUARY 16,
1996 1997 1997 1996 REVENUE 1997
(IN THOUSANDS)

Equipment.............. $ 77,628 $ 54,178 $ 64,620 $ 73,149 36.0% $ 63,208
Service................ 35,735 26,222 27,808 33,673 16.6% 30,592
Repair Parts........... 16,944 12,671 15,976 15,966 7.9% 14,783
Supplies............... 85,056 64,343 77,911 80,149 39.5% 75,067
Curtis................. -- 6,901 --
Net revenue.......... 215,363 157,414 193,216 202,938 100.0% 183,650
Equipment.............. 58,278 44,560 46,559 54,916 75.1% 51,987
Service................ 28,526 21,734 20,596 26,880 79.8% 25,356
Repair Parts........... 7,346 5,672 6,695 6,922 43.4% 6,617
Supplies............... 58,687 43,092 52,967 55,301 69.0% 50,274
Curtis................. -- 2,834 --
-------- -------- -------- -------- ------ --------
Cost of revenue...... 152,837 115,058 129,651 144,019 71.0% 134,234
-------- -------- -------- -------- ------ --------
Gross Profit........... 62,526 42,356 63,565 58,919 29.0% 49,416
Sales and marketing
expenses............. 32,500 23,574 26,386 30,625 15.1% 27,503
General and
administrative
expenses............. 24,272 15,248 17,603 22,872 11.4% 17,789
Pension credit......... (5,057) (7,013) -- (4,765) (2.3)% (8,182)
Research and
development.......... 7,923 4,111 3,755 7,466 3.7% 4,796
Depreciation and
amortization......... 8,922 7,053 1,481 8,407 4.1% 8,229
Management fee......... -- 1,941 --
Acquisition costs...... -- 1,400 --
-------- -------- -------- -------- ------ --------
Total expenses....... 68,560 42,973 52,566 64,605 31.8% 50,135
-------- -------- -------- -------- ------ --------
Operating income....... $ (6,034) $ (617) $ 10,999 $ (5,686) (2.8)% $ (719)
======== ======== ======== ======== ====== ========
EBITDA(1).............. $ (2,169) $ (577) $ 13,880 $ (2,044) (1.0)% $ (672)
======== ======== ======== ======== ====== ========

A.B. DICK 49-WEEK BASIS ENDED
--------------------------------
% OF DECEMBER 31, % OF
REVENUE 1997 REVENUE
(IN THOUSANDS)

Equipment.............. 34.4% $ 64,620 34.7%
Service................ 16.7% 27,808 14.9%
Repair Parts........... 8.0% 15,976 8.6%
Supplies............... 40.9% 77,911 41.8%
Curtis................. -- -- --
Net revenue.......... 100.0% 186,315 100.0%
Equipment.............. 82.2% 46,559 72.1%
Service................ 82.9% 20,596 74.1%
Repair Parts........... 44.8% 6,695 41.9%
Supplies............... 67.0% 52,967 68.0%
Curtis................. -- -- --
------ -------- ------
Cost of revenue...... 73.1% 126,817 68.1%
------ -------- ------
Gross Profit........... 26.9% 59,498 31.9%
Sales and marketing
expenses............. 15.0% 24,729 13.3%
General and
administrative
expenses............. 9.7% 15,830 8.5%
Pension credit......... (4.5)% -- 0.0%
Research and
development.......... 2.6% 3,755 2.0%
Depreciation and
amortization......... 4.5% 1,210 0.6%
Management fee......... -- 1,870 1.0%
Acquisition costs...... -- -- --
------ -------- ------
Total expenses....... 27.3% 47,394 25.4%
------ -------- ------
Operating income....... (0.4)% $ 12,104 6.5%
====== ======== ======
EBITDA(1).............. (0.4)% $ 13,314 7.1%
====== ======== ======

- ---------------

(1) EBITDA represents earnings before interest, income taxes, depreciation,
amortization, miscellaneous income (expenses), pension credit, and for the
49 weeks ended December 31, 1997 excludes $1,400 of acquisition costs
incurred in connection with the Curtis Acquisition.

The Company's forty-nine week period ended December 31, 1997 versus A.B. Dick's
forty-two week period ended January 16, 1997.

Net Revenue. Net revenue increased $35.8 million, or 22.7%, to $193.2
million for the 49 weeks ended December 31, 1997, from $157.4 million for the 42
weeks ended January 16, 1997. The $35.8 million increase in net revenue includes
$6.9 million representing one month's revenue for Curtis.

On a 49-week basis, excluding the results of Curtis, net revenue increased
$2.7 million, or 1.5%, primarily due to an increase of $1.4 million, or 2.2%, in
equipment sales resulting from the introduction of new digital pre-press and
post-press products, partially offset by a decline in sales of optical pre-press
equipment and a loss of market share in the digital duplicator market. In
addition, service revenue decreased $2.8 million, or 9.1%, due to the impact of
the discontinuation of the Company's line of Konica copier equipment and a trend
among customers to switch from preventative maintenance service contracts to
purchased service calls. Repair parts revenue increased $1.2 million, or 8.1%,
primarily due to an increase in repair parts sales on such purchased service
calls. Supplies revenue increased $2.8 million, or 3.8%, primarily due to
management's increased focus on the supplies business, including special
promotions and an incentive program for supplies sales.

43
45

Gross Profit. Gross profit increased $21.2 million, or 50.0%, to $63.6
million for the 49 weeks ended December 31, 1997, from $42.4 million for the 42
weeks ended January 16, 1997. This increase includes $4.1 million relating to
one month's operation of Curtis.

On a 49-week basis, gross profit improved to 31.9% of net revenue in 1997
from 26.9% in 1996. This improvement was attributable to an improvement in gross
margins on equipment sales to 27.9% in 1997 from 17.8% in 1996, primarily due to
enhanced efficiency in manufacturing, head count reductions, the strength of the
United States dollar relative to the Japanese yen and changes in product mix.
Gross margins on service improved to 25.9% in 1997 from 17.1% in 1996 primarily
due to the elimination of personnel. Gross margins on repair parts and supplies
as a percent of net revenue were relatively constant between periods.

Total Expenses. Total expenses increased $9.6 million, or 22.3%, to $52.6
million for the 49 weeks ended December 31, 1997, from $43.0 million for the 42
weeks ended January 16, 1997. This $9.6 million increase was attributable to the
elimination of a $7.0 million pension plan credit, the inclusion of $3.7 million
of expenses relating to one month's operations of Curtis, a $1.9 million
management fee, $1.4 million of expenses relating to the Company's acquisition
of Curtis and an increase of $1.4 million in general operating expenses,
partially offset by a decrease in depreciation and amortization of $5.6 million.

On a 49-week basis, expenses decreased to 25.4% of net revenue in 1997 from
27.3% in 1996. This decrease was attributable primarily to reductions of $2.1
million in administrative head count, $1.5 million of facility costs and $4.7
million in retiree medical benefits, offset by elimination of a pension credit
in the amount of $8.2 million. Expenses in 1997 include a management fee of $1.9
million.

EBITDA. As a result of the above factors, EBITDA improved by $14.5
million, to $13.9 million for the 49 weeks ended December 31, 1997, from $(0.6)
million for the 42 weeks ended January 16, 1997.

Forty-two weeks ended January 16, 1997 versus fifty-two weeks ended March 31,
1996

Net Revenue. Net revenue decreased $57.9 million, or 26.9%, to $157.4
million for the 42 weeks ended January 16, 1997 from $215.4 million for the 52
weeks ended March 31, 1996. Of the $57.9 million decrease in net revenue, $41.4
million was due to the difference in the time periods.

On a 49-week basis, the remainder of the decrease in revenue was
attributable primarily to the delayed introduction of a new offset press and a
decline in Konica copier sales. Further, post-press sales fell because the
Company discontinued sales of a collator/sorter line and had not yet secured a
replacement product line. Service revenue decreased $3.1 million, or 9.1%, and
repair parts revenue decreased $1.2 million, or 7.4%, primarily due to the
decline in copier sales. Supplies revenue decreased $5.1 million, or 6.3% due to
de-emphasized sales efforts and the decline in copier sales.

Gross Profit. Gross profit decreased $20.1 million, or 32.2%, to $42.4
million for the 42 weeks ended January 16, 1997, from $62.5 million for the 52
weeks ended March 31, 1996. $12.0 million of this decrease was due to the
difference in the time periods.

On a 49-week basis, gross margin decreased to 26.9% in 1997 from 29.0% in
1996 due to a decrease in gross margins for equipment sales from 24.9% in 1997
to 17.8% in 1996 primarily attributable to the impact of a new extended warranty
program offered to support certain lines of equipment. Gross margins for
service, repair parts and supplies were relatively constant between years.

Total Expenses. Total expenses decreased $25.6 million, or 37.3%, to $43.0
million for the 42 weeks ended January 16, 1997 from $68.6 million for the 52
weeks ended March 31, 1996. The $25.6 million decrease in expenses includes
$13.2 million due to the difference in the time periods. On a 49-week basis,
expenses decreased 22.4% primarily due to elimination of personnel and an
increase in pension plan credit of $3.4 million.

EBITDA. EBITDA as a result of the changes discussed above improved by $1.6
million, to $(0.6) million for the 42 weeks ended January 16, 1997, from $(2.2)
million for the 52 weeks ended March 31, 1996.

44
46

LIQUIDITY AND CAPITAL RESOURCES

CURTIS

The liquidity needs of Curtis historically have been primarily for working
capital and capital expenditures. Curtis' primary sources of liquidity have been
funds provided by operations, a revolving line of credit and lease financing.

A.B. DICK

Prior to the Acquisition Date, A.B. Dick's capital needs were satisfied by
net cash provided by operations. Pursuant to the A.B. Dick Acquisition, A.B.
Dick transferred to GEC Incorporated $19.5 million of domestic accounts
receivable, which were remitted to GEC Incorporated as collected by A.B. Dick
after the closing the A.B. Dick Acquisition. As a result, the Company drew down
approximately $18.5 million from its revolving credit facility to meet its
working capital needs during the 49-week period ended December 31, 1997.

THE COMPANY

The net proceeds of the Series A Notes Offering were approximately $110.5
million, after deducting approximately $4.5 million to pay fees and expenses
incurred in connection with the Series A Notes Offering. The Company utilized
the net proceeds (i) to refinance substantially all of the Company's existing
indebtedness in the aggregate amount of approximately $71.1 million and (ii) to
fund a dividend to the sole stockholder of the Company of $10.0 million. The
Company expects the remaining net proceeds of the Series A Notes Offering, in an
amount of approximately $29.4 million, to be used for general corporate
purposes, including future acquisitions. Net cash provided by the Series A Notes
Offering together with the availability under the New Credit Agreement is
expected to provide sufficient funds to finance the Company's operational needs
and acquisition strategy.

The Company has substantial indebtedness and significant debt service
obligations. As of December 31, 1997, on a pro forma basis after giving effect
to the Series A Notes Offering and the application of the proceeds therefrom,
the Company would have had total long-term indebtedness, including current
maturities, of $116.2 million and a stockholder's deficit of $3.5 million. The
Indenture will permit the Company and its Subsidiaries to incur additional
indebtedness, including secured indebtedness, subject to certain limitations.
The New Credit Agreement provides for up to $32.0 million of revolving credit
borrowings. See "Capitalization," "Description of Senior Notes--Certain
Covenants" and "Description of New Credit Agreement." For the period ended
December 31, 1997, on a pro forma basis, after giving effect to the Series A
Notes Offering, the application of the net proceeds therefrom and the Curtis
Acquisition, the Company would have had a ratio of earnings to fixed charges of
1.4 to 1. The Company's high degree of leverage could have important
consequences to the holders of the Series B Notes including, without limitation,
the following: (i) a substantial portion of the Company's cash provided from
operations will be committed to the payment of debt service and will not be
available to the Company for other purposes; (ii) the Company's ability to
obtain additional financing in the future for working capital, capital
expenditures or acquisitions may be limited; and (iii) the Company's level of
indebtedness may limit the Company's flexibility in reacting to changes in its
business environment. See "Risk Factors--Leverage and Debt Service Requirements"
and "Description of New Credit Agreement."

The Company's primary capital requirements (excluding acquisitions) consist
of capital expenditures and debt service. The Company estimates that
approximately $7.3 million is required in 1998 for the maintenance and
improvement of its facilities, including $3.1 million in one-time expenses
related to A.B. Dick's relocation to new facilities. The Company believes that
the cost of maintaining its facilities is approximately $4.2 million on an
annual basis. On a pro forma basis, after giving effect to the Offering and the
application of the net proceeds therefrom, the Company would have had total
interest expense in 1997 of approximately $11.7 million.

The Company's principal source of cash to fund debt service and capital
requirements is cash generated from operating activities. Upon consummation of
the Exchange Offer, the Company expects to have approximately $29.5 million of
availability under the New Credit Agreement (see "Description of New Credit
Agreement") and approximately $27.0 million in cash, cash equivalents and
short-term investments.
45
47

YEAR 2000 ISSUES

BUSINESS

The Company, through its two wholly-owned subsidiaries, is engaged in (i)
the distribution of automotive and industrial supplies and (ii) the manufacture
and distribution of printing equipment and supplies. The Company's distribution
business supplies consumable, high margin, multiple-purpose products used in the
automotive and industrial markets, with an increasing focus on providing
value-added logistics services. The distribution business supplies a wide range
of products including (i) automotive security products, including key cutting
equipment and key blanks, and non-model specific automotive parts and (ii) MRO
supplies, including fasteners, connectors, chemicals and tools. The Company's
printing equipment and supplies business is a leading manufacturer and marketer
of printing products for the global quick print and small commercial graphics
markets. The Company's printing equipment and supplies include (i) pre-press
equipment, including imagers, cameras and digital platemakers, (ii) offset
printing equipment, from duplicators to two-color portrait presses, (iii) other
equipment, including post-press equipment and digital duplicators and (iv)
supplies and replacement parts for pre-press and offset printers, including
inks, plates and plate chemistry materials. Approximately 46% of the Company's
pro forma 1997 net revenue were attributable to the sale of supplies,
after-market repair services (primarily under annual contracts) and replacement
parts to its installed printing equipment customer base. For the fiscal year
ended December 31, 1997, the Company generated pro forma net revenue and EBITDA
of $267.4 million and $22.2 million, respectively. Of the Company's pro forma
1997 net revenue, approximately 30.3% was attributable to the distribution
business and approximately 69.7% was attributable to the printing equipment and
supplies business.

Automotive and Industrial Supplies Distribution. The Company's
distribution business supplies approximately 29,000 SKUs, which it purchases
from approximately 750 suppliers and then typically repackages in smaller
quantities more compatible with the needs of its customers. The Company
generally markets its products under its proprietary brand names, Curtis(R) and
Mechanics Choice(R), which the Company believes enjoy wide industry recognition.
The Company's distribution business sells its products to approximately 55,000
customers principally through its network of over 600 sales representatives who
use state-of-the-industry information systems to meet their customers' needs.
Customers of the Company's distribution business include Hertz Corporation, the
fleet operations of Pepsi-Cola Company and Continental Airlines, Inc.,
independent auto dealerships and industrial accounts throughout the United
States, Canada and the United Kingdom.

46
48

products when needed, immediately and on site, can have a high impact on its
customers' operations. The Company consistently maintains an average fill rate
of 96% to 98%. The Company thereby reduces its customers' total procurement
costs, improves their operational up-time, and enables them to focus on their
core businesses. The Company's distribution business' extensive product line
allows customers to reduce the administrative burden of dealing with many
suppliers for their product needs. The Company is also able to provide large
corporations with consistent pricing and service across multiple operating
locations through facilities and sales representatives located strategically
throughout the United States.

COMPETITIVE STRENGTHS

The Company believes its two businesses maintain strong competitive
positions in their respective markets as a result of a number of factors,
including:

- - Breadth of Product Line and Extensive Distribution Network. The distribution
business carries approximately 29,000 SKUs, which it sources from
approximately 750 different suppliers, which the Company believes is greater
than many of its smaller, regional competitors. The printing equipment and
supplies business carries a complete range of pre-press and offset press
equipment and supplies and replacement parts, as well as equipment service,
thereby offering its customers one-stop shopping. Both businesses distribute
their products through dedicated sales organizations and distribution networks
having long-

47
49

standing relationships with their customers. The Company believes its breadth
of supplier relationships, the depth of its product offerings and its sales
relationships with its customers provide it with a significant advantage
relative to potential competitors.

- - Experienced, Proven Management Team. The Company's senior management have an
average of approximately 19 years of relevant industry experience. In addition
to their relevant industry experience, these managers have extensive
experience in acquiring and integrating businesses, as well as growing
revenues and reducing costs in businesses they have acquired and managed.

BUSINESS STRATEGY

The Company seeks to grow sales and profitability through the successful
implementation of its business strategy, the key elements of which include:

- - Increase Penetration of Existing Customers. The Company's primary strategy to
grow net revenue and profitability in the distribution business is to obtain
incremental revenues from existing customers. For example, the Company seeks
to leverage its relationships with the approximately 75% of all U.S. auto
dealers it currently serves to increase the percentage of these auto dealers'
total supply needs provided by the Company. The Company believes that new
marketing efforts, including its recently commenced "Dealer One Source"
program, which offers incentive-based pricing in exchange for volume
commitments, offer potential for significant growth for the Company's
distribution business.

- - Expand Customer Base. The Company believes there are substantial
opportunities for both the distribution business and the printing equipment
and supplies business to expand their existing customer bases. The total
United States market for MRO supplies of the categories of industrial products
sold by the Company is estimated to be in excess of $30 billion annually. The
Company intends to focus on this market, in which it currently has only a
small presence, through acquisitions, strategic alliances with other
distributors and direct selling efforts. In addition, the printing equipment
and supplies business plans to leverage its nationwide network of service
technicians to offer customers an integrated equipment service capability for
equipment not manufactured or currently serviced by the Company.

- - Make Focused Acquisitions. The Company seeks to grow by making acquisitions
that (i) enhance its distribution capabilities, (ii) grow its customer base
and (iii) broaden its product range. The distribution business operates in a
large, fragmented industry characterized by multiple channels of distribution.
The Company believes that approximately 85% of the 25,000 industrial
distributors in the U.S. have sales of less than $5 million and that
acquisitions of small suppliers of industrial products provide an attractive
opportunity for expanding the Company's customer base in existing markets with
minimal customer overlap. Likewise, the Company believes that opportunities
exist to broaden the printing equipment and supplies business' product range,
especially in the area of digital pre-press technology, to further grow its
distribution network and to increase its share of the commercial printing
market. There can be no

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assurance that the Company will be able to identify desirable acquisition
candidates or will be successful in consummating any acquisition on terms
favorable to the Company, if at all. See "Risk Factors--Risks Attendant to
Acquisition Strategy."

The Company's senior management has a track record of improving the results of
acquired companies. For example, Curtis' current management team, which joined
Curtis in 1992, has grown the net revenue of Curtis at a compound annual rate
of 4.5% from $65.1 million in 1992 to $81.1 million in 1997. During the same
period, EBITDA has increased at a compound annual rate of 20.3%, from $3.3
million in 1992 to $8.3 million in 1997. Such improvements have been made
through significant operating expense reductions resulting from factors such
as improved labor efficiency and customer relations, investments in
technology, improved vendor relationships and more effective asset
utilization and management practices, as well as increased access to capital.

INDUSTRY OVERVIEW

AUTOMOTIVE AND INDUSTRIAL SUPPLIES DISTRIBUTION

Automotive. With more than $675 billion in 1996 sales, automotive
retailing is the third largest domestic industry group in the United States. The
industry is highly fragmented and largely privately held with approximately
21,000 automobile dealerships representing more than 48,000 franchises.

Manufacturers originally established franchised dealer networks for the
distribution of their vehicles as single-dealership, single-owner operations. In
the 1970's, dealers began to add foreign franchises and the phenomenon of the
multi-franchise automobile dealer, or "megadealer," emerged, prompting both
significant acquisition activity and the consolidation activities of the 1980s.
The easing of restrictions against megadealers combined with continual
competitive pressures upon smaller dealerships has led to further consolidation
of the industry. Although significant consolidation has taken place since its
inception, the industry today remains highly fragmented, with the largest 100
dealer groups generating less than 11% of total revenues and controlling
approximately 5% of all franchised dealerships.

Industrial. The Company operates in a large, fragmented industry
characterized by multiple channels of distribution. The total United States
market for MRO supplies of the categories of industrial products sold by the
Company is estimated to be in excess of $30 billion annually. The Company
believes that approximately 25,000 distributors, substantially all of which have
annual sales of less than $5 million, supply approximately 75% of the market.
The distribution channels in the industrial products market include retail
outlets, small distributorships, national, regional and local distributors,
direct mail suppliers, large warehouse stores and manufacturers' own sales
forces.

PRINTING EQUIPMENT AND SUPPLIES

According to industry sources, the size of the total U.S. printing and
publishing industry in 1995 was approximately $224 billion. The three markets in
which the Company offers products, the quick print sector, the small commercial
print sector and in-plant printers, accounted for approximately $10 billion, $49
billion and $16 billion of this total, respectively. Since 1987, the dollar
volume of total shipments of U.S. printing equipment and graphic arts supplies
have grown at compound annual rates of approximately 2.4% and 2.7%,
respectively.

The quick print market is comprised primarily of approximately 14,500 print
shops, including independent shops and franchisees of chains such as
Alphagraphic(R), Sir Speedy(R) and Kwik Kopy(R). These shops are
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typically privately owned and offer a range of printing services to primarily
walk-in customers including the printing of business cards, headed stationery
and advertising flyers as well as duplicating, binding and photocopying
services. According to industry sources, the average annual revenue per quick
print outlet for franchised quick service printers was approximately $469,000 in
1997. Because their relatively small size precludes a wide range of equipment,
the Company believes that quick print operators seek to purchase equipment which
is both reliable and flexible in terms of paper sizes. The Company further
believes that, because the majority of such shops' work is on a walk-in basis,
it is crucial that consumable supplies are readily available by next-day
delivery.

The small commercial print market comprises approximately 24,000
operations, defined as establishments with fewer than 20 employees. These shops
typically target small businesses, offer a wider range of printing services and
are able to process longer-order runs. An increasing focus of small commercial
shops is sophisticated color printing using process color technology, which
provides a truer, crisper image than traditional spot color technology. The
in-plant market comprises approximately 11,000 in-house printing operations of
corporations. This market has increasingly adopted the use of distributed
digital technology, such as the Xerox Docutech(R) system, for smaller jobs and
has tended to outsource larger jobs to full-service printers.

The pre-press and offset printing markets have generally been subject to
rapid technological change in recent years. The commercialization of digital
pre-press technology by the Company and certain of its competitors has
substantially reduced the demand for optical pre-press equipment of the type
supplied by the Company. The Company believes that digital printing and other
competitive printing technologies have certain limitations that render them less
attractive to the Company's core quick print market. These factors include: (i)
the relatively high price of digital relative to offset, both in terms of
initial investment in equipment and price per copy over longer runs; (ii) the
lack of flexibility in terms of paper size and the inability of digital printers
to offer simultaneous printing of both sides of a piece of paper; and (iii) the
inherently lower print quality offered by digital presses, especially where
color work is involved. In a 1996 study prepared for the National Printing
Equipment Suppliers Association, digital printing press penetration of quick
print printers was projected to be less than one percent in the year 2000.

PRODUCTS AND MARKETS

The Company, through its subsidiaries, engages in two primary business: (i)
automotive and industrial distribution and (ii) printing equipment and supplies.

AUTOMOTIVE AND INDUSTRIAL SUPPLIES DISTRIBUTION

The Company conducts its distribution business through its wholly-owned
subsidiary Curtis, through which it distributes approximately 29,000 SKUs
primarily to the automotive and industrial markets. These products can be
divided into eight product categories:

Security Products, consisting of key blanks, key duplicating machines,
computerized and manual key code cutters, key transponder cloning devices,
padlocks, combination locks and key accessories.

Fasteners, such as bolts, nuts, screws, washers and rivets for light-duty
to heavy-duty applications.

Automotive Parts, including non-model specific automotive parts such as
wheel weights, fuses, lamps, bulbs, cables, clamps and small parts kits.

Shop supplies, such as work gloves, brushes, wipes and tapes.

Chemicals, comprised of solvents, lubricants, cleaners, adhesives and
sealants designed for vehicle and industrial maintenance.

Electrical connectors, together with wire products, adaptors and terminals.

Tools, including disposable tools such as saw blades, abrasives, taps and
dies, cutting tools, welding products and drill bits, as well as standard tools
such as screwdrivers, pliers and wrenches.

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Fittings, including brass hydraulic fittings, hoses and crimping equipment.

