LEADING EDGE PACKAGING INC, S-1/A, 1996-11-13

LEADING EDGE PACKAGING INC
S-1/A, 1996-11-13
MISCELLANEOUS NONDURABLE GOODS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 13, 1996.

REGISTRATION NO. 333-12911
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LEADING EDGE PACKAGING, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 22-3432883 5199
(State or other jurisdiction (I.R.S. Employer (Primary Standard
of incorporation or organization) Identification No.) Industrial Code)
</TABLE>

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EMPIRE STATE BUILDING
350 FIFTH AVENUE, SUITE 3922
NEW YORK, NEW YORK 10118
(212) 239-1865
(Address and telephone number of registrant's principal executive offices)
------------------------

CASEY K. TJANG
LEADING EDGE PACKAGING, INC.
EMPIRE STATE BUILDING
350 FIFTH AVENUE, SUITE 3922
NEW YORK, NEW YORK 10118
(212) 239-1865
(Name, address and telephone number of agent for service)
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copies to:

<TABLE>
<S> <C>
JOEL S. FORMAN, ESQ. LAWRENCE B. FISHER, ESQ.
BONDY & SCHLOSS LLP ORRICK, HERRINGTON & SUTCLIFFE LLP
6 EAST 43RD STREET 666 FIFTH AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10103
(212) 661-3535 (212) 506-5000
</TABLE>

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Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /______________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /______________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>

SUBJECT TO COMPLETION, DATED NOVEMBER 13, 1996

PROSPECTUS

[LOGO]

1,250,000 SHARES OF COMMON STOCK
---------------------

Leading Edge Packaging, Inc. (the "Company") hereby offers 1,250,000 shares
of common stock, par value $0.01 per share ("Common Stock"). Prior to the
offering, there has been no public market for the Common Stock and there can be
no assurance that such a market will develop after the completion of the
offering or, if developed, that it will be sustained. It is currently
anticipated that the initial public offering price will be $6.00 per share. For
information regarding the factors considered in determining the initial public
offering price of the Common Stock, see "Risk Factors" and "Underwriting." The
Common Stock has been approved for quotation on the Nasdaq National Market
("Nasdaq") under the symbol "LEPI" subject to official notice of issuance.

------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" BEGINNING ON PAGE 6,
AND "DILUTION."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNTS(1) COMPANY(2)
<S> <C> <C> <C>
Per Share.......................................... $ $ $
Total(3)........................................... $ $ $
</TABLE>

(1) Does not include additional compensation payable to Gilford Securities
Incorporated (the "Representative") in the form of a non-accountable expense
allowance. In addition, see "Underwriting" for information concerning
indemnification and contribution arrangements with the Underwriters and
other compensation payable to the Representative.

(2) Before deducting estimated expenses of $905,000 payable by the Company,
including the Representative's non-accountable expense allowance.

(3) The Company has granted to the Underwriters an option (the "over-allotment
option"), exercisable for a period of 45 days after the date of this
Prospectus, to purchase up to 187,500 additional shares of Common Stock upon
the same terms and conditions set forth above, solely to cover
over-allotments, if any. If the over-allotment option is exercised in full,
the total Price to Public, Underwriting Discounts and Proceeds to Company
will be $ , $ and $ , respectively. See
"Underwriting."

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

The Common Stock is being offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters, subject to
approval of certain legal matters by their counsel and subject to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify the
offering and to reject any order in whole or in part. It is expected that
delivery of the shares of Common Stock offered hereby will be made against
payment, at the offices of Gilford Securities Incorporated, New York, New York,
on or about , 1996.

GILFORD SECURITIES INCORPORATED

THE DATE OF THIS PROSPECTUS IS , 1996.

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[ARTWORK: PHOTO OF PACKAGING PRODUCTS]

The Company intends to furnish its stockholders with annual reports
containing financial statements audited by its independent accounting firm and
such other periodic reports as the Company deems appropriate or as may be
required by law.

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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED
IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION AND THE COMPANY'S FINANCIAL
STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION AND SHARE AND PER-SHARE
DATA IN THIS PROSPECTUS ASSUME NO EXERCISE OF THE OVER-ALLOTMENT OPTION OR THE
REPRESENTATIVE'S WARRANTS. THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE
OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION. SEE "UNDERWRITING," "RISK FACTORS"
AND "DILUTION."

THE COMPANY

The Company sells and distributes, in North America, packaging products used
primarily in the sale of luxury consumer goods. Its packaging products include
metal and plastic cases, optical cases, pouches and bags, and paper gift boxes.
The Company also sells display units for retail merchandising of jewelry,
watches, eyeglasses, pens, cosmetics and gold coins (the packaging products and
display units are collectively referred to herein as "Packaging Products"). The
Company's customers are mainly wholesalers and distributors of Packaging
Products and consumer product manufacturers. The Company anticipates that it
will purchase all of its inventory from Rich City International Packaging
Limited ("Rich City"), a Hong Kong company and the Company's parent. The Company
has entered into an Assignment and Distribution Agreement (the "Distribution
Agreement") with Rich City which, effective April 1, 1996, appoints the Company
as the exclusive distributor in North America of Packaging Products supplied by
Rich City. Since 1990, Rich City had supplied its Packaging Products to North
America.

Although no market data exists for the packaging products industry, based on
the number of units of luxury consumer goods sold in each category as extracted
from estimates published by the American Watch Association, MJ JEWELRY SALES and
U.S. OPTICAL INDUSTRY HANDBOOK '96 and on Rich City's average pricing data, the
Company estimates that the U.S. wholesale market in 1994 was approximately
$130,000,000 for jewelry packages of all types and approximately $140,000,000
for watch boxes, and in 1995 was approximately $54,000,000 for prescription
optical cases.

As successor to Rich City's North American business operations, the Company
plans to implement a market consolidation strategy. The Company believes that
the market for Packaging Products in North America is fragmented and lacks a
centralized, efficient mechanism for bringing such products from areas of
low-cost production to wholesalers, distributors and consumer product
manufacturers. The Company plans to consolidate this process through its own
system of purchasing and customizing high quality Packaging Products from the
Company's low-cost Asian producer and distributing the products in North
America.

To effect this strategy, the Company has leased a 2,000 square-foot office
and showroom in the Empire State Building in New York City, and a 33,000
square-foot facility in Raritan Center, Edison, New Jersey, for the Company's
warehousing, customization and distribution operations. The Company believes
that its warehousing and customizing capabilities located in the United States,
coupled with its Asian low-cost source of supply, give it an advantage over its
competitors in the North American market by enabling the Company to fill orders
and customize products on a "just in time" basis. The Company believes that its
source of supply will allow it to capitalize on lower production costs
obtainable overseas, while maintaining the high quality of its products.

3
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THE OFFERING

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<S> <C>
Common Stock offered hereby.................. 1,250,000 shares

Common Stock outstanding after the 3,125,000 shares
offering(1)................................

Use of proceeds.............................. Inventory, warehouse, light assembly
equipment, office and showroom, furniture,
computers, fixtures and equipment, sales and
marketing, and working capital. See "Use of
Proceeds."

Risk factors................................. Investment in the Common Stock offered hereby
involves a high degree of risk and immediate
substantial dilution. See "Risk Factors" and
"Dilution."

Nasdaq National Market Symbol................ LEPI
</TABLE>

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(1) Does not include 312,500 shares of Common Stock which have been reserved for
issuance upon exercise of options, which may be granted under the Company's
1996 Incentive Stock Option Plan for employees. To date, no options to
purchase shares of Common Stock have been granted under the Plan. See
"Management."

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The selected financial data set forth below has been derived from the
financial statements of Rich City's North American Distribution Business (the
"N.A. Distribution Business") for the years ended March 31, 1994, 1995 and 1996
and the financial statements of the Company for the six months ended September
30, 1996. The financial statements of the N.A. Distribution Business for each of
the years ended March 31, 1994, 1995 and 1996 and for the six months ended
September 30, 1995, have been prepared on a "carved-out" basis as if the N.A.
Distribution Business had been operating independently. The financial statements
of the Company for the six months ended September 30, 1996 were prepared on an
actual basis as the Company was operating under the terms of the Distribution
Agreement between the Company and Rich City, which became effective on April 1,
1996. The unaudited pro forma statements of income of the N.A. Distribution
Business for the six months ended September 30, 1995 and for the year ended
March 31, 1996 have been presented on the basis that the Distribution Agreement
had been in place since April 1, 1995. The unaudited pro forma statement of
income of the Company for the six months ended September 30, 1996 has been
presented to reflect the Company's operating lease rentals as if the operating
lease were in effect on April 1, 1996. The selected financial data should be
read in conjunction with, and are qualified in their entirety by reference to,
the financial statements, the unaudited interim financial information and the
unaudited pro forma statements of income, including the respective notes
thereto, included elsewhere in this Prospectus. The historical financial data
may not be indicative of the Company's future performance as an independent
company. Results of any interim period may not be indicative of results for the
full fiscal year.

