Document:

<PAGE>

                                                                  Exhibit 10.7.4

   [CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
    HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.]

                          Technology License Agreement

                            Nortel Networks Limited

                               LogicVision, Inc.

                          Design For Testability (DFT)

                                  Amendment #3

                                 March 20, 2001
<PAGE>

                           AMENDMENT TO THE AGREEMENT

THIS AGREEMENT is made and entered into as of the 20th day of March 2001 (the
"Amendment Date")

BY AND BETWEEN

     Nortel Networks Limited, formerly Northern Telecom Limited ("Northern
     Telecom"), a corporation organized and existing under the laws of Canada,
     having its executive offices at 8200 Dixie Road, Brampton, Ontario, Canada
     L6T 5P6, on behalf of itself and its Subsidiaries and on behalf of its
     Affiliates (hereinafter collectively referred to as "Nortel Networks");

AND

     LOGICVISION, INC., formerly LV SOFTWARE, INC., a corporation organized and
     existing under the laws of Delaware, having its primary business office at
     101 Metro Drive, Third Floor, San Jose, California 95110 (hereinafter
     referred to as "Licensee").

WHEREAS the Parties entered into an Agreement with an Effective Date of the 14th
day of September 1992 concerning software known as the Design For Testability
tool suite (the "Agreement"); and

WHEREAS the Parties made and entered into an amendment to the Agreement on the
1st day of October 1993; and

WHEREAS the Parties made and entered into an amendment to the Agreement on the
11th day of January 1994; and;

WHEREAS the Parties wish to further amend the Agreement as provided herein:

NOW THEREFORE, in consideration of the mutual promises set forth herein, the
Parties agree as follows:

1.0  ARTICLE 1 "DEFINITIONS" is hereby deleted and replaced by the following:

As used herein, unless otherwise defined:

   (a)  "Affiliate" means a company which a Party hereto, or its parent,
        effectively controls, directly or indirectly, other than a Subsidiary,
        through the ownership or control of shares in the company;
<PAGE>

(b)  "Associated Utilities" means the software elements, cells, or models
     described in Schedule C attached hereto and forming a part hereof;

(c)  "Derivative Works" means any software produced by Licensee incorporating
     all or a portion of the Licensed Product;

(d)  "DFT License Revenues" means ***, after deducting any reasonable and
     actually incurred transportation charges or allowances, transportation
     insurance, value added taxes or other sales taxes and custom duties imposed
     upon and paid by Licensee ***:

     (i) ***, or

     (ii)   ***.

(e)  "Documentation" means those documents and other written materials related
     to the Licensed Products, Derivative Works, or Licensed IP that may be
     delivered to End-Users, as described in and subject to certain conditions
     outlined in Schedule B attached hereto and forming a part hereof;

(f)  "Distributor" means any party to whom Licensee provides the Licensed
     Products, Derivative Works, or Licensed IP for sub-licensing to End-Users;

(g)  "Effective Date" means the 14th day of September, 1992;

(h)  "End-Users" shall mean all persons or companies, other than Nortel
     Networks, its Affiliates, Subsidiaries and Manufacturing Licensees, which
     acquire directly from

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

<PAGE>

     Licensee or indirectly through a Distributor, the right to use a Licensed
     Product, Derivative Works or Licensed IP as contemplated in this Agreement;

(i)  "Licensed IP" means any intellectual property licensed, or to be licensed,
     to an End-User whether software or otherwise which is derived from or
     created by the use of the Licensed Product, Technology or Technology IP
     licensed to Licensee under this Agreement.  For greater clarity, Licensed
     IP shall not include any intellectual property made, conceived, developed
     or reduced to practice by the Licensee independently without reference to
     any Technology, Technology IP, Technical Information, Associated Utilities,
     Licensed Product or any other material or information provided by Nortel
     Networks to Licensee.

(j)  "Licensed Product" means the Design for Testability (DFT) tool suite and
     any portion or modification thereof, as described in and subject to certain
     conditions identified in Schedule A attached hereto and forming a part
     hereof;

(k)  "Manufacturing Licensee" means a third party with whom Nortel Networks has
     entered into an agreement permitting such third party to make and sell or
     lease products based on products designed by or for and sold or leased by
     Nortel Networks;

(l)  "Party" means either Licensee or Nortel Networks;

(m)  "Patent Rights" means any patent rights associated with the patents and
     patent applications set forth in Schedule A together with any patents or
     patent rights arising or issuing from said patent applications, provided,
     however, that such patents and patent applications have an effective filing
     date prior to or including the Amendment Date;

(n)  "Subsidiary" means a company which Nortel Networks Limited or Licensee
     hereto effectively owns or controls, and continues to own or control,
     directly or indirectly, more than fifty percent (50%) of the voting stock
     or shares;

(o)  "Technical Information" means all technical or scientific documentation,
     product drawings, bills of materials, component supplier lists, and other
     information (in any form) that is related to the manufacture, use, support
     or maintenance of Licensed Products or that is related to the Technology,
     and that is provided by Nortel Networks to Licensee;

(p)  "Technology" means the source code, object code utilities, libraries,
     development utilities, circuit designs in HDL, algorithms, proof-of-
     concepts described in Schedule A attached hereto and as provided by Nortel
     Networks to Licensee, the associated utilities described in Schedule C
     attached hereto and as provided by Nortel Networks to Licensee, and all
     Technical Information as provided by Nortel Networks to Licensee;

(q)  "Technology IP" means the copyrights and trade secrets owned by Nortel
     Networks as of the Amendment Date directed to and covering the Technology,
     and also includes the Patent Rights, but excludes all trademarks; and

(r)  "Territory" means worldwide subject to applicable United States and
     Canadian export restrictions.
<PAGE>

2.0 ARTICLE 2 "LICENSE" is hereby deleted and replaced by the following:

Nortel Networks hereby, as of the Amendment Date, grants to Licensee subject to
the terms and conditions of this Agreement a personal, non-exclusive, non-
transferable, non-assignable, indivisible, worldwide right and license:

  (i)    to use, copy, translate, improve, enhance, and modify the Licensed
         Product and Technology object code and source code, to merge or have
         merged such translations, modifications, improvements or enhancements
         into other programming material, to sub-license and distribute object
         code versions of Licensed Product, Licensed IP and Derivative Works to
         End-Users, to copy, translate and modify the Documentation and to use,
         sell or distribute copies of such Documentation;
  (ii)   to appoint and to sub-license Distributors to sublicense for use and to
         distribute to End-Users object code versions of Licensed Product,
         Licensed IP and Derivative Works under terms and conditions no less
         stringent than those set out in this Agreement;
  (iii)  to place Licensed Products, Licensed IP and Derivative Works source
         code in escrow for the benefit of End-Users and Distributors and grant
         source code licenses to such End-Users and Distributors pursuant to
         which, in the event of a bankruptcy or similar proceeding against
         Licensee or in the event of termination of this Agreement and the
         refusal of Nortel Networks to assume Licensee's support obligations,
         such End-User or Distributor would be granted a license to use such
         source code solely to maintain and support the Licensed Product,
         Licensed IP or Derivative Works;
  (iv)   to make, use, sell the subject matter claimed by the patents listed in
         Schedule A and attached hereto and the trade secrets inherent in the
         Technology to develop Licensed IP and Derivative Works and to market,
         promote, distribute and license such Licensed IP and Derivative Works
         to End-Users directly or through Distributors;
  (v)    to authorize, directly or through Distributors, End-Users to use and
         incorporate any design objects or Licensed IP generated by the licensed
         use of a Licensed Product or Derivative Work into such End-User's
         integrated circuit designs, and to make or have made and sell or
         otherwise distribute integrated circuits based on such designs; and
  (vi)   to use the Technical Information only as may be necessary to exercise
         the rights granted in this Article 2.

  Nortel Networks also grants to Licensee the right to use Associated Utilities
  in the development and debugging of software produced by Licensee or for
  demonstration purposes.  Associated Utilities must not be delivered to End-
  Users.

  No provision or term or condition of this Agreement shall affect the rights of
  Nortel Networks or any Manufacturing Licensee to use Licensed Product,
  Derivative Works, Licensed IP or Associated Utilities in the normal course of
  Nortel Networks' business.

  Nothing contained herein shall transfer, or be deemed to transfer, or
  contemplate the transfer of, any rights in or to the Technology or Technology
  IP other than those rights specifically granted herein, and in particular but
  without restricting the generality of the foregoing, Nortel
<PAGE>

  Networks does not in any way transfer any right, title, or interest in or to
  the Technology or Technology IP, or any element constituting a portion thereof
  to Licensee or Distributors or End-Users, other than the limited right granted
  herein.

3.0    ARTICLE 3 "GRANTBACK" is hereby deleted and replaced by the following:

Licensee hereby grants to Nortel Networks and Manufacturing Licensees, a non-
exclusive, perpetual, irrevocable, transferable, assignable, worldwide paid-up
right to use Derivative Works and Licensed IP for use in the normal course of
Nortel Networks' business.  Such right includes the right to modify the
Derivative Works and Licensed IP and to incorporate them into software or
product for use in the normal course of Nortel Networks' business.  For greater
clarity, Nortel Networks shall have no right to sub-license, transfer, assign
Innovations (defined below) for the purpose of creating competing products with
Derivative Works.  Ownership in and to the Derivative Works (exclusive of any
Technology or Technology IP) and in and to any and all ideas, inventions,
discoveries, creations, processes, techniques, designs, methods, improvements or
know-how that Licensee may make, conceive, develop or reduce to practice
(collectively, "Innovations"), regardless of whether such Innovations are
developed as a result of Licensee's access to the Technology or Technology IP,
shall remain with and be vested in Licensee.  Subject to the provisions of
Article 2.0(iii), Licensee shall not be obligated to provide the source code
form of the Derivative Works to Nortel Networks.

In partial consideration of the License granted herein by Nortel Networks,
Licensee hereby grants to Nortel Networks, to the full extent of its legal right
to do so, an irrevocable, perpetual, non-exclusive, non-transferable, non-
sublicenseable, fully-paid up, royalty-free, worldwide license under any patents
or patent applications that Licensee owns or acquires that are embodied in the
Derivative Works or Licensed IP or were acquired as a result of access  to the
Technology or Technology IP or rights granted under this Agreement.

This Article 3 Grantback shall not be construed ***, nor shall it be construed
***.

4.0  ARTICLE 5 "ROYALTY" is hereby deleted and replaced by the following:

In partial consideration of the rights granted hereunder, including the
additional Technology and Technology IP, Licensee shall make the following
royalty payments (hereinafter "Royalties") to Nortel Networks:

     (i)  ***; and
     (ii) ***, paid within thirty (30) days

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
<PAGE>

           following the end of each quarterly period ending on March 31, June
           30, September 30, and December 31; and
     (iii) ***.

     Nortel Networks acknowledges that the payments under this amended Article 5
     (i) *** and except as expressly provided in this Article 5 (ii) and (iii),
     Licensee shall possess a fully paid-up license upon completion of these
     payment obligations.

     For further clarification, final payment obligations shall include payments
     under Article 5 (ii) and (iii) up to and including September 30, 2002.

5.0  ARTICLE 8 "RECORDS AND REMITTANCES" is hereby amended by deleting the
     following text:

"Payments related to Licensee's licensing activities in the USA shall be made
to:

Northern Telecom Inc.
200 Athens Way,
Nashville, Tennessee,
U.S.A.  37228

     Attention:    Sue Kane, Dept. 8452."

and adding the following text:

"Payments related to Licensee's licensing activities shall be made to

     Nortel Networks Limited
     8200 Dixie Road, Suite 100 MS:036NO154
     Brampton, Ontario
     L6T 5P6 Canada

     Attention:  Director, Technology Licensing Programs
     FAX:  905-863-8431

6.0  ARTICLE 14 "DURATION AND CONTINUING RIGHTS" is hereby deleted and replaced
     by the following:

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
<PAGE>

This Agreement shall continue until the earlier of September 30, 2002 and the
full and final payment of all sums due Nortel Networks hereunder or until
terminated pursuant to Article 15 hereof.

Provided this Agreement is not terminated prior to September 30, 2002, Licensee
shall on October 1, 2002 posses a fully paid up license to exercise the rights
granted in Article 2 (including patent rights granted in Article 2) without
having the obligation of making payments and providing statements as prescribed
in Articles 5 and 8 hereof.

7.0  ARTICLE 15 "TERMINATION" is hereby amended by adding the following as the
     last two paragraphs:

Notwithstanding anything else contained herein, in the event Licensee brings
patent infringement proceedings against Nortel Networks at any future date,
under any patent that is embodied in the Derivative Works or Licensed IP or that
was acquired as a result of access to the Technology or Technology IP or rights
granted under this Agreement, Nortel Networks shall have the right to
immediately terminate this Agreement and all continuing rights contemplated
under ARTICLE 14 hereof.

During the term of this Agreement, Licensee shall have the right to terminate
the Agreement with or without cause upon thirty (30) days written notice to
Nortel Networks subject to the termination prior to expiration obligations
above.  Termination initiated by Licensee as provided in this ARTICLE 15 shall
also result in immediate termination of all continuing rights contemplated under
ARTICLE 14 hereof.

8.0  ARTICLE 16 "NOTICES" is hereby deleted and replaced by the following:

Any and all notices or other information to be given by one Party to the other
shall be in writing and sent by certified or registered mail, return receipt
requested, or by hand delivery to the other Party at the following address or
fax number:

(a) if to Licensee:

     LOGICVISION, INC.
     101 Metro Drive, Third Floor,
     San Jose, California 95110
     USA

     Attention:    Dr. V.K. Agarwal, Chief Executive Officer
     FAX:          408-573-7640
<PAGE>

(b) if to Nortel Networks:

     Nortel Networks Limited
     8200 Dixie Road, Suite 100  MS:036NO154
     Brampton, Ontario
     L6T 5P6 Canada

     Attention:    Director, Technology Licensing Programs
     FAX:   905-863-8431

Such notices shall be deemed to have been received five (5) business days after
mailing if forwarded by mail or on the day of receipt if delivered by hand or
fax.  The address of either Party may be changed by giving notice to the other
Party in accordance with the foregoing.

9.0  ARTICLE 18 "GENERAL PROVISIONS" is hereby amended by replacing the first
     paragraph with the following paragraph:

"This Agreement shall not be assigned or transferred by either Party except with
the written consent of the other such consent not to be unreasonably refused.
Notwithstanding the foregoing, this Agreement may be assigned by Nortel Networks
to any of its Subsidiaries or Affiliates upon notification to Licensee.

And is further amended by replacing the paragraph;

"This Agreement sets forth the entire agreement and understanding between the
Parties with respect to the licensing of Licensed Products and Associated
Utilities and supersedes and cancels all previous negotiations, agreements,
commitments and writings in respect of the subject matter hereof, and no Party
hereto shall be bound by any term, clause, provision, or condition save as
expressly provided in this Agreement or as duly set forth on or subsequent to
the date hereof in writing, signed by duly authorized officers of the Parties.
The Parties may, however, modify Schedules A, B, and C hereto, from time to time
by written instrument signed by representatives of both Parties, provided any
such modification does not materially change the scope and substance of this
Agreement."

     with the following paragraph;

"This Agreement sets forth the entire agreement and understanding between the
Parties with respect to the licensing of Technology and Technology IP and
supersedes and cancels all previous negotiations, agreements, commitments and
writings in respect of the subject matter hereof, and no Party hereto shall be
bound by any term, clause, provision, or condition save as expressly provided in
this Agreement or as duly set forth on or subsequent to the Amendment Date
hereof in writing, signed by duly authorized officers of the Parties, which for
Nortel Networks Limited shall include the Vice President, Intellectual Property
Law.  The Parties may, however, modify Schedules A, B, and C hereto, from time
to time by written instrument signed
<PAGE>

by representatives of both Parties, provided any such modification does not
materially change the scope and substance of this Agreement."

10.0 SCHEDULE A "LICENSED PRODUCT" is hereby deleted and replaced by the amended
     SCHEDULE A "LICENSED PRODUCT AND PATENTS" attached hereto.

11.0 SCHEDULE B "DOCUMENTATION" is hereby deleted and replaced by the amended
     SCHEDULE B "DOCUMENTATION" attached hereto.

12.0 SCHEDULE C "ASSOCIATED UTILITIES" is hereby deleted and replaced by the
     amended SCHEDULE C "ASSOCIATED UTILITIES" attached hereto.

13.0 This Amendment shall be effective on the date first mentioned above.

IT IS FURTHER AGREED that this Amendment be and is hereby made a part of and
attached to the Agreement and that the Agreement, shall remain in full force and
effect, according to the terms, conditions and covenants therein, except as
herein amended.

IN WITNESS WHEREOF, the Parties hereto have duly executed this amending
agreement.

<TABLE>
<CAPTION>
Nortel Networks Limited                                     LOGICVISION, INC.