Approximately one-third of the Company's distribution business consists of
the sale of security products. The Company distributes a wide variety of key
duplicating machines, which copy keys, and computerized and manual key code
cutters, which generate keys from code numbers. In addition, the Company sells
key transponder cloning devices, which permit copies to be made of keys that
have advanced anti-theft features. The Company believes it is the largest
distributor of key code cutting equipment in the markets that it serves. The
Company estimates that it sells products to approximately 75% of the automotive
dealerships in the U.S., with a large proportion of such products consisting of
key cutting equipment. The Company seeks to use this high penetration and strong
market position to expand sales of its other products to these auto dealers.

The Company distributes these products through a sales force of
approximately 600 sales representatives. The majority of products supplied by
the Company are relatively low-priced and consumable. Products are frequently
purchased from suppliers in bulk and repackaged into smaller quantities
depending upon the needs of the customer. The Company's sales force works
closely with customers to develop an efficient inventory management system, in
many cases making regular on-site visits to proactively monitor inventory
levels, assist in bin restocking and labelling, and provide technical
assistance. The Company thereby reduces its customers' total procurement costs,
improves their operational up-time and enables its customers to focus on their
core businesses.

The Company's distribution products are sold to over 55,000 customers in
the automotive and industrial markets. The automotive market consists of
passenger car, truck and recreational vehicle dealers, business and government
entities performing internal automotive maintenance, rental car companies and
independent sales and service establishments. Franchised new car dealers
represent the most significant customer segment, as approximately 16,000 of the
21,000 automobile dealers in the United States are customers of the Company. The
industrial market is comprised of entities engaged in in-plant maintenance and
repair, private fleet maintenance and off-road vehicle maintenance and
equipment.

The Company's distribution business uses state-of-the-industry technology
to improve customer service and reduce its operating costs through more
effective buying practices and order fulfillment operations. The distribution
business operates a fully-integrated, real-time information system that includes
warehouse operations, inventory management, distribution scheduling and all
aspects of financial control and reporting. In addition, sales representatives
utilize laptop computers to provide order entry and daily updated account
management capability. The Company has developed a proprietary software package,
CuFLink(R), which permits larger customers to access customized daily account
management information. The Company also has established Internet access for
technical information and intends to offer full catalog and order capabilities
during the course of 1998.

PRINTING EQUIPMENT AND SUPPLIES

The Company conducts its printing equipment and supplies business through
its wholly-owned subsidiary A.B. Dick. The Company sells printing equipment,
supplies and service to the global quick print and small commercial printing
markets. The Company manufactures pre-press and offset press equipment. The
Company also offers after-market service and replacement parts and a complete
line of supplies to the pre-press and offset press markets, including film,
plates, inks and solutions. The Company also manufactures supplies, such as inks
and solutions, for itself and for third parties to be sold under private labels.
In addition to its own manufactured products, the Company acts as a distributor
for imaging products manufactured by other companies, including digital
duplicators, digital color copiers and certain high-end offset presses.

Pre-press Equipment. Pre-press equipment is used to prepare materials for
the printing process, generally by transferring images onto sensitive plates
either on a computer network or from an optically scanned original. The plate is
then placed in an offset or digital printing press and used to reproduce the
image onto paper, cardboard or other print media. The Company's line of
pre-press equipment includes digital platemakers, optical platemakers and
cameras.

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Digital platemakers are used to transfer images to a polyester plate
through a computer network. In 1995, the Company introduced its first digital
platemaker, the Digital Platemaster 2000 ("DPM 2000"). The DPM 2000 combines all
the steps in traditional optical platemaking into one machine and produces
plates up to a size of 16.5" x 21.7". The DPM 2000 includes a network connection
that allows files to be transferred from an IBM-compatible PC or Macintosh work
station and converted to a digital format. The DPM 2000 also is offered with a
scanner to convert hard copy originals to digital files, thereby providing
customers the flexibility to handle digital files while retaining the ability to
handle hard copy originals. Since its introduction, sales of the DPM 2000 have
grown to become a significant percentage of the Company's total pre-press
equipment sales. The DPM 2000 won the Graphic Arts Technical Foundation
Intertech Award for technical excellence in 1996.

Although not considered to be a core product segment, the Company continues
to sell equipment, supplies and service to its substantial installed base of
optical processors. The Company also produces camera processors, which have
plate imaging capabilities that allow the operator to adjust the size and
graphic content of the sensitized images.

Offset Presses. Offset printing is an indirect printing method in which an
image from an inked plate is printed onto a smooth rubber cylinder that in turn
offsets, or prints, the inked impression onto a sheet of paper. The Company
offers 15 types of offset printing presses, ranging from entry-level presses
that are designed primarily to print text, to presses capable of producing
high-quality, multi-color printing. Offset presses currently can produce higher
quality reproductions than competing technologies, such as color laser printers
and copiers, at a lower cost per copy for the longer run lengths typically
required by its customers. Offset presses also offer greater flexibility than
competing technologies with respect to the media upon which images can be
transferred. In addition to traditional media such as letter and legal size
paper, the Company's presses are used for small size printing applications such
as business cards, brochures and advertising flyers. The Company believes it has
a market share of approximately 40% of 1997 sales for presses capable of
printing 11" x 17" or smaller output.

Other Equipment. In order to complete its product line, the Company
distributes products manufactured by other companies, including presses, digital
duplicators and post-press equipment, in addition to its own manufactured
products. The Company distributes digital duplicators manufactured by Ricoh
Company Ltd. sold under the A.B. Dick(R) name. Digital duplicators are intended
to fill the gap between copy machines and offset printing for customers with
high copy volume requirements and limited budgets such as schools and government
institutions. These digital duplicators are packaged like a copier with similar
touch button controls and are capable of producing 120 pages per minute for a
significantly lower cost per page than high-speed copiers. The Company
distributes a Minolta-brand digital color copier/printer that is capable of
high-quality process color laser printing. This Minolta unit addresses
customers' needs for low-volume color printing and layout proofs. The Company
also distributes presses manufactured by Ryobi Limited and sold under the A.B.
Dick(R) name that are capable of satisfying a wide range of quality color
printing requirements. In addition, the Company offers a line of post-press
equipment such as automated folders and collators. The collators are
manufactured by third parties and distributed by the Company. This equipment can
be connected to the Company's offset presses to create a complete printing
system.

Supplies. The Company provides a diverse line of over 2,000 SKUs to
operators of the equipment it supplies and to other camera and platemaker
operators. The Company offers approximately 40 plates and plate imaging system
supplies for direct image platemakers, including paper and film-based silver
emulsion and electrostatic plate materials. These supplies are compatible with
most printing equipment regardless of the manufacturer. The Company also offers
a complete line of metal plates and associated processing chemistry. In
addition, the Company offers supplies for offset printing, including a variety
of black ink, special application inks, color inks, and various other ink
supplies. The Company believes it is the largest manufacturer and supplier of
magnetic inks to the check printing industry and that it is a significant
supplier of plate material to Deluxe Corporation and a significant supplier of
inks and plates to other major check printers in the United States and Canada.

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The Company manufactures a significant portion of its inks and solutions.
It also sells ink to other companies to be resold under their private labels.

The Company operates a 40-person telemarketing group for its printing
supplies business, which identifies new customers, services existing customers
and makes outbound sales calls. The Company also maintains a separate customer
service group of 29 persons to respond to customer calls and take orders.

Service and Parts. The Company provides after-market service and
replacement parts for the Company's pre-press and offset press equipment and for
pre-press and offset press equipment manufactured by other companies. The
Company employs approximately 350 service technicians and managers who are
located in cities in the U.S., Canada, the United Kingdom, the Netherlands and
Belgium. Much of the Company's service business is provided pursuant to
maintenance agreements.

Markets and Distribution. The Company's printing products are marketed to
commercial, franchise and independent print shops, in-plant print shops and
government and educational institutions through a highly-developed domestic and
international distribution network. In the United States, this network consists
of 25 branches and approximately 100 independent distributors. Internationally,
this network includes wholly-owned foreign subsidiaries in Canada, the United
Kingdom, the Netherlands and Belgium and a network of independent distributors
in other countries.

In 1997, approximately 60% of the Company's U.S. printing equipment and
supplies business sales were made through direct marketing efforts and sales by
employees of the Company. The remaining 40% of sales were made through the
Company's network of independent dealers and distributors. In 1997, the
Company's non-U.S. sales were approximately 80% direct sales and 20% indirect
sales through independent distributors. A significant portion of the Company's
printing equipment sales are made through third-party financing arranged by, but
non-recourse to, the Company.

An important factor in the printing supplies market is on-time delivery of
supplies to customers. The Company believes its ability to distribute these
printing supplies rapidly from its various distribution centers and independent
dealer locations allows it to remain competitive in this market. Most supplies
are delivered to customers through commercial overnight delivery services within
one day after a customer places an order.

No single customer accounts for more than 2% of the Company's sales.

COMPETITION

The Company faces strong competition throughout the world in all of its
product lines. The various markets in which the Company competes are fragmented
into a large number of competitors, which include large manufacturers and
distributors as well as a large number of regional distributors and local
suppliers. In addition, a number of the Company's competitors have financial and
other resources that are substantially greater than those of the Company.

The Company's distribution business competes with OEMs and other national
distributors, as well as a large number of regional and local distributors.
Because of the similarity of product types, competitive advantage among national
distributors is determined primarily by sales representative performance and
reliability, product presentation, product quality, order fill rate, breadth of
product line, speed of delivery and, to a lesser extent, price. Regional and
local distributors also compete with the Company on the basis of these factors,
but price and delivery timing are more important factors at this level.

The Company's printing equipment and supplies business competes, with
respect to its manufactured products, against a number of other manufacturers of
pre-press equipment and offset presses and with resellers of used presses,
primarily on the basis of quality and price. Some of these competitors have
significantly greater financial and other resources than the Company. The
Company's pre-press and offset press equipment also competes, to a limited
extent, with alternate technologies such as color laser printers, copiers and
other duplicating equipment. In addition, in the markets for supplies, service
and parts, the Company competes against a wide variety of national, regional and
local distributors of graphic arts and printing supplies and related services,
primarily on the basis of availability and service.

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SUPPLIERS

All materials used by the Company's printing equipment and supplies
business to manufacture products are readily available in the marketplace, and
the Company is not dependent upon any single supplier for any materials
essential to the manufacture of any of these products. The Company has been able
to obtain an adequate supply of raw materials and no shortage of raw materials
is currently anticipated.

The Company's distribution business distributes products from a large and
diverse supply base. In 1997, based on the Company's pro forma sales, no single
supplier accounted for more than 5% of the Company's supply of products.

FACILITIES

The Company conducts its operations through the following primary
facilities:

APPROXIMATE
SQUARE OWNED/
LOCATION FOOTAGE PRINCIPAL FUNCTION LEASED

UNITED STATES:
Niles, Illinois 909,000 Headquarters; administration; Leased(1)
manufacturing; warehouse
Rochester, New York 194,000 Manufacturing Leased(2)
Shelbyville, Kentucky 100,000 Warehouse; packaging plant Owned
Atlanta, Georgia 60,000 Warehouse Leased(3)
Sparks, Nevada 50,000 Warehouse Owned
Mayfield Heights, Ohio 34,000 Administration Leased(4)
CANADA:
Rexdale, Ontario 67,000 Administration; warehouse Owned
Mississauga, Ontario 38,000 Administration; warehouse Leased(5)
UNITED KINGDOM:
Brentford 26,000 Administration; warehouse Leased(6)
Andover 15,000 Administration; warehouse Leased(7)
BELGIUM:
Brussels 11,000 Administration; warehouse Leased(8)
THE NETHERLANDS:
Maarssen 25,000 Administration; warehouse Leased(9)

- ---------------
(1) Expires in January 1999. The Company intends to move from its Niles,
Illinois location prior to the end of the lease term to three facilities in
Niles, Illinois containing an aggregate of approximately 300,000 square
feet. The Company has entered into leases for two of these facilities,
containing approximately 54,000 and 155,000 square feet, respectively, which
leases expire in January 2008 and July 2003, respectively. The Company is in
the process of identifying an appropriate third facility.
(2) Expires in April 2007.
(3) Expires in February 2000.
(4) Expires in November 2006.
(5) Expires in August 2001.
(6) Expires in September 2003.
(7) Expires in November 2012.
(8) Expires in December 2004.
(9) Expires April 2003.

The Company believes that all of its property and equipment is in a
condition appropriate for its operations and that it has sufficient capacity to
meet its current operational needs.

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EMPLOYEES

As of December 31, 1997, the Company had approximately 2,100 employees,
approximately 1,600 of whom were located in the United States. The Company
believes its relations with its employees are good. The Company's employees are
not subject to collective bargaining agreements.

ENVIRONMENTAL AND HEALTH AND SAFETY MATTERS

The Company is subject to a variety of environmental standards imposed by
federal, state, local and foreign environmental laws and regulations. The
Company also is subject to the federal Occupational Health and Safety Act and
similar foreign and state laws. The Company periodically reviews its procedures
and policies for compliance with environmental and health and safety laws and
regulations and believes that it is in substantial compliance with all such
material laws and regulations applicable to its operations. Historically, the
costs of compliance with environmental, health and safety requirements have not
been material to the Company's Subsidiaries.

LEGAL PROCEEDINGS

On April 30, 1997, four former and current distributors of A.B. Dick filed
a suit against A.B. Dick alleging, among other things, breach of distributorship
contracts and unfair and deceptive trade practices. The plaintiffs have
requested that the case be given class action status with respect to all A.B.
Dick distributors engaged under distributorship contracts during the four-year
period ended on April 30, 1997. The Company intends to vigorously defend this
case although there can be no assurance as to the eventual outcome.

GEC Incorporated has agreed to fully indemnify the Company against all
costs and liabilities in connection with any litigation that is pending or may
be brought against A.B. Dick and arises out of events occurring prior to the
closing of the A.B. Dick Acquisition, including the case mentioned in the
previous paragraph, for all amounts in excess of $250,000 up to an aggregate
liability of $15,000,000.

In addition, both A.B. Dick and Curtis are parties to routine litigation
incidental to their businesses, some of which is covered by insurance. The
Company does not believe that any such pending litigation will have a material
adverse effect upon its results of operations or financial condition.

SOLE STOCKHOLDER

The Company is a wholly owned subsidiary of NES Group, Inc., all of the
capital stock of which is beneficially owned by Robert J. Tomsich.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding the directors
and executive officers of the Company:

NAME AGE POSITION WITH THE COMPANY

Gerald J. McConnell............... 56 President and Chief Executive Officer
A. Keith Drewett.................. 51 Vice President
Frank J. Rzicznek................. 55 Chief Financial Officer and Secretary
Maurice P. Andrien................ 56 President and Chief Executive Officer of Curtis
John H. Fountain.................. 34 Chairman of the Board
Donald F. Hastings................ 69 Director
John J. Kahl, Jr.................. 57 Director
John R. Tomsich................... 31 Director
Robert J. Tomsich................. 67 Director
James W. Wert..................... 51 Director

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Set forth below is a brief description of the business experience of each
director and executive officer of the Company.

MR. MCCONNELL has served as President and Chief Executive Officer of the
Company since March 1998. Mr. McConnell has served as President and Chief
Executive Officer of A.B. Dick since 1995. Prior to joining A.B. Dick, Mr.
McConnell served as the President and Chief Executive Officer of American Paper
Group, Inc., a specialty envelope manufacturing company, from March 1995 to
December 1995, and as Chief Executive Officer of MAN Roland Inc., a printing
press manufacturer, from 1990 to 1995.

MR. DREWETT has served as Vice President of the Company since March 1998.
Mr. Drewett has served as President--Automotive and Industrial Division of
Curtis since May 1992 and Senior Vice President of Curtis since May 1997.

MR. RZICZNEK has served as Chief Financial Officer and Secretary of the
Company since March 1998 and as Vice President--Finance and Assistant Secretary
from November 1996 to March 1998. Mr. Rzicznek has served as Vice
President-Finance of NESCO, Inc. since November 1985.

MR. ANDRIEN has served as President and Chief Executive Officer of Curtis
since 1992.

MR. FOUNTAIN has served as Chairman of the Board of Directors of the
Company since March 1998. Mr. Fountain served as Secretary and Treasurer of the
Company from its inception in September 1996 through March 1998, as Vice
President from November 1996 to present, and as director since January 1997. Mr.
Fountain has been a Vice President of NESCO, Inc. since 1993. Mr. Fountain is
the son-in-law of Mr. Robert Tomsich.

MR. HASTINGS has served as a Director of the Company since March 1998. Mr.
Hastings served as Chairman of Lincoln Electric Company, a welding products
manufacturer, from 1992 through 1997, and Chief Executive Officer of Lincoln
Electric Company from 1992 through 1996. Mr. Hastings also serves as a director
of Continental Global Group, Inc.

MR. KAHL, JR. has served as a Director of the Company since March 1998. Mr.
Kahl is Chairman and Chief Executive Officer of Manco, Inc., a manufacturer of
pressure sensitive tapes for household and automotive repairs, mailing and
shipping supplies, weatherstripping and related home energy products, and
labels. Mr. Kahl also serves as a director of Applied Industrial Technologies
Inc. and Royal Appliance Mfg. Co.

MR. JOHN TOMSICH has served as a Director of the Company since January 1997
and served as a Vice President of the Company since its inception through March
1998. In addition, Mr. John Tomsich has served as Vice President of NESCO, Inc.
since 1995 and in various other management positions with NESCO, Inc. since
1990. Mr. John Tomsich also serves as director of Continental Global Group, Inc.
Mr. John Tomsich is the son of Mr. Robert Tomsich.

MR. ROBERT TOMSICH has served as a Director of the Company since its
inception and served as President of the Company from its inception to March
1998. In addition, Mr. Robert Tomsich has served as President and a Director of
NESCO, Inc. (including predecessors of NESCO, Inc.) since 1956. Mr. Robert
Tomsich also serves as director of Continental Global Group, Inc. Mr. Robert
Tomsich is the father of Mr. John Tomsich and the father-in-law of Mr. Fountain.

MR. WERT has served as a Director of the Company from January to April 1997
and since March 1998. Prior to his service with the Company, Mr. Wert held a
variety of executive management positions with KeyCorp, a financial services
company based in Cleveland, Ohio, and KeyCorp's predecessor, Society
Corporation. Mr. Wert served as Senior Executive Vice President and Chief
Investment Officer of KeyCorp from 1995 to 1996. Prior to that time, he served
as Senior Executive Vice President and Chief Financial Officer of KeyCorp for
two years and Vice Chairman, Director and Chief Financial Officer of Society
Corporation for four years. Mr. Wert also serves as a director of Continental
Global Group, Inc. and as Chairman of the Executive and Compensation Committees
of the Board of Directors, of Park-Ohio Industries, Inc.

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EXECUTIVE COMPENSATION

The following table sets forth certain information concerning compensation
of the Company's Chief Executive Officer and the other most highly compensated
officers of the Company having total annual salary and bonus in excess of
$100,000.

ANNUAL COMPENSATION
-------------------------------------------
NAME AND PERIOD OTHER ANNUAL
PRINCIPAL POSITION ENDED SALARY BONUS COMPENSATION(1)

Gerald J. McConnell, December 31, 1997 $259,135(2) $125,000 $ 18,952
President and January 17, 1997 222,115(3) -- 140,011(4)
Chief Executive Officer March 31, 1996 84,615(5) -- 6,182
A. Keith Drewett, December 31, 1997 $160,000 $ 42,560 $ 12,472
Vice President December 31, 1996 160,000 32,480 11,361
December 31, 1995 150,000 30,000 10,640
Maurice P. Andrien, Jr. December 31, 1997 $245,000 $ 93,100 $ 10,811
President and Chief December 31, 1996 245,000 105,350 10,482
Executive Officer of
Curtis December 31, 1995 235,000 75,000 6,300

- ---------------

(1) Amounts shown for the year and period ended December 31, 1997 reflect
contributions made by A.B. Dick or Curtis on behalf of the named executives
under the applicable 401(k) plan, life insurance premiums paid, car payments
and miscellaneous payments made on behalf of the named executives, as
follows:

MR. MCCONNELL MR. DREWETT MR. ANDRIEN

401(k) Plan........................................... $ 2,665 $ 2,954 $ 2,954
Life Insurance Premiums............................... 1,927 2,893 7,857
Car Payments and Miscellaneous........................ 14,360 6,625 --
------- ------- -------
$18,942 $12,472 $10,811
======= ======= =======

(2) Reflects 49-week period from January 17, 1997 to December 31, 1997 at annual
salary of $275,000.
(3) Reflects 42-week period from April 1, 1996 to January 16, 1997 at annual
salary of $275,000.
(4) Includes $125,000 payment made on behalf of A.B. Dick, GEC Incorporated and
General Electric Company, p.1.c. for the settlement and release of certain
compensation claims relating to the sale of A.B. Dick to the Company.
(5) Reflects 16-week period from December 1, 1995 to March 31, 1996 at annual
salary of $275,000.

DIRECTOR COMPENSATION

Each director of the Company not employed by the Company or any entity
affiliated with the Company is entitled to receive $25,000 per year for serving
as a director of the Company. In addition, the Company will reimburse such
directors for their travel and other expenses incurred in connection with
attending meetings of the Board of Directors.

EMPLOYMENT, SEVERANCE AND BONUS AGREEMENTS

On November 10, 1995, A.B. Dick entered into a letter agreement with Gerald
J. McConnell providing for Mr. McConnell's employment as President and Chief
Executive Officer of A.B. Dick. The agreement is for a five-year term ending on
December 3, 2000 and provides for an annual base salary of not less than
$275,000. Mr. McConnell's current base salary is $302,500. The agreement also
provides for an annual bonus of up to 25% of Mr. McConnell's salary if the
Company achieves certain financial performance goals. If Mr. McConnell's
employment is terminated for any reason other than for cause or as a result of
permanent total disability, A.B. Dick is required to pay Mr. McConnell his base
salary for twelve months from the date of termination and Mr. McConnell has no
duty to mitigate by seeking other employment. Under the agreement, Mr. McConnell
is not permitted to compete against A.B. Dick or any of its subsidiaries for a
period of twelve months following the termination or expiration of the
agreement.

On February 28, 1996, Curtis entered into a Severance and Non-Competition
Agreement with Maurice P. Andrien, Jr. The agreement provides that if Mr.
Andrien is terminated for reasons other than death,

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disability or cause, Curtis will be required to pay his salary for twelve months
after such termination, to pay any bonuses earned prior to such termination, and
to continue his participation in all employee benefit plans for such twelve
month period or until he receives equivalent coverage and benefits from a
subsequent employer. The agreement also provides that in the event Mr. Andrien
is terminated for any reason other than for cause within two years following a
change in control, Mr. Andrien will be entitled to payment of his salary for a
period of twenty-four months, payment of any bonuses earned prior to such
termination and continued participation in all employee benefit plans for
twenty-four months or until he receives equivalent coverage and benefits from a
subsequent employer. The agreement precludes Mr. Andrien from competing with
Curtis or soliciting or employing any employee, officer or agent of Curtis for
twelve months following termination of employment with Curtis. The Company and
Mr. Andrien have agreed that Mr. Andrien's employment with the Company will
terminate effective May 31, 1998, at which time he will be entitled to receive
the benefits provided for under this agreement.

On February 28, 1996, Curtis entered into a Severance and Non-Competition
Agreement with A. Keith Drewett. The agreement provides that if Mr. Drewett is
terminated for reasons other than death, disability or cause, Curtis will be
required to pay his salary for twelve months after such termination, to pay any
bonuses earned prior to such termination, and to continue his participation in
all employee benefit plans for such twelve month period or until he receives
equivalent coverage and benefits from a subsequent employer. The agreement also
provides that in the event Mr. Drewett is terminated for any reason other than
for cause within two years following a change in control, Mr. Drewett will be
entitled to payment of his salary for a period of twenty-four months, payment of
any bonuses earned prior to such termination and continued participation in all
employee benefit plans for twenty-four months or until he receives equivalent
coverage and benefits from a subsequent employer. The agreement precludes Mr.
Drewett from competing with Curtis or soliciting or employing any employee,
officer or agent of Curtis for twelve months following termination of employment
with Curtis. Mr. Drewett is entitled to termination benefits under this
agreement if he terminates his employment for any reason during the thirty day
period following the first anniversary of a change of control. The Curtis
Acquisition triggered such right to benefits under this agreement.

In connection with the Curtis Acquisition, Mr. Andrien and Curtis also
entered into a Bonus Award Agreement on December 6, 1997. The agreement requires
Curtis to pay Mr. Andrien quarterly payments of $10,920 through September 3,
1999, followed by a payment of $634,920 on December 3, 1999. The Company
guaranteed the payment of all amounts payable to Mr. Andrien under the Bonus
Award Agreement. In March 1998, Curtis paid all amounts due or that would become
due in the future under the Bonus Award Agreement.