4
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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION (CONT'D)

The interim financial information of both the N.A. Distribution Business and
the Company for the six months ended September 30, 1995 and 1996, respectively,
and the pro forma statements of income of the N.A. Distribution Business and the
Company, have not been audited but, in the opinion of management, contain all
adjustments which are of a normal recurring nature, including those to conform
with generally accepted accounting principles, necessary for the fair
presentation of the results of operations and cash flows, for the periods then
ended.

<TABLE>
<CAPTION>
(ALL AMOUNTS IN THOUSANDS OTHER THAN SHARE AND PER SHARE INFORMATION)(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RICH CITY'S
N.A. DISTRIBUTION
RICH CITY'S N.A. DISTRIBUTION BUSINESS BUSINESS LEADING EDGE
---------------------------------------------- ------------------------ ----------------------------

<CAPTION>
YEAR ENDED MARCH 31, SIX MONTHS ENDED SEPTEMBER 30,
---------------------------------------------- ------------------------------------------------------
(CARVED-OUT) (CARVED-OUT) (ACTUAL)
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(PRO (PRO
FORMA)(2) FORMA)(2) (PRO FORMA)(2)
1994 1995 1996 1996 1995 1995 1996 1996
--------- --------- --------- ------------- --------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.............. $ 13,725 $ 6,311 $ 10,987 $10,987 $ 5,210 $5,210 $5,552 $5,552
Gross profit........... 4,296 2,289 4,352 3,921 2,079 1,876 1,815 1,815
Operating income....... 3,073 1,482 3,247 2,816 1,538 1,334 1,540 1,519
Income before income
taxes................ 3,052 1,473 3,201 2,769 1,516 1,313 1,540 1,519
Income taxes........... 33 -- -- 1,052 -- 499 585 577
Net income(3).......... 3,019 1,473 3,201 1,717 1,516 814 955 942
Earnings per share..... -- -- -- 0.92 -- 0.43 0.51 0.50
Weighted average number
of shares
outstanding.......... -- -- -- 1,875,000 -- 1,875,000 1,875,000 1,875,000
</TABLE>

<TABLE>
<CAPTION>
RICH CITY'S N.A. LEADING EDGE
DISTRIBUTION BUSINESS --------------------------------
(CARVED-OUT)
------------------------------- SEPTEMBER 30,
--------------------------------
MARCH 31, 1996
------------------------------- 1996 (AS
1994 1995 1996 (ACTUAL) ADJUSTED)(4)
--------- --------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital........... $ (116) $ (220) $ (194) $ 1,426 $7,271
Total assets.............. 4,559 1,044 1,797 3,944 9,789
Total liabilities......... 4,549 1,044 1,797 2,489 2,489
Division/company equity... 10 -- -- 1,455 7,300
</TABLE>

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

(1) The functional currency of the N.A. Distribution Business is Hong Kong
dollars. Transactions, assets and liabilities denominated in Hong Kong
dollars have been translated to the U.S. dollar at HK$7.80 to $1.00 which
approximates the market rate at all periods presented. References in this
Prospectus to "dollars" or "$" are to United States dollars and reference to
"HK$" are to Hong Kong dollars.

(2) The pro forma income statement data for the N.A. Distribution Business is
presented to reflect the pro forma effect of the Distribution Agreement as
if the Distribution Agreement had been in place since April 1, 1995. See
"Unaudited Pro Forma Statements of Income" elsewhere in this Prospectus. The
pro forma income statement data for the Company is presented to reflect the
pro forma effect of the rental expenses in the United States.

(3) Effective April 1, 1996, the Company is subject to United States income
taxes. Net income for the periods prior to that date after providing for
U.S. federal and state income taxes, calculated at a rate of 38%, would have
been $1,859,000 for year ended March 31, 1994, $913,000 for the year ended
March 31, 1995, $1,984,000 for the year ended March 31, 1996 and $940,000
for the six months ended September 30, 1995.

(4) As adjusted to reflect the receipt and initial application of the estimated
net proceeds from the sale of 1,250,000 shares of Common Stock offered
hereby at an assumed initial public offering price of $6.00 per share.

5
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RISK FACTORS

AN INVESTMENT IN THE COMMON STOCK IS SPECULATIVE IN NATURE, INVOLVES A HIGH
DEGREE OF RISK AND SHOULD ONLY BE MADE BY AN INVESTOR WHO CAN AFFORD THE LOSS OF
HIS ENTIRE INVESTMENT. IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS,
THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY BY POTENTIAL PURCHASERS IN
EVALUATING AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY.

DEPENDENCE ON A SINGLE OVERSEAS SUPPLIER

The Company depends upon Rich City for all of its inventory of Packaging
Products. Rich City, in turn, depends for its inventory supply upon Dongguan
Walford Ornaments Packaging Company Limited, a joint venture (the "Joint
Venture") in the People's Republic of China ("PRC"). The Joint Venture is
controlled by Breakspear Limited, a British Virgin Islands company, which is an
affiliate of Rich City, and a PRC enterprise. Although the Company intends to
engage in limited customization operations for some of the Packaging Products in
the United States, the majority of the Company's products will be manufactured
entirely by the Joint Venture, within the PRC. As a result, the Company's
ability, at least initially, to perform its sales and distribution functions
with respect to its customers in North America depends upon the supply of
Packaging Products it purchases from Rich City. See "The Company" and "Certain
Transactions."

The Company expects that typically it will warehouse generic inventory
sufficient for sales for approximately six months. However, any long-term
disruption or termination of supply would have a material adverse effect on the
business, financial condition and operating results of the Company. In addition
to the usual conditions which can disrupt or terminate inventory supplies, such
as a breakdown of equipment, performance below expected levels of output or
efficiency, labor disputes, natural disasters, inadequate supply of materials,
fluctuations in exchange rates, increase in cost of raw materials, and severe
fluctuations in the market prices for raw materials, there are special
additional risks resulting from the Company's reliance on a single source of
supply and from the fact that such source of supply is located in the PRC and in
Hong Kong, including the following:

LOSS OF EXCLUSIVITY

The Company has entered into a Distribution Agreement with Rich City
pursuant to which the Company is designated as the exclusive distributor in
North America of Packaging Products supplied by Rich City. Although the Company
has the exclusive rights to distribute in North America products supplied by
Rich City, such rights could become non-exclusive upon the occurrence of certain
triggering events, including, but not limited to, the inability of the Company
to increase its sales in the North American market by the cost of living formula
contained in the Distribution Agreement or to make certain scheduled royalty
payments to Rich City as required by the Distribution Agreement. See "Certain
Transactions."

POSSIBLE TERMINATION OF DISTRIBUTION AGREEMENT/LOSS OF SUPPLY

The Distribution Agreement between the Company and Rich City may be
terminated by either party upon the occurrence of a bankruptcy, insolvency,
liquidation or other form of dissolution or corporate reorganization by the
other party. The Distribution Agreement may also be terminated for a breach not
cured within 90 days of written notice of the breach. In the event of
termination of the Distribution Agreement, the Company would lose its sole
source of supply. There can be no assurance that the Company could locate an
alternative source of supply in sufficient time to meet its orders, if at all.

ENFORCEABILITY OF DISTRIBUTION AGREEMENT

Under the Distribution Agreement, the Company is designated as the exclusive
distributor in North America of Packaging Products supplied by Rich City. The
executive offices and a substantial portion of

6
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Rich City's assets are presently located in Hong Kong and the PRC. The
Distribution Agreement requires arbitration in New York of all disputes arising
thereunder. However, in the event the Company obtained an award in arbitration,
it may be difficult under the laws of Hong Kong or the PRC for the Company to
enforce against Rich City any judgment entered on the arbitrators' award. See
"Certain Transactions."

TRANSFER OF SOVEREIGNTY OVER HONG KONG

The headquarters and a substantial portion of the assets of Rich City are
located in Hong Kong. Consequently, the Company's results of operations and
financial condition may be influenced by the political situation in Hong Kong
and by the general state of the Hong Kong economy. On July 1, 1997, sovereignty
over Hong Kong will be transferred from the United Kingdom to the PRC, and Hong
Kong will become a Special Administrative Region of the PRC (an "SAR").
According to the Company's Hong Kong counsel, Erving Brettell, Solicitors, under
the Sino-British Joint Declaration on the Question of Hong Kong (the "Joint
Declaration") and the Basic Law of the Hong Kong SAR of the PRC (the "Basic
Law"), the Hong Kong SAR will have a high degree of autonomy except in foreign
and defense affairs. Under the Basic Law, the Hong Kong SAR is to have its own
legislature, legal and judicial system and full economic autonomy for 50 years.
Based on current political conditions and the advice of Hong Kong counsel, the
Company does not believe that the transfer of sovereignty over Hong Kong should
have an adverse impact on the Company's financial and operating condition. There
can be no assurance, however, that the transfer of sovereignty or changes in
political or other conditions will not disrupt the supply of products to the
Company, which would cause a loss of revenue, a loss of customers due to failure
to timely meet orders and/or a total loss of the Company's inventory.