<S>                                                         <C>
/s/ Arthur Fisher                                           /s/ V.K. Agarwal  03/20/2001
-------------------------------------------------------     -------------------------------------------------------
Authorized Signature and Date                               Authorized Signature and Date

Arthur Fisher, VP Intellectual Property Law                 Dr. V.K. Agarwal, Chief Executive Officer
-------------------------------------------------------     -------------------------------------------------------
Printed Name and Title                                      Printed Name and Title

/s/ Blair F. Morrison
-------------------------------------------------------
Authorized Signature

Blair F. Morrison, Assistant Secretary
-------------------------------------------------------
Printed Name and Title
</TABLE>
<PAGE>

                                   SCHEDULE A

                          LICENSED PRODUCT AND PATENTS

Patents
-------
4969148        Serial Testing Technique For Embedded Memories
5349587        Multiple Clock Rate Test Apparatus For Testing Digital Systems

Source Code
-----------
The Design For Testability (DFT) Technology consists of the tool suite and
database provided to Licensee in source code form as described herein:

               (i)    SCANCHEK, Version 5 Release 3 (5.03) *See Note 2
                      This tool compiles a circuit description from Verilog
                      structural netlists and checks the logic for compliance to
                      a set of scan rules. It also extracts the combinational
                      logic driven by the scan chain as well as a description of
                      the scan chain connections and pin types.

               (ii)   ATPG, Version 5 Release 3 (5.03) *See Note 2
                      Automatic Test Pattern Generator (ATPG) generates and/or
                      evaluates a set of test vectors for the faults in the
                      combinational part of the logic of a circuit. ATPG applies
                      random patterns to detect most faults and switches to
                      deterministic algorithms to find the remaining one.
                      Optionally, a Linear-Feedback-Shift-Register (LFSR) can
                      generate the random patterns and the expected responses
                      for the circuit are compressed and expressed in terms of a
                      32-bit signature.

               (iii)  SEQUENCE, Version 5 Release 3 (5.03) *See Note 2
                      SEQUENCE populates a test pattern database with the test
                      patterns generated by ATPG for the combinational portion
                      of the circuit. SEQUENCE automatically adds generic test
                      patterns for the scan chain itself and asynchronous set /
                      reset pins, if applicable.

               (iv)   TPI, Version 5 Release 2 Maintenance Release 1 (5.02.01)
                      Test Point Insertion (TPI) tool.

               (v)    RamBist, Version 5 Release 2 (5.02)
                      A tool that generates a memory built-in self test
                      controller, a verification test bench, and test pattern.

               (vi)   ScanBist, Version 5 (5.00)
                      A tool that generate a scan built-in self test (a.k.a.
                      logicbist) controller, a verification test bench, and test
                      pattern.

               (vii)  IATPG, Version 5 (5.00)
                      A tool to perform Interconnect Automatic Test Pattern
                      Generator (IATPG)

               (viii) dh2wgl
                      A tool to extract test patterns from datahub native format
                      and translated to Fluence (former TSSI) WGL format.
<PAGE>

               (ix)   datahub
                      A proprietary database and the associated schema for
                      integrating DFT software tools via the storage and
                      exchange of data.

Notes:
-----
1. All Licensed Products and Derivative Works delivered to End-Users must be in
object code form.
2. The following software elements or modules must be modified by Licensee and
Nortel Networks must approve such modifications before Licensee delivers
Licensed Products or Derivative Works to any End-User.
               (i)    SCANCHEK: Cadence menus, ScanBist support, Nortel Networks
                      specific options.
               (ii)   ATPG: Cadence menus, ScanBist support, Nortel Networks
                      specific options.
               (iii)  SEQUENCE: Cadence menus, "Fast simulation", Nortel
                      Networks specific options.

Object Code Utility
-------------------

The Design For Testability (DFT) Technology includes the following utility
provided to Licensee in object code form.  This utility may be included in
Licensed Products or Derivative Works provided however delivery to End-Users
must only be in object code form:

               (i)    dh2tif, Version 5 Release 2 (5.02) A utility to extract
                      test patterns from a DATAHUB file and convert into a TIF
                      (Tool Interchange Format).

Libraries
---------

The Design For Testability (DFT) Technology includes the following libraries
provided to Licensee.  These utilities may be included in Licensed Products or
Derivative Works provided however delivery to End-Users must only be in object
code form:

               (i)    spdata,  (sp.a)
                      a collection of functions for read/write to/from the
                      simulation event file.

               (ii)   anvil,  (anvil.a)
                      a collection of functions for specifying design
                      verification event or test patterns.

               (iii)  Message, (MSg.a)
                      a collection of functions for messaging errors or
                      information messages.

               (iv)   Pattern, (PP.a)
                      a collection of functions for extracting patterns stored
                      in datahub.

               (v)    Read Scaninfo, (readscan.a)
                      a collection of functions for parsing the scaninfo
                      information into datahub.

               (vi)   Datahub, (datahub.a)
<PAGE>

                      a collection of functions that includes the basic
                      read/write of the datahub database and the interface
                      functions.

               (vii)  scan PLI,
                      a collection of PLI functions for Verilog to read and
                      write spdata file.

Circuit Designs in HDL
----------------------
The Design For Testability (DFT) Technology includes the following circuit
designs in HDL.

               (i)    TAP
                      A circuit design that implements an interpretation of the
                      IEEE 1149.1 Standard Test Access Port (TAP).

               (ii)   Boundary Scan Cells
                      A collection of circuit designs that implement an
                      interpretation of the IEEE 1149.1 standard boundary scan
                      cells.

               (iii)  Rambist Controller
                      A circuit design that implements the built-in self-test
                      controller for memory testing which employs the technique
                      specified in patent 4969148.

               (iv)   Logicbist Controller
                      A circuit design that implements the built-in self-test
                      controller for scan based logic testing which employs the
                      technique specified in patent 5349587.

                              [End of Schedule A]
<PAGE>

                                   SCHEDULE B

                                 DOCUMENTATION

The Documentation associated with licensed Technology that, once modified, can
be delivered with Licensed Products, Derivative Works, and/or Licensed IP to
End-Users consists of the following:

    1.  Scan Reference Guide, Version 5 Release 3 (5.03)     CCP 143.1

    2.  DFT Application Notes, Version 5 Release 2 (5.02)    CCP 146.1

    3.  DFT Guidelines, Version 5 Release 1 (5.01)           CCP 146.2

    4.  Memory BIST Guidelines, Version 5 (5.00)

    5.  Scanbist Documentation, Version 5 (5.00)

    6.  TIF Format Description, Version 5 (5.00)

     Note: Licensee must modify The Documentation and Nortel Networks must
     approve such modifications before Licensee delivers any Documentation to
     End-Users.  All other Technical Information is considered Confidential
     Information.

                              [End of Schedule B]
<PAGE>

                                   SCHEDULE C

                              ASSOCIATED UTILITIES

Associated Utilities include the following software elements, cells, or models
that can be used by Licensee for developing and debugging new software or for
demonstration purposes but must not be delivered to End-Users.

          (i)    cells,
                 a subset of simple BATMOS gates including Verilog nominal and
                 SCAN models.

          (ii)   memory macros,

          (iii)  mx,
                 a macro preprocessing utility.

          (iv)   syntran,
                 a translation utility for translating FML2 format into Verilog
                 HDL format.

          (v)    dh2tif, Version 5 Release 2 (5.02)
                 A utility to extract test patterns from a DATAHUB file and
                 convert into a TIF (Tool Interchange Format).

          (vi)   Synful and Synopsys Technology Library Translator to Synful
                 format.

                              [End of Schedule C]01125-01/0/ck /2
                                                     Notary Deed No. 7 Year 2001
                                                     ---------------------------

                                [GRAPHIC OMITTED]

                               N E G O T I A T E D

          in Frankfurt am Main, Eschersheimer Landstra(beta)e 25 - 27,
                               on 26th April 2001
                               ------------------

             Before me, the undersigning Lawyer Dr. Stefan Reinhart
                         as notary deputy of the notary

                                Dr. Ulrich Fritze

           in the district of the Oberlandesgericht Frankfurt am Main
                      with his offices in Frankfurt am Main

<PAGE>

appeared today:

1.   Herr Udo Zimmer, Dipl.-Betriebswirt
     business office in Wilhelm-Leuschner-Stra(beta)e 9-11,
     60329 Frankfurt am Main

identifying himself by identity card issued by F.R.G.
declaring not to act on his own behalf but as "Vorstandsmitglied" of AUGUSTA
Technologie AG, Frankfurt am Main, registered in the Commercial Register at the
Amtsgericht Frankfurt am Main no. HRB 41371.

                              - in the following "Vendor-company" or "Augusta" -

The notary deputy has inspected the Commercial Register at the local court in
Frankfurt today and certifies that AUGUSTA Technologie AG, Frankfurt am Main, is
registered there under the number HRB 41371. The appeared person as of 1) is
however not severally entitled to act on behalf of Augusta. He therefore
submitted the original of a board resolution stating that he is entitled to act
severally on behalf of Augusta in respect to the sale of all shares of KORONA
Haushaltswaren GmbH & Co. KG and KORONA Haushaltswaren GmbH which was attached
to this deed.

The notary deputy cautioned the parties that he can therefore not certify that
Augusta is properly represented by the appeared person as of 1). The parties
nevertheless insisted on the notarisation of the document.

2.   Mrs. Kit Teng Pang, born May 31st, 1962,
     business office at 3 Salisbury Road, Tsimshatsui, Kln.
     Unit 1106-1110, 11/F., Star House, Hong Kong

identifying herself by official passport of Portugal,

declaring not to act on their own behalf but with full power of attorney on
behalf of Bonso Electronics International Inc., a British Virgin Islands
international business corporation, having its address at 3 Salisbury Road,
Tsimshatui Kowloon, Hong Kong (as above).

                                         - in the following "Buyer" or "BONSO" -

The deputy notary deputy advised those appearing that he has before him no
evidence of the existence of BONSO nor of the powers of representation of the
person appearing at 2) and that to this extent he cannot check the existence of
the Buyer and the power of representation of the person at 2) appearing on
behalf of the Buyer. Advised of the inherent risks the appearing persons
requested nevertheless immediate notarisation.

The appearing persons asked the notary deputy to notarise the document in the
English language. The persons appearing have stated that they are capable of
understanding English. The notary deputy has satisfied himself that the person
appearing are capable of understanding the English language.

                                       2
<PAGE>

The notary deputy asked about a prior involvement (Vorbefassung) in the meaning
of ss. 3 subsection 1 Nr. 7 BeurkG (Law of Notarisation). Such an involvement
was denied by the appearing persons on behalf of the parties they represent.

The notary deputy advised the parties appearing that the following agreement
refers to the notarial deed UR 4/2001 of notary Dr. Fritze and documents
contained therein, a certified copy of which has been handed out to each of the
persons appearing. The persons appearing declared that they waive their right to
have the content of the documents read out by the notary (section 13a subsection
1 Beurkundungsgesetz) and that they also waive that the reference deed shall be
attached to this deed (sec. 13a subsec. 2 Beurkundungsgesetz).

The notary also cautioned the parties that the reference deed and the documents
contained therein is treated as if it were part of this deed.

The appearing persons asked for notarisation of the following:

                            STOCK PURCHASE AGREEMENT

                                     BETWEEN

                      BONSO ELECTRONICS INTERNATIONAL INC.

                                       AND

                             AUGUSTA TECHNOLOGIE AG

                                 April 25, 2001

                                       3
<PAGE>

                                TABLE OF CONTENTS

1.  Definitions...............................................................6
2.  Purchase and Sale of Korona Shares.......................................11
    (a)  Purchase and Sale...................................................11
    (b)  Payment at Closing..................................................11
    (c)  Intentionally omitted...............................................11
    (d)  Escrow Accounts.....................................................12
    (e)  Purchase Price Adjustment...........................................12
    (f)  The Closing.........................................................14
    (g)  Deliveries at the Closing...........................................14
    (h)  Transaction Effective Date..........................................15
3.  Representations and Warranties Concerning the Transaction................15
    (a)  Representations and Warranties of Augusta...........................15
    (b)  Representations and Warranties of Buyer.............................16
4.  Representations and Warranties Concerning Korona.........................18
    (a)  Organization, Qualification, and Corporate Power....................19
    (b)  Capitalization......................................................19
    (c)  Noncontravention....................................................19
    (d)  Brokers' Fees.......................................................20
    (e)  Title to Assets.....................................................20
    (f)  Subsidiaries........................................................20
    (g)  Financial Statements................................................20
    (h)  Events Subsequent to Most Recent Fiscal Year End....................21
    (i)  Undisclosed Liabilities.............................................22
    (j)  Legal Compliance....................................................23
    (k)  Tax Matters.........................................................23
    (l)  Real Property.......................................................24
    (m)  Intellectual Property...............................................26
    (n)  Sufficiency of Assets...............................................27
    (o)  Inventory...........................................................27
    (p)  Contracts...........................................................27
    (q)  Accounts Receivable.................................................29
    (r)  Powers of Attorney..................................................29
    (s)  Insurance...........................................................29
    (t)  Litigation..........................................................29
    (u)  Product Warranty....................................................29
    (v)  Product Liability...................................................29
    (w)  Employees...........................................................29
    (x)  Guaranties..........................................................29
    (y)  Environment, Health, and Safety.....................................30
    (z)  Certain Business Relationships with Korona..........................30
5.  Pre-Closing Covenants....................................................30
    (a)  General.............................................................30
    (b)  Notices and Consents................................................31
    (c)  Operation of Business...............................................31
    (d)  Preservation of Business............................................31
    (e)  Full Access.........................................................31
    (f)  Notice of Developments..............................................31
    (g)  Exclusivity.........................................................31
    (h)  Guarantee of Buyer..................................................32

                                       4
<PAGE>

6.  Post-Closing Covenants...................................................32
    (a)  General.............................................................32
    (b)  Litigation Support..................................................32
    (c)  Transition..........................................................32
    (d)  Confidentiality.....................................................32
    (e)  Covenant Not to Compete.............................................33
    (f)  Redemption of Shares................................................33
    (g)  Retention of Books and Records......................................33
    (h)  Rule 144............................................................34
    (i)  Spin Off of RISO....................................................34
    (j)  Repayment of the Shareholder Loans..................................34
    (k)  Purchase of Warehouse...............................................34
    (l)  Corporate filings...................................................34
7.  Conditions to Obligation to Close........................................35
    (a)  Conditions to Obligation of Buyer...................................35
    (b)  Conditions to Obligation of Augusta.................................36
8.  Remedies for Breaches of This Agreement..................................37
    (a)  Survival of Representations and Warranties..........................37
    (b)  Indemnification Provisions for Benefit of Buyer.....................37
    (c)  Indemnification Provisions for Benefit of Augusta...................38
    (d)  Limitation of Indemnification.......................................38
    (e)  Matters Involving Third Parties.....................................39
    (f)  Determination of Adverse Consequences...............................40
    (g)  Other Indemnification Provisions....................................40
9.  Tax Matters..............................................................40
    (a)  Tax Periods Ending on or Before the Closing Date....................40
    (b)  Tax Periods Beginning Before and Ending After the Closing Date......40
    (c)  Cooperation on Tax Matters..........................................41
    (d)  Tax Sharing Agreements..............................................42
    (e)  Certain Taxes.......................................................42
10. Termination..............................................................43
    (a)  Termination of Agreement............................................43
    (b)  Effect of Termination...............................................43
11. Miscellaneous............................................................44
    (a)  Consulting Services.................................................44
    (b)  Press Releases and Public Announcements.............................44
    (c)  No Third Party Beneficiaries........................................44
    (d)  Entire Agreement....................................................44
    (e)  Succession and Assignment...........................................44
    (f)  Counterparts........................................................44
    (g)  Headings............................................................44
    (h)  Notices.............................................................44
    (i)  Governing Law.......................................................46
    (j)  Dispute Resolution; Arbitration.....................................46
    (k)  English Language....................................................46
    (l)  Amendments and Waivers..............................................47
    (m)  Severability........................................................47
    (n)  Expenses............................................................47
    (o)  Construction........................................................47

                                       5
<PAGE>

                            STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (this "Agreement") is entered into on April
25, 2001, by and between Bonso Electronics International Inc., a British Virgin
Islands international business corporation ("Buyer"), and Augusta Technologie
AG, a German stock company ("Augusta"). Buyer and Augusta are each referred to
as a "Party" and collectively referred to as the "Parties" herein.

                                    RECITALS

     A. Augusta is the sole limited partner (with a capital contribution of DEM
1,000,000) of KORONA Haushaltswaren GmbH & Co. KG, Moringen, a German limited
partnership (Amtsgericht (lower district court) Northeim, HRA 837) (hereinafter
"Korona"). Sole general partner of Korona is KORONA Haushaltswaren GmbH,
Frankfurt am Main (Amtsgericht Frankfurt am Main HRB 42322) (hereinafter the
"General Partner"). Augusta owns 100% of the shares of the General Partner,
namely one share in the nominal amount of DEM 50,000.

     B. Buyer proposes to purchase Augusta's equity interest in Korona
consisting of all of the limited partnership interests in Korona and the sole
share of the General Partner.