In connection with the Curtis Acquisition, Mr. Drewett and Curtis also
entered into a Bonus Award Agreement on December 6, 1997. The agreement requires
Curtis to pay Mr. Drewett quarterly payments of $5,915 through September 3,
1999, followed by a payment of $343,915 on December 3, 1999. The Company
guaranteed the payment of all amounts payable to Mr. Drewett under the Bonus
Award Agreement. In March 1998, Curtis paid all amounts due or that would become
due in the future under the Bonus Award Agreement.

RELATED TRANSACTIONS

COMMON OWNERSHIP

The Company is a Delaware corporation formed in September, 1996. All of the
outstanding capital stock of the Company is beneficially owned by NES Group,
Inc., which is beneficially owned by Robert J. Tomsich. Mr. Tomsich also
beneficially owns all the outstanding capital stock of NESCO, Inc., which has
entered into a management agreement with the Company as described below.

As referenced under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources"
in this Prospectus, the Company used a portion of the proceeds of the Series A
Notes Offering to fund a dividend. As the Company's sole stockholder, NES Group,
Inc. was the recipient of such dividend.
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TAX PAYMENT AGREEMENT

The Company and the Subsidiary Guarantors have entered into a tax payment
agreement with NES Group, Inc. providing for monthly payments by each entity to
NES Group, Inc. in an amount equal to the greater of (i) the total federal,
state, local and, under certain circumstances, foreign income tax liability
attributable to such entity's operations for the monthly period, determined on
an annualized basis, and (ii) one-twelfth the total federal, state, local and,
under certain circumstances, foreign income tax liability attributable to such
entity's operations for the year. The tax rates applied to such income are to be
based on the maximum individual federal, state, local and foreign income tax
rates imposed by Section 1 of the Internal Revenue Code of 1986, as amended, and
by the equivalent provisions of state, local and foreign income tax laws. These
tax payments will not recognize any future carry-forward or carry-back tax
benefits to the Company and the Subsidiary Guarantors. Future direct and
indirect Subsidiaries of the Company also will become parties to the tax payment
agreement.

MANAGEMENT AGREEMENT

The Company and NESCO, Inc. have entered into a management agreement (the
"Management Agreement"), the material terms of which are summarized below. Under
the Management Agreement, NESCO, Inc. has agreed to provide general management
oversight services on a regular basis for the benefit of the Company, in regard
to business activities involving financial results, legal issues and long-term
planning relative to current operations and acquisitions. Business development
services will include assistance in identifying and acquiring potential
acquisition candidates, including negotiations and contractual preparations in
connection therewith. Financial planning will include assistance in developing
banking relationships and monitoring cash investments through professional money
management accounts. Under the terms of the Management Agreement, the Company
has agreed to pay NESCO, Inc. a management fee for such services equal to 5% of
the Company's earnings before interest and estimated taxes, depreciation,
amortization and other expense (income) (which fee would have been $1.2 million
on a pro forma basis for 1997). Prior to entering into the Management Agreement,
the management fee was 1.0% of net revenue. The management fee will be payable
in monthly installments. The Management Agreement will remain in effect until
terminated by either party upon not less than 60 days' written notice prior to
an anniversary date of the Management Agreement.

The Company will also separately employ, as required, independent auditors,
outside legal counsel and other consulting services. Such services will be paid
directly by the Company.

CURTIS OFFICE LEASE

Lander Enterprises Co. L.P., an affiliate of the Company ("Lander"), and
Curtis have entered into a lease agreement (the "Lease") for Curtis'
headquarters in Mayfield Heights, Ohio. The initial term of the Lease expires on
September 22, 2006, and Curtis has the option to renew for two additional
five-year terms. Curtis is obligated to pay Lander monthly rent of $37,333
during the first three years of the Lease term, $44,800 during years four
through seven and $53,200 during years eight through ten. Rent for any renewal
term shall be equal to 95% of fair market rent at the time of renewal. Curtis
has a right of first refusal on any additional space that becomes available for
lease in the building during the Lease term and has an option to lease
additional space in the building commencing in the sixth year of the Lease. At
the end of the fifth year of the Lease, Curtis will receive a credit of $5.00
per square foot to complete any refurbishing Curtis deems necessary or
desirable. Lander has furnished Curtis with a cash allowance of $0.5 million to
fund build-out costs, repayable in 120 equal monthly installments of $6,552. The
Company believes this transaction is on terms that are no less favorable than
those that would have been obtained in a comparable transaction with an
unrelated person. The remaining balance of the promissory note evidencing the
cash allowance was discharged with the proceeds of the Series A Notes Offering.

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A.B. DICK OFFICE LEASE

Par Realty Ltd., L.P., an affiliate of the Company ("Par"), and A.B. Dick
have entered into a lease agreement (the "A.B. Dick Lease") for A.B. Dick's new
headquarters in Niles, Illinois. The initial term of the A.B. Dick Lease extends
for ten years from the date A.B. Dick takes possession of the premises, which is
anticipated to be on or before August 1, 1998. A.B. Dick has the option to
extend the term for one additional five-year period at the expiration of the
initial term. The monthly rent payable by A.B. Dick to Par under the A.B. Dick
Lease is approximately $29,000, which will increase 3% per year commencing with
the second lease year. The Company believes this transaction is on terms that
are no less favorable than those that would have been obtained in a comparable
transaction with an unrelated person.

DESCRIPTION OF NEW CREDIT AGREEMENT

The Company and Key Corporate Capital Inc. ("Key") are parties to a credit
facility and security agreement dated as of April 1, 1998, pursuant to which Key
has provided the Company a revolving line of credit equal to $32.0 million (the
"New Credit Agreement"). The availability under the New Credit Agreement is
equal to the sum of (i) 85% of the eligible Curtis accounts receivable, plus 80%
of the eligible A.B. Dick accounts receivable, plus (ii) 60% of the eligible
Curtis inventory (capped at $6.4 million), plus 60% of the eligible A.B. Dick
inventory (capped at $9.6 million), less (iii) reserves and outstanding letters
of credit. The New Credit Agreement is guaranteed by Curtis and A.B. Dick
pursuant to separate credit guaranty agreements with Key. The New Credit
Agreement is secured by liens on accounts receivable and inventory of Curtis and
A.B. Dick, pursuant to separate security agreements between Key and each of
Curtis and A.B. Dick. The New Credit Agreement contains certain financial and
other covenants which, among other things, establish minimum consolidated EBITDA
and consolidated fixed charge ratios. The New Credit Agreement will be fully
revolving until its final maturity in 2003. The New Credit Agreement bears
interest at a rate determined according to a sliding scale under which the rate
adjusts based upon the Company's performance. The New Credit Agreement bears
interest at an initial rate equal to (i) Key's prime rate plus 75 basis points,
or (ii) LIBOR plus 275 basis points, at the option of the Company.

DESCRIPTION OF SENIOR NOTES

GENERAL

The Series A Notes were, and the Series B Notes will be, issued pursuant to
the Indenture. The terms of the Senior Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Senior Notes
are subject to all such terms, and Holders of Senior Notes are referred to the
Indenture and the Trust Indenture Act for a statement thereof. The following
summary of the material provisions of the Indenture and the Registration Rights
Agreement does not purport to be complete and is qualified in its entirety by
reference to the Indenture, including the definitions therein of certain terms
used below. The definitions of certain terms used in the following summary are
set forth below under "-- Certain Definitions." For purposes of this summary,
the term "Company" refers only to Paragon Corporate Holdings Inc. and not to any
of its Subsidiaries.

The Series A Notes are, and the Series B Notes will be, senior unsecured
obligations of the Company and will rank pari passu in right of payment with all
current and future unsecured senior Indebtedness of the Company and senior to
all subordinated Indebtedness of the Company. The Company is party to the New
Credit Agreement, and all borrowings under the New Credit Agreement are secured
by a lien on all accounts receivable and inventory of Curtis and A.B. Dick. The
Indenture permits additional borrowings under the New Credit Agreement.

The operations of the Company are conducted through its Subsidiaries and,
therefore, the Company is dependent upon the cash flow of its Subsidiaries to
meet its obligations, including its obligations under the Senior Notes. The
Company's obligations under the Series A Notes are, and the Series B Notes will
be, jointly and severally guaranteed (the "Subsidiary Guarantees") by each
direct and indirect Subsidiary of the

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Company (other than Foreign Subsidiaries) (each such Person, a "Subsidiary
Guarantor" and, collectively, the "Subsidiary Guarantors"). The Subsidiary
Guarantees are senior unsecured obligations of the Subsidiary Guarantors and
rank pari passu in right of payment with all current and future unsecured senior
Indebtedness of the Subsidiary Guarantors and senior to all subordinated
Indebtedness of the Subsidiary Guarantors. However, the Series A Notes are, and
the Series B Notes will be, effectively subordinated to all Indebtedness and
other liabilities and commitments (including trade payables and lease
obligations) of each Foreign Subsidiary of the Company. Other than as provided
by the terms of the covenant described under the caption "-- Certain
Covenants -- Additional Subsidiary Guarantees," Curtis Industries of Canada,
Ltd., Curtis U.K., Ltd., Curtis Italy, A.B. Dick, S.A., A.B. Dick Company of
Canada, Ltd. and A.B. Dick-Itek Limited and any other Foreign Subsidiary formed
or acquired after the date of the Indenture will not guarantee the Company's
obligations under the Senior Notes. Any right of the Company to receive assets
of any such Foreign Subsidiary upon the latter's liquidation or reorganization
(and the consequent right of the Holders of the Senior Notes to participate in
those assets) will be effectively subordinated to the claims of that Foreign
Subsidiary's creditors. On a pro forma basis, as of December 31, 1997, after
giving effect to the Series A Notes Offering and the application of the net
proceeds therefrom, the aggregate principal amount of secured indebtedness of
the Company, secured indebtedness of the Subsidiary Guarantors and indebtedness
and other liabilities (including trade payables) of the Company's Foreign
Subsidiaries which would have effectively ranked senior to the Senior Notes
would have been approximately $3.9 million. The Indenture permits the Company
and its Subsidiaries to incur additional indebtedness, including secured
indebtedness, subject to certain limitations. See "Risk Factors -- Holding
Company Structure; Ranking of Series B Notes."

PRINCIPAL, MATURITY AND INTEREST

The Senior Notes will be limited in aggregate principal amount to $150.0
million and will mature on April 1, 2008. An aggregate of $115.0 million in
principal amount of Senior Notes were issued pursuant to the Series A Notes
Offering, and an aggregate of $35.0 million in principal amount of Senior Notes
may be issued in the future (subject to the covenant described under the caption
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock"). Interest on the Senior Notes will accrue at the rate of 9 5/8% per
annum and will be payable semiannually in arrears on April 1 and October 1,
commencing on October 1, 1998, to Holders of record on the immediately preceding
March 15 and September 15. Interest on the Senior Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months. Principal, premium, if any,
and interest and Liquidated Damages, if any, on the Senior Notes will be payable
at the office or agency of the Company maintained for such purpose within the
City and State of New York or, at the option of the Company, payment of interest
and Liquidated Damages, if any, may be made by check mailed to the Holders of
the Senior Notes at their respective addresses set forth in the register of
Holders of Senior Notes; provided that all payments of principal, premium,
interest and Liquidated Damages, if any, with respect to Senior Notes the
Holders of which have given wire transfer instructions to the Company will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency in New York will be the office of the
Trustee maintained for such purpose. The Series B Notes will be issued in
denominations of $1,000 and integral multiples thereof.

SUBSIDIARY GUARANTEES

The Company's obligations under the Series A Notes are, and Series B Notes
will be, jointly and severally guaranteed on a senior basis by each direct and
indirect Subsidiary of the Company (other than Foreign Subsidiaries). The
obligations of each Subsidiary Guarantor under its Subsidiary Guarantee are
limited so as not to constitute a fraudulent conveyance under applicable law.
See "Risk Factors -- Fraudulent Transfer Considerations."

The Indenture provides that no Subsidiary Guarantor may consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is the surviving
Person), another corporation, Person or entity whether or not affiliated with
such Subsidiary Guarantor unless, other than with respect to a merger between a

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Subsidiary Guarantor and another Subsidiary Guarantor or a merger between a
Subsidiary Guarantor and the Company, (i) subject to the provisions of the
following paragraph, the Person formed by or surviving any such consolidation or
merger (if other than such Subsidiary Guarantor) assumes all the obligations of
such Subsidiary Guarantor pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Senior Notes and the
Indenture; (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; and (iii) the Company would be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of the covenant described below
under the caption "-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock."

The Indenture provides that in the event of a sale or other disposition of
all of the assets of any Subsidiary Guarantor, by way of merger, consolidation
or otherwise, or a sale or other disposition of all of the capital stock of any
Subsidiary Guarantor, then such Subsidiary Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the capital stock of such Subsidiary Guarantor) or the corporation acquiring
the property (in the event of a sale or other disposition of all of the assets
of such Subsidiary Guarantor) will be released and relieved of any obligations
under its Subsidiary Guarantee; provided that the Net Proceeds of such sale or
other disposition are applied in accordance with the applicable provisions of
the Indenture. See "-- Repurchase at Option of Holders -- Asset Sales."

OPTIONAL REDEMPTION

The Senior Notes will not be redeemable at the Company's option prior to
April 1, 2003. Thereafter, the Senior Notes will be subject to redemption at any
time at the option of the Company, in whole or in part, upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on April 1 of the
years indicated below:

YEAR PERCENTAGE
---- ----------

2003........................................................ 104.8125%
2004........................................................ 103.2083%
2005........................................................ 101.6042%
2006 and thereafter......................................... 100.0000%

Notwithstanding the foregoing, prior to April 1, 2001, the Company may on
any one or more occasions redeem up to an aggregate of 33 1/3% of the original
aggregate principal amount of Senior Notes at a redemption price of 109.625% of
the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the redemption date, with the net cash proceeds of an
offering of common stock of the Company; provided that at least 66 2/3% of the
aggregate principal amount of Senior Notes originally issued remain outstanding
immediately after the occurrence of such redemption; and provided, further, that
such redemption shall occur within 60 days of the date of the closing of such
offering.

SELECTION AND NOTICE

If less than all of the Senior Notes are to be redeemed at any time,
selection of Senior Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Senior Notes are listed, or, if the Senior Notes are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate; provided that no Senior Notes of $1,000 or less shall be
redeemed in part. Notices of redemption shall be mailed by first class mail at
least 30 but not more than 60 days before the redemption date to each Holder of
Senior Notes to be redeemed at its registered address. Notices of redemption may
not be conditional. If any Senior Note is to be redeemed in part only, the
notice of redemption that relates to such Senior Note shall state the portion of
the principal amount thereof to be redeemed. A new Senior Note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Senior Note. Senior

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Notes called for redemption become due on the date fixed for redemption. On and
after the redemption date, interest ceases to accrue on Senior Notes or portions
of them called for redemption.

MANDATORY REDEMPTION

Except as set forth below under "-- Repurchase at the Option of Holders,"
the Company will not be required to make mandatory redemption or sinking fund
payments with respect to the Senior Notes.

REPURCHASE AT THE OPTION OF HOLDERS

CHANGE OF CONTROL

Upon the occurrence of a Change of Control, each Holder of Senior Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Senior Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase (the "Change of Control Payment"). Within ten days following any Change
of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Senior Notes on the date specified in such notice, which date
shall be no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date"), pursuant to the
procedures required by the Indenture and described in such notice. The Company
will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Senior Notes
as a result of a Change of Control.

On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Senior Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Senior
Notes or portions thereof so tendered and (3) deliver or cause to be delivered
to the Trustee the Senior Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Notes or portions
thereof being purchased by the Company. The Paying Agent will promptly mail to
each Holder of Senior Notes so tendered the Change of Control Payment for such
Senior Notes, and the Trustee will promptly authenticate and mail (or cause to
be transferred by book entry) to each Holder a Series B Note equal in principal
amount to any unpurchased portion of the Senior Notes surrendered, if any;
provided that each such Series B Note will be in a principal amount of $1,000 or
an integral multiple thereof. The Company will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.

The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders of the Senior Notes to require that the
Company repurchase or redeem the Senior Notes in the event of a takeover,
recapitalization or similar transaction.

The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all Senior Notes validly tendered and not withdrawn under such Change
of Control Offer.

"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any to "person" (as such term is used in Section 13(d)(3) of the
Exchange Act) other than the Principal or his Related Parties (as defined
below), (ii) the adoption of a plan relating to the liquidation or dissolution
of the Company, (iii) the consummation of the first transaction (including,
without limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the "beneficial owner" (as defined above),
directly or indirectly, of more of the Voting Stock of the Company (measured by
voting power

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rather than number of shares) than is at the time "beneficially owned" (as
defined above) by the Principal and his Related Parties in the aggregate or (iv)
the first day on which a majority of the members of the Board of Directors of
the Company are not Continuing Directors.

The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the Company and its Subsidiaries taken as a whole. Although
there is a developing body of case law interpreting the phrase "substantially
all," there is no precise established definition of the phrase under applicable
law. Accordingly, the ability of a Holder of Senior Notes to require the Company
to repurchase such Senior Notes as a result of a sale, lease, transfer,
conveyance or other disposition of less than all of the assets of the Company
and its Subsidiaries taken as a whole to another Person or group may be
uncertain.

"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of the Principal or a
majority of the Continuing Directors who were members of such Board at the time
of such nomination or election.

"Principal" means Robert J. Tomsich.

"Related Party" with respect to the Principal means (A) any 80% (or more)
owned Subsidiary, or spouse or immediate family member (in the case of an
individual) of the Principal; or (B) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of the
Principal and/or such other Persons referred to in the immediately preceding
clause (A); or (C) the estate of the Principal until such estate is distributed
pursuant to his will or applicable state law.

The New Credit Agreement currently prohibits the Company from repurchasing
any Senior Notes, and also provides that certain change of control events with
respect to the Company would constitute a default thereunder. Any future Credit
Facilities or other agreements relating to Indebtedness to which the Company
becomes a party may contain similar restrictions and provisions. In the event a
Change of Control occurs at a time when the Company is prohibited from
purchasing Senior Notes, the Company could seek the consent of the lenders under
the New Credit Agreement or such future agreements relating to Indebtedness to
the purchase of Senior Notes or could attempt to refinance the borrowings that
contain such prohibition. If the Company did not obtain such a consent or repay
such borrowings, the Company would remain prohibited from purchasing the Senior
Notes. In such case, the Company's failure to purchase tendered Senior Notes
would constitute an Event of Default under the Indenture. In addition, the
Company's ability to pay cash to the Holders of Senior Notes upon a repurchase
may be limited by the Company's then existing financial resources. See "Risk
Factors--Purchase of Series B Notes Upon a Change of Control."

ASSET SALES

The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Subsidiary, as the case may be) receives consideration at the time of such Asset
Sale at least equal to the fair market value (evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise disposed
of and (ii) at least 75% of the consideration therefor received by the Company
or such Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet), of the Company or any Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Senior Notes or such
Subsidiary's Subsidiary Guarantee thereof) that are assumed by the transferee of
any such assets pursuant (except with respect to assumptions of trade payables)
to a customary novation agreement that releases the Company or such Subsidiary
from further liability and (y) any securities, notes or other obligations
received by the Company or any such Subsidiary from such transferee that are
contemporaneously (subject to ordinary settlement periods) converted by the
Company or such Subsidiary into cash (to the extent of the cash received), shall
be deemed to be cash for purposes of this clause (ii).

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Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to repay
Indebtedness under the New Credit Agreement or (b) to an investment in a
Permitted Business through the making of a capital expenditure or the
acquisition of other assets that are used or useful in a Permitted Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the first
sentence of this paragraph will be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will
be required to make an offer to all Holders of Senior Notes (an "Asset Sale
Offer") to purchase the maximum principal amount of Senior Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the date of purchase, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Senior Notes tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Senior Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Senior Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.

The New Credit Agreement currently prohibits the Company from repurchasing
any Senior Notes. Any future Credit Facilities or other agreements relating to
Indebtedness to which the Company becomes a party may contain similar
restrictions and provisions. In the event an Asset Sale Offer is required to be
made at a time when the Company is prohibited from purchasing Senior Notes, the
Company could seek the consent of the lenders under the New Credit Agreement or
such future agreements relating to Indebtedness to the purchase of Senior Notes
or could attempt to refinance the borrowings that contain such prohibition. If
the Company did not obtain such a consent or repay such borrowings, the Company
would remain prohibited from purchasing the Senior Notes. In such case, the
Company's failure to purchase tendered Senior Notes would constitute an Event of
Default under the Indenture.

CERTAIN COVENANTS

RESTRICTED PAYMENTS

The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly: (i) declare or pay any dividend
or make any other payment or distribution on account of the Company's or any of
its Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or any of
its Subsidiaries) or to the direct or indirect holders of the Company's or any
of its Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or to the Company or a Subsidiary of the Company); (ii)
purchase, redeem or otherwise acquire or retire for value (including without
limitation, in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any direct or indirect parent of
the Company; (iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Senior Notes or the Subsidiary Guarantees, except a payment
of interest or principal at Stated Maturity; (iv) pay fees pursuant to, or make
any other distribution in respect of, the Management Agreement; or (v) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (v) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:

(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and

(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed

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Charge Coverage Ratio test set forth in the first paragraph of the covenant
described below under caption "--Incurrence of Indebtedness and Issuance of
Preferred Stock;" and

(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Subsidiaries on or
after the date of the Indenture (excluding Restricted Payments permitted by
clause (ii), (iii), (v) or (vi) of the next succeeding paragraph and
excluding any Restricted Payment made on the date of the Indenture directly
by the Company with the proceeds of the Series A Notes Offering, is less
than the sum, without duplication, of (i) 50% of the Consolidated Net
Income of the Company for the period (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the date of the
Indenture to the end of the Company's most recently ended fiscal quarter
for which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by the Company since the date of the Indenture as a
capital contribution to its common equity capital or from the issue or sale
of Equity Interests of the Company (other than Disqualified Stock) or from
the issuance or sale of Disqualified Stock or debt securities of the
Company that have been converted into such Equity Interests (other than
Equity Interests (or Disqualified Stock or convertible debt securities)
sold to a Subsidiary of the Company and other than Disqualified Stock or
convertible debt securities that have been converted into Disqualified
Stock), plus (iii) to the extent that any Restricted Investment that was
made after the date of the Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (A) the cash return of capital
with respect to such Restricted Investment (less the cost of disposition,
if any) and (B) the initial amount of such Restricted Investment.

The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other Equity Interests of
the Company (other than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (iii) the defeasance, redemption, repurchase
or other acquisition of subordinated Indebtedness with the net cash proceeds
from an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of
any dividend by a Subsidiary of the Company to the holders of its common Equity
Interests on a pro rata basis; (v) payments by the Company or any Subsidiary of
the Company, directly or indirectly, to NES Group, Inc. to satisfy tax
obligations, in accordance with the Tax Payment Agreement as in effect on the
date of the Indenture; provided that such amounts do not exceed the amounts
that, without recognizing any tax loss carryforwards or carrybacks or other tax
attributes, such as alternative minimum tax carryforwards, would otherwise be
due and owing if the Company and its Subsidiaries were an independent,
individual taxpayer; and (vi) so long as no Default or Event of Default has
occurred and is continuing or would occur as a result thereof, the payment of
fees pursuant to the Management Agreement, as in effect on the date of the
Indenture; provided that the amount of fees paid pursuant to the Management
Agreement in any calendar year shall not exceed an amount equal to five percent
of the Company's earnings before interest, taxes, depreciation, amortization and
miscellaneous expense (income).

The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
non-cash Restricted Payment shall be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee, such
determination to be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing if such fair market
value exceeds $5.0 million. Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis

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upon which the calculations required by the covenant "Restricted Payments" were
computed, together with a copy of any fairness opinion or appraisal required by
the Indenture.

INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK

The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and that the Company will not issue any Disqualified Stock and
will not permit any of its Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company or a Subsidiary Guarantor may incur
Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if
the Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2 to 1, determined
on a pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.

The Indenture will also provide that the Company and any Subsidiary
Guarantor will not incur any Indebtedness (other than Existing Indebtedness)
that is contractually subordinated in right of payment to any other Indebtedness
of the Company or such Subsidiary Guarantor, respectively, unless such
Indebtedness is also contractually subordinated in right of payment to the
Senior Notes or the Subsidiary Guarantee of such Subsidiary Guarantor,
respectively, on substantially identical terms; provided, however, that no
Indebtedness of the Company or any Subsidiary Guarantor shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company or such Subsidiary Guarantor, respectively, solely by virtue of being
unsecured.