GOVERNMENT CONTROL OVER THE ECONOMY

The government of the PRC has exercised, and continues to exercise, control
over every sector of the Chinese economy through regulation and state ownership.
Accordingly, government actions in the future, including any decision not to
continue to support the economic reforms program begun in 1978 and to return to
the more centrally planned economy that existed prior to that time, or regional
or local variations in the implementation of economic policies, could have a
significant effect on economic conditions in the PRC or particular regions
thereof. Any such developments could affect opportunities for foreign
investment, the prospects of private sector enterprises (of which the Joint
Venture is an example) and, as a consequence, the ability of the Joint Venture
to continue its manufacturing operations in the PRC on the same terms and
conditions under which it currently operates. This, in turn, could adversely
impact the Joint Venture's labor costs, costs for the use of land, factory and
equipment and/or the ability of the Joint Venture to obtain the permits and
licenses it needs to operate. Any such effect on the Joint Venture would disrupt
the supply of products to the Company, which would cause a loss of revenue, a
loss of customers due to failure to timely meet orders and/or a total loss of
the Company's inventory. Furthermore, any increase in Rich City's production
costs would increase the price paid by the Company for its supply of Packaging
Products.

ENVIRONMENTAL COMPLIANCE

The Joint Venture is, and is likely to continue to be, subject to central,
provincial and local environmental protection laws and regulations. There can be
no assurance, however, that the Joint Venture has complied, or will at all
future times comply, with such laws and regulations, that it will avoid
incurring the consequences of non-compliance or that authorities will not impose
additional regulatory requirements which would necessitate unbudgeted
expenditures for environmental compliance. Any such occurrence could have a
material adverse effect on the Joint Venture and, to the extent that the Company
depends upon the Joint Venture as a principal supplier, on the Company, in turn.
A disruption in supply could cause a loss of revenues, a loss of customers due
to failure to timely meet orders and/or a total loss of the Company's inventory.
In addition, costs of environmental compliance could increase Rich City's costs

7
<PAGE>
to produce Packaging Products. Under the terms of the Distribution Agreement,
this would increase the prices paid by the Company for its supply of Packaging
Products.

ADMINISTRATIVE AND REGULATORY COMPLIANCE

The Joint Venture's activities in the PRC are subject, in some
circumstances, to administrative inspections, audits and approvals by various
national and local agencies of the PRC government. There can be no assurance
that such approvals, when necessary or advisable, will be forthcoming. Any
failure by the Joint Venture to obtain such approvals or to comply with any
administrative or regulatory provisions could result in a disruption of the
supply of Packaging Products to the Company. A disruption in supply could cause
a loss of revenues, a loss of customers due to failure to timely meet orders
and/or a total loss of the Company's inventory. In addition, costs of
administrative and regulatory compliance could increase Rich City's costs to
produce Packaging Products. Under the terms of the Distribution Agreement, this
would increase the prices paid by the Company for its supply of Packaging
Products.

POSSIBLE EXPROPRIATION OF ASSETS

The PRC government has previously renounced various debt obligations
incurred by predecessor governments, which obligations remain in default, and
expropriated assets of private citizens and companies without compensation.
There can be no assurance that the PRC government will not, in the future,
expropriate or nationalize the assets of the Joint Venture, including its
factories in the PRC. This could result in the termination of the Distribution
Agreement and/or disruption of the supply of inventory to the Company. A
disruption in supply could cause a loss of revenues, a loss of customers due to
failure to timely meet orders and/or a total loss of the Company's inventory.

MOST FAVORED NATION STATUS

The PRC currently enjoys Most-Favored Nation ("MFN") status granted by the
United States, which results in imports into the United States from the PRC
being subject to the lowest applicable tariffs. The United States annually
reconsiders the renewal of MFN trading status for the PRC. There can be no
assurance, however, that the PRC's MFN status will be renewed in future years.
The Company believes that the non-renewal of MFN trading status would adversely
affect the pricing of any inventory of the Company consisting of products
manufactured within the PRC. Failure by the United States to renew the PRC's MFN
status, could cause an increase in the cost to import Packaging Products to Hong
Kong from the PRC, and, after transfer of sovereignty over Hong Kong, from Hong
Kong to the United States. Under the terms of the Distribution Agreement, this
would lead to an increase in prices paid by the Company to Rich City for
Packaging Products. If such prices became prohibitively high, there can be no
assurance that the Company could locate substitute suppliers of Packaging
Products outside of the PRC. Failure by the Company to locate such suppliers
would result in a loss of revenues, a loss of customers due to failure to timely
meet orders and/or a total loss of the Company's inventory.

TRADE SANCTIONS

In the past, as a result of trade disputes between the United States and the
PRC, the U.S. Trade Representative announced that the United States would impose
tariffs of up to 100% on certain imports from the PRC. If such tariffs were to
be imposed, it is possible that some of or all the Company's products would be
subject thereto. If such tariffs were prohibitively high, there can be no
assurance that the Company could locate substitute suppliers of Packaging
Products outside of the PRC. Failure by the Company to locate such suppliers
would result in loss of revenues, a loss of customers due to failure to timely
meet orders and/or a total loss of the Company's inventory.

8
<PAGE>
ACCESS TO RAW MATERIALS

The Company believes that the Joint Venture presently obtains many of the
raw materials which it uses in the manufacture of its Packaging Products from
various sources outside of the PRC. Any disruption in the supply of such raw
materials, resulting from any number of factors including increased cost,
currency fluctuation or political strife, would have a material adverse effect
on the ability of the Joint Venture to produce Packaging Products for
distribution by the Company. Such a disruption would thus cause delays in and
possibly a total loss of the Company's supply of Packaging Products, resulting
in a loss of revenue, a loss of customers due to failure to timely meet orders
and/or a total loss of the Company's inventory. In addition, an increase in the
costs of raw materials would result in an increase in Rich City's production
costs. This would increase the prices paid by the Company for Packaging Products
from Rich City under the terms of the Distribution Agreement.

NO LONG-TERM CONTRACTS WITH CUSTOMERS

Each sale by the Company of its Packaging Products is evidenced by a
purchase order, confirmation and similar documentation limited to that specific
sale. The Company does not enter into any long-term sales contracts with its
customers requiring them to make purchases from the Company. In the absence of
such long-term contracts, there can be no assurance that these customers will
continue to purchase Packaging Products from the Company and thus no assurance
that the Company will be able to maintain adequate or consistent levels of
sales.

DEPENDENCE ON LIMITED NUMBER OF CUSTOMERS AND CONCENTRATION OF CREDIT RISK

The North American market for Packaging Products is currently dominated by a
small number of large distributors who purchase Packaging Products from
manufacturers and sell them to end-users. At least initially, a significant
portion of the Company's customer base will consist of these distributors. Two
customers each individually accounted for 10% or more of Rich City's total net
sales in North America for each of the two years ended March 31, 1994 and 1995,
collectively generating approximately 75.8% and 58.0% of total net sales,
respectively. For the year ended March 31, 1996, three customers each
individually accounted for 10% or more of Rich City's net sales in North
America, collectively generating 52.6% of net sales. During fiscal 1996, sales
to Rocket Jewelry Box, Inc., Rich City's then largest North American customer,
accounted for approximately 26.6% of net sales in North America. During fiscal
1994 and 1995, sales to Rocket accounted for approximately 5.4% and 38.8% of net
sales, respectively. For the six months ended September 30, 1995 and 1996, sales
to Rocket accounted for approximately 44.2% and 31.8% of the Company's net
sales, respectively. Sales to Astucci US Inc. and Viva Optique, Inc., Rich
City's next largest North American customers during fiscal 1996, accounted for
approximately 13.9% and 12.1% of net sales, respectively. For the six months
ended September 30, 1995 and 1996, sales to Astucci US Inc. accounted for
approximately 11.4% and 13.5% of net sales, respectively. Because the Company
sells its Packaging Products to manufacturers and distributors, all of its
principal customers are also its competitors. Customers who are also competitors
of the Company include Gem Case Inc., Fuller Corporation, Rocket Jewelry Box
Inc. and Boxco Inc. There can be no assurance that any of these companies will
remain customers of the Company or that there will be adequate demand for the
Company's Packaging Products. Cessation of business with one or more of these
customers would have a material adverse effect on the Company and could result
in a substantial decline in net sales and income for the Company and/or a total
loss of the Company's business. In addition, any failure by one or more of these
customers to satisfy obligations owing to the Company for the purchase of
Packaging Products would have a material adverse effect on the Company's
business and could result in a substantial decline in net sales and income for
the Company and/or a total loss of the Company's business.