     C. This Agreement contemplates a transaction in which Buyer will purchase
from Augusta, and Augusta will sell and transfer to Buyer, all of the equity
interest in Korona (as described above) in return for cash and shares of Buyer's
common stock.

     D. Buyer will purchase the shares of the General Partner Korona from
Augusta through a newly formed wholly-owned British Virgin Islands international
business corporation ("Newco").

     NOW, THEREFORE, in consideration of the premises and the mutual promises
made herein, and in consideration of the representations, warranties, and
covenants contained herein, the Parties agree as follows:

1.   Definitions.

     (a) "Accounting Firm" has the meaning specified in ss.2(e)(iii).

     (b) "Adjusted Purchase Price has the meaning specified in ss.2(e)(iv).

     (c) "Adverse Consequences" means all actions, suits, proceedings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.

                                       6
<PAGE>

     (d) "Affiliate" (and, with a correlative meaning, "Affiliated") shall mean,
with respect to any Person, any other Person that directly, or through one or
more intermediaries, controls or is controlled by or is under common control
with such first Person. For the purpose of this definition and of the definition
of the term "Subsidiary", "control" (including, with correlative meanings,
"controlled by" and "under common control with") means possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies, whether through ownership of securities or other ownership interests,
by contract or otherwise.

     (e) "Ancillary Documents" has the meaning specified in ss.11(j)(ii).

     (f) "Applicable Rate" means the EUROLIBOR for a three-month period as
announced from time to time plus 1.5% per annum.

     (g) "Augusta Escrow Account" has the meaning specified in ss.2(d).

     (h) "Base Purchase Price" is U.S. $ 4,200,000

     (i) "Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.

     (j) "Business Day" means a day on which the securities in question are
traded on the Nasdaq National Market System.

     (k) "Buyer" has the meaning set forth in the preface above.

     (l) "Buyer Escrow Account" has the meaning specified in ss.2(d).

     (m) "Cash Consideration" has the meaning specified in ss.2(b).

     (n) "Closing" has the meaning set forth in ss.2(f) below.

     (o) "Closing Balance Sheet" has the meaning specified in ss.2(e)(i).

     (p) "Closing Date" has the meaning set forth in ss.2(f) below.

     (q) "Closing Net Book Value" has the meaning specified in ss.2(e)(v).

     (r) "Closing Total Assets" has the meaning specified in ss.2(e)(v).

     (s) "Closing Total Liabilities" has the meaning specified in ss.2(e)(v).

     (t) "Confidential Information" means any information concerning the
businesses (including the strategy), financial information, customer information
and product information of Korona that is not generally available to the public.

     (u) "Conversion Price" shall mean the average of the reported closing
market prices of Buyer's common stock on the Nasdaq National Market System
during the 30-trading day period ending two Business Days prior to the Closing;
provided, however, that (i) if such average of the reported closing market
prices shall be lower than U.S.$8.00, the Conversion Price shall equal U.S.$8.00
and (ii) if such average of the reported closing market prices shall be higher
than U.S.$10.00, the Conversion Price shall equal U.S.$10.00.

                                       7
<PAGE>

     (v) "Disclosure Schedule" has the meaning set forth in ss.4 below and is
attached as Exhibit D to the Reference Deed.

     (w) "DEM" means the lawful money of the Federal Republic of Germany.

     (x) "Dollar" and the sign "$" mean the lawful money of the United States.

     (y) "Doubtful Receivables" has the meaning specified in ss.2(e)(vi).

     (y(1)) "Effective Date" means May 1, 2001.

     (z) "Environmental, Health, and Safety Laws" means all German laws
(including rules, regulations, codes, injunctions, judgments, orders and decrees
thereunder) concerning pollution or protection of the environment, public health
and safety, or employee health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of Hazardous Substances into
ambient air, surface water, ground water, or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Hazardous Substances, in each case as in effect on the
date of this Agreement.

     (aa) "Escrow Accounts" means the Augusta Escrow Account and Buyer Escrow
Account.

     (bb) "Estimated Closing Net Book Value" has the meaning specified in
ss.2(e)(i).

     (cc) "Euro Currency Exchange Rate" means the European Central Bank
Reference Rate of the Dollar as announced by the European Central Bank in
Frankfurt at the Closing Date.

     (dd) "Financial Statement" has the meaning set forth in ss.4(g) below and
is attached as Exhibit B to the Reference Deed.

     (ee) "GAAP" means German generally accepted accounting principles in
accordance with the German Commercial Code ("Handelsgesetzbuch") as in effect
(i) with respect of the Financial Statements as of the respective dates of such
Financial Statements, and (ii) otherwise, as of the date of this Agreement.

     (ff) "Government Filing" has the meaning specified in ss.3(a).

     (gg) "Hazardous Substance" means any substances or materials defined as
"hazardous substances", "hazardous wastes", "toxic substances", "toxic wastes",
"solid wastes", or words of similar import in any applicable German
environmental laws, as presently in effect.

     (hh) "ICC Rules" has the meaning specified in ss.11(j)(ii).

     (ii) "Indemnified Party" has the meaning set forth in ss.8(e) below.

     (jj) "Indemnifying Party" has the meaning set forth in ss.8(e) below.

                                       8
<PAGE>

     (kk) "Initial Payment" shall mean the Base Purchase Price (A) plus an
amount, if any, equal to the amount by which the Estimated Closing Net Book
Value exceeds the Target Amount or (B) minus an amount, if any, equal to the
amount by which the Target Amount exceeds the Estimated Closing Net Book Value;
provided, that any amount in DEM shall be converted into Dollars based on the
Euro Currency Exchange Rate as of the Closing Date.

     (ll) "Intellectual Property" means (a) all patents, trademarks, service
marks, trade dress, logos, trade names, and corporate names, including all
appurtenant goodwill associated with such names and marks, and all applications,
registrations, and renewals in connection therewith, (b) all copyrights, and all
applications, registrations, and renewals in connection therewith, (c) all mask
works and all applications, registrations, and renewals in connection therewith,
(d) all trade secrets and know-how and (e) all computer software (including data
and related documentation).

     (mm) "Knowledge" with respect to Buyer or Augusta means actual knowledge
after reasonable investigation of the members of the board of directors of such
Party at the date of this Agreement.

     (nn) "Korona Shares" means the entire equity interest in Korona, consisting
of all of the limited partnership interests in Korona and the sole share of the
General Partner.

     (oo) "Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.

     (pp) "Material Adverse Effect" means any material adverse change in or
effect on the business, results of operations or financial condition of Korona
taken as a whole.

     (qq) "Material Subsidiary" or "Material Subsidiaries" means any
"significant subsidiary" as defined under Regulation S-X of the Securities
Exchange Act of 1934, as amended.

     (rr) "Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.

     (ss) "Most Recent Financial Statements" has the meaning set forth in
ss.4(g) below.

     (tt) "Most Recent Fiscal Year End" has the meaning set forth in ss.4(g)
below.

     (uu) "Notice of Disagreement" has the meaning specified in ss.2(e)(ii).

     (vv) "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

     (ww) "Party" or "Parties" has the meaning set forth in the preface above.

                                       9
<PAGE>

     (xx) "Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).

     (yy) "Promissory Note" has the meaning specified in ss.6(f) and is attached
as Exhibit C to the Reference Deed.

     (zz) "Purchase Price" shall mean the Base Purchase Price (A) plus an
amount, if any, equal to the amount by which the Closing Net Book Value exceeds
the Target Amount or (B) minus an amount, if any, equal to the amount by which
the Target Amount exceeds the Closing Net Book Value; provided, that any amount
in DEM shall be converted into Dollars based on the Euro Currency Exchange Rate
as of the Closing Date.

     (aaa) "Receivables Adjustment" has the meaning specified in ss.2(e)(vi).

     (bbb) "Reference Deed" means the notarised deed notarised on April 25, 2001
(UR 4/2001 of Notary Dr. Fritze) which contains all Exhibits and Annexes to this
Agreement, except the "Darlehensvereinbarung" and the "Guarantee" which are
attached to this deed.

     (ccc) "Registration Rights Agreement" has the meaning specified in ss.2(g)
and is attached as Exhibit A to the Reference Deed.

     (ddd) "Restricted Common Stock" means Buyer's common stock, par value US
$0.003 per share, the issuance of which to Augusta has not been registered under
the Securities Act.

     (eee) "RISO" means R.I.S.O. Haushaltswaren GmbH, Moringen (Amtsgericht
Northeim, HRB 1109).

     (fff) "SEC" has the meaning set forth in ss.6(h).

     (ggg) "SEC Documents" means all reports, schedules, registration statements
and other documents (including all exhibits and schedules thereto) required to
be filed by Buyer with the SEC on or after December 31, 1999.

     (hhh) "Securities Act" means the U.S. Securities Act of 1933, as amended.

     (iii) "Securities Exchange Act" means the U.S. Securities Exchange Act of
1934, as amended.

     (jjj) "Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money
liens and liens securing rental payments under capital lease arrangements, (d)
other liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money and (e) all similar encumbrances provided
for under German law.

     (kkk) "Shares" has the meaning specified in ss.3(b)(v)(3).

     (lll) "Specified Lien" means the land charge ("Grundschuld") in favor of
Commerzbank AG, Gottingen, registered in the land register ("Grundbuch") of
Moringen, Bl. 2947, Fl. 48, Flst. 75/1, 7092qm and B1.2947, Fl. 48, Flst. 74/1,
64qm in the amount of DEM 2,000,000.

                                       10
<PAGE>

     (mmm) "Stock Consideration" has the meaning specified in ss.2(b).

     (nnn) "Subsidiary" means, with respect to any specified Person, any other
Person which, directly or indirectly, is controlled by such Person.

     (ooo) "Target Amount" means DEM 3,000,000 based on U.S. GAAP.

     (ppp) "Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, sales, use, transfer, value added, trade taxes
("Gewerbesteuer"), or other tax of any kind whatsoever, imposed by any federal,
state, local or foreign governmental authority, including any interest, penalty,
or addition thereto, whether disputed or not.

     (qqq) "Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

     (rrr) "Third Party Claim" has the meaning set forth in ss.8(e) below.

     (sss) "U.S. GAAP" means United States generally accepted accounting
principles, as in effect from time to time.

2.   Purchase and Sale of Korona Shares.

     (a) Purchase and Sale. On the terms and subject to conditions set forth in
this Agreement, Augusta agrees to sell and transfer to Buyer, Buyer agrees to
purchase and accept from Augusta, all of the Korona Shares owned by Augusta for
the Purchase Price.

     (b) Payment at Closing. On the Closing Date, Buyer shall deliver to Augusta
(x) 65% of the Initial Payment in immediately available U.S. funds (the "Cash
Consideration") by wire transfers to (A) the Augusta Escrow Account of such
portion of the Cash Consideration as set forth in ss.2(d) and (B) a bank account
designated by Augusta in a written notice given to Buyer at least two Business
Days prior to the Closing of the remaining portion of the Cash Consideration
minus the amount withheld pursuant to ss.2(e)(vi) (the "Withholding") (if any),
and (y) one or more certificates registered in the name of Augusta representing
that number of fully paid and nonassessable shares of Buyer's Restricted Common
Stock (the "Stock Consideration") equal to (i) 35% of the Initial Payment,
divided by (ii) the Conversion Price, provided that the certificate representing
the portion of the Stock Consideration to be placed in escrow pursuant to
ss.2(d) will directly be placed in the Augusta Escrow Account. The Stock
Consideration will be "restricted," as that term is defined in Rule 144 adopted
under the Securities Act and subject to the Registration Rights Agreement
attached as Exhibit A to the Reference Deed.

     (c) Intentionally omitted.

                                       11
<PAGE>

     (d) Escrow Accounts. At the Closing, Buyer shall deliver, or cause to be
delivered, 12% of the Stock Consideration and 12% of the Cash Consideration (it
being understood that the aggregate value of the Augusta Escrow Account will be
in any event not less than DEM 1,000,000 computed based on the Conversion Price)
to be held in escrow to the escrow account to be established at a bank or law
firm proposed by Augusta with Buyer's consent (the "Augusta Escrow Account"). At
the Closing, Buyer shall remit the funds of the Withholding to be held in escrow
in the escrow account to be established at a bank or law firm proposed by Buyer
with Augusta's consent (the "Buyer Escrow Account") as provided for in
ss.2(e)(vi) below. Buyer Escrow Account and the cash portion of the Augusta
Escrow Account shall be interest bearing and all interest income, after
deduction of all fees and applicable Taxes, will be allocated one half to
Augusta and one half to Buyer. The Escrow Accounts shall be closed no later than
six months after the Closing Date and any balance or Stock Consideration
remaining in the respective Escrow Account shall be distributed to Buyer and
Augusta as provided herein.

     (e) Purchase Price Adjustment. (i) Not later than two (2) Business Days
prior to the Closing Date, Augusta shall prepare and deliver to Buyer a balance
sheet of Korona dated April 30, 2001 in accordance with GAAP and in a manner
consistent with that used to prepare the Financial Statements and reconciled to
U.S. GAAP (the "Closing Balance Sheet"), providing an estimate of the Closing
Net Book Value (the "Estimated Closing Net Book Value") based on U.S. GAAP.

          (ii) During the 60-day period following Buyer's receipt of the Closing
Balance Sheet, Buyer and (if applicable) Buyer's designated independent auditors
shall be permitted to review and make copies reasonably required of (x) the
working papers of Korona and, if relevant, its independent auditors relating to
the preparation of the Closing Balance Sheet and (y) any supporting schedules,
supporting analyses and other supporting documentation relating to the
preparation of the Closing Balance Sheet. The Closing Balance Sheet shall become
final and binding upon the Parties on the sixtieth day following delivery
thereof, unless Buyer gives written notice of disagreement with the Closing
Balance Sheet ("Notice of Disagreement") to Augusta prior to such date. Any
Notice of Disagreement shall (A) specify in reasonable detail the nature of any
disagreement so asserted, (B) only include disagreements based on mathematical
errors or based on Closing Net Book Value not being calculated in accordance
with this ss.2(e), (C) be accompanied by a certificate of Buyer that it has
complied with the covenants set forth in this ss.2(e) and (D) if Buyer's
independent auditors are engaged by Buyer in connection with the preparation of
the Notice of Disagreement, be accompanied by a certificate of Buyer's
independent auditors that they concur with each of the positions taken by Buyer
in the Notice of Disagreement. If a Notice of Disagreement complying with the
preceding sentence is received by Augusta in a timely manner, then the Closing
Balance Sheet (as revised in accordance with clause (I) or (II) below) shall
become final and binding upon the parties on the earlier of (I) the date Augusta
and Buyer resolve in writing any differences they have with respect to the
matters specified in the Notice of Disagreement or (II) the date any disputed
matters are finally resolved in writing by the Accounting Firm (as defined
below).

          (iii) During the 60-day period following Augusta's receipt of a Notice
of Disagreement that complies with the preceding paragraph, Buyer and Augusta
shall seek in good faith to resolve in writing any differences which they may
have with respect to the matters specified in the Notice of Disagreement. During
such period Augusta and its independent auditors shall be permitted to review
and make copies reasonably required of (x) the working papers of Buyer and, if
relevant, Buyer's designated independent auditors (if any) relating to the

                                       12
<PAGE>

preparation of the Notice of Disagreement and (y) any supporting schedules,
supporting analyses and other supporting documentation relating to the
preparation of the Notice of Disagreement. If, at the end of such 60-day period,
the differences as specified in the Notice of Disagreement are not resolved,
Augusta and Buyer shall submit to an independent accounting firm (the
"Accounting Firm") for review and resolution any and all matters which remain in
dispute and which are properly included in the Notice of Disagreement. The
Accounting Firm shall be the Frankfurt office of Deloitte Touche (or an other
mutually acceptable independent public accounting firm and office agreed upon by
the Parties in writing). Augusta and Buyer shall use reasonable efforts to cause
the Accounting Firm to render a decision resolving the matters in dispute within
30 days following the receipt of the submission of such matters by the
Accounting Firm. Upon receipt by Augusta and Buyer of such decision, either
Augusta and Buyer may request that judgment be entered upon the determination of
the Accounting Firm in any court having jurisdiction over the party against
which such determination is to be enforced. Except as specified in the following
sentence, the cost of any dispute resolution procedure (including the fees and
expenses of the Accounting Firm) pursuant to this ss.2(e) shall be borne by
Augusta, on the one hand, and Buyer, on the other hand, in inverse proportion as
they may prevail on matters resolved by the Accounting Firm, which proportionate
allocations shall be determined by the Accounting Firm at the time the decision
of the Accounting Firm is rendered on the merits of the matters submitted. The
fees and expenses of the Augusta's independent auditors (if any) incurred in
connection with the issuance of the Closing Balance Sheet shall be borne by
Augusta, and the fees and expenses of the independent auditors of Buyer incurred
in connection with their review of the Closing Balance Sheet shall be borne by
Buyer.

