Document:

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                                                                   EXHIBIT 10.32

MILES D. SCULLY (SBN 135853)
KEVIN W. ALEXANDER (SBN 175204)
GORDON & REES, LLP
101 West Broadway, Suite 1600
San Diego, CA 92101
Telephone:  (619) 696-6700
Facsimile:   (619) 696-7124

Attorneys for Plaintiff
ON-POINT TECHNOLOGY SYSTEMS, INC.

                   SUPERIOR COURT OF CALIFORNIA-COUNTY OF SAN DIEGO

ON-POINT TECHNOLOGY SYSTEMS,          )   CASE NO.  GIC735997
INC., a Nevada Corporation,           )
                                      )
      Plaintiff,                      )   STIPULATED JUDGMENT
                                      )
   vs.                                )
                                      )
U.S. TELECARD, INC., a Georgia        )
corporation, RICK ARRINGTON and       )
DOES 1-200, inclusive,                )
                                      )
      Defendants.                     )
______________________________________)

           WHEREAS, plaintiff On-Point Technology Systems, Inc. ("On-Point")
filed the instant action on or about September 24, 1999, alleging causes of
action against defendants U.S. Telecard, Inc. ("Telecard") and Rick Arrington
("Arrington") for declaratory relief, breach of written contract, breach of the
implied covenant of good faith and fair dealing, account stated and common
count, among others;

           WHEREAS, On-Point, Telecard and Arrington desire to enter into a
Stipulated Judgment with respect to claims at issue in the instant action;

           IT IS HEREBY STIPULATED by and between the parties that:

           1.        Judgment is awarded in favor of On-Point and against
Telecard on all causes of action, and On-Point is to recover damages from
Telecard in the amount of eight hundred thousand dollars ($800,000.00);

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                      STIPULATION TO RESPOND TO COMPLAINT
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           2.        Telecard shall satisfy said Judgment by paying On-Point
six thousand dollars ($6,000.00) per month, for 60 consecutive months, beginning
April 10, 2000 and becoming due on the tenth day of each successive month
thereafter until March 10, 2004, and by paying On-Point an additional five
hundred thousand dollars ($500,000.00) on or before April 10, 2004.  The above
payments shall be made by check or draft payable to On-Point, on or before the
dates set forth herein, and delivered to On-Point's place of business located at
1370 W. San Marcos Blvd., Suite 100, San Marcos, CA 92069, Attn: Frederick
Sandvick. In the event that Telecard fails to make timely payment to On-Point
pursuant to this paragraph, the entire Judgment amount shall become due and
payable immediately to On-Point.

           3.        On-Point shall dismiss all claims against Arrington
without prejudice.

           4.        Telecard and Arrington shall waive all applicable statutes
of limitations in connection with the claims alleged by On-Point for a period
of six years from the date of entry of this Judgment.

DATED: November 12, 1999         ON-POINT TECHNOLOGY SYSTEMS, INC.

                                 By:  /s/ Frederick Sandvick
                                    ---------------------------------------
                                     Frederick Sandvick
                                     Chief Executive Officer

DATED: November 12, 1999         U.S. TELECARD, INC.

                                 By: /s/ Rick Arrington
                                    ---------------------------------------
                                      Rick Arrington
                                      Chief Executive Officer

DATED: November 12,  1999        By: /s/ Rick Arrington
                                    ---------------------------------------
                                     RICK ARRINGTON

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                      STIPULATION TO RESPOND TO COMPLAINT
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DATED: November 15, 1999         GORDON & REES, LLP

                                 By: /s/ Miles D. Scully
                                     ---------------------------------------
                                     MILES D. SCULLY
                                     KEVIN W. ALEXANDER
                                     Attorneys for Plaintiff
                                     ON-POINT TECHNOLOGY SYSTEMS, INC

DATED: November ___, 1999        By: /s/ Alan B. Waln
                                     ---------------------------------------
                                     ALAN B. WALN
                                     Attorney for Defendants
                                     U.S. TELECARD, INC. and RICK ARRINGTON

           IT IS HEREBY ADJUDGED, ORDERED AND DECREED that plaintiff On-Point
is entitled to JUDGMENT against Telecard, and that damages are awarded in favor
of On-Point and against Telecard, pursuant to the stipulation herein.

DATED: December 15, 1999             J. Richard Haden
       -----------------             ---------------------------------------
                                     JUDGE OF THE SUPERIOR COURT

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                      STIPULATION TO RESPOND TO COMPLAINT<PAGE>   1
                                                                    EXHIBIT 10.1

                     Commercial Limited Partnership-Interest

                       Purchase- and Assignment Agreement

1.       Bornemann & Bick GmbH & Co. KG , Gewerbestrasse 21-23, 32584 Lohne,
         represented by Provista 379. Verwaltungsgesellschaft mbH, Bergstrasse
         7, 20095 Hamburg registered in the Commercial Register at the local
         court Hamburg under HRB 75179 in turn legally represented by Mr.
         Gerhard Bornemann, managing director with single authority of
         representation,

2.       Mr. Gerhard Bornemann, businessman, born on September 25, 1939,
         residing at Schmiedestrasse 5, 45549 Sprockhovel,

3.       Dr. Ulrich Bornemann, Studienrat, born on October 2, 1941, residing at
         Niederstrasse 22, 46509 Xanten, represented by Mr. Gerhard Bornemann
         according to the power of attorney dated May 12, 2000 attached as
         Exhibit A, and

4.       Paxar Corporation, 105 Corporate Park Drive, White Plaines, New York
         10604, USA, represented by Mr. Robert S. Stone born on May 15, 1937
         residing at 70 Burr Farms Road, Mount Kisco, New York 10549, USA
         according to the power of attorney dated May 10, 2000 attached as
         Exhibit B,

herewith enter into the following

               Commercial Limited Partnership-Interest-, Purchase-

                   and Assignment Agreement (the "Agreement"):
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                                Table of Contents

<TABLE>
<CAPTION>
Article                                                                                                    Page
<S>                                                                                                        <C>

         Table of Attachments

         Preliminary Remarks

1.       Sale and Assignment..........................................................................        9

2.       Purchase Price and Payment...................................................................       12

3.       Transfer Accounts of the KG..................................................................       16

4.       Adjustment of the Purchase Price.............................................................       17

5.       Representations, Warranties and Guarantees of the Sellers....................................       19

6.       Legal Consequences in Case of Violation of Representations, Warranties and Guarantees........       47

7.       No Compete Restraint.........................................................................       48

8.       Statute of Limitations.......................................................................       50

9.       Inspection by the Purchaser..................................................................       50

10.      Taxes........................................................................................       51

11.      Conditions Precedent.........................................................................       52

12.      Merger Control...............................................................................       52

13.      Rights and Obligations of the Parties........................................................       52

14.      Guarantee of the Guarantor...................................................................       56

15.      Seller no. 1's Profit Participation..........................................................       56

16.      Interim Period...............................................................................       60

17.      Arbitration..................................................................................       61

18.      Miscellaneous................................................................................       62
</TABLE>
<PAGE>   3
                              Table of Attachments

<TABLE>
<CAPTION>
       NO.                                         CONTENTS OF ATTACHMENT
       ---                                         ----------------------
<S>              <C>
   1.9           Tangible or intangible assets

  1.15           Application in the Commercial Register

 5.2.7           Abstract from the Commercial Register, articles of association et al. of the KG

 5.2.8           Abstract from the Commercial Register, articles of association et al. of B+B-Polska

5.2.10           Abstract from the Commercial Register, articles of association et al. of Bornemann-Spain

5.2.11           Abstract from the Commercial Register, articles of association et al. of Bornemann-India

5.2.12           Abstract from the Commercial Register, articles of association et al. of Bornemann-Turkey

5.2.23           Restrictions of KG's ownership in, liens and encumbrances of shares in Bornemann-Spain

5.2.24           Restrictions of KG's ownership in, liens and encumbrances of shares in Bornemann-India

5.2.26           List of other equity, interest, shares, participations or sub-participations

5.2.30           Restrictions on disposal of Bornemann-Spain-Shares

5.2.31           Restrictions on disposal of Bornemann-India-Shares

5.2.36           Joint-venture agreement, cooperation agreement, working party agreement (Arbeitsgemeinschaftsvertrag) or similar
                 contractual arrangement with third parties

5.2.37           Branch offices or other business operations

5.2.38           Supervisory board, advisory board, consultancy board or comparable boards or obligation to install such boards

5.2.39 (d)       Execution of the Agreement conflicts with, violates, results any contract, agreement, arrangement et al.

5.2.39 (e)       Execution of the Agreement creates or increases the amount of any liability or obligation of one of the Companies
                 under such contract, agreement, arrangement or instrument

5.2.39 (f)       Lapse of rights of one of the Companies

 5.3.1           Financial Statement of the KG

 5.3.2           Financial Statement of the Subsidiary

 5.3.3           Balance sheet of Bornemann-Turkey

 5.3.4           Financial Statements of the Affiliates
</TABLE>

<PAGE>   4

<TABLE>
<S>              <C>
 5.3.5           List of liabilities that are not directly related to, and that did not arise directly out of their business

 5.3.5 (a)       Assets, properties and rights not owned by the Companies which were used by the Companies on the basis of binding
                 agreements with the Sellers

 5.3.5 (b)       Assets, properties and rights not owned by the Companies which were used by the Companies on the basis of binding
                 agreements with third parties

 5.3.7           Liabilities, debts, claims or obligations in excess of DM 250,000.00

   5.4 (a)       German Real Estate

   5.4 (b)       Real estate property abstracts of German Real Estate

   5.4 (c)       Mortgages on German Real Estate

   5.4 (e)       Charges according to public law (Baulasten), building restrictions, land development plan, building scheme of
                 German Real Estate

   5.4 (f)       Foreign Real Estate

   5.4 (g)       Real estate property leased or rented by the KG

   5.4 (h)       Leased property with unwithdrawable right to purchase

   5.4 (i)       Real estate property leased or rented by the Subsidiary or the Affiliates

   5.4 (k)       Real estate property leased to third parties

   5.4 (l) (i)   Real estate property sold during the last 5 (five) years

   5.4 (l) (ii)  Terminated lease agreements during the last 5 (five) years

   5.5           Material Adverse Change et al.

 5.6.1 (e)       Filed tax returns and countries of filing

 5.6.3           Last tax audit report

   5.7 (a) (i)   Patents, trademarks/service marks, business or trade name

   5.7 (a) (ii)  Intellectual Property Rights of the Companies

   5.7 (c)       Use of trademarks/service marks

   5.7 (d)       Challenges of the Intellectual Property Rights by third parties

   5.7 (e)       Infringement of Intellectual Property Rights or unauthorized use of  Know-How by third parties

   5.7 (f)       Compliance of products

   5.7 (g)       Licenses and agreements to pay or receive any royalty in respect to the Intellectual Property Rights of the
                 Companies

   5.7 (h)       Intellectual Property Rights licensed to, but not owned by the Companies

   5.7 (i)       Know-how licenses

   5.8           Insurance policies (setting forth whether the third party liability insurance contract is of claim made or
                 occurrence type) in each case with the
</TABLE>
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<TABLE>
<S>              <C>
                 statement of the insured amount and the annual premium

 5.9.1           Material licenses, certificates, permits, permit applications, franchises, private product approvals

5.10.1           Work's council agreements, collective bargaining agreements of the KG

5.10.3           Relationships of the Companies with their employees

5.10.5           Names, titles, locations, annual compensation and all bonuses for all board members, et al.

5.10.6           Benefit having a monetary value

5.10.8           Obligations arising from termination or cancellation of any employment agreement

5.10.9           Obligations to pay or grant any salary, fringe benefit

  5.11 (a)       Rental, leasing or similar contracts

  5.11 (b)       Consultancy agreements

  5.11 (c)       Obligations owed to a benevolent fund, pension liabilities, pension- and related benefit liabilities et al.

  5.11 (d) (i)   Standard sales contract

  5.11 (d) (ii)  General conditions of sales

  5.11 (e)       Agreements regarding compensation, dependant on profit or turnover of the Companies, profit sharing or similar
                 arrangements

  5.11 (f)       Competition restraints or contracts or similar restrictions to the detriment of the Companies

  5.11 (g)       Sureties, guarantees, comfort letters, performance bonds, letters of credit et al.

  5.11 (h)       Contingent or actual repayment obligations in connection with grants or subsidies received by the Companies

  5.11 (i)       Contractual obligations not shown in the financial statements of the Companies with a face value of more than DM
                 250,000.00

  5.11 (j)       Pending, expected or threatened actions, claims, disputes, inquiries

  5.11 (k)       Forward contracts regarding goods, foreign currencies and interest

  5.11 (l)       License agreements
</TABLE>
<PAGE>   6
<TABLE>
<S>              <C>
  5.11 (m)       Contractual or statutory obligations to make lump sum payments (Abfindungen) of whatsoever kind

  5.11 (n)       Commitments to pay out loans or loans which have been paid out by the Companies

  5.11 (o) (i)   Distribution agreements (distributor- or commercial agent agreements) (appointing the Companies as distributor or
                 commercial agent)

  5.11 (o) (ii)  Distribution agreements (distributor- or commercial agent agreements) (appointing a third party as distributor or
                 commercial agent).

  5.11 (p)       Powers of attorney

  5.11 (u)       Long term agreements

  5.11 (v)       Agreements leading to payments which are received or which have to be made by the Companies of more than DM
                 250,000.00 annually

  5.11 (x)       Loan agreements and other banking and overdraft facilities

5.13.2 (i)       Managing directors of the Companies

5.13.2. (ii)     Holders of a commercial limited statutory power of attorney (Prokura)

5.13.4 (i)       Open accounts receivable of the Companies which came into existence up to April 30, 2000

5.13.4.(ii)      Open liabilities of the Companies which came into existence up to April 30, 2000

5.13.5           Contracts, agreements or arrangements, providing for an aggregate annual payment obligation of more than DM
                 500,000.00 or with a termination period of more than 6 months

5.13.6           Bank accounts of the Companies except Bornemann-Spain and Bornemann-India

5.13.7           Guarantees (Garantien, Burgschaften, Kreditauftrage) issued by the Sellers for the benefit of the Companies or
                 issued by the KG for the Subsidiary or the Affiliates.

5.13.8           Credit-lines of the Companies

   6.4           Persons whose knowledge is deemed to be knowledge of the Sellers
</TABLE>
<PAGE>   7
<TABLE>
<S>              <C>
    12           Clearance at The Federal Cartel Office

  13.1           Other enterprises which use the firm to identify an enterprise

  13.2           Intellectual property rights being owned by the Sellers or another party

  13.4           Legal relationships between the Sellers and the Companies

  13.8           Sureties

  15.1           Consolidated profit of the Companies as of December 31, 1999

 18.15           Interest-holders meeting of the KG
</TABLE>
<PAGE>   8
                               Preliminary Remarks

1.       Bornemann & Bick GmbH & Co. KG, with statutory seat in Lohne, for which
         registration in the Commercial Register at the local court Bad
         Oeynhausen has been applied for on April 27, 2000 (notarial deed no.
         894/2000 of the Notar Dr. Axel Pfeifer with official seat in Hamburg)
         is a commercial limited partnership duly incorporated and validly
         existing under the laws of the Federal Republic of Germany (the
         "Purchaser").

2.       Mr. Gerhard Bornemann is a businessman with the business address at
         Harkortstrasse 20, 45549 Sprockhovel (the "Seller No. 1").

3.       Dr. Ulrich Bornemann is a Studienrat with the business address at
         Harkortstrasse 20, 45549 Sprockhovel (the "Seller No. 2"; Seller No. 1
         and Seller No. 2 together, the "Sellers").

4.       Bornemann & Bick KG, with statutory seat in Sprockhovel with the
         principal place of business at Harkortstrasse 20, 45549 Sprockhovel,
         registered in the Commercial Register at the local court Hattingen
         under HRA 2741, is a commercial limited partnership
         (Kommanditgesellschaft) duly incorporated and validly existing under
         the laws of the Federal Republic of Germany. It has a commercial
         limited partnership capital registered in the Commercial Register in
         the nominal amount of DM 80,000.00 (German Mark: eighty thousand) (the
         "KG").

5.       Mr. Gerhard Bornemann is the only general partner (Komplementar) of the
         KG. Other general partners of the KG do not exist.

6.       Dr. Ulrich Bornemann is the only limited partner (Kommanditist) of the
         KG and owns the only commercial limited partnership interest of the KG
         (Kommanditanteil) in the nominal amount of DM 80,000.00 (German Mark:
         eighty thousand). Other commercial limited partnership interests of the
         KG do not exist.
<PAGE>   9
7.       The KG has one wholly owned subsidiary, B+B Etiketten Polska Sp. Z o.o.
         (the "Subsidiary"). The KG further has several directly held
         affiliates, Bornemann Barata S.A. (43,07%), Mandhana Bornemann
         Industries Limited (50%) and Bornemann Dualplast Istanbul Etiket Ic ve
         Dis Ticaret Limited Sirketi (98%) (together, the "Affiliates" or each a
         "Affiliate"; the KG, the Subsidiary and the Affiliates together, the
         "Companies" or each a "Company").

8.       The Companies manufacture and market apparel identification products.

9.       The Purchaser is a German holding company.

10.      Paxar Corporation with its principal place of business at 105 Corporate
         Park Drive, White Plaines, New York 10604 USA is a corporation
         organised and existing under the laws of the state of New York is the
         ultimate holding company of the Purchaser (the "Guarantor").

11.      The Seller No. 1 who is the only general partner of the KG desires to
         withdraw from the KG and to sell and to transfer his position as
         general partner of the KG to the Purchaser and the Seller No. 2 who is
         the only limited partner of the KG desires to sell and to assign his
         commercial limited partnership interest in the KG to the Purchaser
         whereby the Sellers wish to convey all their rights to the KG to the
         Purchaser according to the terms and conditions of the Agreement. The
         Purchaser wishes to become the only general partner of the KG and the
         only limited partner of the KG whereby the Purchaser wishes to acquire
         all rights to the KG according to the terms and conditions of the
         Agreement on the basis of the representations and warranties made and
         guarantees and indemnities given by the Sellers.

