Biscayne Apparel Inc/FL · 8-K · For 2/12/99 · EX-10.1

Filed On 2/11/99   ·   SEC File 1-09635   ·   Accession Number 950144-99-1397

Current Report   ·   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Biscayne Apparel Form 8-K for 2/12/1999                5     21K 
 2: EX-10.1     Asset Purchase Agreement 2/5/1999                    121    390K 
 3: EX-10.2     Interim Agreement 2/5/1999                            16     47K 
 4: EX-99.1     Press Release 2/5/1999                                 2±    14K 

EX-10.1   ·   Asset Purchase Agreement 2/5/1999
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                                                                    EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

BY AND AMONG

M & L INTERNATIONAL GROUP, LLC

 M & L HONG KONG, LTD.

 AND AMEREX (USA) INC.

 (Buyer)

 AND

 M & L INTERNATIONAL, INC.

 AND

M & L INTERNATIONAL (H.K.) LIMITED

 (Sellers)

Dated February 5, 1999

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ARTICLE I DEFINITIONS.............................................................................................2
         Affiliate................................................................................................2
         Amerex...................................................................................................2
         Assets...................................................................................................2
         Assigned Contracts.......................................................................................2
         Assumed Liabilities......................................................................................2
         Bankruptcy Code..........................................................................................2
         Bankruptcy Court.........................................................................................2
         Books and Records........................................................................................2
         Break Up Fee.............................................................................................2
         Business ................................................................................................2
         Business Day.............................................................................................3
         Buyer....................................................................................................3
         Closing .................................................................................................3
         Closing Date.............................................................................................3
         Code.....................................................................................................3
         Contracts................................................................................................3
         Customer Orders..........................................................................................3
         Deposit..................................................................................................3
         Employee Benefit Plan....................................................................................3
         Employee Pension Benefit Plan............................................................................3
         Employee Welfare Benefit Plan............................................................................3
         Environmental Laws.......................................................................................3
         Equipment................................................................................................4
         ERISA....................................................................................................4
         Escrow Agreement.........................................................................................4
         Escrow Amount............................................................................................4
         Estimated Purchase Price.................................................................................4
         Excluded Assets..........................................................................................4
         Excluded Contracts.......................................................................................4
         GAAP.....................................................................................................4
         Government...............................................................................................5
         Higher and Better Offers.................................................................................5
         Improvements.............................................................................................5
         Intellectual Property Rights.............................................................................5
         Interim Agreement........................................................................................5
         Interim Gross Profits....................................................................................5
         Interim Net Sales........................................................................................5
         Inventory................................................................................................5
         Leased Real Property.....................................................................................5

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         Leases...................................................................................................5
         Lien.....................................................................................................5
         M&LHK....................................................................................................5
         M&L Hong Kong............................................................................................5
         M&LIG....................................................................................................5
         M&L International........................................................................................5
         Mackintosh...............................................................................................5
         Material Adverse Effect..................................................................................5
         Multiemployer Plan.......................................................................................6
         Operating Costs and Expenses.............................................................................6
         Order ...................................................................................................6
         Permits..................................................................................................6
         Person ..................................................................................................6
         Premises ................................................................................................6
         Purchase Orders..........................................................................................6
         Purchase Price...........................................................................................6
         Reorganization Case......................................................................................6
         Returned Goods...........................................................................................6
         Sale Hearing.............................................................................................6
         Secured Bank Group.......................................................................................6
         Sellers..................................................................................................6
         Sellers' Cost............................................................................................6
         Sellers' Receivables.....................................................................................6
         Severance Plans..........................................................................................7
         Subsidiary...............................................................................................7
         Taxes....................................................................................................7
         Transaction Taxes........................................................................................7
         Warn.....................................................................................................7
ARTICLE II PURCHASE AND SALE......................................................................................7
         Section 2.1 Assets to be Sold and Purchased..............................................................7
         Section 2.2 Assumed Liabilities.........................................................................11
         Section 2.3 Allocation of Assets and Liabilities Between M&LIG and M&LHK................................12
ARTICLE III PURCHASE PRICE; ESCROW...............................................................................12
         Section 3.1 Purchase Price..............................................................................12
         Section 3.2 Payment of Purchase Price...................................................................12
         Section 3.3 Escrow Amount...............................................................................13
         Section 3.4 Deposit.....................................................................................13
         Section 3.5 Physical Inventory; Estimated Purchase Price................................................14
         Section 3.6 Post-Closing Adjustment.....................................................................15
ARTICLE IV CLOSING...............................................................................................16

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ARTICLE V REPRESENTATION AND WARRANTIES OF THE SELLERS...........................................................17
         Section 5.1 Corporate Organization......................................................................17
         Section 5.2 Qualification to Do Business................................................................17
         Section 5.3 Authorization and Validity of Agreements....................................................18
         Section 5.4 No Conflict or Violation....................................................................18
         Section 5.5 Consents and Approvals......................................................................18
         Section 5.6 Compliance with Law.........................................................................19
         Section 5.7 Litigation..................................................................................19
         Section 5.7 Litigation..................................................................................19
         Section 5.9 Employee Benefits...........................................................................20
         Section 5.10 Contracts..................................................................................20
         Section 5.11 Inventory..................................................................................21
         Section 5.12 Purchase Orders............................................................................21
         Section 5.13 Permits....................................................................................21
         Section 5.14 Leases.....................................................................................21
         Section 5.15 Environmental Matters......................................................................22
         Section 5.16 Insurance..................................................................................22
         Section 5.17 Intellectual Property Rights...............................................................22
         Section 5.18 Equipment..................................................................................23
         Section 5.19 Condition of Title of Assets...............................................................23
         Section 5.20 Brokers' and Finders' Fees.................................................................23
         Section 5.21 Hong Kong Receivables......................................................................23
         Section 5.22 Disclaimer.................................................................................23
ARTICLE VI REPRESENTATION AND WARRANTIES OF BUYER................................................................24
         Section 6.1 Organization................................................................................24
         Section 6.2 Authorization and Validity of Agreements....................................................24
         Section 6.3 No Conflict or Violation....................................................................24
         Section 6.4 Consents and Approvals......................................................................25
         Section 6.5 Brokers' and Finders' Fees..................................................................25
         Section 6.6 Acknowledgment by Buyer.....................................................................25
ARTICLE VII COVENANTS OF THE SELLERS.............................................................................27
         Section 7.1 Conduct of Business Before the Closing Date Acknowledgement by Buyer........................27
         Section 7.2 Consents and Approvals......................................................................28
         Section 7.3 Access to Properties and Records............................................................28
         Section 7.4 Assigned Contracts..........................................................................28
         Section 7.5 Reasonable Efforts..........................................................................29
         Section 7.2 Curing of Default under Assigned Contracts..................................................29
         Section 7.6 Notice to the Buyer.........................................................................29
         Section 7.8 Break-Up Fee................................................................................29
         Section 7.9 Higher and Better Offers; Bidding Procedures................................................30
         Section 7.10 Application for the Order..................................................................30
         Section 7.11 Post Closing Responsibilities of Sellers...................................................32

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         Section 7.12 Misdirected Payments.......................................................................32
         Section 7.13 Trademark Assignments......................................................................32
         Section 7.14 Access to Books and Records................................................................32
         Section 7.15 Withdrawal of Motion or Order by Sellers...................................................32
ARTICLE VIII COVENANTS OF BUYER..................................................................................33
         Section 8.1 Actions Before Closing Date.................................................................33
         Section 8.2 Consents and Approvals......................................................................33
         Section 8.3 Collection of Sellers'Accounts Receivable...................................................33
         Section 8.4 Returns of Sellers'Goods....................................................................33
         Section 8.5 Right to Set-off............................................................................35
         Section 8.6 Misdirected Payments........................................................................35
         Section 8.7 Access to Books and Records.................................................................35
ARTICLE IX EMPLOYEES.............................................................................................36
         Section 9.1 Termination of Employees....................................................................36
         Section 9.2 COBRA.......................................................................................37
         Section 9.3 Employee Benefit Plans......................................................................37
ARTICLE X TAXES; RECORDING FEES..................................................................................37
ARTICLE XI CONDITIONS PRECEDENT                                                                                    
         TO PERFORMANCE BY THE SELLERS...........................................................................38
         Section 11.1 Representations and Warranties of the Buyer................................................38
         Section 11.2 Performance of the Obligations of the Buyer................................................38
         Section 11.3 Consents and Approvals.....................................................................39
         Section 11.4 No Violation of Orders.....................................................................39
         Section 11.5 Entry of the Order.........................................................................39
ARTICLE XII CONDITIONS PRECEDENT TO THE                                                                            
         PERFORMANCE BY THE BUYER................................................................................39
         Section 12.1 Representations and Warranties of the Sellers..............................................39
         Section 12.2 Performance of the Obligations of the Sellers..............................................40
         Section 12.3 Consents and Approvals.....................................................................40
         Section 12.4 No Violation of Orders.....................................................................40
         Section 12.5 No Material Adverse Change.................................................................40
         Section 12.6 Intentionally Omitted......................................................................41
         Section 12.7 Entry of the Order.........................................................................41
ARTICLE XIII TERMINATION.........................................................................................41
         Section 13.1 Conditions of Termination..................................................................41
         Section 13.2 Specific Performance.......................................................................42
         Section 13.3 Effect of Termination; Right to Proceed....................................................43
ARTICLE XIV GENERAL AND MISCELLANEOUS............................................................................44
         Section 14.1 Successors and Assigns.....................................................................44
         Section 14.2 Governing Law; Jurisdiction................................................................44
         Section 14.3 Expenses...................................................................................44

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Section 14.4 Notice of Bankruptcy Proceedings...........................................................44
Section 14.5 Further Assurances.........................................................................44
Section 14.6 Severability...............................................................................45
Section 14.7 Notices....................................................................................45
Section 14.8 Amendments; Waivers........................................................................47
Section 14.9 Public Announcements.......................................................................47
Section 14.10 Entire Agreement..........................................................................47
Section 14.11 Parties in Interest.......................................................................48
Section 14.12 Section and Paragraph Headings............................................................48
Section 14.13 Business Days.............................................................................48
Section 14.14 Counterparts..............................................................................48
Section 14.15 Treatment of Lease for Warehouse Premises in                                                
         Auburn, Washington ("Auburn Lease")............................................................48

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List of Schedules                                                               

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Schedule 1            Assigned Contracts                                      
Schedule 2.1(a)(i)    Equipment                                               
Schedule 2.1(a)(ii)   Leased Real Property                                    
Schedule 2.1(a)(iii)  Inventory                                               
Schedule 2.1(a)(v)    Trademarks, Tradenames, Patents, Logos                  
Schedule 2.1(a)(ix)   Prepaid Expenses/Security Deposits                      
Schedule 2.1(a)(xvi)  M&L Hong Kong Accounts Receivable                       
Schedule 2.1(b)(iii)  Excluded Contracts                                      
Schedule 2.2(a)       Assumed Liabilities                                     
Schedule 3.1          Purchase Price Formula                                  
Schedule 5.2          Jurisdictions Where Sellers Are Qualified to do Business
Schedule 5.5          Consents and Waivers Required for Transaction           
Schedule 5.6          Compliance with Law                                     
Schedule 5.7          Litigation                                              
Schedule 5.9          Employee Benefit Plans                                  
Schedule 5.10         Contracts                                               
Schedule 5.12         Purchase Orders for which L/Cs have Not Been Opened     
Schedule 5.13         Permits                                                 
Schedule 5.14         Defaults Under Leases                                   
Schedule 5.15         Environmental Law Violations                            
Schedule 5.16         Insurance Policies                                      
Schedule 5.17         Intellectual Property                                   
Schedule 5.18         Equipment (with original purchase price over $10,000)   
Schedule 5.19         Condition of Title to Assets                            
Schedule 7.1          Budget                                                  
Schedule 9.1          Employees to Be Retained                                
Schedule 11.2         Buyer Closing Documents                                 
Schedule 12.2         Sellers Closing Documents                               

List of Exhibits                                                              

Exhibit A             Form of Escrow Agreement                                
Exhibit B             Form of Order                                           

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ASSET PURCHASE AGREEMENT

      ASSET PURCHASE AGREEMENT dated this 5th day of February, 1999 by and
among M&L INTERNATIONAL GROUP, LLC, a Delaware limited liability company with   
its principal office at 350 Fifth Avenue, New York, New York 10118 ("M&LIG"),   
M&L HONG KONG, LTD., a Hong Kong corporation ("M&LHK"), and AMEREX (USA) INC.,  
a New York corporation with its principal office at 350 Fifth Avenue, New York, 
New York 10018 ("Amerex") (M&LIG, M&LHK and Amerex to be referred to hereinafter
collectively as "Buyer"), M&L INTERNATIONAL, INC., an Illinois corporation with 
its principal office at 1333 North Kingsbury Street, Chicago, Illinois, 60622   
("M&L International") and M&L INTERNATIONAL (H.K.) LIMITED, a Hong Kong         
Corporation with its principal office at M-F, Keep Mount Centre, 9-11 Shing Wan 
Road, TaiWai, N.T. Hong Kong ("M&L Hong Kong") (M&L International and M&L Hong  
Kong to be referred to hereinafter collectively as the "Sellers").              

W I T N E S S E T H:

      WHEREAS, M&L International is, simultaneously with the execution and
delivery of this Agreement, filing a petition to commence a reorganization case 
(the "Reorganization Case") under Chapter 11 of Title 11 of the United States   
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the      
Southern District of New York (the "Bankruptcy Court");                         

WHEREAS, after commencement of the Reorganization Case, M&L   
International will be operating its business as a debtor-in-possession pursuant 
to the Bankruptcy Code;                                                         

    WHEREAS, Buyer desires to purchase certain assets from Sellers and
Sellers desire to sell such assets to Buyer, all upon the terms and subject to  
the conditions set forth in this Agreement; and                                 

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WHEREAS, Sellers and Buyer are simultaneously entering into an
agreement (the "Interim Agreement") pursuant to which Amerex agrees to          
facilitate the continued operation of the Business from the date hereof until   
the Closing Date by opening letters of credit subject to the terms and          
conditions of the Interim Agreement.                                            

      NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements hereinafter contained, the parties hereto hereby agree 
as follows:                                                                     

 ARTICLE I

 DEFINITIONS

                 As used in this Agreement, the following terms shall have the
following meanings:                                                             

                  "Affiliate" shall mean, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under direct or indirect   
common control with such other Person;                                          

"Amerex" - See Preamble hereto;             

"Assets" - See Section 2.1 (a);             

            "Assigned Contracts" shall mean the Contracts of Sellers
listed on Schedule 1 annexed hereto;                                            

"Assumed Liabilities" - See Section 2.2(a); 

"Bankruptcy Code" - See the Recitals hereto;

 "Bankruptcy Court" - See the Recitals hereto;

 "Books and Records" - See Section 2.1(a)(xv);

"Break Up Fee" - See Section 7.8;           

         "Business" shall mean all the business activities and
operations of the Sellers;                                                      

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                 "Business Day" shall mean any day other than Saturday, Sunday
and any day which is a legal holiday or a day on which banking institutions in  
New York City are authorized by law or other governmental action to close;      

"Buyer" - See the Preamble hereto;          

"Closing" -  See Article IV;                

"Closing Date" -  See Article IV;           

           "Code" shall mean the Internal Revenue Code of 1986, as
amended;                                                                        

             "Contracts" shall mean any and all contracts, agreements,
leases, licenses, indentures, notes, mortgages, instruments, open Purchase      
Orders, open Customer Orders, or other binding arrangements to which either     
Seller is a party, whether oral or written, and all modifications and amendments
thereto;                                                                        

              "Customer Orders" shall mean the Sellers' customer orders,
contracts or other commitments to customers of the Business;                    

"Deposit" - See Section 3.4;                

                  "Employee Benefit Plan" shall mean an Employee Pension Benefit
Plan or an Employee Welfare Benefit Plan, where no distinction is required by   
the context in which the term is used;                                          

              "Employee Pension Benefit Plan" shall have the meaning set
forth in Section 3(2) of ERISA;                                                 

              "Employee Welfare Benefit Plan" shall have the meaning set
forth in Section 3(l) of ERISA;                                                 

                "Environmental Laws" shall mean all federal, state and local
laws, statutes, ordinances and regulations, including, without limitation, any  
applicable judicial or                                                          

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administrative order, consent decree or judgment, all as in effect as of the    
Closing Date relative to the applicable Premises, relating to the regulation and
protection of the environment and natural resources (including, without         
limitation, ambient air, surface water, groundwater, wetlands, land surface or  
subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws
include but are not limited to the Comprehensive Environmental Response,        
Compensation, and Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et seq.)
("CERCLA"); the Hazardous Material Transportation Act, as amended (49 U.S.C. ss.
1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as      
amended (7 U.S.C. ss. 136 et seq.); the Resource Conservation and Recovery Act, 
as amended (42 U.S.C. ss. 7401 et seq.) ("RCRA"); the Federal Water Pollution   
Control Act, as amended (29 U.S.C. ss. 300f et seq.); and any and all           
regulations promulgated thereunder, and all similar or analogous state, local   
and federal statutes, counterparts or equivalents and any transfer of ownership 
notification or approval statutes;                                              

"Equipment" - See Section 2.1(a)(i);        

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended;                                                            

"Escrow Agreement" - See Section 3.3;       

"Escrow Amount" - See Section 3.3;          

 "Estimated Purchase Price" - See Section 3.5;

"Excluded Assets" - See Section 2.1(b);     

   "Excluded Contracts" - See Section 2.1(b)(iii);

        "GAAP" shall mean U.S. generally accepted accounting
principles;                                                                     

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              "Government" shall mean any agency, division, subdivision,
audit group or procuring office of the Government of the United States, and     
state, or any foreign government, including the employees or agents thereof;    

  "Higher and Better Offers" -  See Section 7.9;

"Improvements" -  See Section 2.1(a)(ii);   

             "Intellectual Property Rights" -  See Section 2.1(a)(vi);

"Interim Agreement" - See Recitals hereto;  

                "Interim Gross Profits" shall mean Sellers' gross profits on
Interim Net Sales;                                                              

             "Interim Net Sales" shall mean Sellers' net sales for the
period January 1, 1999 through the Closing Date;                                

"Inventory" -  See Section 2.1(a)(iii);     

     "Leased Real Property" -  See Section 2.1(a)(ii);

            "Leases" shall mean those real property leases listed on
Schedule 5.10;                                                                  

              "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, claim, lien (statutory or other) or conditional sale agreement;    

"M&LHK" - See the Preamble hereto;          

"M&L Hong Kong" - See the Preamble hereto;  

"M&LIG" - See the Preamble hereto;          

  "M&L International" - See the Preamble hereto;

          "Mackintosh" shall mean Mackintosh of New England Co.,

                  "Material Adverse Effect" shall mean a material adverse effect
on the Assets, the Business or the use or operation thereof, in each case, taken
as a whole, or a material adverse                                               

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effect on Sellers' ability to consummate the transactions contemplated by this  
Agreement other than the commencement of the Reorganization Case as contemplated
herein;                                                                         

            "Multiemployer Plan" shall have the meaning set forth in
Section 3(37) of ERISA;                                                         

      "Operating Costs and Expenses" - See Schedule 3.1;

"Order" - See Section 7.10;                 

"Permits" - See Section 2.1(a)(xiii);       

                 "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,     
trust, unincorporated organization or Government;                               

"Premises" - See Section 2.1(a)(ii);        

              "Purchase Orders" shall mean the Sellers' purchase orders,
contracts or other commitments to suppliers of goods and services for materials,
supplies or other items used in the Business;                                   

"Purchase Price" - See Section 3.1;         

"Reorganization Case" - See Recitals hereto;

"Returned Goods" - See Section 8.4;         

"Sale Hearing" - See Section 7.10;          

                  "Secured Bank Group" shall mean, collectively, Chase Manhattan
Bank for itself, and as agent for certain other lenders of Sellers, together    
with such other lenders;                                                        

"Sellers" - See the Preamble hereto;        

"Sellers' Cost" - see Schedule 3.1;         

"Sellers' Receivables" - See Section 8.3;   

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                 "Severance Plans" shall mean all severance plans, programs or
practices of the Sellers;                                                       

           "Subsidiary" shall mean with respect to any Person, any
corporation or other organization, whether incorporated or unincorporated, of   
which more than 50% of either the equity interests in, or the voting control of,
such corporation or other organization is, directly or indirectly, through      
subsidiaries or otherwise, beneficially owned by such Person;                   

             "Taxes" shall mean for all purposes of this Agreement all
taxes, however denominated, including any interest, penalties or additions to   
tax that may become payable in respect thereof, imposed by any Government, which
taxes shall include, without limiting the generality of the foregoing, all      
income taxes, payroll and employee withholding taxes, unemployment insurance,   
social security, sales and use taxes, excise taxes, franchise taxes, gross      
receipts taxes, occupation taxes, real and personal property taxes, stamp taxes,
transfer taxes, workmen's compensation taxes and other obligations of the same  
or a similar nature, whether arising before, on or after the Closing; and "Tax" 
shall mean any one of the foregoing;                                            

"Transaction Taxes" - See Article X;        

                  "WARN" shall mean the Federal Worker Adjustment and Retraining
Notification Act.                                                               

ARTICLE II

 PURCHASE AND SALE

Section 2.1      Assets to be Sold and Purchased.             