The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):

(i) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness under Credit Facilities; provided that the aggregate principal
amount of all Indebtedness (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company
and its Subsidiaries thereunder) outstanding under all Credit Facilities
after giving effect to such incurrence, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (i), does not exceed an
amount equal to the greater of (x) $32.0 million and (y) the Borrowing
Base;

(ii) the incurrence by any Foreign Subsidiary of Indebtedness under
Foreign Credit Facilities; provided that the aggregate principal amount of
all Indebtedness (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of Foreign Subsidiaries
thereunder) outstanding under all Foreign Credit Facilities after giving
effect to such incurrence, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (ii), does not exceed an amount equal to the
greater of (x) $8.0 million and (y) the Foreign Borrowing Base;

(iii) the incurrence by the Company and its Subsidiaries of the
Existing Indebtedness;

(iv) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the Senior Notes and the Subsidiary Guarantees,
respectively;

(v) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations, sale and leaseback
transactions, mortgage financings, purchase money obligations, capital
expenditures or similar financing transactions, in each case incurred for
the purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of the Company or such Subsidiary, in each case with respect to
the respective properties, assets and rights of the Company or such
Subsidiary as of the date of the Indenture, in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all
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Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness incurred pursuant to this clause (v), not to exceed
$10.0 million;

(vi) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace any Indebtedness (other than
intercompany Indebtedness and Indebtedness incurred under Credit
Facilities) that was permitted by the Indenture to be incurred;

(vii) the incurrence by the Company or any of the Subsidiary
Guarantors of intercompany Indebtedness between or among the Company and
any Subsidiaries that are Subsidiary Guarantors; provided, however, that
(i) if the Company or a Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Senior Notes
and the Subsidiary Guarantees, respectively, and (ii) (A) any subsequent
issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Subsidiary
Guarantor and (B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Subsidiary Guarantor shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Company or such Subsidiary, as the case may be, that was not permitted
by this clause (vii);

(viii) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations;

(ix) the guarantee by the Company or any of the Subsidiary Guarantors
of Indebtedness of the Company or a Subsidiary of the Company that was
permitted to be incurred by another provision of this covenant; and

(x) the incurrence by the Company or any of its Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (x), not to exceed $10.0
million.

For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (ix) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest, accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness for
purposes of this covenant; provided, in each case, that the amount thereof is
included in Fixed Charges of the Company as accrued.

SALE AND LEASEBACK TRANSACTIONS

The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, enter into any sale and leaseback transaction; provided
that the Company and any Subsidiary Guarantor may enter into a sale and
leaseback transaction if (i) the Company or such Subsidiary Guarantor could have
(a) (1) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the Fixed Charge
Coverage Ratio test set forth in clause (i) of the covenant described above
under the caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock," or (2) incurred Indebtedness pursuant to clause (v) of the second
paragraph of the covenant described above under the caption "--Incurrence of
Indebtedness and Issuance of Preferred Stock;" and (b) incurred a Lien to secure
such Indebtedness pursuant to the covenant described above under the caption
"--Liens," (ii) the gross cash proceeds of such sale and leaseback transaction
are at least equal to the fair market value (as determined in good faith by the
Board of Directors and set forth in an Officers' Certificate delivered to the
Trustee) of the property that is the subject of such sale and leaseback
transaction and (iii) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company or the applicable Subsidiary
Guarantor applies

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the proceeds of such transaction in compliance with, the covenant described
above under the caption "--Repurchase at the Option of Holders--Asset Sales."

LIENS

The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except for Permitted Liens, unless the Senior Notes and the Subsidiary
Guarantees are secured on an equal and ratable basis (or senior basis where such
Liens secure subordinated debt) with the obligations so secured until such time
as such obligations are no longer secured by a Lien.

DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (i) (a) pay dividends or make any other
distributions to the Company or any of its Subsidiaries (1) on its Capital Stock
or (2) with respect to any other interest or participation in, or measured by,
its profits, or (b) pay any indebtedness owed to the Company or any of its
Subsidiaries, (ii) make loans or advances to the Company or any of its
Subsidiaries or (iii) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the date of the
Indenture, (b) the Indenture, the Senior Notes and the Subsidiary Guarantees,
(c) applicable law, (d) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired; provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred, (e) by
reason of customary non-assignment provisions in leases or contracts entered
into in the ordinary course of business and consistent with past practices, (f)
mortgages or other purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (iii) above on the property so acquired, (g) Permitted Refinancing
Indebtedness; provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced, (h) any agreement for the sale of a Subsidiary that restricts
distributions by that Subsidiary pending its sale, (i) secured Indebtedness
otherwise permitted to be incurred pursuant to the provisions of the covenant
described above under the caption "-- Liens" that limits the right of the debtor
to dispose of the assets securing such Indebtedness, (j) provisions with respect
to the disposition or distribution of assets or property in joint venture
agreements and other similar agreements entered into in the ordinary course of
business and (k) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.

MERGER, CONSOLIDATION, OR SALE OF ASSETS

The Indenture provides that the Company may not consolidate or merge with
or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company) or
the entity or Person to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made assumes all the obligations of the
Company under the Registration Rights Agreement, the Senior Notes and the
Indenture

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pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; (iii) immediately after such transaction no Default or Event of Default
exists; (iv) except in the case of a merger of the Company with or into a Wholly
Owned Subsidiary of the Company, the Company or the entity or Person formed by
or surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the covenant described
above under the caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock;" and (v) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, shall have by supplemental indenture confirmed
that its Subsidiary Guarantee shall apply to the Company's or the surviving
Person's obligations under the Indenture and the Senior Notes.

TRANSACTIONS WITH AFFILIATES

The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Subsidiary than those that would have been obtained
in a comparable transaction by the Company or such Subsidiary with an unrelated
Person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing; provided that (A) any employment
agreement entered into by the Company or any of its Subsidiaries in the ordinary
course of business and consistent with the past practice of the Company or such
Subsidiary, (B) transactions between or among the Company and/or its
Subsidiaries, (C) Restricted Payments that are permitted by the provisions of
the Indenture described above under the caption "--Restricted Payments" and (D)
the payment by the Company or its Subsidiaries of reasonable and customary fees
to members of their respective Boards of Directors, in each case, shall not be
deemed Affiliate Transactions.

ADDITIONAL SUBSIDIARY GUARANTEES

The Indenture provides that if the Company or any of its Subsidiaries shall
after the date of the Indenture, (i) transfer or cause to be transferred in one
or a series of transactions (whether or not related), any assets, businesses,
divisions, real property or equipment having an aggregate fair market value (as
determined in good faith by the Board of Directors) in excess of $1.0 million to
any Subsidiary (other than a Foreign Subsidiary) that is not a Subsidiary
Guarantor; (ii) acquire or create another Subsidiary (other than a Foreign
Subsidiary); or (iii) any Subsidiary of the Company, that is not a Subsidiary
Guarantor, guarantees any Indebtedness of the Company other than the Senior
Notes, or pledges any of its assets to secure any Indebtedness of the Company
other than the Senior Notes, then the Company will cause such Subsidiary to (A)
execute and deliver to the Trustee a supplemental indenture in form and
substance reasonably satisfactory to the Trustee pursuant to which such
Subsidiary shall unconditionally Guarantee all of the Company's obligations
under the Senior Notes on the terms set forth in such supplemental indenture and
(B) deliver to the Trustee an opinion of counsel reasonably satisfactory to the
Trustee that such supplemental indenture has been duly executed and delivered by
such Subsidiary.

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BUSINESS ACTIVITIES

The Company will not, and will not permit any Subsidiary to, engage in any
business other than Permitted Businesses, except to such extent as would not be
material to the Company and its Subsidiaries taken as a whole.

PAYMENTS FOR CONSENT

The Indenture provides that neither the Company nor any of its Subsidiaries
will, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any Holder of any Senior Notes for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Indenture or the Senior Notes unless such consideration is
offered to be paid or is paid to all Holders of the Senior Notes that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.

REPORTS

The Indenture provides that, from and after the earlier of the effective
date of the Exchange Offer Registration Statement and the effective date of the
Shelf Registration Statement, whether or not required by the rules and
regulations of the Commission, so long as any Senior Notes are outstanding, the
Company will furnish to the Holders of Senior Notes (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports, in each case within the
time periods specified in the Commission's rules and regulations. In addition,
following the consummation of the exchange offer contemplated by the
Registration Rights Agreement, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company has agreed that, for so long as any Senior Notes remain outstanding, it
will furnish to the Holders, to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.

EVENTS OF DEFAULT AND REMEDIES

The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Senior Notes; (ii) default in
payment when due of the principal of or premium, if any, on the Senior Notes;
(iii) failure by the Company or any Subsidiary to comply with the provisions
described under the captions "-- Repurchase at the Option of Holders -- Change
of Control;" "-- Repurchase at the Option of Holders -- Asset Sales;"
"-- Certain Covenants -- Restricted Payments;" "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock;" or
"-- Certain Covenants -- Merger, Consolidation, or Sale of Assets;" (iv) failure
by the Company or any Subsidiary for 60 days after notice to comply with any of
its other agreements in the Indenture or the Senior Notes; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of the Indenture, which default (A) (i) is
caused by a failure to pay any principal of or premium, if any, or interest on
such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express maturity and (B)
in each case, the principal amount of any such Indebtedness as to which a
Payment Default shall have occurred, together with the principal amount of any
other such Indebtedness under which
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there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more; (vi) failure by the Company or any
of its Subsidiaries to pay final judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed within 60 days after
their entry; (vii) certain events of bankruptcy or insolvency with respect to
the Company, any of its Significant Subsidiaries or any group of Subsidiaries
that, taken together, would constitute a Significant Subsidiary; and (viii) the
termination of the Subsidiary Guarantee of any Subsidiary Guarantor for any
reason not permitted by the Indenture or the denial of any Person acting on
behalf of any Subsidiary Guarantor of its obligations under any such Subsidiary
Guarantee.

If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Senior Notes
may declare all the Senior Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Senior Notes will become
due and payable without further action or notice. Holders of the Senior Notes
may not enforce the Indenture or the Senior Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Senior Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Senior Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest) if
it determines that withholding notice is in their interest.

In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Senior Notes pursuant to
the optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Senior Notes. If an Event of Default occurs prior
to April 1, 2003 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Senior Notes prior to April 1, 2003, then the
premium specified in the Indenture shall also become immediately due and payable
to the extent permitted by law upon the acceleration of the Senior Notes.

The Holders of a majority in aggregate principal amount of the Senior Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Senior Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Senior Notes.

The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

No director, officer, employee, incorporator or stockholder of the Company
or any Subsidiary Guarantor, as such, shall have any liability for any
obligations of the Company or any Subsidiary Guarantor under the Senior Notes,
the Indenture, the Subsidiary Guarantees or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder of Senior
Notes by accepting a Senior Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Senior
Notes and the Subsidiary Guarantees. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

The Company may, at its option, and the Subsidiary Guarantors may, at the
option of their respective Boards of Directors and at any time, elect to have
all of their respective obligations discharged with respect to the outstanding
Senior Notes and Subsidiary Guarantees ("Legal Defeasance") except for (i) the
rights of Holders of outstanding Senior Notes to receive payments in respect of
the principal of, premium, if any, and
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interest and Liquidated Damages on such Senior Notes when such payments are due
from the trust referred to below, (ii) the Company's obligations with respect to
the Senior Notes concerning issuing temporary Senior Notes, registration of
Senior Notes, mutilated, destroyed, lost or stolen Senior Notes and the
maintenance of an office or agency for payment and money for security payments
held in trust, (iii) the rights, powers, trusts, duties and immunities of the
Trustee, and the Company's obligations in connection therewith and (iv) the
Legal Defeasance provisions of the Indenture. In addition, the Company may, at
its option and at any time, elect to have the obligations of the Company and the
obligations of the Subsidiary Guarantors released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Senior Notes. In the event
Covenant Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events) described under
"Events of Default" will no longer constitute an Event of Default with respect
to the Senior Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the Senior Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages on the outstanding Senior Notes on the stated maturity or on
the applicable redemption date, as the case may be, and the Company must specify
whether the Senior Notes are being defeased to maturity or to a particular
redemption date; (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of the Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel shall confirm that, the Holders of the outstanding Senior
Notes will not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred; (iii) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an opinion
of counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Senior Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the date
of deposit; (v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than the Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound; (vi) the Company must have delivered to the Trustee an opinion of counsel
to the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (vii) the
Company must deliver to the Trustee an Officers' Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of
Senior Notes over the other creditors of the Company with the intent of
defeating, hindering, delaying or defrauding creditors of the Company or others;
and (viii) the Company must deliver to the Trustee an Officers' Certificate and
an opinion of counsel, each stating that all conditions precedent provided for
relating to the Legal Defeasance or the Covenant Defeasance have been complied
with.

TRANSFER AND EXCHANGE

A Holder may transfer or exchange Senior Notes in accordance with the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Senior Note selected for redemption.
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Also, the Company is not required to transfer or exchange any Senior Note for a
period of 15 days before a selection of Senior Notes to be redeemed.

The registered Holder of a Senior Note will be treated as the owner of it
for all purposes.

AMENDMENT, SUPPLEMENT AND WAIVER

Except as provided in the next two succeeding paragraphs, the Indenture,
the Senior Notes or the Subsidiary Guarantees may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Senior Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Senior Notes), and any existing default or compliance with any provision of
the Indenture, the Senior Notes or the Subsidiary Guarantees may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Senior Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for Senior
Notes).

Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Senior Notes held by a non-consenting Holder): (i) reduce
the principal amount of Senior Notes whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed maturity
of any Senior Note or alter the provisions with respect to the redemption of the
Senior Notes (other than provisions relating to the covenants described above
under the caption "-- Repurchase at the Option of Holders"), (iii) reduce the
rate of or change the time for payment of interest on any Senior Note, (iv)
waive a Default or Event of Default in the payment of principal of or premium or
Liquidated Damages, if any, or interest on the Senior Notes (except a rescission
of acceleration of the Senior Notes by the Holders of at least a majority in
aggregate principal amount of the Senior Notes and a waiver of the payment
default that resulted from such acceleration), (v) make any Senior Note payable
in money other than that stated in the Senior Notes, (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the rights
of Holders of Senior Notes to receive payments of principal of or premium or
Liquidated Damages, if any, or interest on the Senior Notes, (vii) waive a
redemption payment with respect to any Senior Note (other than a payment
required by one of the covenants described above under the caption
"-- Repurchase at the Option of Holders") or (viii) make any change in the
foregoing amendment and waiver provisions.

Notwithstanding the foregoing, without the consent of any Holder of Senior
Notes, the Company and the Trustee may amend or supplement the Indenture, the
Senior Notes or the Subsidiary Guarantees to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes, to provide for the assumption of the
Company's obligations to Holders of Senior Notes in the case of a merger or
consolidation or sale of all or substantially all of the Company's assets, to
make any change that would provide any additional rights or benefits to the
Holders of Senior Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, or to comply with requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act or to allow any Subsidiary Guarantor to guarantee
the Senior Notes.

CONCERNING THE TRUSTEE

The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company or any Subsidiary Guarantor, to
obtain payment of claims in certain cases, or to realize on certain property
received in respect of any such claim as security or otherwise. The Trustee will
be permitted to engage in other transactions; however, if it acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the Commission for permission to continue or resign.

The Holders of a majority in principal amount of the then outstanding
Senior Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee,
subject to certain exceptions. The Indenture provides that in case an Event of
Default shall occur (which shall not be cured), the Trustee will be required, in
the exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder of Senior
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Notes, unless such Holder shall have offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.

BOOK-ENTRY; DELIVERY AND FORM

The Series A Notes initially have been, and the Series B Notes initially
will be, represented by one or more Senior Notes in registered, global form
without interest coupons (collectively, the "Global Note"). The Global Note will
be deposited upon issuance with the Trustee as custodian for DTC, in New York,
New York, and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant as described below.

Except as set forth below, the Global Note may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Note may not be exchanged for Senior
Notes in certificated form except in the limited circumstances described below.
See "-- Exchange of Book-Entry Notes for Certificated Notes." Except in the
limited circumstances described below, owners of beneficial interests in the
Global Note will not be entitled to receive physical delivery of Certificated
Notes (as defined below).

Rule 144A Notes (including beneficial interests in the Rule 144A Global
Note) will be subject to certain restrictions on transfer and will bear a
restrictive legend as described under "Notice to Investors." In addition,
transfers of beneficial interests in the Global Note will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants,
which may change from time to time.

Initially, the Trustee will act as Paying Agent and Registrar. The Senior
Notes may be presented for registration of transfer and exchange at the offices
of the Registrar.

DEPOSITORY PROCEDURES

DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities
held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interests in, and transfers of ownership interests
in, each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.

DTC has also advised the Company that, pursuant to procedures established
by it, (i) upon deposit of the Global Note, DTC will credit the accounts of
Participants designated by the Initial Purchasers with portions of the principal
amount of the Global Note and (ii) ownership of such interests in the Global
Note will be shown on, and the transfer of ownership thereof will be effected
only through, records maintained by DTC (with respect to Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Note).

Investors in the Rule 144A Global Note may hold their interests therein
directly through DTC, if they are Participants in such system, or indirectly
through organizations which are Participants in such system. All interests in a
Global Note may be subject to the procedures and requirements of DTC. The laws
of some states require that certain persons take physical delivery in definitive
form of securities that they own. Consequently, the ability to transfer
beneficial interests in a Global Note to such persons will be limited to that
extent. Because DTC can act only on behalf of Participants, which in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having beneficial interests in a Global Note to pledge such interests to persons
or entities that do not participate in the DTC system, or otherwise take actions
in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests.

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EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTE WILL NOT
HAVE SENIOR NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY
OF SENIOR NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED
OWNERS OR "HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.

Payments in respect of the principal of, and premium, if any, Liquidated
Damages, if any, and interest on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered Holder
under the Indenture. Under the terms of the Indenture, the Company and the
Trustee have treated, and will continue to treat, the persons in whose names the
Senior Notes, including the Global Note, are registered as the owners thereof
for the purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Company, the Trustee nor any agent of the
Company or the Trustee has or will have any responsibility or liability for (i)
any aspect of DTC's records or any Participant's or Indirect Participant's
records relating to or payments made on account of beneficial ownership
interests in the Global Note, or for maintaining, supervising or reviewing any
of DTC's records or any Participant's or Indirect Participant's records relating
to the beneficial ownership interests in the Global Note or (ii) any other
matter relating to the actions and practices of DTC or any of its Participants
or Indirect Participants. DTC has advised the Company that its current practice,
upon receipt of any payment in respect of securities such as the Senior Notes
(including principal and interest), is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their respective holdings in the principal amount of beneficial interests in the
relevant security as shown on the records of DTC unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of Senior
Notes will be governed by standing instructions and customary practices and will
be the responsibility of the Participants or the Indirect Participants and will
not be the responsibility of DTC, the Trustee or the Company. Neither the
Company nor the Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Senior Notes, and the
Company and the Trustee may conclusively rely on and will be protected in
relying on instructions from DTC or its nominee for all purposes.

Interests in the Global Note trade in DTC's Same-Day Funds Settlement
System and secondary market trading activity in such interests will therefore
settle in immediately available funds, subject in all cases to the rules and
procedures of DTC and its Participants. See "-- Same Day Settlement and
Payment." Transfers between Participants in DTC will be effected in accordance
with DTC's procedures, and will be settled in same day funds.

DTC has advised the Company that it will take any action permitted to be
taken by a Holder of Senior Notes only at the direction of one or more
Participants to whose account DTC has credited the interests in the Global Note
and only in respect of such portion of the aggregate principal amount of the
Senior Notes as to which such Participant or Participants has or have given such
direction. However, if there is an Event of Default under the Senior Notes, DTC
reserves the right to exchange the Global Note for legended Senior Notes in
certificated form, and to distribute such Senior Notes to its Participants.

Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Rule 144A Global Note among Participants in DTC, it is under
no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company nor the Trustee
nor any of their respective agents will have any responsibility for the
performance by DTC or its respective participants or indirect participants of
their respective obligations under the rules and procedures governing their
operations.

EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES

The Global Note is exchangeable for definitive Senior Notes in registered
certificated form ("Certificated Notes") if (i) DTC (x) notifies the Company
that it is unwilling or unable to continue as depositary for the Global Note and
the Company thereupon fails to appoint a successor depositary or (y) has ceased
to be a clearing agency registered under the Exchange Act, (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the issuance
of the Certificated Notes or (iii) there shall have occurred and be continuing a
Default or Event of Default with respect to the Senior Notes. In addition,
beneficial interests in

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the Global Note may be exchanged for Certificated Notes upon request but only
upon prior written notice given to the Trustee by or on behalf of DTC in
accordance with the Indenture. In all cases, Certificated Notes delivered in
exchange for the Global Note or beneficial interests therein will be registered
in the names, and issued in any approved denominations, requested by or on
behalf of the depositary (in accordance with its customary procedures).

EXCHANGE OF CERTIFICATED NOTES FOR BOOK-ENTRY NOTES

Senior Notes issued in certificated form may not be exchanged for
beneficial interests in the Global Note unless the transferor first delivers to
the Trustee a written certificate (in the form provided in the Indenture) to the
effect that such transfer will comply with the appropriate transfer restrictions
applicable to such Senior Notes.

SAME DAY SETTLEMENT AND PAYMENT

The Indenture requires that payments in respect of the Senior Notes
represented by the Global Note (including principal, premium, if any, interest
and Liquidated Damages, if any) be made by wire transfer of immediately
available funds to the accounts specified by the Global Note Holder. With
respect to Senior Notes in certificated form, the Company will make all payments
of principal, premium, if any, interest and Liquidated Damages, if any, by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof or, if no such account is specified, by mailing a check to each such
Holder's registered address. The Senior Notes represented by the Global Note are
expected to be eligible to trade in the PORTAL market and to trade in the
Depositary's Same-Day Funds Settlement System, and any permitted secondary
market trading activity in such Senior Notes will, therefore, be required by the
Depositary to be settled in immediately available funds. The Company expects
that secondary trading in any Certificated Notes will also be settled in
immediately available funds.

REGISTRATION RIGHTS; LIQUIDATED DAMAGES

In connection with the Series A Notes Offering, the Company, the Subsidiary
Guarantors and the Initial Purchasers entered into the Registration Rights
Agreement. Pursuant to the Registration Rights Agreement, the Company and the
Subsidiary Guarantors agreed to file with the Commission the Exchange Offer
Registration Statement, of which this Prospectus is a part, on the appropriate
form under the Securities Act with respect to the Series B Notes. Upon the
effectiveness of the Exchange Offer Registration Statement, the Company will
offer Series B Notes pursuant to the Exchange Offer in exchange for Series A
Notes. If (i) the Company is not required to file the Exchange Offer
Registration Statement or permitted to consummate the Exchange Offer because the
Exchange Offer is not permitted by applicable law or Commission policy or (ii)
any Holder of a Senior Note notifies the Company prior to the 20th day following
consummation of the Exchange Offer that (A) it is prohibited by law or
Commission policy from participating in the Exchange Offer or (B) that it may
not resell the Series B Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales or
(C) that it is a broker-dealer and owns Series A Notes acquired directly from
the Company or an affiliate of the Company, the Company and the Subsidiary
Guarantors will file with the Commission a Shelf Registration Statement to cover
resales of the Series A Notes by the Holders thereof who satisfy certain
conditions relating to the provision of information in connection with the Shelf
Registration Statement. The Company and the Subsidiary Guarantors will use their
reasonable best efforts to cause the applicable registration statement to be
declared effective as promptly as possible by the Commission.