1.       SALE AND ASSIGNMENT

1.1      The Seller No. 1 hereby sells and transfers to the Purchaser his
         position as the only general partner (Komplementar) of the KG. The
         Seller No. 1 hereby withdraws from (tritt aus) the KG. The Purchaser
         accepts such sale and transfer, is hereby admitted as and becomes the
         only general partner of the KG.
<PAGE>   10
1.2      The Seller No. 2 hereby sells and assigns his commercial limited
         partnership interest (Kommanditanteil) of the KG in the nominal amount
         of DM 80,000.00 (German Mark: eighty thousand) being the only
         commercial limited partnership interest of the KG to the Purchaser. The
         Purchaser accepts such sale and assignment and herewith becomes the
         only limited partner of the KG.

1.3      The sale and the transfer of the position of the only general partner
         of the KG by the Seller No. 1 to the Purchaser and the sale and the
         assignment of the only commercial limited partnership interest in the
         KG by the Seller No. 2 to the Purchaser being the sale, transfer and
         assignment of all rights to the KG according to section 1.1 and section
         1.2 is made with immediate in rem effect (dingliche Wirkung) (the
         "Transfer Date"), provided, however, that the withdrawal of the Seller
         No. 1 as the only general partner of the KG and the assignment of the
         only commercial limited partnership interest in the KG is made the
         earliest with the entry (Eintragung) of the Purchaser as limited
         partner of the KG due to special legal succession
         (Sonderrechtsnachfolge) in the commercial register. Such period of
         delay of the effectiveness of the assignment shall in no manner affect
         or limit the total control of the management of the KG by the Purchaser
         from and including the Transfer Date. Contractually (schuldrechtlich)
         the sale, transfer and assignment is made with retroactive effect as of
         April 30, 2000 24:00 hours (the "Effective Date").

1.4      The sale, transfer and assignment includes and is herewith made
         regarding all claims of the Seller No. 1 and the Seller No. 2 resulting
         from the partnership accounts of the Seller No. 1 and the Seller No. 2
         with the KG, the rights to the profits and losses of the KG accruing
         since the Effective Date as well as all other rights related to the
         position as the only general partner of the KG and the only limited
         partner of the KG beginning with the Effective Date, including but not
         limited to:

         (a)      The claims of the Seller No. 2 arising out of or in connection
                  with the fixed capital account (Festkapitalkonto) of the
                  Seller No. 2 with the KG and

         (b)      the claims of the Seller No. 1 arising out of or in connection
                  with the variable capital account (variables Kapitalkonto) of
                  the Seller No. 1 with the KG.

1.5      The Seller No. 1 guarantees that the aggregate amount of all accounts
         set forth under section 1.4 shows a credit balance of at least DM
         27,556,000.00 (German Mark: twenty seven million five hundred fifty six
         thousand) as of the Effective Date, the date of the Agreement and the
         Transfer Date. The parties agree that such credit balance shall be
         determined without the inclusion of the KG's interest in Dualplast
         Italia Groppo Bornemann S.r.l. ("Dualplast Italia"). Such
<PAGE>   11
         interest of the KG in Dualplast Italia is carried as an asset of the KG
         having a book value of DM 1,082,000.00 (German Mark: one million eighty
         two thousand) as of December 31, 1999.

1.6      The Purchaser guarantees that the KG pays to the Sellers an amount
         equal to the profit of the KG accrued during the period starting with
         January 1, 2000 up to and including the Effective Date as shown in the
         Binding Transfer Accounts of the KG. Such amount is due and payable by
         the KG to the Sellers 10 (ten) bank working days after the Transfer
         Accounts of the KG (as defined in Article 3) become the Binding
         Transfer Accounts of the KG (as defined in Article 3) and shall carry
         interest starting from that due date at the rate set forth in section
         2.5.

1.7      The Taxes (as defined in section 5.6.2) owed by the Sellers personally
         in connection with the profits of the KG or in connection with
         remuneration in cash or in kind received from the KG have to be borne
         exclusively by the Sellers personally, and the Sellers herewith
         indemnify the Purchaser and the KG accordingly, provided, however, the
         Taxes owed by the Sellers personally in connection with the profits of
         the KG beginning with the Effective Date or in connection with
         remuneration in cash or in kind received from the KG on account of the
         profit of the KG beginning with the Effective Date shall be borne by
         the Purchaser and the Purchaser herewith indemnifies the Sellers
         accordingly.

1.8      The Sellers are prohibited to make withdrawals from the KG or to
         tolerate such withdrawals beginning with the date of the Agreement.

1.9      The Sellers sell and assign herewith to the Purchaser all tangible or
         intangible assets to which the Sellers may hold full or partial title,
         which serve the object of the Companies or which are designated to
         serve the object of the Companies, as well as all eventual rights of
         the Sellers against the Companies in so far as the Agreement does not
         explicitly provide otherwise, except as listed in Attachment 1.9. The
         Purchaser accepts such sale and assignment.

1.10     The Sellers herewith waive all option rights, sale rights
         (Verkaufsrechte), right of first refusal (Vorkaufsrechte) and rights of
         first receipt of an offer (Voranbietungsrechte), to which they might be
         entitled regarding their position as only general partner of the KG and
         only limited partner of the KG in connection with the transaction
         contemplated in the Agreement.

1.11     The Sellers shall execute and deliver all documents and all notarial
         formalities shall be effected which are necessary to transfer the
         position of the only general partner of the KG and assign the only
         commercial limited partnership interest in the KG as well as the
         accounts set forth in section 1.4 of the general partner of the KG and
         the limited partner of the KG with the KG free and clear of all liens,
         encumbrances and other rights of third parties. An application
<PAGE>   12
         (Handelsregisteranmeldung) to the commercial register of the local
         court Hattingen relating to the transfer of the position of the only
         general partner of the KG and the assignment of the only commercial
         limited partnership interest of the KG shall be executed by the Sellers
         and the Purchaser and certified by a German Notar and the application
         so executed shall be delivered to counsel to the Sellers for immediate
         filing with such commercial register.

1.12     The Purchaser shall pay to Mr. Dieter Korten, Leinen & Derichs
         Anwaltssozietat, Clever Strasse 16, 50668 Koln (the "Escrow Agent"),
         pursuant to the escrow agreement signed on the date hereof by the
         Escrow Agent and the Purchaser (the "First Instalment Escrow
         Agreement"), on behalf of the Seller No. 1 an amount equivalent to the
         First Instalment (as defined in section 2.3.1) and on behalf of the
         Seller No. 2 an amount equivalent to the Purchase Price according to
         section 2.2.b. The Escrow Agent shall release the amount received on
         behalf of the Seller No. 1 to the Seller No. 1 and the amount received
         on behalf of the Seller No. 2 to the Seller No. 2 upon registration of
         the transfer of the position as only general partner of the KG to the
         Purchaser and the assignment of the only limited partnership interest
         of the KG to the Purchaser in the Commercial Register of the local
         court Hattingen as provided in the First Instalment Escrow Agreement or
         by June 18, 2000 whichever comes first.

1.13     The transfer, withdrawal and assignment according to section 1.1,
         section 1.4 (b) and section 1.9 shall become valid and binding at the
         date at which the following conditions precedent are satisfied:

1.13.1   Credit of the First Instalment (as defined in section 2.3.1) to the
         account set forth in section 2.6.1, and

1.13.2   Credit of the Escrow Amount (as defined in section 2.3.2) to the
         account set forth in section 2.6.2.

1.14     The assignment according to section 1.2, section 1.4 (a) and section
         1.9 shall become valid and binding at the date at which the condition
         precedent in form of the credit of Purchase Price according to section
         2.2 (b) to the account set forth in section 2.7 is satisfied.

1.15     In execution of the Agreement the parties are obliged to sign, notarise
         and file the application to the Commercial Register in the form as
         Attachment 1.15.

2.       PURCHASE PRICE AND PAYMENT

2.1      The total consideration for the sale and transfer of the position of
         the only general partner of the KG and the sale and assignment of the
         only commercial limited partnership interest of the KG according to
         Article 1, for the sale of all tangible and intangible assets to which
         the Sellers may hold full or partial title,
<PAGE>   13
         which serve the object of the Companies or which are designated to
         serve the object of the Companies, for the sale of all eventual rights
         of the Sellers against the Companies according to section 1.9 as well
         as for all other obligations taken over by the Sellers in the Agreement
         amounts to DM 76,238,500.00 (German Mark: seventysix million two
         hundred thirtyeight thousand five hundred) (the "Purchase-Price").

2.2      The Purchase Price according to section 2.1 is split among the Seller
         No. 1 and the Seller No. 2 as follows:

         (a)      Seller No. 1: DM 76,158,500.00 (German Mark: seventysix
                  million one hundred fiftyeight thousand five hundred)

         (b)      Seller No. 2: DM 80,000.00 (German Mark: eighty thousand).

2.3      The Purchase-Price according to section 2.2 (a) shall be paid by the
         Purchaser to the Seller No. 1 in two instalments on the following due
         dates:

2.3.1    The first instalment shall be in the amount of DM 64,722,725.00 (German
         Mark: sixtyfour million seven hundred twentytwo thousand seven hundred
         twentyfive) (the "First Instalment") and shall be paid by the Purchaser
         to the Seller No. 1 at the date of the Agreement subject to (i) all
         conditions precedent pursuant to Article 11 having been satisfied and
         (ii) the First Instalment Escrow Agreement.

         The First Instalment shall be paid by the Purchaser by wire transfer.

2.3.2    The second instalment shall be in the amount of DM 11,435,775.00
         (German Mark: eleven million four hundred thirtyfive thousand seven
         hundred seventyfive) (the "Escrow-Amount") and shall be paid by the
         Purchaser on behalf of the Seller No. 1 to Clifford Chance Punder
         Rechtsanwalte Wirtschaftsprufer Steuerberater, Cecilienallee 6, 40474
         Dusseldorf ("CCP") at the date of the Agreement by wire transfer
         subject to the condition precedent pursuant to Article 11 having been
         satisfied to the interest bearing account regarding which CCP is only
         authorised to dispose of after receipt by CCP of irrevocable and
         identical instructions from both (i) the Chief Financial Officer, the
         Chief Executive Officer, the Treasurer or an Assistant Treasurer of
         Paxar Corporation, each of them with single authority of representation
         on behalf of Paxar Corporation (each of the aforementioned officers of
         Paxar Corporation, the "Paxar-Representative") and (ii) the Seller No.
         1, Mrs. Anja Bornemann and Mr. Georg Bornemann, each of them with
         single authority of representation on behalf of the Seller No. 1 (each
         of the aforementioned persons the Seller No. 1, Anja Bornemann and
         Georg Bornemann, the "Seller-Representative") (the "Escrow-Account").
         Interest accruing on the Escrow-Amount shall be added to the
         Escrow-Amount and as a consequence shall increase the Escrow-Amount.
<PAGE>   14
         (a)      Intentionally Omitted

         (b)      The Escrow-Amount shall serve the Purchaser as security for
                  claims of the Purchaser against the Sellers of all kind
                  arising out of or in connection with the Agreement (the
                  "Claims") raised by the Purchaser against the Sellers within a
                  period of 18 (eighteen) months after May 31, 2000 (the
                  "Claims-Period").

                  The Paxar-Representative and the Seller-Representative are
                  obliged to take all actions which are necessary and
                  appropriate including giving respective instructions to CCP to
                  transfer an amount equivalent to the Claims raised during the
                  Claims-Period not exceeding the Escrow-Amount from the
                  Escrow-Account to the Purchaser after the Claims have been
                  determined by mutual agreement between the parties of the
                  Agreement or by arbitration according to Article 17.

                  The Paxar-Representative and the Seller-Representative are
                  obliged to take all actions which are necessary and
                  appropriate including giving respective instructions to CCP to
                  transfer an amount, if any, equivalent to the Escrow-Amount
                  reduced by the amount equivalent to Claims, if any, raised
                  during the Claims-Period further reduced by an amount
                  equivalent to 5 (five) % (percent) of the Purchaser Price from
                  the Escrow-Account to the Sellers after the Claims-Period has
                  lapsed.

         (c)      5 (five) % (percent) of the Purchase Price, if any, which
                  remain on the Escrow-Account after the lapse of the
                  Claims-Period (the "Tax-Escrow-Amount") shall serve the
                  Purchaser as security for claims of the Purchaser against the
                  Sellers in connection with Taxes according to sections 6.1 in
                  connection with 5.6 and Article 10 (the "Tax-Claims") raised
                  by the Purchaser against the Sellers within a period of 6
                  (six) months following the date at which the tax assessments
                  made after a tax field audit of the relevant periods of all
                  the Taxes payable by the Companies for the period up to the
                  Effective Date have become final and binding such period not
                  exceeding 5 (five) years after the date of the Agreement (the
                  "Tax-Claims-Period").

                  The Paxar-Representative and the Seller-Representative are
                  obliged to take all actions which are necessary and
                  appropriate including giving respective instructions to CCP to
                  transfer an amount equivalent to the Tax-Claims raised during
                  the Tax-Claims-Period from the Escrow-Account to the Purchaser
                  after the Tax-Claims have been determined by mutual agreement
                  between the parties of the Agreement or by arbitration
                  according to Article 17.
<PAGE>   15
                  The Paxar-Representative and the Seller-Representative are
                  obliged to take all actions which are necessary and
                  appropriate including giving respective instructions to CCP to
                  transfer an amount equivalent to the Tax-Escrow-Amount reduced
                  by the amount equivalent to the Tax-Claims, if any, raised
                  during the Tax-Claims-Period from the Escrow-Account to the
                  Sellers after the Tax-Claims-Period has lapsed.

2.4      The Purchase Price according to section 2.2 (b) shall be paid by the
         Purchaser to the Seller No. 2 in one instalment at the date of the
         Agreement subject to (i) all conditions precedent pursuant to Article
         11 having been satisfied and (ii) the First Instalment Escrow
         Agreement.

         The Purchase Price according to section 2.2 (b) shall be paid by the
         Purchaser by wire transfer.

2.5      In case of default in payment, the contracting parties agree that the
         default interest (Verzugszinsen) shall be payable at a rate of 5.5 %
         (five point five percent) annually above the respective base percentage
         (Basiszinssatz) according to Section 1 German Statute Regarding
         Transitory Regulations for the Discount Rate
         (Diskontsatzuberleitungsgesetz, "DUG") for the period between the due
         date and the receipt of payment.

2.6      The Purchaser shall make payment of the Purchase Price according to
         section 2.2 (a) to the accounts set forth below:

2.6.1    The First Instalment shall be paid to the account of the Escrow Agent

         Leinen & Derichs Anwaltssozietat
         Deutsche Bank 24 AG, Branch Koeln
         account No.: 205780005
         bank code No.: 370 700 24, and

2.6.2    the Escrow Amount shall be paid to the Escrow-Account

         Clifford Chance Punder
         Deutsche Bank 24 AG
         account No.: 1079011-06
         bank code No.: 300 700 24.

2.7      The Purchaser shall make payment of the Purchase Price according to
         section 2.2 (b) to the account of the Escrow Agent set forth below:

         Leinen & Derichs Anwaltssozietat
         Deutsche Bank 24 AG, Branch Koeln
         account No.: 205780005
         bank code No.: 370 700 24.
<PAGE>   16
3.       TRANSFER ACCOUNTS OF THE KG

3.1      The KG will as soon as practicable following the date of the Agreement
         prepare a balance sheet of the KG as of the Effective Date together
         with a profit and loss account of the KG in respect of the period from
         January 01, 2000 to and including the Effective Date (the "Transfer
         Accounts of the KG").

3.2      The KG shall send the Transfer Accounts of the KG the latest by July
         31, 2000 simultaneously to the Purchaser and the Sellers.

3.3      The Purchaser and the Sellers will be deemed to have received the
         Transfer Accounts of the KG on the 3. (third) day (the "Date of
         Receipt") following the dispatch by the KG of the Transfer Accounts of
         the KG to the Purchaser and the Sellers.

3.4      Each of the Sellers and the Purchaser shall notify the other in writing
         within a period of 20 (twenty) days after the Date of Receipt, as to
         whether it intends to retain a firm of auditors to review the Transfer
         Accounts of the KG.

3.5      If both the Seller and the Purchaser give notice that they do not
         intend to retain a firm of auditors or if they do not notify the other
         of its intention to retain a firm of auditors to review the Transfer
         Accounts of the KG in accordance with section 3.4, then the Transfer
         Accounts of the KG as delivered by the KG shall be deemed to be
         approved and shall be final and binding on the parties (the "Binding
         Transfer Accounts of the KG").

3.6      If either or both of the Sellers and the Purchaser give written notice
         of its intention to retain a firm of auditors in accordance with
         section 3.4, such review shall be carried out and all objections raised
         by the auditor(s) shall be delivered by written notice to the party who
         retained such auditor and to the other party within a period of 40
         (forty) days after the Date of Receipt.

3.7      If the auditors retained by the Sellers and/or the Purchaser do not
         raise any objections within the period pursuant to section 3.6 to the
         contents of the Transfer Accounts of the KG, then the Transfer Accounts
         of the KG as delivered by the KG shall be deemed to be approved and
         shall be final and binding on the parties (the "Binding Transfer
         Accounts of the KG").

3.8      If either of the auditors retained by a party raises objections to the
         contents of the Transfer Accounts of the KG, the parties shall use
         their best efforts to resolve such objections. In case the objections
         raised by either of the auditors retained by the parties should lead to
         an amendment of the Transfer Accounts of the KG, the accounts amended
         by the Sellers and the Purchaser by mutual written agreement signed by
         the parties shall be deemed to be approved and
<PAGE>   17
         shall be final and binding on the parties (the "Binding Transfer
         Accounts of the KG").

3.9      If the parties fail to reach an agreement on the disputed issues within
         a period of 60 (sixty) days after the Date of Receipt, the disputed
         issues shall be referred to an independent firm of auditors with
         significant international experience appointed as expert
         (Schiedsgutachter) in the sense of Section 317 German Civil Code
         (Burgerliches Gesetzbuch, "BGB") (the "Expert") and not as an
         arbitrator jointly by the Sellers and the Purchaser, who will resolve
         the disputed issues. The decision of the Expert shall be final and
         binding on the parties. The Transfer Accounts of the KG as amended by
         the decision of the Expert shall be final and binding on the parties
         (the "Binding Transfer Accounts of the KG"). If the parties fail to
         agree on the firm of auditors to appoint as the Expert within a period
         of 70 (seventy) days after the Date of Receipt, the Expert (which shall
         be an independent firm of auditors with significant international
         experience) shall be appointed by the President of the Institut der
         Wirtschaftsprufer e. V., Dusseldorf upon the request of either party of
         the Agreement.