          (iv) If the Purchase Price is greater than the Initial Payment, Buyer
shall, within 10 Business Days after the Closing Balance Sheet becomes final and
binding upon the Parties, make payment to Augusta equal to the amount of such
difference, together with interest earned thereon, calculated on the basis of
the actual number of days elapsed and a 365-day year, from the Closing Date to
the date of actual payment, compounded annually, by delivering to Augusta (A)
65% of such difference and the accrued interest in immediately available U.S.
funds by wire transfer and (B) a certificate registered in the name of Augusta
representing that number of fully paid and nonassessable shares of Buyer's
Restricted Common Stock equal to (x) 35% of such difference and the accrued
interest, divided by (y) the Conversion Price. If the Initial Payment is greater
than the Purchase Price, Augusta shall, within 10 Business Days after the
Closing Balance Sheet becomes final and binding upon the parties, make payment
to Buyer equal to the amount of such difference, together with interest earned
thereon, calculated on the basis of the actual number of days elapsed and a
365-day year, from the Closing Date to the date of actual payment, compounded
annually, by delivering (I) 65% of such difference and the accrued interest in
immediately available U.S. funds by wire transfer and (II) Stock Consideration
equal to (1) 35% of such difference and the accrued interest, divided by (2) the
Conversion Price computed using the Conversion Price applied to determine the
Stock Consideration. Any Payment obligation of Augusta pursuant to the
proceeding sentence shall be satisfied by releasing first the founds and the
stock consideration held in the Augusta Escow amount. Any remaining balance in
the Augusta Escow account after the Purchase Price adjustment pursuant to
ss.2(e), (i)-(v) shall be paid out of Austria.

          (v) The term "Closing Net Book Value" means Closing Total Assets minus
Closing Total Liabilities (in each case as defined below). The term "Closing
Total Assets" means the total assets of Korona as of April 30, 2001, determined

                                       13
<PAGE>

in accordance with GAAP and reconciled to U.S. GAAP. The term "Closing Total
Liabilities" shall mean the sum of (x) total Liabilities of Korona as of April
30, 2001 (A) determined in accordance with GAAP and (B) determined in a manner
consistent with the determination of Liabilities of Korona for purposes of the
balance sheet of Korona at December 31, 2000 included in the Financial
Statements and reconciled to U.S. GAAP (it being understood and agreed that any
conflict between the principles specified in clauses (A) and (B) shall be
determined in the manner that would result in the greatest amount of
Liabilities), plus (y) any Liabilities arising upon the occurrence of, or as a
result of the consummation of, the Closing.

          (vi) Notwithstanding the foregoing, the Purchase Price shall be
adjusted in the amount of outstanding Korona's Doubtful Receivables (the
"Receivables Adjustment") as described in this clause (vi). "Doubtful
Receivables" means any receivable which is more than 60 days past due as of the
Closing Date and is listed in ss.2(e)(vi) of the Disclosure Schedule. At
Closing, Buyer will remit funds to Buyer Escrow Account in the aggregate amount
of the Doubtful Receivables. Buyer will use its reasonable best efforts to
collect the Doubtful Receivables. It is understood that any funds collected by
Buyer with respect to any customer will be applied first against any Doubtful
Receivable of such customer. Buyer will not discount any of the Doubtful
Receivables without Augusta's prior written consent. As Buyer and Augusta work
together to collect the Doubtful Receivables, the collected funds will be
remitted to Buyer. Augusta shall receive funds from the Withholding from Buyer
Escrow Account in the amount equal to the collected Doubtful Receivables. At the
end of six months from the Closing, Buyer will assign all remaining Doubtful
Receivables (if any) to Augusta and Buyer will receive any remaining funds
relating to the Doubtful Receivables from Buyer Escrow Account.

     (f) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Knauthe Paul
Schmitt, Eschersheimer Landstrasse 27 60322 Frankfurt am Main, Germany, or such
other place as mutually agreed by the Parties, commencing at 9:00 a.m. local
time on May 10, 2001, subject to the satisfaction or waiver of all conditions to
the obligations of the Parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective Parties
will take at the Closing itself), or such other date as Buyer and Augusta may
mutually determine (the "Closing Date").

     (g) Deliveries at the Closing. At the Closing, (i) Augusta will deliver to
Buyer the various certificates, instruments, and documents referred to in
ss.7(a) below, (ii) Buyer will deliver to Augusta the various certificates,
instruments, and documents referred to in ss.7(b) below, (iii) Augusta and Buyer
shall execute the Registration Rights Agreement in substantially the form
attached as Exhibit A to the Reference Deed ("Registration Rights Agreement"),
(iv) Augusta and Buyer will enter into a legally binding agreement on the
transfer of the Korona Shares, (v) Buyer will deliver to Augusta (A) the Cash
Consideration and (B) one or more certificates representing the Stock
Consideration of the Purchase Price, each as specified in ss.2(b) above, and
(vi) the Parties will deliver such other documents as Augusta or Buyer, as the
case may be, reasonably request in order to effectuate the transactions
contemplated by this Agreement to be consummated at the Closing. The stock
certificate(s) to be delivered by Buyer pursuant to this ss.2(g) shall bear the
following legend:

                                       14
<PAGE>

     The Securities represented by this certificate have not been
     registered under the Securities Act of 1933, as amended (the "Act"),
     and may not be sold or otherwise transferred unless (i) pursuant to an
     effective registration statement under the Act, (ii) in accordance
     with an exemption from registration under the Act, (iii), or unless
     sold pursuant to Rule 144 under the Act, or (iv) the registration
     requirements of the Act do not apply.

     (h) Transaction Effective Date. The Parties agree that in the event
the Closing occurs, the transfer of the economic interest and risk will be
deemed to have taken effect on May 1, 2001 (the "Effective Date").

3.   Representations and Warranties Concerning the Transaction.

     (a) Representations and Warranties of Augusta. Except as set forth in
Annex I attached to the Reference Deed, Augusta represents and warrants to
Buyer as of the date hereof as follows:

          (i) Organisation of Korona. Augusta is duly organised and validly
     existing under the laws of Germany. Augusta is the sole limited
     partner (with a capital contribution of DEM 1,000,000) of Korona, a
     German limited partnership (Amtsgericht Northeim, HRA 837). The sole
     general partner of Korona is the General Partner (Amtsgericht
     Frankfurt am Main, HRB 42322). Augusta owns 100% of the shares of the
     General Partner, namely one share in the nominal amount of DEM 50,000.

          (ii) Authorisation of Transaction. Augusta has full corporate
     power and authority to execute and deliver this Agreement and to
     perform its obligations hereunder. The execution, delivery and
     performance of this Agreement and the transactions contemplated hereby
     have been duly authorised and approved by the directors of Augusta and
     no other corporate proceedings on the part of Augusta are necessary to
     authorise and approve this Agreement and the transactions contemplated
     hereby. This Agreement constitutes subject to (x) the notarisation of
     this Agreement and (y) the notarised transfer of the share in the
     General Partner, the valid and legally binding obligation of Augusta,
     enforceable in accordance with its terms and conditions, except as
     enforceability may be limited by applicable bankruptcy, insolvency,
     reorganisation, moratorium, fraudulent transfer or similar laws
     affecting creditors' rights generally or by the principles governing
     the availability of equitable rights. Augusta need not give any notice
     to, make any filing with, or obtain any authorisation, consent, or
     approval of any government or governmental agency (a "Governmental
     Filing"), except for (A) Governmental Filings in respect of Taxes, (B)
     Governmental Filings that may be obtained or made in the Ordinary
     Course of Business of Augusta or Korona (as the case may be) and (C)
     such Government Filings the failure to obtain or make, as the case may
     be, would not in the aggregate reasonably be expected to have a
     Material Adverse Effect or have a material adverse effect on Augusta's
     ability to consummate the transactions contemplated by this Agreement.

                                    15
<PAGE>

          (iii) Noncontravention. Neither the execution and the delivery of
     this Agreement, nor the consummation of the transactions contemplated
     hereby, will violate the "Satzung" (articles of incorporation) of
     Augusta or will violate in any material respect any constitution,
     statute, regulation, rule, injunction, judgement, order, decree,
     ruling, charge, or other restriction of any government, governmental
     agency, or court to which Augusta or Korona is subject.

          (iv) Brokers' Fees. Augusta has no Liability or obligation to pay
     any fees or commissions to any broker, finder, or agent with respect
     to the transactions contemplated by this Agreement for which Buyer
     could become liable or obligated.

          (v) Investment. Augusta (A) understands that the transfer of
     Restricted Common Stock to Augusta has not been registered under the
     Securities Act, or under any applicable state securities laws, and is
     being offered and sold in reliance upon federal and state exemptions
     for transactions not involving any public offering, (B) is not a U.S.
     person (as defined in Rule 902(k) of Regulation S) and is not
     acquiring the Shares to be issued under this Agreement for the account
     or benefit of any U.S. person (as defined in Rule 902(k) of Regulation
     S), (C) will resell the Shares to be issued under this Agreement only
     in accordance with the provisions of Regulation S, pursuant to
     registration under the Securities Act, or pursuant to an available
     exemption from registration under the Securities Act, and (D) will not
     engage in hedging transactions with regard to the Shares to be issued
     under this Agreement unless in compliance with the Securities Act.

          (vi) Korona Shares. Augusta holds of record and owns beneficially
     100% of the Korona Shares, free and clear of any restrictions on
     transfer (other than any restrictions (A) under the Securities Act and
     state securities laws or (B) contained in the Gesellschaftsvertrag of
     Korona, Taxes, Security Interests, options, warrants, purchase rights,
     contracts, commitments, equities, claims, and demands. Augusta is not
     a party to any option, warrant, purchase right, or other contract or
     commitment that could require Augusta to sell, transfer, or otherwise
     dispose of any of Korona's capital stock (other than this Agreement).
     Augusta is not a party to any voting trust, proxy, or other agreement
     or understanding with respect to the voting of any capital stock of
     Korona.

     (b) Representations and Warranties of Buyer. Except as set forth in
Annex II attached to the Reference Deed, Buyer represents and warrants to
Augusta as of the date hereof as follows:

          (i) Organisation of Buyer. Buyer is a corporation duly organizsd,
     validly existing, and in good standing under the laws of the British
     Virgin Islands.

          (ii) Authorisation of Transaction. Buyer has full power and
     authority (including full corporate power and authority) to execute
     and deliver this Agreement and to perform its obligations hereunder.
     The execution, delivery and performance of this Agreement and the
     transactions contemplated hereby have been duly authorised and
     approved by the board of directors of Buyer and neither any other
     corporate proceedings on the part of Buyer nor any action by the
     shareholders of Buyer are necessary to authorise and approve this

                                    16
<PAGE>

     Agreement and the transactions contemplated hereby. This Agreement
     constitutes the valid and legally binding obligation of Buyer,
     enforceable in accordance with its terms and conditions, except as
     enforceability may be limited by applicable bankruptcy, insolvency,
     reorganisation, moratorium, fraudulent transfer or similar laws
     affecting creditors' rights generally or by the principles governing
     the availability of equitable rights. Buyer need not give any notice
     to, make any filing with, or obtain any authorisation, consent, or
     approval of any government or governmental agency in order to
     consummate the transactions contemplated by this Agreement.

          (iii) Noncontravention. Neither the execution and the delivery of
     this Agreement, nor the consummation of the transactions contemplated
     hereby, will violate Memorandum and Articles of Association of Buyer,
     or will violate in any material respect any constitution, statute,
     regulation, rule, injunction, judgement, order, decree, ruling,
     charge, or other restriction of any government, governmental agency,
     or court to which Buyer is subject or any provision of its charter or
     bylaws.

          (iv) Brokers' Fees. Buyer has no Liability or obligation to pay
     any fees or commissions to any broker, finder, or agent with respect
     to the transactions contemplated by this Agreement for which Augusta
     could become liable or obligated.

          (v) Capitalization. (1) The authorised capital stock of Buyer
     consists of 23,333,334 shares of common stock, $0.003 par value per
     share. As of the date of this Agreement, only 5,496,133 shares of
     Common Stock of Buyer ($0.003 par value) are issued and outstanding.

          (2) Buyer has sufficient funds to complete payment of the Cash
     Consideration of the Purchase Price hereunder.

          (3) Buyer's shares of Restricted Common Stock to be issued to
     Augusta pursuant to ss.2 of this Agreement (the "Shares") have been,
     or prior to the Closing will be, duly authorised, and such Shares,
     when issued and delivered to Augusta pursuant to this Agreement, shall
     be validly issued, fully paid and non-assessable shares, free of any
     liens, encumbrance and restriction other than the restrictions set
     forth in ss.2(g).

          (vi) Litigation. There is no litigation, proceeding or
     investigation of any nature pending or, to Buyer's Knowledge,
     threatened against or affecting Buyer that would affect the ability of
     Buyer fully to carry out the transactions contemplated by this
     Agreement nor, to the Knowledge of Buyer, after due and careful
     inquiry, is there any Basis for any such litigation, proceeding or
     investigation.

          (vii) Investment Intent of Buyer. Buyer is buying and receiving
     the Korona Shares to be delivered pursuant to this Agreement for
     investment purposes for its own account, and not with the view to or
     in connection with any distribution thereof. Buyer understands that

                                    17
<PAGE>

     its purchase of the Korona Shares has not been registered under the
     Securities Act or applicable securities laws of any other jurisdiction
     and that the Korona Shares may not be sold, assigned, offered for
     sale, pledged or otherwise transferred unless such transaction is
     registered under the Securities Act and applicable securities laws of
     any other jurisdiction, or exemptions for such requirements are
     available or such requirements are not applicable. Buyer is an
     "accredited investor", as the term is defined in Rule 501(a) under the
     Securities Act, and its management has such knowledge and experience
     in financial matters as make it capable of evaluating the merits and
     risks of the purchase of the Korona Shares upon the terms of this
     Agreement.

          (viii) SEC Documents; Financial Information. Augusta has had
     access to Buyer's SEC Documents on the SEC's web site which contains
     true and complete copies of all SEC Documents filed with the SEC. As
     of their respective filing dates, the SEC Documents complied in all
     material respects with the requirements of the Securities Act, the
     Exchange Act and the rules and regulations of the SEC thereunder
     applicable to such SEC Documents, and as of their respective dates
     none of the SEC Documents contained any untrue statement of a material
     fact or omitted to state a material fact required to be stated therein
     or necessary in order to make the statements therein, in light of the
     circumstances under which they were made, not misleading. The
     financial statements of Buyer and its Material Subsidiaries included
     in the SEC Documents comply as of their respective dates in all
     material respects with applicable accounting requirements and the
     rules and regulations of the SEC with respect thereto (except as may
     be indicated in the notes thereto) and present fairly in all material
     respects as of their respective dates the consolidated financial
     position of Buyer and its Subsidiaries as at the dates thereof and the
     consolidated results of their operations and their consolidated cash
     flows for each of the respective periods, in conformity with U.S.
     GAAP.

          (2) Except as and to the extent expressly set forth in the
     balance sheet, or the notes, schedules or exhibits thereto, or as
     disclosed in the SEC Documents, (i) as of December 31, 2000, neither
     Buyer nor the Material Subsidiaries had any material liabilities or
     obligations (whether absolute, contingent, accrued or otherwise) that
     would be required to be included on a balance sheet or in the notes,
     schedules or exhibits thereto prepared in accordance with U.S. GAAP.

4.   Representations and Warranties Concerning Korona. Except as set forth
in the disclosure schedule delivered by Augusta to Buyer on the date hereof
(the "Disclosure Schedule"), Augusta represents and warrants to Buyer as of
the date hereof as follows:

     (a) Organisation, Qualification, and Corporate Power. Korona is a
German limited partnership duly organised and validly existing under the
laws of Germany. The General Partner is a German limited liability company
duly organised and validly existing under the laws of Germany. Korona has
full corporate power and authority, and all licenses, permits, and
authorisations, necessary to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it, with such
exceptions which would not reasonably be expected to have a Material

                                    18
<PAGE>

Adverse Effect. Section 4(a) of the Disclosure Schedule lists the General
Partner's managing directors. Augusta has delivered to Buyer correct and
complete copies of the "Satzung" (articles of association) of the General
Partner and the "Gesellschaftsvertrag" (partnership agreement) (each as
amended to date) of Korona. Neither Korona nor the General Partner is in
default under or in violation of any provision of its Satzung or
Gesellschaftsvertrag, respectively, with such exceptions which would not
reasonably be expected to have a Material Adverse Effect.

     (b) Capitalization. The entire paid in capital contribution of Augusta
in Korona consists of DEM 1,000,000. There is no capital contribution of
the General Partner in Korona. The sole existing share in the General
Partner in the nominal amount of DEM 50,000 is validly issued, fully paid,
and non-assessable, and is held of record by Augusta. There are no
outstanding or authorised options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or
commitments that could require Korona to issue, sell, or otherwise cause to
become outstanding any of its capital stock. There are no outstanding or
authorised stock appreciation, phantom stock, profit participation, or
similar rights with respect to Korona or the General Partner. There are no
voting trusts, proxies, or other agreements or understandings with respect
to the voting of any of Korona's equity interest.