The Registration Rights Agreement provides that (i) the Company and the
Subsidiary Guarantors will file the Exchange Offer Registration Statement with
the Commission on or prior to 60 days after the Closing Date, (ii) the Company
and the Subsidiary Guarantors will use their reasonable best efforts to have the
Exchange Offer Registration Statement declared effective by the Commission on or
prior to 150 days after the Closing Date, (iii) unless the Exchange Offer would
not be permitted by applicable law or Commission policy, the Company will
commence the Exchange Offer and use its reasonable best efforts to issue on or
prior to 30
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business days after the date on which the Exchange Offer Registration Statement
was declared effective by the Commission, Series B Notes in exchange for all
Series A Notes tendered prior thereto in the Exchange Offer and (iv) if
obligated to file the Shelf Registration Statement, the Company and the
Subsidiary Guarantors will use their reasonable best efforts to file the Shelf
Registration Statement with the Commission on or prior to 30 days after such
filing obligation arises and to cause the Shelf Registration to be declared
effective by the Commission on or prior to 150 days after such obligation
arises. If (a) the Company and the Subsidiary Guarantors fail to file any of the
Registration Statements required by the Registration Rights Agreement on or
before the date specified for such filing, (b) any of such Registration
Statements is not declared effective by the Commission on or prior to the date
specified for such effectiveness (the "Effectiveness Target Date"), or (c) the
Company and the Subsidiary Guarantors fail to consummate the Exchange Offer
within 30 business days of the Effectiveness Target Date with respect to the
Exchange Offer Registration Statement, or (d) the Shelf Registration Statement
or the Exchange Offer Registration Statement is declared effective but
thereafter ceases to be effective or usable in connection with resales of
Transfer Restricted Securities during the periods specified in the Registration
Rights Agreement (each such event referred to in clauses (a) through (d) above a
"Registration Default"), then the Company will pay Liquidated Damages to each
Holder of Notes, with respect to the first 90-day period immediately following
the occurrence of the first Registration Default in an amount equal to $.05 per
week per $1,000 principal amount of Senior Notes held by such Holder. The amount
of the Liquidated Damages will increase by an additional $.05 per week per
$1,000 principal amount of Senior Notes with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of Liquidated Damages of $.50 per week per $1,000 principal amount of Senior
Notes. All accrued Liquidated Damages will be paid by the Company on each
Damages Payment Date to the Global Note Holder by wire transfer of immediately
available funds or by federal funds check and to Holders of Certificated
Securities by wire transfer to the accounts specified by them or by mailing
checks to their registered addresses if no such accounts have been specified.
Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease.

Holders of Series A Notes will be required to make certain representations
to the Company and the Subsidiary Guarantors (as described in the Registration
Rights Agreement) in order to participate in the Exchange Offer and will be
required to deliver information to be used in connection with the Shelf
Registration Statement and to provide comments on the Shelf Registration
Statement within the time periods set forth in the Registration Rights Agreement
in order to have their Series A Notes included in the Shelf Registration
Statement and benefit from the provisions regarding Liquidated Damages set forth
above.

CERTAIN DEFINITIONS

Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.

"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "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 or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that,
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control; provided, further, that in the case of a joint venture,
partnership, association or other business arrangement with any Person entered
into in the ordinary course of business, neither such Person nor the joint
venture, partnership, association or business arrangement shall be deemed to be
an Affiliate by reason of the preceding proviso.
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"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Subsidiaries taken as a whole will be governed by the provisions of the
Indenture described above under the caption "-- Repurchase at the Option of
Holders -- Change of Control" and/or the provisions described above under the
caption "-- Certain Covenants -- Merger, Consolidation or Sale of Assets" and
not by the provisions of the Asset Sale covenant), and (ii) the issue or sale by
the Company or any of its Subsidiaries of Equity Interests of any of the
Company's Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $1.0 million or (b) for net proceeds in excess of $1.0
million. Notwithstanding the foregoing: (i) a transfer of assets by the Company
to a Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to the Company or
to another Wholly Owned Subsidiary, (ii) an issuance of Equity Interests by a
Wholly Owned Subsidiary to the Company or to another Wholly Owned Subsidiary,
(iii) a Restricted Payment that is permitted by the covenant described above
under the caption "-- Certain Covenants -- Restricted Payments" and (iv)
dispositions of obsolete equipment, in each case, will not be deemed to be Asset
Sales.

"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).

"Borrowing Base" means, as of any date, an amount equal to the sum of (a)
85% of the face amount of all accounts receivable owned by the Company and its
Subsidiaries (other than Foreign Subsidiaries) as of such date that are not more
than 60 days past due, and (b) 65% of the book value of all inventory owned by
the Company and its Subsidiaries (other than Foreign Subsidiaries) as of such
date, all calculated on a consolidated basis and in accordance with GAAP. To the
extent that information is not available as to the amount of accounts receivable
or inventory as of a specific date, the Company may utilize the most recent
available information for purposes of calculating the Borrowing Base.

"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.

"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.

"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of not
more than six months from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case, with any lender party to the New
Credit Agreement or with any domestic commercial bank having capital and surplus
in excess of $500 million and a Thompson Bank Watch Rating of "B" or better,
(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above, (v) commercial paper having the highest rating obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in
each case maturing within six months after the date of acquisition and (vi)
money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (i) through (v) above.
Notwithstanding the foregoing, up to 40% of the Cash Equivalents of the kinds
described in clauses (ii),

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(iii) and (v) above at any one time held by the Company or any Restricted
Subsidiary of the Company may be invested in securities, certificates of
deposit, eurodollar time deposits, bankers' acceptances and commercial paper
having maturities of not more than one year after the date of acquisition.

"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, less (v) non-cash items increasing such
Consolidated Net Income for such period, in each case, on a consolidated basis
and determined in accordance with GAAP.

"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided
that (i) the Net Income (but not loss) of any Person that is not a Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid in cash to the
referent Person or a Wholly Owned Subsidiary thereof that is a Subsidiary
Guarantor, (ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded and (iv) the
cumulative effect of a change in accounting principles shall be excluded.

"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of the Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Subsidiaries and in Persons
that are not Subsidiaries (except, in each case, Permitted Investments), and (z)
all unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.

"Credit Facilities" means, with respect to the Company or any of its
Subsidiaries (other than Foreign Subsidiaries), one or more debt facilities
(including, without limitation, the New Credit Agreement) or other
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debt securities or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time. Indebtedness under
Credit Facilities outstanding on the date on which Senior Notes are first issued
and authenticated under the Indenture shall be deemed to have been incurred on
such date in reliance on the exception provided by clause (i) of the definition
of Permitted Indebtedness.

"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.

"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Senior Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with the covenant described above
under the caption "-- Certain Covenants -- Restricted Payments."

"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

"Existing Indebtedness" means up to $1.2 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the New Credit Agreement) in existence on the date of the
Indenture, until such amounts are repaid.

"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Subsidiaries that was capitalized during such period, and (iii)
any interest expense on Indebtedness of another Person that is Guaranteed by
such Person or one of its Subsidiaries or secured by a Lien on assets of such
Person or one of its Subsidiaries (whether or not such Guarantee or Lien is
called upon) and (iv) the product of (a) all dividend payments, whether or not
in cash on any series of preferred stock of such Person or any of its
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company (other than Disqualified Stock) or to the
Company or a Subsidiary of the Company, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.

"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues or redeems
preferred stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or redemption
of Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. In addition, for purposes of making the computation referred to above,
(i) acquisitions that have been made
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by the Company or any of its Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (iii) of
the proviso set forth in the definition of Consolidated Net Income, and (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Subsidiaries following
the Calculation Date.

"Foreign Borrowing Base" means, as of any date, the amount equal to the sum
of (a) 85% of the face amount of all accounts receivable owned by Foreign
Subsidiaries of the Company as of such date that are not more than 60 days past
due, and (b) 65% of the book value of all inventory owned by Foreign
Subsidiaries of the Company as of such date, all calculated on a consolidated
basis and in accordance with generally accepted accounting principles. To the
extent that information is not available as to the amount of accounts receivable
or inventory as of a specific date, the Company may utilize the most recent
available information for purposes of calculating the Foreign Borrowing Base.

"Foreign Credit Facilities" means, with respect to the Company or any of
its Foreign Subsidiaries, one or more debt facilities or other debt securities
or commercial paper facilities with banks or other institutional lenders
providing for revolving credit loans, terms loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time. Indebtedness under
Foreign Credit Facilities outstanding on the date on which Senior Notes are
first issued and authenticated under the Indenture shall be deemed to have been
incurred on such date in reliance on the exception provided by clause (ii) of
the definition of Permitted Indebtedness.

"Foreign Subsidiary" means any Subsidiary of the Company, more than 80% of
the sales, earnings or assets (determined on a consolidated basis) of which are
located or derived from operations outside the United States.

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indenture.

"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.

"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates and (iii) agreements entered into for the purpose of fixing or hedging the
risks associated with fluctuations in foreign currency exchange rates.

"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade

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payable, if and to the extent any of the foregoing Indebtedness (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such Indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any Indebtedness of any
other Person. The amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount, and (ii) the principal amount thereof, together with
any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.

"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of the covenant described
above under the caption "-- Certain Covenants -- Restricted Payments."

"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

"Management Agreement" means that certain Management Agreement between
NESCO, Inc. and the Company as in effect on the date of the Indenture.

"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).

"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.

"New Credit Agreement" means that certain New Credit Agreement, as in
effect on the date of the Indenture, by and among the Company, the Subsidiary
Guarantors and the lenders party thereto, providing for up to $32.0 million of
revolving credit borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time (together with any amendment,
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modification, renewal, refunding, replacement or refinancing to or of any of the
foregoing, including, without limitation, any agreement modifying the maturity
or amortization schedule of or refinancing or refunding all or any portion of
Indebtedness thereunder or increasing the amount that may be borrowed under such
agreement or any successor agreement, whether or not among the same parties.

"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

"Permitted Businesses" means the manufacture, sale or distribution of
equipment, parts, supplies or other goods or the provision of services relating
to industrial, automotive, graphic arts, printing, and reasonably related
businesses.

"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Subsidiary of the Company that is a Subsidiary Guarantor that is
engaged in a Permitted Business; (b) any Investment in Cash Equivalents; (c) any
Investment by the Company or any Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Wholly Owned Subsidiary of
the Company that is a Subsidiary Guarantor that is engaged in a Permitted
Business or (ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Subsidiary of the Company that is
a Subsidiary Guarantor; (d) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales;" (e) any acquisition of
assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company; (f) any Investment by a Foreign Subsidiary
of the Company in any other Foreign Subsidiary of the Company; and (g) any
Investment in any Person principally engaged in a Permitted Business having an
aggregate fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (g) that are at the time
outstanding, not to exceed $20.0 million.

"Permitted Liens" means (i) Liens on assets securing Indebtedness under
Credit Facilities and Foreign Credit Facilities that was permitted by the terms
of the Indenture to be incurred; (ii) Liens securing Indebtedness incurred
pursuant to (A) the Fixed Charge Coverage Ratio test set forth under the first
paragraph of the covenant described under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock" or (B)
paragraph (ix) of the covenant described under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock"
provided that, in either case, such Indebtedness ranks, by its terms, pari passu
with the Senior Notes; (iii) Liens in favor of the Company; (iv) Liens on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company; provided that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company; (v) Liens on property existing at
the time of acquisition thereof by the Company or any Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
acquisition; (vi) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vii) Liens to secure Indebtedness
(including Capital Lease Obligations) permitted by clause (iv) of the second
paragraph of the covenant entitled "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock" covering only the assets acquired
with such Indebtedness; (viii) Liens existing on the date of the Indenture; (ix)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (x) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations that do not
exceed $5.0 million at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Subsidiary; and (xi) Liens arising by reason of (1) any
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attachment, judgment, decree or order of any court, so long as such Lien is
being contested in good faith and is either adequately bonded or execution
thereon has been stayed pending appeal or review, and any appropriate legal
proceedings which may have been duly initiated for the review of such
attachment, judgment, decree or order shall not have been fully terminated or
the period within which such proceedings may be initiated shall not have
expired; (2) security for payment of workers' compensation or other insurance;
(3) security for the performance of tenders, bids, leases and contracts (other
than contracts for the payment of money); (4) operation of law in favor of
carriers, warehousemen, landlords, mechanics, materialmen, laborers, employees
or suppliers, incurred in the ordinary course of business for sums which are not
yet delinquent or are being contested in good faith by negotiations or by
appropriate proceedings which suspend the collection thereof; (5) any interest
or title of a lessor under any lease; and (6) easements, rights-of-way, zoning
and similar covenants and restrictions and other similar encumbrances or title
defects which, in the aggregate, are not substantial in amount and which do not
in any case materially interfere with the ordinary course of business of the
Company or any of its Subsidiaries.

"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries (other than intercompany
Indebtedness); provided that: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus accrued interest
on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Senior
Notes, such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and is subordinated in right of payment to, the
Senior Notes on terms at least as favorable to the Holders of Senior Notes as
those contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.

"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.

"Restricted Investment" means an Investment other than a Permitted
Investment.

"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
the Indenture.

"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).

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"Subsidiary Guarantor" means each of (i) A.B. Dick and Curtis and (ii) any
other Subsidiary that executes a Subsidiary Guarantee in accordance with the
provisions of the Indenture, and their respective successors and assigns.

"Tax Payment Agreement" means that certain Tax Payment Agreement among NES
Group, Inc., the Company, A.B. Dick, Curtis, Itek Graphix Corp. and Curtis Sub,
Inc. as in effect on the date of the Indenture.

"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.

"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of Squire, Sanders & Dempsey L.L.P., counsel to the Company,
the following describes the material federal income tax consequences expected to
result to holders whose Series A Notes are exchanged for Series B Notes in the
Exchange Offer. Such opinion is based on the tax laws of the United States in
effect on the date of this Prospectus, as well as judicial and administrative
interpretations thereof (in final or proposed form) available on or before such
date. There can be no assurance that the Internal Revenue Service ("Service")
will not take a contrary view, and no ruling from the Service has been or will
be sought. The laws and interpretations thereof on which such opinion is based
are subject to change and any such change could apply retroactively.

The exchange of Series A Notes for Series B Notes pursuant to the Exchange
Offer will not be a taxable event to either the Company or the holders of the
Series A Notes for federal income tax purposes. A holder's holding period for
Series B Notes will include the holding period for Series A Notes. HOLDERS
SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES OF EXCHANGING SERIES A NOTES FOR SERIES B NOTES.

PLAN OF DISTRIBUTION

A broker-dealer that is the holder of Series A Notes that were acquired for
the account of such broker-dealer as a result of market-making or other trading
activities (other than Series A Notes acquired directly from the Company or any
affiliate of the Company) may exchange such Series A Notes for Series B Notes
pursuant to the Exchange Offer; provided, that each broker-dealer that receives
Series B Notes for its own account in exchange for Series A Notes, where such
Series A Notes were acquired by such broker-dealer as a result of market-making
or other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such Series B Notes. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Series B Notes received in exchange for Series A
Notes where such Series A Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that for a period
of 120 days after consummation of the Exchange Offer, it will make this
Prospectus, as it may be amended or supplemented from time to time, available to
any broker-dealer for use in connection with any such resale. The Company will
not receive any proceeds from any sale of Series B Notes by broker-dealers or
any other holder of Series B Notes.

86
88

Series B Notes received by broker-dealers for their own account pursuant to
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the Series B Notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Series B Notes. Any
broker-dealer that resells Series B Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Series B Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Series B Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.

For a period of 120 days after consummation of the Exchange Offer, the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer and to the Company's performance of, or
compliance with, the Registration Rights Agreement (other than commissions or
concessions of any brokers or dealers) and will indemnify the holders of the
Senior Notes (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.

LEGAL MATTERS

Certain matters will be passed upon for the Company by Squire, Sanders &
Dempsey L.L.P., Cleveland, Ohio.

EXPERTS

The consolidated financial statements of the Company as of January 17, 1997
and December 31, 1997 and for the period from January 17, 1997 through December
31, 1997, and of A.B. Dick for the fiscal year ended March 31, 1996 and for the
period from April 1, 1996 through January 16, 1997, and of Curtis as of December
28, 1996 and December 5, 1997 and for the fiscal years ended December 30, 1995
and December 28, 1996 and for the eleven-month period ended December 5, 1997,
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.

87
89

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE

PARAGON CORPORATE HOLDINGS INC. AND A.B. DICK COMPANY
(THE PREDECESSOR COMPANY)
Report of Independent Auditors.............................. F-2
Consolidated Balance Sheets of Paragon Corporate Holdings
Inc. as of January 17, 1997 and December 31, 1997......... F-3
Consolidated Statements of Operations for A.B. Dick Company
for the fiscal year ended March 31, 1996 and for the
nine-month and sixteen-day period ended January 16, 1997
and for Paragon Corporate Holdings Inc. for the
eleven-month and fifteen-day period ended December 31,
1997...................................................... F-4
Consolidated Statements of Stockholders' Equity for A.B.
Dick Company for the fiscal year ended March 31, 1996 and
for the nine-month and sixteen-day period ended January
16, 1997 and for Paragon Corporate Holdings Inc. for the
eleven-month and fifteen-day period ended December 31,
1997...................................................... F-5
Consolidated Statements of Cash Flows for A.B. Dick Company
for the fiscal year ended March 31, 1996 and for the
nine-month and sixteen-day period ended January 16, 1997
and for Paragon Corporate Holdings Inc. for the
eleven-month and fifteen-day period ended December 31,
1997...................................................... F-6
Notes to Consolidated Financial Statements.................. F-7

CURTIS INDUSTRIES, INC. AND SUBSIDIARIES
Report of Independent Auditors.............................. F-22
Consolidated Balance Sheets as of December 28, 1996 and
December 5, 1997.......................................... F-23
Consolidated Statements of Operations for the fiscal years
ended December 30, 1995 and December 28, 1996 and for the
eleven-month period ended December 5, 1997................ F-24
Consolidated Statements of Stockholders' Deficit for the
fiscal years ended December 30, 1995 and December 28, 1996
and for the eleven-month period ended December 5, 1997.... F-25
Consolidated Statements of Cash Flows for the fiscal years
ended December 30, 1995 and December 28, 1996 and for the
eleven-month period ended December 5, 1997................ F-26
Notes to Consolidated Financial Statements.................. F-27

F-1
90

REPORT OF INDEPENDENT AUDITORS

To the Stockholders
Paragon Corporate Holdings Inc.

We have audited the accompanying consolidated balance sheets of Paragon
Corporate Holdings Inc. (see Note A) as of January 17, 1997 and December 31,
1997, and the related consolidated statements of operations, stockholders'
equity and cash flows for A.B. Dick Company (the Predecessor Company) for the
fiscal year ended March 31, 1996 and for the nine-month and sixteen-day period
ended January 16, 1997 and for Paragon Corporate Holdings Inc. for the
eleven-month and fifteen-day period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Paragon Corporate
Holdings Inc. at January 17, 1997 and December 31, 1997, and the consolidated
results of operations and cash flows for A.B. Dick Company (the Predecessor
Company) for the fiscal year ended March 31, 1996 and for the nine-month and
sixteen-day period ended January 16, 1997 and for Paragon Corporate Holdings
Inc. for the eleven-month and fifteen-day period ended December 31, 1997, in
conformity with generally accepted accounting principles.

Ernst & Young LLP

February 27, 1998, except for Note J, as to
which the date is April 1, 1998
Cleveland, Ohio

F-2
91

PARAGON CORPORATE HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

JANUARY 17, DECEMBER 31,
----------- ------------
1997 1997
DOLLARS IN THOUSANDS

ASSETS
Current assets:
Cash and cash equivalents................................. $ 2,150 $ 3,283
Short-term investments.................................... 6,130 4,176
Accounts receivable, less allowance for doubtful accounts
of $100 at January 17 and $1,545 at December 31........ 7,411 37,821
Inventories............................................... 41,080 48,068
Other..................................................... 911 1,535
------- --------
Total current assets................................. 57,682 94,883
Property, plant and equipment, less accumulated
depreciation.............................................. 9,998
Goodwill.................................................... 32,072
Deferred charges............................................ 359 1,122
------- --------
$58,041 $138,075
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 7,491 $ 14,143
Accrued expenses.......................................... 19,955 28,599
Deferred service revenue.................................. 8,541 6,960
Due to GEC................................................ 3,381 945
Restructuring and severance reserves...................... 4,400 3,121
Current portion of long-term debt......................... 899 3,495
------- --------
Total current liabilities............................ 44,667 57,263
Long-term debt, less current portion........................ 7,117 67,121
Retirement obligations...................................... 3,451
Other long-term liabilities................................. 6,209 3,109
------- --------
57,993 130,944
Stockholders' equity:
Common stock, no par value, Authorized 2,000 shares of
Class A (voting) and 28,000 shares of Class B
(non-voting); issued and outstanding 1,000 shares of
Class A and 19,000 shares of Class B, at stated
value.................................................. 1 1
Paid-in capital........................................... 47 47
Retained earnings......................................... 7,604
Cumulative translation adjustment......................... (521)
------- --------
Total stockholders' equity........................... 48 7,131
------- --------
$58,041 $138,075
======= ========

See Notes to Consolidated Financial Statements.
F-3
92

PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

A.B. DICK COMPANY PARAGON CORPORATE
--------------------------- HOLDINGS INC.
PERIOD FROM -----------------
FISCAL YEAR APRIL 1, 1996 PERIOD FROM
ENDED THROUGH JANUARY 17, 1997
MARCH 31, JANUARY 16, THROUGH
1996 1997 DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

NET REVENUE
Equipment............................................. $ 77,628 $ 54,178 $ 64,620
Service............................................... 35,735 26,222 27,808
Repair parts.......................................... 16,944 12,671 15,976
Supplies.............................................. 85,056 64,343 77,911
Automotive and industrial............................. 6,901
-------- -------- --------
Total revenue......................................... 215,363 157,414 193,216
COST OF REVENUE
Equipment............................................. 58,278 44,560 46,559
Service............................................... 28,526 21,734 20,596
Repair parts.......................................... 7,346 5,672 6,695
Supplies.............................................. 58,687 43,092 52,967
Automotive and industrial............................. 2,834
-------- -------- --------
Total cost of revenue................................. 152,837 115,058 129,651
-------- -------- --------
Gross profit.......................................... 62,526 42,356 63,565
COSTS AND EXPENSES
Sales and marketing expenses.......................... 32,500 23,574 26,386
General and administrative expenses................... 24,272 15,248 17,603
Pension credit........................................ (5,057) (7,013) --
Research and development.............................. 7,923 4,111 3,755
Depreciation and amortization......................... 8,922 7,053 1,481
Management fee........................................ 1,941
Acquisition costs..................................... 1,400
-------- -------- --------
68,560 42,973 52,566
-------- -------- --------
Operating income (loss)............................... (6,034) (617) 10,999
Interest income....................................... 1,620 998 789
Interest expense...................................... (162) (205) (2,598)
Other income (expense)................................ (887) (631) 139
-------- -------- --------
Income (loss) before income taxes..................... (5,463) (455) 9,329
Foreign income taxes.................................. 941 651 775
-------- -------- --------
Net income (loss)..................................... $ (6,404) $ (1,106) $ 8,554
======== ======== ========

See Notes to Consolidated Financial Statements.
F-4
93

PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

PAID- CUMULATIVE
COMMON IN RETAINED TRANSLATION
STOCK CAPITAL EARNINGS ADJUSTMENT TOTAL
(DOLLARS IN THOUSANDS)

A.B. DICK COMPANY
Balance at April 1, 1995................. $1 $ -- $ 88,802 $ 1,348 $ 90,151
Net loss................................. (6,404) (6,404)
Cash distributions to GEC and
affiliates............................. (4,177) (4,177)
Other assets distributed to GEC.......... (2,778) (2,778)
Translation adjustments.................. 346 346
-- ---- -------- ------- --------
Balance at March 31, 1996................ 1 -- 75,443 1,694 77,138
Net loss................................. (1,106) (1,106)
Cash distributions to GEC and
affiliates............................. (26,307) (26,307)
Accounts receivable and other assets
distributed to GEC..................... (28,245) (28,245)
Translation adjustments.................. (903) (903)
-- ---- -------- ------- --------
BALANCE AT JANUARY 16, 1997.............. $1 $ -- $ 19,785 $ 791 $ 20,577
== ==== ======== ======= ========
PARAGON CORPORATE HOLDINGS INC.
Opening balance at January 17, 1997...... $1 $ 47 $ -- $ -- $ 48
Net income............................... 8,554 8,554
Accrued dividend for stockholders' income
taxes.................................. (950) (950)
Translation adjustments.................. (521) (521)
-- ---- -------- ------- --------
Balance at December 31, 1997............. $1 $ 47 $ 7,604 $ (521) $ 7,131
== ==== ======== ======= ========

See Notes to Consolidated Financial Statements.
F-5
94

PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

A.B. DICK COMPANY PARAGON CORPORATE
--------------------------- HOLDINGS INC.
PERIOD FROM ------------------
FISCAL YEAR APRIL 1, 1996 PERIOD FROM
ENDED THROUGH JANUARY 17, 1997
MARCH 31, JANUARY 16, THROUGH
1996 1997 DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

Operating activities:
Net income (loss).................................. $ (6,404) $ (1,106) $ 8,554
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization................... 8,922 7,053 1,481
Pension credit.................................. (5,057) (7,013)
Retirement expense.............................. 1,990 1,577
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable.... 2,764 4,857 (205)
(Increase) decrease in inventory.............. 8,442 (1,045) 6,029
(Increase) decrease in other assets........... 549 (383) (877)
Increase (decrease) in accounts payable....... (3,376) 1,460 1,193
Increase (decrease) in deferred service
revenue.................................... 813 (557) (1,581)
Increase (decrease) in other liabilities...... (120) 2,638 491
-------- --------- --------
Net cash provided by operating
activities............................ 8,523 7,481 15,085
Investing activities:
Accounts receivable used in connection with the
acquisition of A.B. Dick Company................ (19,489)
Acquisition of Curtis Industries Inc., less cash
acquired........................................ (4,910)
Purchases of property, plant and equipment......... (5,528) (3,960) (1,860)
Payments of acquisition liabilities................ (4,379)
Decrease in short-term investments................. 1,954
-------- --------- --------
Net cash used in investing activities...... (5,528) (3,960) (28,684)
Financing activities:
Borrowings on revolving credit lines............... 18,603
Cash distributions to GEC and affiliates........... (4,177) (26,307) (2,436)
Decrease in long-term borrowings................... (291) (172) (914)
-------- --------- --------
Net cash provided by (used in) financing
activities............................... (4,468) (26,479) 15,253
Effect of exchange rate changes on cash............ 346 (903) (521)
-------- --------- --------
Increase (decrease) in cash and cash equivalents..... (1,127) (23,861) 1,133
Cash and cash equivalents at beginning of period..... 27,039 25,912 2,150
-------- --------- --------
Cash and cash equivalents at end of period........... $ 25,912 $ 2,051 $ 3,283
======== ========= ========

See Notes to Consolidated Financial Statements.
F-6
95

PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997

(DOLLARS IN THOUSANDS)

A. ORGANIZATION AND ACQUISITIONS

Paragon Corporate Holdings Inc. ("the Company") commenced operations on
January 17, 1997 through the acquisition on that date of the common stock of
A.B. Dick Company and its three wholly owned subsidiaries (collectively "A.B.
Dick" or "the Predecessor Company"), from General Electric Company Ltd. (GEC) in
return for an unsecured promissory note in the amount of $6,000. The Company is
a holding company with no assets or operations other than its investments in its
subsidiaries. The stockholders of the Company are affiliates of NES Group, Inc.
Subsequent to December 31, 1997, NES Group, Inc. became the sole stockholder of
the Company. A.B. Dick is engaged in the manufacture, sale, distribution and
service of offset presses, cameras and plate makers and related supplies for the
graphic arts and printing industry.