3.10     Each party bears the cost of the firm of auditors it retains to review
         the Transfer Accounts of the KG. Each party shall bear one half of the
         costs of the Expert appointed pursuant to section 3.9.

3.11     The Transfer Accounts of the KG shall be prepared in accordance with
         the principles set out in section 5.3.1 whereby (i) no hidden reserves
         shall be dissolved, especially not by the exercise of option rights
         pursuant to tax or commercial law, (ii) the Subsidiary and the
         Affiliates shall not be consolidated, (iii) the principle of balance
         sheet consistency (Grundsatz der Bilanzkontinuitat) with the Financial
         Statement of the KG (as defined in section 5.3.1) shall be applicable,
         and (iv) the profits of the Subsidiary and the Affiliates which have
         not been distributed to the KG shall only be taken into account with a
         lump sum of DM 150,000.00 (German Mark: one hundred fifty thousand).
         The parties agree that the Transfer Accounts of the KG shall reflect
         the transfer of the KG's interest in Dualplast Italia Groppo Bornemann
         S.r.l. ("Dualplast Italia") from the KG to the Seller No. 1 against no
         consideration and shall not constitute a loss. Such interest of the KG
         in Dualplast Italia is carried as an asset of the KG having a book
         value of DM 1,082,000.00 (German Mark: one million eighty two thousand)
         as of December 31, 1999.

4.       ADJUSTMENT OF THE PURCHASE PRICE

4.1      Adjustment of the Purchaser Price due to lower equity capital:

4.1.1    In the course of the determination of the Purchase Price the parties
         proceeded on the assumption that the equity capital of the KG in the
         sense of Section 266 para. (3)
<PAGE>   18
         lit. A of the German Commercial Code (Handelsgesetzbuch, "HGB")
         (Eigenkapital) (the "Equity Capital") in the Binding Transfer Accounts
         of the KG amounts to at least DM 27,556,000.00 (German Mark: twenty
         seven million five hundred fifty six thousand).

4.1.2    Should the Equity Capital in the Binding Transfer Accounts of the KG be
         lower than the amount of DM 27,556,000.00 (German Mark: twenty seven
         million five hundred fifty six thousand) the Purchase Price shall be
         reduced by an amount equivalent to the difference.

4.1.3    The amount by which the Purchase Price is reduced in accordance with
         section 4.1.2 is due and payable by the Seller No. 1 to the Purchaser,
         10 (ten) bank working days after the Transfer Accounts of the KG became
         the Binding Transfer Accounts of the KG and shall carry interest
         starting from such due date up to the date at which the amount by which
         the Purchase Price is reduced is credited on the account of the
         Purchaser at the rate set forth in section 2.5.

4.2      Adjustment of the Purchase Price due to higher obligations owed to
         banks:

4.2.1    In the course of the determination of the Purchase Price the parties
         proceeded on the assumption that the aggregate amount of the
         obligations of the Companies (except Bornemann-India and
         Bornemann-Spain both as defined below), Bonny Nice Industries Limited
         and Bonny Nice (Panyu) Label Co., Ltd. owed to banks at the Transfer
         Date including interest accrued thereon up to and including the
         Transfer Date (the "Bank-Debt") does not exceed the amount of DM
         9,500,000.00 (German Mark: nine million five hundred thousand).

4.2.2    Should the Bank-Debt exceed the amount of DM 9,500,000.00 (German Mark:
         nine million five hundred thousand), the Purchase Price shall be
         reduced by an amount equivalent to the difference between the Bank-Debt
         and the amount of DM 9,500,000.00 (German Mark: nine million five
         hundred thousand).

4.2.3    The amount by which the Purchase Price is reduced in accordance with
         section 4.2.2 is due and payable by the Seller No. 1 to the Purchaser
         (i) 40 (forty) days after the Transfer Date or (ii) in case the dispute
         is referred to the Bank Debt Expert 10 (ten) days after the decision of
         the Bank Debt Expert has been rendered and shall in both cases carry
         interest starting from the Transfer Date up to the date at which the
         amount by which the Purchase Price is reduced is credited on the
         account of the Purchaser at the rate set forth in section 2.5.

4.2.4    The amount of the Bank-Debt shall be determined by Arthur Andersen
         Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft mbH,
         Sophienstrasse 5, 30159 Hannover, Federal Republic of Germany
         ("Arthur Andersen") and shall be notified by Arthur Andersen in writing
         to the Sellers
<PAGE>   19
         and the Purchaser simultaneously the latest 30 (thirty) days after the
         Transfer Date (the "Date of Receipt").

4.2.5    In case the Purchaser or the Sellers do not agree with the
         determination made by Arthur Andersen according to section 4.2.4, the
         Purchaser or the Sellers as the case may be shall notify the respective
         other parties of such disagreement at the latest 10 (ten) days after
         the Date of Receipt. If a notification according to this section is not
         made, the amount of the Bank-Debt as determined by Arthur Andersen
         shall be binding on the parties.

4.2.6    If the parties fail to reach an agreement on the amount of the
         Bank-Debt after a notification has been made according to section 4.2.5
         within a period of 20 (twenty) days after the Date of Receipt, the
         dispute shall be referred to an independent firm of auditors with
         significant international experience appointed as an expert
         (Schiedsgutachter) in the sense of Section 317 BGB (the
         "Bank-Debt-Expert") and not as an arbitrator jointly by the Sellers and
         the Purchaser who will resolve the dispute. The decision of the
         Bank-Debt-Expert shall be final and binding on the parties. The amount
         of the Bank-Debt as decided by the Bank-Debt-Expert shall be final and
         binding on the parties. If the parties fail to agree on the firm of
         auditors to appoint as the Bank-Debt-Expert within a period of 30
         (thirty) days after the Date of Receipt the Bank-Debt-Expert (which
         shall be an independent firm of auditors with significant international
         experience) shall be appointed by the President of the Institut der
         Wirtschaftsprufer e.V., Dusseldorf upon the request of either party of
         the Agreement.

4.2.7    The cost of the determination made by Arthur Andersen shall be borne by
         the Purchaser. Each party shall bear one half of the costs of the
         Bank-Debt-Expert appointed pursuant to section 4.2.6.

5.       REPRESENTATIONS, WARRANTIES AND GUARANTEES OF THE SELLERS

         The Seller No. 1 hereby represents (gewahrleist) and warrants (sichert
         zu) to the Purchaser and takes responsibility for, as an independent
         guarantee (als selbstandiges Garantieversprechen) in the meaning of
         Section 305 German Civil Code (Burgerliches Gesetzbuch, BGB) vis a vis
         the Purchaser that the following statements and declarations are
         complete and correct as of the date of the Agreement and the Transfer
         Date, except as provided otherwise in the Agreement and the Seller No.
         2 hereby represents (gewahrleistet) and warrants (sichert zu) to the
         Purchaser and takes responsibility for, as an independent guarantee
         (als selbstandiges Garantieversprechen) in the meaning of Section 305
         German Civil Code (Burgerliches Gesetzbuch, BGB) vis a vis the
         Purchaser that the statements and declarations made in No. 7 of the
         Preliminary Remarks and in sections 5.2.14, 5.2.20 and 5.2.27 are
         complete and correct as of the date of the
<PAGE>   20
         Agreement and the Transfer Date, except as provided otherwise in the
         Agreement:

5.1      Preliminary Remarks

         The representations made in the Preliminary Remarks to the Agreement
         especially relating to the KG, the sole general partner of the KG and
         the sole limited partner of the KG, the Subsidiary and the Affiliates
         and the direct or indirect interests or shares of the KG in the
         Subsidiary and the Affiliates are complete and correct in every
         respect.

5.2      Corporate Matters

5.2.1    The KG is a commercial limited partnership duly incorporated and
         validly existing, is licensed or qualified to transact business in all
         locations in which it transacts business and has the corporate power
         and authority to own, lease or operate its assets and properties and to
         carry on its business as now being conducted.

5.2.2    B+B Etiketten Polska Sp. Z o.o. ("B+B-Polska") is duly incorporated and
         validly existing under the laws of its jurisdiction of incorporation,
         is licensed or qualified to transact business in all locations in which
         it transacts business and has the corporate power and authority to own,
         lease or operate its assets and properties and to carry on its business
         as now being conducted. If required by law, B+B-Polska is properly and
         correctly registered in the commercial or other relevant company
         registers, and the current registrations reflect the most recent
         corporate status in B+B-Polska.

5.2.3    (Intentionally Omitted)

5.2.4    Bornemann Barata S.A. ("Bornemann-Spain") is duly incorporated and
         validly existing under the laws of its jurisdiction of incorporation,
         is licensed or qualified to transact business in all locations in which
         it transacts business and has the corporate power and authority to own,
         lease or operate its assets and properties and to carry on its business
         as now being conducted. If required by law, Bornemann-Spain is properly
         and correctly registered in the commercial or other relevant company
         registers, and the current registrations reflect the most recent
         corporate status in Bornemann-Spain.

5.2.5    Mandhana Bornemann Industries Limited ("Bornemann-India") is duly
         incorporated and validly existing under the laws of its jurisdiction of
         incorporation, is licensed or qualified to transact business in all
         locations in which it transacts business and has the corporate power
         and authority to own, lease or operate its assets and properties and to
         carry on its business as now being conducted. If required by law,
         Bornemann-India is properly and correctly
<PAGE>   21
         registered in the commercial or other relevant company registers, and
         the current registrations reflect the most recent corporate status in
         Bornemann-India.

5.2.6    Bornemann Dualplast Istanbul Etiket Ic ve Dis Ticaret Limited Sirketi
         ("Bornemann-Turkey") is duly incorporated and validly existing under
         the laws of its jurisdiction of incorporation, is licensed or qualified
         to transact business in all locations in which it transacts business
         and has the corporate power and authority to own, lease or operate its
         assets and properties and to carry on its business as now being
         conducted. If required by law, Bornemann-Turkey is properly and
         correctly registered in the commercial or other relevant company
         registers, and the current registrations reflect the most recent
         corporate status in Bornemann-Turkey.

5.2.7    Attachment 5.2.7 contains a most recent abstract from the competent
         Commercial Register and the true, accurate and complete version of the
         articles of association or other organisational instruments of the KG
         presently valid and in full force and effect. No changes have been made
         thereto. Besides such articles of association or other organisational
         instruments there are no agreements, resolutions or arrangements
         whatsoever which relate to the relationship between the KG and the
         partners of the KG or the relationship among the partners of the KG.
         There are no obligations to enter into such agreements, resolutions or
         arrangements which the Purchaser would be subject to as a consequence
         of the acquisition of the partnership interests in the KG.

5.2.8    Attachment 5.2.8 contains a most recent abstract from the competent
         Commercial Register and the true, accurate and complete version of the
         articles of association or other organisational instruments of
         B+B-Polska presently valid and in full force and effect. No changes
         have been made thereto. Besides such articles of association or other
         organisational instruments there are no agreements, resolutions or
         arrangements whatsoever which relate to the relationship between
         B+B-Polska and the interest holders of B+B-Polska. There are no
         obligations to enter into such agreements, resolutions or arrangements
         which the Purchaser or the Companies would be subject to as a
         consequence of the acquisition of the partnership interests in the KG.

5.2.9    (Intentionally Omitted)

5.2.10   Attachment 5.2.10 contains a most recent abstract from the competent
         Commercial Register and the true, accurate and complete version of the
         articles of association or other organisational instruments of
         Bornemann-Spain presently valid and in full force and effect. No
         changes have been made thereto. Besides such articles of association or
         other organisational instruments there are no agreements, resolutions
         or arrangements whatsoever which relate to the relationship between
         Bornemann-Spain and the share holders of Bornemann-
<PAGE>   22
         Spain or the relationship among the share holders of Bornemann-Spain.
         There are no obligations to enter into such agreements, resolutions or
         arrangements which the Purchaser or the Companies would be subject to
         as a consequence of the acquisition of the partnership interests in the
         KG.

5.2.11   Attachment 5.2.11 contains a most recent abstract from the competent
         Commercial Register and the true, accurate and complete version of the
         articles of association or other organisational instruments of
         Bornemann-India presently valid and in full force and effect. No
         changes have been made thereto. Besides such articles of association or
         other organisational instruments there are no agreements, resolutions
         or arrangements whatsoever which relate to the relationship between
         Bornemann-India and the share holders of Bornemann-India or the
         relationship among the share holders of Bornemann-India. There are no
         obligations to enter into such agreements, resolutions or arrangements
         which the Purchaser or the Companies would be subject to as a
         consequence of the acquisition of the partnership interests in the KG.

5.2.12   Attachment 5.2.12 contains a most recent abstract from the competent
         Commercial Register and the true, accurate and complete version of the
         articles of association or other organisational instruments of
         Bornemann-Turkey presently valid and in full force and effect. No
         changes have been made thereto. Besides such articles of association or
         other organisational instruments there are no agreements, resolutions
         or arrangements whatsoever which relate to the relationship between
         Bornemann-Turkey and the shareholders of Bornemann-Turkey or the
         relationship among the share holders of Bornemann-Turkey. There are no
         obligations to enter into such agreements, resolutions or arrangements
         which the Purchaser or the Companies would be subject to as a
         consequence of the acquisition of the partnership interests in the KG.

5.2.13   The KG, the Subsidiary and the Affiliates are not bound by or otherwise
         a party to a domination or profit and loss absorption agreement within
         the meaning of Sections 291 et seq. or Section 324 para. (2) of
         the German Stock Corporation Act (Aktiengesetz, AktG) or other
         agreement to make up for losses of whatsoever kind of a person or
         company. The KG has not been a subordinate company (Organgesellschaft)
         to a dominant company (Organtrager) for trade tax purposes.

5.2.14   The limited partner's capital contribution (Hafteinlage) of the Seller
         No. 2 being the only limited partner of the KG in the amount of DM
         80,000.00 (German Mark: eighty thousand) has been fully contributed
         (erbracht). No repayments of capital have been made in whole or in
         part. Such commercial limited partnership interest is non-assessable
         (nicht nachschusspflichtig). There are neither obligations to repay
         nor collateral obligations. No capital contributions in kind have been
         made in respect of the capital of the KG.

<PAGE>   23
5.2.15   The registered share capital in the nominal amount of PLN 4,000 (polish
         zlotys: four thousand) of B+B-Polska has been fully paid up in cash. No
         repayments of capital have been made in whole or in part. The shares
         are non-assessable (nicht nachschusspflichtig). There are neither
         obligations to repay nor collateral obligations. There have been no
         contributions in kind in respect of the share capital of B+B-Polska.

5.2.16   (Intentionally Omitted)

5.2.17   The registered share capital in the nominal amount of 65,000,000
         Pesetas (spanish pesetas: sixty five million) of Bornemann-Spain has
         been fully paid up in cash. No repayments of capital have been made in
         whole or in part. The shares are non-assessable (nicht
         nachschusspflichtig). There are neither obligations to repay nor
         collateral obligations. There have been no contributions in kind in
         respect of the share capital of Bornemann-Spain.

5.2.18   The registered share capital in the nominal amount of 16,000,000.00
         Indian Rupees (Indian Rupees: sixteen million) of Bornemann-India has
         been fully paid up in cash/in kind. No repayments of capital have been
         made in whole or in part. The shares are non-assessable (nicht
         nachschusspflichtig). There are neither obligations to repay nor
         collateral obligations. There have been no contributions in kind in
         respect of the share capital of Bornemann-India.

5.2.19   The registered share capital in the nominal amount of 16,000,000,000.00
         TL (Turkish Lira: sixteen billion) of Bornemann-Turkey has been fully
         paid up in cash/in kind. No repayments of capital have been made in
         whole or in part. The shares are non-assessable (nicht
         nachschusspflichtig). There are neither obligations to repay nor
         collateral obligations. There have been no contributions in kind in
         respect of the share capital of Bornemann-Turkey.

5.2.20   No other persons or companies, except those mentioned in the
         Preliminary Remarks of the Agreement, hold any direct or indirect
         interest in the KG and no rights to grant such interests exist. The
         position of the only general partner sold and transferred and the only
         commercial limited partnership interest sold and assigned are validly
         existing. The Seller No 1 is the sole and unrestricted general partner
         of the KG and the Seller No 2 is the sole and unrestricted limited
         partner of the KG. The Seller No 1 and the Seller No 2 are the only
         partners (Gesellschafter) of the KG. Both, the Seller No 1 is holding
         his position as general partner (Komplemetar) and the Seller No 2 is
         holding his commercial limited partnership interest (Kommanditist) free
         and clear of all liens, encumbrances and other rights of third parties
         and are not subject to any option rights, preemptive rights, rights of
         first refusal or other rights in favour of third parties. No rights
         exist to grant such rights or to transfer the position as general
         partner and to assign the commercial limited partnership interest.
<PAGE>   24

5.2.21   The KG is the sole and unrestricted owner of all shares in B+B-Polska,
         being 80 shares of a nominal value of 50 zlotys each (the
         "B+B-Polska-Shares"). The B+B-Polska-Shares are free and clear of any
         liens, encumbrances or other rights of third parties and the
         B+B-Polska-Shares are not subject to any option rights, preemption
         rights or rights of first refusal in favour of any third party; the
         B+B-Polska-Shares have been fully paid up in cash, have not been repaid
         (in whole or in part) and are non-assessable.

5.2.22   (Intentionally Omitted)

5.2.23   Except as listed in Attachment 5.2.23, the KG is the sole and
         unrestricted owner of 2,800 shares in Bornemann-Spain with a nominal
         value of 10,000 Pesetas each, being 43.07% of the total outstanding
         6,500 shares with a nominal value of 10,000 Pesetas each (the
         "Bornemann-Spain-Shares"). The Bornemann-Spain-Shares are free and
         clear of any liens, encumbrances or other rights of third parties and
         the Bornemann-Spain-Shares are not subject to any option rights,
         preemption rights or rights of first refusal in favour of any third
         party; all the Bornemann-Spain-Shares have been fully paid up in cash,
         have not been repaid in whole or in part and are non-assessable.