         (a) Subject to Section 2.1(b) and the other terms and
conditions hereof, at the Closing Sellers shall sell, assign, transfer, convey  
and deliver to Buyer free and clear of all Liens,                               

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and Buyer shall purchase from Sellers, all of the property, assets and rights   
used or held for use in the Business (collectively, the "Assets") including:    

               (i)    all of Sellers' rights, title and interest in and to
the machinery, equipment, tools, supplies, spare parts, vehicles, furniture and 
other tangible personal property owned, used or held for use in the Business on 
the Closing Date (the "Equipment"), as set forth on Schedule 2.1(a)(i);         

               (ii)   all of Sellers' rights, title and interest in and to
the real property leased by Sellers and used in the Business (the "Premises")   
and all of Sellers' rights, title and interest in and to all buildings,         
improvements and fixtures constructed thereon (the "Improvements," and together 
with the Premises, the "Leased Real Property" ) as set forth on Schedule        
2.1(a)(ii);                                                                     

                 (iii)  all raw materials, work-in-progress and inventories of
finished goods, whether in possession of Sellers or any supplier, manufacturer  
or contractor of Sellers on the Closing Date (the "Inventory") which, as of     
December 31, 1998, is as set forth on Schedule 2.1(a)(iii);                     

              (iv)   all claims, rights and chooses in action of Sellers
against third parties in respect of unliquidated rights under manufacturers' and
vendors' warranties, guarantees or similar obligations to the extent same are   
assignable;                                                                     

                (v)    all of Sellers' rights, title and interest in, to and
under all patents, patent applications, trade names, trademarks, copyrights,    
copyright applications, service marks, trademark and service mark registrations 
and applications, domain names, logos and other intangible property as set forth
on Schedule 2.1(a)(v), in each case, together with the good will of the business
associated therewith, whether owned or licensed by Sellers (including, without  

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limitation, all of Sellers' right to use the names "M&L" and "M&L International"
and any derivations thereof) whether or not used in the Business, and the       
trademarks and trademark applications listed on Schedule 2.1(a)(v) annexed      
hereto under the heading "Mackintosh Trademarks" which are currently owned of   
record by Mackintosh;                                                           

                 (vi)   all of Sellers' rights in, to and under trade secrets,
formulae and specifications and technical know-how, whether currently being used
or under development, including engineering and other drawings, data, design and
specifications, product literature and related materials, in each case which are
owned or licensed by Sellers as of the Closing Date (together with the          
intellectual property described in Section 2.1(a)(v), the "Intellectual Property
Rights") and all of Sellers' books, records and computer software programs      
relating thereto;                                                               

                  (vii)  all of Sellers' rights in, to and under the goodwill of
the Business;                                                                   

                  (viii) all of Sellers' rights, titles and interests in, to and
under all Assigned Contracts;                                                   

         (ix)   all prepaid expenses, prepaid rents, and other
prepayments, including security deposits relating to the Assigned Contracts, as 
of the Closing Date which, as of December 31, 1998, are as set forth on Schedule
2.1(a)(ix);                                                                     

                  (x)    all existing customer lists, credit policies and credit
information with respect to all existing customers of, and all existing cost and
pricing data for, the Business other than customer information pertaining to the
collection of Sellers' Receivables;                                             

               (xi)   all existing supplier lists, product specifications,
bills of materials, production routings and all other production information;   

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       (xii)  all existing business plans, advertising and
promotional plans, product development plans, forecasts, market research        
reports, competitor information, and reference catalogs;                        

              (xiii) all of Sellers' rights under governmental licenses,
certificates, permits, franchises, similar authorizations and approvals of      
Seller (the "Permits") relating to or necessary to the lawful conduct of the    
Business as of the Closing Date (including all rights of Sellers to obtain      
renewals and extensions thereof, together with all causes of action in favor of 
Sellers heretofore accrued or hereafter accruing with respect thereto), in each 
case to the extent such Permits are transferable;                               

                (xiv)  all transferable warranties and guarantees pertaining
to the Assets; and                                                              

                 (xv)   all books and records relating to the Business and the
Assets (the "Books and Records") including, without limitation, records with    
respect to costs, Inventory and Equipment; materials, catalogues,               
correspondence, mailing lists, art work, films, negatives, photographs, sales   
materials and records; purchasing materials and records; personnel records with 
respect to employees of the Business being retained by Buyer; media materials   
and plates; sales order files; ledgers and other books of account of Sellers;   
plans, specifications, surveys, reports and other materials relating to the     
Leased Real Property; other records required to continue the Business as        
heretofore and now being conducted by Sellers; and all software programs,       
computer printouts, databases and related items used in the Business;           

                 (xvi)  accounts receivable of M&L Hong Kong as of the Closing
Date, which as of December 31, 1998, are set forth on Schedule 2.1(a)(xvi); and 

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                 (xvii) all designs, patterns and supplies owned by Sellers or
used by Sellers in the Business.                                                

(b)      The Assets shall not include the following assets and
properties (the "Excluded Assets"):                                             

              (i)    all cash and cash equivalents, if any, belonging to
Sellers;                                                                        

                (ii)   all accounts receivable of M&L International existing
prior to the Closing Date;                                                      

               (iii)  the Contracts set forth on Schedule 2.1(b)(iii) (the
"Excluded Contracts");                                                          

(iv)   the capital stock of M&L Hong Kong;  

                (v)    any and all Employee Benefit Plans of Sellers and all
assets related thereto;                                                         

      (vi)   any and all real property owned by Sellers;

              (vii)  any and all amounts due to Sellers from Affiliates;

            (viii) any Tax attributes or Tax receivables of Sellers,
including any tax loss carryforward attributable to federal or state income     
Taxes;                                                                          

 (ix)   prepaid expenses to professionals; and

           (x)    all Books and Records relating to or used in the
collection of Sellers' Receivables or in the possession or control of Sellers'  
outside accountants.                                                            

     Section 2.2  Assumed Liabilities.; Assumption of Obligations Under Assigned
Contracts                                                                       

     (a)      Upon the Closing, Buyer shall assume all accounts payable,
liabilities and obligations of Sellers set forth on Schedule 2.2 (a) (the       
"Assumed Liabilities").                                                         

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        (b)    From and after the Closing, Buyer shall perform all obligations
required to be performed after Closing under the Assigned Contracts (the        
"Assumed Contract Obligations").                                                

(c)    Buyer shall not assume or be bound by or otherwise be  
responsible for any liabilities or obligations of Sellers of any kind or nature,
known, unknown, contingent or otherwise, other than the Assumed Liabilities and 
the Assumed Contract Obligations.                                               

     Section 2.3 Allocation of Assets and Liabilities Between M&LIG and M&LHK.
M&LIG and M&LHK shall purchase the Assets, and assume the Assumed Liabilities,  
in such proportion as they shall determine. Buyer shall notify Sellers of such  
determination prior to the Closing.                                             

 ARTICLE III

PURCHASE PRICE; ESCROW

Section 3.1 Purchase Price. The purchase price for the Assets (the  
"Purchase Price") shall be determined in accordance with the formula set forth  
on Schedule 3.1 annexed hereto. The Purchase Price shall be allocated to the    
Assets in accordance with applicable provisions of the Code and Internal Revenue
Service Regulations and Sellers and Buyer agree to make the necessary and       
appropriate Tax filings in connection therewith.                                

  Section 3.2 Payment of Purchase Price. . At the Closing, the Estimated
Purchase Price, less the Deposit, the Assumed Liabilities, and the Escrow Amount
(the "Closing Cash Payment"), shall be paid by Buyer to, or for the account of  
Sellers, by wire transfer of immediately available funds unless otherwise       
directed by the Bankruptcy Court pursuant to the Order. The balance of the      
Purchase Price, if any, shall be paid by Buyer as provided in Section 3.6.      

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Section 3.3 Escrow Amount. At Closing, Two Hundred Thousand Dollars 
($200,000) of the Purchase Price (the "Escrow Amount") shall be deposited by    
Buyer into escrow with Greenberg Traurig, counsel to the Sellers, as escrow     
agent (the "Escrow Agent"), to be held and disbursed by the Escrow Agent        
pursuant to the terms of Section 3.6 and an escrow agreement in the form annexed
hereto as Exhibit A (the "Escrow Agreement") until the actual Purchase Price is 
determined.                                                                     

Section 3.4 Deposit.                                                

        (a)      As a good faith deposit against the Purchase Price, the Buyer
is delivering to Greenberg Traurig, counsel to the Sellers, concurrently with   
the execution and delivery of this Agreement, the sum of $250,000 (the          
"Deposit"), which shall be held by such attorneys in a segregated interest      
bearing escrow account pending application or disbursement thereof in accordance
with this Agreement and pursuant to the Order. At the time of the Closing, the  
amount of the Deposit and interest earned thereon shall be applied in partial   
payment of the Purchase Price. In the event that this Agreement shall be        
terminated by the Sellers pursuant to Article XIII due to a breach of this      
Agreement by Buyer then the Deposit and interest earned thereon shall be        
retained by the Sellers as damages in respect of the Buyer's default and Sellers
specifically reserve the right to sue for damages and for specific performance  
as provided in Section 13.2(b). Upon any other termination of this Agreement,   
the Deposit and all interest earned thereon shall be promptly returned to the   
Buyer, and if Buyer has terminated this Agreement pursuant to Article XIII due  
to a breach of this Agreement by Sellers, Buyer specifically reserves the right 
to sue for damages and for specific performance as provided in Section 13.2(a). 

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   (b)      In order to induce the Sellers' counsel to act as escrow
holder (in such capacity, the "Deposit Escrow Agent"), the parties hereby       
confirm that the Deposit Escrow Agent (i) shall not incur any liability for any 
action taken by it hereunder, except to the extent that the same constitutes    
gross negligence or willful misconduct by the Deposit Escrow Agent, (ii) shall  
be entitled to rely upon and assume to be accurate all notices and advice given 
to the Deposit Escrow Agent hereunder (absent specific knowledge to the         
contrary) and to rely upon any document and/or signature believed by it in good 
faith to be to be genuine and rendered by an authorized representative of the   
subject person, (iii) may, notwithstanding its status as Deposit Escrow Agent,  
act as counsel for the Sellers, without any claims of conflict of interest by   
reason thereof, (iv) may resign at any time, provided that such resignation     
shall not become effective until a substitute escrow agent is appointed by      
mutual agreement of the Sellers and the Buyer, and the Deposit Escrow Agent has 
delivered to its successor all funds then held in escrow hereunder, and (v) may,
in the event of any dispute hereunder, deposit any and all funds held in escrow 
hereunder into the Court pending resolution of such dispute, and thereby be     
relieved of its obligations as Deposit Escrow Agent hereunder.                  

Section 3.5   Physical Inventory; Estimated Purchase Price.             

     (a)      Sellers' and Buyer's representatives, employees, agents or
accountants shall jointly conduct a physical inspection and counting of         
Inventory, including a count of Inventory returned from and after January 1,    
1999, not more than ten (10) and not fewer than five (5) days prior to the Sale 
Hearing. Buyer and Sellers shall attempt in good faith to resolve any disputes  
regarding the Inventory count during such physical inspection and counting and, 
in any event, shall resolve any disputes not more than three (3) days prior to  
the Sale Hearing.                                                               

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        (b) Three (3) days prior to the Sale Hearing, Sellers shall deliver to
Buyer the following:                                                            

           (i)  a certificate (the "Interim Period Certificate") signed by a
Vice President of M&L International certifying Sellers' reasonable good faith   
estimate of the Operating Costs and Expenses, the Interim Net Sales and the     
Interim Gross Profits, accompanied by reasonably detailed documentation         
substantiating such estimates; and                                              

           (ii) a certificate (the "Purchase Price Certificate") signed by a
Vice President of M&L International setting forth, in the detail required by    
Schedule 3.1, Sellers' reasonable good faith estimate of the Purchase Price (the
"Estimated Purchase Price") calculated in the manner set forth in Schedule 3.1  
applying the results of the physical Inventory count referred to in Section     
3.5(a) and the Sellers' estimate of Operating Costs and Expenses, Interim Net   
Sales and Interim Gross Profits set forth on the Interim Period Certificate.    

Section 3.6   Post-Closing Adjustment.                                  

(a)      From and after the Closing, Buyer and its agents and 
representatives shall have the right to inspect and examine the Books and       
Records, and any other materials reasonably requested of Sellers, for the       
purpose of calculating the actual Purchase Price.                               

  (b)      If, within sixty (60) days after the Closing, Buyer and
Sellers agree upon the Purchase Price, the procedures in Section 3.6(c) shall be
followed. If the Sellers and Buyer do not agree upon the Purchase Price within  
such sixty (60) day period, the accounting firm of M.R. Weiser & Co., LLP (the  
"Independent Accountants") shall be jointly retained by Sellers and Buyer to    
determine the Purchase Price based upon Schedule 3.1. The determination of the  
Independent Accountants shall be conclusive and binding upon the parties. The   
fees and disbursements of the Independent Accountants shall be shared equally by
Sellers and Buyer. The                                                          

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amounts owed by Sellers to the Independent Accountants shall constitute a       
priority administrative claim in the Reorganization Case. Upon determination of 
the Purchase Price by the Independent Accountants, the procedures in Section    
3.6(c) shall be followed.                                                       

         (c) (i)   If the Closing Cash Payment, plus the Deposit and the Assumed
Liabilities, is less than the Purchase Price as agreed to by the Sellers and    
Buyer or as determined by the Independent Accountants, then, upon delivery to   
the Escrow Agent of joint written instructions from Sellers and Buyer, the      
Escrow Agent shall remit to Sellers out of the Escrow Amount the amount of such 
shortfall (the "Purchase Price Shortfall") and the balance of the Escrow Amount,
if any, shall be remitted to Buyer, provided that, if the Escrow Amount is not  
sufficient to cover the entire Purchase Price Shortfall, Buyer shall pay to the 
Sellers the amount of such deficiency within three (3) days after determination 
thereof; and                                                                    

             (ii)  If the Closing Cash Payment, plus the Deposit and the Assumed
Liabilities, exceeds the Purchase Price as agreed to by the Sellers and Buyer or
as determined by the Independent Accountants (the "Overpayment") then, upon     
delivery to Escrow Agent of joint written instructions from Sellers and Buyer,  
the Escrow Agent shall remit to the Buyer the full Escrow Amount and the Sellers
shall be liable to Buyer for the amount by which the Overpayment exceeds the    
Escrow Amount. Buyer shall have a priority administrative claim for the         
Overpayment against the estate of M&L International in the Reorganization Case. 

ARTICLE IV

 CLOSING

      The Closing under this Agreement (the "Closing") shall take place at
the offices of Rosen & Reade, LLP, 757 Third Avenue, New York, New York 10017 at
10:00 a.m. on the day                                                           

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immediately following the day on which all of the conditions contained in       
Article XI and Article XII have been satisfied or waived by the Sellers or the  
Buyer, as the case may be, or on such later date and at such other place and    
time as may be mutually agreed to by the parties hereto (the "Closing Date").   

 ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE SELLERS                                   

   The Sellers hereby represent and warrant to the Buyer as follows:

        Section 5.1 Corporate Organization. M&L International is a corporation
duly organized, validly existing and in good standing under the laws of the     
State of Illinois, and M&L Hong Kong is a corporation duly organized, validly   
existing and in good standing under the laws of Hong Kong. Each of the Sellers  
has all requisite corporate power and authority to own its properties and assets
and to conduct its businesses as now conducted. No direct or indirect Subsidiary
or Affiliate of M&L International other than M&L Hong Kong owns or has any      
rights in the Assets.                                                           

        Section 5.2 Qualification to Do Business. Schedule 5.2 sets forth each
jurisdiction in which each of the Sellers is qualified to do business as a      
foreign corporation. Each Seller is qualified to do business as a foreign       
corporation and is in good standing in every jurisdiction which the character of
the property owned or leased by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so qualified 
or in good standing would not have a Material Adverse Effect.                   

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   Section 5.3 Authorization and Validity of Agreements. Each of the
Sellers has all requisite corporate power and authority to enter into this      
Agreement, and, subject to the Bankruptcy Court's entry of the Order and the    
receipt of the consents, waivers and approvals set forth on Schedule 5.5, to    
carry out its obligations hereunder and thereunder. The execution and delivery  
of this Agreement, and the performance of each Sellers' obligations hereunder   
have been duly authorized by all necessary corporate action by the Boards of    
Directors of each of such Sellers, and no other corporate proceedings on the    
part of such Sellers are necessary to authorize such execution, delivery and    
performance. This Agreement has been duly executed by each of the Sellers and,  
subject to the Bankruptcy Court's entry of the Order, constitutes its valid and 
binding obligation, enforceable against it in accordance with its terms.        

   Section 5.4 No Conflict or Violation. Subject to the Bankruptcy's
Court's entry of the Order and receipt of all consents and waivers set forth on 
Schedule 5.5, the execution, delivery and performance by each of the Sellers of 
this Agreement do not and will not violate or conflict with any provision of the
Certificates or Articles of Incorporation or By-laws (or equivalent documents)  
of such Sellers and do not and will not violate any provision of law, or any    
order, judgment or decree of any court or other governmental or regulatory      
authority applicable to either of such Sellers, nor violate nor will result in a
breach of or constitute (with due notice or lapse of time or both) a default    
under any Assigned Contract.                                                    

        Section 5.5 Consents and Approvals. Schedule 5.5 sets forth a true and
complete list of each consent, waiver, authorization or approval of any         
Governmental or regulatory authority, domestic or foreign, or of any other      
Person, and each declaration to or filing or registration with any such         
Governmental or regulatory authority, that is required in connection with the   
execution and delivery of this Agreement by the Sellers or the performance by   
the Sellers of their                                                            

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respective obligations hereunder, except to the extent the failure to obtain    
such consent, waiver, authorization or approval would not have a Material       
Adverse Effect.                                                                 

       Section 5.6 Compliance with Law. Except as set forth on Schedule 5.6,
to the best knowledge of Sellers, the Sellers (a) are not in violation of any   
law, regulation, order or other legal requirement with respect to or affecting  
the Assets which violation could have a Material Adverse Effect and (b) are not 
in default of any order, writ, judgment, award, injunction or decree of any     
national, state or local court or governmental or regulatory authority or       
arbitrator, domestic or foreign, applicable to the Business or any of the       
assets, properties or operations thereof including, without limitation, the     
Assets.                                                                         

         Section 5.7 Litigation. Except as set forth in Schedule 5.7, and except
for the Reorganization Case and claims filed with the Bankruptcy Court in       
connection therewith, there are no claims, complaints, charges, actions, suits, 
condemnation or other proceedings, labor disputes or investigations pending     
before any federal or state court, arbitrator or governmental authority brought 
by or against either of the Sellers or, to the Sellers' knowledge, threatened to
be brought against either of the Sellers, which, if adversely determined, would 
have a Material Adverse Effect.                                                 

Section 5.8  Labor Relations.                                 

                (a) The Sellers are not a party to any collective bargaining
agreement or collective bargaining relationship and there are no unfair labor   
practice or representation proceedings pending or threatened with respect to the
Sellers and any of their current or former employees or any labor or other      
collective bargaining unit representing any current or former employee of the   
Sellers.                                                                        

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(b)          To the best knowledge of Sellers, Sellers are in 
compliance with all federal, state and local laws, regulations and orders       
relating to the employment of labor, including, without limitation, all such    
laws, regulations and orders relating to wages, hours, WARN, collective         
bargaining, discrimination, civil rights, safety and health, workers'           
compensation and the collection and payment of withholding and/or social        
security taxes and any similar tax except for non-compliance that would not     
result in a Material Adverse Effect.                                            

         Section 5.9  Employee Benefits. Schedule 5.9 lists all Employee Benefit
Plans (including Multiemployer Plans and the Severance Plans) whether or not    
covered by ERISA, and any executive compensation arrangement, excess benefit    
plan or supplemental pension plan, change in control agreement or other         
severance plan or arrangement that either of the Sellers maintains, or to which 
either of the Sellers contributes. With respect to all Employee Benefit Plans   
listed in Schedule 5.9, the Sellers have delivered to the Buyer complete and    
accurate copies of all applicable plans (to the extent in written form) and     
related summary plan descriptions.                                              

     Section 5.10 Contracts. Set forth on Schedule 5.10 is a list of all
Contracts. The Sellers have delivered to the Buyer copies of all Assigned       
Contracts which copies are true and complete in all respects. All Assigned      
Contracts are and, subject to the Order, at Closing will be in full force and   
effect and are, and subject to the Order, at Closing will be legally binding and
enforceable by and against the Sellers and the other parties thereto. Neither of
the Sellers is in monetary default under any Assigned Contract to which it is a 
party and there is no non-monetary default that could have a Material Adverse   
Effect. No condition, event or act is existing or has occurred that (with or    
without the lapse of time or the giving of notice, or both) would result in any 
monetary default under any Assigned Contract or which would result in a         
non-monetary default under any Assigned Contract that could have a Material     
Adverse Effect.                                                                 

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   Section 5.11 Inventory. The Inventory is, and at Closing will be,
usable or salable in the ordinary course of business consistent with Sellers'   
past practices. In-process and finished goods have been produced in compliance  
with Sellers's applicable quality control procedures and are fit for the uses   
intended.                                                                       

         Section 5.12 Purchase Orders. Except as set forth on Schedule 5.12, all
Purchase Orders outstanding as of the date hereof have been entered into by the 
Sellers in the ordinary course of business consistent with past practice.       

      Section 5.13 Permits. A list of all Permits is set forth on Schedule
5.13. Except with respect to matters disclosed on Schedule 5.6, all Permits have
been paid for and are in full force and effect with respect to each of the      
Premises. Except with respect to matters disclosed on Schedule 5.6, Sellers have
no knowledge of any law or regulation of any governmental authority having      
jurisdiction which might require any of the Premises to be improved beyond its  
present state or which might restrict the use and enjoyment of any of the       
Premises in the manner in which it is currently being used and enjoyed.         

        Section 5.14 Leases. Each of the Leases is, and, subject to the Order,
as of the Closing shall be, a valid and subsisting lease enforceable against the
parties thereto in accordance with its terms with no amendments or other        
modifications thereto that are not listed on Schedule 5.10. Except as set forth 
in Schedule 5.14, to the Sellers' knowledge, no default of a landlord under any 
of such Leases, after giving effect to applicable grace periods, if any, exists 
or is alleged to exist. Except as set forth on Schedule 5.14, Sellers have not  
received any notices alleging a default by Sellers under the Leases and there   
are no monetary defaults by Sellers under any of the Leases and there are no    
non-monetary defaults under any Lease that would have a Material Adverse Effect.