The consolidated balance sheet of the Company as of January 17, 1997
reflects the acquisition of A.B. Dick under the purchase method of accounting.
The purchase price was subject to a working capital adjustment which resulted in
the Company receiving $6,200 in cash from GEC offset by a $5,400 liability to
GEC payable over approximately two years. Under the terms of the stock purchase
agreement, A.B. Dick transferred to GEC $19,489 of domestic accounts receivable
(which was collected by A.B. Dick during 1997 and remitted to GEC) and the Niles
manufacturing and headquarters facilities, which had a carrying amount of
$3,500. GEC agreed to let the Company use these facilities until the Company
moves to new manufacturing, headquarters and distribution facilities during
1998. GEC also agreed to fund up to $1,500 in severance costs incurred in 1997
and to reimburse the Company in 1998 for moving costs up to $2,000. These
amounts have been reflected in the allocation of the purchase price.

Additional restructuring reserves of $6,000 were included in the purchase
price allocation in accordance with the Company's business plans to
substantially reorganize the A.B. Dick operations. These reserves represent
accruals for severance of administrative and operating employees ($1,600) and
occupancy costs ($4,400) to be incurred in 1997 and 1998 for idle manufacturing
and headquarters facilities prior to the relocation of operations in 1998.

Since the fair value of the net assets acquired exceeded the purchase price
by approximately $16,000, the historical book values of the acquired property,
plant and equipment ($12,900) have been recorded on the January 17, 1997 opening
balance sheet at zero. The remaining excess ($3,100) of fair value of net assets
acquired over purchase price has been classified as other long-term liabilities
and is being amortized into income over ten years.

On December 5, 1997, the Company acquired all the common stock of Curtis
Industries, Inc. ("Curtis"), a national distributor of products in the
automotive and industrial markets, for a purchase price of $22,290 composed
primarily of $6,500 in cash and $15,700 in seller notes. The acquisition was
accounted for under the purchase method of accounting and, accordingly, the
results of operations of Curtis are included in the consolidated financial
statements since the date of acquisition. Non-recurring compensation awards of

F-7
96
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$1,400 were made to certain executives in connection with the Curtis
acquisition. The table below summarizes the allocation of the purchase price
based upon the fair value of the net assets acquired on December 5, 1997 and the
carrying values of the Curtis net assets as of:

DECEMBER 5, DECEMBER 31,
-------- --------
1997 1997

Cash.................................................. $ 1,680 1,438
Accounts receivable................................... 10,716 10,179
Inventories........................................... 14,088 14,112
Property, plant and equipment......................... 8,448 8,795
Goodwill.............................................. 32,170 32,072
Other assets.......................................... 512 4,844
Accounts payable...................................... (5,459) (4,959)
Accrued expenses...................................... (7,228) (6,938)
Long-term debt........................................ (29,211) (33,809)
Retirement obligations................................ (3,426) (3,451)
-------- --------
$ 22,290 $ 22,283
======== ========

The following unaudited pro forma results of operations assume the
acquisition of Curtis occurred on January 1, 1997. These pro forma results have
been prepared for comparative purposes only and do not purport to be indicative
of the results of operations which actually would have resulted had the
acquisition occurred on January 1, 1997:

Net revenues................................................ $267,419
Costs and expenses.......................................... 251,695
Operating income............................................ 15,724
Net income.................................................. 8,700

B. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The 1997 consolidated financial statements of the Company include the
accounts of A.B. Dick and of Curtis since its acquisition on December 5, 1997.
Consolidated statements of operations, stockholder's equity and cash flows for
the fiscal year ended March 31, 1996 and for the nine-month and sixteen-day
period ended January 16, 1997 have been presented for A.B. Dick, the Predecessor
Company. All significant intercompany accounts and transactions have been
eliminated.

Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments with maturities of
three months or less when purchased to be cash equivalents. The Company's
short-term investments are comprised primarily of certificates of deposit with
maturities in excess of three months.

Accounts Receivable

As set forth in the stock purchase agreement (see Note A), immediately
prior to closing, A.B. Dick transferred all accounts receivable from its
operations in the United States to GEC; therefore, the trade accounts receivable
balance on the January 17, 1997 opening balance sheet relates solely to the
operations of the wholly-owned, foreign subsidiaries of A.B. Dick.

F-8
97
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Inventories

Domestic inventories, which represent approximately 80% of total
consolidated inventory, are determined on the last-in, first-out (LIFO) basis
and foreign inventories are determined on the first-in, first-out (FIFO) basis.
Where necessary, reserves are provided to value inventory at the lower of cost
or market.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, trade receivables and
payables approximates fair value because of the short maturity of these
instruments. Management believes the carrying amount of long-term debt
approximates fair value at December 31, 1997.

Property, Plant and Equipment

Property, plant and equipment are stated at cost (see Note A). Depreciation
is computed using the straight-line method based on the expected useful lives of
the assets, which are as follows:

Building and improvements..................... 15 to 40 years
Machinery and equipment....................... 3 to 18 years
Rental equipment.............................. 3 years

Goodwill

Goodwill is being amortized on a straight-line basis over 30 years. The
ongoing value and remaining useful life of goodwill are subject to periodic
evaluation and the Company currently expects the carrying amounts to be fully
recoverable.

Deferred Charges

The Company deferred $539 in costs incurred to establish the A.B. Dick
credit facility as of January 17, 1997. These deferred charges are being
amortized over the 3 year term of the related debt.

Impairment of Long-lived Assets

When conditions are present that indicate a potential impairment in the
value of a long-lived asset, the Company evaluates such potential impairment by
comparing the aggregate of the estimated undiscounted future net cash flows
(including any salvage values) to be generated by an asset with the asset's
carrying value. No impairment has been recorded in the consolidated financial
statements.

Income Taxes

The Company and its domestic subsidiaries, A.B. Dick and Curtis, have
elected Subchapter S Corporation status for United States income tax purposes.
Accordingly, the Company's United States operations for 1997 are not subject to
income taxes as separate entities. The Company's United States income is
included in the income tax returns of the stockholders. As of December 31, 1997,
the Company accrued dividends totaling $950 for the payment of stockholders'
income taxes.

Prior to its acquisition by the Company, the operations of A.B. Dick were
subject to United States income taxes and included in the income tax returns of
its U.S. Parent. For financial reporting purposes, U.S. income tax expense was
allocated to A.B. Dick by its U.S. Parent on a separate return basis giving
effect to permanent differences which were not taxable or deductible for federal
income tax purposes. All deferred income taxes were recorded by the U.S. Parent,
as it was the U.S. Parent's policy not to allocate deferred

F-9
98
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

income taxes to its subsidiaries. No U.S. income tax credits were allocated to
A.B. Dick by its U.S. Parent for the fiscal year ended March 31, 1996 or for the
nine-month and sixteen day period ended January 16, 1997.

The foreign subsidiaries of A.B. Dick and Curtis are subject to foreign
income taxes. Accordingly, deferred taxes have been provided for the expected
future tax consequences of temporary differences in the foreign subsidiaries
between the carrying amount and tax basis of assets and liabilities. Where the
Company has determined that it is more likely than not that deferred assets will
not be realized, a valuation allowance has been established.

Revenue Recognition

For the majority of its operations, the Company recognizes revenues upon
shipment of its equipment and products. A.B. Dick receives advance payments for
service contracts and recognizes income evenly over the contract term as service
is provided. Deferred revenues are recorded on the balance sheet related to
these advance payments.

Product Warranty

A.B. Dick's products (pre-press, press and post-press equipment, copiers,
repair parts and supplies) are subject to varying warranty periods. A reserve
for estimated future warranty obligations is included in accrued expenses based
on historical rates of warranty claims.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs for
the fiscal year ended March 31, 1996, the period from April 1, 1996 through
January 16, 1997 and the period from January 17,1997 through December 31, 1997
amounted to $3,736, $3,024 and $1,832, respectively.

Management Fee

Operations include management fees of one percent of sales charged by
Nesco, Inc., an affiliate of the stockholders of the Company, to provide
management, legal, financial, strategic planning, business development and other
services to the Company.

Foreign Currency Translation

The assets and liabilities of the Company's foreign subsidiaries are
translated at the current exchange rates, while revenue and expenses are
translated at average rates prevailing during the year. The effects of exchange
rate fluctuations have been reported as a separate component of stockholders'
equity.

Use of Estimates

The presentation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of any contingent assets or liabilities, at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement 130, Reporting Comprehensive Income. Statement 130 establishes new
rules for the reporting and display of comprehensive income and its components;
however, adoption in 1998 will have no impact on the Company's net income or

F-10
99
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

stockholders' equity. Statement 130 requires the Company's foreign currency
translation adjustments, which currently are reported in stockholders' equity,
to be included in other comprehensive income and the disclosure of total
comprehensive income.

In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information" was issued by the FASB. SFAS No. 131 establishes
standards for the way that public business enterprises report financial and
descriptive information about its reporting operating segments. The Company has
not determined the impact on the Company's financial statement disclosure. SFAS
No. 131 is effective for the Company's financial statements for the year ending
December 31, 1998.

C. INVENTORIES

Inventories are summarized as follows:

JANUARY 17, DECEMBER 31,
----------- ------------
1997 1997

Raw materials and work in process........................... $13,073 $ 9,295
Finished goods.............................................. 28,007 39,363
LIFO reserve................................................ -- (590)
------- -------
$41,080 $48,068
======= =======

Finished goods inventory at December 31, 1997 includes $14,112 related to
Curtis.

D. PROPERTY, PLANT AND EQUIPMENT

Property and equipment (see Note A) is summarized as follows:

JANUARY 17, DECEMBER 31,
----------- ------------
1997 1997

Land........................................................ $ -- $ 330
Buildings and improvements.................................. -- 2,721
Machinery and equipment..................................... -- 6,687
Rental assets............................................... -- 570
------- -------
10,308
Less: Accumulated depreciation.............................. -- 310
------- -------
$ -- $ 9,998
======= =======

F-11
100
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

E. FINANCING ARRANGEMENTS

Long-term debt at January 17 and December 31, 1997 included the following:

JANUARY 17, DECEMBER 31,
----------- ------------
1997 1997

Paragon:
Note payable to GEC, interest at 8%, annual payments of
$1,000................................................. $6,000 $ 6,000
Notes payable to former Curtis shareholders, interest at
7%, matures in December 1999........................... 15,700
Curtis:
Term loan, interest at prime plus .75%-1.50% or LIBOR plus
2.75%-3.50%; payable monthly through December 2004..... 12,000
Revolving credit agreement, interest at prime plus
.75%-1.50% or LIBOR plus 2.50%-3.25%, matures in
January 2001........................................... 12,085
Subordinated debentures maturing in February 2002;
interest at 13 1/8%.................................... 9,189
Note payable, interest at 10% due monthly through December
2006................................................... 460
Capital lease obligations................................. 75
A.B. Dick:
Revolving credit agreements, availability up to $32,000,
interest at prime plus .5% or adjusted LIBOR plus 2.5%,
matures in January 2000................................ 14,000
Capital lease obligations................................. 2,016 1,107
------ -------
Total debt.................................................. 8,016 70,616
Less: current portion....................................... 899 3,495
------ -------
Total long-term debt........................................ $7,117 $67,121
====== =======

The aggregate maturities of the long-term debt for each of the five years
subsequent to December 31, 1997 are as follows:

Year Ending December 31:
1998............................................. $ 3,495
1999............................................. 19,203
2000............................................. 16,793
2001............................................. 14,864
2002............................................. 11,927
Thereafter....................................... 4,334
-------
$70,616
=======

As of December 31, 1997, Curtis had a $15,000 revolving credit agreement
subject to available collateral, as defined. At December 31, 1997, $2,915 was
available under the line of credit. A fee of 3/8% per annum is required on the
unused portion of the revolving credit commitment. Included in the revolving
credit is a provision for the issuance of letters of credit up to a maximum of
$2,000. At December 31, 1997, there were no letters of credit outstanding. The
revolving credit agreement is secured by substantially all of the assets of
Curtis and contains financial and other covenants, including, but not limited
to, maintenance of minimum levels of interest coverage, and other financial
ratios.

A.B. Dick has established two line of credit agreements with Congress
Financial Corporation (Congress) which total $32,000 in loans and letters of
credit ($14,100 outstanding at December 31, 1997). The collateral for the
revolving credit agreement includes eligible trade accounts receivable,
inventories and equipment. A.B.

F-12
101
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dick is also subject to certain compensating balance requirements ($3,800 of
short-term investments were held by Congress at December 31, 1997) and loan
covenants relating to financial reporting and lender approval of certain
transactions.

During the eleven-month and fifteen-day period ended December 31, 1997, the
Company paid interest of $1,242.

F. OPERATING LEASES

The Company leases certain facilities and equipment under operating leases
which generally provide that the Company pay the insurance, maintenance and
property taxes related to the leases. In the normal course of business, the
Company expects that, as leases expire, they will be renewed or replaced by
other leases. The leases generally provide for renewal options and various
escalation clauses.

As of December 31, 1997, minimum lease payments under non-cancelable
operating leases are as follows:

Year Ending December 31:
1998............................................. $ 3,454
1999............................................. 2,950
2000............................................. 2,393
2001............................................. 1,514
2002............................................. 1,355
Thereafter....................................... 3,308
-------
Total minimum lease payments....................... $14,974
=======

The above lease commitments have not been reduced by aggregate minimum
sublease rentals of $636 due in the future under non-cancelable subleases.

The Company had $2,184, $2,296 and $2,226 of rental expense for the fiscal
year ended March 31, 1996, the period from April 1, 1996 through January 16,
1997 and the period from January 17, 1997 through December 31, 1997,
respectively.

G. GEOGRAPHIC AREA

The Company's principal operations are in the United States, but it also
maintains operating subsidiaries in Belgium, Canada and the United Kingdom.

Transfers between geographic areas are accounted for at market with
appropriate adjustments made to inventory carrying values in consolidation.
Identifiable assets represent assets that are used in the Company's operations
in each geographic area at year end.

F-13
102
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company's and its Predecessor's financial data by geographic area for
the fiscal year ended March 31, 1996, the period from April 1, 1996 through
January 16, 1997 and the period from January 17, 1997 through December 31, 1997
is as follows:

FISCAL YEAR ENDED
MARCH 31, 1996
-------------------------------------
OPERATING
NET INCOME IDENTIFIABLE
REVENUE (LOSS) ASSETS

Domestic.................................................... $176,846 $(7,277) $ 82,793
Foreign..................................................... 43,000 1,243 34,647
Elimination between geographic area......................... (4,483) -- (879)
-------- ------- --------
$215,363 $(6,034) $116,561
======== ======= ========

PERIOD FROM AS OF
APRIL 1, 1996 JANUARY
THROUGH 17,
JANUARY 16, 1997 1997
-------------------- ------------
OPERATING
NET INCOME IDENTIFIABLE
REVENUE (LOSS) ASSETS

Domestic.................................................... $128,732 $(1,211) $52,975
Foreign..................................................... 32,633 594 14,339
Elimination between geographic area......................... (3,951) -- (9,273)
-------- ------- -------
$157,414 $ (617) $58,041
======== ======= =======

PERIOD FROM JANUARY 17, 1997
THROUGH DECEMBER 31, 1997
-----------------------------------
NET OPERATING IDENTIFIABLE
REVENUE INCOME ASSETS

Domestic.................................................... $154,934 $ 8,863 $129,056
Foreign..................................................... 42,773 2,159 20,709
Elimination between geographic area......................... (4,491) (23) (11,690)
-------- ------- --------
$193,216 $10,999 $138,075
======== ======= ========

H. CONTINGENCIES

On April 30, 1997, four former and current distributors of A.B. Dick filed
a suit against A.B. Dick, the Predecessor Company, alleging, among other things,
breach of distributorship contracts and unfair and deceptive trade practices.
The plaintiffs have requested that the case be given class action status with
respect to all A.B. Dick distributors engaged under distributorship contracts
during the four-year period ended on April 30, 1997. The Company intends to
vigorously defend this case although there can be no assurance as to the
eventual outcome.

GEC has agreed to fully indemnify the Company against all costs and
liabilities in connection with any litigation that is pending or may be brought
against A.B. Dick arising out of events occurring prior to the closing of the
A.B. Dick acquisition, including the case mentioned in the previous paragraph.

F-14
103
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

I. EMPLOYEE BENEFIT PLANS

Effective March 1, 1997, the Company established a defined contribution
plan that includes an employee 401(k) contribution provision covering certain
employees of A.B. Dick. The plan provides for employee contributions ranging
from 1%-15% of employee's compensation, subject to statutory limitation, as well
as a matching Company contribution equal to 25% of the employee's contribution
but limited to 6% of compensation. The Company contribution for the period ended
December 31, 1997 was approximately $600.

The Predecessor Company maintained a defined benefit pension plan for its
manufacturing employees. The plan was overfunded at April 1, 1995 and April 1,
1996. Net periodic pension credits of $5,057 for the fiscal year ended March 31,
1996 and $7,013 for period from April 1, 1996 through January 16, 1997,
allocated to the Predecessor Company by GEC based upon actuarial valuations in
accordance with FASB Statement No. 87, "Employers' Accounting for Pensions,"
consisted of the following:

MARCH 31, JANUARY 17,
1996 1997

Service cost................................................ $ 3,768 $ 3,039
Interest cost on projected benefit obligation............... 10,450 9,245
Actual return on plan assets................................ (16,678) (16,075)
Net amortization and deferral............................... (2,607) (3,222)
-------- --------
Net pension (income)........................................ $ (5,057) $ (7,013)
======== ========

In connection with the sale of the Predecessor Company on January 16, 1997,
GEC assumed all existing obligations relating to such benefits.

The Predecessor Company also provided postretirement health care benefits
to certain retirees. Net periodic benefit costs of $4,676 for the fiscal year
ended March 31, 1996 and $3,455 for the period from April 1, 1996 through
January 16, 1997, allocated to the Predecessor Company by GEC based on actuarial
valuations in accordance with FASB Statement No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," consisted of the following:

MARCH 31, JANUARY 17,
1996 1997

Service cost................................................ $ 804 $ 539
Interest cost............................................... 5,124 3,704
Amortization................................................ (1,252) (788)
------- ------
$ 4,676 $3,455
======= ======

In connection with the sale of the Predecessor Company on January 16, 1997,
GEC assumed all obligations existing under the plan.

Curtis has deferred compensation agreements with certain former executives
which provide for payments of a fixed level of compensation on a monthly basis
from retirement until death. Curtis also maintains a Supplemental Executive
Retirement Plan in which one former executive participates.

Additionally, Curtis has a deferred compensation plan for the benefit of
sales representatives attaining specified sales goals. Curtis credits eligible
participant's accounts with a percentage of their annual earnings. The annual
amount credited to participant accounts vests at the rate of 5% per annum.
Eligible participants over the age of 55 vest at an accelerated rate.

Curtis also maintains a 401(k) retirement savings plan covering
substantially all employees. Contributions to the 401(k) plan are based upon a
percentage of each participant's compensation.

F-15
104
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Curtis also maintains a defined benefit pension plan and provides
postretirement health care benefits to certain UAW manufacturing employees.
Pension plan benefits are based on years of service. As of December 31, 1997 the
actuarial present value of the pension's vested benefit obligation is $2,428 and
the projected benefit obligation in excess of the plan assets is $347. The
postretirement health care plan is unfunded. The actuarial present value of the
accumulated benefit ($1,406 at December 31, 1997) has been recorded as a
long-term liability.

J. SUBSEQUENT EVENT AND GUARANTOR AND NON-GUARANTOR SUBSIDIARY INFORMATION

On April 1, 1998, the Company issued $115,000 of 9 5/8% Senior Notes due
2008. The proceeds from the offering were used to repay $69,400 of long-term
debt outstanding at December 31, 1997 and to pay a $10,000 dividend to the sole
stockholder of the Company. The remaining proceeds of approximately $30,000
after deducting expenses will be used for general corporate purposes, including
future acquisitions.

The Company's domestic subsidiaries, AB Dick and Curtis, both of which are
wholly owned, are the only guarantors of the Senior Notes. The guarantees are
full, unconditional and joint and several. Separate financial statements of
these guarantor subsidiaries are not presented as management has determined that
they would not be material to investors.