5.2.24   Except as listed in Attachment 5.2.24, the KG is the sole and
         unrestricted owner of 800.000 shares in Bornemann-India with a nominal
         value of 10 Indian Rupees each, being 50% of the total outstanding
         1,600,000 shares of a nominal value of 10 Indian Rupees each (the
         "Bornemann-India-Shares"); the Bornemann-India-Shares are free and
         clear of any liens, encumbrances or other rights of third parties and
         the Bornemann-India-Shares are not subject to any option rights,
         preemption rights or rights of first refusal in favour of any third
         party; all the Bornemann-India-Shares have been fully paid up in cash,
         have not been repaid in whole or in part and are non-assessable.

5.2.25   The KG is the sole and unrestricted owner of 634 shares in
         Bornemann-Turkey with a nominal value of TL 25,000,000.00 each, being
         98% of the total outstanding 640 shares of a nominal value of TL
         25,000,000.00 each (the "Bornemann-Turkey-Shares"). The
         Bornemann-Turkey-Shares are free and clear of any liens, encumbrances
         or other rights of third parties and the Bornemann-Turkey-Shares are
         not subject to any option rights, preemption rights or rights of first
         refusal in favour of any third party; all the Bornemann-Turkey-Shares
         have been fully paid up in cash, have not been repaid (in whole or in
         part) and are non-assessable.

5.2.26   Neither the KG, nor the Subsidiary nor any of the Affiliates owns or
         holds any other equity, interest, shares, participations or
         sub-participations of any kind in any other person or entity except as
         shown in Attachment 5.2.26.

<PAGE>   25

5.2.27   The Sellers have the unrestricted right to freely dispose of the
         position as the only general partner of the KG sold and transferred and
         the only commercial limited partnership interest of the KG sold and
         assigned in the Agreement. There are no restrictions regarding the
         right to dispose of, or rights of third parties regarding the position
         as the only general partner of the KG and the only commercial limited
         partnership interest of the KG. Sub-participations (Unterbeteiligungen)
         do not exist. With the transfer of the position as the only general
         partner of the KG and the assignment of the only commercial limited
         partnership interest in the KG, and the transfer of assets and possible
         rights against the Companies according to section 1.8, the Purchaser
         acquires full, unrestricted and unencumbered title to the position as
         the only general partner of the KG and the only commercial limited
         partnership interest in the KG, assets and rights to his free
         disposition.

5.2.28   The KG has the unrestricted right to freely dispose of the
         B+B-Polska-Shares. There are no restrictions regarding the right to
         dispose of, or rights of third parties regarding the B+B-Polska-Shares.
         Sub-participations (Unterbeteiligungen) do not exist.

5.2.29   (Intentionally Omitted)

5.2.30   Except as listed in Attachment 5.2.30, the KG has the unrestricted
         right to freely dispose of the Bornemann-Spain-Shares; there are no
         restrictions regarding the right to dispose of, or rights of third
         parties regarding the Bornemann-Spain-Shares. Sub-participations
         (Unterbeteiligungen) do not exist.

5.2.31   Except as listed in Attachment 5.2.31, the KG has the unrestricted
         right to freely dispose of the Bornemann-India-Shares; there are no
         restrictions regarding the right to dispose of, or rights of third
         parties regarding the Bornemann-India-Shares. Sub-participations
         (Unterbeteiligungen) do not exist.

5.2.32   The KG has the unrestricted right to freely dispose of the
         Bornemann-Turkey-Shares sold and assigned in the Agreement. There are
         no restrictions regarding the right to dispose of, or rights of third
         parties regarding the Bornemann-Turkey-Shares. Sub-participations
         (Unterbeteiligungen) do not exist.

5.2.33   Neither the KG nor the Subsidiary and the Affiliates have any right or
         obligation to acquire or to subscribe to any equity or other interest
         in any other person or entity and no person or entity has the right to
         call for the allotment, issuance, conversion, sale or transfer of any
         share or interest of, or other securities as the case may be, giving
         rise to a right over the capital of any company of the Companies.

5.2.34   (Intentionally Omitted)

<PAGE>   26

5.2.35   Except for Bornemann-Turkey none of the Companies is over-indebted or
         insolvent (uberschuldet oder zahlungsunfahig).

5.2.36   Neither the KG nor the Subsidiary and Affiliates are a party to any
         joint-venture agreement, cooperation agreement, working party agreement
         (Arbeitsgemeinschaftsvertrag) or similar contractual arrangement with
         third parties (excluding membership in professional associations),
         except as listed in Attachment 5.2.36.

5.2.37   None of the Companies has branch offices or other business operations
         apart from the administrative headquarters, except as listed in
         Attachment 5.2.37.

5.2.38   None of the Companies has a supervisory board, advisory board,
         consultancy board or comparable boards and no other obligations as the
         statutory obligations or the obligations arising out of the articles of
         association to institute such boards, except as listed in Attachment
         5.2.38.

5.2.39   Neither the execution or delivery of the Agreement and any other
         agreements or instruments executed or to be executed in connection with
         the Agreement to which the Sellers will become a party, nor the
         consummation of the transactions contemplated hereby or thereby

         (a)      requires any filing or registration with, or permit,
                  authorization, consent or approval of, any court,
                  governmental, administrative or regulatory authority or any
                  third party for which the parties of the Agreement shall not
                  be obliged to comply using their best efforts,

         (b)      violates legal provisions or instruments or other agreements
                  the Sellers are subject to,

         (c)      violates the Articles of Association of the Companies or
                  similar legal provisions or instruments the Companies are
                  subject to,

         (d)      except as set forth in Attachment 5.2.39 (d) conflicts with,
                  violates, results in breach of, or constitutes a default
                  under, any contract, agreement, arrangement or instrument to
                  which one of the Companies is a party or by which one of the
                  Companies is bound or relieves any other party to such
                  contract, agreement, arrangement or instrument of its
                  obligations thereunder or entitles any such party to
                  terminate, amend, supplement, suspend or renegotiate such
                  contract, agreement, arrangement or instrument,

         (e)      except as set forth in Attachment 5.2.39 (e) creates or
                  increases the amount of any liability or obligation of one of
                  the Companies under such contract, agreement, arrangement or
                  instrument (or give any other party

<PAGE>   27

                  the right to accelerate the obligation thereunder or claim any
                  fee or penalty with respect thereto) or any liability or
                  obligation for which the Purchaser or one of the Companies
                  will assume responsibility following the date of the
                  Agreement, or

         (f)      except as set forth in Attachment 5.2.39 (f) will result in
                  the lapse of rights of one of the Companies.

5.2.40   The KG has no liability arising out of or in connection with the sale
         of Dualplast Italia Gruppo Bornemann S.r.l. ("Dualplast Italia"), the
         liquidation of Intertag Labels S.r.l., Via Friuli, 55, 31020 San
         Vendemiano (TV), Italy and the liquidation or sale of Tunital Labels
         s.a.r.l., Rotue de La Soukra km 9, 2036 La Soukra, Tunsia.

5.3      Financial Matters

5.3.1    The Sellers have delivered to the Purchaser the financial statement
         (balance sheet, profit and loss account and notes (Anhang) thereto) of
         the KG for the fiscal year 1999 (the "Financial Statement of the KG").
         The Financial Statement of the KG is contained in Attachment 5.3.1. The
         Financial Statement of the KG has been prepared with the due diligence
         of an orderly and prudent businessman in accordance with the generally
         accepted German principles of proper accounting and preparation of
         financial statements (Grundsatze ordnungsgemasser Buchfuhrung und
         Bilanzierung) and valuation (Bewertung) according to the governing
         principles set forth in the German Commercial Code (Handelsgesetzbuch,
         HGB) for commercial partnerships as well as in accordance with all
         other applicable statutory provisions applying the principle of balance
         sheet consistency (Grundsatz der Bilanzkontinuitat) as well as applying
         the same valuation methods. The Financial Statement of the KG contains
         all known (bekannte) assets and all recognizable (erkennbare)
         liabilities. All recognizable risks (erkennbare Risiken), depreciation
         in value (Wertminderungen) and/or losses are taken care of by
         sufficient depreciation (Abschreibungen), value adjustments (Einzel-
         oder Pauschalwertberichtigungen) or provisions (Ruckstellungen). The
         Financial Statement of the KG is complete and correct and correctly
         reflects the actual economic (Vermogens-), financial (Finanz-) and
         profit situation (Ertragslage) of the KG as of the date
         (Bilanzstichtag) and for the period of the Financial Statement of the
         KG within the meaning of Section 264 HGB.

5.3.2    The Sellers have delivered to the Purchaser the financial statement
         (balance sheet and profit and loss account) of the Subsidiary for the
         fiscal year 1999, the "Financial Statement of the Subsidiary"). The
         Financial Statement of the Subsidiary is contained in Attachment 5.3.2.
         The Financial Statement of the Subsidiary has been prepared with the
         due diligence of an orderly and prudent businessman in accordance with
         the principles of proper accounting and

<PAGE>   28

         preparation of financial statements and valuation generally accepted in
         the jurisdiction of organisation of the Subsidiary applying the
         principle of balance sheet consistency as well as applying the same
         valuation methods. The Financial Statement of the Subsidiary contains
         all known assets and all recognizable liabilities. All recognizable
         risks, depreciation in value and/or losses are taken care of by
         sufficient depreciation, value adjustments or provisions. The Financial
         Statement of the Subsidiary is complete and correct and correctly
         reflects the economic, financial and profit situation of the Subsidiary
         as of the date and for the period of the Financial Statement of the
         Subsidiary.

5.3.3    The Sellers have delivered to the Purchaser the balance sheet of
         Bornemann-Turkey as of December 31, 1999. The balance sheet of
         Bornemann-Turkey as of December 31, 1999 is contained in Attachment
         5.3.3. The balance sheet of Bornemann-Turkey as of December 31, 1999
         has been prepared with the due diligence of an orderly and prudent
         businessman in accordance with the principles of proper accounting and
         preparation of financial statements and valuation generally accepted in
         Turkey applying the principle of balance sheet consistency as well as
         applying the same valuation methods. The balance sheet of
         Bornemann-Turkey as of December 31, 1999 contains all known assets and
         all recognizable liabilities. All recognizable risks, depreciation in
         value and/or losses are taken care of by sufficient depreciation, value
         adjustments or provisions with the exception of potential provisions in
         connection with the past business practices of Bornemann-Turkey. The
         balance sheet of Bornemann-Turkey as of December 31, 1999 is complete
         and correct and correctly reflects the economic, financial and profit
         situation of Bornemann-Turkey as of the respective date with the
         exception of potential provisions in connection with the past business
         practices of Bornemann-Turkey. The exception made in the two preceding
         sentences regarding the past business practices of Bornemann-Turkey is
         also applicable to all other representations, warranties and guarantees
         of the Sellers regarding Bornemann-Turkey referred to in the Agreement.

5.3.4    The Sellers have delivered to the Purchaser the financial statements
         (balance sheet and profit and loss account) of Bornemann-Spain for the
         fiscal year 1999 and Bornemann-India for the fiscal year ended March
         31, 2000 (the financial statements of Bornemann-Spain and
         Bornemann-India together, the "Financial Statements of the
         Affiliates"). The Financial Statements of the Affiliates are contained
         in Attachment 5.3.3. The Financial Statements of the Affiliates have
         been prepared with the due diligence of an orderly and prudent
         businessman in accordance with the principles of proper accounting and
         preparation of financial statements and valuation generally accepted in
         the jurisdiction of organisation of such Affiliate applying the
         principle of balance sheet consistency as well as applying the same
         valuation methods. The Financial Statements of the Affiliates contain
         all known assets and all recognizable liabilities. All recognizable
         risks,

<PAGE>   29

         depreciation in value and/or losses are taken care of by sufficient
         depreciation, value adjustments or provisions. The Financial Statements
         of the Affiliates are complete and correct and correctly reflect the
         economic, financial and profit situation of each of the Bornemann-Spain
         and Bornemann-India as of the respective dates and for the respective
         periods of the Financial Statements of the Affiliates (the Financial
         Statement of the KG, the Financial Statement of the Subsidiary, the
         balance sheet of Bornemann-Turkey as of December 31, 1999 and the
         Financial Statements of the Affiliates, together the "Financial
         Statements".)

5.3.5    All the tangible assets having a book value in excess of DM 100,000.00
         (German Mark: one hundred thousand) reflected in the Financial
         Statements are fit to be used and in good operating condition and
         repair (with the exception of normal wear and tear). All the tangible
         and intangible assets, properties and rights reflected in the Financial
         Statements are in unrestricted ownership of the Companies, which
         Companies can dispose freely of such assets, properties and rights
         which are, except as set forth under section 5.3.6, free and clear of
         any liens, encumbrances or other rights of third parties and comprise
         all the business assets which are necessary for carrying on the
         business of the Companies as now carried on and such assets, properties
         and rights, were sufficient to produce the income for the period
         between January 1, 2000 and the Transfer Date as shown on the relevant
         income statement for that period contained in the relevant financial
         statement other than assets, properties and rights not owned by the
         Companies which were used by the Companies on the basis of binding
         agreements with (i) the Sellers as set forth in Attachment 5.3.5 (a) or
         (ii) third parties as listed in Attachment 5.3.5 (b). Except as listed
         in Attachment 5.3.5, the Companies have not any liabilities that are
         not directly related to, and that did not arise directly out of their
         business. Each single asset has a value of at least the amount as shown
         in the Financial Statements.

5.3.6    The stock (Vorrate) stated in the Financial Statements is only
         encumbered with title retention rights (Eigentumsvorbehaltsrechte) or
         other securities for liabilities which came into existence during the
         ordinary course of the business and which are shown in the Financial
         Statements. The stock of the Companies are readily saleable or properly
         reserved against.

5.3.7    The Financial Statements including the notes (Anhang) thereto, makes
         full and adequate disclosure of, and provision for, all obligations and
         liabilities of the Companies to which they relate as of the date
         thereof. The Companies do not have any liabilities, debts, claims or
         obligations (including "off-balance sheet" liabilities, debts, claims
         or obligations) and nothing of the foregoing comes into existence out
         of events, actions or omissions during the time period up to the
         Transfer Date in excess of DM 250,000.00 (German Mark: two hundred
         fifty thousand) in each single case, whether accrued, absolute,
         contingent or

<PAGE>   30

         otherwise, and whether due or to become due, other than (i) as fully
         provided for in the Financial Statements, (ii) as listed in Attachment
         5.3.7 or (iii) trade payables and accrued expenses incurred in the
         ordinary course of business since the respective dates of the Financial
         Statements.

5.4      Real Estate Property

         (a)      The KG is the sole owner of the real estate property located
                  in Germany and described in Attachment 5.4 (a) as to owner,
                  postal address of property, competent real estate property
                  register (Grundbuchamt), land register folio number
                  (Grundbuchblatt-Nummer), cadastral district (Flur), cadastral
                  unit (Flurstuck) and size. The real estate property described
                  in Attachment 5.4 (a) is identical with such real estate
                  property which is marked with red colour on the current
                  certified cadastre maps contained in Attachment 5.4 (a) the
                  "German Real Estate"). The abstracts from the real estate
                  register regarding the German Real Estate are attached as
                  Attachment 5.4 (a).

         (b)      There are no rights to purchase (Ankaufsrechte), rights of
                  sale (Verkaufsrechte), buy-back rights (Ruckkaufrechte) or
                  similar rights and no mortgages (Grundpfandrechte) relating to
                  the German Real Estate, except statutory purchase rights of
                  the municipalities (Vorkaufsrecht der Gemeinden) and those
                  which have been registered in the respective real estate
                  property abstracts which are listed in Attachment 5.4 (b) as
                  to real estate property register, land register folio number
                  and date of the latest entry.

         (c)      The German Real Estate is only encumbered with such mortgages
                  (Grundpfandrechte) which are entered into Section III (Dritte
                  Abteilung) of the land register folio and listed in Attachment
                  5.4 (c).

         (d)      The KG has no outstanding obligations to pay local improvement
                  assessments (Erschliessungsbeitrage) regarding the German Real
                  Estate.

(e)               There are no encumbrances according to private or
                  administrative law on the German Real Estate, other than those
                  set forth above, which may result in any financial obligation
                  of the KG or would have a detrimental effect on the present
                  and future use of the German Real Estate. The German Real
                  Estate is not subject to charges according to public law
                  (Baulasten), except as listed in Attachment 5.4 (e) (i). The
                  land development plan (Flachennutzungsplan) and the building
                  scheme (Bebauungsplan) applicable to the German Real Estate
                  are attached as Attachment 5.4 (e) (ii).

<PAGE>   31

         (f)      The Subsidiary and the Affiliates are the owner of the real
                  estate property located outside of Germany described in
                  Attachment 5.4 (f) as to location, size and ownership. The
                  real estate described in Attachment 5.4 (f) is identical with
                  such real estate property which is marked with red colour on
                  the maps contained in Attachment 5.4 (f). Such real estate
                  property is only encumbered as shown in Attachment 5.4 (f)
                  (the "Foreign Real Estate"; the German Real Estate and the
                  Foreign Real Estate together, the "Companies Real Estate").
                  The Subsidiary and the Affiliates have no obligations to pay
                  local improvement assessments regarding the Foreign Real
                  Estate. There are no encumbrances on the Foreign Real Estate,
                  other than those set forth above, which may result in any
                  financial obligation of the Companies or would have a
                  detrimental effect on the present and future use of the
                  Foreign Real Estate.

         (g)      The real estate property leased or rented by the KG is
                  described in Attachment 5.4 (g) as to lessor, lessee,
                  location, size and annual lease payment. The lessee has not
                  committed a material violation of the lease or rental
                  agreement which would give the owner or lessor of the real
                  estate property the right to prematurely terminate the rental
                  or lease agreement concerned. The KG is not in default with
                  payments or other obligations owed under the lease or rental
                  agreements. The lessor has not given notice of termination
                  regarding such lease or rental agreements (the "German Leased
                  Real Estate").