9
<PAGE>
IMPACT OF INFLATION

In recent years, the PRC has experienced periods of high inflation. The
Company's results of operations may be affected by such inflation, particularly
rising labor costs and other operating costs of the Joint Venture. Because the
price paid by the Company for Packaging Products, purchased from Rich City
pursuant to a formula contained in the Distribution Agreement, are directly tied
to the production costs of Rich City's affiliate, any increase in such
production costs will raise the prices paid by the Company for its inventory.
The Company may not be able to raise the prices of its products in the future at
the rate by which its operating costs may rise, which would reduce its profit
margin and its ability to pay dividends (should the Company determine to pay
dividends). See "Management's Discussion and Analysis of Financial Condition and
Result of Operations" and "Dividend Policy."

OVERSEAS PRINCIPALS OF THE COMPANY

Certain of the directors and officers of the Company and experts named
herein are nationals or residents of Hong Kong, the PRC or other countries, and
all or a substantial portion of the assets of such persons are or may be located
outside the United States. As a result, it may be difficult for investors to
effect service of process within the United States upon such persons, or to
enforce against them judgments obtained in United States courts, including
judgments predicated upon the civil liability provisions of the United States
federal securities laws. The Company has been advised by its Hong Kong counsel,
Messrs. Erving Brettell, Solicitors, that there is uncertainty as to whether the
courts of Hong Kong or the PRC would (i) enforce judgments of United States
courts obtained against such persons predicated upon the civil liability
provisions of United States federal or any state's securities laws or (ii) find
liability against such persons predicated upon United States federal or any
state's securities laws in original actions brought in Hong Kong or the PRC.

DEPENDENCE ON KEY PERSONNEL

The Company relies on certain key executives with whom it has entered into
employment agreements. The Company is particularly dependent upon the services
of Lip-Boon Saw, its Chairman and Chief Executive Officer. The loss of services
of one or more of the key executives could disrupt and have a material adverse
effect on the operations of the Company. The Company has applied for key-man
life insurance for Mr. Saw in the amount of $1 million for the sole benefit of
the Company. See "Management."

DEPENDENCE ON INVENTORY AND CUSTOMIZATION FACILITY

The Company's inventory and customization operation will be located in its
Raritan Center, Edison, New Jersey warehouse facility. Many of the Company's
employees, particularly in the distribution and customer service areas will work
out of this facility. Any production failures or other circumstances, including
fire, power outage, flooding or any other form of natural disaster would have a
material adverse effect on the Company's business and could result in a total
loss of the Company's current inventory and customization capability. In
addition to the loss of current revenue and assets of the Company, this could
result in the failure to fill orders on a timely basis, if at all, and a loss of
customers over the long term. The Company maintains insurance for this facility,
but there can be no assurance that proceeds from such insurance will be adequate
to cover any such losses.

NO INDEPENDENT OPERATING HISTORY AS A SEPARATE U.S. COMPANY

The Company is a newly-formed company and, as such, has no independent
operating history as a separate U.S. company. The financial statements covering
the three years ended March 31, 1996 contained elsewhere in this Prospectus, as
well as any summary or supplemental data contained herein, have been prepared on
a "carved-out" basis of Rich City's existing operations in North America. This
financial information may not necessarily reflect the results of operations,
financial position and cash flows had the

10
<PAGE>
Company been a separate, stand-alone entity during the periods presented. The
financial information included herein does not reflect the many significant
changes that will occur in the finances and operations of the Company as a
result of its operations separate from its parent, Rich City. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Certain Transactions."

CYCLICALITY

Many of the end-users of the Company's Packaging Products are manufacturers
of luxury products. During periods of economic decline, the demand for these
luxury products could decrease, which would have a material adverse effect on
the market for the Company's Packaging Products.

COMPETITION

There is substantial competition in the Packaging Products industry. The
Company competes with distributors and manufacturers of Packaging Products based
in the U.S. and overseas. Many of the Company's competitors have name
recognition in the market, longer operating histories and, in many cases, are
substantially larger and better financed than the Company. Such competitors may
use their economic strength to influence the market to continue to buy their
existing or newly developed products. New competitors may arise and may develop
products which compete with the Company's products. The Company believes that
several companies currently distribute products in North America in direct
competition with the Company's Packaging Products, including International
Packaging Inc., Gem Case Inc., Fuller Corporation, Rocket Jewelry Box Inc.,
Boxco Inc. and Gunther Mele Inc. Some of the Company's current customers
presently, or at some future point may, compete with the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business."

FUTURE FINANCING

The Company believes that the net proceeds from this offering will be
sufficient to meet its anticipated capital needs for its planned operations for
at least 12 months from the date of this Prospectus. However, there can be no
assurance that the Company will not require additional capital or financing.
There also can be no assurance that any future financing will be available on
terms commercially acceptable if and when needed. If additional financing is
required but is not obtained, the Company may be unable to further its expansion
into the North American market or remain competitive. In the past, the Company
has relied upon advances of inventory and other financing from Rich City. There
can be no assurance that such advances or financing will continue, and Rich City
is under no obligation to continue to make them. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

MANAGEMENT'S BROAD DISCRETION IN APPLICATION OF PROCEEDS

Approximately $1,945,000 or 33% of the net proceeds of this offering will be
utilized to expand the Company's business, by providing working capital for
hiring additional employees, purchasing increased quantities of inventory and
possibly expanding the Company's facilities. The Company is currently unable to
predict the percentage, if any, of such proceeds that will be applied to any or
all of these items, and, accordingly, the Company will have broad discretion
regarding the application of such proceeds.

CONTROL BY PRESENT STOCKHOLDER

Upon completion of this offering, Rich City, the existing stockholder who
owned all of the issued and outstanding shares of the Company's Common Stock
prior to this offering, will own 60% of the issued and outstanding Common Stock.
Rich City will have the ability to exert significant control over the election
of the Company's Board of Directors and to influence or determine corporate
action requiring stockholder approval.

11
<PAGE>

MANAGEMENT'S POTENTIAL CONFLICT OF INTEREST; PROCEEDS TO BENEFIT PARENT

Lip-Boon Saw, Chairman of the Board and Chief Executive Officer, and Richard
Fung-Gea Wong, one of the directors of the Company, each serve on the board of
directors of Rich City, the Company's parent company. As a result of Mr. Saw's
and Mr. Wong's obligations to both companies, their dual roles could lead to a
potential conflict between the Company's and Rich City's interests.
Approximately $136,000 has been advanced by Rich City to the Company to cover
certain costs of this offering. This advance will be repaid to Rich City out of
the gross proceeds of this offering. See "Certain Transactions."

DILUTION

The amount by which the initial public offering price per share of Common
Stock exceeds the pro forma net tangible book value per share after this
offering constitutes dilution to investors in this offering. Investors
purchasing shares of Common Stock in this offering will experience an immediate
and substantial dilution in net tangible book value of $3.66 per share or
approximately 61.0%. See "Dilution."

FUTURE SALES OF COMMON STOCK BY EXISTING STOCKHOLDER; POTENTIAL ADVERSE EFFECT
ON MARKET PRICE

None of the Company's presently outstanding 1,875,000 shares of Common Stock
has been registered under the Securities Act of 1933, as amended (the
"Securities Act"). Such shares will be "restricted securities" as that term is
defined by Rule 144 promulgated under the Securities Act. In the future, such
restricted securities may be sold in compliance with the limitations of Rule
144. Generally, under Rule 144, a person who has held fully-paid-for "restricted
securities" for a period of two years may, every 90 days, sell to a market
maker, or in an ordinary broker's transaction, an amount that does not exceed
the greater of one percent of the Company's then outstanding stock or the
average weekly trading volume during the four calendar weeks preceding the sale.
Rule 144 also permits a person who is not an affiliate of the Company, and who
has held fully-paid-for "restricted securities" for a period of three years, to
sell such securities without compliance with the limitations on quantity and
manner of sale.

Except upon the consent of the Representative, all officers, directors and
the sole stockholder of the Company have agreed not to, directly or indirectly,
offer, sell, transfer, pledge, assign, hypothecate or otherwise encumber any
shares or convertible securities whether or not owned, or otherwise dispose of
any interest therein under Rule 144 or otherwise, for a period commencing on the
date hereof and ending 24 months from the effective date of the Registration
Statement. Such persons have further agreed that, for a period commencing on the
date hereof and ending 24 months following the effective date of the
Registration Statement, all sales of securities issued by the Company shall be
made through the Representative in accordance with its customary brokerage
policies. An appropriate legend shall be marked on the face of stock
certificates representing all of such shares of Common Stock. In addition,
without the consent of the Representative, the Company shall not sell or offer
for sale any of its securities for a period of 24 months following the effective
date of the Registration Statement.

All of the 1,875,000 shares of Common Stock outstanding as of the date of
this Prospectus will be eligible under Rule 144 for sale in the public market
two years from the date of this Prospectus.