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       Section 5.15 Environmental Matters. The Sellers have furnished to the
Buyer copies of all reports, tests, notices, studies and other like information 
in the possession of or ordered by Sellers relating to the presence or absence  
of toxic or hazardous materials at the Leased Real Property. To the best of     
Sellers' actual knowledge, except as set forth in Schedule 5.15, neither the    
Sellers nor any of the Leased Real Property are in violation of any             
Environmental Law.                                                              

       Section 5.16 Insurance. Annexed hereto as Schedule 5.16 is a true and
complete list of all insurance policies held by Sellers, including the names of 
the insurance carriers, a general description of the risks insured against under
each policy, the amount of coverage, the named insured or insureds thereunder,  
the annual premium and the effective date and terms thereof. True and correct   
copies of all such insurance policies have been delivered to Buyer. The coverage
under such policies is adequate to cover all risks of Sellers which reasonably  
and prudently should be insured against with regard to the Assets and in the    
operation and conduct of the Business. All such policies are in full force and  
effect and no notice or warning of cancellation, termination or premium increase
has been received with respect thereto, and Sellers are in compliance with all  
conditions contained therein.                                                   

       Section 5.17 Intellectual Property Rights. Schedule 5.17 sets forth a
list of all Intellectual Property Rights of Sellers. Copies of all registrations
and applications with respect thereto filed with or issued by any governmental  
body have been delivered to Buyer. Except as set forth on Schedule 5.17, (i) all
Intellectual Property Rights are owned by Sellers; (ii) none of the Intellectual
Property Rights have been assigned, pledged, mortgaged, transferred or licensed 
to or from any third person, (iii) Sellers have not received any written notice 
of invalidity, infringement or misappropriation from any third party with       
respect to any Intellectual Property Rights; (iv) to the knowledge of Sellers,  
Sellers have not interfered with, infringed upon,                               

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misappropriated or otherwise come into conflict with any intellectual property  
or other rights of any third parties; and (v) to the knowledge of Sellers, no   
third party has interfered with, infringed upon, misappropriated, or otherwise  
come into conflict with any Intellectual Property Rights of Sellers.            

Section 5.18 Equipment. Schedule 5.18 sets forth a list of all
Equipment with an original purchase price in excess of $10,000. Except as       
otherwise set forth in Schedule 5.18, Sellers have good and valid title to all  
of the Equipment and the Equipment is in good operating condition and repair and
is suitable for the uses for which it is currently used.                        

   Section 5.19 Condition of Title of Assets. Except as set forth on
Schedule 5.19, Sellers own all the Assets free and clear of any and all Liens   
except for claims that may be filed with the Bankruptcy Court in the            
Reorganization Case. At Closing, the Assets will be transferred to Buyer free   
and clear of all Liens, including, without limitation, any and all Liens for    
Taxes.                                                                          

 Section 5.20 Brokers' and Finders' Fees. Except for Kurt Salmon
Associates Capital Advisors, Inc. ("KSA") no advisor, broker, finder or any     
other Person has been consulted or performed any services in connection with the
transactions contemplated by this Agreement by or for the Sellers. All fees and 
expenses due and owing to KSA shall be the sole responsibility of Sellers.      

         Section 5.21 Hong Kong Receivables. The accounts receivable of M&L Hong
Kong as of the Closing Date will be valid and collectible in full.              

Section 5.22 Disclaimer. Except as otherwise set forth in this
Agreement, Sellers make no representation or warranty concerning the condition  
of the Assets and the Assets are being sold "as is" and "where is."             

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ARTICLE VI

 REPRESENTATIONS AND WARRANTIES OF BUYER

      Each Buyer hereby represents and warrants to the Sellers as follows:

     Section 6.1 Organization. M&LIG is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of 
Delaware, and has all requisite power and authority to own its properties and   
assets and to conduct its business as now conducted. M&LHK is a corporation duly
organized, validity existing and in good standing under the laws of Hong Kong,  
and has all requisite corporate power and authority to own its properties and   
assets and to conduct its business as now conducted. Amerex is a corporation    
duly organized, validly existing and in good standing under the laws of the     
State of New York, and has all requisite corporate power and authority to own   
its properties and assets and to conduct its business as now conducted.         

      Section 6.2 Authorization and Validity of Agreements. Each Buyer has
all requisite power and authority to enter into this Agreement and to carry out 
its obligations hereunder. The execution and delivery of this Agreement and the 
performance by each Buyer of its obligations hereunder and thereunder have been 
duly authorized by all necessary actions of the members, managers and directors 
of each Buyer, as the case may be. This Agreement has been duly executed by each
Buyer and constitutes the valid and binding obligations of each Buyer,          
enforceable against each Buyer in accordance with its terms.                    

   Section 6.3 No Conflict or Violation. The execution, delivery and
performance by each Buyer of this Agreement does not and will not violate or    
conflict with any provision of the Certificate of Formation or Limited Liability
Company Agreement of M&LIG, the Articles of Incorporation or By-Laws of M&LHK,  
or the Certificate of Incorporation or By-Laws of                               

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Amerex, and does not and will not violate any provisions of law, or any order,  
judgment or decree of any court or other governmental or regulatory authority   
applicable to any Buyer, nor violate nor will result in a breach of or          
constitute (with due notice or lapse of time or both) a default under any       
material contract, lease, loan agreement, mortgage, security agreement, trust   
indenture or other agreement or instrument to which any Buyer is a party or by  
which any Buyer is bound or to which any of its properties or assets is subject.

 Section 6.4 Consents and Approvals. The execution, delivery and
performance of this Agreement on behalf of each Buyer do not require the consent
or approval of, or filing with, any Government, governmental body or agency or  
other entity or Person except: (i) as may be required to transfer any Permits;  
(ii) entry of the Order by the Bankruptcy Court; and (iii) the approval of the  
Managers of M&LIG, the Board of Directors of M&LHK, and the Board of Directors  
of Amerex (which limited liability company and corporate approvals have been    
obtained).                                                                      

       Section 6.5 Brokers' and Finders' Fees. Except for Houlihan Lokey, no
advisor, broker, finder or any other Person has been consulted or performed any 
services in connection with the transactions contemplated by this Agreement by  
or for Buyer. All fees, costs and expenses due and owing to Houlihan, Lokey     
shall be the sole responsibility of Buyer.                                      

         Section 6.6 Acknowledgment by Buyer. Buyer has inspected the Assets and
has relied upon such inspection and Buyer acknowledges that, except for the     
representations and warranties of Sellers set forth in this Agreement, the      
Assets are being sold "as is" and "where is." Buyer acknowledges that its offer 
to purchase the Assets pursuant to this Agreement is subject to Higher and      
Better Offers and that other bidders may receive from Sellers information about 
the Assets and that Sellers and their respective employees are bound by their   
fiduciary duties under the Bankruptcy Code.                                     

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 ARTICLE VII

COVENANTS OF THE SELLERS

The Sellers covenant as follows:                            

Section 7.1  Conduct of Business Before the Closing Date    
Acknowledgment by Buyer.                                                        

       Subject to the terms and conditions of Bankruptcy Court orders in the
Reorganization Case consistent with this Agreement and the Interim Agreement,   
including a contemplated cash collateral stipulation with the Secured Bank      
Group:                                                                          

              (a)  From the date hereof to the Closing Date, without the
prior written consent of the Buyer, the Sellers shall not make any material     
change in (i) the physical condition of any Leased Real Property, or (ii) the   
operation of the Business, and the Sellers shall conduct the Business in the    
ordinary course consistent with the Sellers' status as debtors and debtors in   
possession under chapter 11 of the Bankruptcy Code, except in all cases as      
required or expressly permitted pursuant to the terms hereof and the Interim    
Agreement. Buyer hereby consents to the operation of the Business pursuant to   
the budget annexed hereto as Schedule 7.1 (the "Budget"). Notwithstanding       
anything in this Agreement to the contrary, Sellers shall not be obligated to   
open letters of credit for the benefit of Sellers' suppliers or to place orders 
except as contemplated by the Interim Agreement.                                

                  (b) Without limiting the generality of the foregoing, from the
date hereof to the Closing Date, the Sellers shall (i) use their commercially   
reasonable efforts to preserve and maintain the Assets and the existing         
relationships with suppliers, customers and their agencies and others having    
business with the Sellers; (ii) promptly, and in any event within two (2) days  
of the Sellers obtaining knowledge thereof, notify Buyer in writing of any      
material damage to or                                                           

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destruction of the Assets; (iii) except as otherwise provided in the Budget,    
cause all purchases of, and Purchase Orders for, merchandise to be documented in
accordance with the Sellers' past practices, except that Sellers shall not be   
required to open letters of credit for the benefit of Sellers' suppliers; and   
(iv) maintain in effect the insurance policies listed in Schedule 5.16.         

                 (c) Notwithstanding any other provisions of this Section 7.1,
and except as otherwise provided in Section 14.15, from the date hereof to the  
Closing Date, the Sellers shall not renew, or fail to renew, any Lease relating 
to any Leased Real Property pursuant to a renewal option contained therein, or  
exercise any options with respect thereto, or amend any Assigned Contract,      
without the prior written consent of Buyer.                                     

        Section 7.2 Consents and Approvals. The Sellers shall use commercially
reasonable efforts to obtain all necessary consents, waivers, authorizations and
approvals of all governmental and regulatory authorities, domestic and foreign, 
and of all other Persons whose consent is required in order for the Sellers to  
be able to enter into and consummate the transactions contemplated by this      
Agreement.                                                                      

   Section 7.3 Access to Properties and Records. Except as otherwise
granted, limited or addressed in this Agreement, from the date hereof to the    
Closing Date (or the earlier termination of this Agreement pursuant to Article  
XIII), the Sellers shall, during normal business hours, (i) provide to the Buyer
and its representatives full access to the Premises, Books & Records, and other 
information of each of the Sellers as it relates to the Assets, and (ii) make   
available for inspection and copying by the Buyer copies of any documents       
relating to the foregoing.                                                      

        Section 7.4 Assigned Contracts. On the Closing Date, the Sellers shall
assume, pursuant to Section 365 of the Bankruptcy Code, all Assigned Contracts, 
with the costs, expenses                                                        

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and liabilities of such assumption to be borne by Sellers as provided for in    
section 365 of the Bankruptcy Code.                                             

Section 7.5 Reasonable Efforts. Sellers will use commercially 
reasonable efforts to take, or cause to be taken, all action, and to do, or     
cause to be done, all things necessary or proper consistent with applicable law 
to consummate and make effective in the most expeditious manner practicable the 
transactions contemplated hereby.                                               

     Section 7.6 Curing of Default under Assigned Contracts. The Sellers
shall, on or prior to the Closing, cure any and all defaults under the Assigned 
Contracts which are required to be cured pursuant to the Order so that such     
contracts may be assumed by the Sellers and assigned to the Buyer in accordance 
with the provisions of Section 365 of the Bankruptcy Code, and Buyer shall have 
no liability or responsibility for such defaults. At Closing, Sellers shall     
assign to Buyer all their rights under the Assigned Contracts free and clear of 
all Liens.                                                                      

        Section 7.7 Notice to the Buyer. The Sellers shall notify the Buyer in
writing of (i) any fact or circumstance which will cause any of the             
representations or warranties set forth in Article V that are qualified by a    
materiality standard to be untrue as of the Closing Date; and (ii) any fact or  
circumstance which will cause any of the representations and warranties set     
forth in Article V that are not qualified by a materiality standard to be       
materially untrue as of the Closing Date.                                       

         Section 7.8 Break-Up Fee. If (i) Sellers accept an alternative offer to
purchase the Assets and do not sell the Assets to Buyer, and Buyer is not in    
breach of this Agreement, or if, (ii) in violation of the Order, Sellers do not 
close the sale of the Assets, or if, (iii) Sellers move to withdraw the Order or
the Motion; in any of the foregoing instances, Sellers shall pay to Buyer the   
sum of $250,000 (the "Break-up Fee").                                           

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        Section 7.9  Higher and Better Offers; Bidding Procedures. Immediately
after the execution and delivery of this Agreement and commencement of the      
Reorganization Case, M&L International shall file a motion with the Bankruptcy  
Court (the "Preliminary Motion") requesting orders (the "Preliminary Orders")   
approving: (i) the Break-up Fee; (ii) a bidding procedure for alternative offers
and counter offers (the "Bidding Procedure"); (iii) an abbreviated notice period
for a hearing with respect to the Order; and (iv) the Interim Agreement. Such   
Bidding Procedure shall provide that alternative offers shall contain the       
additional undertaking by such alternative bidder ("Alternative Bidder") to: (x)
pay to the Buyer the Break-up Fee provided in Section 7.8; (y) pay to Amerex the
Service Fee and reimburse Amerex for the Expenses as required by Section 3.2 of 
the Interim Agreement; and (z) perform and assume the obligations set forth in  
Section 3.3 of the Interim Agreement (collectively, the "Additional             
Undertakings"). Such Preliminary Orders and Bidding Procedure shall further     
provide that the Sellers shall not be required to entertain an alternative offer
unless such offer is for a value of at least $250,000 greater than the offer set
forth in this Agreement plus the Additional Undertakings (the "Higher and Better
Offer"). Such Preliminary Orders and Bidding Procedure shall further provide    
that counter offers shall be made in increments of at least $100,000; that in   
all instances Alternative Bidders shall, in addition to the higher cash offer,  
assume the Additional Undertakings; and that Buyer shall be exempt from assuming
the Additional Undertakings and shall be deemed to have made the highest and    
best offer as long as its cash offer is at least $100,000 more than the cash    
offer made by the Alternative Bidder making the highest Higher and Better Offer.

         Section 7.10 Application for the Order. Within three (3) days after the
execution and delivery of this Agreement and commencement of the Reorganization 
Case, the Sellers shall,                                                        

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following consultation with the Buyer, file a motion (the "Motion") with the    
Bankruptcy Court seeking an order pursuant to Sections 363 and 365 of the       
Bankruptcy Code (the "Order"), in substantially the form of Exhibit B annexed   
hereto, authorizing and approving the sale and assignment of the Assets on the  
terms and conditions set forth in this Agreement. The Sellers shall request the 
Court to schedule one or more hearings to approve the sale of the Assets on or  
before February 26, 1999 (the "Sale Hearing"), and shall further request that   
the Order provide that (i) the Bankruptcy Court shall retain jurisdiction to    
determine any claims, disputes or causes of action arising out of or relating to
this Agreement or any of the transactions contemplated hereby (including any    
objections to the sale of the Assets hereunder), (ii) the Buyer is a bona fide  
good faith purchaser, (iii) the Sellers are authorized to sell, assign, transfer
and convey the Assets pursuant to Sections 363 and 365 of the Bankruptcy Code   
free and clear of all liens, pledges, security interests and encumbrances of    
every kind and nature and other interests, with all such liens, pledges,        
security interests, encumbrances and interests attaching to the proceeds of sale
to the extent and in the same order of priority of any existing liens, security 
interests, encumbrances and interests of record or as may be determined by the  
Court. In furtherance of obtaining the Order, the parties shall file such       
affidavits, motions and other papers, and take such other action, in the        
Reorganization Case as shall be necessary or appropriate to support the sale of 
the Assets to the Buyer on the terms and conditions of this Agreement subject to
Sellers' obligation to seek approval of Higher and Better Offers and perform its
obligations as a debtor-in-possession. The Sellers shall provide to the Buyer,  
at the time of filing, a true and complete copy of the Motion papers.           

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  Section 7.11 Post Closing Responsibilities of Sellers. After the
Closing, Sellers shall be responsible for and shall pay to Buyer: (i) the       
Processing Fee, as more specifically set forth in Section 8.4 hereof; and, (ii) 
any fee agreed upon for the collection of Sellers' Receivables.                 

    Section 7.12 Misdirected Payments. If any payments by customers in
respect of receivables other than Sellers' Receivables are paid to Sellers,     
Sellers shall, within five (5) days after receipt thereof, remit such payment to
Buyer.                                                                          

         Section 7.13 Trademark Assignments. At or prior to the Closing, Sellers
shall record with the United States Patent and Trademark Office, or deliver to  
Buyer, an assignment from Mackintosh to M&L International of the trademarks and 
trademark applications listed on Schedule 2.1(a)(v) under the heading           
"Mackintosh Trademarks," duly executed and in recordable form.                  

       Section 7.14 Access to Books and Records. From and after the Closing,
Sellers shall, during regular business hours and upon reasonable prior written  
notice, grant to Buyer access to Books and Records of Sellers pertaining to the 
Excluded Assets to the extent Buyer requires such access in connection with     
responding to any inquiries of any Government or for other reasonable purposes  
specified in reasonable detail by Buyer.                                        

        Section 7.15 Withdrawal of Motion or Order by Sellers. If Sellers move
to withdraw the Motion or the Order, then, in addition to any other rights and  
remedies of Buyer hereunder, (i) Buyer shall be permitted to solicit and hire   
employees of Sellers without any liability to Sellers and (ii) Sellers hereby   
agree that Kurt Gutfreund ("Gutfreund") shall be released from any and all      
claims, causes of action, obligations and liabilities to Sellers (including     
under his present employment agreement with M&L International) without the      
execution of any further instrument, other than a release from Gutfreund        
releasing Sellers from any liabilities with respect                             

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to his employment by Sellers (other than compensation and incentive compensation
already earned but unpaid, and reimbursable expenses not previously reimbursed),
and Sellers acknowledge receipt of good and valuable consideration therefor,    
provided, however, that Buyer shall make reasonably available to Sellers, to    
assist Sellers in the liquidation of its assets, at reasonable times and upon   
reasonable request, employees hired by Buyer.                                   

ARTICLE VIII

COVENANTS OF BUYER

      Section 8.1 Actions Before Closing Date. Prior to Closing, the Buyer
shall not take any action which shall cause it to be in breach of any           
representations, warranties, covenants or agreements contained in this          
Agreement. The Buyer shall use commercially reasonable efforts to perform and   
satisfy all conditions to Closing to be performed or satisfied by the Buyer     
under this Agreement as promptly as practicable, but in no event later than the 
Closing Date.                                                                   

      Section 8.2 Consents and Approvals. The Buyer shall use commercially
reasonable efforts to obtain all necessary consents, waivers, authorizations and
approvals of all governmental and regulatory authorities, domestic and foreign, 
and of all other Persons whose consent is required in order for the Buyer to be 
able to enter into and consummate the transactions contemplated by this         
Agreement.                                                                      

    Section 8.3 Collection of Sellers' Accounts Receivable. Subject to
Buyer and Sellers entering into a mutually acceptable agreement satisfactory to 
the Secured Bank Group, after the Closing, Buyer hereby agrees to assist Sellers
in the collection of Sellers' accounts receivable existing as of the close of   
business on the day prior to the Closing Date ("Sellers' Receivables").         

    Section 8.4 Returns of Sellers' Goods. Buyer agrees to accept from
customers, and to process, returns of goods sold by Sellers prior to the Closing
Date ("Returned Goods"). Sellers                                                

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shall pay to Buyer a fee equal to five percent (5%) of the Sellers' cost of any 
and all Returned Goods (the "Processing Fee") as reimbursement for Buyer's costs
and expenses of processing, handling, postage, storage, transportation and      
servicing of Returned Goods. Such payment shall be made by Sellers within thirty
(30) days after receipt of Buyer's monthly statement therefor. If the Returned  
Goods are claimed by the customer to be damaged or non-conforming, or if such   
Returned Goods are in fact damaged or nonconforming, then Buyer shall give      
Sellers notice of such Returned Goods (the "Returned Goods Notice") and Sellers 
and Sellers' designated agents or representatives shall have the right to       
inspect such Returned Goods. If Sellers do not object in writing within five (5)
days after delivery of the Returned Goods Notice, then the Returned Goods shall 
be deemed to be damaged or nonconforming goods ("Damaged Goods"). If Sellers so 
advise Buyer of their desire to do so by written notice delivered within five   
(5) days after delivery of the Returned Goods Notice, Sellers shall have the    
right, at Sellers' sole cost and expense, to take possession of Damaged Goods   
and, after removing all labels and other proprietary markings and references    
indicating origin of the Damaged Goods, to sell the Damaged Goods for their own 
account. Sellers shall not be entitled to any compensation with respect to      
Damaged Goods. If the Returned Goods are finished goods for Fall 1998 or Spring 
1999 styles and are not Damaged Goods, Buyer shall, provided any and all Liens  
on such Returned Goods have been released and discharged pursuant to an order of
the Bankruptcy Court, compensate Sellers in the amount of sixty percent (60%) of
Sellers' Cost of such Returned Goods, less the Processing Fee. If the Returned  
Goods are finished goods for styles older than Fall 1998 and are not Damaged    
Goods, Buyer shall, provided any and all Liens on such Returned Goods have been 
released and discharged pursuant to an order of the Bankruptcy Court, compensate
Sellers in the amount of fifty percent (50%) of Sellers' Cost of such Returned  

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Goods, less the Processing Fee. Payment in respect of such Returned Goods shall 
be remitted to Sellers on a monthly basis together with a statement indicating  
all Returned Goods for the period. Such statement shall be subject to audit by  
Sellers, as reasonably requested. Any and all Returned Goods purchased by Buyer 
shall be held by Buyer free and clear of any and all liens, pledges, charges,   
judgments, security interests and encumbrances of every kind or nature.         
Notwithstanding the foregoing, in no event shall Buyer be obligated to purchase 
Returned Goods in excess of $1,000,000, in the aggregate, at Sellers' cost. Upon
receiving any Returned Goods in excess of $1,000,000 at Sellers' cost ("Excess  
Returned Goods"), Buyer shall, within five (5) days after receipt thereof, elect
whether or not to purchase such Excess Returned Goods. If Buyer elects not to   
purchase any Excess Returned Goods, Buyer shall so notify Sellers in writing    
within five (5) days after receipt of such Excess Returned Goods whereupon      
Sellers shall have the right to accept such Excess Returned Goods and to sell   
them. To facilitate such sale by Sellers, Buyer grants to Sellers a limited     
non-exclusive license and sublicense to utilize the Intellectual Property Rights
solely in connection with the sale of Excess Returned Goods.                    

         Section 8.5 Right to Set-off. Buyer shall have the right to set off the
Processing Fee against any amounts owed by Buyer to Sellers for undamaged       
Returned Goods.                                                                 

    Section 8.6 Misdirected Payments. Unless otherwise provided in the
agreement referred to in Section 8.3, after the Closing, if any payments by     
customers in respect of Sellers' Receivables are paid to Buyer, Buyer shall,    
within five (5) days after receipt thereof, remit such payment to Sellers.      