         (h)      The KG has the unwithdrawable right to purchase the leased
                  property which is described in Attachment 5.4 (h) as to
                  Lessor, Lessee, Size and annual lease payment from the Lessor
                  for such terms and conditions as described in Section B II
                  Section 1 through to Section 20 of the notarial deed
                  No.1028/1988B dated 8 June 1988 of the German Notar Dr.
                  Friedhelm Bauer with official residence in Mainz (the "Sale
                  and Lease Back Agreement"). The Sellers are not responsible
                  for legal consequences in connection with the lease agreement
                  due to acts or omissions caused by the Purchaser or its legal
                  successors.

         (i)      The real estate property leased or rented by the Subsidiary or
                  the Affiliates is described in Attachment 5.4 (i) as to
                  lessor, lessee, location, size and annual lease payment. The
                  lessee has not committed a material violation of the lease or
                  rental agreement which would give the owner or lessor of the
                  real estate property the right to prematurely terminate the
                  rental or lease agreement concerned. The Subsidiary and the
                  Affiliates are not in default with payments or other
                  obligations owed under the lease or rental agreements. The
                  lessor has not given notice of termination regarding such
                  lease or rental agreements (the "Foreign Leased Real

<PAGE>   32

                  Estate"; the German Leased Real Estate and the Foreign Leased
                  Real Estate together, the "Leased Real Estate").

         (j)      The Companies do not use or possess real estate property which
                  is neither the Companies Real Estate nor the Leased Real
                  Estate. The Companies do not own and have not leased any real
                  estate property which is not set forth in Attachment 5.4 (f)
                  (Companies Real Estate) and Attachment 5.4 (i) (Leased Real
                  Estate).

                  The Companies do not have any obligation to acquire or lease
                  any real estate property.

         (k)      The Companies have leased real estate property to third
                  parties as set forth in Attachment 5.4 (k) as to location,
                  lessor, lessee and annual lease payment.

         (l)      During the last 5 (five) years the Companies

                  (i)      have only sold the real estate property listed in
                           Attachment 5.4 (l) (i) and

                  (ii)     have terminated lease agreements regarding real
                           estate property listed in Attachment 5.4 (l) (ii).

         (m)      To the best knowledge of the Seller No. 1 after due inquiry,
                  the buildings located on the Companies Real Estate and the
                  buildings used by the Companies have been erected in
                  compliance with the - to the extent the buildings are located
                  in the Federal Republic of Germany - applicable provisions of
                  the construction planning law (Bauplanungsrecht) and of the
                  building regulation law (Bauordnungsrecht) or - to the extent
                  the buildings are located outside the Federal Republic of
                  Germany - applicable other legal provisions applicable to the
                  buildings at their respective location and are used and
                  maintained in compliance with such laws. The Companies Real
                  Estate is not subject to the laws regarding protection of
                  monuments (Denkmalschutz). All public permits and licences
                  required for the construction and operation of the buildings
                  and constructions installed on the Companies Real Estate or on
                  the buildings used by the Company have been obtained. No
                  withdrawal or revocation of such public permits and licences
                  has been threatened and there are no circumstances which would
                  allow such withdrawal or revocation of any such public permit
                  or licence. All statements in the application for such public
                  permits and licences were, and to the best knowledge, all
                  statements in such public permit and licences are true,
                  accurate and

<PAGE>   33

                  complete and all permits and licences that are necessary or
                  useful for the operation of the buildings and constructions
                  are transferable.

5.5      Period following the End of the Recent Fiscal Year

         Except as mentioned in Attachment 5.5 and since December 31, 1999 or
         since March 31, 2000 as the case may be until the date of the Agreement
         the business and the operations of the Companies have been conducted
         according to the principles of a prudent businessman; no changes in the
         business activities or the financial circumstances or the kind and
         manner of conducting the business of the Companies have occurred, which
         are outside the ordinary course of the business activities of the
         Companies and which are not consistent with past practices. Without
         limiting the foregoing and except as mentioned in Attachment 5.5 since
         December 31, 1999 or since March 31, 2000 as the case may be until the
         date of the Agreement:

         (a)      The Companies have not suffered any material adverse effect
                  on, or material adverse change in the condition (financial or
                  otherwise), business, operations, assets, liabilities, results
                  of operation, cash flows, or prospects.

         (b)      The Companies have not incurred any obligation (contingent or
                  otherwise) or entered into any contract, agreement or
                  arrangement which, ab initio, either

                  (i)      requires a payment by any party in excess of, or a
                           series of payments which in the aggregate exceed, DM
                           500,000.00 (German Mark: five hundred thousand) or
                           provides for the delivery of goods or performance of
                           services, or any combination thereof, having a value
                           in excess of DM 500,000.00 (German Mark: five hundred
                           thousand), or

                  (ii)     has a term in excess of, or requires the performance
                           of any obligations by the Companies over a period in
                           excess of 6 (six) months.

         (c)      The Companies have not taken any action, or entered into or
                  authorized any contract, agreement or arrangement or
                  transaction, other than in the ordinary course of business and
                  consistent with past practice. None of the Companies incurred
                  any obligation in excess of DM 200,000.00 (German Mark: two
                  hundred thousand) in the aggregation which are not shown in
                  the books of the Companies or which were not incurred in the
                  ordinary course of the business of the Companies.
<PAGE>   34

         (d)      The Companies have not sold, transferred, conveyed, assigned
                  or otherwise disposed of any of their assets or properties in
                  each single case in excess of DM 200,000.00 (German Mark: two
                  hundred thousand), except sales of inventory in the ordinary
                  course of business and consistent with past practice.

         (e)      The Companies have not acquired or disposed of any shares or
                  interest in other companies or partnerships.

         (f)      The Companies have not entered into, authorized, or permitted
                  any transaction with the Sellers.

         (g)      The Companies have not authorized for issuance, issued, sold,
                  delivered or agreed or committed to issue, sell or deliver
                  (whether through the issuance or granting of options,
                  warrants, convertible or exchangeable securities, commitments,
                  subscriptions, rights to purchase or otherwise) any of their
                  capital or any other securities, or amended any of the terms
                  of any such capital or securities. The Companies have not
                  changed their corporate documents or changed their registered
                  capital.

         (h)      The Companies have not split, combined, or reclassified any
                  interests in their capital, declared, set aside or paid any
                  dividend or other distribution (whether in cash, securities or
                  property or any combination thereof) in respect of their
                  capital, or redeemed or otherwise acquired any capital or
                  securities of the Companies.

         (i)      The Companies have not made any borrowing or agreements to
                  borrow, incurred any debt or applied for the granting or
                  increase of a credit line (other than trade payables in the
                  ordinary course of business and consistent with past
                  practice), or assumed, guaranteed, endorsed (except for the
                  negotiation or collection of negotiable instruments in
                  transactions in the ordinary course of business and consistent
                  with past practice) or otherwise become liable (whether
                  directly, contingently or otherwise) for the obligations of
                  any other person or entity, or made any payment or repayment
                  in respect of any indebtedness (other than trade payables and
                  accrued expenses in the ordinary course of business and
                  consistent with past practice).

         (j)      The Companies have not made any loans or extensions of credit
                  to, advances or capital contributions to, or investments in,
                  any other person or entity in excess of DM 100,000.00 (German
                  Mark: one hundred thousand) in each single case or DM
                  250,000.00 (German Mark: two hundred fifty thousand) in the
                  aggregate.

<PAGE>   35

         (k)      The Companies have not entered into, adopted, amended or
                  terminated any bonus, profit sharing, compensation,
                  termination, stock option, stock appreciation right,
                  restricted stock, performance unit, pension, retirement,
                  deferred compensation, employment, severance or other employee
                  benefit agreements, trusts, plans, funds or other arrangements
                  for the benefit or welfare of any director, officer,
                  consultant or employee, or increased in any manner the
                  compensation or fringe benefits of any director, officer,
                  consultant or employee or paid any benefit not required by any
                  existing plan and arrangement or entered into any contract,
                  agreement, commitment or arrangement to do any of the
                  foregoing in excess of an annual obligation of DM 150,000.00
                  (German Mark: one hundred fifty thousand) in each single case.

         (l)      The Companies have not except for capital expenditures
                  contemplated by section 5.5 (m) acquired, leased or encumbered
                  any assets or properties outside the ordinary course of
                  business or any assets with a market value of more than DM
                  100,000.00 (German Mark: one hundred thousand) in each single
                  case or DM 250,000.00 (German Mark: two hundred fifty
                  thousand) in the aggregate.

         (m)      The Companies have not authorized or made any capital
                  expenditure which individually is in excess of DM 200,000.00
                  (German Mark: two hundred thousand).

         (n)      The Companies have not made any tax election or settled or
                  compromised any liability for Taxes (as defined in section
                  5.6).

(o)               The Companies have not paid any amount, performed any
                  obligation or agreed to pay any amount or perform any
                  obligation, in settlement or compromise of any suits or claims
                  of liability against the Companies or any of their respective
                  board members, managing directors, officers, employees or
                  agents in excess of DM 50,000.00 (German Mark: fifty thousand)
                  in each single case and DM 100,000.00 (German Mark: one
                  hundred thousand) in the aggregate.

         (p)      The Companies have not been subject of a substantial change or
                  termination of any Material Contract (as defined in section
                  5.13.5 below).

5.6      Taxes and Other Levies

5.6.1    The Companies have

         (a)      paid when due (and, if not yet due, has fully and adequately
                  provided for on the Financial Statements) all Taxes (as
                  defined below), levies, social

<PAGE>   36

                  contributions, duties or other assessments or charges of any
                  nature whatsoever imposed by any taxing authority and any
                  amounts representing the recapture of investment and other
                  incentives. The Companies have not incurred any liabilities
                  for Taxes other than in the ordinary course of business for
                  any taxable year for which the applicable statute of
                  limitations has not expired; there are no liens (other than
                  liens for current Taxes not yet due and payable) upon the
                  assets or properties of the Companies. The Companies have not
                  granted or been requested to grant any waiver or extension of
                  any statute of limitations applicable to any claim for Taxes,

         (b)      filed all Tax Returns (as defined below) for all periods
                  through and including the date of the Agreement as required by
                  applicable statutes, law, regulations or common practice and
                  paid (and, if not yet due, has fully and adequately provided
                  for on the Financial Statements) all Taxes shown as due on the
                  Tax Returns and on all tax assessments. Each tax return is
                  true, accurate and complete and the Companies have not and
                  will not have any additional liability for Taxes with respect
                  to any Tax Return, other than as reflected as liabilities on
                  the Financial Statements. No amended Tax Returns have been or
                  are proposed to be filed by the Companies nor has any
                  liability for Taxes been settled or compromised. The Companies
                  have furnished to the Purchaser correct and complete copies of
                  all Tax Returns for all tax years for which the applicable
                  statutes of limitations has not expired. The Companies have
                  copies of all Tax Returns and supporting work schedules for
                  all tax periods or portions thereof ending before or including
                  the Transfer Date and has not destroyed or otherwise disposed
                  of any such records,

         (c)      paid the current adequate advance payments for all relevant
                  Taxes,

         (d)      duly withheld or collected all Taxes the Companies are
                  required to withhold or collect,

         (e)      filed tax returns in the countries listed in Attachment 5.6.1
                  (e) and has no current or former presence in any taxing
                  jurisdiction in which it does not file Tax Returns that may
                  cause the Companies to be subject to any Tax in such taxing
                  jurisdiction,

         (f)      not made any hidden profit distributions.

5.6.2    "Tax" or "Taxes" means all income, corporation, gross receipts,
         profits, sales, use, value added, transfer, employment, social
         contribution, franchise, license, payroll, unemployment, exercise,
         capital duties, customs duties, environmental, property, estimated
         withholding or other taxes, fees, stamp taxes and duties,

<PAGE>   37

         assessments or charges of any kind whatsoever (whether payable directly
         or by withholding), together with any interest and any penalties,
         additions to tax or additional amounts imposed by any taxing authority
         with respect thereto.

         "Tax Return(s)" means any return (including any consolidated, combined
         or pro forma return), report, declaration, claim for refund,
         information return or statement, relating to any Tax, including any
         schedule or attachment thereto or any amendment thereof.

5.6.3    The last tax field audit (steuerliche Aussenprufung) of the KG has been
         carried out during the year 1999 and was related to the period
         including 1997. A copy of the last tax audit report is contained in
         Attachment 5.6.3. No Tax Return of the Companies is currently under
         examination by any taxing authority nor have the Companies been
         contacted by any taxing authority in order to commence such an
         examination. There are no pending appeals or other administrative or
         judicial proceedings with respect to any Tax imposed with respect to
         the activities of the Companies.

5.7      Intellectual Property Rights

         (a)      Attachment 5.7 (a) (i) sets out a true, accurate and complete
                  list of all patents including utility patents and design
                  patents (Patente, Gebrauchsmuster und Geschmacksmuster),
                  trademarks/service marks (Marken) (including logos), business
                  or trade name including respective applications which are
                  owned by, licensed to, necessary for or used in the business
                  of the Companies (including intellectual property rights
                  licensed to the Companies from the Sellers) for products
                  designed, developed, manufactured, used, marketed, sold,
                  distributed, serviced or maintained as well as for related
                  services as of the date of the Agreement or at any time during
                  the 2 (two) year period prior to the date of the Agreement or
                  in development as of the date of the Agreement or at any time
                  during the 2 (two) year period prior to the date of the
                  Agreement (hereinafter the "Intellectual Property Rights").
                  Attachment 5.7 (a) (ii) sets out a true, accurate and complete
                  list of all such Intellectual Property Rights which are owned
                  by the Companies (the "Intellectual Property Rights of the
                  Companies").

         (b)      Besides the Intellectual Property Rights there are no
                  intellectual property rights including respective applications
                  which are owned by the Sellers which relate to the business of
                  the Companies.

         (c)      Except for design patents the Companies have fully carried out
                  their business activities and have used all trademarks/service
                  marks (Marken) included in the Intellectual Property Rights of
                  the Companies to the

<PAGE>   38

                  extent required by law for the Companies to register and
                  enforce such trademarks/service marks except as listed in
                  Attachment 5.7 (c).

         (d)      Third parties neither have challenged nor have threatened to
                  challenge the Intellectual Property Rights by means of filing
                  objections, taking action for cancellation or otherwise except
                  as set forth in Attachment 5.7 (d).

         (e)      To the best knowledge of the Sellers third parties do neither
                  infringe the Intellectual Property Rights nor make
                  unauthorized use of the know-how except as set forth in
                  Attachment 5.7 (e).

         (f)      No intellectual property rights of third parties are
                  conflicting with or prevent the unlimited use of the
                  Intellectual Property Rights and Know-How; the products
                  produced and sold and the services provided by the Companies
                  and any process, method and design employment in connection
                  with such products or services and the marketing, use or
                  provision by the Companies of any such product or service do
                  not infringe or conflict with any intellectual property rights
                  of any other person or entity; none of the Intellectual
                  Property Rights is subject to any pending or threatened
                  litigation or claim of infringement and no written notice has
                  been received by the Sellers and the Companies contesting the
                  right of the Companies to use any Intellectual Property
                  Rights; the Companies can make unlimited use of their
                  Know-How; except as listed in Attachment 5.7 (f).

         (g)      All Intellectual Property Rights of the Companies are properly
                  registered and maintained and valid, or a proper application
                  for registration has been filed with regard to such
                  Intellectual Property Rights of the Companies. The Companies
                  have not granted any license or agreed to pay or receive any
                  royalty in respect to the Intellectual Property Rights of the
                  Companies except as listed in Attachment 5.7 (g). The
                  Intellectual Property Rights of the Companies are free and
                  clear of any liens, encumbrances and other rights of third
                  parties.

         (h)      All Intellectual Property Rights licensed to, but not owned by
                  the Companies are shown in Attachment 5.7 (h) and all such
                  licenses are valid and enforceable and the Companies are not
                  in breach or default with respect to any such license or
                  royalty agreements nor have they received any written notice
                  of termination thereunder.

         (i)      The Companies have not granted or received know-how licenses
                  except as listed in Attachment 5.7 (i).

<PAGE>   39

         (j)      The Companies own or hold valid and enforceable licenses for
                  the use of all software rights used in their business.

         (k)      All software used in the business of the Companies is Year
                  2000 compliant.

5.8      Insurance

         Attachment 5.8 contains a true, accurate and complete list of all
         insurance policies applicable to the Companies (and its respective
         business and assets) including the third party liability insurance
         contracts (setting forth whether the third party liability insurance
         contract is of claim made or occurrence type) in each case with the
         statement of the insured amount and the annual premium. Such insurance
         policies provide type and amounts of insurance customarily obtained by
         businesses similar to the business of the Companies (including with
         respect to product liability coverage).

5.9      Approvals

5.9.1    Attachment 5.9.1 sets out a true, accurate and complete list of all
         material licenses, certificates, permits, permit applications,
         franchises, private product approvals ("Approvals") held by or applied
         for by the Companies. The Approvals listed in Attachment 5.9.1 are the
         only material approvals required according to public and private law to
         conduct the respective business operations of the Companies, as
         presently conducted and the revocation, withdrawal or refusal of any of
         the Approvals is not pending. The business of the Companies is carried
         out in compliance with such Approvals. Except as listed in Attachment
         5.9.1 all material approvals required for the production, marketing and
         sale of all products of the Companies have been obtained and are valid
         and in full force and effect. All products sold by the Companies comply
         with the applicable statutory or other legal provisions and the
         Approvals.

         Neither the Sellers nor the Companies are aware of nor have received
         notice that any supranational, national, federal, state or local
         governmental or regulatory authority or agency (the "Authorities") in
         their respective jurisdiction has commenced, or is considering
         commencing, any action to seize, withdraw any of the Approvals of, or
         recall any device developed, produced, manufactured, tested,
         distributed, packaged or sold or serviced by the Companies, and have no
         grounds to believe that these or other enforcement actions are
         imminent.

5.9.2    Except as previously disclosed to the Guarantor or its accountant to
         the best knowledge of the Seller No. 1 after due inquiry, the Companies
         have not and no officer, employee, or agent of the Companies has made
         an untrue statement of material fact or fraudulent statement to the
         Authorities, failed to disclose a material fact required to be
         disclosed to the Authorities, or committed an act,

<PAGE>   40

         made a statement, or failed to make a statement that could reasonably
         be expected to provide a basis for the Authorities to invoke any
         investigative or other proceedings.