The future sale of any "restricted securities" by the holders thereof or the
issuance of Common Stock upon the exercise of the Representative's Warrants or
options may have an adverse effect upon the market price of the Common Stock and
the ability of the Company to raise capital. In addition, the Company has
granted the Representative certain registration rights with respect to the
Common Stock underlying the Representative's Warrants pursuant to which the
Company may be required to register such shares beginning one year from the date
of this Prospectus. The registration of such shares could result in substantial
future expense to the Company and could adversely affect any future equity or
debt financing. Furthermore, the registration and sale of the Common Stock
issuable upon exercise of the Representative's Warrants, or even the potential
sale, could have an adverse effect on the market price of the Common Stock. See
"Shares Eligible for Future Sale" and "Underwriting."

12
<PAGE>
NO PRIOR PUBLIC MARKET; DETERMINATION OF INITIAL PUBLIC OFFERING PRICE;
POTENTIAL VOLATILITY OF STOCK PRICE

Prior to this offering there has been no public trading market for the
Common Stock, and there can be no assurance that a trading market will develop
or, if one does develop, that it will be maintained. In the event that a public
trading market does not develop, any investment in the Company's securities will
be highly illiquid. The initial public offering price has been established by
negotiations between the Company and the Representative and is not necessarily
related to the Company's asset value, net worth or other established criteria of
value. The initial public offering price should not be considered an indication
of the actual value of the securities or of prices that will prevail in the
trading market following this offering. The factors considered in such
negotiations, in addition to general conditions of securities markets at the
time of this offering, included the history of and prospects for the industry in
which the Company competes, an assessment of the Company's management, the
prospects of the Company, its capital structure and certain other factors as
were deemed relevant. See "Underwriting."

The stock market has, from time to time, experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. In addition, the market price of the Common Stock may be
highly volatile. Factors such as fluctuations in the Company's operating
results, governmental regulation and general conditions in the packaging
industry may have a significant effect on the market price of the Common Stock
and may cause it to fluctuate dramatically. General economic trends such as
recessionary cycles and changing interest rates could also adversely affect the
market price of the Common Stock.

NO DIVIDENDS AND NONE ANTICIPATED

No dividends have been paid on the Common Stock of the Company. It is
anticipated that income received from operations, if any, will be devoted to the
Company's future operations. Accordingly, no dividends are anticipated in the
future. See "Dividend Policy."

LIMITATION ON LIABILITY OF DIRECTORS

The Company's Certificate of Incorporation limits personal liability of
directors to the fullest extent permitted by the General Corporation Law of the
State of Delaware. See "Description of Securities."

BARRIERS TO TAKEOVER

The Company has an authorized class of 5,000,000 shares of preferred stock
which may be issued by the Board of Directors on such terms and with such
rights, preferences and designations as the Board may determine. Issuance of
such preferred stock, depending upon the rights, preferences and designations
thereof, may have the effect of delaying, deterring or preventing a change in
control of the Company. In addition, certain "anti-takeover" provisions of the
General Corporation Law of the State of Delaware, among other things, restrict
the ability of stockholders to effect a merger or business combination or obtain
control of the Company and may be considered disadvantageous by a stockholder.
See "Description of Securities."

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK

This Prospectus contains forward-looking statements, including statements
regarding, among other items (i) the Company's growth strategies, (ii) the
impact of the Company's products and anticipated trends in the Company's
business and (iii) the Company's ability to expand its sales. These
forward-looking statements are based largely on the Company's expectations and
are subject to a number of risks and uncertainties, certain of which are beyond
the Company's control. Actual results could differ materially from these
forward-looking statements as a result of the factors described in "Risk
Factors," including, among others, regulatory or economic influences. In light
of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Prospectus will in fact transpire
or prove to be accurate.

13
<PAGE>
THE COMPANY

The Company was incorporated in Delaware on December 15, 1995 as a
wholly-owned subsidiary of Rich City. Pursuant to the Distribution Agreement,
effective April 1, 1996, Rich City has assigned to the Company, on an exclusive
basis, its North American distribution business, together with the right to
market, sell and warehouse the Packaging Products supplied by Rich City to North
America.

The principal office of the Company is located in the Empire State Building,
350 Fifth Avenue, Suite 3922, New York, New York 10018, and the Company's
telephone number is (212) 239-1865.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,250,000 shares of
Common Stock offered hereby are estimated to be $5,845,000 at an initial public
offering price of $6.00 per share after deducting the estimated underwriting
discount and expenses (and $6,823,750 if the Underwriter's over-allotment option
is fully exercised). The net proceeds are expected to be used as follows:

<TABLE>
<CAPTION>
AMOUNT PERCENTAGE
------------ -----------
<S> <C> <C>
Inventory(1)........................................................ $ 3,000,000 51.3%
Warehouse, fixtures, and light assembly equipment and
installation...................................................... 350,000 6.0%
Office and showroom, furniture, fixtures, computers and equipment... 200,000 3.4%
Sales and marketing................................................. 350,000 6.0%
Working capital..................................................... 1,945,000 33.3%
------------ -----
Total........................................................... $ 5,845,000 100.0%
------------ -----
------------ -----
</TABLE>

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

(1) This amount represents the Company's inventory requirements for at least 12
months from the date of this Prospectus. Inventory will be purchased from
Rich City. Prior to this offering, Rich City owned 100% of the outstanding
Common Stock of the Company. Upon completion of this offering, Rich City
will beneficially own 60% of the Common Stock.

Rich City has advanced approximately $136,000 to cover certain costs of this
offering. As part of the offering expenses, these amounts will be repaid out of
the gross proceeds of the offering and are thus not listed in the table above.

The allocation set forth in the above table is subject to change based upon
actual rather than estimated expenses and changes in business conditions.
Pending use of the proceeds as described above, the net proceeds will be
invested in bank deposits and short-term, investment grade securities, including
government obligations and money market instruments, as the Company may
determine.

The Company estimates that the amounts listed in the above table together
with cash from operations will meet the Company's cash requirements for at least
12 months from the date of this Prospectus. Any additional proceeds from the
offering will be used for general corporate purposes, including expansion of
sales, operations and working capital. If the Underwriters exercise the
over-allotment option, the Company intends to add the net proceeds of such
exercise to working capital. Any net proceeds to the Company from this offering
or from the exercise of the over-allotment option which are not applied to the
commencement of operations or other corporate purpose will be invested in bank
deposits and short-term investment grade securities, including government
obligations and money market instruments, as the Company may determine.

14
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company at
September 30, 1996 and as adjusted to reflect the issuance and sale of 1,250,000
shares of the Common Stock offered hereby at an initial public offering price of
$6.00 per share and the receipt and initial application of the net proceeds
therefrom. The following table should be read in conjunction with the financial
statements and related notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
--------------------------

<S> <C> <C>
ACTUAL AS ADJUSTED
------------ ------------
Short-term debt....................................................................... $ -- $ --

Long-term debt........................................................................ -- --

Stockholders' equity

Preferred Stock, par value, $0.01 per share: 5,000,000 shares
authorized; no shares issued or outstanding....................................... -- --

Common Stock, par value, $0.01 per share: 5,000,000 shares
authorized, 1,875,000 shares issued and outstanding, actual, and
3,125,000 shares issued and outstanding, as adjusted.............................. 18,750 31,250

Additional paid-in capital............................................................ 481,250 6,313,750

Retained earnings..................................................................... 955,084 955,084
------------ ------------

Total capitalization.............................................................. $ 1,455,084 $ 7,300,084
------------ ------------
------------ ------------
</TABLE>

15
<PAGE>
DILUTION

The unaudited net tangible book value of the Company at September 30, 1996
was approximately $1,455,084, or $0.78 per share of Common Stock. The unaudited
net tangible book value per share is determined by dividing the tangible net
worth of the Company (total assets less liabilities), by the number of shares of
the Common Stock deemed to be outstanding on such date. After giving effect to
the sale of the shares of Common Stock being offered hereby and the receipt of
the net proceeds from the offering by the Company, the unaudited pro forma net
tangible book value of the Company at September 30, 1996, would have been
approximately $7,300,084 or $2.34 per share. This represents an immediate
increase in pro forma net tangible book value of $1.56 per share to Rich City,
as the current stockholder, and an immediate dilution of $3.66 per share (or
61.0%) to persons purchasing shares of Common Stock at the initial public
offering price (the "New Investors"). "Dilution" is determined by subtracting
pro forma net tangible book value per share after the offering from the initial
public offering price per share of the Common Stock.

The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share....................................... $ 6.00
Net tangible book value per share of Common Stock before the offering....... $ 0.78
Increase per share attributable to New Investors............................ $ 1.56
---------
Pro forma net tangible book value per share after the offering................ $ 2.34
---------
Dilution per share to New Investors........................................... $ 3.66
---------
---------
</TABLE>

If the Underwriters exercise the over-allotment option in full, the pro
forma net tangible book value will be $8,278,834 (or $2.50 per share), resulting
in an immediate dilution of $3.49 per share (or 58.3%) to New Investors.