     (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgement, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Korona is subject or any
provision of the Gesellschaftsvertrag of Korona or Satzung of the General
Partner or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to
which Korona is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Security Interest
upon any of its assets), with such exceptions which would not reasonably be
expected to have a Material Adverse Effect or have a material adverse
effect on Augusta's ability to consummate the transactions contemplated by
this Agreement. Korona does not need to give any notice to, make any filing
with, or obtain any authorisation, consent, or approval of any government
or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement except for (A) Governmental
Filings in respect of Taxes, (B) Governmental Filings that may be obtained
or made in the Ordinary Course of Business of Korona and (C) such
Government Filings the failure to obtain or make, as the case may be, would
not in the aggregate reasonably be expected to have a Material Adverse
Effect or have a material adverse effect on Augusta's ability to consummate
the transactions contemplated by this Agreement.

     (d) Brokers' Fees. Korona has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

     (e) Title to Assets. Korona has good and marketable title to, or a
valid leasehold interest in, the properties and assets reflected on the
Most Recent Balance Sheet or acquired after the date thereof, free and
clear of all Security Interests, except for (i) the Specified Lien and (ii)
properties and assets disposed of in the Ordinary Course of Business since
the date of the Most Recent Balance Sheet, with such exceptions which would
not reasonably be expected to have a Material Adverse Effect.

                                    19
<PAGE>

     (f) Subsidiaries. Section 4(f) of the Disclosure Schedule sets forth
for each Subsidiary of Korona as of the date of this Agreement (i) its name
and jurisdiction of incorporation, (ii) the number of shares of authorised
capital stock of each class of its capital stock, (iii) the number of
issued and outstanding shares of each class of its capital stock, the names
of the holders thereof, and the number of shares held by each such holder,
and (iv) the number of shares of its capital stock held in treasury. All of
the issued and outstanding shares of capital stock of each Subsidiary of
Korona have been duly authorised and are validly issued, fully paid, and
non-assessable. Korona holds of record and owns beneficially all of the
outstanding shares of each Subsidiary of Korona, free and clear of any
restrictions on transfer (other than restrictions under the Securities Act
and state securities laws), Taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands.
Subject to ss.6(i), there are no outstanding or authorised options,
warrants, purchase rights, conversion rights, exchange rights, or other
contracts or commitments that could require Korona to sell, transfer, or
otherwise dispose of any capital stock of any of its Subsidiaries or that
could require any Subsidiary of Korona to issue, sell, or otherwise cause
to become outstanding any of its capital stock. There are no outstanding
stock appreciation, phantom stock, profit participation, or similar rights
with respect to any Subsidiary of Korona. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting
of any capital stock of any Subsidiary of Korona. Augusta expressly
warrants that neither Korona nor Buyer bears any risk or obligation arising
out of the former business of, or the former participation in, AUGUSTA
Venture GmbH, Frankfurt am Main (previously a subsidiary of Korona under
the firm name Richardson Sheffield GmbH). Augusta further expressly
warrants that neither Korona nor Buyer bears any risk or obligation arising
out of the former business of, or the former participation in, RISO.

     (g) Financial Statements. Attached to the Reference Deed as Exhibit B
are the following financial statements (collectively the "Financial
Statements"): (i) audited consolidated balance sheets and statements of
income, changes in stockholders' equity, and cash flow as of and for the
fiscal years ended December 31, 1998, December 31, 1999, and December 31,
2000 (the "Most Recent Fiscal Year End") for Korona; and (ii) unaudited
consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flow (the "Most Recent Financial
Statements") as of and for the month ended March 31, 2001 for Korona and
the General Partner. The Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly in all material respects the financial
condition of Korona as of such dates and the results of operations of
Korona for such periods, are correct and complete, and are consistent with
the books and records of Korona (which books and records are correct and
complete); provided, however, that the Most Recent Financial Statements are
subject to normal year-end adjustments (which will not be material, i.e.,
more than DEM 50,000, individually or in the aggregate) and lack footnotes
and other presentation items.

     (h) Events Subsequent to Most Recent Fiscal Year End. Since the Most
Recent Fiscal Year End and prior to the date of this Agreement, there has
not been any Material Adverse Effect. Without limiting the generality of
the foregoing, since the Most Recent Fiscal Year End, except as
specifically contemplated by this Agreement, to the best of Augusta's
Knowledge:

                                    20
<PAGE>

          (i) Subject toss.6(i), Korona has not sold, leased, transferred,
     or assigned any of its assets, tangible or intangible, other than in
     the Ordinary Course of Business;

          (ii) Korona has not entered into any agreement, contract, lease,
     or license (or series of related agreements, contracts, leases, and
     licenses) involving more than DEM 60,000;

          (iii) No party (including Korona and the General Partner) has
     accelerated, terminated, modified, or cancelled any material
     agreement, contract, lease, or license (or series of related
     agreements, contracts, leases, and licenses) involving a remaining
     payment of more than DEM 10,000 to which any of Korona is a party or
     by which any of them is bound other than in the Ordinary Course of
     Business;

          (iv) Korona has not imposed any Security Interest or in any other
     way encumbered any of its material assets, tangible or intangible
     other than in the Ordinary Course of Business;

          (v) Korona has not made any capital expenditure (or series of
     related capital expenditures) involving more than DEM 60,000 other
     than in the Ordinary Course of Business;

          (vi) Korona has not made any capital investment in, any loan to,
     or any acquisition of the securities or assets of, any other Person
     (or series of related capital investments, loans, and acquisitions)
     involving more than DEM 60,000 other than in the Ordinary Course of
     Business;

          (vii) Korona has not issued any note, bond, or other debt
     security or created, incurred, assumed, or guaranteed any indebtedness
     for borrowed money or capitalised lease obligation either involving
     more than DEM 50,000 singly or DEM 100,000 in the aggregate other than
     in the Ordinary Course of Business;

          (viii) Korona has not delayed or postponed the payment of
     accounts payable and other Liabilities outside the Ordinary Course of
     Business;

          (ix) Korona has not cancelled, compromised, waived, or released
     any right or claim (or series of related rights and claims) either
     involving more than DEM 25,000 or outside the Ordinary Course of
     Business;

          (x) Korona has not issued, sold, or otherwise disposed of any of
     its capital stock or granted any options, warrants, or other rights to
     purchase or obtain (including upon conversion, exchange, or exercise)
     any of its capital stock;

                                    21
<PAGE>

          (xi) Korona has not declared, set aside, or paid any dividend or
     made any distribution with respect to its capital stock (whether in
     cash or in kind) or redeemed, purchased, or otherwise acquired any of
     its capital stock;

          (xii) Korona has not experienced any damage, destruction, or loss
     (whether or not covered by insurance) to any of its property which is
     material to its business;

          (xiii) Neither Korona nor the General Partner has made any loan
     to, or entered into any other transaction with, any of its directors
     and employees outside the Ordinary Course of Business;

          (xiv) Neither Korona nor the General Partner has entered into any
     material employment contract or collective bargaining agreement,
     written or oral, or modified the terms of any existing such contract
     or agreement;

          (xv) Neither Korona nor the General Partner has granted any
     material increase in the base compensation of any of its directors and
     employees outside the Ordinary Course of Business;

          (xvi) Korona has not adopted, amended, modified, or terminated
     any material bonus, profit-sharing, incentive, severance, or other
     plan, contract, or commitment for the benefit of any of its directors
     and employees outside the Ordinary Course of Business.

          (xvii) Korona has not made any other material change in
     employment terms for any of its directors and employees outside the
     Ordinary Course of Business;

          (xviii) Korona has not made or pledged to make any material
     charitable or other capital contribution outside the Ordinary Course
     of Business; and

          (xix) Korona has not committed to any of the foregoing.

     (i) Undisclosed Liabilities. Korona has no Liability (and there is no
Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them
giving rise to any Liability), except for (i) Liabilities reflected or
reserved against in the Most Recent Balance Sheet, (ii) Liabilities which
have arisen after March 31, 2001 in the Ordinary Course of Business, (iii)
such other liabilities as are not required to be reflected on a balance
sheet of Korona prepared in accordance with GAAP or in a manner consistent
with the preparation of the Financial Statements and (iv) liabilities for
Taxes, except for such Taxes as allocated pursuant to ss.9.

     (j) Legal Compliance. Korona and its Subsidiaries are in compliance
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgements, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all agencies
thereof) with such exceptions which would not reasonably be expected to
have a Material Adverse Effect, and, to the best of Augusta's Knowledge, no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging
any failure so to comply.

                                    22
<PAGE>

     (k) Tax Matters.

          (i) To the best of Augusta's Knowledge, Korona and the General
     Partner have filed all Tax Returns that they were required to file as
     follows:

          Korona has filed the VAT returns including the year 1999, the
     trade tax returns, including the year 1999, the uniform and specified
     income determination (,,einheitliche und gesonderte
     Gewinnfeststellung") including the year 1999, the VAT monthly
     prepayment notice including February 2001, the monthly wage tax filing
     until March 2001.

          The General Partner has filed the VAT returns including the year
     1999, the trade tax returns including the year 1999, the corporate tax
     including the year 1999, the assessment of the distributable equity
     capital ("Verwendbares Eigenkapital") according to (ss. 47 KStG -
     German Corporate Tax Act) until the year 1999.

          For RISO the filings have been made in accordance with the
     filings of the General Partner. All the relevant assessment notes
     ("Steuerbescheide") are with the company, except, with respect to the
     trade tax and the VAT of the General Partner and RISO, because of the
     integrated inter-company relation ("steuerliches
     Organschaftsverhaltnis") to Augusta.

          There are no objections filed to the tax authorities.

          All such Tax Returns were correct and complete in all respects.
     All Taxes due (whether or not shown on any Tax Return) have been paid
     by Korona and the General Partner, respectively. No claim has ever
     been made by an authority in a jurisdiction where Korona does not file
     Tax Returns that it is or may be subject to taxation by that
     jurisdiction. There are no Security Interests on any of Korona's
     assets that arose in connection with any failure (or alleged failure)
     to pay any Tax.

          (ii) To the best of Augusta's Knowledge, Korona and the General
     Partner have withheld and paid all Taxes required to have been
     withheld and paid in connection with amounts paid or owing to any
     employee, independent contractor, creditor, stockholder, or other
     third party, except with respect to the VAT monthly prepayment notice
     March 2001, which will be paid on May 10th, 2001 in accordance with
     the Tax authorities.

          (iii) To the best of Augusta's Knowledge, no managing director
     (or employee responsible for Tax matters) of Korona expects any
     authority to assess any additional Taxes for any period for which Tax
     Returns have been filed, except as mentioned in Section ss. 4 (k)(iii)
     of the Disclosure Schedule. To the best of Augusta's Knowledge, there
     is no dispute or claim concerning any Tax Liability of Korona either
     (A) claimed or raised by any authority in writing or (B) as to which
     Korona's managing directors (and employees responsible for Tax
     matters) has knowledge based upon personal contact with any agent of
     such authority. Section 4(k) of the Disclosure Schedule lists all
     federal, state, local, and foreign income Tax Returns filed with

                                    23
<PAGE>

     respect to Korona and the General Partner for taxable periods ended on
     or after December 31, 2000. The most recent governmental tax
     assessment ("Betriebsprufung") is listed in Section 4(k)(iii) of the
     Disclosure Schedule. Korona has delivered to Buyer correct and
     complete copies of trade tax returns from 1996 until 1999 of Korona
     and the corporate tax returns of the General Partner since 1997.

          (iv) To the best of Augusta's Knowledge, Korona and the General
     Partner have not waived any statute of limitations in respect of Taxes
     or agreed to any extension of time with respect to a Tax assessment or
     deficiency.

          (v) To the best of Augusta's Knowledge, the unpaid Taxes of
     Korona (A) did not, as of March 31, 2001, exceed the reserve for Tax
     Liability (rather than any reserve for deferred Taxes established to
     reflect timing differences between book and Tax income) set forth on
     the face of the Most Recent Balance Sheet and (B) do not exceed that
     reserve as adjusted for the passage of time through the Closing Date
     in accordance with the past custom and practice of Korona in filing
     its Tax Returns.

          (vi) To the best of Augusta's Knowledge, all warranties as set
     forth under (i) to (v) above shall also apply to Subsidiaries and to
     legal predecessors of Korona.

(l)  Real Property.

          (i) Section 4(l)(i) of the Disclosure Schedule lists and
     describes briefly all real property that Korona owns. Buyer has
     received current excerpts from the respective land registers. With
     respect to each such parcel of owned real property:

          (a)  the identified owner is the rightful owner of the parcel of
               real property, free and clear of any Security Interest,
               easement, covenant, or other restriction, except for (A) the
               Specified Lien, (B) installments of special assessments not
               yet delinquent and (C) recorded easements, covenants, and
               other restrictions; and

          (b)  all facilities have received all approvals of governmental
               authorities (including licenses and permits) required in
               connection with the ownership or operation thereof and have
               been operated and maintained in accordance with applicable
               laws, rules, and regulations with such exceptions which
               would not reasonably be expected to have a Material Adverse
               Effect;

          (ii) Section 4(l)(ii) of the Disclosure Schedule lists and
     describes briefly all real property leased or subleased to Korona.
     Augusta has delivered to Buyer correct and complete copies of the
     leases and subleases listed in ss.4(l)(ii) of the Disclosure Schedule
     (as amended to date). With respect to each lease and sublease listed
     in ss.4(l)(ii) of the Disclosure Schedule with such exceptions which
     would not reasonably be expected to have a Material Adverse Effect:

                                    24
<PAGE>

          (a)  the lease or sublease is legal, valid, binding, enforceable,
               and in full force and effect in accordance with its terms,
               except that such enforcement may be limited by any
               bankruptcy, insolvency, reorganisation, moratorium,
               fraudulent transfer or other laws (whether statutory,
               regulatory or decisional), now or hereafter in effect,
               relating to or affecting the rights of creditors generally
               or by equitable principles (regardless of whether considered
               in a proceeding at law or in equity);

          (b)  the lease or sublease will not be effected by the
               consummation of the transactions contemplated hereby;

          (c)  no party to the lease or sublease is in breach or default in
               any material respect, and, to the Knowledge of Augusta, no
               event has occurred which, with notice or lapse of time,
               would constitute a material breach or default or permit
               termination, modification, or acceleration thereunder;

          (d)  there are no material disputes or oral agreements in effect
               as to the lease or sublease;

          (e)  Korona has not assigned, transferred, conveyed, mortgaged,
               deeded in trust, or encumbered any interest in the leasehold
               or subleasehold;

          (f)  all facilities leased or subleased thereunder have received
               all material approvals of governmental authorities
               (including licenses and permits) required in connection with
               the operation thereof and have been operated and maintained
               in accordance with applicable laws, rules, and regulations;
               and

          (g)  all facilities leased or subleased thereunder have direct
               access to utilities and other services necessary for the
               operation of said facilities.

(m)  Intellectual Property.

          (i) Korona owns, or has the right to use pursuant to license,
     sublicense, agreement, or permission, all Intellectual Property
     necessary for the operation of the businesses of Korona as presently
     conducted.

          (ii) To the Knowledge of Augusta, Korona has not interfered with,
     infringed upon, misappropriated, or otherwise come into conflict with
     any Intellectual Property rights of third parties, and none of the
     managing directors (and employees with responsibility for Intellectual
     Property matters) of Korona has received any charge, complaint, claim,
     demand, or notice alleging any such interference, infringement,
     misappropriation, or violation (including any claim that Korona must
     license or refrain from using any Intellectual Property rights of any

                                    25
<PAGE>

     third party) which is still pending and which is reasonably likely to
     be adversely determined and which, if adversely determined, would
     reasonably be expected to have a Material Adverse Effect. To the
     Knowledge of Augusta, no third party has interfered with, infringed
     upon, misappropriated, or otherwise come into conflict with any of
     Korona's Intellectual Property rights.

          (iii) Section 4(m)(iii) of the Disclosure Schedule identifies
     each patent or registration which has been issued to Korona with
     respect to any of its Intellectual Property, identifies each pending
     patent application or application for registration which Korona has
     made with respect to any of its Intellectual Property, and identifies
     each license, agreement, or other permission which Korona has granted
     to any third party with respect to any of its Intellectual Property
     (together with any exceptions). Korona has delivered to Buyer correct
     and complete copies of all such patents, registrations, applications,
     licenses, agreements, and permissions (as amended to date). Section
     4(m)(iii) of the Disclosure Schedule also identifies each trade name
     or registered trademark used by Korona in connection with any of its
     businesses including, but not limited to, the name "Korona" and
     identifies each country or jurisdiction in which it has registered and
     currently maintains the trademark or trade name. With respect to each
     item of Intellectual Property identified in ss.4(m)(iii) of the
     Disclosure Schedule:

          (1) Korona possesses all right, title, and interest in and to the
          item, free and clear of any Security Interest, license, or other
          restriction;

          (2) the item is, to the best of Augusta's Knowledge, not subject
          to any outstanding injunction, judgment, order, decree, ruling,
          or charge;

          (3) to the best of Augusta's Knowledge, no action, suit,
          proceeding, hearing, investigation, charge, complaint, claim, or
          demand is pending or is threatened which challenges the legality,
          validity, enforceability, use, or ownership of the item; and

          (4) to the best of Augusta's Knowledge, Korona is under no
          obligation to indemnify any Person for or against any
          interference, infringement, misappropriation, or other conflict
          with respect to the item.