5.9.3    Except as previously disclosed to the Guarantor or its accountant to
         the best knowledge of the Seller No. 1 after due inquiry, the Companies
         do not violate in their businesses any right or rights of third
         parties. The Companies and their businesses and all of their
         properties, assets and equipment are in compliance with, and no
         violation exists under, any and all laws, statutes, rules, regulations,
         ordinances and decrees applicable to the Companies and to such
         businesses, properties assets and equipment (including applicable laws,
         regulations and orders of any Authorities). The Companies are currently
         not the subject of any compliance or enforcement actions by any
         Authorities nor are they subject to any consent orders or decrees. No
         notice from any Authorities has been received by the Companies claiming
         any violation of any law, statute, rule, regulation, ordinance or
         decree or requiring any work, constructing or expenditure, or asserting
         any tax, assessment or penalty.

5.10     Pension / Labour

5.10.1   all work's council agreements (Betriebsvereinbarungen) or collective
         bargaining agreements (Tarifvertrage) of the KG are listed in
         Attachment 5.10.1. No further works council agreements or collective
         bargaining agreements are currently being negotiated in respect of the
         KG,

5.10.2   (Intentionally Omitted)

5.10.3   except as listed in Attachment 5.10.3, the relationships of the
         Companies with their employees are good and there is, and during the
         past 3 (three) years prior to the date of the Agreement there has been,
         no material dispute with trade unions, labor strike, dispute,
         slow-down, work stoppage or other labor difficulty actually pending or
         threatened against or involving the Companies,

5.10.4   the Companies have and currently are conducting their business in full
         compliance with all laws, rules, regulations and ordinances, works
         council agreements and collective bargaining agreements relating to
         employment and employment practices, terms and conditions of
         employment, family leave, wages and hours and nondiscrimination
         unemployment,

5.10.5   Attachment 5.10.5 sets out a true, accurate and complete list of the
         names, titles, locations, annual compensation and all bonuses and
         similar payments made with respect to each such individual for the
         current and preceding fiscal years for all board members, managing
         directors, directors, officers and employees of the

<PAGE>   41

         Companies who have an annual base salary of more than DM 150,000.00
         (German Mark: one hundred fifty thousand) or who can only be terminated
         by the Companies with a notice period of 3 (three) or more months.

5.10.6   except as listed in Attachment 5.10.6 the KG does not owe any benefit
         having a monetary value (geldwerte Leistung) to any of its current or
         former employees which is not owed on the basis of employment contracts
         or collective bargaining agreements and which have without reservation
         of their voluntary nature been granted more than three times.

5.10.7    (Intentionally Omitted)

5.10.8   The Companies have no obligations arising from the termination or
         cancellation of any employment agreement exceeding DM 50,000.00 (German
         Mark: fifty thousand) in each single case, except as set forth in
         Attachment 5.10.8.

5.10.9   The Companies have no obligation, whether contractually established or
         by plant exercise (betriebliche Ubung), to pay or grant to any of its
         current or former employees any salary, fringe benefit exceeding DM
         150,000.00 (German Mark: one hundred fifty thousand) annually in each
         single case, other than listed in Attachment 5.10.9.

5.10.10  (Intentionally Omitted)

5.11     Negative Representations

         The Companies are not party or subject to:

         (a)      rental, leasing or similar contracts with continuing
                  obligations which in each single case provide for an annual
                  payment in excess of DM 250,000.00 (German Mark: two hundred
                  fifty thousand) except as listed in Attachment 5.11 (a),

         (b)      consultancy agreements which provide for an annual payment in
                  excess of DM 200,000.00 (German Mark: two hundred thousand)
                  except as listed in Attachment 5.11 (b),

         (c)      obligations owed to a benevolent fund, pension liabilities,
                  pension- and related benefit liabilities or other agreements
                  for payments in case of sickness, disablement or age except as
                  listed in Attachment 5.11 (c),

         (d)      sales agreements with a volume of more than DM 250,000.00
                  (German Mark: two hundred fifty thousand) annually of the
                  Companies which have a different wording compared to the
                  standard sales contract of the Companies which is contained in
                  Attachment 5.11 (d) (i) and which are not governed by the
                  general conditions of sales of the Companies

<PAGE>   42

                  contained in Attachment 5.11 (d) (ii), whereby sales
                  agreements with varying delivery terms, discounted payment
                  terms of less than 61 (sixtyone) days and annual volume
                  bonuses of less than 3 (three) % (percent) of invoiced prices
                  are not considered as having different wording compared to the
                  standard sales contract of the Companies,

         (e)      agreements regarding compensation, dependant on profit or
                  turnover of the Companies, profit sharing or similar
                  arrangements except as listed in Attachment 5.11 (e),

         (f)      competition restraints or contracts or other documents that
                  limit the freedom of the Companies to compete or similar
                  restrictions to the detriment of the Companies except as
                  listed in Attachment 5.11 (f),

         (g)      sureties, guarantees, comfort letters, performance bonds,
                  letters of credit or similar undertakings regarding the
                  indebtedness of any person or entity incurred or issued by the
                  Companies with a face value of more than DM 250,000.00 (German
                  Mark: two hundred fifty thousand), except as listed in
                  Attachment 5.11 (g),

         (h)      contingent or actual repayment obligations in connection with
                  grants or subsidies received by the Companies except as listed
                  in Attachment 5.11 (h),

         (i)      contractual obligations of whatsoever kind which are not shown
                  in the Financial Statements with a face value of more than DM
                  250,000.00 (German Mark: two hundred fifty thousand), except
                  as set forth in sections 5.11 (a) through to 5.11 (h) or in
                  sales agreements and except as listed in Attachment 5.11 (i),

         (j)      pending, expected or threatened actions, claims, disputes,
                  inquiries or proceedings before courts, administrative
                  authorities or arbitration bodies, investigations or inquiries
                  by administrative authorities, especially due to impairment of
                  the environment (including no criminal investigations) where
                  the Companies are a party to or involved or named in or where
                  properties or assets of the Companies are involved in, with an
                  aggregate value in dispute (Streitwert) in excess of DM
                  500,000.00 (German Mark: five hundred thousand) except as
                  listed in Attachment 5.11 (j). There are no facts known which
                  could give reason to institute the aforementioned proceedings,

         (k)      forward contracts regarding goods, foreign currencies and
                  interest (Waren-, Devisen- und Zinstermingeschafte) except as
                  listed in Attachment 5.11 (k),

<PAGE>   43

         (l)      license agreements with the Companies as licensor or licensee
                  regarding intellectual property rights or other unprotected
                  Know-How except as listed in Attachment 5.11 (l),

         (m)      contractual or statutory obligations to make lump sum payments
                  (Abfindungen) of whatsoever kind except as listed in
                  Attachment 5.11 (m),

         (n)      commitments to pay out loans or loans with a principal amount
                  of more than DM 10,000.00 (German Mark: ten thousand) which
                  have been paid out by the Companies except as listed in
                  Attachment 5.11 (n),

         (o)      distribution agreements (distributor- or commercial agent
                  agreements) (Eigenhandler oder Handelsvertretervertrage) of
                  whatsoever kind (including similar commission arrangement)
                  except as listed in Attachment 5.11 (o) (i) (appointing the
                  Companies as distributor or commercial agent) and Attachment
                  5.11 (o) (ii) (appointing a third party as distributor or
                  commercial agent). All such agreements are in conformity with
                  the respective applicable law including EU-law, if EU-law is
                  applicable on such agreements, except as stated in the
                  aforementioned attachments,

         (p)      powers of attorney of whatsoever kind including bank,
                  cashier's or powers of attorney regarding bills of exchange
                  except as listed in Attachment 5.11 (p),

         (q)      acts of violation of competition, e.g. no violations of
                  Sections 1 et seq. German Act Against Unfair Trade Practice
                  (Gesetz gegen den unlauteren Wettbewerb, UWG),

         (r)      orders by the Companies, except in the ordinary course of
                  business, especially no orders for investments in an amount
                  exceeding DM 200,000.00 (German Mark: two hundred thousand) in
                  each single case,

         (s)      obligations outside the ordinary course of business,

         (t)      any judgement or order rendered by court or administrative
                  proceedings or any settlement entered into in such context
                  which would substantially impair or restrict the Companies in
                  conducting their businesses, in acquiring or selling of goods
                  or assets or in competing in the market,

         (u)      agreements with an annual volume of more than DM 250,000.00
                  (German Marks: two hundred fifty thousand) which either do not
                  automatically come to an end 6 (six) months after the entering
                  into of the Agreement or which cannot be terminated by the
                  Companies so that they

<PAGE>   44

                  come to an end the latest within 6 (six) months after the
                  entering into of the Agreement except as listed in Attachment
                  5.11 (u),

         (v)      agreements which in each single case lead to payments which
                  are received or which have to be made by the Companies of more
                  than DM 250,000.00 (German Mark: two hundred fifty thousand)
                  annually or which are otherwise of special significance for
                  the Companies other than sales in the ordinary course with the
                  exception of those listed in Attachment 5.11 (v). The Sellers
                  do not know of any impairment of the performance of
                  obligations arising out of such agreements, especially the
                  Companies are not in default with any obligations of the
                  Company arising out of such agreements,

         (w)      agreements which are to the best knowledge of the Sellers not
                  valid,

         (x)      loan agreements and other banking and overdraft facilities
                  other than those set forth in Attachment 5.11 (x).

5.12     Environmental

         No harmful substances (Schadstoffe) have been let (einlassen), have
         seeped (einsickern), have been stored (einlagern) or otherwise have
         been put (einbringen) into the ground (Erdreich), water (Grundwasser
         und Oberflachenwasser) and air (Luft) of any of the property, owned,
         leased or used by the Companies and no such substances have been on
         such property in violation of all the applicable laws. All harmful
         substances have been dealt with (umgehen), stored (lagern) and disposed
         of (entsorgen) in compliance with all Environmental Laws and
         Environmental Permits applicable from time to time when any such action
         has been taken.

         The Companies are in compliance with all Environmental Laws and
         Environmental Permits. All waste products generated by the Companies
         are disposed of in compliance with applicable Environmental Laws in
         effect now or at the time of such disposal, and, where applicable,
         pursuant to and in accordance with all Environmental Permits.

         There is no liability, whether asserted or unasserted, fixed or
         contingent, relating to the real estate property, owned, leased or used
         by the Companies which results from any environmental matters,
         including, the use, discharge, disposal, storage, accumulation,
         transport, leakage, spillage or other actions by the Companies with
         respect to any harmful or toxic substances, hazardous waste or other
         pollutants, contaminants or nuisances.

<PAGE>   45

         No claim has been made with respect to the operation of facilities of
         the Companies resulting from any harmful substance, hazardous waste or
         from any asbestos or similar materials used in the construction thereof
         and there is no valid basis for any such claim.

         For purposes of this Article:

         (a)      the term "Environmental Law(s)" means any law, statute,
                  regulation, ordinance, rule, order, decree, judgement, consent
                  decree, settlement agreement or governmental requirement
                  enacted, promulgated, entered into, agreed or imposed by any
                  government of any country in which the properties owned,
                  leased or used by the Companies are located, or any state or
                  political subdivision thereof and any entity, body or
                  authority exercising executive, legislative, judicial,
                  regulatory or administrative functions of or pertaining to
                  government in such country, which relates to or otherwise
                  imposes liability or standard of conduct concerning
                  discharges, emissions, releases or threatened releases of
                  noises, odours or any pollutants, contaminants or hazardous or
                  toxic wastes, substances or materials, whether as matter of
                  energy, into ambient air, water, or land, or otherwise
                  relating to manufacture, processing, generation, distribution,
                  use, treatment, storage, disposal, cleanup, transport or
                  handling of pollutants, contaminants, or hazardous or toxic
                  wastes, substances or materials; and

         (b)      the term "Environmental Permit(s)" means any permit, license,
                  approval, consent or other authorization required by pursuant
                  to any applicable Environmental Law.

         The statements and declarations contained in section 5.12 are only
         given to the best knowledge of Sellers to the extent they relate to the
         Affiliates.

5.13     Miscellaneous

5.13.1   Neither the Purchaser nor any affiliate of the Purchaser nor the
         Companies have or shall have any liability or otherwise suffer or incur
         any loss, cost or damage as a result of or in connection with any
         brokerage or finder's fee or other commission of any person retained by
         the Sellers or the Companies in connection with any of the transactions
         contemplated by the Agreement.

5.13.2   The managing directors of the Companies are listed in Attachment 5.13.2
         (i). Holders of a commercial limited statutory power of attorney
         (Prokura) are listed in Attachment 5.13.2 (ii). There are no other
         managing directors or holders of a commercial limited statutory power
         of attorney.

<PAGE>   46

5.13.3   Except as previously disclosed to the Purchaser and its accountant to
         the best knowledge of the Seller No. 1 after due inquiry, neither the
         Companies nor the Subsidiary and Affiliates nor any of its respective
         board members, managing directors, directors, officers, employees,
         agents or representatives, nor any other person or entity acting on
         behalf of any of them, has made, paid or received bribes, kickbacks or
         other similar payments to or from any person, whether lawful or
         unlawful.

5.13.4   Attachment 5.13.4 (i) contains a true, accurate and complete list of
         all open accounts receivable of the KG which came into existence up to
         April 30, 2000 and of the Subsidiary and the Affiliates which came into
         existence up to March 31, 2000 including its respective due dates and
         Attachment 5.13.4 (ii) contains a true, accurate and complete list of
         all open liabilities of the KG which came into existence and which have
         been invoiced on or prior to April 30, 2000 and of the Subsidiary and
         the Affiliates which came into existence and which have been invoiced
         on or prior to March 31, 2000 including its respective due dates with
         the exception of such accounts receivable and liabilities of the
         Companies which are contained in the Financial Statements.

5.13.5   Attachment 5.13.5 contains a true, accurate and complete list of all
         contracts, agreements or arrangements, other than contracts set forth
         under section 13.4, by which the Companies are bound, or in respect of
         which any of their assets or properties are subject, providing for an
         aggregate annual payment obligation of more than DM 500,000.00 (German
         Mark: five hundred thousand) or with a termination period of more than
         6 (six) months (all contracts, agreements or arrangements listed in
         Attachment 5.13.5, the "Material Contracts"). All Material Contracts
         (true, accurate and complete copies of which have been delivered to the
         Purchaser) are in full force and have not been terminated by any party
         thereto. The Companies are not in default in the fulfilment of any of
         the obligations under or resulting from such Material Contracts. No
         other party to such Material Contract is in default of its obligations
         thereunder.

5.13.6   The list of all bank accounts of the Companies except Bornemann-Spain
         and Bornemann-India set forth in Attachment 5.13.6 is complete and
         correct including the list of all persons which are authorized to sign
         or to dispose about such accounts.

5.13.7   Attachment 5.13.7 sets out a true, accurate and complete list of all
         guarantees (Garantien, Burgschaften, Kreditauftrage) issued by the
         Sellers for the benefit of the Companies or issued by the KG for the
         Subsidiary or the Affiliates.

5.13.8   The credit-lines of the Companies are set forth in Attachment 5.13.8.

<PAGE>   47

5.13.9   The information provided by the Sellers and the Companies regarding the
         KG, B+B-Polska and Bornemann Turkey in the course of the due diligence
         process to the Purchaser and on the Purchaser's behalf to its advisors,
         is true, accurate and complete in all respects. The information
         provided by the Sellers and the Companies regarding Bornemann Spain and
         Bornemann India in the course of the due diligence process to the
         Purchaser and on the Purchaser's behalf to its advisors, is to the best
         knowledge of the Seller No. 1 after due inquiry true, accurate and
         complete in all respects. No information has been withheld which is of
         importance for the evaluation of the Companies and their business.

6.       LEGAL CONSEQUENCES IN CASE OF VIOLATION OF REPRESENTATIONS, WARRANTIES
         AND GUARANTEES

6.1      In case a representation or warranty or guarantee given by the Sellers
         in Article 5 should be incorrect, the Purchaser shall give the Sellers
         respective notice by registered letter and shall request the Sellers to
         bring about the contractual condition which would have existed if such
         representation or warranty or guarantee would have been fulfilled
         within a period, selected at the discretion of the Purchaser, but being
         at least 60 calendar days. In the event that

         (i)      the Sellers are not able to bring about such contractual
                  condition, or

         (ii)     the Sellers refuse to bring about such contractual condition,
                  or

         (iii)    the Sellers fail to bring about such contractual condition
                  within the period of time identified in the Purchaser's
                  notice, and

         (iv)     the Purchaser or the Companies suffer any financial damage or
                  loss as a consequence of such breach of representation or
                  warranty or guarantee (whether or not the Sellers have brought
                  about the contractual condition),

         then at the discretion of the Purchaser, either (A) the Purchaser shall
         reduce the Purchase Price (Minderung) in the respective amount of the
         loss or damage arising from such breach of a representation or warranty
         or guarantee or (B) the Sellers shall put at the discretion of the
         Purchaser the Purchaser or the Companies in the position the Purchaser
         or the Companies would have been in if the representation or warranty
         or guarantee would have been correct.

6.2      The Purchaser is only entitled to assert claims based on breach of
         representations, warranties or guarantees if the aggregate amount of
         such claims exceeds the amount of DM 1,000,000.00 (German Mark: one
         million).

<PAGE>   48

6.3      The aggregate amount of all claims of the Purchaser against the Sellers
         arising out of Article 6 shall not exceed 30% (thirty percent) of the
         Purchase Price as reduced (if any) in accordance with Article 4. Within
         the limitation contained in the preceding sentence (i) all claims of
         the Purchaser against the Sellers arising out of Article 6 in
         connection with Bornemann-Turkey shall not exceed DM 10,000,000.00
         (German Mark: ten million), (ii) all claims of the Purchaser against
         the Sellers arising out of Article 6 in connection with Bornemann-Spain
         shall not exceed 5 (five) % (percent) of the Purchase Price as reduced
         (if any) in accordance with Article 4, and (iii) all claims of the
         Purchaser against the Sellers arising out of Article 6 in connection
         with Bornemann-India shall not exceed 5 (five) % (percent) of the
         Purchase Price as reduced (if any) in accordance with Article 4.