      Section 8.7 Access to Books and Records. From and after the Closing,
Buyer shall, upon reasonable prior written notice and during regular business   
hours, provide Sellers with reasonable access to any employees of Buyer who were
previously employees of Sellers (and                                            

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make such employees available to Sellers and its counsel and accountants), and  
the Books and Records as necessary or desirable to enable Sellers to comply with
their duties under the Bankruptcy Code and Bankruptcy Rules, including without  
limitation, their duties and responsibilities relating to (i) preparing and     
filing of operating reports, (ii) preparing and filing schedules of assets and  
liabilities, (iii) preparing and filing their statement of financial affairs,   
(iv) attending statutory meetings of creditors, (v) analyzing claims (including 
preparing objections to claims), (vi) attending hearings and depositions        
relating to collecting assets of M&L International's estate, (vii) preparing and
filing tax returns, (viii) preparing and filing data and information required to
comply with applicable securities laws. Sellers shall be responsible for        
reimbursing Buyer for the reasonable costs and expenses actually incurred for   
any travel, food and lodging for Buyer's employees who are required to travel to
New York, New York, to attend hearings or depositions and such obligation of    
Sellers shall constitute a priority administrative claim in the Reorganization  
Case. In addition, from and after the Closing, Buyer shall, during regular      
business hours and upon reasonable prior written notice, grant to Sellers access
to the Books and Records to the extent Sellers require such access to respond to
inquiries of any Government or for other reasonable purposes specified in       
reasonable detail by Sellers.                                                   

ARTICLE IX

 EMPLOYEES

        Section 9.1 Termination of Employees. Immediately prior to the Closing
and in accordance with the applicable requirements of all applicable laws,      
rules, regulations and orders, including, without limitation, WARN, if          
applicable, Sellers shall terminate the employment of each of its employees who 
perform services for or with respect to the operations of the Business (the     
"Business Employees"). Buyer shall offer employment to the Business Employees   
listed on                                                                       

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Schedule 9.1 on such terms and conditions as Buyer shall, in its sole           
discretion, determine. Prior to the Closing Date, Sellers shall provide Buyer   
with reasonable access to the Business Employees for purposes of interviewing   
and communicating offers of employment. Any Business Employee who becomes       
employed by Buyer (or any Affiliate of Buyer) is hereinafter referred to as a   
"Transferred Employee."                                                         

         Section 9.2 COBRA. Buyer shall have no liability under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") or any similar  
state or local law, to any Business Employee who does not become a Transferred  
Employee. Sellers shall have no liability under COBRA or any similar state or   
local law with respect to any Transferred Employee.                             

         Section 9.3 Employee Benefit Plans. Sellers shall have no liability for
claims by any Transferred Employee accruing on or after January 1, 1999 under   
Employee Benefit Plans maintained by Buyer for Transferred Employees. Buyer     
shall have no liability for claims by any Business Employee accruing prior to   
January 1, 1999 under Employee Benefit Plans maintained by Sellers for Business 
Employees.                                                                      

 ARTICLE X

 TAXES; RECORDING FEES

     Unless the Order provides for an exemption therefrom, all state and
local transfer, excise, value-added or other similar taxes, and all recording   
and filing fees (collectively, "Transaction Taxes") that may be imposed by      
reason of the sale, transfer, assignment and delivery of the                    

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Assets shall be the sole responsibility of Sellers, except that Buyer shall pay 
all recording fees with respect to trademark assignments.                       

ARTICLE XI

CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLERS

The obligations of the Sellers to consummate the transactions 
contemplated by this Agreement are subject to the fulfillment, on or before the 
Closing Date, of the following conditions, any one or more of which may be      
waived by the Sellers in their sole discretion:                                 

Section 11.1 Representations and Warranties of the Buyer. All 
representations and warranties made by each Buyer in this Agreement shall be    
true and correct in all respects on and as of the Closing Date as if again made 
by such Buyer on and as of such date, except for failures to be true and correct
that do not result in a material adverse effect on such Buyer's ability to      
execute and deliver this Agreement or perform its obligations hereunder, and the
Sellers shall have received a certificate dated the Closing Date and signed by  
the Chairman, President or the Chief Financial Officer of each Buyer to that    
effect. Notwithstanding anything herein to the contrary, the representations and
warranties of each Buyer shall not survive the Closing.                         

      Section 11.2 Performance of the Obligations of the Buyer. Each Buyer
shall have performed in all material respects all obligations required under    
this Agreement and such Buyer shall have performed in all material respects all 
obligations required under the Interim Agreement to be performed by it on or    
before the Closing Date, and the Sellers shall have received a certificate dated
the Closing Date and signed by the Chairman, President or the Chief Financial   
Officer of each Buyer to that effect, and each Buyer shall have delivered to    
Sellers on                                                                      

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or before the Closing Date the documents, instruments and certificates set forth
on Schedule 11.2.                                                               

        Section 11.3 Consents and Approvals. Other than the Bankruptcy Court's
entry of the Order which is addressed in Section 11.5, all consents, waivers,   
authorizations and approvals of any governmental or regulatory authority,       
domestic or foreign, or any other Person, required in connection with the       
execution, delivery and performance of this Agreement, shall have been duly     
obtained and shall be in full force and effect on the Closing Date.             

  Section 11.4 No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or other governmental or          
regulatory authority, domestic or foreign, nor any statute, rule, regulation,   
decree or executive order promulgated or enacted by any government or           
governmental or regulatory authority, domestic or foreign, that declares this   
Agreement invalid or unenforceable in any respect or which prevents or stays the
consummation of the transactions contemplated hereby shall be in effect.        

  Section 11.5 Entry of the Order. The Bankruptcy Court shall have
entered the Order and no order staying, reversing, modifying or amending the    
Order shall then be in effect.                                                  

 ARTICLE XII

CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE BUYER

The obligations of the Buyer to consummate the transactions   
contemplated by this Agreement are subject to the fulfillment, on or before the 
Closing Date, of the following conditions, any one or more of which may be      
waived by the Buyer in its sole discretion:                                     

 Section 12.1 Representations and Warranties of the Sellers. All
representations and warranties made by the Sellers in this Agreement shall be   
true and correct in all respects on and as of the Closing Date as if again made 
by the Sellers on and as of such date except for failures to                    

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be true and correct that do not have a Material Adverse Effect, and the Buyer   
shall have received a certificate dated the Closing Date and signed by a Vice   
President or by the chief financial officer of each of the Sellers to that      
effect. Notwithstanding anything herein to the contrary, the representations and
warranties of Sellers shall not survive the Closing.                            

         Section 12.2 Performance of the Obligations of the Sellers. The Sellers
shall have performed in all material respects all obligations required under    
this Agreement and the Interim Agreement to be performed by them on or before   
the Closing Date, and the Buyer shall have received a certificate dated the     
Closing Date and signed by a Vice President or the chief financial officer of   
each of the Sellers to that effect, and the Sellers shall have delivered to the 
Buyer on or before the Closing Date the documents, instruments and certificates 
set forth on Schedule 12.2.                                                     

  Section 12.3 Consents and Approvals. Other than the entry by the
Bankruptcy Court of the Order which is addressed in Section 12.7, all consents, 
waivers, authorizations and approvals of any governmental or regulatory         
authority, domestic or foreign, or any other Person required in connection with 
the execution, delivery and performance of this Agreement shall have been duly  
obtained and shall be in full force and effect on the Closing Date.             

  Section 12.4 No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory     
authority, domestic or foreign, nor any statute, rule, regulation, decree or    
executive order promulgated or enacted by any government or governmental or     
regulatory authority, which declares this Agreement invalid in any respect or   
prevents or stays the consummation of the transactions contemplated hereby,     
shall be in effect.                                                             

     Section 12.5 No Material Adverse Change. No material adverse change
resulting from fire or other casualty that is not insured shall have occurred   
in, or with respect to, the Assets or Business, at any time after the date      
hereof.                                                                         

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Section 12.6 Intentionally Omitted.                           

  Section 12.7 Entry of the Order. The Bankruptcy Court shall have
entered the Order and no order staying, reversing, modifying or amending the    
Order shall then be in effect.                                                  

ARTICLE XIII

 TERMINATION

         Section 13.1 Conditions of Termination. Notwithstanding anything to the
contrary contained herein, this Agreement may be terminated at any time before  
the Closing:                                                                    

       (a) By mutual consent of the Sellers and the Buyer;

                (b) By the Buyer, if any condition contained in Article XII,
other than Section 12.7, has not been satisfied or waived by the Closing Date;  

          (c) By the Buyer or the Sellers, if any court or other
governmental or regulatory authority has issued an order, decree or ruling or   
taken any other action restraining, enjoining or otherwise prohibiting the      
transactions contemplated by this Agreement, and such order, decree, ruling or  
other action has become final and non-appealable;                               

            (d) By the Buyer, if the Buyer provides the Sellers with
written notice of a failure to fulfill the condition set forth in Section 12.2  
and the Sellers have failed within 15 days after such notice to have fulfilled  
such condition or provide adequate assurance to the Buyer of the Sellers'       
ability to fulfill such condition;                                              

                  (e) By Buyer, if a material adverse change has occurred in, or
with respect to, the Assets or the Business at any time after the date hereof;  

                (d) By the Buyer, if the condition set forth in Section 12.7
has not been satisfied by March 5, 1999 or, if additional time is required by   
the Bankruptcy Court, March 12, 1999;                                           

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                (f) By Sellers, if any condition contained in Article XI has
not been satisfied or waived by the Closing Date;                               

                (g) By Sellers, if Sellers provide Buyer with written notice
of a failure to fulfill the condition set forth in Section 11.2 and Buyer has   
failed within 15 days after such notice to have fulfilled such condition, or    
provide adequate assurance to Sellers of Buyer's ability to fulfill such        
condition;                                                                      

                  (h) By Buyer, if the Preliminary Motion referred to in Section
7.9 is not filed immediately after execution and delivery of this Agreement and 
commencement of the Reorganization Case, upon written notice delivered to       
Sellers within three (3) days after such failure to file or such later date as  
the parties shall mutually agree upon;                                          

                  (i) By Buyer, if the Preliminary Orders referred to in Section
7.9 are not entered by the Bankruptcy Court by February 9, 1999, upon written   
notice delivered to Sellers within three (3) days after such failure or such    
later date as the parties shall mutually agree upon; and                        

                  (j) By Buyer, if the Motion is not filed within three (3) days
after execution and delivery of this Agreement and commencement of the          
Reorganization Case, upon written notice delivered to Sellers within three (3)  
days after such failure to file or such later date as the parties shall mutually
agree upon.                                                                     

      If the Buyer or the Sellers terminate this Agreement pursuant to the
provisions hereof, such termination will be effected by written notice to the   
other party specifying the provision hereof pursuant to which such termination  
is made.                                                                        

      Section 13.2 Specific Performance. (a) Sellers acknowledge and agree
that if, after entry of the Order, Sellers fail to proceed with the Closing in  
any circumstance other than those                                               

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described in clauses (a), (c), (g) or (h) of Section 13.1 above, Buyer will not 
have adequate remedies at law with respect to such breach. In such event, and in
addition to Buyer's right to terminate this Agreement, Buyer shall be entitled, 
without the necessity or obligation of posting a bond or other security, to seek
from the Bankruptcy Court specific performance of Sellers' obligations under    
this Agreement. Sellers specifically affirm the appropriateness of such         
injunctive or other equitable relief in any such action.                        

                 (b) Buyer acknowledges and agrees that if, after entry of the
Order, Buyer fails to proceed with the Closing in any circumstance other than   
those described in clauses (a), (b), (c), (d) or (e) above, Sellers will not    
have adequate remedies at law with respect to such breach. In such event, and in
addition to Sellers' right to terminate this Agreement, Sellers shall be        
entitled, without necessity or obligation of posting a bond or other security,  
to seek from the Bankruptcy Court specific performance of Buyer's obligations   
under this Agreement. Buyer specifically affirms the appropriateness of such    
injunctive or other equitable relief in any such action.                        

         Section 13.3 Effect of Termination; Right to Proceed. In the event that
this Agreement shall be terminated pursuant to Section 13.1, the agreements     
contained in Sections 3.4, 7.8, 7.15 and 14.3 shall survive the termination     
hereof, provided that the Break-up Fee shall only be payable if approved by the 
Bankruptcy Court. In the event that a condition precedent to its obligation is  
not met, nothing contained herein shall be deemed to require any party to       
terminate this Agreement as opposed to waiving such condition precedent and     
proceeding with the transactions contemplated by this Agreement.                

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 ARTICLE XIV

 GENERAL AND MISCELLANEOUS

      Section 14.1 Successors and Assigns. Except as otherwise provided in
this Agreement, no party hereto shall assign this Agreement or any rights or    
obligations hereunder without the prior written consent of the other parties    
hereto and any such attempted assignment without such prior written consent     
shall be void and of no force and effect.                                       

   Section 14.2 Governing Law; Jurisdiction. This Agreement shall be
construed, performed and enforced in accordance with, and governed by, the laws 
of the State of New York, without giving effect to the principles of conflicts  
of laws thereof. Except as specifically provided herein, the parties hereto     
irrevocably elect as the sole judicial forum for the adjudication of any matters
arising under or in connection with this Agreement, and consent to the          
jurisdiction of the Bankruptcy Court.                                           

         Section 14.3 Expenses. Except as otherwise provided herein, each of the
parties hereto shall pay its own expenses in connection with this Agreement and 
the transactions contemplated hereby, including, without limitation, any legal  
and accounting fees, whether or not the transactions contemplated hereby are    
consummated.                                                                    

        Section 14.4 Notice of Bankruptcy Proceedings. The Sellers shall, from
and after the date hereof, provide the Buyer's counsel with all notices and     
pleadings filed by the Sellers in the Reorganization Case in accordance with    
Federal Rule of Bankruptcy Procedure 2002.                                      

        Section 14.5 Further Assurances. The Sellers and the Buyer agree that,
from time to time, whether before, at or after the Closing Date, each of them   
shall forthwith execute and deliver such documents as the Buyer or the Sellers  
or their respective counsel may reasonably request to effectuate the purposes of
this Agreement.                                                                 

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         Section 14.6 Severability. In the event that any part of this Agreement
is declared by any court or other judicial or administrative body to be null,   
void or unenforceable, said provision shall survive to the extent it is not so  
declared, and all of the provisions of this Agreement shall remain in full force
and effect only if, after excluding the portion deemed to be unenforceable, the 
remaining terms shall provide for the consummation of the transactions          
contemplated hereby in substantially the same manner as originally set forth at 
the later of the date this Agreement was executed or last amended.              

Section 14.7 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to  
have been duly given: (i) on the date of service if served personally on the    
party to whom notice is to be given; (ii) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, and electronic      
confirmation of receipt is obtained promptly after completion of transmission;  
(iii) on the date after delivery to Federal Express or similar overnight courier
or the Express Mail service maintained by the United States Postal Service; or  
(iv) on the fifth day after mailing, if mailed to the party to whom notice is   
given, by first class mail, registered or certified, postage prepaid and        
properly addressed, to the party as follows:                                    

If to Sellers:                                                

M&L International, Inc.   
c/o Trivest               
2665 South Bayshore Drive 
Suite 800                 
Miami, Florida 33133-5301 
 Attn: Peter Vandenberg, Jr.
    Telecopier No.: (305) 285-0102

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Copy to:                  

Greenberg Traurig         
Met Life Building         
 200 Park Avenue, 15th Floor
New York, New York 10166  
   Attn: Richard N. Tilton, Esq.
    Telecopier No.: (212) 801-6400

  Salomon Green & Ostrow, P.C.
919 Third Avenue          
15th Floor                
New York, New York 10022  
   Attn: Nicholas F. Kajon, Esq.
     Telecopier No.: (212) 319-8505;

 Morgan, Lewis & Bockius LLP
101 Park Avenue           
   New York, New York 10178-0060
 Attn.: Mark F. Liscio, Esq.
     Telecopier No.: (212) 309-6273;

             And, if a committee is appointed in the
                           Reorganization Case, to counsel for such committee at
                           the address specified by Sellers in written notice to
                 Buyer given in the manner set forth herein.

If to the Buyer:          

    M & L International Group, LLC
c/o AMEREX (USA) Inc.     
350 Fifth Avenue          
New York, New York 10018  
     Attn:  Fred R. Shvetz, Chairman
    Telecopier No.: (212) 967-3352

Copy to:                  

Rosen & Reade, LLP        
757 Third Avenue          
New York, New York 10017  
    Attn: Lawrence A. Blatte, Esq.
    Telecopier No.: (212) 755-5600

     Any party may change its address for the purpose of this Section by
giving the other party written notice of its new address in the manner set forth
above.                                                                          

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     Section 14.8  Amendments; Waivers. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties or       
conditions hereof may be waived, only by a written instrument executed by the   
parties hereto, or in the case of a waiver, by the party waiving compliance. Any
waiver by any party of any condition, or of the breach of any provision, term,  
covenant, representation or warranty contained in this Agreement, in any one or 
more instances, shall not be deemed to be nor construed as a further or         
continuing waiver of any such condition, or of the breach of any other          
provision, term, covenant, representation or warranty of this Agreement.        

   Section 14.9  Public Announcements. Subject to Sellers' fiduciary
duties, including their obligation to give notice of the proposed sale and the  
opportunity to make Higher and Better Offers, which will be published in        
newspapers and periodicals of general circulation, the parties agree that after 
the signing of this Agreement, neither party shall make any press release or    
public announcement concerning this transaction without the prior written       
approval of the other party unless a press release or public announcement is    
required by law or order of the Bankruptcy Court. If any such announcement or   
other disclosure is required by law or order of the Bankruptcy Court, the       
disclosing party agrees to give the nondisclosing party prior notice of, and an 
opportunity to comment on, the proposed disclosure. The parties acknowledge that
the Sellers shall file this Agreement with the Bankruptcy Court.                

       Section 14.10 Entire Agreement. This Agreement, the Escrow Agreement,
the Interim Agreement and all other agreements referred to herein, contain the  
entire understanding among the parties hereto with respect to the transactions  
contemplated hereby and supersedes and replaces all prior and contemporaneous   
agreements and understandings, oral or written, with regard to such             
transactions. All schedules hereto and any documents and instruments delivered  

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pursuant to any provision hereof are expressly made a part of this Agreement as 
fully as though completely set forth herein.                                    

    Section 14.11 Parties in Interest. Except as otherwise provided in
Section 7.15, nothing contained in this Agreement is intended to confer any     
rights or remedies under or by reason of this Agreement on any persons other    
than the Sellers and the Buyer and their respective successors and permitted    
assigns. Nothing in this Agreement is intended to relieve or discharge the      
obligations or liability of any third persons to the Sellers or to the Buyer. No
provision of this Agreement shall give any third persons any right of           
subrogation or action over or against the Sellers or the Buyer.                 

         Section 14.12 Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect 
the meaning or interpretation of this Agreement.                                

       Section 14.13 Business Days. Any reference in this Agreement to a day
shall mean a Business Day. If the day on which any action is required to be     
performed or to take place is not a Business Day in New York City, then such    
action shall not be required, or shall not take place, until the next Business  
Day thereafter.                                                                 

      Section 14.14 Counterparts. This Agreement may be executed in two or
more counterparts each of which shall be an original and all of which, taken    
together, shall be deemed one and the same document.                            

    Section 14.15 Treatment of Lease for Warehouse Premises in Auburn,
Washington ("Auburn Lease"). The Sellers and Buyer agree to cooperate in good   
faith to renegotiate the Auburn Lease with the lessor so that such renegotiated 
lease will be reasonably acceptable to both Sellers and Buyer. Buyer shall      
notify Sellers in writing not less than three (3) days prior to                 

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the Sale Hearing whether it elects to purchase the Auburn Lease as part of the  
Assets being purchased. If Buyer does not elect to purchase the Auburn Lease,   
then M&L International may elect to reject the Auburn Lease. If M&L             
International rejects the Auburn Lease, Buyer shall pay to Sellers as additional
Purchase Price an amount equal to the full amount of the landlord's allowed     
claim arising out of such rejection as determined by the Bankruptcy Court, such 
amount to be paid to Sellers without offset or deduction within ten (10) days   
after entry of an order of the Bankruptcy Court determining such damages. Such  
payment shall constitute part of the general assets of the estate of M&L        
International and shall not be allocated to pay any specific claims.            

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date  
first above written.                                                            

                                      M & L INTERNATIONAL GROUP, LLC

           By:
                                             -------------------------------

                               Name:    FRED R. SHVETZ
                         Title:   Chairman

                             M & L HONG KONG, LTD.

           By:
                                              --------------------------------

                               Name:    FRED R. SHVETZ
                         Title:   Chairman

                                 M & L INTERNATIONAL, INC.

           By:
                                              --------------------------------

             Name:
                                                ------------------------------
              Title:
                                                 -----------------------------

                                          M & L INTERNATIONAL (H.K.) LIMITED

          By
                                              --------------------------------

             Name:
                                                ------------------------------
              Title:
                                                 -----------------------------

                         AMEREX (USA) INC.

          By
                                              --------------------------------

             Name:
                                                ------------------------------
              Title:
                                                 -----------------------------

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SCHEDULE 3.1

The Purchase Price shall be calculated as follows:                              

1.       The value of the Inventory at the Closing Date. In determining the     
    value of the Inventory, the following guidelines shall be applied:

        a.       Raw materials shall be priced at 50% of Sellers' Cost, except
              raw materials for Fall 1999 styles which will be priced at
100% of Sellers' Cost.                      

         b.       Finished goods for Fall 1998 and Spring 1999 styles, for which
                there are open customer orders, shall be individually priced
                 at the lesser of (i) 92% of Sellers' Cost, or (ii) 70% of net
                  selling price, but in no event less than 60% of Sellers' Cost.

        c.       Finished goods for Fall 1998 or Spring 1999 styles (which are
            not damaged goods), for which there are no open customer
   orders shall be priced at 60% of Sellers' Cost.

     d.       Unsold finished goods (which are not damaged goods), which
                  consist of styles older than Fall 1998, shall be priced at 50%
of Sellers' Cost.                           

   e.       Damaged goods shall have no value in the Inventory price
calculation.                                

        "Sellers' Cost" shall mean: (i) as to Inventory owned by Sellers as of
     September 30, 1998, cost as reported in Sellers' September 30, 1998
   financial statements (excluding management loads); and (ii) as to
        Inventory acquired after September 30, 1998, Sellers' landed duty-paid
  cost including agents' fees and overseas office costs (excluding
management loads).                                            

2.       Operating Costs and Expenses incurred by the Sellers on a consolidated 
 world-wide basis from January 1, 1999 through the Closing Date.
        "Operating Costs and Expenses" shall include all normal current period
       items, calculated on the basis of GAAP consistently applied and shall
exclude the following:                                        

       a.       Corporate charges and intercompany charges other than normal
local M&L Hong Kong charges.                

    b.       Transaction fees and expenses related to the transactions
contemplated by this Agreement.             

c.       Interest.                                            

d.       Depreciation and amortization.                       