The following table sets forth, at September 30, 1996, the differences in
the total consideration paid and the average price per share paid between the
existing stockholder and the New Investors with respect to the shares of Common
Stock to be issued by the Company:

<TABLE>
<CAPTION>
TOTAL SHARES TOTAL CONSIDERATION AVERAGE
--------------------- ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- --------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C>
Existing Stockholder.................................. 1,875,000 60.0% $ 500,000 6.3% $ 0.27
New Investors......................................... 1,250,000 40.0% $ 7,500,000 93.7% $ 6.00
---------- --------- ------------ ---------
Total............................................. 3,125,000 100.0% $ 8,000,000 100.0%
---------- --------- ------------ ---------
---------- --------- ------------ ---------
</TABLE>

If the Underwriters exercise the over-allotment option in full, the Shares
of Common Stock purchased by New Investors would be 1,437,500; Percent of Total
Shares purchased by New Investors would be 43%; Total Consideration Amount
Payable by New Investors would be $8,625,000; Percent of Total Consideration
Amount Payable by New Investors would be 95% and Average Price Per Share would
be $6.00.

16
<PAGE>
DIVIDEND POLICY

The Company anticipates that it will retain all of its earnings, if any, as
working capital and that income received from operations will be devoted to the
Company's future operations. Accordingly, no dividends are anticipated.
Dividends on the Common Stock may be declared at the discretion of the Board of
Directors from funds legally available therefor. No dividends have been paid on
the Common Stock.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA

The selected financial data set forth below has been derived from the
financial statements of Rich City's N.A. Distribution Business (the "N.A.
Distribution Business") for the years ended March 31, 1994, 1995 and 1996 and
the financial statements of the Company for the six months ended September 30,
1996. The financial statements of the N.A. Distribution Business for each of the
five years ended March 31, 1996 and for the six months ended September 30, 1995,
have been prepared on a "carved-out" basis as if the N.A. Distribution Business
had been operating independently. The financial statements of the Company for
the six months ended September 30, 1996 were prepared on an actual basis as the
Company was operating under the terms of the Distribution Agreement between the
Company and Rich City, which became effective on April 1, 1996. The unaudited
pro forma statements of income of the N.A. Distribution Business for the six
months ended September 30, 1995 and for the year ended March 31, 1996 have been
presented on the basis that the Distribution Agreement had been in place since
April 1, 1995. The unaudited pro forma statement of income of the Company for
the six months ended September 30, 1996 has been presented to reflect the
Company's operating lease rentals as if the operating lease were in effect on
April 1, 1996. The selected financial data should be read in conjunction with,
and are qualified in their entirety by reference to, the financial statements,
the unaudited interim financial information and the unaudited pro forma
statements of income, including the respective notes thereto, included elsewhere
in this Prospectus. The historical financial data may not be indicative of the
Company's future performance as an independent company.

The financial data for the years ended March 31, 1992 and 1993, the interim
financial data for the six months ended September 30, 1995 and 1996, and the pro
forma statements of income were derived from unaudited financial data which
include, in the opinion of management, all adjustments, which are of a normal
recurring nature including those to conform with generally accepted accounting
principles, necessary to present fairly the data for such periods. Results for
the six months ended September 30, 1996 are not necessarily indicative of the
results to be expected for the full year.

17
<PAGE>
SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA (CONT'D)
(ALL AMOUNTS IN THOUSANDS OTHER THAN SHARE AND PER SHARE INFORMATION)(1)

<TABLE>
<CAPTION>
RICH CITY'S N.A.
DISTRIBUTION LEADING
RICH CITY'S N.A. DISTRIBUTION BUSINESS BUSINESS EDGE
(CARVED-OUT) (CARVED-OUT) (ACTUAL)
------------------------------------------------------------------- ----------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED MARCH 31, SIX MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------------- ----------------------------------
PRO FORMA(2) PRO FORMA(2)
1992 1993 1994 1995 1996 1996 1995 1995 1996
--------- --------- --------- --------- --------- ------------ --------- ------------ ---------
INCOME STATEMENT
DATA:
Net sales........... $ 4,024 $ 8,768 $ 13,725 $ 6,311 $ 10,987 $10,987 $ 5,210 $5,210 $5,552
Gross profit........ 249 1,782 4,296 2,289 4,352 3,921 2,079 1,876 1,815
Operating income.... 43 1,187 3,073 1,482 3,247 2,816 1,538 1,334 1,540
Income before income
taxes............. 43 1,178 3,052 1,473 3,201 2,769 1,516 1,313 1,540
Income taxes(3)..... -- -- 33 -- -- 1,052 -- 499 585
Net income.......... 43 1,178 3,019 1,473 3,201 1,717 1,516 814 955
Earnings per
share............. -- -- -- -- -- 0.92 -- 0.43 0.51
Weighted average
number of shares
outstanding....... -- -- -- -- -- 1,875,000 -- 1,875,000 1,875,000

<S> <C>

PRO FORMA(2)
1996
-------------
INCOME STATEMENT
DATA:
Net sales........... $5,552
Gross profit........ 1,815
Operating income.... 1,519
Income before income
taxes............. 1,519
Income taxes(3)..... 577
Net income.......... 942
Earnings per
share............. 0.50
Weighted average
number of shares
outstanding....... 1,875,000
</TABLE>

<TABLE>
<CAPTION>
LEADING EDGE
(ACTUAL)
-------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MARCH 31, SEPTEMBER 30,
----------------------------------------------------- -------------

<CAPTION>
1992 1993 1994 1995 1996 1996
--------- --------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..... $ 35 $ 1,183 $ (116) $ (220) $ (194) $1,426
Total assets........ 810 2,496 4,559 1,044 1,797 3,944
Total liabilities... 767 1,274 4,549 1,044 1,797 2,489
Division/company
equity............ 43 1,222 10 -- -- 1,455

<CAPTION>
<S> <C>
<S> <C>
BALANCE SHEET DATA:
Working capital.....
Total assets........
Total liabilities...
Division/company
equity............
</TABLE>

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

(1) The functional currency of the N.A. Distribution Business is Hong Kong
dollars. Transactions, assets and liabilities denominated in Hong Kong
dollars have been translated to the U.S. dollar at approximately HK$7.80 to
US$1.00, which approximates the market rate at all periods presented.

(2) The pro forma income statement data for the N.A. Distribution Business is
presented to reflect the pro forma effect of the Distribution Agreement as
if the agreement had been in place since April 1, 1995. See "Unaudited Pro
Forma Statements of Income" elsewhere in this Prospectus. The pro forma
income statement data for the Company is presented to reflect the pro forma
effect of the rental expenses in the United States.

(3) Effective April 1, 1996, the company is subject to United States income
taxes. Net income for the periods prior to that date after providing for
U.S. federal and state income taxes, calculated at a rate of 38%, would have
been $27,000 for the year ended March 31, 1992, $730,000, for the year ended
March 31, 1993, $1,859,000 for the year ended March 31, 1994, $913,000 for
the year ended March 31, 1995, $1,984,000 for the year ended March 31, 1996
and $940,000 for the six months ended September 30, 1995.

18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND NOTES THERETO CONTAINED ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

The Company is successor to the North American distribution business of Rich
City (the
"N.A. Distribution Business"), and, accordingly, the Company's historical
financial information is derived from the operations of Rich City in North
America. Under the terms of the Distribution Agreement, Rich City has assigned
all of its business in North America to the Company, effective April 1, 1996,
with the exclusive rights to market, distribute, sell and warehouse the
Packaging Products supplied by Rich City.

The Company's Financial Statements appearing elsewhere in this Prospectus
consist of (i) Financial Statements of the N.A. Distribution Business for the
years ended March 31, 1994, 1995, and 1996; (ii) the Company's Balance Sheet at
March 31, 1996; (iii) Unaudited Interim Financial Information for the
N.A. Distribution Business for the six months ended September 30, 1995 as well
as for the Company for the six months ended September 30, 1996; and (iv)
Unaudited Pro Forma Statements of Income for the N.A. Distribution Business for
the six months ended September 30, 1995 and for the year ended March 31, 1996
and for the Company for the six months ended September 30, 1996.

The audited financial statements for the N.A. Distribution Business, for the
years ended March 31, 1994, 1995, and 1996, and the unaudited financial
statements for the six months ended September 30, 1995, have been prepared on a
"carved-out" basis as if the N.A. Distribution Business had been in existence
and operating independently prior to the effective date of the Distribution
Agreement. The Unaudited Pro Forma Statements of Income have been prepared on
the same "carved-out" basis with pro forma adjustments made for the 6-8% mark-up
payable to Rich City for inventory, the estimated salaries of the Company's
employees and a 38% federal income tax, all of which costs the Company will
incur going forward. This financial information does not purport to represent
what the results of operations or the financial position of the N.A.
Distribution Business would actually have been had the Distribution Agreement
been in effect on such date or at the beginning of the period, or to project the
results of the operations of the N.A. Distribution Business for any future date
or period.