The Company's foreign subsidiaries are not guarantors of the Senior Notes.
Summarized consolidating financial information for the Company, the guarantor
subsidiaries, and the non-guarantor, foreign subsidiaries is as follows (in
thousands):

F-16
105
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

COMBINED COMBINED
THE GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL

BALANCE SHEET DATA (DECEMBER 31,
1997):
Current assets:
Cash and cash equivalents..... $ 28 $ 1,173 $ 2,082 $ -- $ 3,283
Short-term investments........ 4,176 4,176
Accounts receivable, net...... -- 29,230 8,778 (187) 37,821
Inventories................... -- 39,494 8,496 78 48,068
Other current assets.......... -- 900 635 -- 1,535
------- -------- ------- -------- --------
Total current assets............ 4,204 70,797 19,991 (109) 94,883
Property, plant and equipment,
net........................... -- 9,351 647 -- 9,998
Goodwill........................ -- 32,008 64 -- 32,072
Investment in subsidiary........ 31,437 11,581 -- (43,018) --
Deferred charges................ 417 698 7 -- 1,122
Intercompany.................... -- 4,000 -- (4,000) --
------- -------- ------- -------- --------
Total assets.................... $36,058 $128,435 $20,709 $(47,127) $138,075
======= ======== ======= ======== ========
Current liabilities:
Trade accounts payable........ $ -- $ 11,475 $ 2,668 $ -- $ 14,143
Accrued expenses.............. 3,227 22,345 2,430 597 28,599
Deferred service revenue...... -- 5,903 1,057 -- 6,960
Due to GEC.................... -- 945 -- -- 945
Restructuring and severance
reserves................... -- 3,121 -- -- 3,121
Current portion of long-term
debt....................... 1,000 2,495 -- -- 3,495
Intercompany.................. 4,000 -- -- (4,000) --
------- -------- ------- -------- --------
Total current liabilities....... 8,227 46,284 6,155 (3,403) 57,263
Long-term debt, less current
portion....................... 20,700 46,421 -- -- 67,121
Retirement obligations.......... -- 3,414 37 -- 3,451
Other long-term liabilities..... -- -- -- 3,109 3,109
Intercompany.................... -- (1,155) 2,190 (1,035) --
Stockholder's equity............ 7,131 33,471 12,327 (45,798) 7,131
------- -------- ------- -------- --------
Total liabilities and
stockholder's equity.......... $36,058 $128,435 $20,709 $(47,127) $138,075
======= ======== ======= ======== ========

F-17
106
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

COMBINED COMBINED
GUARANTOR NON-GUARANTOR
THE COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL

12/31/97 INCOME STATEMENT DATA:
Net revenue........................... $ -- $154,934 $42,773 $ (4,491) $193,216
Costs of products sold................ -- 104,150 29,969 (4,468) 129,651
-------- -------- ------- -------- --------
Gross profit.......................... -- 50,784 12,804 (23) 63,565
Total operating expenses.............. 1,433 40,488 10,645 -- 52,566
-------- -------- ------- -------- --------
Operating income (loss)............... (1,433) 10,296 2,159 (23) 10,999
Interest income (expense), net........ 146 (2,079) 124 -- (1,809)
Miscellaneous, net.................... -- (36) 175 -- 139
-------- -------- ------- -------- --------
Income (loss) before foreign income
taxes............................... (1,287) 8,181 2,458 (23) 9,329
Foreign income taxes.................. -- -- 775 -- 775
-------- -------- ------- -------- --------
Net income (loss)..................... $ (1,287) $ 8,181 $ 1,683 $ (23) $ 8,554
======== ======== ======= ======== ========
12/31/97 CASH FLOW DATA:
Net cash provided by operating
activities:......................... $ 563 $ 12,668 $ 1,854 $ -- $ 15,085
Investing activities:
Accounts receivable used in
connection with the acquisition
of A.B. Dick..................... -- (19,489) -- (19,489)
Acquisition of Curtis............... (2,589) (3,076) 755 (4,910)
Purchases of property, plant and
equipment........................ -- (1,405) (455) (1,860)
Payments of acquisition
liabilities...................... -- (4,379) -- (4,379)
Decrease in short-term
investments...................... 1,954 -- -- 1,954
-------- -------- ------- -------- --------
Net cash provided by (used in)
investing activities................ (635) (28,349) 300 (28,684)
Financing activities:
Borrowings on revolving credit
lines............................ -- 18,603 -- 18,603
Cash distribution to GEC and
affiliates....................... -- (2,436) -- (2,436)
Decrease in long-term borrowings.... -- (914) -- (914)
-------- -------- ------- -------- --------
Net cash provided by financing
activities.......................... -- 15,253 -- 15,253
Effect of exchange rate on cash....... -- -- (521) (521)
-------- -------- ------- -------- --------
Increase (decrease) in cash and cash
equivalents......................... (72) (428) 1,633 1,133
Cash and cash equivalents at beginning
of period........................... 100 1,601 449 2,150
-------- -------- ------- -------- --------
Cash and cash equivalents at end of
period.............................. $ 28 $ 1,173 2,082 $ -- $ 3,283
======== ======== ======= ======== ========

F-18
107
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

COMBINED COMBINED
GUARANTOR NON-GUARANTOR
THE COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL

BALANCE SHEET DATA JANUARY 17, 1997:
Current assets:
Cash and cash equivalents............ $ 100 $ 1,601 $ 449 $ -- $ 2,150
Short-term investments............... 6,130 -- -- -- 6,130
Accounts receivable, net............. -- 710 6,701 -- 7,411
Inventories.......................... -- 35,241 6,774 (935) 41,080
Other current assets................. -- 496 415 -- 911
-------- -------- ------- -------- -------
Total current assets................... 6,230 38,048 14,339 (935) 57,682
Investment in subsidiary............... (172) 8,510 -- (8,338) --
Deferred charges....................... 359 -- -- 359
-------- -------- ------- -------- -------
Total assets........................... $ 6,058 $ 46,917 $14,339 $ (9,273) $58,041
======== ======== ======= ======== =======
Current liabilities:
Trade accounts payable............... $ -- $ 6,338 $ 1,153 $ -- $ 7,491
Accrued expenses..................... 10 17,422 2,523 -- 19,955
Deferred service revenue............. -- 7,323 1,218 -- 8,541
Due to GEC........................... -- 3,381 -- -- 3,381
Restructuring and severance
reserves.......................... -- 4,400 -- -- 4,400
Current portion of long-term debt.... -- 899 -- -- 899
-------- -------- ------- -------- -------
Total current liabilities.............. 10 39,763 4,894 -- 44,667
Long-term debt, less current portion... 6,000 1,117 -- -- 7,117
Other long-term liabilities............ -- 3,100 -- 3,109 6,209
Stockholder's equity................... 48 2,937 9,445 (12,382) 48
-------- -------- ------- -------- -------
Total liabilities and stockholder's
equity............................... $ 6,058 $ 46,917 $14,339 $ (9,273) $58,041
======== ======== ======= ======== =======

F-19
108
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

A.B. DICK COMBINED
GUARANTOR NON-GUARANTOR
SUBSIDIARY SUBSIDIARIES ELIMINATIONS TOTAL

1/16/97 INCOME STATEMENT DATA:
Net revenue...................................... $128,732 $32,633 $ (3,951) $157,414
Costs of products sold........................... 95,948 23,061 (3,951) 115,058
-------- ------- -------- --------
Gross profit..................................... 32,784 9,572 -- 42,356
Total operating expenses......................... 33,995 8,978 -- 42,973
-------- ------- -------- --------
Operating income (loss).......................... (1,211) 594 -- (617)
Interest income.................................. 196 597 -- 793
Miscellaneous, net............................... (793) 162 -- (631)
-------- ------- -------- --------
Income (loss) before foreign income taxes........ (1,808) 1,353 -- (455)
Foreign income taxes............................. -- 651 -- 651
-------- ------- -------- --------
Net income (loss)................................ $ (1,808) $ 702 $ -- $ (1,106)
======== ======= ======== ========
1/16/97 CASH FLOW DATA:
Net cash provided by (used in) operating
activities:.................................... $ 8,342 $ (861) $ -- $ 7,481
Investing activities:
Purchases of property, plant and equipment..... (3,561) (399) (3,960)
Financing activities:
Cash distribution to GEC and affiliates........ (8,834) (17,473) (26,307)
Decrease in long-term borrowings............... (172) -- (172)
-------- ------- -------- --------
Net cash used in financing activities............ (9,006) (17,473) (26,479)
Effect of exchange rate on cash.................. -- (903) (903)
-------- ------- -------- --------
Decrease in cash and cash equivalents............ (4,225) (19,636) (23,861)
Cash and cash equivalents at beginning of
period......................................... 5,827 20,085 25,912
-------- ------- -------- --------
Cash and cash equivalents at end of period....... $ 1,602 $ 449 $ -- $ 2,051
======== ======= ======== ========

F-20
109
PARAGON CORPORATE HOLDINGS INC. AND
A.B. DICK COMPANY (THE PREDECESSOR COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

A.B. DICK COMBINED
GUARANTOR NON-GUARANTOR
SUBSIDIARY SUBSIDIARIES ELIMINATIONS TOTAL

3/31/96 INCOME STATEMENT DATA:
Net revenue...................................... $176,846 $43,000 $ (4,483) $215,363
Costs of products sold........................... 126,842 30,478 (4,483) 152,837
-------- ------- -------- --------
Gross profit..................................... 50,004 12,522 -- 62,526
Total operating expenses......................... 57,281 11,279 -- 68,560
-------- ------- -------- --------
Operating income (loss).......................... (7,277) 1,243 -- (6,034)
Interest income, net............................. 254 1,204 -- 1,458
Miscellaneous, net............................... (545) (342) -- (887)
-------- ------- -------- --------
Income (loss) before foreign income taxes........ (7,568) 2,105 -- (5,463)
Foreign income taxes............................. -- 941 -- 941
-------- ------- -------- --------
Net income (loss)................................ $ (7,568) $ 1,164 $ -- $ (6,404)
======== ======= ======== ========
3/31/96 CASH FLOW DATA:
Net cash provided by operating activities:....... $ 6,625 $ 1,898 $ -- $ 8,523
Investing activities:
Purchases of property, plant and equipment..... (5,148) (380) (5,528)
Financing activities:
Cash distribution to GEC and affiliates........ (2,700) (1,477) (4,177)
Decrease in long-term borrowings............... (291) -- (291)
-------- ------- -------- --------
Net cash used by investing financing
activities..................................... (2,991) (1,477) (4,468)
Effect of exchange rate on cash.................. -- 346 346
-------- ------- -------- --------
Increase (decrease) in cash and cash
equivalents.................................... (1,514) 387 (1,127)
Cash and cash equivalents at beginning of year... 7,341 19,698 27,039
-------- ------- -------- --------
Cash and cash equivalents at end of year......... $ 5,827 $20,085 $ -- $ 25,912
======== ======= ======== ========

F-21
110

REPORT OF INDEPENDENT AUDITORS

To the Stockholder
Curtis Industries, Inc.

We have audited the accompanying consolidated balance sheets of Curtis
Industries, Inc. as of December 28, 1996 and December 5, 1997, and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the fiscal years ended December 30, 1995 and December 28, 1996 and the
eleven-month period ended December 5, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Curtis Industries,
Inc. at December 28, 1996 and December 5, 1997, and the consolidated results of
its operations and cash flows for the fiscal years ended December 30, 1995 and
December 28, 1996 and for the eleven-month period ended December 5, 1997, in
conformity with generally accepted accounting principles.

Ernst & Young LLP

February 27, 1998
Cleveland, Ohio

F-22
111

CURTIS INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 28, DECEMBER 5,
------------ ------------
1996 1997
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)

ASSETS
Current assets:
Cash and cash equivalents................................. $ 715 $ 1,680
Accounts receivable, less allowance for doubtful accounts
of $716 and $545, respectively......................... 10,753 10,616
Inventories............................................... 13,158 10,565
Other current assets...................................... 761 453
-------- --------
Total current assets................................. 25,387 23,314
Property, plant and equipment:
Land...................................................... 267 267
Buildings and improvements................................ 2,423 2,463
Machinery and equipment................................... 6,672 7,655
Leased equipment.......................................... 1,341 2,751
-------- --------
10,703 13,136
Less accumulated depreciation............................. 5,730 6,992
-------- --------
4,973 6,144
Goodwill.................................................... 3,273 3,340
Other long-term assets...................................... 871 835
-------- --------
$ 34,504 $ 33,633
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......................................... $ 7,246 $ 5,459
Accrued expenses.......................................... 7,152 5,983
Current portion of long-term debt......................... 158 61
-------- --------
Total current liabilities............................ 14,556 11,503
Long-term debt, less current portion........................ 27,880 27,809
Retirement obligations...................................... 3,123 3,079
-------- --------
45,559 42,391
Redeemable convertible Series B preferred stock............. 27,475 28,856
Stockholders' deficit:
Common stock, voting, $.01 par value, authorized 500,000
shares, issued and outstanding 263,341 shares.......... 3 3
Series A convertible preferred stock...................... 11 11
Additional paid-in capital................................ 3,725 3,725
Cumulative translation adjustment......................... (481) (505)
Accumulated deficit....................................... (41,788) (40,848)
-------- --------
Total stockholders' deficit.......................... (38,530) (37,614)
-------- --------
$ 34,504 $ 33,633
======== ========

See Notes to Consolidated Financial Statements.
F-23
112

CURTIS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

FISCAL YEAR ENDED FISCAL YEAR ENDED ELEVEN MONTHS ENDED
DECEMBER 30, DECEMBER 28, DECEMBER 5,
----------------- ----------------- -------------------
1995 1996 1997
(DOLLARS IN THOUSANDS)

Net revenue................................ $68,842 $77,072 $74,203
Cost of revenue............................ 26,886 31,175 31,141
------- ------- -------
Gross profit.......................... 41,956 45,897 43,062

Direct selling expenses.................... 16,685 17,713 16,199
Selling, general and administrative
expenses................................. 18,451 21,201 19,274
Depreciation and amortization.............. 2,460 2,053 1,624
Nonrecurring charges....................... 1,707
------- ------- -------
Operating income from continuing
operations............................... 2,653 4,930 5,965
Interest expense, net...................... 3,678 3,687 3,511
Other expense, net......................... 13 83
------- ------- -------
Income (loss) from continuing operations
before income taxes...................... (1,025) 1,230 2,371
Provision for foreign income taxes......... 15 63 50
------- ------- -------
Income (loss) from continuing operations... (1,040) 1,167 2,321

Loss from discontinued operations.......... (1,489)
------- ------- -------
Net income (loss)..................... $(2,529) $ 1,167 $ 2,321
======= ======= =======

See Notes to Consolidated Financial Statements.
F-24
113

CURTIS INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

PREFERRED ADDITIONAL CUMULATIVE
COMMON STOCK PAID-IN TRANSLATION ACCUMULATED
STOCK SERIES A CAPITAL ADJUSTMENT DEFICIT TOTAL
(DOLLARS IN THOUSANDS)

Balance at December 31, 1994........ $3 $11 $3,687 $(639) $(37,458) $(34,396)
Net loss............................ (2,529) (2,529)
Issuance of restricted common
stock............................. 25 25
Currency translation adjustments.... 26 26
Dividends on Series B preferred
stock............................. (1,484) (1,484)
-- --- ------ ----- -------- --------
Balance at December 30, 1995........ 3 11 3,712 (613) (41,471) (38,358)
Net income.......................... 1,167 1,167
Issuance of restricted common
stock............................. 13 13
Currency translation adjustments.... 132 132
Dividends on Series B preferred
stock............................. (1,484) (1,484)
-- --- ------ ----- -------- --------
Balance at December 28, 1996........ 3 11 3,725 (481) (41,788) (38,530)
Net income.......................... 2,321 2,321
Currency translation adjustments.... (24) (24)
Dividends on Series B preferred
stock............................. (1,381) (1,381)
-- --- ------ ----- -------- --------
Balance at December 5, 1997......... $3 $11 $3,725 $(505) $(40,848) $(37,614)
== === ====== ===== ======== ========

See Notes to Consolidated Financial Statements.
F-25
114

CURTIS INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FISCAL FISCAL ELEVEN MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 30, DECEMBER 28, DECEMBER 5,
----------------- ----------------- --------------
1995 1996 1997
(DOLLARS IN THOUSANDS)

OPERATING ACTIVITIES
Net income (loss).............................. $ (2,529) $ 1,167 $ 2,321
Adjustments to reconcile net income (loss) to
net cash provided by continuing operations:
Loss from discontinued operations............ 1,489
Depreciation and amortization................ 2,460 2,053 1,624
Original issue discount...................... 345 359 327
Write-down of leasehold interest............. 418
Changes in operating assets and liabilities:
Accounts receivable....................... (146) (2,025) 90
Inventories............................... 1,974 (329) 2,414
Accounts payable.......................... (254) 2,714 (1,787)
Accrued expenses.......................... (1,076) (1,913) (1,169)
Other, net................................ (1,762) 1,310 211
-------- -------- -------
Net cash provided by operating activities of
continuing operations........................ 919 3,336 4,031
INVESTING ACTIVITIES
Acquisition of Mechanics Choice................ (6,629)
Purchases of property, plant and equipment,
net.......................................... (743) (3,120) (2,542)
Net proceeds from sale of fixed assets......... 1,724 1,806
Net proceeds from sale of retail division...... 6,649
-------- -------- -------
Net cash provided by (used for) investing
activities................................... 7,630 (7,943) (2,542)
FINANCING ACTIVITIES
Borrowings of long-term debt................... 81,913 81,920 70,265
Repayments of long-term debt................... (91,267) (78,467) (70,765)
Repayment of shareholders' notes............... (600)
Issuance of restricted stock................... 25 13
-------- -------- -------
Net cash provided by (used for) financing
activities................................... (9,929) 3,466 (500)
Effect of exchange rate changes on cash........ 22 138 (24)
Cash provided by discontinued operations....... 1,544 511
-------- -------- -------
Net increase (decrease) in cash and cash
equivalents.................................. 186 (492) 965
Cash and cash equivalents at beginning of
period....................................... 1,021 1,207 715
-------- -------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD..... $ 1,207 $ 715 $ 1,680
======== ======== =======

See Notes to Consolidated Financial Statements.
F-26
115

CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 5, 1997

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business and Presentation

Curtis Industries, Inc. ("the Company" or "Curtis") is a national
distributor of products in the automotive and industrial markets. Curtis
products are sold through a sales force of over 600 representatives throughout
the United States, Canada and the United Kingdom.

The Company was a majority owned subsidiary of Noel Group, Inc. until
December 5, 1997. On December 5, 1997 the Company was acquired by Paragon
Corporate Holdings Inc. ("Paragon") for $22,290. The consolidated balance sheet
of the Company as of December 5, 1997 was prepared prior to the sale to Paragon
and, accordingly, reflects the historical book values of the assets and
liabilities of the Company.

Consolidation

The accompanying financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.

Fiscal Year

The Company's fiscal year ends on the Saturday closest to December 31.
Fiscal years 1995 and 1996 ended on December 30, 1995 and December 28, 1996,
respectively. The 1997 consolidated financial statements were prepared as of and
for the eleven-month period ended December 5, 1997, the date of the sale of the
Company to Paragon.

Inventories

Inventories, all of which are finished goods, are stated at the lower of
first-in, first-out (FIFO) cost or market.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, trade receivables and
payables approximates fair value because of the short maturity of these
instruments. Management believes that the carrying amount of long-term debt,
excluding unamortized original issue debt discount, approximates fair value.

Property, Plant and Equipment

Property, plant and equipment additions are recorded at cost. Depreciation
is provided using the straight-line method over the estimated useful lives of
the respective assets. Useful lives are estimated at twenty years for buildings
and improvements and three to ten years for machinery and equipment. Maintenance
and repair costs are expensed as incurred.

Goodwill

Goodwill acquired in 1996 ($3,100) is amortized using the straight-line
method over a period of 20 years. All other acquired goodwill is being amortized
using the straight-line method over a period of 40 years. Accumulated
amortization at December 28, 1996 and December 5, 1997 was $163 and $323,
respectively. Management periodically evaluates the recoverability of goodwill
and measures the amount of impairment, if any, by assessing current and future
levels of income and cash flows as well as other factors, such as business
trends and prospects and market and economic conditions.

F-27
116
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Income Taxes

Income taxes are accounted for under the liability method. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates that will be in effect when the differences
are expected to reverse.

Postretirement Benefits

The costs of health care benefits for eligible retirees were accrued during
the years that the employees rendered their services. Actuarial gains and losses
are recognized when incurred.

Revenue Recognition

With the exception of equipment sold under operating leases, (see Note E),
revenue from sales is recognized when goods are shipped.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions in certain circumstances that affect the amounts reported in the
accompanying consolidated financial statements and notes. Actual results could
differ from those estimates.

Cash Flows

The Company considers all temporary cash investments which have original
maturities of three months or less to be cash equivalents. Net cash flows used
for operating activities for the fiscal years ended December 30, 1995, December
28, 1996 and for the eleven-month period ended December 5, 1997 include cash
payments for interest of $4,112, $3,389 and $3,086, respectively, and for income
taxes of $103 for the fiscal year ended December 30, 1995.

B. ACQUISITION

On May 13, 1996, the Company acquired certain assets of Mechanics Choice, a
distributor of industrial maintenance products, for approximately $6,600. The
acquisition of Mechanics Choice has been accounted for as a purchase.
Accordingly, the purchase price was allocated to the net assets acquired based
upon their estimated fair values. The excess of the purchase price over the
estimated fair value of net assets acquired amounted to approximately $3,100
which has been accounted for as goodwill. The following unaudited pro forma
income statement information for the Company is presented as though Mechanics
Choice was acquired on January 1, 1996:

Net revenue........................................... $81,958
Net income............................................ 1,635

The unaudited pro forma financial information is presented for
informational purposes only and is not necessarily indicative of the operating
results that would have occurred had the acquisition actually occurred on
January 1, 1996.

F-28
117
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

C. DISCONTINUED OPERATIONS

In July 1995 the Board of Directors of the Company approved a plan to sell
the retail division. Effective November 13, 1995, the division was sold and its
results of operations were reported as discontinued operations in the
consolidated statement of operations.

D. NONRECURRING CHARGES

In June 1995, the Company shut down its manufacturing operations and
recorded a one time charge of $732 for severance and other benefit costs, and
the write-down of an intangible asset to net realizable value.

Also, during 1995, the Company recorded a charge to operations of $975 in
connection with an assessment from the Internal Revenue Service (IRS) which
alleged that the Company's expense reimbursement policy for certain employees
did not meet the definition of an accountable plan. In 1997, the Company paid
the IRS $975 in full settlement of all IRS claims through December 31, 1996. The
expense reimbursement plan was changed effective January 1, 1997 to meet IRS
requirements.

E. EQUIPMENT LEASING

The Company is the lessor of equipment under noncancelable operating leases
for periods of three years. The cost of leased equipment is depreciated on a
straight-line basis over its estimated useful life. At December 5, 1997, the
approximate future minimum rental income under noncancelable operating leases is
as follows:

1998 $ 1,774
1999 1,223
2000 291
-------
$ 3,288
=======

F. ACCRUED EXPENSES

Accrued expenses at December 28, 1996 and December 5, 1997 include the
following:

1996 1997
------ ------

Compensation and benefits................................ $2,421 $2,481
Taxes other than income.................................. 1,925 739
Interest................................................. 589 701
Other.................................................... 2,217 2,062
------ ------
$7,152 $5,983
====== ======

F-29
118
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

G. LONG-TERM DEBT

Long-term debt at December 28, 1996 and December 5, 1997 included the
following:

1996 1997

Senior debt:
Revolving line of credit due January 15, 1999. At the
Company's option, interest is charged at the LIBOR rate
(5.66% at December 28, 1996 and 5.97% at December 5,
1997) plus 3% or the lender's prime rate (8.25% at
December 28, 1996 and 8.5% at December 5, 1997) plus
1%. Interest is payable monthly........................ $ 7,898 $ 7,481
Senior secured subordinated notes, maturing on March 31,
1999. Interest payable quarterly at 12% per annum...... 12,000 12,000
Subordinated debentures, maturing on February 1, 2002.
Interest payable semiannually at 13-1/8% per annum..... 9,189 9,189
Other....................................................... 619 541
------- -------
27,706 29,211
Less:
Unamortized original issue debt discount.................. 1,668 1,341
Current portion........................................... 158 61
------- -------
$27,880 $27,809
======= =======

As of December 5, 1997, the Company had a $15,000 revolving credit
agreement subject to available collateral, as defined. At December 5, 1997,
$7,200 was available under the line of credit. A fee of 3/8% per annum was
required on the unused portion of the revolving credit commitment. Included in
the revolving credit agreement was a provision for the issuance of letters of
credit up to a maximum of $2,000. At December 5, 1997, there were no letters of
credit outstanding.

The revolving credit agreement was secured by substantially all of the
assets of the Company and contained financial and other covenants, including,
but not limited to, maintenance of minimum levels of interest coverage,
inventory turns and other financial ratios.

In addition to any voluntary principal reduction on the senior secured
subordinated notes, prepayments are mandatory based on consolidated excess cash
flow, as defined. No mandatory prepayments were made in 1996 or for the
eleven-month period ended December 5, 1997. Unamortized original issue discount
on these notes at December 28, 1996 and December 5, 1997 was $126 and $89,
respectively.

The subordinated debentures, due February 1, 2002, are redeemable at the
option of the Company. Unamortized original issue discount on these notes at
December 28, 1996 and December 5, 1997 was $1,542 and $1,252, respectively.

Scheduled principal repayments of long-term debt at December 5, 1997 are as
follows:

Year ending December 31:
1998...................................................... $ 61
1999...................................................... 19,549
2000...................................................... 61
2001...................................................... 46
2002...................................................... 9,240
Thereafter................................................ 254
-------
$29,211
=======

F-30
119
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

H. PREFERRED STOCK

The number of shares and related amounts of the Company's two classes of
convertible Preferred Stock issued and outstanding at December 5, 1997 were as
follows:

Series A Preferred Stock, 1,619 shares...................... $ 11
Series B Preferred Stock, 211,930 shares.................... 28,856
-------
$28,867
=======

The Series A Preferred Stock has a par value of .01 per share and a $6.18
liquidation preference per share. The Series B Preferred Stock has a par value
of $.01 per share and a $100 liquidation preference per share. The holders of
the Series A Preferred Stock are entitled to cumulative dividends at an annual
rate of $.309 per share, and the holders of the Series B Preferred Stock are
entitled to cumulative dividends at the annual rate of $7 per share.

The Company may redeem, at its option, at any time, shares of Series B
Preferred Stock, subject to the legal availability of funds (Optional
Redemption). The Company is required to redeem the shares of Series B Preferred
Stock on the following dates: December 31, 1997 and on July 15th in each
succeeding year through July 15, 2000, 20% of the maximum number of shares of
Series B Preferred Stock issued and outstanding at any time, and on July 15,
2001, all remaining outstanding shares (Mandatory Redemption). The redemption
price, whether an Optional Redemption or a Mandatory Redemption, is equal to
$100 per share, plus accrued and unpaid dividends, whether or not declared, to
the date of redemption.