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       e.       Costs and expenses pertaining to the period prior to January
              1, 1999, including, without limitation, the portion of any
               accrued bonus, vacation, severance and termination benefits
              for Business Employees attributable to the period prior to
January 1, 1999.                            

f.       Taxes.                                               

3.       $3,000 for the Andy Johns trademarks.                                  

4.       Security deposits, prepaid rent and other prepaid expenses as of the   
Closing Date.                                                 

5.       100% of accounts receivable of M&L Hong Kong as of the Closing Date.   

There shall be deducted from the above items the following:                     

6.       The greater of (i) 29% of Interim Net Sales; or (ii) Interim Gross     
Profits.                                                      

7.       5% of Inventory returned to the Sellers during the period January 1,   
1999 to the Closing Date.                                     

The Purchase Price shall be the total of items 1, 2, 3, 4 and 5 minus items 6   
and 7.                                                                          

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SCHEDULE 1

ASSIGNED CONTRACTS

NEW YORK                                                      

1.       Ti-Tone Communications, Inc. Service Agreement                         
Ti-Tone Communications, Inc.                                  
386 Broadway, 2nd floor                                       
New York, New York  10013                                     
(212) 431-7765                                                
dated 5/04/98 thru 5/03/99                                    
M&L & Ti-Tone Communications, Inc.                            
facsimile service                                             

2.       Tele Dynamics Service Contract                                         
Tele Dynamic                                                  
330 Seventh Avenue                                            
New York, New York  10001                                     
(212) 594-7333                                                
dated 7/01/98 thru 6/30/99                                    
M&L & Tele Dynamics                                           
telephone system                                              

3.       NY Lease SZS 33 Associates L.P.                                        
c/o M.S. Management Associates, Inc.                          
One Merchant Plaza                                            
P.O. Box 7033                                                 
Indianapolis, IN  46207                                       
dated 7/01/93                                                 
M&L & SZC 33 Associates L.P.                                  
NY Office space lease                                         

AUBURN                                                        

1.       Advanced Filter & Mechanical Inc.                                      
Advanced Filter & Mechanical Inc.                             
516 Valley Avenue Northeast                                   
Puyallup, WA  98372-2503                                      
(253) 770-2443                                                
dated 2/17/98                                                 
M&L & Advanced Filter and Mechanical, Inc.                    
heating and airconditioning service and check                 

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AUBURN                                                        

2.       Rider to Alarm Service Agreement                                       
Security Link From Ameritech 3003 16th                        
Avenue West Seattle, WA 98119                                 
dated 10/15/97                                                
M&L & Security Link from Ameritech                            
change in alarm system                                        

3.       Addendum Rider to Alarm Service Agreement                              
Security link from Ameritech                                  
3003 16th Avenue West                                         
Seattle, WA  98119                                            
(206) 443-9620                                                
SecurityLink from Ameritech                                   
dated 11/10/97                                                
M&L & SecurityLink form Ameritech                             
addition to alarm system                                      

4.       Copy Kit "plus" Agreement                                              
West Star Business Systems, Inc.                              
P.O. Box 58043                                                
Seattle, WA  98138-1043                                       
206) 575-9710                                                 
dated 2/25/99 thru 2/25/00                                    
M&L & West Star Business Systems, Inc.                        
service and parts for copy machine                            

5.       Equipment Maintenance                                                  
Pitney Bowes                                                  
501 N Riverpoint Blvd. Suite 200                              
Spokane, WA 99202-1664                                        
(800) 522-0020                                                
dated 10/01/98                                                
M&L & Pitney Bowes                                            
mail machine maintenance                                      

6.       Postage Meter Rental                                                   
Pitney Bowes                                                  
501 N. Riverpoint Blvd., Suite 200                            
Spokane, WA  99202-1664                                       
(800) 522-0020                                                
dated 10/01/98                                                
M&L & Pitney Bowes                                            
mail machine maintenance                                      

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AUBURN                                                        

7.       Facsimile Rental                                                       
Pitney Bowes                                                  
501 N Riverpoint Blvd. Suite 200                              
Spokane, WA 99202-1664                                        
(800) 322-8000                                                
dated 1/01/99                                                 
M&L & Pitney Bowes                                            
Fax machine rental                                            

8.       Lease                                                                  
HRP Properties 6                                              
P.O. Box 700                                                  
Mercer Island, WA 98040                                       
dated 7/23/91                                                 
M&L & HRP Properties 6                                        
Auburn Warehouse Lease                                        

CHICAGO                                                       

1.       Amerinet Maintenance Agreement with M & L                              
Amerinet                                                      
324 E. Roosevelt Rd. Suite 201                                
Wheaton, IL  60187                                            
(708) 653-8699                                                
dated 6/08/92                                                 
M&L & Amerinet                                                
service and parts for computers                               

2.       Allcom Equipment Maintenance Agreement                                 
Allcom Inc.                                                   
5621 W. Howard Street                                         
Niles, IL 60714                                               
dated 4/01/93                                                 
M&L & Allcom Inc.                                             
labor only on phone system/full main. on voice mail           

3.       Cannon Financial Services Lease                                        
Cannon Financial Service, Inc.                                
200 Commerce Square Blvd.                                     
P.O. Box 370                                                  
Burlington, NJ  08016                                         
(800) 220-0200                                                
dated 12/04/96 for 48 months                                  
M&L & Cannon Financial Services                               
color copy machine lease                                      

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CHICAGO                                                       

4.       Maintenance Agreement Service Division                                 
Cannon Financial Service, Inc                                 
200 Commerce Square Blvd.                                     
P.O. Box 370                                                  
Burlington, NJ  08016                                         
(800) 220-0200                                                
M&L & Ambassador Office Equipment                             
color copy maintenance and supplies                           

5.       Addendum to Maintenance Agreement                                      
React Computer Service, Inc.                                  
15W 700 Frontage Rd.                                          
Hinsdale, IL  6052-5543                                       
(708) 323-6200                                                
dated 1/08/98                                                 
M&L & React Computer Services, Inc.                           
printer service                                               

6.       Central Station Protective Signaling Service Renewal                   
Wells Fargo Alarm Service, Inc.                               
230 W. Division Street                                        
Chicago, IL  60610                                            
(312) 337-3100                                                
dated 9/25/97                                                 
M&L & Wells Fargo                                             
security alarm system service                                 

7.       Service Purchase Agreement                                             
Peak Technologies                                             
9200 Berger Rd.                                               
Columbia, MD  21046-1602                                      
(410) 312-6000                                                
dated 11/09/98 and 12/30/97                                   
M&L & Peak Technologies                                       
service on dot matrix printers (one for each printer)         

8.       Credit Recommendation Contract                                         
Crex of New York, Inc. d/b/a Credit International             
P.O. Box 5426                                                 
Flushing, NY  11354                                           
(718) 539-8085                                                
dated 3/01/98                                                 
M&L & CREX of New York, Inc. d/b/a Credit International       

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CHICAGO                                                       

9.       Credit Recommendation Contract                                         
Dun & Bradstreet                                              
P.O. Box 92542                                                
Chicago, IL  60675-2542                                       
(800) 284-4953                                                
dated 3/9/98                                                  
M&L & Dun & Bradstreet                                        
credit checks                                                 

10.      Facsimile Rental Agreement                                             
Pitney Bowes                                                  
P.O. Box 85390                                                
Louisville, KY 40285-5390                                     
dated 9/23/97 for 36 month minimum                            
M&L & Pitney Bowes                                            
facsimile rental and maintenance agreement front desk         

11.      Facsimile Equipment Maintenance                                        
Pitney Bowes                                                  
P.O. Box 85390                                                
Louisville, KY 40285-5390                                     
dated 01/01/99 renewal                                        
M&L Pitney Bowes                                              
back fax machine maintenance                                  

12.      Equipment Maintenance                                                  
Pitney Bowes P.O. Box 85390                                   
Louisville, KY 40285-5390                                     
M&L & Pitney Bowes                                            
mailing machine maintenance                                   

13.      QuickLease Agreement                                                   
IBM Credit Corp.                                              
1605 LBJ Freeway                                              
Dallas, TX 75234                                              
(972) 280-4750                                                
dated 2/23/98                                                 
M&L & IBM Credit Corp.                                        
RS6000 computer and maintenance                               

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CHICAGO                                                       

14.      Connector Account Schedule Charges                                     
MSCNET                                                        
Two Prudential Plaza, Suite 2625                              
Chicago, IL  60601                                            
(312) 803-6271                                                
dated 01/21/98                                                
M&L & MCSNet                                                  
Internet Access                                               

15.      Annual Typewriter Maintenance Renewal                                  
United Business Machines                                      
875 E. Rand Rd.                                               
Desplaines, IL  60016                                         
(847) 299-3000                                                
dated 3/12/98                                                 
M&L & United Business Machines                                
typewriter maintenance                                        

16.      Preventive Maintenance Agreement                                       
Shavitz and Sons, Inc.                                        
8245 N. Kimball Avenue                                        
Skokie, IL  60076                                             
(708) 674-8252                                                
M&L & Shavitz and Sons, Inc.                                  
heating and air conditioning maintenance                      

17.      Copier Service Agreement                                               
Camadon, Inc.                                                 
600 Bunker Court                                              
Vernon Hills, IL  60061                                       
(800) 542-7634                                                
dated 12/14/95                                                
M&L & Camadon/IKON                                            
5570 model copier maintenance agreement                       

18.      Copier Service Agreement                                               
Camadon, Inc.                                                 
600 Bunker Court                                              
Vernon Hills, IL  60061                                       
(800) 542=7634                                                
M&L & Camadon/IKON                                            
6750 model copier maintenance agreement                       

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CHICAGO                                                       

19.      Rental Agreement                                                       
Sparkling Spring Mineral Water Co.                            
1629 Park Avenue West                                         
Highland Park, IL  60035                                      
(708) 831-3442                                                
dated 4/21/93                                                 
M&L & Sparkling Spring Mineral Water Co.                      
2 water cooler rentals                                        

20.      Monthly Commitment and Term Agreement                                  
LCI International Telecom Corp.                               
4650 Lakehurst Court                                          
Dublin, OH  43016                                             
dated 8/16/95                                                 
M&L & LCI International                                       
long distance carrier agreement                               

21.      UPS Incentive Program                                                  
United Parcel Service                                         
1400 S. Jefferson Street                                      
Chicago, IL 60607                                             
(800) 782-7892                                                
dated 6/08/98                                                 
M&L & United Parcel Service                                   
shipping carrier service contract for better rates            

22.      Chicago Lease                                                          
Everbury Partners, Ltd. L.P.                                  
c/o Urban Estates, Inc.                                       
1777 N. Clybourn Avenue                                       
Chicago, IL  60614                                            
dated 4/01/97                                                 
M&L & Everbury Partners, Ltd. Limited                         
Chicago Office space lease                                    

23.      License Agreement                                                      
Healthtex Apparel Corp.                                       
200 Weldin Building, Concord Plaza                            
3411 Silverside Road                                          
Wilmington, DE  19810                                         
(302) 477-3930                                                
dated 11/01/97                                                
M&L & Healthtex Apparel Corp.                                 
Healthtex License Agreement                                   

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CHICAGO                                                       

24.      License Agreement                                                      
Eclipse, Incorporated                                         
110 E. 9th Street, Suite C-1259                               
Los Angeles, CA 90079                                         
dated 7/13/97                                                 
M&L & Eclipse                                                 
Eclipse License Agreement                                     

25.      Hong Kong Lease                                                        
Ravelin Limited                                               
13 Miles, Castel Peak Rd.                                     
Sham Tseng                                                    
New Territories, Hong Kong                                    
dated 1/12/96                                                 
M&L & Ravelin Limited                                         
Hong Kong office lease                                        

26.      Bangladesh Verbal Lease                                                
Abdur Rahman                                                  
#4 Naoratan Colony, Bailey Rd.                                
Dhaka 2, Bangladesh                                           
880 2 416687                                                  
M&L & Abdur Rahman                                            
Bangladesh office lease                                       

27.      Sri Lanka Lease                                                        
Maree Ruanee Gunasekera                                       
#13/2 Elibank Rd.                                             
Colombo 5, Sri Lanka                                          
dated 07/15/97                                                
M&L & Maree Ruanee Gunasekera                                 
Sri Lanka office lease                                        

28.      Moore Forms Handling Equipment Maintenance Service Agreement           
Moore Document Automation Systems                             
P.O. Box 951030                                               
Dallas, TX  75395-1030                                        
dated 2/20/99                                                 
M&L & Moore Document Automation Systems                       
invoice detacher maintenance                                  

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HONG KONG                                                     

1.       Air Conditioner Preventive Maintenance Service Agreement               
Quiet & Cool Engineering Company Ltd.                         
Flat 2E, Fu Cheung Centre                                     
5-7 Wong Chuk Yeung Street                                    
Fotan, Shatin, Hong Kong                                      
dated 1/05/98                                                 
M&L & Quiet & Cool Engineering Co. Ltd.                       
Air Conditioning Maintenance                                  

2.       Messengerial Services Contract                                         
Alliance Express Service Co.                                  
Room 5-6, 3/F, Block A                                        
Wing Kut Industrial bldg.                                     
608 Castle Peak Rd, Kin.                                      
Hong Kong                                                     
dated 1/10/97                                                 
M&L & Alliance Express Service So.                            
Messenger Services                                            

3.       Lectra Systems Services Agreement                                      
Lectra Systems (HK) Limited                                   
Units 1112-1113, 11/F New East Ocean Centre                   
No. 9 Science Museum Road                                     
Tsinshatsui East                                              
Kowloon, Hong Kong                                            
dated 1/01/98                                                 
M&L & Lectra Systems Services Agreement                       
Lectra Design Equipment Maintenance                           

4.       Office Automation Equipment Maintenance Certificate                    
Shun Hing Electric Service Centre Ltd.                        
18/F, Shun Hing Centre                                        
8 Shing Ylu Street                                            
Kwai Chung, N.T.                                              
Hong Kong                                                     
dated 4/22/98                                                 
M&L & Shun Hing Electric Service Centre Ltd.                  
Fax Machine Maintenance                                       

5.       Tradelink Registration and Subscriber Form                             
Tradelink Electronic Document Services, Ltd.                  
Suite 89, 5/F, Hong Kong Trade & Exhibition Centre            
1 Trademart Drive, Kowloon Bay, Hong Kong                     
dated 02/11/98                                                
M&L & Valunet Standard                                        
Import & Export Declaration Services                          

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HONG KONG                                                     

6.       Personal Computer Maintenance Agreement                                
Asia Pacific Systems Ltd.                                     
Unit 13, 8/F, Hing Wah Centre                                 
82-84 to Daw Wan Road,                                        
Kowloon                                                       
dated 3/10/98                                                 
M&L & Asia Pacific Systems Ltd.                               
Computer Maintenance                                          

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SCHEDULE 2.1 (A) (I)                                                            
EQUIPMENT                                                                       

The following is a list of equipment purchased after 12/1/94.                   
All equipment purchased prior to that date will also be transferred as part of  
this transaction                                                                

                                                                · Download Table

                          In Service           
Description                  Date        Cost  

                                               
3 Drawer Vert File          1-5-95       268.00
5 Ft Bookcase Black         2-1-95       256.00
2 4Dr Letter Files           4-195       268.00
4 Designer Stack Chairs     5-1-95       213.80
2 Drawer Legal File         6-1-95       237.04
Refrigerator for lunch R    8-1-95       433.00
Two Work Station Chairs     9-1-95       444.18
Phillocraft 60"x96"        10-1-95       421.36
Lighting  From Sup LGT    11-30-95       105.32
Floor Cushions              9-1-95       164.77
Chair for office Act MGR   10-1-95       210.37
Univ 1110-247SC-TC         10-1-95       274.44
Lighting Fixture            1-1-95       117.00
Table Lamp                  2-1-95       228.00
Folding Table               4-1-95       107.50
Paneling for Progm Area    10-1-95       626.10
Work Chair & Stool        11-30-95       691.65
Univ 1110-247SC-TC         10-1-95       225.29
Multitask Chairs            1-1-96       365.92
Lighting                    4-1-96       117.90
Multitask Chair             6-1-96       169.05
Office Panels              11-1-96       131.05
AIRM Kit for Chairs         6-1-96       165.63
Multitask Chairs            6-1-96     1,564.04
Color Printer              12-1-94     7,143.40
SLT Cards & Install        12-1-94       862.29
486 PC with Accessories    12-1-94     3,069.00
Chameleon NFS               1-1-95     1,224.25
Cambex Disk Drive          12-1-94    20,451.75
HP laser printer compusa    1-1-95     1,568.41
486 PC Zeos                 1-1-95     2,435.00
Design PC-Zeos             12-1-94     1,985.00
PC Computer                 3-1-95     1,828.88
PC Computer                 3-1-95     1,224.25

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SCHEDULE 2.1 (A) (I)                                                            
EQUIPMENT                                                                       

                                                                · Download Table

                         In Service           
Description                 Date        Cost  

                                              
Chameleon Software          4-1-95      618.63
Notebook                    5-1-95      326.58
BTN Hole Machine           10-1-95      800.00
6 Chairs Sewg Room         10-1-95      150.00
Eyelet Machine             10-1-95      100.00
Print Unit W/3 WS Cards     1-1-95    9,597.50
Novell Software Upgrade     2-1-95    1,711.91
HP Desk Jet Printer         4-1-95    1,030.68
486 PC                      5-1-95    1,835.00
Lectra  Machine             6-1-95   40,531.69
Power Converter-Electra     7-1-95    2,022.00
Conner Python Int 2-4GB     8-1-95      909.50
Chameleon Software          9-1-95      619.44
Juki MO3704 (Sewg Rm)      10-1-95    2,324.63
Memory Chips for Netw      12-1-95    1,109.25
PC Computer                 3-1-95    3,424.30
Chameleon Software          4-1-95      618.64
Fax Machine                 6-1-95      322.17
Motherboard                 7-1-95      377.84
Zeos Computer               9-1-95    2,474.00
Juki LH -3128-S            10-1-95    2,754.19
PC Computer                 3-1-95    5,655.00
2-486 Pers Computers        4-1-95    3,770.00
Modem                       3-1-95      993.23
USRO Courrier Modem         4-1-95      910.29
3-486 PC Computers          5-1-95    5,505.00
IBM RS/6000 Series          6-1-95    1,361.00
Chameleon Software          7-1-95      619.44
Laptop Computer             8-1-95    2,762.95
Amerinet Purchases          9-1-95    1,117.29
Juki DDL-DDDON -7-WS       10-1-95    2,862.94
PC For Walmart            12-31-95    3,683.59
PC Computer                 3-1-95      630.63
Chameleon Software 3        4-1-95    1,590.81
Wolf & Heap Forms          10-1-95      350.00
PC Computer                 3-1-95    2,884.68
1-486 Pers Computers        4-1-95    1,835.00
Memory                      2-1-96    1,317.00

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SCHEDULE 2.1 (A) (I)                                                            
EQUIPMENT                                                                       

                                                                · Download Table

                           In Service           
Description                   Date       Cost   

                                                
Compudyne P75 w/moni         3-31-96    1,300.91
Conn 2GB SCS &Delphi          4-1-96    1,122.97
Monitor                       5-1-96      653.26
8 Port Adapter & Interfae     7-1-96      686.25
17" Monitor                   8-1-96      926.60
Main Printer                  9-1-96    6,888.23
Actg/AP Software             10-1-96    8,544.86
Software Costs Install       12-1-96    1,841.07
Detacher                      1-1-96      727.00
Memory                        2-1-96      727.20
Micro Computer ATO M         3-31-96    1,799.00
Nove Anyxcpt                  4-1-96    1,616.67
HP Lasetjet  5M               5-1-96    1,942.17
Shipping Machine              8-1-96    3,258.15
Micron Computer              11-1-96    4,836.00
Primavision Wkstation        12-1-96   19,500.00
Netmanage Software            2-1-96    1,225.06
Memory -Amex                  1-1-96    2,221.59
Memory                        2-1-96      552.93
Union Special 52800-BE       3-31-96    1,760.00
WD 2.5 Harddrive & HP         4-1-96    1,481.04
Memory                        5-1-96    1,165.00
Micron Computer               7-1-96    6,294.00
HP Laserjet 5m                8-1-96    1,960.59
Millennia Computer            9-1-96    2,498.00
Micron Comp                  11-1-96    2,448.00
Primavision CLC Driver       12-1-96    4,000.00
Chameleon Software            1-1-96      619.44
Micron Computer ATO           2-1-96    3,736.00
ADAPEC Kit &Seagate           4-1-96      908.35
Dell Network Comp            11-1-96   10,560.77
Deskpro 4000                 12-1-96    2,043.41
Pro/5 Data Server             4-1-96      638.50
PC Computer-Mocron            1-1-96    2,468.00
Novell Software               1/1/97    2,249.58
Novell Software               1/1/97    1,035.61
Computer (Mr G)               1/1/97    4,054.23
Computer                      1/1/97    5,003.52

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SCHEDULE 2.1 (A) (1)                                                            
EQUIPMENT                                                                       

                                                                · Download Table

                             In Service           
Description                     Date       Cost   

                                                  
Computer                        1/1/97    3,078.84
Primavision software            1/1/97    2,400.00
Nova computer                   2/1/97    2,753.55
CADD Engr Supply                2/1/97      843.00
WACOM Tech                      2/1/97      179.97
CDW enet cards                  1/8/97      659.99
CDW Serial port adapter         3/1/97    1,521.04
Basis Computer                  3/1/97    5,471.50
Nova Pentium Pro                3/1/97    2,437.09
Basis International             3/1/97    1,250.00
Computer Equipment              4/1/97    3,277.81
Nova PC                         6/1/97    1,336.54
IBM TP 560E 5/150               6/1/97    2,799.40
               delete above     7/1/98    2,799.40
IBM TP 560E 5/166               7/1/97    4,600.13
2 PC for office                 7/1/97   10,326.60
HP deskjet printer              7/1/97      269.00
HP Jetdirect printer            8/1/97      333.87
Minolta PC                      9/1/97      328.77
Int P60/180                     9/1/97      271.27
HP Officejet 500                9/1/97      542.47
Epso LQ 570+                    9/1/97      277.76
Printer Buffer                10/01/97      416.95
NT Software                   10/01/97      958.95
Software upgrade AIX          10/01/97    2,871.58
Laptop for Suren              11/01/97    4,174.96
Modem                         11/01/97      542.49
HP Laserjet printer           12/01/97      424.10
RS6000                         12-1-97   40,862.32
Printer                       12/01/97    8,059.32
Disk Drive                    12/01/97      296.70
Monitor                       12/01/97      490.80
Software (Eudora & L Smtst)   12/01/97    1,332.57
Computer Hardware             12/01/97    5,533.38
Monitor                       01/01/98      489.72
Task Chair                    01/01/98      268.33
Phone                         02/01/98      641.79
5 PCs                         02/01/98    4,463.58