          (iv) Section 4(m)(iv) of the Disclosure Schedule identifies each
     material item of Intellectual Property that any third party owns and
     that Korona uses pursuant to license, sublicense, agreement, or
     permission. Korona has delivered to Buyer correct and complete copies
     of all such licenses, sublicenses, agreements, and permissions (as
     amended to the date hereof). With respect to each item of Intellectual
     Property identified in ss.4(m)(iv) of the Disclosure Schedule:

                                    26
<PAGE>

          (1) the license, sublicense, agreement, or permission covering
          the item is legal, valid, binding, enforceable, and in full force
          and effect, except as enforceability may be limited by applicable
          bankruptcy, insolvency, reorganization, moratorium, fraudulent
          transfer or similar laws affecting creditors' rights generally or
          by the principles governing the availability of equity rights;

          (2) to the best of Augusta's Knowledge, no party to the license,
          sublicense, agreement, or permission is in breach or default, and
          no event has occurred which with notice or lapse of time would
          constitute a breach or default or permit termination,
          modification, or acceleration thereunder;

          (3) to the best of Augusta's Knowledge, no party to the license,
          sublicense, agreement, or permission has repudiated any provision
          thereof; and

          (4) Korona has not granted any sublicense or similar right with
          respect to the license, sublicense, agreement, or permission.

     (n) Sufficiency of Assets. All material tangible assets are free from
known defects, have been maintained in accordance with normal industry
practice, are in good operating condition and repair (normal wear and tear
excepted), and are suitable for the purposes for which they are used, with
such exceptions which would not reasonably be expected to have a Material
Adverse Effect.

     (o) Inventory. Korona's inventory consists of supplies, purchased
parts and finished goods, all of which is usable and salable in the
Ordinary Course of Business, not obsolete, damaged or defective, subject to
the reserve for inventory writedown set forth on the Most Recent Balance
Sheet (or in the notes thereto) as adjusted for the passage of time through
the Closing Date in accordance with Korona's custom and practice.

     (p) Contracts. Section 4(p) of the Disclosure Schedule lists the
following contracts and other agreements to which Korona is a party:

          (i) any agreement (or group of related agreements) for the lease
     of personal property to or from any Person providing for lease
     payments in excess of DEM 25,000 per annum;

          (ii) any agreement (or group of related agreements) for the
     purchase or sale of supplies, products, or other personal property, or
     for the furnishing or receipt of services, the performance of which
     will extend over a period of more than one year, result in a material
     loss to Korona or involve consideration in excess of DEM 50,000 per
     annum;

          (iii) any agreement concerning a partnership or joint venture;

          (iv) any agreement (or group of related agreements) under which
     it has created, incurred, assumed, or guaranteed any indebtedness for
     borrowed money, or any capitalized lease obligation, in excess of DEM
     50,000 or under which it has imposed a Security Interest on any of its
     assets, tangible or intangible;

                                    27
<PAGE>

          (v) any agreement concerning confidentiality or non-competition;

          (vi) any agreement with Augusta or any of Augusta's directors;

          (vii) any profit sharing, stock option, stock purchase, stock
     appreciation, deferred compensation, severance, or other material plan
     or arrangement for the benefit of its current or former directors, and
     employees;

          (viii) any collective bargaining agreement;

          (ix) any agreement for the employment of any individual on a
     full-time, part-time, consulting, or other basis providing annual
     compensation in excess of DEM 100,000 or providing severance benefits;

          (x) any agreement under which it has advanced or lent any amount
     of money to any of its directors and employees outside the Ordinary
     Course of Business; and

          (xi) any other agreement (or group of related agreements) the
     performance of which involves consideration in excess of DEM 50,000.

Augusta has delivered to Buyer a correct and complete copy of each written
agreement listed in ss.4(p) of the Disclosure Schedule (as amended to the date
hereof). With respect to each such agreement: (A) the agreement is legal, valid,
binding, enforceable, and in full force and effect, except that such enforcement
may be limited by any bankruptcy, insolvency, reorganisation, moratorium,
fraudulent transfer or other laws (whether statutory, regulatory or decisional),
now or hereafter in effect, relating to or affecting the rights of creditors
generally or by equitable principles (regardless of whether considered in a
proceeding at law or in equity); (B) the agreement will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby; (C) to the
Knowledge of Augusta, no party is in breach or default in any material respect,
and no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the agreement; and (D) no party has repudiated any provision of the agreement,
in each case, with such exceptions which would not reasonably be expected to
have a Material Adverse Effect.

     (q) Accounts Receivable. Except for the Doubtful Receivables pursuant
toss.2(e)(vi), all of Korona's accounts receivable are reflected properly
on its books and records and are believed to be collectible.

     (r) Powers of Attorney. There are no outstanding powers of attorney
executed by Korona.

     (s) Insurance. Section 4(s) of the Disclosure Schedule contains a
complete and correct list and summary description (including only the name
of the insurer, coverage, premium and expiration date) of all policies of
insurance relating to the business or assets of Korona which are in force
as of the date hereof, maintained by Korona. Augusta has delivered to Buyer
or provided Buyer with access to true and complete copies of all binders
with respect to such policies of insurance. Such policies are in full force
and effect.

                                    28
<PAGE>

     (t) Litigation. Section 4(t) of the Disclosure Schedule sets forth
each instance in which Korona (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to the
Knowledge of Augusta, is threatened in writing to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator, in each case,
which is reasonably likely to be adversely determined and which, if
adversely determined, would reasonably be expected to have a Material
Adverse Effect.

     (u) Product Warranty. To Augusta's Knowledge, since 1998 and as of the
date hereof, Korona has not experienced any material warranty claims
resulting from or arising out of the warranties described in ss.4(u) of the
Disclosure Schedule other than (i) in the Ordinary Course of Business or
(ii) as reflected or reserved against in the Most Recent Balance Sheet.

     (v) Product Liability. To Augusta's Knowledge, Korona has no Liability
arising out of any injury to individuals caused by a product sold by Korona
and RISO, except for Liabilities disclosed, reflected or reserved against
on the Most Recent Balance Sheets.

     (w) Employees. To the Knowledge of Augusta, no executive, key
employee, or group of employees has any plans to terminate employment with
Korona. Korona is not a party to or bound by any collective bargaining
agreement. As of the date of this Agreement, there are no labor strikes,
grievances, claims of unfair labor practices, or other collective
bargaining dispute. To the Knowledge of Augusta, there is not any
organisational effort presently being made or threatened by or on behalf of
any labor union with respect to Korona's employees.

     (x) Guaranties. Korona is not a guarantor or is otherwise liable for
any Liability or obligation (including indebtedness) of any other Person.

     (y) Environment, Health, and Safety.

          (i) Korona and its Subsidiaries have in all material respects
     complied with all Environmental, Health, and Safety Laws with such
     exceptions which would not reasonably be expected to have a Material
     Adverse Effect. Without limiting the generality of the preceding
     sentence, Korona and its Subsidiaries have obtained and been in
     compliance in all material respects with the terms and conditions of
     all material permits, licenses, and other authorisations which are
     required under, and have in all material respects complied with all
     other material limitations, restrictions, conditions, standards,
     prohibitions, requirements and obligations which are contained in, all
     Environmental, Health, and Safety Laws.

          (ii) Except for each Liability disclosed, reflected or reserved
     against in the Financial Statements, Korona has no Liability (and none
     of Korona or its Subsidiaries has handled or disposed of any
     substance, arranged for the disposal of any substance, exposed any
     employee or other individual to any substance or condition, or owned

                                    29
<PAGE>

     or operated any property or facility in any manner that could form the
     Basis for any present or future action, suit, proceeding,
     investigation, charge, complaint, claim, or demand against Korona
     giving rise to any Liability) for damage to any site, location, or
     body of water (surface or subsurface), for any illness of or personal
     injury to any employee or other individual, or for any reason under
     any Environmental, Health, and Safety Law.

          (iii) To the best of Augusta's Knowledge, all properties and
     equipment used in Korona's business have been free of asbestos, PCB's,
     methylene chloride, trichloroethylene, 1,2-trans-dichloroethylene,
     dioxins, dibenzofurans, and Hazardous Substances.

     (z) Certain Business Relationships with Korona. None of Augusta's
shareholders have been involved in any business arrangement or relationship
with Korona within the past 12 months, and none of Augusta or its
Affiliates owns any asset, tangible or intangible, which is used in the
business of Korona's shareholders, other than the outstanding shareholder
loans ("Gesellschafterdarlehen") in the amount of DEM 2,300,000 plus
accrued interest and the variable capital (`variables Kapital") in the
amount of DEM 1,500,000 plus accrued interest. Buyer agrees and
acknowledges that it is aware of the fact, that Mr. Haas is a shareholder
of Augusta, CEO of Augusta and a managing director of General Partner.

5.   Pre-Closing Covenants. The Parties covenant and agree as follows with
respect to the period between the execution of this Agreement and the
Closing:

     (a) General. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in
order to consummate and make effective the transactions contemplated by
this Agreement (including satisfaction, but not waiver, of the closing
conditions set forth in ss.7 below).

     (b) Notices and Consents. Augusta will cause Korona to give any
notices to third parties, and will cause Korona to use its best efforts to
obtain any third party consents, that Buyer may request in connection with
the matters referred to in ss.4(c) above. Each of the Parties will (and
Augusta will cause Korona to) give any notices to, make any filings with,
and use its best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection with the
matters referred to in ss.3(a)(ii), ss.3(b)(ii), and ss.4(c) above. Without
limiting the generality of the foregoing, each of the Parties will file
(and Augusta will cause Korona to file) any notification and report forms
and related material that it may be required to file with the German
Anti-Trust authorities, if necessary. Augusta shall use its reasonable
efforts to ensure that the current loan agreements of Korona, referring to
the borrower being a subsidiary of Augusta shall be amended to reflect the
new ownership, and Buyer will use its reasonable efforts to accomplish the
amendments of such loan agreements and to ensure that such amendments take
effect as of the Closing.

     (c) Operation of Business. Without Buyer's consent, which shall not be
unreasonably withheld or delayed, Augusta will not cause or permit Korona
to engage in any practice, take any action, or enter into any transaction
outside the Ordinary Course of Business, except for such transactions
specifically contemplated by this Agreement. Without limiting the
generality of the foregoing, without Buyer's consent, which shall not be
unreasonably be withheld or delayed, Augusta will not cause or permit
Korona to (i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or
otherwise acquire any of its capital stock; or (ii) otherwise engage in any
practice, take any action, or enter into any transaction of the sort
described in ss.4(h) above.

                                    30
<PAGE>

     (d) Preservation of Business. Augusta will cause Korona to use its
reasonable efforts to keep its business and properties substantially
intact, including its operations, physical facilities, working conditions,
and relationships with lessors, licensors, suppliers, customers, and
employees.

     (e) Full Access. Augusta will permit, and Augusta will cause Korona to
permit, representatives of Buyer to have full access during normal business
hours and upon reasonable notice, and in a manner so as not to interfere
with Korona's normal business operations, to all premises, properties,
personnel, books, records (including Tax records), contracts, and documents
of or pertaining to Korona. All information provided to Buyer or its
representatives by or on behalf of Augusta, Korona or their representatives
(whether pursuant to this ss.5(e) or otherwise) shall be deemed
Confidential Information and may not be disclosed or otherwise disseminated
by Buyer, and Buyer covenants to provide this Confidential Information to
its Employees only on a "need to know" basis.

     (f) Notice of Developments. Augusta will give prompt written notice to
Buyer of any material adverse development causing a breach of any of the
representations and warranties in ss.4 above. Each Party will give prompt
written notice to the other of any material adverse development causing a
breach of any of its own representations and warranties in ss.3 above.

     (g) Exclusivity. Prior to May 10, 2001, Augusta will not (and Augusta
will not cause or permit Korona to): (i) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities, or any
substantial portion of the assets of Korona (including any acquisition
structured as a merger, consolidation, or share exchange), (ii) participate
in any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any Person to do or seek any of the foregoing, (iii)
Augusta will not vote its Korona Shares in favor of any such acquisition
structured as a merger, consolidation, or share exchange, and (iv) Augusta
will notify Buyer immediately if any Person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.

     (h) Guarantee of Buyer. Buyer shall negotiate in good faith and use
its reasonable best efforts to enter into a guarantee agreement with
Commerzbank to replace Augusta's guarantee obligation arising out of or
resulting from the guarantee dated as of January 11, 2001 to said credit
institution.

6.   Post-Closing Covenants. The Parties covenant and agree as follows with
respect to the period following the Closing:

     (a) General. In case at any time after the Closing any further action
is necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party reasonably
may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
ss.8 below). Augusta and Korona acknowledge and agree that from and after
the Closing Buyer will be entitled to review all documents, books, records
(including Tax records), agreements, and financial data of any sort
relating to Korona.

                                    31
<PAGE>

     (b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection
with (i) any transaction contemplated under this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or
prior to the Closing Date involving Korona, each of the other Party will
cooperate with it and its counsel in the contest or defense, make available
its personnel, and provide such testimony and access to its books and
records as may be necessary in connection with the contest or defense, all
at the sole cost and expense of the contesting or defending Party (unless
the contesting or defending Party is entitled to indemnification therefor
under ss.8 below).

     (c) Transition. Augusta will take no action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of Korona from maintaining the same
business relationships with Korona after the Closing as it maintained with
Korona prior to the Closing. Augusta will refer all customer inquiries
relating to the businesses of Korona to Buyer for a period of six months
after the Closing.

     (d) Confidentiality. Subject to ss.6(g) and ss.9(c), Augusta will
treat and hold as such all of the Confidential Information, refrain from
using any of the Confidential Information except in connection with this
Agreement, and deliver promptly to Buyer at the request of Buyer, or
destroy, all tangible embodiments (and all copies) of the Confidential
Information which are in their possession other than such Confidential
Information which Augusta in good faith determines it will need to comply
with statutory or regulatory requirements. If Augusta is requested or
required (by oral question or request for information or documents in any
legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, Augusta will,
unless prohibited by such legal proceeding, subpoena, court order or
similar process, notify Buyer promptly of the request or requirement so
that Buyer may seek an appropriate protective order or waive compliance
with the provisions of this ss.6(d). If, in the absence of a protective
order or the receipt of a waiver hereunder, Augusta is, on the advice of
counsel, compelled to disclose any Confidential Information to any tribunal
or else stand liable for contempt, Augusta may disclose the Confidential
Information to the tribunal; provided, however, that Augusta uses its
reasonable efforts to obtain, at the request and expense of Buyer, an order
or other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed as Buyer
shall designate. The foregoing provisions shall not apply to any
Confidential Information which is generally available to the public or
comes into Augusta's possession not in violation of this Agreement prior to
the time of disclosure.

     (e) Covenant Not to Compete. For a period of two years from and after
the Closing Date, Augusta will not, and will use its reasonable best
efforts to cause its directors and key managerial employees not to, engage
directly or indirectly in any business that Korona conducts prior to the
Closing Date in any geographic area in which Korona conducts that business
prior to the Closing Date; provided, however, that ownership of less than
5% of the outstanding stock of any publicly traded corporation shall not be

                                    32
<PAGE>

deemed to be engaged in such businesses. If the final judgment of a court
of competent jurisdiction declares that any term or provision of this
ss.6(e) is invalid or unenforceable, the Parties agree that the court
making the determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or provision, to
delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which
the judgment may be appealed.

     (f) Redemption of Shares. Buyer hereby covenants and agrees that if
the Registration Statement of the Mandatory Registration (as such terms are
defined in the Registration Rights Agreement) is not declared effective on
or before January 31, 2002 (as provided for in more detail in the
Registration Rights Agreement), Augusta may elect to return the Shares
issued to it and receive a promissory note, in substantially the form
attached as Exhibit C to the Reference Deed (the "Promissory Note"), in the
full amount of the Stock Consideration and any additional Shares which may
be received pursuant to ss.2; provided that Augusta makes this election on
or before March 31, 2002. The Promissory Note shall bear interest at a rate
of 8% per annum, and the principal amount will be payable in nine (9)
monthly payments commencing on April 1, 2002.

     (g) Retention of Books and Records. Buyer will cause Korona to retain
all books, records and other documents pertaining to Korona in existence on
the Closing Date for at least five (5) years thereafter and to make the
same available after the Closing Date for examination and copying by
Augusta or its representatives, at Augusta's expense, upon reasonable
notice. Buyer agrees that no such books, records or documents will be
destroyed by Buyer or Korona without first advising Augusta in writing and
providing to Augusta a reasonable opportunity (and in any event not less
than 30 days) to obtain possession or make copies thereof at Augusta's
expense.