The Financial Statements have been prepared in accordance with generally
accepted accounting principles, which, in the opinion of the Company's
independent auditors, do not differ significantly from those used in the
statutory accounts of Rich City.

FUTURE TRENDS

Commencing in the third quarter of fiscal 1997, the Company will incur
certain costs which are not reflected in either the "carved-out" financial
statements for Rich City's N.A. Distribution Business or the Company's financial
statements for the six month period ended September 30, 1996. The Statement of
Income for the six month period ended September 30, 1996 excludes expenses for
office and warehouse facilities, certain other administrative costs and expenses
absorbed by Rich City, including some staffing and support, and advances for
inventory. In addition, commencing in the third quarter of fiscal 1997, the
Company anticipates that it will incur additional costs related to its
operations as an independent entity in the U.S. These costs include salaries
estimated at $438,000 on an annualized basis, and sales commissions from 1-3% of
sales; and depreciation on property, plant and equipment estimated at $95,000 on
an annualized basis.

The Distribution Agreement provides that the inventory purchase price
payable by the Company to Rich City equals Rich City's cost to manufacture the
Packaging Products plus a 6-8% mark-up depending upon the product being
manufactured and Rich City's production schedule. Because the price payable by
the Company for its inventory of Packaging Products is directly tied to Rich
City's manufacturing cost, any inflationary pressure on the components of Rich
City's manufacturing cost (specifically, costs of materials,

19
<PAGE>
labor, office and factory overhead) would increase the purchase price paid by
the Company for its inventory. If the Company were unable to pass such an
increase on to its customers, the result would be a reduction in profits to the
Company. See "Risk Factors."

RESULTS OF OPERATIONS

NET SALES

Net sales for the six month period ended September 30, 1996 were $5,551,581
versus $5,210,228 for the six month period ended September 30, 1995. This
increase of $341,353 or 6.6% was primarily due to an increase in the size of
orders from existing customers and the addition of new customers.

For fiscal years 1994, 1995 and 1996, net sales were $13,725,079, $6,310,879
and $10,987,470, respectively. Net sales in fiscal 1995 decreased by 54% or
$7,414,200 from fiscal 1994. The decrease in fiscal 1995 sales was primarily due
to the cessation of business with Rich City's largest customer in North America
prior to July 1994, Jewelpak Corporation, a distributor of Rich City's products.
In July 1994, Rich City became involved in a dispute with Jewelpak Corporation
and companies controlled by its principal (together "Jewelpak") over the failure
of Jewelpak to make certain payments to Rich City aggregating approximately $4.3
million. Jewelpak's total purchase orders from Rich City accounted for
approximately 64% of Rich City's total sales in North America for the year ended
March 31, 1994. In the first half of fiscal 1995, the litigation between Rich
City and Jewelpak was resolved and the payments in dispute were made to Rich
City. Net sales in fiscal 1996 increased by 74.1% or $4,676,591 from fiscal
1995, as Rich City captured sales from Jewelpak's client base and increased
orders derived from its other distributor/ customers and from new customers.

COST OF SALES FROM HOLDING COMPANY/RELATED PARTY

Cost of sales from holding company/related party in the six month period
ended September 30, 1996 was $3,736,403 versus $3,131,142 during the six month
period ended September 30, 1995, an increase of $605,261 or 19.3%. As a
percentage of net sales, cost of sales from holding company/related party
increased to 67.3% from 60.1% during the respective periods. The increase in
cost of sales as a percentage of net sales was primarily due to the payment to
Rich City of an average mark-up of 6.5% of its manufacturing costs pursuant to
the Distribution Agreement. The remainder of the increase was the result of a
variation of customer orders to products with higher costs in that specific
period. This cost represents the purchase price for Packaging Products paid by
the Company to a manufacturing affiliate of Rich City and, therefore, varies
with the production cost for each particular product ordered.

20
<PAGE>
For fiscal years 1994, 1995 and 1996, cost of sales from related party were
$9,429,109, $4,021,908 and $6,635,318, respectively, which reflected the impact
of the cessation of business with Jewelpak and the corresponding decline in
sales. As a percentage of net sales, cost of sales from related party in 1994,
1995 and 1996 were 68.7%, 63.7% and 60.4%, respectively. The decline in costs as
a percentage of net sales was primarily due to increased efficiency in the
factory and manufacturing operations and also reflects the shift in orders
during the periods toward Packaging Products with relatively lower manufacturing
costs.

SELLING EXPENSES

During the six month period ended September 30, 1996, selling expenses were
$162,923 versus $222,812 in the six month period ended September 30, 1995. As a
percentage of net sales, selling expenses were 2.9% during the six month period
ended September 30, 1996 versus 4.3% during the six month period ended September
30, 1995. Selling expenses for the six month period ended September 30, 1996 did
not reflect certain items normally included, as the Company had not established
its office and warehouse operations and was only incurring direct sales-related
costs while benefiting from the absorption of certain costs and expenses by Rich
City. Selling expenses for the six month period ended September 30, 1996 were
travel and related costs incurred by Lip-Boon Saw, the Company's Chairman and
Chief Executive Officer, in connection with the Company's sales in North
America. In contrast, selling expenses for the six month period ended September
30, 1995 reflect the "carved-out" selling expenses of Rich City attributable to
the N.A. Distribution Business, including amounts spent for sales and marketing
personnel and for advertising and promotions. Commencing with the third quarter
of fiscal 1997, selling expenses will include expense items as shown in the six
month period ended September 30, 1995, and the Company expects that such
expenses will increase as a percentage of net sales. See "Future Trends."

In fiscal 1994, 1995 and 1996, selling expenses were $441,450, $263,778 and
$451,327, respectively. This represented a decrease of 40.2% from 1994 to 1995
and an increase of 71.1% from 1995 to 1996. The changes reflect the impact of
the cessation of business with Jewelpak. As a percentage of sales, selling
expenses remained constant from fiscal 1995 to 1996 at approximately 4.1%.
Selling expenses as a percentage of sales increased from 3.2% in 1994 to 4.1% in
1995, primarily reflective of the extra expenses to expand sales after the
cessation of business with Jewelpak.

GENERAL AND ADMINISTRATIVE EXPENSES

During the six months ended September 30, 1996, general and administrative
expenses were $111,797 versus $318,680 in the six months ended September 30,
1995. As a percentage of net sales, general and administrative expenses were
2.0% for the six months ended September 30, 1996 and 6.1% for the six months
ended September 30, 1995. General and administrative expenses for the six months
ended September 30, 1996 do not reflect certain items normally included, as the
Company had not established its office and warehouse operations and was
incurring only minimal operating costs while benefiting from the absorption of
certain costs and expenses by Rich City. These expenses for the six months ended
September 30, 1996 included $60,000 salary to Lip-Boon Saw, the Company's
Chairman and Chief Executive Officer, under his employment agreement with the
Company and $14,000 in office and warehouse start up expenses. In contrast,
general and administrative expenses for the six months ended September 30, 1995
reflect the "carved-out" expenses of Rich City attributable to the N.A.
Distribution Business, including office rent, supplies and salaries for
non-sales personnel, adjusted to reflect lower costs of certain items (such as
rent and postal expenses) in the U.S. versus Hong Kong. Commencing with the
third quarter of fiscal 1997, general and administrative expenses will include
the expense items as shown in the six months ended September 30, 1995 plus
warehouse and office expenses, and the Company expects that such expenses will
increase as a percentage of net sales. See "Future Trends."

In fiscal 1994, 1995 and 1996, general and administrative expenses were
$781,893, $543,644 and $653,283, respectively. This represented a decrease of
30.5% from 1994 to 1995 and an increase of 20.2% from 1995 to 1996. For fiscal
years 1994, 1995 and 1996, general and administrative expenses, as a percentage
of net sales, were 5.7%, 8.6% and 5.9%, respectively. The increase in expenses
as a percentage of net sales in 1995 was primarily due to the reduction in sales
coupled with professional and other costs in

21
<PAGE>
connection with the Jewelpak litigation. The reduction in 1996 was the result of
efficiencies created over the entire period by Rich City's management and an
increase in sales.

OPERATING INCOME

Operating income for the six months ended September 30, 1996 was $1,540,458
versus $1,537,594 in the six months ended September 30, 1995, an increase of
0.2% or $2,864. As a percentage of net sales, operating income decreased to
27.7% from 29.5% during the respective periods. The decrease, was primarily due
to the increase in cost of sales discussed above.

In fiscal 1994, 1995 and 1996, operating income was $3,072,627, $1,481,549
and $3,247,542, respectively. This represented a decrease of 51.8% from 1994 to
1995 and an increase of 119.2% from 1995 to 1996. As a percentage of sales,
operating income for fiscal 1994, 1995 and 1996 was 22.4%, 23.5% and 29.6%,
respectively. These increases and decreases correlated to increases and
decreases in sales and expenses.