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SCHEDULE 2.1 (A) (I)                                                            
EQUIPMENT                                                                       

                                                                · Download Table

                         In Service            
Description                 Date         Cost  

                                               
Monitor & sound card       02/01/98      606.65
Aspen Computer             02/01/98    9,045.76
AJ telephone system        02/01/98    4,437.00
Surge Protectors           05/01/98      268.58
Compusa                    05/01/98      385.10
Monitors                   05/01/98      364.18
PC                         09/01/98    1,160.22
MS Office (sftwr)          09/01/98      361.46
PC                         09/01/98    3,096.17
PC                         03/01/98    3,650.47
Software                   03/01/98      497.93
PC                         10/27/98      970.55
Fusinon 3.0 software       11/30/98      295.33
hardware                   11/30/98      608.12
Computer (3)               11/30/98    3,048.61
Computer                   11/30/98    1,233.32
Phone system upgrade       11/30/98    6,719.81
                                     ----------
                                     427,134.40

Ford Windstar                2-1-97   21,724.31

Monitor                      7-1-96      433.97
Showroom Chairs            01/01/98    1,926.25
Monitor                    11/01/98      291.17
                                     ----------
                                       2,651.39

Air Conditioners             8-1-95    8,625.00
Computer Software            8-1-95    1,750.00
Computer Network & Accs      8-1-95   24,825.00
Telephone Connections        8-1-95    1,000.00
Fax Machine                  8-1-95    1,500.00
Office Furniture             8-1-95      500.00
Computer                     7-1-96    4,800.00
Computer Table               7-1-96      575.00
Chairs                       7-1-96      770.00

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SCHEDULE 2.1 (A) (I)                                                            
EQUIPMENT                                                                       

                                                                · Download Table

                           In Service           
Description                   Date        Cost  

                                                
Marker Table                   7-1-96     360.00
Printer                        7-1-96   2,045.00
Table                          7-1-96     360.00
Curtains                       7-1-96   1,495.00
Copier                         3/1/97   5,475.00
Generator                      3/1/97   5,250.00
PC wiring                      3/1/97   2,000.00
Scanner                        3/1/97     950.00
Air conditioners             10/01/97   5,000.00
Copiers                      10/01/97   4,750.00
IBM PC                       10/01/97   2,250.00
Furniture                    10/01/97   1,500.00
FAX                          10/01/97   1,150.00
PC                           10/01/98   1,200.00
                                       ---------

                                       78,130.00

Van                            3-1-97  15,000.00

RF Base Station                3-1-95   9,239.28
Computer                       3/1/97   7,883.40
Power system for Computer      3/1/97   2,162.92
2 PCs for office               3/1/97   2,901.39
Computer Equipment             4/1/97     561.73
Datamax used prodigy prtr      7/1/97   1,362.72
Tables w/ lighting             5/1/97   2,460.85
Time Clock                   04/01/98   1,009.98
Printer                      09/01/98   1,641.27
                                       ---------

                                       29,223.54

Fortress UPS                   9-1-95     881.28
Lift Truck                     9-1-95  17,122.25
Washer & Dryer               10/01/97   1,042.54
Bike                         04/01/98   1,058.85
                                       ---------

                                       20,104.92

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SCHEDULE 2.1 (A) (I)                                                            
EQUIPMENT                                                                       

                                                                · Download Table

                           In Service            
Description                   Date         Cost  

                                                 
Install New Pump              1-1-96     5,135.75
Sprinklers in Washroom        7-1-96       257.52
Fixture & Outlets            10-1-96     2,359.85
Overhead doors                5/1/97     4,897.86
                                       ----------

                                        12,650.98

Leasehold Impv NY Starter   08/31/98    56,218.28
w/o Starter                             46,848.57
                                       ----------

                                         9,369.71

Generator for Office          6-1-96     4,400.00
Air Conditioner             03/01/98     2,600.00
                                       ----------

                                         7,000.00

Susuki Motorcycle             7-1-96     2,945.00
Susuki Motorcycle           03/01/98     2,625.00
                                       ----------

                                         5,570.00

                                       619,189.54

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 SCHEDULE 2.1(A)(II)
LEASED REAL PROPERTY

SHOWROOM                                                                        
100 WEST 33RD ST                                                                
NEW YORK CITY, NY  10001                                                        

OFFICE SPACE                                                                    
1333 N KINGSBURY                                                                
CHICAGO, IL  60622                                                              

RETAIL SPACE                                                                    
222 MERCH MART PLAZA                                                            
CHICAGO, IL  60654                                                              

OFFICE                                                                          
9-11 SHING WAG ROAD                                                             
HONG KONG                                                                       

OFFICE                                                                          
36 & 36.6 PAMANKADA RD                                                          
KIRILLAPON, WLLAWATTE, SRI LANKA                                                

OFFICE                                                                          
DKAKA, BANGLADESH                                                               

OFFICE                                                                          
CHITTAGONG, BANGLADESH                                                          

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 SCHEDULE 2.1(A) (III)
INVENTORY AS OF 12/31/98

                                                                · Download Table

                                             TOTAL     

                                                       
FINISHED GOOD/PHYSICAL COUNT            $ 5,095,865.00 

INTRANSIT INVENTORY                         536,491.00 

INVENTORY AT STORE OUTLET                    25,724.82 

PIECE GOODS AT OTHER MAKERS                 347,472.94 
                                        -------------- 

                  TOTAL BOOK INVENTORY    6,005,553.76 

      LESS ESTIMATED BOOK RESERVES FOR                 

            OBSOLESCENCE AND MARKDOWNS   (1,190,774.00)
                                        -------------- 
                         NET INVENTORY  $ 4,814,779.76 
                                        ============== 

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SCHEDULE 2.1(A)(V)
TRADEMARKS, TRADENAMES, PATENTS, LOGOS

                                                                · Download Table

     OWNED TRADEMARKS                                  REGISTRATION NO.      
---------------------------                       ---------------------------

                                                                             

Good Friends **                                            1,294,492         

Good Friends Design **                                     1,475,080         

Hi Dives **                                                1,514,693         

Winning Team                                               1,773,699         

Windy Trail                                                1,836,878         

Wonderralls **                                             1,013,839         

Cyberfleece                                                2,088,371         

Cyber Berber                                        Applied For              

Weather Tamer                                                730,123         

Weather Tamer                                              1,561,092         

Collie Warm as a Collie's Fur **                           1,561,093         

Weather Tamer                                              1,577,883         

Collie Design **                                           1,582,648         

The Kids Andy Johns                                        2,045,161         



   MACKINTOSH TRADEMARKS                               REGISTRATION NO.      
---------------------------                       ---------------------------

                                                                             
KAOS                                                       1,197,990         

KAOS                                                       1,419,300         

Andy Johns                                                 1,562,284         

Andy Johns                                                 1,060,825         

** These trademarks are not currently being used.                            



 TRADEMARKS UNDER LICENSE                              REGISTRATION NO.      
---------------------------                       ---------------------------

                                                                             
Healthtex                                                  1,807,653         

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                                                                · Download Table
                                                      
Girls Club by Healthtex       Applied For             

Little Impressions            Applied For             

Starter                       Not disclosed in License

"S and Star"                  Not disclosed in License

"Starter in conjunction with  Not disclosed           
   S and Star"                                        

Eclipse                       Unregistered            

COPYRIGHTS                                                                      

The company occasionally applies for copyright registration of artwork used in  
connection with its products, however, none is considered to be material to the 
operation of M&L.                                                               

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 SCHEDULE 2.1 (A) (IX)
PREPAID EXPENSES

                                                        · Enlarge/Download Table

                                   As of    Projected (1)                                    
                                  12/31/98  2/28/99                                          

                                                                                             
M & L International - US                                                                     

Advances to Suppliers                                                                        

        Rudra                        4,460    4,460 To be paid off w/ fall deliveries        
        Remerco                      6,000        0 Paid in Jan                              
                                    ------  -------                                          
        US Advances                  1,540    4,460                                          
                                    ------  -------                                          
Prepaid Expenses                                                                             

        Insurance                   21,740        0 Not to be carried forward to Amerex      
        Postage                      4,494    4,000 Estimate                                 
        Starter                     20,833          Depends on payment and new contract terms
        Trade Show                   4,000        0 Trade show in Feb                        
        Sri Lanka Rent               6,000    4,000                                          
        Bangladesh Rent                  0        0                                          
        Prepaid Freight              2,877        0                                          
        Other Prepaids               7,327        0 To be amortized before Feb 28th          
        Due from Empl                  257        0                                          
        Electra Svc contract HK          0    5,857                                          
                                    ------  -------                                          
        US Prepaids                 67,528   13,857                                          
                                    ------  -------                                          
Total US Prepaids & Advances        65,988   18,317                                          
                                    ------  -------                                          
Prepaid Hong Kong Expenses                                                                   

        Rental deposit              42,806   42,806                                          
        Electrical deposit           3,782    3,782                                          
        Courier Services               103      103                                          
        Trade Departments              641      641                                          
        Water Bottling deposit         288      288                                          
        Employee Adv                   652        0                                          
        Maintenance contracts        1,123      201                                          
        Lectra computer ins            345      172                                          
        Insurance                    1,104    1,389                                          
        Nominee fees                   748      748                                          
                                    ------  -------                                          
        Total Hong Kong Prepaids    51,592   50,130                                          
                                    ------  -------                                          
Liabilities Hong Kong                                                                        
                                                                (1) Actual numbers at Closing
                                                                Date                         
                                                                may vary from projections.   

        Accounts Payable            31,483   31,483                                          
        Provisions for Severance    23,206  112,984                                          

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                                                                · Download Table
                                                         
        Audit Fees                      2,949       3,440
                                       ------     -------
        Total Hong Kong                57,637     147,907
        Liabilities                                      
                                       ------     -------
Net Hong Kong                           6,045      97,777
                                       ------     -------
Total US and Hong Kong                 59,943      79,459
                                       ======     =======

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 SCHEDULE 2.1 (A)(XVI)
 M&L INTERNATIONAL (H.K.) LTD. ACCOUNTS RECEIVABLE

                                                                · Download Table

                       BALANCE          PROJECTED    
                       12/31/98          2/28/99     
                   ----------------  ----------------

                                                     
Total Receivables     $19,214.50           None      

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SCHEDULE 2.1(B)(III)
EXCLUDED CONTRACTS

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SCHEDULE 2.2

 ASSUMED LIABILITIES

 See Schedule 2.1(a)(ix) under the heading Hong Kong Liabilities

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                                                                · Download Table
                                                                               
1)  Illinois                                    Charter # 5784-689-5           
    Incorporated                                Registration date      7-Jun-94
    Prentice Hall Legal and Financial Services                                 
    33 North LaSalle St.                                                       
    Chicago, IL  60602                                                         

2)  California                                  Charter # 1914238              
    Qualification                               Registration date      6-Oct-94
    Prentice Hall Legal and Financial Services                                 
    6430 Sunset Blvd., Suite 1117                                              
    Los Angeles, CA  90028                                                     

3)  Georgia                                     Charter # 9419063              
    Qualification                               Registration date      1-Aug-94
    Prentice Hall Legal and Financial Services                                 
    100 Peachtree St.                                                          
    Atlanta, GA  30303                                                         

4)  New York                                    Charter #                      
    Qualification                               Registration date     11-Oct-94
    Prentice Hall Legal and Financial Services                                 
    80 State St.                                                               
    Albany, NY 12207                                                           

5)  Washington                                  Charter # 601562673            
    Qualification                               Registration date     12-Oct-94
    Prentice Hall Legal and Financial Services                                 
    1010 Union Ave. SE                                                         
    Olympia, WA  98501                                                         

6)  Wisconsin                                   Charter # M047820              
    Qualification                               Registration date     17-Jun-97
    CSC                                         Termination date      25-Sep-98
    25 W. Main St.                                                             
    Madison, WI  53703                                                         

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SCHEDULE 5.5
 CONSENTS AND WAIVERS REQUIRED FOR TRANSACTION

15.      CONSENT OF BANK IS REQUIRED PURSUANT TO CREDIT AGREEMENT               

16.      APPROVAL OF THE COMPANY'S BOARD OF DIRECTORS IS REQUIRED.              

17.      THE CHICAGO OFFICE LEASE CAN BE ASSIGNED TO ANY ENTITY WHICH IS A      

SUCCESSOR TO ALL OR A SUBSTANTIAL PORTION OF M&L'S BUSINESS.  

18.      THE NEW YORK SHOWROOM LEASE MAY BE ASSIGNED TO A CORPORATION TO WHICH  

         SUBSTANTIALLY ALL OF THE TENANT'S ASSETS ARE TRANSFERRED PROVIDED THAT:

        a.       The  transfer is for a good business purpose and not a device

for the transfer of the tenant's interest in the lease; and                     

b.       The assignee has a net worth of at least $593,481.   

19.      THE HEALTHTEX LICENSE PROHIBITS ASSIGNMENT.                            

20.      THE FOLLOWING CONTRACTS REQUIRE WRITTEN CONSENT:                       

          a)       West Star Business Systems -- Copy Kit "plus"
Agreement                 

          b)       Wells Fargo Alarm Service -- Security service

             c)       Cannon Financial Services -- Color printer lease

                  d)       LCI International Telecom Corp -- Long distance phone
service                   

          e)       React Computer Services -- Computer printer &
terminal maintenance      

          f)       Moore Document Information System -- Detacher
maintenance               

g)       Starter Corporation -- License     

          h)       Asia Pacific Systems Limited (HK) -- Computer
Maintenance               

      i)       Dun & Bradstreet -- Credit Report Service

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21.      THE FOLLOWING CONTRACTS ARE NOT ASSIGNABLE                             

a)       IBM Credit Corp. -- Computer Lease/Purchase          

  b)       Pitney Bowes -- Various facsimile rental agreements and
mailing equipment rentals and service.      

         c)       Quiet & Cool Engineering Company Ltd. (HK) -- Air conditioning
maintenance                                 

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 SECTION 5.6 COMPLIANCE WITH LAW

(a)      None                                                                   

(b)      None                                                                   

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 SCHEDULE 5.7 LITIGATION

None                                                                            

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SCHEDULE 5.9
EMPLOYEE BENEFIT PLANS

                                                                · Download Table
                                                                              
HEALTH INSURANCE Chicago & NY               HEALTH and DENTAL INSURANCE AUBURN
American Unified Life and Health Insurance  Regence Blue Sheild               
Group #     PPO-9860                        MS 610                            
            HMO-IL11980                     P.O. Box 21267                    
                                            Seattle, WA 98111-3267            
Attention - Claim Dept.                                                       
4601 Saulk Trail Rd.                        Group # 028871                    
Richton Park, IL 60471                                                        

Phoenix Disability Insurance                                                  
ACCOUNT #'S                                                                   
SHORT TERM DISABILITY                       LONG TERM DISABILITY              
054-9024-00                                 054-9019-00                       

mail enrollments to:                                                          
Group BIlling                                                                 
Phoenix Home Life                           Phone:     1-800-451-2513         
100 Bright Meadow Blvd.                     Fax:       860-403-6980           
P.O. Box 1900                                                                 
Enfield, CT  06083-1900                                                       

Lafayette Life Insurance                                                      
POLICY #    G002530                                                           

PUT TODAY'S DATE IN THE TOP RIGHT CORNER OF FORM AND FAX TO:                    
GROUP DEPT.                                                                     
LAFAYETTE LIFE INS. CO.                                                         
FAX #:      765-477-3369                     COVERAGE AMOUNTS ARE:              

                                                                · Download Table

LIFE                  AD&D 
                           
25000                 25000



OVER AGE 70 COVERAGE IS 1/2
LIFE                  AD&D 
                           
12500                 12500

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                                                                · Download Table
                                                                          
DENTAL INSURANCE Chicago                                                  
1st Commonwealth                             Enrollments to:              
Dental HMO                                   First Commonwealth           
Plan 3000D                                   444 North Wells, Suite 600   
Group Name is M&L International              Chicago, IL 60610            
                                             Attn:  Processing Dept.      
                                             Fax: (312) 644-1822          

401K Plan                                                                 
Principal Financial Group                    The Principal Financial Group
Contract # (3)77345                          710 9th St.                  
Location # 2                                 Des Moines, IA  50309-1502   

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 SCHEDULE 5.10

 CONTRACTS

NEW YORK                                                                        
1) Ti-Tone Communications, Inc. Service Agreement                               
Ti-Tone Communications,Inc.                                                     
386 Broadway,2nd floor                                                          
New York, NY 10013                                                              
(212) 431-7765                                                                  
dated 5/04/98 thru 5/03/99                                                      
M&L & Ti-Tone Communications, Inc.                                              
facsimile service                                                               

2) Tele Dynamics Service Contract                                               
Tele Dynamic                                                                    
330 Seventh Avenue                                                              
New York, NY 10001                                                              
(212) 594-7333                                                                  
dated 7/01/98 thru 6/30/99                                                      
M&L & Tele Dynamics                                                             
telephone system                                                                

3) NY Lease                                                                     
SZS 33 Associates L.P.                                                          
c/o M.S. Management Associates, Inc.                                            
One Merchant Plaza                                                              
P.O. Box 7033                                                                   
Indianapolis, IN  46207                                                         
dated 7/01/93                                                                   
M&L & SZC 33 Associates L.P.                                                    
NY Office space lease                                                           

AUBURN                                                                          
1) Advanced Filter & Mechanical Inc.                                            
Advanced Filter & Mechanical Inc.                                               
516 Valley  Avenue Northeast                                                    
Puyallup, WA  98372-2503                                                        
(253) 770-2443                                                                  
dated 2/17/98                                                                   
M&L & Advanced Filter and Mechanical, Inc.                                      
heating and air conditioning service and check                                  

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2) Rider to Alarm Service Agreement                                             
Security Link from Ameritech                                                    
3003 16th Avenue West                                                           
Seattle, WA  98119                                                              
(206) 443-9620                                                                  
dated 10/15/97                                                                  
M&L & Security Link from Ameritech                                              
change in alarm system                                                          

3) Addendum Rider to Alarm Service Agreement                                    
Security link from Ameritech                                                    
3003 16th Avenue West                                                           
Seattle, WA  98119                                                              
(206) 443-9620                                                                  
Security link from Ameritech                                                    
dated 11/10/97                                                                  
M&L & SecurityLink from Ameritech                                               
addition to alarm system                                                        

4) Copy Kit "plus" Agreement                                                    
West Star Business Systems, Inc.                                                
P.O. Box 58043                                                                  
Seattle, WA  98138-1043                                                         
(206) 575-9710                                                                  
dated 2/25/99 thru 2/25/00                                                      
M&L & West Star Business Systems, Inc.                                          
service and parts for copy machine                                              

5) Equipment Maintenance                                                        
Pitney Bowes                                                                    
501 N Riverpoint Blvd. Suite 200                                                
Spokane, WA 99202-1664                                                          
(800) 522-0020                                                                  
dated 10/01/98                                                                  
M&L & Pitney Bowes                                                              
mail machine maintenance                                                        

6) Postage Meter Rental                                                         
Pitney Bowes                                                                    
501 N. Riverpoint Blvd., Suite 200                                              
Spokane, WA  99202-1664                                                         
(800) 243-7800                                                                  
dated 11/16/98                                                                  
M&L & Pitney Bowes                                                              
postage meter rental                                                            

7) Facsimile Rental                                                             
Pitney Bowes                                                                    
501 N. Riverpoint Blvd., Suite 200                                              
Spokane, WA  99202-1664                                                         
(800) 322-8000                                                                  
dated 1/01/99                                                                   
M&L & Pitney Bowes                                                              
Fax machine rental                                                              

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8) Exclusive Listing Agreement Sublease Contract                                
Cushman & Wakefield of Washington, Inc.                                         
Pacific Northwest Area                                                          
700 Fifth Ave., Suite 2700                                                      
Seattle, WA 98104-5027                                                          
dated 11/01/98 thru 4/30/99                                                     
M&L & Cushman & Wakefield of Washington, Inc.                                   
Real Estate listing agreement                                                   

9) Lease                                                                        
HRP Properties 6                                                                
P.O. Box 700                                                                    
Mercer Island, WA 98040                                                         
dated 7/23/91                                                                   
M&L & HRP Properties 6                                                          
Auburn Warehouse Lease                                                          

CHICAGO                                                                         
1) Amerinet Maintenance Agreement with M & L                                    
Amerinet                                                                        
324 E. Roosevelt Rd.Suite 201                                                   
Wheaton, IL 60187                                                               
(708) 653-8699                                                                  
dated 6/08/92                                                                   
M&L & Amerinet                                                                  
service and parts for computers                                                 

2) Allcom Equipment Maintenance Agreement                                       
Allcom Inc.                                                                     
5621 W. Howard St.                                                              
Niles, IL  60714                                                                
dated 4/01/93                                                                   
M&L & Allcom Inc.                                                               
labor only on phone system/ full main. on voice mail                            

3) Cannon Financial Services Lease                                              
Cannon Financial Service, Inc.                                                  
200 Commerce Square Blvd.                                                       
P.O. Box 370                                                                    
Burlington, NJ  08016                                                           
(800) 220-0200                                                                  
dated 12/04/96 for 48 months                                                    
M&L & Cannon Financial Services                                                 
color copy machine lease                                                        

4) Maintenance Agreement Service Division                                       
Cannon Financial Service, Inc                                                   
200 Commerce Square Blvd.                                                       
P.O. Box 370                                                                    
Burlington, NJ  08016                                                           
(800) 220-0200                                                                  
M&L & Ambassador Office Equipment                                               
color copy maintenance and supplies                                             