     (h) Rule 144. Buyer will take all action reasonably necessary to
enable Augusta to sell the Shares without registration under the Securities
Act within the limitations of the exemptions provided by (i) Rule 144 under
the Securities Act or (ii) any similar rule or regulation hereafter adopted
by the U.S. Securities and Exchange Commission (the "SEC"), including
without limiting the generality of the foregoing, filing on a timely basis
all reports required to be filed with the SEC under the Securities Exchange
Act, or if Buyer is not subject to Section 13 or 15(d) of the Securities
Exchange Act, it will make publicly available information required by
Section (c)(2) of Rule 144. Upon request of Augusta from time to time,
Buyer will deliver to Augusta a written statement as to whether it has
complied with such requirements.

     (i) Spin Off of RISO. After the Closing, Augusta shall purchase from
Korona, and Buyer shall cause Korona to sell and transfer to Augusta, all
of the capital stock of RISO (consisting of one share in the nominal amount
of DEM 50,000 for the higher of (i) DEM 50,000 or (ii) the book value as
reflected on the Closing Balance Sheet not later than June 30, 2001 (it
being understood that Augusta and Korona will use its reasonable best
efforts to consummate the purchase as soon as possible after the Closing).

                                    33
<PAGE>

     (j) Repayment of the Shareholder Loans. Buyer will cause Korona to
repay the shareholder loans ("Gesellschafterdarlehen") granted by Augusta
to Korona in the amount of DEM 2,300,000, plus accrued interest in the
amount of DEM 11,425.14 (collectively, the "Principal Amount"), in eight
(8) monthly installments, beginning May 31, 2001. The outstanding Principal
Amount shall bear interest at a rate of 6% per annum. The interest shall be
paid with the last installment prior to or on December 31, 2001. Buyer
irrevocably guarantees to Augusta as set out in the Guarantee attached to
this deed the payment of the Principal Amount and the interest thereon by
Korona. Augusta and Korona have entered into a loan agreement as set out in
the "Darlehensvereinbarung und Garantieerklarung" attached to this deed.

     (k) Purchase of the Warehouse Property. Augusta will purchase from
Korona, and Buyer will cause Korona to sell to Augusta, not later than June
30, 2001, (A) the real property with warehouse recorded in the land
register of Moringen, Blatt 2947, Flur 48, Flurstucke 75/1 and 74/1,
vacated and clear of any items, goods or machinery ("besenrein"), free and
clear of the Special Lien and any other lien, easement or covenant, for a
purchase price equal to (i) the book value at the date the purchase
agreement for such property transfer is notarised (ii) minus the
equal-installment depreciation in accordance with GAAP and past practice
and (B) - if bought by Korona - the additional parcel which is anticipated
to be bought by Korona in connection with the execution of the lease with
UPS (to which Augusta consents) (located in Moringen, Flur 48, Flurstuck
76/11, 745 qm) for the purchase price equal to the proposed purchase price
in the amount of approximately DM 50.000,00 to be paid by Korona. Augusta
will assume all of Korona's obligation and liabilities related to such real
property (including any lease related thereto) pursuant to a purchase
agreement for real property on terms and conditions commonly used in
Germany for the transfer of such real property and such other conditions as
to which the parties shall reasonably agree; provided, however, that Korona
shall not enter into new obligations (including without limitation any
lease) without the prior written consent of Augusta. Korona will have the
right to offset its payment obligations with respect to the repayment of
shareholder loans under ss.6(j) if Augusta should not perform its
obligation under this ss.6(k).

     (l) Corporate Filings . Buyer shall file with the respective
Commercial Registers ("Handelsregister") all necessary filings under
applicable German law with respect to the transactions contemplated by this
Agreement as soon as practicable after the Closing but in no event later
than 5 days after the Closing.

7.   Conditions to Obligation to Close.

     (a) Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions prior or at
the Closing:

          (i) the representations and warranties set forth inss.3(a)
     andss.4 above shall be true and correct in all material respects at
     and as of the Closing Date;

          (ii) Augusta shall have performed and complied with all of its
     covenants underss.5 in all material respects through the Closing;

          (iii) Korona shall have procured all of the material third-party
     consents specified inss.5(b) above;

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<PAGE>

          (iv) no action, suit or proceeding shall be pending at any court
     or quasi-judicial or administrative agency of any federal, state,
     local, or foreign jurisdiction which is reasonably likely to result in
     an unfavorable injunction, judgment, order, decree, ruling, or charge
     which would (A) prevent consummation of any of the material
     transactions contemplated by this Agreement, (B) cause any of the
     transactions contemplated by this Agreement to be rescinded following
     consummation, (C) affect adversely the right of Buyer to own Korona
     Shares and to control Korona, or (D) affect adversely the right of
     Korona to own its assets and to operate its business (and no such
     injunction, judgment, order decree, ruling, or charge shall be in
     effect);

          (v) Augusta shall have delivered to Buyer a certificate, dated as
     of the Closing Date, to the effect that each of the conditions
     specified above in ss.7(a)(i)-(iv) is satisfied in all material
     respects;

          (vi) Augusta shall have delivered written confirmation to Buyer
     that any and all consulting agreements it may have with Korona are
     terminated and no fees pursuant to those agreements are due and owing;
     and

          (vii) Buyer shall have obtained on terms and conditions
     reasonably satisfactory to it extensions or continuations of credit or
     bank facilities in the aggregate amount of DEM 11,000,000 as currently
     granted to Korona, provided, however, that Buyer shall have complied
     with ss.5(b) and ss.5(h);

     and Buyer may waive any condition specified in this ss.7(a) if it
     executes a writing so stating at or prior to the Closing.

     (b) Conditions to Obligation of Augusta. The obligation of Augusta to
consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions at or prior
to the Closing:

          (i) the representations and warranties set forth inss.3(b) above
     shall be true and correct in all material respects at and as of the
     Closing Date;

          (ii) Buyer shall have performed and complied with all of its
     covenants underss.5 in all material respects through the Closing;

          (iii) no action, suit or proceeding shall be pending at any court
     or quasi-judicial or administrative agency of any federal, state,
     local, or foreign jurisdiction which is reasonably likely to result in
     an unfavorable injunction, judgment, order, decree, ruling, or charge
     which would (A) prevent consummation of any of the material
     transactions contemplated by this Agreement or (B) cause any of the
     transactions contemplated by this Agreement to be rescinded following
     consummation (and no such injunction, judgment, order decree, ruling,
     or charge shall be in effect);

                                    35
<PAGE>

          (iv) Buyer shall have delivered to Augusta a certificate, dated
     as of the Closing Date, to the effect that each of the conditions
     specified above in ss.7(b)(i)-(iii) is satisfied in all material
     respects;

          (v) all actions to be taken by Buyer in connection with
     consummation of the transactions contemplated hereby (including
     without limitation the execution of the Registration Rights Agreement)
     and all certificates, opinions, instruments, and other documents
     required to effect the transactions contemplated hereby will be
     reasonably satisfactory in form and substance to Augusta;

          (vi) Augusta and Korona shall have entered into a loan agreement
     (see attachment) and Buyer shall have guaranteed the repayment of the
     Principal Amount and the interest thereon under such loan agreement;
     and

          (vii) Augusta has been released from all obligations and
     liabilities arising out of or resulting from its guarantee in favor of
     Commerzbank, dated as of January 11, 2001, and has received a release
     satisfactory to Augusta in its sole and absolute discretion;

     and Augusta may waive any condition specified in this ss.7(b) if it
     executes a writing so stating at or prior to the Closing.

8.   Remedies for Breaches of This Agreement.

     (a) Survival of Representations and Warranties.

          (i) All of the representations and warranties of the Parties
     contained in this Agreement shall survive the Closing. Notwithstanding
     the foregoing, the representations and warranties contained in or made
     pursuant to this Agreement shall terminate on, and no claim or action
     with respect thereto may be brought after, the first anniversary of
     the Closing Date, provided, however, that the representations and
     warranties contained in ss.3(a)(i) and (ii), ss.3(b)(i), (ii) and (v),
     ss.4(a), ss.4(b), ss.4(k) and ss.4(y) shall continue in full force and
     effect forever thereafter (subject to any applicable statutes of
     limitations).

     (b) Indemnification Provisions for Benefit of Buyer.

          (i) Subject to clause (d) of this ss.8, if Augusta breaches any
     of its representations, warranties, and covenants (in the case of each
     representation and warranty (x) as made and given on the date of this
     Agreement or (y) as if made and given on the Closing Date exactly as
     written herein (including references to "the date hereof", "the date
     of this Agreement" or other particular dates)) contained herein (other
     than the representations and warranties in ss.3(a) above), and, if
     there is an applicable survival period pursuant to ss.8(a) above,
     provided that Buyer makes a written claim for indemnification against
     Augusta pursuant to ss.11(h) below within such survival period, then
     Augusta agrees to indemnify Buyer from and against the entirety of any
     Adverse Consequences Buyer may suffer through and after the date of
     the claim for indemnification (including any Adverse Consequences
     Buyer may suffer after the end of any applicable survival period)
     resulting from, arising out of, relating to, in the nature of, or
     caused by the breach.

                                    36
<PAGE>

          (ii) Subject to clause (d) of this ss.8, in the event Augusta
     breaches (or in the event any third party alleges facts that, if true,
     would mean Augusta has breached) any of its representations and
     warranties (in the case of each representation and warranty (x) as
     made and given on the date of this Agreement or (y) as if made and
     given on the Closing Date exactly as written herein (including
     references to "the date hereof", "the date of this Agreement" or other
     particular dates)) in ss.3(a) above, and, if there is an applicable
     survival period pursuant to ss.8(a) above, provided that Buyer or
     Newco makes a written claim for indemnification against Augusta
     pursuant to ss.11(h) below within such survival period, then Augusta
     agrees to indemnify Buyer from and against the entirety of any Adverse
     Consequences Buyer or Newco may suffer through and after the date of
     the claim for indemnification (including any Adverse Consequences
     Buyer or Newco may suffer after the end of any applicable survival
     period) resulting from, arising out of, relating to, in the nature of,
     or caused by the breach.

     (c) Indemnification Provisions for Benefit of Augusta. Subject to
clause (d) of this ss.8, in the event Buyer or Newco breaches (or in the
event any third party alleges facts that, if true, would mean Buyer or
Newco has breached) any of its representations, warranties, and covenants
contained herein, and, if there is an applicable survival period pursuant
to ss.8(a) above, provided that Augusta makes a written claim for
indemnification against Buyer pursuant to ss.11(h) below within such
survival period, then Buyer agrees to indemnify Augusta from and against
the entirety of any Adverse Consequences Augusta may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences Augusta may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the nature of, or
caused by the breach.

     (d) Limitation of Indemnification. Notwithstanding anything to the
contrary in this Agreement:

          (i) the aggregate liability of Augusta pursuant toss.8(b) will
     not exceed the Purchase Price;

          (ii) no Indemnified Party (as defined below) will be entitled to
     recover indirect, special, consequential or punitive damages (other
     than expenses and fees of counsel to which it is entitled to
     indemnification pursuant to ss.8(b) or ss.8(c), as the case may be)
     pursuant to ss.8(b) or ss.8(c);

          (iii) Augusta shall not be liable, and shall not be required to
     indemnify Buyer, for any Adverse Consequence pursuant to ss.8(b) until
     the aggregate amount of all Adverse Consequences which are otherwise
     recoverable hereunder by Buyer or Newco exceeds $50,000, after which
     Augusta will be responsible pursuant to ss.8(b) only for amounts in
     excess of such threshold;

          (iv) Augusta shall not have any Liability pursuant to ss.8(b) to
     the extent the Adverse Consequences arise as a result of the operation
     of the business or assets of Korona after the Closing Date or any
     action taken or omitted to be taken by Buyer or any of its Affiliates;

                                    37
<PAGE>

          (v) Buyer shall not be liable, and shall not be required to
     indemnify Augusta, for any Adverse Consequence pursuant to ss.8(c)
     until the aggregate amount of all Adverse Consequences which are
     otherwise recoverable hereunder by Augusta exceeds $50,000, after
     which Buyer will be responsible pursuant to ss.8(c) only for amounts
     in excess of such threshold; and

          (vi) Each of Buyer and Augusta agrees that, unless the other
     party shall otherwise direct in writing, it will (and cause its
     Affiliates to) use commercially reasonable efforts to recover amounts
     under insurance policies to the extent such recoveries would reduce
     amounts required to be paid by the other Party pursuant to ss.8(c) or
     ss.8(b), as the case may be.

     (e) Matters Involving Third Parties.

          (i) If any third party shall notify any Party (the "Indemnified
     Party") with respect to any matter (a "Third Party Claim") which may
     give rise to a claim for indemnification against the other Party (the
     "Indemnifying Party") under this ss.8, then the Indemnified Party
     shall promptly notify the Indemnifying Party thereof in writing;
     provided, however, that no delay on the part of the Indemnified Party
     in notifying any Indemnifying Party shall relieve the Indemnifying
     Party from any obligation hereunder unless (and then solely to the
     extent) the Indemnifying Party thereby is prejudiced.

          (ii) Any Indemnifying Party will have the right to defend the
     Indemnified Party against the Third Party Claim with counsel of its
     choice satisfactory to the Indemnified Party so long as (A) the
     Indemnifying Party notifies the Indemnified Party in writing within 15
     days after the Indemnified Party has given notice of the Third Party
     Claim that the Indemnifying Party will indemnify the Indemnified Party
     from and against the entirety of any Adverse Consequences the
     Indemnified Party may suffer resulting from, arising out of, relating
     to, in the nature of, or caused by, the Third Party Claim, (B) the
     Indemnifying Party provides the Indemnified Party with evidence
     acceptable to the Indemnified Party that the Indemnifying Party will
     have the financial resources to defend against the Third Party Claim
     and fulfill its indemnification obligations hereunder, (C) the Third
     Party Claim involves only money damages and does not seek an
     injunction or other equitable relief, (D) settlement of, or an adverse
     judgment with respect to, the Third Party Claim does not (1) impose an
     injunctive or other equitable relief against the Indemnified Party or
     (2) establish a precedential custom or practice materially adverse to
     the continuing business interests of the Indemnified Party, and (E)
     the Indemnifying Party conducts the defense of the Third Party Claim
     actively and diligently.

          (iii) So long as the Indemnifying Party is conducting the defense
     of the Third Party Claim in accordance with ss.8(e)(ii) above, (A) the
     Indemnified Party may retain separate co-counsel at its sole cost and
     expense and participate in the defense of the Third Party Claim, (B)

                                    38
<PAGE>

     the Indemnified Party will not consent to the entry of any judgment or
     enter into any settlement with respect to the Third Party Claim
     without the prior written consent of the Indemnifying Party (not to be
     unreasonably withheld), and (C) the Indemnifying Party will not
     consent to the entry of any judgment or enter into any settlement with
     respect to the Third Party Claim without the prior written consent of
     the Indemnified Party (not to be unreasonably withheld).

          (iv) In the event any of the conditions in ss.8(e)(ii) above is
     or becomes unsatisfied, however, (A) the Indemnified Party may defend
     against, and consent to the entry of any judgment or enter into any
     settlement with respect to, the Third Party Claim in any manner it may
     deem appropriate (and the Indemnified Party need not consult with, or
     obtain any consent from, the Indemnifying Party in connection
     therewith), (B) the Indemnifying Party will reimburse the Indemnified
     Party promptly and periodically for the costs of defending against the
     Third Party Claim (including reasonable attorneys' fees and expenses),
     and (C) the Indemnifying Party will remain responsible for any Adverse
     Consequences the Indemnified Party may suffer resulting from, arising
     out of, relating to, in the nature of, or caused by the Third Party
     Claim to the fullest extent provided in this ss.8.

     (f) Determination of Adverse Consequences. The Parties shall take into
account the time cost of money (using the Applicable Rate as the discount
rate) in determining Adverse Consequences for purposes of this ss.8. All
indemnification payments under this ss.8 shall be deemed adjustments to the
Purchase Price.

     (g) Other Indemnification Provisions. The rights of the Parties under
ss.8(b) and ss.8(c) will be the exclusive remedy of the Parties with
respect to breaches of representations, warranties, covenants or agreements
contained in or made pursuant to this Agreement. Augusta hereby agrees that
it will not make any claim for indemnification against Korona or the
General Partner solely by reason of the fact that it was a shareholder of
any such entity or was serving at the request of any such entity as a
partner, trustee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement,
losses, expenses, or otherwise and whether such claim is pursuant to any
statute, charter document, bylaw, agreement, or otherwise) with respect to
any action, suit, proceeding, complaint, claim, or demand brought by Buyer
against Augusta (whether such action, suit, proceeding, complaint, claim,
or demand is pursuant to this Agreement, applicable law, or otherwise).