6.4      To the extent that representations or warranties or guarantees are
         based upon knowledge (Kenntnis) or constructive knowledge
         (Kennenmussen) of the Sellers, knowledge or constructive knowledge of
         the Sellers or of the persons listed in Attachment 6.4 is or is deemed
         to be knowledge or constructive knowledge of the Sellers.

6.5      Rights of the Purchaser pursuant to Article 6 in connection with
         Article 5 are excluded to the extent that losses or damages resulting
         from a breach of representations, warranties and guarantees have lead
         to a reduction of the Purchase Price according to section 4.1

6.6      Rights of the Purchaser pursuant to Article 6 in connection with
         Article 5 are excluded to the extent that losses or damages resulting
         from a breach of representations, warranties and guarantees regarding
         the Bank-Debt (as defined in section 4.2.1) have lead to a reduction of
         the Purchase Price according to section 4.2.

7.       NO COMPETE RESTRAINT

7.1      The Seller No. 1 shall not without prior written consent of the
         Purchaser,

7.1.1    for a period of 3 (three) years, beginning with the date of the
         Agreement, commence or pursue any activity in the business area of
         designing, developing, manufacturing, using, marketing, distributing
         and selling woven labels, printed labels, merchandise tags and other
         apparel identification products in the territory of the Federal
         Republic of Germany, Poland, Spain, Turkey and India no matter for his
         own account or in connection with or to the benefit of any third party;
         the Seller No. 1 shall neither support such activities directly or
         indirectly, nor shall he receive any economic benefit from such
         activities, nor shall he participate in an enterprise in any way
         whatsoever which is active in such areas, nor shall he

<PAGE>   49

         disturb, or attempt to disturb, any business relationship between any
         third party and the Companies or make any statement to any third party,
         including the press or media, likely to result in adverse or negative
         publicity for the Companies,

7.1.2    for a period of 3 (three) years, beginning with the date of the
         Agreement, solicit, divert or attempt to solicit or divert any third
         party who is, was, or was solicited to become, a customer or supplier
         of the Companies at any time prior to the date of the Agreement,

7.1.3    for a period of 3 (three) years, beginning with the date of the
         Agreement, cause any employee, distributor or advisor or independent
         consultant (with the exception of attorneys, chartered accountants and
         tax advisers) who is presently active for the Companies or has been
         active for the Companies since January, 1990 or will be active for the
         Companies in the future, or any client, customer or supplier of the
         Companies, to become active for himself or for a company in which the
         Seller No. 1 participates or for a competing company in any way
         whatsoever, be it for himself or to the benefit of any person, firm or
         company,

7.1.4    at any time after the date of the Agreement provide or disclose to
         third parties, neither directly nor indirectly, business secrets of the
         Companies, and shall neither cause third parties to provide or to
         disclose such business secrets, nor to promote or cover such provision
         or disclosure, nor to use such business secrets for his personal
         purposes.

7.2      For the purposes of section 7.1.1 there shall be disregarded the
         financial interest of any person or company in a class of securities
         which are listed on any recognised stock exchange if that interest is
         less that 5 (five) per cent of that class.

7.3      For each individual breach of the provisions contained in section 7.1
         the Seller No. 1 shall pay to the Purchaser an adequate contractual
         penalty in an amount to be assessed by the Purchaser according to
         Section 315 BGB. If a dispute arises as to the adequacy of the amount
         of such contractual penalty, such amount shall be assessed by the
         competent court upon request of the Seller No. 1 according to Section
         315 para. 3 BGB. This provision, however, does not affect the other
         remedies of the Purchaser to recover an exceeding damage as well as the
         enforcement of other claims. Each day during which a violation of
         section 7.1 continues is considered to be an independent event
         triggering the contractual penalty.

7.4      The parties of the Agreement assume that the provisions contained in
         section 7.1 and section 7.3 are reasonable. If at any time any of the
         provisions of section 7.1 and/or section 7.3 shall be determined to be
         invalid or unenforceable by reason of being vague or unreasonable as to
         duration, territory, scope of activity or otherwise, then this Article
         shall be considered divisible (with the other

<PAGE>   50

         provisions to remain in full force and effect) and the invalid or
         unenforceable provisions shall become and be deemed to be immediately
         amended to include only such duration, territory, scope of activity and
         other restrictions, as shall be determined to be reasonable and
         enforceable by the court or other body having jurisdiction over the
         matter, and parties expressly agreeing that the Agreement, as so
         amended, shall be valid and binding as though any invalid or
         unenforceable provision had not been included herein.

7.5      The participation of the Seller No. 1 in Dualplast Italia does not
         violate Article 7.

8.       STATUTE OF LIMITATIONS

8.1      Any claims of the Purchaser pursuant to section 6.1 in connection with
         Article 5 shall be time-barred after 2 (two) years following the date
         of the Agreement, provided that

         (i)      any claims of the Purchaser pursuant to section 6.1 in
                  connection with section 5.1 and section 5.2 shall be
                  time-barred after 10 (ten) years following the date of the
                  Agreement,

         (ii)     any claims of the Purchaser pursuant to section 6.1 in
                  connection with section 5.4 (h) shall be time barred after 6
                  (six) months following the date mentioned in Section B II
                  Section 3 No. 1 b) of the Sale and Lease Back Agreement, and

         (iii)    any claims of the Purchaser pursuant to section 6.1 in
                  connection with section 5.6 shall be time-barred after 60
                  (sixty) months after the date of the Agreement.

         According to the law of the Federal Republic of Germany mandatory
         shorter periods of limitation remain untouched.

8.2      The claims of the Sellers are time-barred after 5 (five) years
         following the date of the Agreement.

9.       INSPECTION BY THE PURCHASER

9.1      Any knowledge obtained by the Purchaser or its advisers in the course
         of the due diligence audit or otherwise leave statements,
         representations, warranties, guarantees and indemnities of the Sellers
         made in the Agreement untouched and leave also untouched the right of
         the Purchaser to make claims based on such statements, representations,
         warranties, guarantees and indemnities of the Sellers made in the
         Agreement.

<PAGE>   51

10.      TAXES

10.1     To the extent that the Companies are subject to payments of any Taxes
         (as defined in section 5.6) relating to periods or events prior to the
         Effective Date, the Seller No. 1 hereby indemnifies and holds harmless
         the Purchaser and the Companies from and against any and all such Taxes
         and any other losses, cost and expenses (including attorney's fees and
         disbursements) arising out of or in connection with the obligation to
         pay the Taxes, but only to the extent that such payment to be made by
         the Companies exceed the specific provisions relating thereto in the
         Financial Statements provided, however, that the Seller No. 1 is not
         obliged to indemnify the Purchaser for Taxes payable by the KG (i) due
         to profit distributions made by the Subsidiary or the Affiliates to the
         KG received by the KG after the Effective Date or (ii) due to profits
         gained by the Subsidiary or the Affiliates after the Effective Date.

10.2     After the Transfer Date the Purchaser will request the Companies, as
         far as legally permissible, to give to the Sellers reasonable access to
         the books and records of the Companies, as necessary and appropriate,
         to allow the Sellers to safeguard their concerns and interests in tax
         field audits relating to the period or events prior to the Effective
         Date and the Purchaser is obliged at the cost of the Sellers to appeal
         against any tax assessments and to challenge a notice of assessment
         upon the Sellers' request concerning any tax purposes involving all
         periods prior to the Effective Date, but only to the extent that the
         affairs of the Companies and the Purchaser are not thereby prejudiced.

10.3     Furthermore, the Purchaser shall ensure, to the extent legally
         permissible, that the Sellers are given reasonable opportunity to
         consult with the Companies regarding any tax field audits of the
         Companies relating to periods or events prior to the Effective Date,
         but only to the extent the affairs of the Companies and the Purchaser
         are not thereby prejudiced. The Sellers are obliged to cooperate with
         the Companies concerning any tax field audits of the Companies
         involving all periods prior to the Effective Date.

10.4     An increase in the valuation of an asset and a decrease in the
         valuation of a liability as consequence of a tax audit of the Companies
         do not lead to claims of the Sellers against the Purchaser or the
         Companies and do not reduce claims of the Purchaser and the Companies
         against the Sellers.

<PAGE>   52

11.      CONDITIONS PRECEDENT

11.1     Upon signing of the Agreement, section 13.5 and Articles 16 and 17
         shall become valid and binding for the parties. The remainder of the
         Agreement, including the sale of and the withdrawal from the position
         as the only general partner of the KG and the sale and assignment or
         the only commercial limited partnership interest in the KG shall become
         valid and binding upon the satisfaction of the condition precedent
         (aufschiebende Bedingung) in form of the entering into (Abschluss) of
         the Sale and Purchase Agreement between Paxar Far East Limited as
         purchaser and Mr. Ulrich Bornemann as seller regarding shares in Bonny
         Nice Industries Limited dated with the date of the Agreement.

11.2     (Intentionally Omitted)

11.3     If the condition set forth in section 11.1 above has not been satisfied
         by 30 June 2000, the Purchaser may until the day preceding the day of
         the satisfaction of all such conditions rescind (zurucktreten) the
         Agreement by written statement to the other parties in which case all
         commitments of the Sellers and the Purchaser hereunder shall terminate
         without any continuing liability except that each party shall deliver
         to the other party all documents, working papers and other materials
         furnished to it by the respective other party in connection with the
         transaction contemplated by the Agreement hereunder irrespective of
         whether such materials have been furnished before or after the signing
         of the Agreement. Each party will keep strictly and confidential all
         information which has been so revealed by the other party.

12.      MERGER CONTROL

         The transaction which is object of the Agreement has been cleared by
         the German Federal Cartel Office (Bundeskartellamt, "FCO") by letter of
         the FCO dated May 4, 2000 attached as Attachment 12.

13.      RIGHTS AND OBLIGATIONS OF THE PARTIES

13.1     The Sellers grant to the Purchaser, its respective affiliates
         (Beteiligungsgesellschaften) and the Companies and its respective
         affiliates as well as to their respective successors a worldwide
         perpetual royaltyfree and exclusive right to use for itself or for an
         affiliate (Beteiligungsgesellschaft), a branch office or a department
         with right to sublicense, the name "Bornemann + Bick" (including the
         right to use such name as a "geschaftliche Bezeichnung" and to register
         new trademarks (Marken) including the name "Bornemann + Bick") and/or
         each distinctive part thereof in the business of designing,

<PAGE>   53

         developing, manufacturing, using, marketing, distributing and selling
         woven labels, printed labels, merchandise tags and other apparel
         identification products and related services. The Sellers declare that
         they do not know of any other enterprise which uses the firm to
         identify an enterprise except as listed in Attachment 13.1.

         The Sellers will support the Purchaser, its respective affiliates and
         the Companies as well as their respective successors in each and any
         permissible way and will give all necessary declarations and will issue
         all documents to put the Purchaser its respective affiliates and the
         Companies as well as their respective successors in the position to use
         such name and/or distinctive parts thereof with and without additions.

13.2     The Sellers shall cause that all intellectual property rights which are
         identified in Attachment 13.2 as being owned by the Sellers or another
         party are transferred from the Sellers or the respective other party
         holding such intellectual property rights to the Companies, at Sellers'
         expense, as soon as possible after the date hereof and that all
         applications or filings necessary for such transfer shall have been
         effected prior to the date of the Agreement. Moreover, the Sellers
         hereby grant the Companies a worldwide, exclusive royalty-free licence
         to use, with right to sublicense, such intellectual property rights
         during the period between the Transfer Date and the effectiveness of
         their transfer to the Companies. With regard to such intellectual
         property rights, the Sellers hereby give as of the date of
         effectiveness of the transfer of the intellectual property rights the
         representations and warranties set forth in section 5.7 above mutatis
         mutandis, it being understood that the limitation period pursuant to
         section 8.1 will be 2 (two) years following the effectiveness of the
         transfers. The Sellers shall not, contest or support third parties in
         contesting the Company's rights to use the intellectual property rights
         or the know-how referred to in section 13.2.

         In so far as the Sellers own at the date of the Agreement, intellectual
         property rights including respective applications which are adverse to
         the business activity of the Companies and which for any reason have
         not been transferred to the Companies pursuant to this section, the
         Sellers herewith grants to the Companies a worldwide, perpetual royalty
         free and exclusive licence regarding such intellectual property rights.

13.3     The Sellers agrees that all know-how previously provided by the Sellers
         to the Companies, may continue to be used by the Companies after the
         Transfer Date without restriction, including without any further
         requirement for licensing or payments with respect thereto. The Sellers
         have delivered or will deliver to the Companies all know-how related
         documents including but not limited to drawings, plans, computer
         programs etc. relating to the object of the Companies.
<PAGE>   54

13.4     Except as provided explicitly otherwise in Attachment 13.4, the Sellers
         neither have any legal relationships with the Companies, nor have the
         Sellers any rights and claims against the Companies or to any tangible
         or intangible asset of the Companies (including rights arising out of
         licenses), which are necessary for the conduct of the business of the
         Companies in its present area and scope of activity, or which are used
         by the Companies, nor have the Sellers any other rights and claims
         against the Companies.

         To the extent that any such legal relationships which are not
         explicitly mentioned in Attachment 13.4 should exist nevertheless, all
         such legal relationships between the Sellers and the Companies end on
         the Transfer Date without coming into existence of any liability or
         obligation whatsoever for the Purchaser or the Companies. To the extent
         that such rights and claims, which are not explicitly mentioned in
         Attachment 13.4, should exist nevertheless, the Sellers are at the
         discretion of the Purchaser either obliged to waive such rights and
         claims or obliged to transfer such rights and claims to the Companies
         without further consideration, or such rights and claims end on the
         Transfer Date without coming into existence of any liability or
         obligation whatsoever for the Purchaser or the Companies. The Sellers
         herewith guarantee that the same applies to all legal relationships
         between the members of their families, the persons or companies related
         to the Sellers and former partner or interest-holders of the Companies
         and persons related to such former partner or interest-holders of the
         Companies on the one hand and the Companies on the other.

13.5     The Sellers guarantee that the KG sells its interest in Dualplast
         Italia Gruppo Bornemann S.r.l. to the Seller No. 1 against no
         consideration the latest by the date of the Agreement. The Sellers
         herewith indemnify the KG from and against all liability arising out of
         or in connection with such sale.

13.6     The Seller No. 2 is obliged prior to the Transfer Date to repay to the
         KG the total principal amount of the loan including interest thereon
         granted to the Seller No. 2 by the KG.

13.7     The Purchaser procures that the KG continues the environmental
         protection insurance which the KG presently has also after the Transfer
         Date at least for a time period of 2 (two) years after the date of the
         Agreement, provided the present insurance company is willing to
         continue to provide such insurance coverage during such period on the
         basis of reasonable terms and conditions. The Purchaser is, however,
         entitled to substitute the present insurance company by another
         insurance company the Purchaser may designate, provided the insurance
         coverage of the other insurance company is not materially different
         from the insurance coverage provided by the present insurance company.

<PAGE>   55

13.8     The Seller No. 1 has granted sureties to banks as security for loans
         granted by such banks to the KG and to Bonny Nice Industries Limited,
         Hong Kong attached as Attachment 13.8 (the "Sureties"). The Purchaser
         and the Guarantor hereby jointly and severally indemnify the Seller No.
         1 from and against all liability arising out of the Sureties. This
         indemnity is irrevocable. The Purchaser and the Guarantor shall use
         their best efforts to externally release the Seller No. 1 from all
         liability arising out of the Sureties. Any setting of (Aufrechnung) and
         right of retention (Zuruckbehaltung) with regard to the indemnity
         contained in this section is excluded unless claims have been
         acknowledged (anerkannt) in writing or have been confirmed by final
         decision of a competent court or court of arbitration.

13.9     The Seller No. 1 is the only general partner of the KG. Upon completion
         of the Agreement the Seller No. 1 withdraws from the KG as general
         partner. Pursuant to Section 160 HGB the Seller No. 1 is liable for all
         liabilities of the KG which came into existence prior to such
         withdrawal of the Seller No. 1 from the KG during a period of 5 (five)
         years after such withdrawal. The Purchaser and Paxar Corporation hereby
         jointly and severally indemnify the Seller No. 1 from and against all
         liability arising out of Section 160 HGB. This indemnity is
         irrevocable. Section 13.8 last sentence is applicable. This section
         13.9 is also applicable regarding liability, if any, arising out of
         Section 159 HGB and/or Section 613 a BGB.

13.10    The Seller No. 1 guarantees payment by Gerhard Hohmann, Hilgershohe
         83a, 42277 Wuppertal of all obligations G. Hohmann owes to the
         Companies including interest thereon existing at the date of the
         Agreement the latest by December 31, 2000 to the respective Company.
         The Purchaser is obliged to assign the respective claims of the
         Companies to the Seller No. 1 to the extent the Seller No. 1 makes
         payment to the Companies due to the guarantee contained in this
         section.

13.11    The Seller No. 1 guarantees payment by Europrint S.A., Bat. 2 BP 49
         Torcy, 77201 Marne La Vallee Cedex 1, France of all obligations
         Europrint owes to the Companies including interest thereon existing at
         the date of the Agreement the latest by December 31, 2000 to the
         respective Company. The Purchaser is obliged to assign the respective
         claims of the Companies to the Seller No. 1 to the extent the Seller
         No. 1 makes payment to the Companies due to the guarantee contained in
         this section.

13.12    Notwithstanding the exception made in the 5th and 6th sentences of
         Section 5.3.3 the Seller No. 1 is obliged to indemnify the Purchaser
         and Bornemann-Turkey against claims raised by third parties against
         Bornemann-Turkey if such claims relate to the past business practices
         of Bornemann-Turkey to the extent no provision has been made or to the
         extent such claims have not been recorded as liabilities.

<PAGE>   56

14.      GUARANTEE OF THE GUARANTOR

         The Guarantor guarantees the obligations of the Purchaser arising out
         of section 2.1, section 13.8, section 13.9 and Article 15.

15.      SELLER NO. 1'S PROFIT PARTICIPATION

15.1     During the calendar years 2000, 2001 and 2002 the Seller No. 1 shall
         receive a participation in the profits of the Companies in the amount
         of the product of the Differential Amount (as defined below) and the
         factor 3 (three) (the "Profit-Participation").