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5) Addendum to Maintenance Agreement                                            
React Computer Service, Inc.                                                    
15W 700 Frontage Rd.                                                            
Hinsdale, IL  60521-5543                                                        
(708) 323-6200                                                                  
dated 1/08/98                                                                   
M&L & React Computer Services, Inc.                                             
printer service                                                                 

6) Central Station Protective Signaling Service Renewal                         
Wells Fargo Alarm Service,Inc.                                                  
230 W. Division  St.                                                            
Chicago, IL  60610                                                              
(312) 337-3100                                                                  
dated 9/25/97                                                                   
M&L & Wells Fargo                                                               
security alarm system service                                                   

7) Service Purchase Agreement                                                   
Peak Technologies                                                               
9200 Berger Rd.                                                                 
Columbia, MD  21046-1602                                                        
(410) 312-6000                                                                  
dated 11/09/98 and 12/30/97                                                     
M&L & Peak Technologies                                                         
service on dot matrix printers (one for each printer)                           

8) Credit Recommendation Contract                                               
Crex of New York, Inc. d/b/a Credit International                               
P.O. Box 5426                                                                   
Flushing, NY  11354                                                             
(718) 539-8085                                                                  
dated 3/01/98                                                                   
M&L & CREX of New York, Inc. d/b/a Credit International                         
credit checks                                                                   

9) Credit Recommendation Contract                                               
Dun & Bradstreet                                                                
P.O. Box 92542                                                                  
Chicago, IL  60675-2542                                                         
(800) 284-4953                                                                  
dated 3/9/98                                                                    
M&L & Dun & Bradstreet                                                          
credit checks                                                                   

10) Facsimile Rental Agreement                                                  
Pitney Bowes                                                                    
P.O. Box 85390                                                                  
Louisville, KY  40285-5390                                                      
dated 9/23/97 for 36 month minimum                                              
M&L & Pitney Bowes facsimile rental and maintenance agreement front desk        

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                                                        · Enlarge/Download Table
                                                                                                
11) Facsimile Equipment Maintenance                                                             
Pitney Bowes                                                                                    
P.O. Box 85390                       no actual signed contract, maintenance is billed annually  
Louisville, KY  40285-5390           if invoice not paid, maintenance is discontinued and billed
dated 01/01/99 renewal                            per service call instead.                     
M&L Pitney Bowes                                                                                
back fax machine maintenance                                                                    

12) Equipment Maintenance                                                                       
Pitney Bowes                                                                                    
P.O. Box 85390                                                                                  
Louisville, KY  40285-5390                                                                      
M&L & Pitney Bowes                                                                              
mailing machine maintenance                                                                     

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13) QuickLease Agreement                                                        
IBM Credit Corp.                                                                
1605 LBJ Freeway                                                                
Dallas, TX  75234                                                               
(972) 280-4750                                                                  
dated 2/23/98                                                                   
M&L & IBM Credit Corp.                                                          
RS6000 computer and maintenance                                                 

14) Connector Account Schedule Charges                                          
MSCNET                                                                          
Two Prudential Plaza, Suite 2625                                                
Chicago, IL  60601                                                              
(312) 803-6271                                                                  
dated 01/21/98                                                                  
M&L & MCSNet                                                                    
Internet Access                                                                 

15) Annual Typewriter Maintenance Renewal                                       
United Business Machines                                                        
875 E. Rand Rd.                                                                 
Desplaines, IL  60016                                                           
(847) 299-3000                                                                  
dated 3/12/98                                                                   
M&L & United Business Machines                                                  
typewriter maintenance                                                          

16) Preventive Maintenance Agreement                                            
Shavitz and Sons, Inc.                                                          
8245 N. Kimball Ave.                                                            
Skokie, IL  60076                                                               
(708) 674-8252                                                                  
M&L & Shavitz and Sons, Inc.                                                    
heating and air conditioning maintenance                                        

17) Copier Service Agreement                                                    
Camadon,Inc.                                                                    
600 Bunker Court                                                                
Vernon Hills, IL  60061                                                         
(800) 542-7634                                                                  
dated 12/14/95                                                                  
M&L & Camadon/IKON                                                              
5570 model copier maintenance agreement                                         

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18) Copier Service Agreement                                                    
Camadon,Inc.                                                                    
600 Bunker Court                                                                
Vernon Hills, IL  60061                                                         
(800) 542-7634                                                                  
M&L & Camadon/IKON                                                              
6750 model copier maintenance agreement                                         

19) Rental Agreement                                                            
Sparkling Spring Mineral Water Co.                                              
1629 Park Ave. West                                                             
Highland Park, IL  60035                                                        
(708) 831-3442                                                                  
dated 4/21/93                                                                   
M&L & Sparkling Spring Mineral Water Co.                                        
2 water cooler rentals                                                          

20) Monthly Commitment and Term Agreement                                       
LCI International Telecom Corp.                                                 
4650 Lakehurst  Court.                                                          
Dublin, OH  43016                                                               
dated 8/16/95                                                                   
M&L & LCI International                                                         
long distance carrier agreement                                                 

21) UPS Incentive Program                                                       
United Parcel Service                                                           
1400 S. Jefferson St.                                                           
Chicago, IL  60607                                                              
(800) 782-7892                                                                  
dated 6/08/98                                                                   
M&L & United Parcel Service                                                     
shipping carrier service contract for better rates                              

22) Chicago Lease                                                               
Everbury Partners, Ltd. L.P.                                                    
% Urban Estates, Inc.                                                           
1777 N. Clybourn Ave.                                                           
Chicago, IL  60614                                                              
dated 4/01/97                                                                   
M&L & Everbury Partners, Ltd. Limited                                           
Chicago Office space lease                                                      

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23) License Agreement                                                           
Healthtex Apparel Corp.                                                         
200 Weldin Building, Concord Plaza                                              
3411 Silverside Road                                                            
Wilmington, DE  19810                                                           
(302) 477-3930                                                                  
dated 11/01/97                                                                  
M&L & Healthtex Apparel Corp.                                                   
Healthtex License Agreement                                                     

24) License Agreement                                                           
Eclipse, Incorporated                                                           
110 E. 9th Street, Suite C-1259                                                 
Los Angles, CA 90079                                                            
dated 7/13/87                                                                   
M&L & Eclipse                                                                   
Eclipse License Agreement                                                       

25) Oral Contract                                                               
J-Belt Sales                                                                    
694 The Apparel Center                                                          
Chicago, IL 60654                                                               
M&L & J-Belt Sales                                                              
Sales Rep                                                                       

26) Oral Contract                                                               
Liz Clark                                                                       
451 E. 58th Ave.                                                                
Box 315, Suite 4167                                                             
Denver, CO  80216                                                               
M&L & Liz Clark                                                                 
Sales Rep                                                                       

27) Oral Contract                                                               
Alan Mallman                                                                    
1356 Neshaminy Valley Dr.                                                       
Ben Salem, PA  19020                                                            
M&L & Alan Mallman                                                              
Sales Rep                                                                       

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28) Oral Contract                                                               
Jerry Bassett                                                                   
1300 Nicollet Mall                                                              
Suite 4035                                                                      
Minneapolis, MN  55403                                                          
(612) 333-7166                                                                  
M&L & Jerry Bassett                                                             
Sales Rep - Healthtex                                                           

29) Oral Contract                                                               
Mike Benson                                                                     
215 Homeland St.                                                                
Fairfield, Ct  06432                                                            
(203) 331-1830                                                                  
M&L & Mike Benson                                                               
Sales Rep - Healthtex                                                           

30) Oral Contract                                                               
Michael Branch                                                                  
2300 Stemmons Freeway                                                           
Suite 3829                                                                      
Dallas, TX  75207                                                               
(214) 637-1322                                                                  
M&L & Michael Branch                                                            
Sales Rep - Healthtex                                                           

31) Oral Contract                                                               
Walt Bringman                                                                   
1502 E. Schantz                                                                 
Dayton, OH  45419                                                               
(513) 298-3725                                                                  
M&L & Walt Bringman                                                             
Sales Rep - Healthtex                                                           

32) Oral Contract                                                               
Rusty Buckman                                                                   
5033 Craig Ave                                                                  
Kenner, LA  70065                                                               
(504) 456-9090                                                                  
M&L & Rusty Buckman                                                             
Sales Rep - Healthtex                                                           

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33) Oral Contract                                                               
Glenda Doherty                                                                  
3315 159th PL SE                                                                
Millcreek, WA 98012-8330                                                        
M&L & Glenda Doherty                                                            
Sales Rep - Healthtex                                                           

34) Oral Contract                                                               
Chuck Groomes                                                                   
1644 Lochcrest                                                                  
Chesterfield, MO  63017                                                         
(314) 537-9703                                                                  
M&L & Chuck Groomes                                                             
Sales Rep - Healthtex                                                           

35) Oral Contract                                                               
James Haley                                                                     
12735 Providence Rd.                                                            
Alpharetta, GA  30201                                                           
(770) 475-1013                                                                  
M&L & James Haley                                                               
Sales Rep - Healthtex                                                           

36) Oral Contract                                                               
Priscilla Mathis                                                                
110 East 9th St                                                                 
Suite B-684                                                                     
Los Angles, CA   90079                                                          
M&L & Priscilla Mathis                                                          
Sales Rep - Healthtex                                                           

37) Oral Contract                                                               
William Mcjunkin                                                                
1016 Gatewood Dr                                                                
Bethel Park, PA 15102                                                           
(412) 835-2078                                                                  
M&L & William Mcjunkin                                                          
Sales Rep - Healthtex                                                           

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38) Oral Contract                                                               
Elwood Regan                                                                    
P.O. Box 44844                                                                  
Greensboro, NC  27404-4484                                                      
(910) 854-5522                                                                  
M&L & Elwood Regan                                                              
Sales Rep - Healthtex                                                           

39) Oral Contract                                                               
Susan Roholt                                                                    
2109 Wimbledon Circle                                                           
Franklin, TN  37069                                                             
(615) 794-0234                                                                  
M&L & Susan Roholt                                                              
Sales Rep - Healthtex                                                           

40) Oral Contract                                                               
Jan Switzer                                                                     
11846 Cedar Pass                                                                
Houston, TX  77077                                                              
(218) 493-0347                                                                  
M&L & Jan Switzer                                                               
Sales Rep - Healthtex                                                           

41) Buying Agreement                                                            
Jun Jin                                                                         
#804, 8F Keumpoong Bldg 326-2 Kunja-Dong                                        
Seoul, Korea                                                                    
9761-342738                                                                     
dated 12/17/98                                                                  
M&L & Jun Jin Corporation                                                       
buying agent agreement                                                          

42) Buying Agreement                                                            
Ronnie Shahar                                                                   
6 Halotus St                                                                    
Ramat-Effal, Israel 52960                                                       
972 353 43129                                                                   
dated 8/02/95                                                                   
M&L & Ronnie Shahar                                                             
buying agent agreement                                                          

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43) Buying Agreement                                                            
Savitex                                                                         
Dogan Arasli Cad.Fatih Mah Yeni                                                 
Belediye Binasi Karsisi                                                         
Esenyurt, Istanbul                                                              
Turkey                                                                          
02126205778                                                                     
dated 3/12/98                                                                   
M&L & Savitex International                                                     
buying agent agreement                                                          

44) Hong Kong Lease                                                             
Ravelin Limited                                                                 
13 Miles, Castle Peak Rd.                                                       
Sham Tseng                                                                      
New Territories, Hong Kong                                                      
dated 1/12/96                                                                   
M&L & Ravelin Limited                                                           
Hong Kong office lease                                                          

45) Bangladesh Verbal Lease                                                     
Abdur Rahman                                                                    
#4 Naoratan Colony, Bailey Rd.                                                  
Dhaka 2, Bangladesh                                                             
880 2 416687                                                                    
M&L & Abdur Rahman                                                              
Bangladesh office lease                                                         

46) Sri Lanka Lease                                                             
Maree Ruanee Gunasekera                                                         
# 13/2 Elibank Rd.                                                              
Colombo 5, Sri Lanka                                                            
dated 07/15/97                                                                  
M&L & Maree Ruanee Gunasekera                                                   
Sri Lanka office lease                                                          

47) License Agreement                                                           
Starter Corporation                                                             
370 James St.                                                                   
New Haven, CT  06513                                                            
dated 6/30/97                                                                   
M&L & Starter Corporation                                                       
Starter License Agreement                                                       

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48) Employment Contract                                                         
Kurt Gutfreund                                                                  
33 E. Bellevue, Apt # 4E                                                        
Chicago, IL 60611                                                               
dated 11/30/1994                                                                
M&L & Kurt Gutfreund                                                            
Mr. Kurt Gutfreund's Employment Contract                                        

49) Moore Forms Handling Equipment Maintenance Service Agreement                
Moore Document Automation Systems                                               
P.O. Box 951030                                                                 
Dallas, TX 75395-1030                                                           
dated 2/20/99                                                                   
M&L & Moore Document Automation Systems                                         
invoice detacher maintenance                                                    

HONG KONG                                                                       
1) Air Conditioner Preventive Maintenance Service Agreement                     
Quiet & Cool Engineering Company Ltd.                                           
Flat 2E, Fu Cheung Centre                                                       
5-7 Wong Chuk Yeung Street                                                      
Fotan, Shatin, Hong Kong                                                        
dated 1/05/98                                                                   
M&L & Quiet & Cool Engineering Co. Ltd.                                         
Air Conditioning Maintenance                                                    

2) Messengerial Services Contract                                               
Alliance Express Service Co.                                                    
Room 5-6, 3/F, Block A                                                          
Wing Kut Industrial bldg.                                                       
608 Castle Peak Rd, Kln.                                                        
Hong Kong                                                                       
dated 1/10/97                                                                   
M&L & Alliance Express Service So.                                              
Messenger Services                                                              

3) Lectra Systems Services Agreement                                            
Lectra Systems (HK) Limited                                                     
Units 1112-1113, 11/F New East Ocean Centre                                     
No. 9 Science Museum Road                                                       
Tsinshatsui East                                                                
Kowloon, Hong Kong                                                              
dated 1/01/98                                                                   
M&L & Lectra Systems Services Agreement                                         
Lectra Design Equipment Maintenance                                             

4) Office Automation Equipment Maintenance Certificate                          
Shun Hing Electric Service Centre Ltd.                                          
18/F, Shun Hing Centre                                                          
8 Shing Yiu Street                                                              
Kwai Chung, N.T.                                                                
Hong Kong                                                                       
dated 4/22/98                                                                   
M&L & Shun Hing Electric Service Centre Ltd.                                    

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Fax Machine Maintenance                                                         

5) Tradelink Registration and Subscriber Form                                   
Tradelink Electronic Document Services, Ltd.                                    
Suite 89, 5/F, Hong Kong Trade & Exhibition Centre                              
1 Trademart Drive, Kowloon Bay, Hong Kong                                       
dated 02/11/98                                                                  
M&L & Valunet Standard                                                          
Import & Export Declaration Services                                            

6) Personal Computer Maintenance Agreement                                      
Asia Pacific Systems Ltd.                                                       
Unit 13, 8/F, Hing Wah Centre                                                   
82-84 To Daw Wan Road,                                                          
Kowloon                                                                         
dated 3/10/98                                                                   
M&L & Asia Pacific Systems Ltd.                                                 
Computer Maintenance                                                            

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 SCHEDULE 5.12

 PURCHASE ORDERS

All Purchase Orders for Fall 1999 have been entered into in the ordinary course 
of business but are not consistent with past practice on the following two      
points:                                                                         

1)       Orders have been placed later than past practice.    

2)       Letters of credit have not been opened.              

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 SCHEDULE 5.13

 PERMITS

1.       City of Chicago -- License                                             

2.       State of Washington -- Registration and License                        

3.       City of Auburn -- Business Registration                                

4.       State of Utah -- License for Quilted Clothing                          

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SCHEDULED 5.14

LEASES

None                                                                            

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 SCHEDULE 5.15
ENVIRONMENTAL LAW VIOLATIONS

None                                                                            

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 SCHEDULE 5.16
INSURANCE POLICIES

 M & L INTERNATIONAL, INC.

                                                        · Enlarge/Download Table

   COVERAGE                                                                                                                    
    DATES                INSURANCE COMPANY        POLICY #   DESC. OF COVERAGE    PREMIUM            COVERAGE                  
                                                                                                                               

11/01/98-11/01/99  EMPLOYERS MUTUAL CASUALTY CO.  1A88S75   COMMERCIAL PROPERTY  28,000.00  170,123,440 BLANKET REAL & PERSONAL
                                                                                            PROPERTY INCLUDING EDP (SUB-LIMITS 
                                                                                            APPLY-SEE POLICY FOR DETAILS)      
                                                                                            107,810,000 BLANKET BUSINESS       
                                                                                            INTERRUPTION/RENTS 50%             
                                                                                            50,000,000 EARTH MOVEMENT PER      
                                                                                            OCCURRENCE/AGGREGATE INCLUDING     
                                                                                            SPRINKLER LEAKAGE-EXCEPT CA.       
                                                                                            5,000,000 EARTH MOVEMENT PER       
                                                                                            OCCURRENCE/AGGREGATE INCLUDING     
                                                                                            SPRINKLER LEAKAGE-CA               
                                                                                            50,000,000 FLOOD PER               
                                                                                            OCCURRENCE/AGGREGATE-EXCEPT FLOOD  
                                                                                            ZONE A                             
                                                                                            1,000,000 FLOOD PER                
                                                                                            OCCURRENCE/AGGREGATE-FLOOD ZONE A  
                                                                                            DEDUCTIBLES                        
                                                                                            5,000 COMBINED PROPERTY DAMAGE AND 
                                                                                            TIME LIMIT EXCEPT                  
                                                                                            25,000 EARTH MOVEMENT COMBINED     
                                                                                            PROPERTY DAMAGE AND TIME ELEMENT.  
                                                                                            EXCEPT CA                          
                                                                                            25,000 FLOOD COMBINED PROPERTY     
                                                                                            DAMAGE AND TIME ELEMENT, EXCEPT    
                                                                                            FLOOD ZONE A                       
                                                                                            1,000 TRANSIT                      
                                                                                            5% CA EARTHQUAKE PER ITEM OF       
                                                                                            INSURANCE (100,000 MINIMUM)        
                                                                                            1% WIND FOR 1* TIER COUNTIES       
                                                                                            (100,000 MINIMUM)                  
                                                                                            FLOOD ZONE A DEDUCTIBLE SHALL BE   
                                                                                            AMOUNT AVAILABLE UNDER             
                                                                                            NATIONAL FLOOD PROGRAM WHETHER IN  
                                                                                            FORCE OR NOT                       
11/01/98-11/01/99  GREAT NORTHERN INSURANCE      35331938   FOREIGN LIABILITY     6,091.00  450,000 BLANKET PERSONAL PROPERTY  
                                                                                            ENGLAND (BISCAYNE)                 
                                                                                            500,000 BLANKET PERSONAL PROPERTY  
                                                                                            DOMINICAN REPUBLIC(BISCAYNE)       
                                                                                            500,000 BLANKET BUSINESS INCOME    
                                                                                            500,000 CONTINGENT BUSINESS INCOME 
                                                                                            IN CHINA                           
                                                                                            500,000 BLANKET PERSONAL PROPERTY  
                                                                                            ANY OTHER LOCATIONS                
                                                                                            DEDUCTIBLES                        
                                                                                            1,000 EXCEPT                       
                                                                                            25,000 FLOOD & EARTHQUAKE          
                                                                                            24 HOURS WAITING PERIOD-BUSINESS   
                                                                                            INTERRUPTION                       
                                                                                            INTERNATIONAL COMMERCIAL LIABILITY 
                                                                                            COVERAGE WITH PER OCCURRENCE/PER   
                                                                                            OFFENSE LIMITS                     
                                                                                            1,000,000 BODILY INJURY & PROPERTY 
                                                                                            DAMAGE LIMIT(OTHER THAN            

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   COVERAGE                                                                                                                  
    DATES                INSURANCE COMPANY    POLICY #  DESC. OF COVERAGE     PREMIUM            COVERAGE                    
                                                                                                                             

                                                                                         PRODUCTS-COMPLETED OPERATIONS HAZARD
                                                                                         EMPLOYMENT RELATED PRACTICES HAZARD 
                                                                                         & PROPERTY DAMAGE TO RENTED OR      
                                                                                         OCCUPIED PREMISES                   
                                                                                         1,000,000 PERSONAL INJURY &         
                                                                                         ADVERTISING INJURY LIMIT (OTHER THAN
                                                                                         EMPLOYMENT RELATED PRACTICES HAZARD)
                                                                                         1,000,000 PROPERTY DAMAGE TO RENTED 
                                                                                         OR OCCUPIED PREMISES LIMIT COVERAGE 
                                                                                         OTHER THAN CLAIMS-MADE AGGREGATE    
                                                                                         LIMITS ONLY:                        
                                                                                         1,000,000 PRODUCTS-COMPLETED        
                                                                                         OPERATIONS HAZARD AGGREGATE LIMIT   
                                                                                         NOT COVERED EMPLOYMENT RELATED      
                                                                                         PRACTICES HAZARD                    
                                                                                         1,000,000 MEDICAL EXPENSE AGGREGATE 
                                                                                         LIMIT                               
                                                                                         INTERNATIONAL AUTOMOBILE DIC/EXCESS 
                                                                                         LIABILITY                           
                                                                                         1,000,000 BODILY INJURY & PROPERTY  
                                                                                         DAMAGE LIMIT                        
                                                                                         10,000 AUTO MEDICAL PAYMENTS        
                                                                                         LIMIT-PER PERSON                    
                                                                                         RETAINED LIMITS                     
                                                                                         20,000 THRESHOLD AMOUNT ON DEFENSE  
                                                                                         EXPENSE FOR PROPERTY DAMAGE         
                                                                                         STATE OF HIRE BENEFITS APPLICABLE   
                                                                                         1,000,000 EMPLOYER'S LIABILITY      
                                                                                         50,000 REPATRIATION EXPENSE POLICY  
                                                                                         LIMIT                               
                                                                                         50,000 REPATRIATION EXPENSE PER     
                                                                                         EMPLOYEE                            
11/01/98-11/01/99  FEDERAL INSURANCE CO.      78339689  BOILER & MACHINERY     2,002.00  50,000,000 COMBINED LIMIT PER       
                          (CHUBB)                                                        ACCIDENT (SUB LIMIT APPLY - SEE     
                                                                                         POLICY FOR DETAILS)                 
                                                                                         DEDUCTIBLES                         
                                                                                         5.000 ALL ENTITIES                  
                                                                                         10,000 PRODUCTION MACHINES (ALL     
                                                                                         ENTITIES)                           
                                                                                         TIME ELEMENT                        
                                                                                         24 HOURS WAITING PERIOD             
                                                                                         48 HOURS WAITING PERIOD FOR         
                                                                                         PRODUCTION MACHINES                 
11/01/98-11/01/99  ZURICH INSURANCE CO.      BAP837469  BUSINESS AUTO COVERAGE 5,000.00  ALL AUTOS-INCLUDING HIRED AND       
                                             301                                         NON-OWNED                           
                                                                                         1.000,000 COMBINED SINGLE LIMIT     
                                                                                         (SYMBOL 1)                          
                                                                                         1,000,000 UNINSURED/UNDERINSURED    
                                                                                         MOTORISTS                           
                                                                                         MEDICAL PAYMENTS                    
                                                                                         5,000 PER PERSON                    
                                                                                         DEDUCTIBLES                         
                                                                                         500 COMP/COLLISION-ALL EXCEPT       
                                                                                         TRACTORS                            
                                                                                         500 HIRED AUTO PHYSICAL DAMAGE      
                                                                                         1,000 COMP/COLLISION-TRACTORS       
11/01/98-11/01/99  GREAT AMERICAN INS. CO.  TUU2534089  COMMERCIAL UMBRELLA   11,794.00  EXCESS OF UNDERLYING LIMITS         