9.   Tax Matters. The following provisions shall govern the allocation of
     responsibility as between Buyer and Augusta for certain tax matters
     following the Closing Date:

     (a) Tax Periods Ending on or Before the Effective Date. Augusta shall
prepare or cause to be prepared and file or cause to be filed all Tax
Returns for Korona for all periods ending on or prior to the Effective Date
which are filed after the Effective Date. Augusta shall permit Buyer to
review and comment on each such Tax Return described in the preceding
sentence prior to filing. Augusta shall reimburse Buyer for Taxes owed by
Korona with respect to such periods within fifteen (15) days after payment
by Buyer or Korona of such Taxes to the extent such Taxes are not reflected
in the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and Tax
income) shown on the face of the Closing Balance Sheet. In the case that
the reserve for Tax Liability will be released an exceeding amount, which
has not to cover Tax Liability shall be paid back to Augusta. In the case
of any tax refund with respect to a period before the Effective Date,
Augusta shall be refunded insofar as an asset is not reflected in the
relevant Financial Statements.

                                    39
<PAGE>

     (b) Tax Periods Beginning Before and Ending After the Effective Date.
Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of Korona for Tax periods which begin before the Closing
Date and end after the Closing Date. Augusta shall pay to Buyer within
fifteen (15) days after the date on which Taxes are paid with respect to
such periods an amount equal to the portion of such Taxes which relates to
the portion of such Taxable period ending on the Closing Date to the extent
such Taxes are not reflected in the reserve for Tax Liability (rather than
any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the face of the Closing Balance
Sheet. For purposes of this Section, in the case of any Taxes that are
imposed on a periodic basis and are payable for a Taxable period that
includes (but does not end on) the Closing Date, the portion of such Tax
which relates to the portion of such Taxable period ending on the Closing
Date shall (x) in the case of any Taxes other than Taxes based upon or
related to income or receipts, be deemed to be the amount of such Tax for
the entire Taxable period multiplied by a fraction the numerator of which
is the number of days in the Taxable period ending on the Closing Date and
the denominator of which is the number of days in the entire Taxable
period, and (y) in the case of any Tax based upon or related to income or
receipts be deemed equal to the amount which would be payable if the
relevant Taxable period ended on the Closing Date. Any credits relating to
a Taxable period that begins before and ends after the Closing Date shall
be taken into account as though the relevant Taxable period ended on the
Closing Date. All determinations necessary to give effect to the foregoing
allocations shall be made in a manner consistent with prior practice of
Korona. Not only positive income but also a loss of Korona shall be
allocated to Augusta and Buyer based upon the period before and after the
Closing.

     In addition to the aforementioned paragraph, with respect to the
fiscal year 2001, however, the following procedure is agreed: Buyer shall
prepare or cause to prepare and file or cause to be filed any Tax return of
Korona and the General Partner. Korona - for taxable reasons - shall be
caused to prepare a Balance Sheet on the Effective Date ("steuerliche
Zwischenbilanz"), including the relevant special purpose balances which
have been and are used in the Limited Partnership (including
"Erganzungsbilanz" and "Sonderbilanz"). These Balances shall derive from
the Closing Balance Sheet as set up under this Agreement. The same
procedure is for the General Partner. The Taxes to be paid shall be
reflected as Tax Liability or as Tax Reserve in the relevant Balance Sheet
("steuerliche Zwischenbilanz"). If, under any final due governmental tax
assessment (,,Veranlagung") the Tax Liabilities or Tax Reserves reflected
in the relevant Balance Sheet ("steuerliche Zwischenbilanz") amount to less
than the Tax Liability to be effectively to be paid, Augusta shall
indemnify Buyer to that specific amount. If the Tax Liability to be
effectively to be paid is lower than the Tax Liabilities or Tax Reserves
reflected in the relevant Balance Sheet ("steuerliche Zwischenbilanz"),
Buyer will indemnify Augusta to the amount. Tax Returns in 2001 shall be
based on the relevant Balance Sheet ("steuerliche Zwischenbilanz"). To any
Tax Return to be filed with respect to the fiscal year 2001, Buyer shall
permit Augusta to review and comment on each such Tax Return described in
this section prior to filing.

                                    40
<PAGE>

     (c) Cooperation on Tax Matters.

          (i) Buyer and Augusta shall cooperate fully, as and to the extent
     reasonably requested by the other party, in connection with the filing
     of Tax Returns pursuant to this ss.9 and any audit, litigation or
     other proceeding with respect to Taxes. Such cooperation shall include
     the retention and (upon the other party's request) the provision of
     records and information which are reasonably relevant to any such
     audit, litigation or other proceeding and making employees available
     on a mutually convenient basis to provide additional information and
     explanation of any material provided hereunder. Korona and Augusta
     agree (A) to retain all books and records with respect to Tax matters
     pertinent to Korona relating to any taxable period beginning before
     the Closing Date until the expiration of the statute of limitations
     (and, to the extent notified by Buyer or Augusta, any extensions
     thereof) of the respective taxable periods, and to abide by all record
     retention agreements entered into with any taxing authority, and (B)
     to give the other party reasonable written notice prior to
     transferring, destroying or discarding any such books and records and,
     if the other party so requests, Korona or Augusta, as the case may be,
     shall allow the other party to take possession of such books and
     records.

          (ii) Buyer and Augusta further agree, upon request, to use their
     best efforts to obtain any certificate or other document from any
     governmental authority or any other Person as may be necessary to
     mitigate, reduce or eliminate any Tax that could be imposed
     (including, but not limited to, with respect to the transactions
     contemplated hereby).

          (iii) Buyer and Augusta further agree, upon request, to provide
     the other Party with all information that either Party may be required
     to report pursuant to applicable tax provisions in Germany, Hong Kong,
     the U.S., or the British Virgin Islands. Augusta and, if Augusta so
     elects, its designated independent auditors shall be entitled in its
     discretion to undertake or promote any tax audit by the tax
     authorities ("Betriebsprufung"), and any filing, procedure or action
     relating thereto, and to avert or defend against any claim,
     assessment, procedure or actions by the tax authorities, until the
     assessment period comprising the Closing Date, for which a tax audit
     may be carried out by the tax authorities, expires.

          (iv) It is agreed, that if the amount of trade taxes and VAT
     ("Gewerbe- und Umsatzsteuer") reflected by reserves in the Closing
     Balance Sheet exceed the respective amount of trade taxes or VAT being
     payable by Augusta according to these provisions, it shall be refunded
     to Augusta or shall be used for payment of trade taxes of prior years
     for the period for which Augusta is responsible for the payment of
     these taxes according to the provisions of this Section (c).

     (d) Tax Sharing Agreements. All tax sharing agreements or similar
agreements between Augusta, or any of its Subsidiaries, as the case may be,
and Korona shall be terminated as of the Closing Date and, after the
Closing Date, Korona shall not be bound thereby or have any liability
thereunder. Augusta shall be entitled to terminate the integrated
inter-company relation (,,gewerbesteuerliche Organschaft") between itself
and the General Partner and / or RISO on the Effective Date or at its sole
discretion before December 31, 2000.

                                    41
<PAGE>

     (e) Certain Taxes. Buyer shall bear all transfer, documentary, sales,
use, stamp, registration, and such other Taxes (excluding trade tax or
"Gewerbesteuer") and fees (including any penalties and interest) incurred
in connection with this Agreement and shall pay, to the extent permitted by
applicable law, when due all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees.

10.  Termination.

     (a) Termination of Agreement. The Parties may terminate this Agreement
as provided below:

          (i) The Parties may terminate this Agreement by mutual written
     consent at any time prior to the Closing;

          (ii) Either Party may terminate this Agreement, if any court, or
     other governmental or judicial authority, of competent jurisdiction
     has issued an injunction, restraining order or other decree of any
     nature that restrains, enjoins or otherwise prohibits in any material
     respect the consummation of the transactions contemplated hereby, and
     such injunction, restraining order or other decree has become final
     and non-appealable;

          (iii) Buyer may terminate this Agreement by giving written notice
     to Augusta at any time prior to the Closing (A) in the event Augusta
     has breached any material representation, warranty, or covenant
     contained in this Agreement in any material respect, Buyer has
     notified Augusta of the breach, and the breach has continued without
     cure for a period of 30 days after the notice of breach; or (B) if the
     Closing shall not have occurred on or before May 15, 2001, by reason
     of the failure of any condition precedent under ss.7(a) hereof (unless
     the failure results primarily from Buyer breaching any representation,
     warranty, or covenant contained in this Agreement); and

          (iv) Augusta may terminate this Agreement by giving written
     notice to Buyer at any time prior to the Closing (A) in the event
     Buyer has breached any material representation, warranty, or covenant
     contained in this Agreement in any material respect, Augusta has
     notified Buyer of the breach, and the breach has continued without
     cure for a period of 30 days after the notice of breach or (B) if the
     Closing shall not have occurred on or before May 15, 2001, by reason
     of the failure of any condition precedent under ss.7(b) hereof (unless
     the failure results primarily from Augusta breaching any
     representation, warranty, or covenant contained in this Agreement).

     (b) Effect of Termination. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in ss.10(a),
this Agreement shall become null and void and of no further force and
effect, except for the provisions of (i) ss.3(a)(iv), ss.3(b)(iv) and
ss.4(d) relating to broker's fees, (ii) this Agreement relating to expenses
(including ss.11(n)), (iii) this ss.10 and (iv) ss.11. Nothing in this
ss.10(b) shall be deemed to release any Party hereto from any Liability for
any breach, prior to termination of this Agreement, by such Party of its
obligations or covenants under this Agreement.

                                    42
<PAGE>

11.  Miscellaneous.

     (a) Consulting Services. Upon the Closing and without any further
action all management and consulting agreements between Augusta and Korona
will terminate effective April 30, 2001.

     (b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior approval of
the other Party; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in
which case the disclosing Party will use its best efforts to advise the
other Party prior to making the disclosure).

     (c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.

     (d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they related in any way
to the subject matter hereof (including the Confidentiality Agreement dated
as of February 15, 2001).

     (e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written
approval of the other Party; provided, however, that Buyer may (i) assign
any or all of its rights and interests hereunder to one or more of its
Subsidiaries and (ii) designate one or more of its Subsidiaries to perform
its obligations hereunder (in any and all of which cases Buyer nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).

     (f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

     (g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.

     (h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given when
received by the intended recipient at the address set forth below:

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<PAGE>

     If to Augusta:

     Herrn Udo Zimmer
     AUGUSTA Technologie AG
     Wilhelm-Leuschner-Strasse 9-11
     D-60329 Frankfurt am Main, Germany

     Copies to:

     Herrn RA
     Alexander Schmitz-Elsen
     Knauthe Paul Schmitt
     Eschersheimer Landstrasse 27
     60322 Frankfurt am Main, Germany

     Edward S. Davis, Esq.
     Hughes Hubbard & Reed LLP
     One Battery Park Plaza
     New York, NY 10004

     If to Buyer:

     Mr. Anthony So, President
     Bonso Electronics International Inc.
     Unit 1106-1110, 11/F., Star House, 3, Salisbury Road
     Tsimshatui Kowloon, Hong Kong

     Copies to:

     Henry F. Schlueter, Esq.
     Schlueter & Associates, P.C.
     1050 Seventeenth Street, Suite 1700
     Denver, Colorado 80265

     Herrn RA
     Friedhold Andreas
     PricewaterhouseCoopersVeltins
     Rechtsanwaltsgesellschaft mbH
     Im Trutz Frankfurt 55
     60322 Frankfurt am Main, Germany

Any notice, request, demand, claim, or other communication hereunder may be sent
to the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.

                                    44
<PAGE>

     (i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, U.S.A. without regard
to the conflict of law principals thereof, provided, however, that the
transfer of the shares of Korona, the General Partner and Buyer and the
real property shall be governed by and construed in accordance with the
respectively applicable lex rei sitae.

     (j) Dispute Resolution; Arbitration.

          (i) All claims for specific performance of one or more provisions
     of this Agreement prior to the Closing, including all such claims with
     respect to the obligations hereunder to consummate the Closing, shall
     be resolved exclusively by litigation before a court of competent
     jurisdiction located in New York. The Parties hereby irrevocably (A)
     submit to the exclusive jurisdiction of any of such court in any
     action or proceedings relating to the aforementioned claims, (B)
     submit to the jurisdiction of any court, located in any jurisdiction
     in which such Party has contacts or assets sufficient to sustain
     jurisdiction, in any action or proceeding relating to the enforcement
     of any arbitral award or judgment pursuant to ss.11(j)(ii), and (C)
     waive the defenses of lack of personal jurisdiction, sovereign
     immunity, improper venue, and inconvenient forum in any action or
     proceeding as set forth in this ss.11(j).

          (ii) Except for (A) the claims covered by ss.ss.11(j)(i) of this
     Agreement, and (B) disputes covered by ss.2(e) of this Agreement, all
     disputes or claims arising out of or in connection with this Agreement
     or the certificates, instruments and document delivered at the Closing
     (the "Ancillary Documents") shall be finally settled by arbitration
     under the Rules of Arbitration of the International Chamber of
     Commerce (the "ICC Rules"). The place of arbitration shall be New
     York. The number of arbitrators shall be three (3), and the
     arbitrators shall be appointed in accordance with the ICC Rules and
     this Agreement. The two party-appointed arbitrators shall agree on a
     third arbitrator, who shall serve as chairman of the arbitral
     tribunal, within twenty (20) days after appointment of the second
     party-appointed arbitrator, failing which the third arbitrator shall
     be appointed by the ICC International Court of Arbitration. The
     language to be used in the arbitral proceedings shall be English. Any
     award of the arbitral tribunal shall be made in writing, shall be
     final and binding on the parties and may be entered in any court of
     competent jurisdiction. The Parties hereby waive any right to appeal
     insofar as such waiver can validly be made. Each of the Parties agree
     that arbitration under this ss.11(j)(ii) is the exclusive method for
     resolving any of the disputes defined in this ss.11(j)(ii), and that
     no Party shall commence any action or proceeding in any court with
     respect to any such dispute, except to (1) enforce this ss.11(j)(ii),
     (2) obtain provisional judicial assistance in aid of arbitration under
     this ss.11(j)(ii), or (3) file a petition to enforce or set aside an
     arbitral award made in accordance with this ss.11(j)(ii).

     (k) English Language. The English language version of any documents
furnished by one Party to the other and the English language version of
this Agreement and the related schedules and exhibits shall control in the
event of any conflict between the English language version and non-English
language version of any such documents. With respect to documents furnished
by one Party to the other, such as balance sheets, tax declarations and tax
assessments, Commercial Register files and the like ("Official Documents"),
that the language of origin shall govern in the event of a conflict between
the English language version and non-English versions of any such Official
Documents.

                                    45
<PAGE>

     (l) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.

     (m) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction.

     (n) Expenses. Each of the Parties, Korona, and its Subsidiaries will
bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions
contemplated hereby. Augusta agrees that Korona has not borne or will bear
any of Augusta' costs and expenses (including any of it's legal fees and
expenses) in connection with this Agreement or any of the transactions
contemplated hereby. The Parties agree to share the costs of the German
Notary for notarizing this Agreement as follows: Buyer will pay the fees
and costs up to the amount of DEM 30,000.00. Augusta will pay any fees and
costs exceeding the first DEM 30,000.00 up to an amount of DEM 60,000.00.
Any fees and costs in excess of DEM 60,000.00 will be split equally between
Augusta and Buyer.

     (o) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden
of proof shall arise favoring or disfavoring a Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including
without limitation. The Parties intend that each representation, warranty,
and covenant contained herein shall have independent significance. If a
Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of
the relative levels of specificity) which the Party has not breached shall
not detract from or mitigate the fact that the Party is in breach of the
first representation, warranty, or covenant.

12.  Advice and cautioning by the notary deputy

1.   The notary deputy advised the parties that this document must be
     presented to the local tax office under ss.54 EStDV (German income tax
     execution regulations).

2.   The notary deputy advised the parties that since the agreement is
     subject to the laws of the state of New York, he is neither in a
     position to give advice on or to examine the legal validity of the
     provisions contained in the agreement, nor can the notary deputy
     advice on the foreign law applicable to the transfer of the Buyer's
     shares to Augusta.

                                    46
<PAGE>

3.   The notary deputy advised the parties that the execution of this
     agreement, in particular the transfer of the shares of Korona
     Haushaltswaren GmbH and the transfer of the real property, will need
     to be notarised according to German law.

4.   The notary deputy cautioned the parties that he has not given and is
     not in a position to give tax advice in respect to the above read
     agreement. The parties declared that they have sought separate advice
     on tax issues involved therein.

5.   The notary deputy cautioned the parties that the transfer of the
     Kommanditanteil will need the approval of the shareholders of Korona
     Haushaltswaren GmbH & Co KG.

The above text and the both attachments were read out to the appeared persons
who consented to its content. The attachment "Darlehensvereinbarung und
Garantieerklarung" which is kept in German was translated by the notary deputy
to the person appearing and 2.). The translation of the document is attached to
this deed. The document was personally signed by them and the notary deputy as
follows:

                                        gez.: Udo Zimmer
                                        gez.: Kit Teng Pang
                       L.S.             gez.: Stefan Reinhart, Notarvertreter

                                    47

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