         The "Differential Amount" is the positive difference between the
         Average Consolidated Profit of the Companies (as defined below) and the
         consolidated profit of the Companies as of December 31, 1999 as set
         forth on Attachment 15.1.

         The average consolidated annual profit of the Companies before taxes on
         operating and non-operating income for the calendar years 2000, 2001
         and 2002 is 1/3 of the sum of the consolidated profits of the Companies
         before taxes on operating and non-operating income for the calendar
         years 2000, 2001 and 2002 (the "Average Consolidated Profit of the
         Companies").

15.2     The parties agree that for the calendar years 2000, 2001 and 2002 the
         consolidated profit of the Companies before taxes on operating and
         non-operating income

15.2.1   is ascertained as follows:

         (a)      On the basis of the statutory financial statements of the
                  Companies which shall be prepared on the basis of the same
                  principles and practices used to prepare the Financial
                  Statements referred to in section 5.3,

         (b)      the actual amount of the annual remuneration of the Seller No.
                  1 shall be treated as business expenses,

         (c)      for the respective Company according to the generally accepted
                  accounting principles applicable at the seat of the respective
                  Company,

         (d)      within the scope of the consolidation of the Affiliates, is
                  only computed on a pro rata basis according to the interest
                  the KG holds immediately prior to the Transfer Date in the
                  Affiliates, both directly and indirectly, except as set forth
                  in section 15.2.4,

<PAGE>   57

         (e)      shall be expressed in German Mark converted from other
                  currencies using the generally accepted accounting principles
                  applicable at the seat of the respective Company, and

         (f)      is increased by the trade tax payable in the Federal Republic
                  of Germany.

15.2.2   is ascertained regarding intercompany transactions between the
         Companies on the one side and Paxar Corporation and companies in which
         Paxar Corporation directly or indirectly owns interests on the other
         side (the "Intercompany Transactions") as follows:

         (a)      Intercompany Transactions regarding manufactured products
                  between the KG, B+B-Polska and Bornemann-Turkey on the one
                  side and companies in which Paxar Corporation directly or
                  indirectly owns at least 75% will be at intercompany transfer
                  prices (the "IC-Prices"), which are set at a mark up of 28%
                  above direct cost only consisting of direct materials, direct
                  labor, direct factory overhead and shipping costs. IC-Prices
                  so determined will apply unless market conditions require a
                  lower price, which will then be determined in a fair and
                  reasonable negotiation between the buyer and the seller of the
                  manufactured products.

         (b)      If either the seller or the purchaser of manufactured products
                  are less than 75% owned by either Paxar Corporation and
                  companies in which Paxar Corporation directly or indirectly
                  owns interests or the Sellers, the IC Price will be set by the
                  seller of the manufactured products so as to be no higher than
                  the lowest price charged to any of its third-party customers.

         (c)      Purchases or sales of raw materials or other products to which
                  the selling company does not add significant value will be
                  sold at cost plus a handling charge not to exceed 5% of cost.

         (d)      For the elimination of doubt, the Sellers and Paxar
                  Corporation agree that each will endeavour to sell the
                  products manufactured by the other and will do so with the
                  understanding that no sales commissions shall be paid.

15.2.3   is ascertained according to cash required or excess cash as follows:

         (a)      Profit before taxes on operating and non-operating income will
                  be calculated so as to include an appropriate interest cost
                  based upon the cash required by any of the Companies provided
                  by Paxar Corporation beyond amounts generated from the
                  operations of the businesses. The

<PAGE>   58

                  source and the terms and conditions of funding of such cash
                  requirements will be determined by Paxar Corporation.

         (b)      Profit before taxes on operating and non-operating income will
                  reflect an appropriate interest income credit to the extent
                  that the Companies generate more cash than is needed to
                  support current requirements. The disposition of such excess
                  (e.g., debt repayment or short-term investments) will be
                  determined by Paxar Corporation.

15.2.4   is ascertained according to the following rules in the event that the
         equity ownership percentages should change for any of the Companies
         currently directly or indirectly owned less than 51% by the Sellers as
         follows:

         (a)      In the event Paxar Corporation combines its business in Spain
                  with Bornemann-Spain or decreases the interest held in
                  Bornemann-Spain or Bornemann-India then such entity as
                  disregarded for the purpose of Article 15.

         (b)      In the event Paxar Corporation increases the interest held in
                  Bornemann-Spain or Bornemann-India then section 15.1.1 (d)
                  remains applicable and such entity is taken into account with
                  such interest as has been held by the KG at the date of the
                  date of the Agreement.

15.2.5   is ascertained, since it is likely that there will be some integration
         of the Sellers' businesses with Paxar Corporation's businesses
         according to the following rules:

         (a)      Where businesses are combined for administrative purposes
                  (e.g., accounting reasons or customer service) in order to
                  reduce overall costs, the administrative costs of the combined
                  businesses will be allocated between the Sellers' and Paxar
                  Corporation's businesses using sales to determine the
                  apportionment factors. Paxar Corporation agrees that such
                  combinations will not occur unless the Sellers' agree that
                  there is an advantage to making the combination (lower costs
                  or improved capabilities) or unless Paxar Corporation agrees
                  to override the apportionment of costs set forth in the
                  preceding sentence by charging the Sellers' businesses no more
                  than an amount equal to the cost incurred prior to the
                  combination.

         (b)      If existing manufacturing operations are combined into one
                  plant or adjacent plants that are managed by the same plant
                  management, the indirect costs (i.e., overhead costs) of the
                  combined operation will be allocated to the previously
                  separate businesses using sales to determine the apportionment
                  factors. In this instance, only the results of the Sellers'
                  previously existing business will be included. The foregoing
                  would

<PAGE>   59

                  apply, for example, if the Sellers' and Paxar Corporation's
                  existing manufacturing operations in Turkey were to be
                  combined.

15.2.6   is ascertained for the elimination of doubt, in such a way as that
         profit before taxes on operating and non-operating income will include
         the results of any expansion of activities of the Companies beyond
         those taking place on the date of the Agreement. For example, existing
         woven label operations of the Seller and Paxar Corporation in Panyu may
         be combined. As another example, narrow woven edge tape production may
         be introduced to Mr. Ulrich Bornemann's plant in Panyu.

15.3     The Profit-Participation shall be due for payment by the Purchaser to
         the Seller No. 1 on April 15, 2003.

15.4     The Profit-Participation of the Seller No. 1 amounts to a maximum of DM
         20,000,000.00 (German Mark: twenty million), provided, however, that
         such maximum amount of DM 20,000,000.00 shall be increased if any by
         the difference between the maximum amount of the profit-participation
         as defined in section 14.4 of the Sale and Purchase Agreement between
         Paxar Far East Limited as purchaser and Mr. Ulrich Bornemann as seller
         regarding shares in Bonny Nice Industries Limited dated with the date
         of the Agreement (the "HK-Agreement") being HK$ 58,500,000.00 (Hong
         Kong Dollar: fifty eight million five hundred thousand) and the actual
         amount paid to Mr. Ulrich Bornemann under section 14.1 of the
         HK-Agreement. For the purpose of this section HK$ shall be converted
         into DM using the rates printed in the New York edition of the Wall
         Street Journal for the last business day in New York City of the year
         2002. Independent from the provisions contained in Article 15, the
         Profit-Participation of the Seller No. 1 amounts to a minimum of DM
         2,500,000.00 (German Mark: two million five hundred thousand).

15.5     The amount of the Profit-Participation shall be determined by Arthur
         Andersen and shall be notified by Arthur Andersen in writing to the
         Seller No. 1 and the Purchaser simultaneously the latest on April 1,
         2003 (the "Receipt Date").

15.6     In case the Purchaser or the Seller No. 1 do not agree with the
         determination made by Arthur Andersen according to section 15.5, the
         Purchaser or the Seller No. 1 as the case may be shall notify the
         respective other parties on such disagreement at the latest 10 (ten)
         days after the Receipt Date. If a notification according to this
         section is not made, the amount of the Profit-Participation as
         determined by Arthur Andersen shall be binding on the parties.

15.7     If the parties fail to reach an agreement on the Profit-Participation
         after a notification has been made according to section 15.6 within a
         period of 45 (forty five) days after Receipt Date, the dispute shall be
         referred to an independent firm

<PAGE>   60

         of auditors with significant international experience appointed as an
         expert (Schiedsgutachter) in the sense of Section 317 BGB (the
         "Profit-Participation-Expert") and not as an arbitrator jointly by the
         Seller No. 1 and the Purchaser, who will resolve the dispute. The
         decision of the Profit-Participation-Expert shall be final and binding
         on the parties. The Profit-Participation as decided by the
         Profit-Participation-Expert shall be final and binding on the parties.
         If the parties fail to agree on the firm of auditors to appoint as the
         Profit-Participation-Expert within a period of 60 (sixty) days after
         the Receipt Date, the Profit-Participation-Expert (which shall be an
         independent firm of auditors with significant international experience)
         shall be appointed by the President of the Institut der
         Wirtschaftsprufer e.V., Dusseldorf upon the request of either party of
         the Agreement.

15.8     The cost of the determination made by Arthur Andersen shall be borne by
         the Purchaser. Each party shall bear one half of the costs of the
         Profit-Participation-Expert appointed pursuant to section 15.7.

15.9     In case the Seller No. 1 voluntarily resigns as managing director of
         the Purchaser prior to December 31, 2002 the Seller No. 1 is only
         entitled to a payment according to Article 15 equivalent to the
         Profit-Participation multiplied by a fraction the numerator of which is
         equivalent to the number of months the Seller was General Partner of
         the KG and managing director of the Purchaser after January 1, 2000 and
         the denominator of which is 36 (thirty six), provided, however, that
         the Seller No. 1 is entitled to a payment of not less than DM
         2,500,000.00 (German Mark: two million five hundred)

16.      INTERIM PERIOD

16.1     The Sellers undertake to procure that during the period between the
         date of the Agreement and the Transfer Date the Companies have been and
         will be managed in the ordinary course of business in compliance with
         the provisions of any applicable laws or regulations and in compliance
         with the obligations assumed by them, and that the Companies have not
         and will not enter into agreements or arrangements which, by their
         nature, scope or duration are outside the ordinary course of business
         or which may conflict with the representations and warranties set out
         in Article 5.

16.2     In particular, but without limitation thereto, the Companies have not
         and will not within the limits mentioned above

16.2.1   give guarantees or surety in respect of obligations of the Sellers, or,
         in respect of obligations of third parties, other than in the ordinary
         course of business;

<PAGE>   61

16.2.2   neither acquire nor dispose of (including by way of leasing agreements)
         any businesses, interests or fixed assets, nor undertake to make such
         acquisition or disposal;

16.2.3   make any legally relevant declaration in respect of any other item
         addressed in sections 5.5 (a) through to 5.5 (p).

16.3     The Sellers will cause that

16.3.1   the Purchaser's and Paxar Corporation's employees have reasonable
         access to the Companies' premises and documents at all times during
         normal business hours;

16.3.2   the Purchaser is regularly and continuously informed about the
         Companies' business, financial and economic situation.

16.4     Regarding Article 16 the Seller is only obliged to use its best efforts
         to cause the Affiliates to comply.

17.      ARBITRATION

17.1     Any dispute arising out of or in connection with the Agreement and its
         Attachments, including any question regarding its existence, validity
         or termination, shall be referred to and finally resolved by
         arbitration under the Rules of London Court of International
         Arbitration (the "Rules"), which Rules are deemed to be incorporated by
         reference into this clause.

17.2     The jurisdiction of the ordinary courts shall be excluded.

17.3     The tribunal shall consist of three arbitrators, two of them shall be
         nominated by the respective parties and the third arbitrator shall be
         appointed in accordance with the Rules.

17.4     The rules governing the arbitration proceeding before the arbitrators
         shall be the Rules and, where the Rules are silent the parties hereof
         agree that the procedural law of the Federal Republic of Germany shall
         be applicable.

17.5     The language of the arbitration shall be the English language.

17.6     The place of the arbitration shall be Wuppertal, Federal Republic of
         Germany.

17.7     (Intentionally omitted)

17.8     The parties hereof agree that the winning party of an arbitration
         proceeding has a claim for reimbursement against the losing party for
         all reasonable costs which the winning party had to spend for and
         during the course of the arbitration proceeding.

<PAGE>   62

17.9     The decision of the arbitrators which has to contain a reasoning (the
         "Decision") shall be binding upon the parties hereof and enforceable by
         any court having jurisdiction for the enforcement of the Decision.

18.      MISCELLANEOUS

18.1     (Intentionally Omitted)

18.2     Any transfer taxes in connection with the sale, transfer and assignment
         according to Article 1 are borne by the Purchaser. Each party, however,
         bears the cost of its advisors and chartered accountants itself unless
         it is provided expressly otherwise in the Agreement.

18.3     Changes, amendments and supplements to the Agreement shall be in
         writing, signed by each of the parties hereto to be valid and require
         the explicit reference to the Agreement but need to be notarized if
         this is required by mandatory law.
         This is also applicable for a change or addition of this section.

18.4     Any demand, notice, declaration or other communication to be given in
         connection with the Agreement shall be given in English and in writing
         addressed to the recipient as follows:

18.4.1   to the Sellers:       Gerhard Bornemann
                               Schmiedestrasse 5
                               D-45549 Sprockhovel
         with a copy to:       Leinen & Derichs
                               Clever Strasse 16
                               D-50668 Koln
18.4.2   to the Purchaser:     Paxar Corporation
                               Att.: General Counsel
                               105 Corporate Park Drive
                               White Plains, NY 10604
                               USA
         with a copy to:       Clifford Chance Punder
                               Attn.: Gustaf-Rudolf Schlieper
                               Cecilienallee 6
                               40474 Dusseldorf

         or to such other individual or address as a party hereto may designate
         for itself by notice given as herein provided.

18.5     If any provision of the Agreement or any provision to be incorporated
         into the Agreement is or becomes invalid or impracticable or should a
         necessary provision not be contained in the Agreement, the validity of
         the Agreement and the remaining provisions of the Agreement shall
         remain unaffected. Instead of

<PAGE>   63

         the invalid or impracticable provision or to bridge the gap, a valid
         provision is applicable which to the fullest extent possible
         corresponds to what the parties would have wanted or according to the
         sense and object of the Agreement would have agreed if they had known
         the invalidity or impracticability or had realised the gap.

18.6     Declarations which are contained in an Attachment to the Agreement are
         part of the Agreement and are deemed also for purposes of all other
         Attachments to the Agreement as part of the Agreement.

18.7     The Agreement is exclusively governed by and construed in accordance
         with the law of the Federal Republic of Germany applicable to parties
         residing within the Federal Republic of Germany.

18.8     (Intentionally Omitted)

18.9     The Agreement is written in the English language (except that certain
         of the Attachments may be in the German language). The Agreement may be
         translated into any language other than the English language, provided,
         however, that, for all purposes, the English language text of the
         Agreement shall prevail, provided, further, that, such terms to which a
         German translation has been added in parenthesis shall be interpreted
         throughout the Agreement in the meaning assigned to them by the German
         translation.

18.10    The Agreement including the Attachments hereto contain all of the
         terms, conditions, representations and warranties agreed upon between
         the parties relating to the subject matter of the Agreement and
         supersedes all prior negotiations, agreements and undertaking of the
         parties, oral, written, with respect to the subject matter hereof. Oral
         side agreements to the Agreement do not exist.

18.11    Except as required by law and except as required to perform the
         Agreement, no public announcements or press releases concerning the
         entering into of the Agreement shall be made by any party hereto
         without the prior written consent of the other party. If required by
         law and except as required to perform the Agreement, public
         announcements or press releases shall only be made upon consultation
         with the other party.

18.12    No party shall assign the Agreement, any part hereof or any rights
         arising hereunder to any third party (including affiliates of such
         party) without having obtained the prior written consent of the other
         party provided, however, that the Purchaser may at any time and from
         time to time, even without the prior written consent of the Sellers
         assign in whole or in part its respective rights and obligations under
         the Agreement to one or more wholly owned subsidiaries of the
         Purchaser, such assignee(s) shall collectively be deemed to be the

<PAGE>   64

         "Purchaser" for all purposes of the Agreement and the assignee in such
         assignment shall have no further obligations with respect to the
         portions of its rights and obligations that have been assigned.

18.13    Except as expressly provided herein, no delay or omission to exercise
         any right, power or remedy accruing to any party to the Agreement,
         shall impair any such right, power or remedy of such party nor shall it
         be construed to be a waiver of any such breach or default, or an
         acquiescence therein, or of or in any similar breach or default
         thereafter occurring; nor shall any waiver of any single breach or
         default be deemed a waiver of any other breach or default theretofore
         or thereafter occurring. Any waiver, permit, consent or approval of any
         kind or character of any breach or default under the Agreement, or any
         waiver of any provisions or conditions of the Agreement, must be in
         writing and shall be effective only to the extent specifically set
         forth in such writing.

18.14    Each party shall from time to time execute and deliver all such
         additional documents and take all such additional actions as the other
         party may reasonably require in order to effectively consummate the
         Agreement as provided herein.

18.15    The KG has in an extraordinary interest-holders meeting on February 20,
         2000 resolved that it approves the transfer of its interests to the
         Purchaser. This resolution is attached to the Agreement as Attachment
         18.15.

18.16    All Attachments to the Agreement have been given by the parties to the
         Notar Dr. Gerrit Wenz with his official residence in Dusseldorf who on
         request of the parties accepted the Attachments to the Agreement and
         prepared his notarial deed no. W369/2000 out of the Attachments to
         the Agreement.

Sprockhovel, May 18, 2000

                                                /s/ Gerhard Bornemann
Bornemann & Bick GmbH & Co. KG                  ______________________________

By: /s/ Gerhard Bornemann                       (Gerhard Bornemann)
    ________________________

    (Gerhard Bornemann, managing director
    with single authority of representation of
    Provista 379. Verwaltungsgesellschaft mbH,
    general partner of Bornemann & Bick
    GmbH & Co. KG)

                                                /s/ Gerhard Bornemann
Paxar Corporation                               ______________________________

By: /s/ Robert S. Stone                         (Dr. Ulrich Bornemann)
    ________________________
    (Robert S. Stone)

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