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                                                        · Enlarge/Download Table

   COVERAGE                                                                                                                        
    DATES                 INSURANCE COMPANY         POLICY #   DESC. OF COVERAGE     PREMIUM            COVERAGE                   
                                                                                                                                   

                    (TAMARACK INSURANCE CO.)                                                   50,000,000 EACH OCCURRENCE          
                                                                                               50,000,000 POLICY AGGREGATE LIMIT   
                                                                                               50,000,000 PRODUCTS COMPLETED       
                                                                                               OPERATIONS AGGREGATE                
                                                                                               DEDUCTIBLES - NONE SIR-EACH         
                                                                                               OCCURRENCE                          
11/01/98-11/01/99   ZURICH INSURANCE CO.       WC8374188-02   WORKERS COMPENSATION  10,965.00  EMPLOYER'S LIABILITY                
                                                                                               500,000 BI BY ACCIDENT-EACH ACCIDENT
                                                                                               500,000 BI BY DISEASE-EACH EMPLOYEE 
                                                                                               500,000 BI BY DISEASE-POLICY LIMIT  
                                                                                               100,000 REPATRIATION AND ENDEMIC    
                                                                                               DISEASE                             
11/01/98-11/01/99   ZURICH-AMERICAN INS. CO.  GLO8374233-02   COMMERCIAL GENERAL     2,800.00  GENERAL LIABILITY (OCCURRENCE)      
                                                              LIABILITY                        2,000,000 GENERAL AGGREGATE PER     
                                                                                               LOCATION                            
                                                                                               1,000,000 OCCURRENCE LIMIT          
                                                                                               2,000,000 PRODUCTS/COMPLETED        
                                                                                               OPERATIONS AGGREGATE                
                                                                                               1,000,000 PERSONAL & ADVERTISING    
                                                                                               INJURY                              
                                                                                               50,000 FIRE DAMAGE LEGAL            
                                                                                               LIABILITY-ANY ONE FIRE              
                                                                                               10,000 MEDICAL EXPENSE-ANY ONE      
                                                                                               PERSON                              
                                                                                               EMPLOYEE BENEFITS LIABILITY (CLAIMS 
                                                                                               MADE)                               
                                                                                               1,000,000 EACH OCCURRENCE           
                                                                                               1,000,000 AGGREGATE LIMIT           
                                                                                               DEDUCTIBLES                         
                                                                                               1,000 EMPLOYEE BENEFITS LIABILITY   
                                                                                               NONE-ALL OTHER                      
11/01/98-11/01/99   ROYAL INSURANCE CO.           PSF000686   COMMERCIAL CRIME       7,755.00  1.000,000 BLANKET LIMIT FOR THE     
                    OF AMERICA                                COVERAGE                         FOLLOWING                           
                                                                                               EMPLOYEE THEFT-MONEY, SECURITIES AND
                                                                                               OTHER PROPERTY                      
                                                                                               PREMISES COVERAGE-MONEY AND         
                                                                                               SECURITIES                          
                                                                                               TRANSIT COVERAGE-MONEY AND          
                                                                                               SECURITIES                          
                                                                                               DEPOSITORS FORGERY                  
                                                                                               COMPLETE THEFT & FUNDS TRANSFER     
                                                                                               COVERAGE                            
                                                                                               1,000,000 SPECIAL CRIME LIMIT       
                                                                                               DEDUCTIBLES                         
                                                                                               5,000 PER OCCURRENCE                
                                                                                               NONE SIR SPECIAL CRIME              
11/01/98-11/01/99   ROYAL INSURANCE CO.           PSF000686   FIDUCIARY LIABILITY    1,800.00  1,000,000 ANNUAL AGGREGATE          
QUARTERLY(NOV-JAN)  ATLANTIC MUTUAL COMPANIES    146018943-   OCEAN CARGO COVERAGE  30,000.00  3,000,000 ANY ONE VESSEL            
                                                 0203                                                                              
                                                                                               10,000 DEDUCTIBLE ALL OCCURRENCES   
                                                                                               300,000 STOWED ON DECK              

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   COVERAGE                                                                                                              
    DATES                INSURANCE COMPANY    POLICY #   DESC. OF COVERAGE  PREMIUM            COVERAGE                  
                                                                                                                         

                                                                                      1,000,000 AIRCRAFT                 
                                                                                      500,000 BARGE                      
06/21/98-06/21/99  OMAHA PROPERTY & CASUALTY    3-0063-  FLOOD INSURANCE              6,091.00 500,000 PRIMARY -         
                                                 8468-3                               5,000 DEDUCTIBLE                   

04/12/98-04/12/99  MINN. MUTUAL                1463700H  KURT GUTFREUND     2,884.40  4,000 PER MO. 90 DAY ELIMINATION   
                                                         DISABILITY                   FOR LIFE                           

01/05/99-          UNUM                       LAN653298  KURT GUTFREUND     1,519.00  2,000 PER MO. 90 DAY ELIMINATION TO
02/05/2000                                    DI         DISABILITY                   AGE 65 ILLNESS                     

11/01/98-11/01/99  AETNA CASUALTY & SURETY    971015014  CUSTOMS BOND                 LIFETIME ACCIDENT                  
                                                                            1,300.00  450,000                            

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 SCHEDULE 5.17

 INTELLECTUAL PROPERTY

(i)      Trademarks listed on schedule 2.1(a)(v) under the headings "Trademarks 
  Under License" and "Mackintosh Trademarks" are not owned by M&L.

(ii)     All of the owned rights have been assigned to Chase Manhattan Bank.    

(iii)    None                                                                   

(iv)     None                                                                   

(v)      None                                                                   

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 SCHEDULE 5.18

 EQUIPMENT (WITH ORIGINAL PURCHASE PRICE OVER $10,000)

                                                                · Download Table

                                     Acquisition                   
Description              Cost           Date      Location         

                                                                   
Cambex Disk Drive         20,451.75    12-1-94    Chicago          
                                                  office           
Lectra  Machine           40,531.69     6-1-95    Chicago          
                                                  office           
Primavision Wkstation     19,500.00    12-1-96    Chicago          
                                                  office           
Dell Network Comp         10,560.77    11-1-96    Chicago          
                                                  office           
RS6000                    40,862.32    12-1-97    Chicago          
                                                  office           
Ford Windstar             21,724.31     2-1-97    Chicago          
                                                  office           
Computer Network & Accs   24,825.00     8-1-95    Sri Lanka Office 
Van                       15,000.00     3-1-97    Sri Lanka Office 
Lift Truck                17,122.25     9-1-95    Seattle Warehouse

                         210,578.09                                

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 SCHEDULE 5.19
CONDITION OF TITLE TO ASSETS

The following liens exist against the companies assets                          

1) The Chase Manhattan Bank                                                     
New York, NY                                                            
type:         original                                                  
filing #      95056478                                                  
date filed:   03/21/1995                                                
filed with:   NY                                                        
Collateral:   All assets including proceeds and products                

type:         original                                                  
filing #      1776297                                                   
date filed    06/27/1997                                                
filed with:   NJ                                                        
Collateral:   All assets including proceeds and products                

type:         amendment                                                 
filing #      983270055      original #  950800044                      
date filed    11/23/1998                                                
filed with:   WA                                                        
Collateral:   Inventory                                                 

2) Canon Financial Services, Inc.                                               
Burlington, NJ                                                          
type:         original                                                  
filing #      003639085                                                 
date filed    01/14/1997                                                
filed with:   IL                                                        
Collateral:   Assets including proceeds and products - Leased Business  
       Machinery/Equipment including proceeds and products

3) IBM Credit Corp                                                              
White Plains, NY                                                        
type:         original                                                  
filing #      003814423                                                 
date filed    03/10/1998                                                
filed with:   IL                                                        
Collateral:   Leased Computer Equipment                                 

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         M&L International Inc.                       SCHEDULE 7.1

Consolidated Forecast Statement of              
Income                                          
INC1 For The Year Ended December 31, 1999       

                                                        · Enlarge/Download Table

                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
                               JAN       FEB      MAR      1st        APR       MAY       JUNE        2nd         Six      % OF  
                               1999      1999     1999     Qtr        1999      1999      1999        Qtr        Months    SALES 
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------

                                                                                                                                 
Net sales                   2,806,001  458,247  529,841  3,794,089  390,239  1,009,691  2,496,380   3,896,310   7,690,399  100.00
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------

Cost of sales               2,002,755  339,646  416,902  2,759,303  261,043    732,004  1,652,052   2,645,099   5,404,403   70.27
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
      Gross profit            803,246  118,600  112,939  1,034,786  129,196    277,687    844,327   1,251,210   2,285,996   29.73
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
Selling expenses              335,126  247,814  235,033    817,973  253,330    297,494    280,885     831,709   1,649,682   21.45
General & administrative      500,412  460,377  464,791  1,425,580  488,094    428,527    443,229   1,359,850   2,785,430   36.22
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
    Total S,G & A             835,538  708,191  699,824  2,243,553  741,424    726,021    724,115   2,191,559   4,435,112   57.67
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
      Operating income         32,292  589,591  586,884  1,208,767  612,228    448,334    120,213     940,349   2,149,116   27.95
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
Interest Expense and Other                                                                                                       
Expenses                       28,801   34,133   41,666    104,599   44,747     56,352     68,022     169,121     273,721    3.56
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
Interest Expense BAI                0        0        0          0        0          0          0           0           0    0.00
Banking Fees - Default              0        0        0          0        0          0          0           0           0    0.00
Interest Term Loan                  0        0        0          0        0          0          0           0           0    0.00
Discontinued Operations Exp         0        0        0          0        0          0          0           0           0    0.00
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
 Income bef. sub,OH & taxes    61,093  623,724  628,550 $1,313,366  656,975    504,686     52,191  $1,109,470  $2,422,836   31.50
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
Amortization of intangibles         0        0        0          0        0          0          0           0           0        
Equity in subsidiary                0        0        0          0        0          0          0           0           0    0.00
Corporate Overhead                  0        0        0          0        0          0          0           0           0    0.00
Management fee                      0        0        0          0        0          0          0           0           0    0.00
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
      Income before taxes      61,093  623,724  628,550  1,313,366  656,975    504,686     52,191   1,109,470   2,422,836   31.50

Income tax provision                0        0        0          0        0          0          0           0           0       0
                            ---------  -------  ------- ----------  -------  ---------  ---------  ----------  ----------  ------
      Net income               61,093  623,724  628,550  1,313,366  656,975    504,686     52,191   1,109,470   2,422,836   31.50
                            =========  =======  ======= ==========  =======  =========  =========  ==========  ==========  ======


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            M&L International Inc.                                  SCHEDULE 7.1

Consolidated Forecast Statement of Income               
For The Year Ended December 31, 1999                    

                                                        · Enlarge/Download Table

                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
                               JULY       AUG        SEPT        3RD          NINE       OCT        NOV        DEC    
                               1999       1999       1999        QTR         MONTHS      1999       1999       1999   
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------

                                                                                                                      
Net sales                    4,330,729  6,120,085  6,551,988  17,002,803   24,693,202  5,378,957  2,228,609  2,528,468
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------

Cost of sales                2,836,321  3,965,513  4,322,551  11,124,385   16,528,787  3,492,677  1,423,018  1,680,755
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
      Gross profit           1,494,408  2,154,572  2,229,437   5,878,418    8,164,414  1,886,280    805,591    847,713
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
Selling expenses               329,510    418,642    390,422   1,138,575    2,788,257    426,142    340,350    337,796
General & administrative       520,510    491,347    457,028   1,468,885    4,254,315    519,291    467,971    450,579
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
    Total S,G & A              850,020    909,989    847,450   2,607,460    7,042,572    945,433    808,321    788,375
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
      Operating income         644,388  1,244,583  1,381,987   3,270,958    1,121,842    940,847      2,730     59,338
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
Interest Expense and Other      82,896     92,377     91,972     267,245      540,965     81,255     40,047     38,256
Expenses                                                                                                              
Interest Expense BAI                 0          0          0           0            0          0          0          0
Banking Fees - Default               0          0          0           0            0          0          0          0
Interest Term Loan                   0          0          0           0            0          0          0          0
Discontinued Operations Exp          0          0          0           0            0          0          0          0
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
 Income bef. sub,OH & taxes    561,492  1,152,207  1,290,015 $ 3,003,714  $   580,877    859,592     42,777     21,082
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
Amortization of intangibles          0          0          0           0            0          0          0          0
Equity in subsidiary                 0          0          0           0            0          0          0          0
Corporate Overhead                   0          0          0           0            0          0          0          0
Management fee                       0          0          0           0            0          0          0          0
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
      Income before taxes      561,492  1,152,207  1,290,015   3,003,714      580,877    859,592     42,777     21,082
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
Income tax provision             1,000      3,000      3,000       7,000        7,000      3,000          0          0
                             ---------  ---------  --------- -----------  -----------  ---------  ---------  ---------
      Net income               560,492  1,149,207  1,287,015   2,996,714      573,877    856,592     42,777     21,082
                             =========  =========  ========= ===========  ===========  =========  =========  =========

                                                                · Download Table

                              ----------  -----------  ------  ------------  ------
                                 4TH                   % OF       1998       % OF  
                                 QTR         TOTAL     SALES   CONSOLIDATED  SALES 
                              ----------  -----------  ------  ------------  ------

                                                                                   
Net sales                     10,136,034   34,829,236  100.00   44,602,596   100.00
                              ----------  -----------  ------  -----------   ------

Cost of sales                  6,596,450   23,125,238   66.40   29,454,119    66.04
                              ----------  -----------  ------  -----------   ------
      Gross profit             3,539,584   11,703,998   33.60   15,148,477    33.96
                              ----------  -----------  ------  -----------   ------
Selling expenses               1,104,287    3,892,544   11.18    5,242,094    11.75
General & administrative       1,437,841    5,692,156   16.34    6,511,585    14.60
                              ----------  -----------  ------  -----------   ------
    Total S,G & A              2,542,128    9,584,700   27.52   11,753,679    26.35
                              ----------  -----------  ------  -----------   ------
      Operating income           997,456    2,119,298    6.08    3,394,798     7.61
                              ----------  -----------  ------  -----------   ------
Interest Expense and Other       159,558      700,524    2.01    1,012,008     2.27
Expenses                                                                           
Interest Expense BAI                   0            0    0.00      610,949     1.37
Banking Fees - Default                 0            0    0.00      250,000     0.56
Interest Term Loan                     0            0    0.00      319,823     0.72
Discontinued Operations Exp            0            0    0.00    1,024,033     2.30
                              ----------  -----------  ------  -----------   ------
  Income bef. sub,OH & taxes     837,897  $ 1,418,774    4.07  $ 1,399,883     3.14
                              ----------  -----------  ------  -----------   ------
Amortization of intangibles            0            0    0.00       20,016     0.04
Equity in subsidiary                   0            0    0.00            0     0.00
Corporate Overhead                     0            0    0.00      152,330     0.34
Management fee                         0            0    0.00            0     0.00
                              ----------  -----------  ------  -----------   ------
      Income before taxes        837,897    1,418,774    4.07    1,267,569     2.84
                              ----------  -----------  ------  -----------   ------
Income tax provision               3,000       10,000    0.70       10,854     0.86
                              ----------  -----------  ------  -----------   ------
      Net income                 834,897    1,408,774    4.04    1,256,714     2.82
                              ==========  ===========  ======  ===========   ======

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SCHEDULE 9.1
 EMPLOYEES

                                                                · Download Table


CHICAGO                 N.Y. OFFICE          BANGLADESH - DHAKA     
-------                 -----------          ------------------     

                                                                    
EXECUTIVES              Cliff Uttan          Sharif Ahmed           
----------              John Nitti           David Halder           
                        David Pick           MD Shahadat Hossain    
Albert DeCarlo          Helen Tirado         MD Golam Rabbi         
Ken MacFarlane          Barbara Arlia        Abdullah Mahamud       
Kurt Gutfreund          Michael Mager        Richard Milton         
Patricia Pierce         Kathryn Devlin       S. H. Khan             
Daniel Sinnaduray                            Shafiquer Rahaman      
                        SEATTLE              Neser-Uddin            
                        -------              Amir Hossain           
OFFICE                                       Abul Kalam             
------                  Anna Clark           Michale Kulantono      
                        Denny Ko             Ruhul Amin             
Alexandria Schroeder    Merv Box             S.M. Babul             
Andrea Landon           Patty Barker         M.R. Shelly            
Andrew Shalla           William Barry        Kamal Ahmed            
Arline Rogers           Donna Battles        Samir K. Saha          
Arlene Bernstein        Joyce Braunschweig   Tashin M. Shelly       
Aronette Espada         Daniel Desmet        Firoz Alam             
Carol Gongala           Keely Dever          Abu Hanif              
Denise Rix              James Krager         Abul Kalam Azad        
Ericka Hall             Dean Owens           Anis Kal               
Fran Pappalardo         Joyce Palmer         Saiful Islam           
Gale Johnson            Melvin Ploegman      Faruk Ahmed            
German Velez            Timothy Risovi       Saleh Ahmed            
Giselle Thomas          Fern Tyler           P.V.P.A. Jayasinghe    
Hoa Vu                                       J.B. Rana Sashi        
Jamille Wilson          SRI LANKA                                   
John Severns            ---------            HONG KONG              
Julie Baro                                   ---------              
Karen Williams-Aguirre  A. Thatchanamoorthy                         
Kelly Kramer            Perera W. Janaka     Ronald Hui Kam Tai     
Ky Huynh                M.C. Offen           Chito Marcelino        
Leslie Cohn             Jenifer Nicholas     Lam Kin Chi Kaser      
Lisa Warechowicz        Nalani Bathotuwa     Chan Yuk Fun Debby     
Lissette Torres         Shanthi Weerasinghe  Young Nga Kit          
Magdalena Jarzebska     G.C. Demoore         Chan Chun Kit (Thomson)
                        Tyrone Fernando                             

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Mahendra Shah         Priyankara Mendis        Lui Kat Cheing (Tommy) 
Marie Sabatka         P.L.A. Udayakantha       Kwan Suk Kuen (Idy)    
Marlisse Rosado       C. Thushara              Shelly Tan Shaonen     
Mel Smith             K.G. Gunaratne           Wong Wai Yan           
Nikia Carter          M. Chandramoghan         Ng Sui Ha              
Nurith Landau         Mohamed Irshad           Ho sat Yin             
Nyekro Kuykendall                              Pong Shiu Kuen         
Paula Polizzi-Kellas  BANGLADESH - CHITTAGONG  Yam Chun Choi          
Pamela Cabrera        -----------------------  Yeung Ming Kit (Fready)
Ramona Strickland                              Li Chi Kwan            
Raymond McCallister   MD Haroon                Ng Kit Pui             
Richard Cobbins       MD Khurshid Alam         Li Fu Yau Tai          
Richard Ostrowski     Aminul Haque             Li Lai Yung            
Robert Rud            Anayet Rabbi             Fung Siu Mei           
Rodolfo Borja         Lucky Ghose                                     
Rosa Perez            Ismail Hossain                                  
Rosalind Young        Sajjad Hossain                                  
Rosalino Capio        J.M.D.J. Sydney                                 
Rosemary Jordan       Noel Gunaratne                                  
Sakinah Hudson                                                        
Sarah Thomas          MADRAS                                          
Sue Kandefer          ------                                          
Sylkia Julia                                                          
Tim Makinster         G. Bhagyesh                                     
Tracy Congdon                                                         

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 SCHEDULE 12.2

 Closing Documents

1.       Bill of Sale                                                           

2.       Assignment of Assigned Contracts                                       

3.       Resolutions of the Board of Directors of each Seller approving the     
      Asset Purchase Agreement and the sale of the Assets, certified by an
officer of each Seller.                                       

4.       Certified copy of Certificates of Incorporation for each Seller.       

5.       Good standing certificates for each Seller from the jurisdiction in    
      which it was organized and all jurisdictions in which each Seller is
qualified to do business as a foreign corporation.            

6.       UCC-3 Termination Statements with respect to all Liens affecting the   
     Assets in form for recordation in all jurisdictions where Financing
Statements are filed.                                         

7.       Terminations of any and all recorded Liens against trademarks included 
in the Intellectual Property Rights.                          

8.       The trademark assignments referred to in Section 7.12 in recordable    
form, or evidence of recordation thereof.                     

9.       Assignments of all trademarks included in the Intellectual Property    
Rights, in recordable form.                                   

10.      Any third party consents required for consummation of the sale of the  
Assets by Sellers.                                            

11.      Escrow Agreement signed by Sellers.                                    

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 8-K Filing		Date		First		Last			Other Filings
		9/30/98		57					10-Q, NT 10-Q
		12/31/98		15		17			NT 10-K, 10-K
		1/1/99		12		58
		2/5/99		1
		2/9/99		48
Filed On / Filed As Of		2/11/99
For The Period Ended		2/12/99
		2/26/99		37
		3/5/99		47
		3/12/99		47					NT 10-K, 8-K
		12/31/99		117		118
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