If the Company fails to make any Mandatory Redemption, all holders of
Series B Preferred Stock then outstanding will begin to receive a special rate
of dividend in lieu of the $7 per share annual rate. This special rate is equal
to 10% of the total of $100 per share plus any unpaid dividends as of the
immediately preceding dividend payment date.

Each holder of Series A Preferred Stock may, at its option, convert all or
any of its Series A Preferred Stock into shares of Common Stock at the rate of
one share of Common Stock for each share of Series A Preferred Stock. Each
holder of Series B Preferred Stock may, between January 1 and January 15 of each
year beginning with 1997 and ending with 2001, elect to convert 20% of its
shares into shares of Common Stock. The number of shares of Common Stock to be
issued upon the conversion of each share of Series B Preferred Stock is equal to
(i) $100 per share of Series B Preferred Stock, plus the amount representing
accrued and unpaid dividends thereon, whether or not declared, to the Conversion
Date divided by (ii) the Share Value of the Company's common stock, as defined.
No such elections were made during the period.

Each holder of Series A Preferred Stock has one vote for each share. The
holders of a majority of the outstanding shares of Series B Preferred Stock have
the right to vote together as a single class for the election or removal of a
majority of the Board of Directors.

The amount shown as Series A and Series B Preferred Stock in the
accompanying consolidated balance sheets represents the liquidation preference
value and unpaid dividends for each series of Preferred Stock. The Series B
Preferred Stock included unpaid dividends of $6,280 and $7,661 at December 28,
1996 and December 5, 1997, respectively.

I. BENEFIT PLANS

Deferred compensation agreements were entered into with certain former
executives which provide for payment of a fixed level of compensation on a
monthly basis from retirement until death. The Company does not have any
deferred compensation agreements with any of its current executives at December
5, 1997. The Company also maintains a Supplemental Executive Retirement Plan in
which one former executive participates. Expense recognized for the Executive
Deferred Compensation and Supplemental Executive

F-31
120
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Retirement Plans for the years ended December 30, 1995, December 28, 1996 and
for the eleven-month period ended December 5, 1997 was $145, $135 and $121,
respectively.

In 1996, the Company initiated a deferred compensation plan for the benefit
of sales representatives attaining specified sales goals. The Company credits
eligible participants with a percentage of their annual earnings. The annual
amount credited to participant accounts vests at the rate of 5% per annum.
Eligible participants over the age of 55 vest at an accelerated rate. Expense
under this plan for the year ended December 28, 1996 and for the eleven-month
period ended December 5, 1997 was $257 and $195, respectively.

The Company also maintains a 401(k) retirement savings plan covering
substantially all salaried and hourly employees. Company contributions to the
401(k) plan are based upon a percentage of each participant's compensation. The
expense under this plan for the years ended December 30, 1995, December 28, 1996
and for the eleven-month period ended December 5, 1997 was $336, $131 and $242,
respectively.

Liabilities recorded for the Company's outstanding contributions to these
plans were $280 at December 28, 1996 and $261 at December 5, 1997.

The Company also maintains a defined benefit pension plan for certain UAW
manufacturing employees. Pension plan benefits were based on years of service.
Net periodic pension expense for the years ended December 30, 1995, December 28,
1996 and for the eleven-month period ended December 5, 1997 consisted of the
following:

1995 1996 1997

Service cost.............................................. $ 17
Interest cost on projected benefit obligation............. 139 $ 136 $132
Actual return on plan assets.............................. (138) (116) (99)
Net amortization and deferral............................. (32) (53) (58)
----- ----- ----
Net pension (income)...................................... $ (14) $ (33) $(25)
===== ===== ====

In addition to the 1995 net pension income noted above, a $154 curtailment
loss was recorded as a result of the 1995 manufacturing shutdown (see Note D),
whereby employees covered by the UAW defined benefit plan were terminated. The
curtailment loss is included in the non-recurring charge in the consolidated
statements of operations.

The following table sets forth the funded status of the pension plan and
amounts recognized in the Company's consolidated balance sheets at December 28,
1996 and December 5, 1997 as follows:

1996 1997

Actuarial present value of:
Vested benefit obligation................................. $1,860 $1,842
====== ======
Projected and accumulated benefit obligation.............. $1,860 $1,842
Plan assets at fair value................................. 2,188 2,081
------ ------
Plan assets in excess of projected benefit obligation..... 328 239
Unrecognized net obligation............................... 411 525
------ ------
Prepaid pension cost........................................ $ 739 $ 764
====== ======

Assumptions used in determining these amounts were as follows:

Method..................................................... Projected Unit Credit
Weighted average discount rate............................. 7.5%
Long-term rate of return on plan assets.................... 8%

F-32
121
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company also provides postretirement health care benefits to certain
UAW manufacturing employees. For the years ended December 30, 1995, December 28,
1996 and for the eleven-month period ended December 5, 1997, the Company's net
periodic postretirement healthcare benefit expense (income) consisted of the
following:

1995 1996 1997

Service cost................................................ $ 7
Interest cost............................................... 201 $ 120 $109
Actuarial gain.............................................. (861) (119) (86)
----- ----- ----
Net postretirement benefit expense (income)................. $(653) $ 1 $ 23
===== ===== ====

In June 1995, manufacturing operations were discontinued and only those
employees retired or eligible to retire prior to June 1995 remained eligible for
postretirement health benefits. The elimination of postretirement health care
benefits for active employees resulted in the recognition of a $468 curtailment
gain which is not reflected in the net postretirement benefit income for 1995.
The curtailment gain is included in the non-recurring charge in the consolidated
statement of income. The 1996 and 1997 actuarial gains are primarily the result
of favorable plan experience.

The postretirement health care plan is unfunded. The actuarial present
value of the accumulated benefit obligation ($1,528 at December 28, 1996 and
$1,406 at December 5, 1997) has been recorded as a long-term liability.

For measurement purposes, a 6.75% annual rate of increase in the per capita
cost of covered health care claims was assumed for 1998; 6.00% for 1999 and 5.5%
for the year 2000 and thereafter. The health care trend rate has a significant
impact on the amounts reported. If the health care cost trend rate was increased
by 1%, the accumulated postretirement benefit obligation as of December 5, 1997
would have increased by 6%. The effect of this change on the interest cost for
1997 would be an increase of 7%.

J. LEASE COMMITMENTS

The Company leases certain facilities and equipment under noncancelable
operating leases with remaining terms through the year 2006. The aggregate
future rental obligations under leases are as follows:

Year ending December 31:
1998...................................................... $ 815
1999...................................................... 818
2000...................................................... 776
2001...................................................... 707
2002...................................................... 602
Thereafter................................................ 3,044
------
$6,762
======

Rent expense for operating leases for the years ended December 30, 1995,
December 28, 1996 and for the eleven-month period ended December 5, 1997 was
$549, $558 and $778, respectively.

K. GEOGRAPHIC AREA

The Company's principal operations are in the United States, but it also
maintains operations in Canada and the United Kingdom.

F-33
122
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company's financial data by geographic area for the years ended
December 30, 1995 and December 28, 1996 and for the eleven-month period ended
December 5, 1997 is as follows:

1995
-----------------------------------
NET OPERATING IDENTIFIABLE
SALES INCOME ASSETS

Domestic.............................................. $58,591 $3,150 $23,290
Foreign............................................... 10,578 (554) 4,739
Elimination between geographic area................... (327) 57 (55)
------- ------ -------
$68,842 $2,653 $27,974
======= ====== =======

1996
-----------------------------------
NET OPERATING IDENTIFIABLE
SALES INCOME ASSETS

Domestic.............................................. $65,600 $4,837 $25,821
Foreign............................................... 11,792 102 5,424
Elimination between geographic area................... (320) (9) (14)
------- ------ -------
$77,072 $4,930 $31,231
======= ====== =======

1997
-----------------------------------
NET OPERATING IDENTIFIABLE
SALES INCOME ASSETS

Domestic.............................................. $62,410 $5,952 $24,620
Foreign............................................... 12,122 104 5,828
Elimination between geographic area................... (329) (91) (155)
------- ------ -------
$74,203 $5,965 $30,293
======= ====== =======

L. CONTINGENCIES

From time to time, the Company is subject to routine litigation incidental
to its business. The Company believes that the results of these pending legal
proceedings will not have a materially adverse effect on the Company's financial
condition.

M. INCENTIVE STOCK PLAN

On February 3, 1993, the Company adopted the "1992 Incentive Plan of Curtis
Industries, Inc." Under the plan, the Company may grant incentive and
nonqualified stock options, stock appreciation rights, restricted stock awards
and stock bonus awards up to a maximum of 46,415 shares of Common Stock.

In February 1993, the Company granted options to acquire 25,106 shares of
Common Stock, all of which were granted at $6.18 per share, the estimated fair
market value at date of grant. These options shall be exercisable for a term of
not more than 10 years from the date of grant.

In 1996 and 1995, the Company made awards of 2,100 shares and 3,900 shares,
respectively, of restricted Common Stock, at $6.18 per share, the estimated fair
market value at the time of the award. The restrictions lapse immediately as to
20% of the shares and an additional 20% annually thereafter.

F-34
123
CURTIS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

N. INCOME TAXES

The income tax provision for the years ended December 30, 1995, December
28, 1996 and the eleven-month period ended December 5, 1997 was comprised of the
following:

1995 1996 1997

Current tax expense:
Federal................................................... $ -- $ -- $ --
State..................................................... -- -- --
Foreign................................................... 15 63 50
---- ---- ----
15 63 50
Deferred tax expense........................................ -- -- --
---- ---- ----
$ 15 $ 63 $ 50
==== ==== ====

A reconciliation of the federal statutory income tax expense (benefit) to
the Company's effective tax expense is as follows:

1995 1996 1997

Statutory federal tax expense (benefit).................... $(349) $ 418 $ 806
Benefit of net operating loss carryforwards................ 382 (465) (809)
Nondeductible meals and entertainment expense.............. 107 49
Other, net................................................. (18) 3 4
----- ----- -----
$ 15 $ 63 $ 50
===== ===== =====

Deferred tax assets and liabilities at December 28, 1996 and December 5,
1997 consisted of the following:

1996 1997

Deferred tax assets:
Net operating loss carryforwards and tax credits.......... $ 10,227 $ 9,815
Depreciation and amortization............................. 582 447
Inventories............................................... 903 1,203
Postretirement health care benefits....................... 818 534
Reserves for future expenses.............................. 611 916
Deferred compensation..................................... 587 626
Other..................................................... 594 619
-------- --------
Total deferred tax assets................................... 14,322 14,160
Deferred tax liabilities:
Pension asset............................................. 165
Original issue discount................................... 586 476
Excess book basis goodwill................................ 9 694
-------- --------
Total deferred tax liabilities.............................. 595 1,335
-------- --------
Net deferred tax asset...................................... 13,727 12,825
Valuation allowance......................................... (13,727) (12,825)
-------- --------
Net deferred taxes.......................................... $ -- $ --
======== ========

The Company has tax net operating loss carryforwards of $26 million at
December 5, 1997. Of these net operating losses, approximately $22 million will
be utilized by the Company to offset the gain on the sale to Paragon (see Note
A). For financial reporting purposes, a valuation allowance had been established
equal to the net deferred tax assets because the Company's lack of history of
consistent earnings gave rise to uncertainty as to whether the deferred tax
assets were realizable.

No foreign taxes have been provided on the undistributed earnings of
foreign subsidiaries because the Company intends to permanently reinvest these
earnings.

F-35
124

======================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.

------------------------

TABLE OF CONTENTS

PAGE

Prospectus Summary.................... 5
Risk Factors.......................... 15
The Company........................... 20
The Exchange Offer.................... 21
Capitalization........................ 28
Selected Consolidated Financial
Data................................ 29
Unaudited Pro Forma Consolidated
Financial Statements................ 34
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 40
Business.............................. 46
Sole Stockholder...................... 55
Management............................ 55
Related Transactions.................. 58
Description of New Credit Agreement... 60
Description of Senior Notes........... 60
Certain Federal Income Tax
Considerations...................... 86
Plan of Distribution.................. 86
Legal Matters......................... 87
Experts............................... 87
Index to Financial Statements......... F-1

======================================================
======================================================

$115,000,000

PARAGON LOGO

PARAGON CORPORATE
HOLDINGS INC.

OFFER TO EXCHANGE
9 5/8% SENIOR B NOTES DUE 2008
FOR ANY AND ALL OUTSTANDING
9 5/8% SERIES A NOTES DUE 2008
------------------------

PROSPECTUS
------------------------

, 1998

======================================================
125

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article VII, Section 7 of the Bylaws of the Company provides: "The
corporation shall indemnify its officers, directors, employees and agents to the
extent permitted by the General Corporation Law of Delaware."

Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit, or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon
plea of nolo contendere or its equivalent, shall not, in and of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

Section 145 of the DGCL also provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon adjudication that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery of Delaware or such other court shall deem proper.

To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue,
or matter therein, such person shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by such person in connection
therewith.

Any such indemnification (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
circumstances because such person has met the applicable standard of conduct set
forth above. Such determination shall be made (i) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding; or (ii) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or (iii) by the stockholders.

Section 145 of the DGCL permits a Delaware business corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify such person against such liability.

II-1
126

The above discussion of Section 145 of the DGCL is not intended to be
exhaustive and is qualified in its entirety by the DGCL.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------

3.1 Certificate of Incorporation of Paragon Corporate Holdings
Inc., as currently in effect.
3.2 By-Laws of Paragon Corporate Holdings Inc., as currently in
effect.
3.3 Certificate of Incorporation of A.B. Dick Company, as
currently in effect.
3.4 By-Laws of A.B. Dick Company, as currently in effect.
3.5 Certificate of Incorporation of Curtis Industries, Inc., as
currently in effect.
3.6 By-Laws of Curtis Industries, Inc., as currently in effect.
3.7 Certificate of Incorporation of Itek Graphix Corp., as
currently in effect.
3.8 By-Laws of Itek Graphix Corp., as currently in effect.
3.9 Certificate of Incorporation of Curtis Sub, Inc., as
currently in effect.
3.10 By-Laws of Curtis Sub, Inc., as currently in effect.
4.1 Indenture, dated as of April 1, 1998, among Paragon
Corporate Holdings Inc., A.B. Dick Company, Curtis
Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc. and
Norwest Bank Minnesota, National Association, as Trustee
(containing, as exhibits, specimens of the Series A Notes
and the Series B Notes).
4.2 Purchase Agreement, dated as of March 27, 1998 among Paragon
Corporate Holdings Inc., A.B. Dick Company, Curtis
Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc., and
Donaldson, Lufkin & Jenrette Securities Corporation and CIBC
Oppenheimer Corp., as Initial Purchasers, relating to the
Series A Notes.
4.3 Registration Rights Agreement, dated as of April 1, 1998,
among Paragon Corporate Holdings Inc., A.B. Dick Company,
Curtis Industries, Inc., Itek Graphix Corp., Curtis Sub,
Inc., and Donaldson, Lufkin & Jenrette Securities
Corporation and CIBC Oppenheimer Corp., as Initial
Purchasers.
4.4 Credit and Security Agreement, dated as of April 1, 1998
between Paragon Corporate Holdings Inc. and Key Corporate
Capital Inc.
5 Opinion of Squire, Sanders & Dempsey L.L.P. regarding
securities being registered.
8 Opinion of Squire, Sanders & Dempsey L.L.P. regarding tax
matters.
10.1 Agreement and Plan of Merger, dated as of November 6, 1997,
among Paragon Corporate Holdings Inc., Curtis Industries,
Inc. and Curtis Acquisition Corp.
10.2 Stock Purchase Agreement, dated as of December 19, 1996,
between Paragon Corporate Holdings Inc. and GEC
Incorporated.
10.3 Management Agreement, dated as of April 1, 1998, between
Paragon Corporate Holdings Inc. and NESCO, Inc.
10.4 Tax Payment Agreement, dated as of April 1, 1998, among
Paragon Corporate Holdings Inc., A.B. Dick Company, Curtis
Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc. and
NES Group, Inc.
10.5 Agreement dated November 10, 1995 between A.B. Dick Company
and Gerald J. McConnell.
10.6 Severance and Non-Competition Agreement dated February 28,
1996 between Curtis Industries, Inc. and A. Keith Drewett.
10.7 Severance and Non-Competition Agreement dated February 28,
1996 between Curtis Industries, Inc. and Maurice P. Andrien,
Jr., as amended April 22, 1998.
12 Statement regarding computation of ratio of earnings to
fixed charges.
21 List of subsidiaries of the Company.
23.1 Consents of Squire, Sanders & Dempsey L.L.P. (included in
opinions filed as Exhibits 5 and 8).
23.2 Consents of Ernst & Young LLP.
25 Statement of Eligibility and Qualification on Form T-1 of
Trustee.

II-2
127

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------

27 Financial Data Schedule.
99 Form of Letter of Transmittal and related documents.

(b) Financial Statement Schedules

No Financial Statement Schedules are required.

ITEM 22. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4,10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first-class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement.

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

II-3
128

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Niles, State of Illinois,
on the day of , 1998.

PARAGON CORPORATE HOLDINGS INC.

By: /s/ GERALD J. MCCONNELL
---------------------------------------
Gerald J. McConnell
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:

SIGNATURE TITLE DATE
--------- ----- ----

/s/ GERALD J. MCCONNELL President and Chief Executive Officer , 1998
- --------------------------------------------- (Principal Executive Officer)
Gerald J. McConnell

/s/ FRANK J. RZICZNEK Chief Financial Officer and Secretary , 1998
- --------------------------------------------- (Principal Financial Officer and
Frank J. Rzicznek Principal Accounting Officer)

/s/ JOHN H. FOUNTAIN Chairman of the Board , 1998
- ---------------------------------------------
John H. Fountain

/s/ DONALD F. HASTINGS Director , 1998
- ---------------------------------------------
Donald F. Hastings

/s/ JOHN J. KAHL, JR. Director , 1998
- ---------------------------------------------
John J. Kahl, Jr.

/s/ ROBERT J. TOMSICH Director , 1998
- ---------------------------------------------
Robert J. Tomsich

/s/ JOHN R. TOMSICH Director , 1998
- ---------------------------------------------
John R. Tomsich

/s/ JAMES W. WERT Director , 1998
- ---------------------------------------------
James W. Wert

II-4
129

SIGNATURES

A. B. DICK COMPANY

By: /s/ GERALD J. MCCONNELL
---------------------------------------
Gerald J. McConnell
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:

SIGNATURE TITLE DATE
--------- ----- ----

/s/ GERALD J. MCCONNELL President, Chief Executive Officer and , 1998
- --------------------------------------------- Director (Principal Executive Officer)
Gerald J. McConnell

/s/ JAMES R. BRYAN Vice President and Chief Financial Officer , 1998
- --------------------------------------------- (Principal Financial Officer and
James R. Bryan Principal Accounting Officer)

/s/ JOHN H. FOUNTAIN Director , 1998
- ---------------------------------------------
John H. Fountain

/s/ FRANK J. RZICZNEK Director , 1998
- ---------------------------------------------
Frank J. Rzicznek

II-5
130

SIGNATURES

CURTIS INDUSTRIES, INC.

By: /s/ MAURICE P. ANDRIEN
---------------------------------------
Maurice P. Andrien
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:

SIGNATURE TITLE DATE
--------- ----- ----

/s/ MAURICE P. ANDRIEN President and Chief Executive Officer , 1998
- --------------------------------------------- (Principal Executive Officer)
Maurice P. Andrien

/s/ IDELLE K. WOLF Senior Vice President, Chief Financial , 1998
- --------------------------------------------- Officer, Treasurer and Secretary (Principal
Idelle K. Wolf Financial Officer and Principal Accounting
Officer)

/s/ ROBERT J. TOMSICH Director , 1998
- ---------------------------------------------
Robert J. Tomsich

II-6
131

SIGNATURES

ITEK GRAPHIX CORP.

By: /s/ GERALD J. MCCONNELL
---------------------------------------
Gerald J. McConnell
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:

SIGNATURE TITLE DATE
--------- ----- ----

/s/ GERALD J. MCCONNELL President and Director (Principal Executive , 1998
- --------------------------------------------- Officer)
Gerald J. McConnell

/s/ JAMES R. BRYAN Secretary (Principal Financial Officer , 1998
- --------------------------------------------- and Principal Accounting Officer)
James R. Bryan

/s/ JOHN H. FOUNTAIN Director , 1998
- ---------------------------------------------
John H. Fountain

II-7
132

SIGNATURES

CURTIS SUB, INC.

By: /s/ MAURICE P. ANDRIEN
---------------------------------------
Maurice P. Andrien
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:

SIGNATURE TITLE DATE
--------- ----- ----

/s/ MAURICE P. ANDRIEN President (Principal Executive Officer) , 1998
- ---------------------------------------------
Maurice P. Andrien

/s/ IDELLE K. WOLF Treasurer (Principal Financial Officer , 1998
- --------------------------------------------- and Principal Accounting Officer)
Idelle K. Wolf

/s/ ROBERT J. TOMSICH Director , 1998
- ---------------------------------------------
Robert J. Tomsich

II-8
133

EXHIBIT INDEX

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------

3.1 Certificate of Incorporation of Paragon Corporate Holdings
Inc., as currently in effect.
3.2 By-Laws of Paragon Corporate Holdings Inc., as currently in
effect.
3.3 Certificate of Incorporation of A.B. Dick Company, as
currently in effect.
3.4 By-Laws of A.B. Dick Company, as currently in effect.
3.5 Certificate of Incorporation of Curtis Industries, Inc., as
currently in effect.
3.6 By-Laws of Curtis Industries, Inc., as currently in effect.
3.7 Certificate of Incorporation of Itek Graphix Corp., as
currently in effect.
3.8 By-Laws of Itek Graphix Corp., as currently in effect.
3.9 Certificate of Incorporation of Curtis Sub, Inc., as
currently in effect.
3.10 By-Laws of Curtis Sub, Inc., as currently in effect.
4.1 Indenture, dated as of April 1, 1998, among Paragon
Corporate Holdings Inc., A.B. Dick Company, Curtis
Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc. and
Norwest Bank Minnesota, National Association, as Trustee
(containing, as exhibits, specimens of the Series A Notes
and the Series B Notes).
4.2 Purchase Agreement, dated as of March 27, 1998, among
Paragon Corporate Holdings Inc., A.B. Dick Company, Curtis
Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc., and
Donaldson, Lufkin & Jenrette Securities Corporation and CIBC
Oppenheimer Corp., as Initial Purchasers, relating to the
Series A Notes.
4.3 Registration Rights Agreement, dated as of April 1, 1998,
among Paragon Corporate Holdings Inc., A.B. Dick Company,
Curtis Industries, Inc., Itek Graphix Corp., Curtis Sub,
Inc., and Donaldson, Lufkin & Jenrette Securities
Corporation and CIBC Oppenheimer Corp., as Initial
Purchasers.
4.4 Credit and Security Agreement, dated as of April 1, 1998
between Paragon Corporate Holdings Inc. and Key Corporate
Capital Inc.
5 Opinion of Squire, Sanders & Dempsey L.L.P. regarding
securities being registered.
8 Opinion of Squire, Sanders & Dempsey L.L.P. regarding tax
matters.
10.1 Agreement and Plan of Merger, dated as of November 6, 1997,
among Paragon Corporate Holdings Inc., Curtis Industries,
Inc. and Curtis Acquisition Corp.
10.2 Stock Purchase Agreement, dated as of December 19, 1996,
between Paragon Corporate Holdings Inc. and GEC
Incorporated.
10.3 Management Agreement, dated as of April 1, 1998, between
Paragon Corporate Holdings Inc. and NESCO, Inc.
10.4 Tax Payment Agreement, dated as of April 1, 1998, among
Paragon Corporate Holdings Inc., A.B. Dick Company, Curtis
Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc. and
NES Group, Inc.
10.5 Agreement dated November 10, 1995 between A.B. Dick Company
and Gerald J. McConnell.
10.6 Severance and Non-Competition Agreement dated February 28,
1996 between Curtis Industries, Inc. and A. Keith Drewett.
10.7 Severance and Non-Competition Agreement dated February 28,
1996 between Curtis Industries, Inc. and Maurice P. Andrien,
Jr., as amended April 22, 1998.
12 Statement regarding computation of ratio of earnings to
fixed charges.
21 List of subsidiaries of the Company.
23.1 Consents of Squire, Sanders & Dempsey L.L.P. (included in
opinions filed as Exhibits 5 and 8).

134
EXHIBIT INDEX -- CONTINUED

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------

23.2 Consents of Ernst & Young LLP.
25 Statement of Eligibility and Qualification on Form T-1 of
Trustee.
27 Financial Data Schedule.
99 Form of Letter of Transmittal and related documents.

(b) Financial Statement Schedules

No Financial Statement Schedules are required.