INTEREST EXPENSE

During the six months ended September 30, 1996, the Company had no interest
expense. Interest expense for the six months ended September 30, 1995 was
$22,237. Interest expense for fiscal 1994, 1995 and 1996 was $51,190, $65,057
and $53,961, respectively. This represented an increase of 27% from 1994 to 1995
and a decrease of 17% from 1995 to 1996. This item represents interest accruing
on inventory advances from Rich City's manufacturing affiliates and fluctuates
with the amount of such advances.

NET INCOME

As a result of the foregoing, the Company's net income was $955,084 and
$1,516,414 for the six months ended September 30, 1996 and the six months ended
September 30, 1995, respectively. The decrease in net income was primarily
attributable to the deduction of $585,374 payable as United States taxation
during the six months ended September 30, 1996, as compared with the six months
ended September 30, 1995 for which no United States income taxes were paid. The
N.A. Distribution Business's net income was $3,200,595, $1,472,908 and
$3,018,766, for the fiscal years ended March 31, 1996, 1995 and 1994,
respectively.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended September 30, 1996 and for each of the three years
ended March 31, 1996, the Company experienced positive cash flows of $62,731,
$2,037,507, $3,844,982 and $4,464,088, respectively, from operating activities.
In each of fiscal 1994, 1995 and 1996, cash flows were distributed to Rich
City's holding company. Beginning with the six months ended September 30, 1996
and going forward, cash flows will be retained and used to purchase inventory
and fund the Company's operations.

The Company has funded its operations through cash advances and shipment of
goods on open account from Rich City. Rich City's total capital contribution to
the Company is $500,000. Subsequent to the offering the Company does not
anticipate receiving any additional cash or other advances from Rich City nor
will Rich City continue to ship goods on open account.

The six month period ended September 30, 1996 reflects cash flows from
operating activities of $62,731 as compared with $2,070,902 for the six month
period ended September 30, 1995. This is primarily due to U.S. taxation,
salaries and the 6-8% mark-up which are included in the net income data for the
six month period ended September 30, 1996 but are not reflected in the data for
the six month period ended September 30, 1995 (although they have been included
in the pro forma data for the six month period ended September 30, 1995). For
the six month period ended September 30, 1995, no inventory was maintained in
the U.S. The six month period ended September 30, 1996 reflects $585,668 for
inventory. Also, historically, customers have paid for Packaging Products with
bills receivable, which are essentially accounts receivable in the form of bills
of exchange, which are discountable within seven days by banks

22
<PAGE>
providing such facilities. During the fourth quarter of fiscal 1997, the Company
expects to make sales on terms ranging from cash on delivery, deposit on order,
payment on receipt of a bill of lading and payment on shipment from Hong Kong or
on credit terms ranging from 30-90 days.

Net cash used in investing activities for the six month period ended
September 30, 1996 was $(29,576) and for the six month period ended September
30, 1995 was $(1,772).

Net cash used in investing activities for fiscal 1994, 1995 and 1996 was
$(104,691), $(137,409) and $(4,401), respectively. These amounts primarily
reflect the purchase of property, plant and equipment. For the six month period
ended September 30, 1996, this consisted primarily of furniture, fixtures and
equipment for establishing the Company's North American operations.

Net cash used in financing activities for the six month period ended
September 30, 1995 was $(2,300,248), representing an increase in advances to the
head office of Rich City during that period. The Company used no cash in
financing activities in the six month period ended September 30, 1996.

Net cash used in financing activities for fiscal 1994, 1995 and 1996 were
$(1,164,537), $(4,190,531) and $(4,714,815), respectively. These amounts
primarily reflect distributions, advances and repayments to and from Rich City's
head office.

Accounts receivable and bills receivable aggregated $361,715 for the year
ended March 31, 1996 and aggregated $1,779,133 for the six months ended
September 30, 1996, an increase of $1,417,418. Because the Company commenced its
independent operations, separately from the N.A. Distribution Business, on April
1, 1996, its accounts/bills receivable were presumed to be zero at that date.
The increase, however, was primarily because of the inability of the Company to
discount its accounts/bills receivable as it has not yet established its own
credit facilities. Rich City had typically discounted these receivables in the
past in Hong Kong. Bills receivable in the total amount of $1,255,453 were
discounted by Rich City through trade loans from its own banks and carried on
the Company's balance sheet as bills receivable (rather than discounted as cash)
for the six month period ended September 30, 1996.

The Company expects to receive estimated net proceeds of $5,845,000 from
this offering. The major portion of the proceeds will be used for purchase of
inventory and for general corporate purposes, including consolidation and
expansion of sales operations. The Company anticipates that net proceeds will
satisfy the Company's cash requirements for at least 12 months from the date of
this Prospectus. See "Use of Proceeds."

The Company's operations may require funds in addition to those raised in
this offering and cash from operations. The Company believes that after
completion of this offering it will be able to raise such funds through bank
lines of credit. There can be no assurance, however, that any such financing
will be available if and when the Company requires additional capital. Prior to
this offering, the Company relied heavily upon funding and other advances from
Rich City. There can be no assurance that any such funding or advances will be
available in the future.

23
<PAGE>
BUSINESS

GENERAL

The Company sells and distributes, in North America, packaging products used
primarily in the sale of luxury consumer goods. Its packaging products include
metal and plastic cases, optical cases, pouches and bags, and paper gift boxes.
The Company also sells display units for retail merchandising of jewelry,
watches, eyeglasses, pens, cosmetics and gold coins (the packaging products and
display units are collectively referred to herein as "Packaging Products"). The
Company's customers are mainly wholesalers and distributors of Packaging
Products and consumer product manufacturers. The Company anticipates that it
will purchase all of its inventory from Rich City. The Company has entered into
the Distribution Agreement with Rich City which, effective as of April 1, 1996,
appoints the Company as the exclusive distributor in North America of Packaging
Products supplied by Rich City. Prior to that time, Rich City had supplied its
own products to North America.

To effect this strategy, the Company has leased a 2,000 square-foot office
and showroom in the Empire State Building in New York City, and a 33,000
square-foot facility in Raritan Center, Edison, New Jersey, for the Company's
warehousing, customization and distribution operations. The Company believes
that its warehousing and customizing capabilities located in the United States,
coupled with its Asian low-cost source of supply, give it an advantage over its
competitors in the North American market by enabling the Company to fill orders
and customize products on a "just-in-time" basis. The Company believes that its
source of supply will allow it to capitalize on lower production costs
obtainable overseas, while maintaining the high quality of its products.

INDUSTRY

Based on data published by the American Watch Association, the Company
believes that approximately 128,000,000 quartz analog watches were imported into
the U.S. in 1994. Based on the Company's experience and Rich City's average
price per box, the Company believes that the U.S. wholesale market for watch
boxes was approximately $140,000,000 in 1994. Based on data published in MJ
JEWELRY SALES, the Company believes that the number of units of all types of
jewelry sold in the U.S. in 1994 was approximately 118,000,000. Based on the
Company's experience and Rich City's average pricing, the Company believes that
the U.S. wholesale market for jewelry packaging in 1994 was approximately
$130,000,000. Based on data published by U.S. OPTICAL INDUSTRY HANDBOOK '96, the
Company believes that approximately 77,000,000 prescription optical frames were
sold in the U.S. in 1995. Based on the Company's experience and Rich City's
average pricing, the Company believes that the U.S. wholesale market for
prescription optical cases in 1995 was approximately $54,000,000.

24
<PAGE>
A substantial part of North America's demand for jewelry packaging is now
supplied by Asian
manufacturers. The Company believes that the two leading exporting countries of
such products to North America are Hong Kong and Thailand, with Hong Kong's
products being manufactured principally in the PRC.

COMPETITION

The Company is aware of eight substantial foreign-based manufacturers and of
six North American distributors whose products are in direct competition with
various of its Packaging Products. The cost of manufacturing Packaging Products
in North America is relatively high, causing manufacturers to seek out overseas
suppliers to fill their orders.

The Company believes that it will be able to compete by having the
flexibility to respond quickly to orders and catering to changes in customers'
design specifications; by endeavoring to offer a wider range of products than
its competitors; and by capitalizing on lower production costs obtainable
through its Distribution Agreement with Rich City, while maintaining the high
quality of its products. The Company believes it can offer its North American
customers a quick response time on short orders because of its customization
facilities in the United States.

There is substantial competition in the Packaging Products industry. The
Company competes with distributors and manufacturers of Packaging Products based
in the U.S. and overseas. Many of the Company's competitors have name
recognition in the market and longer operating histories and in many cases are
substantially larger and better financed than the Company. Such competitors may
use their economic strength to influence the market to continue to buy their
existing or newly developed products. New competitors may arise and may market
products which compete with the Company's products. The Company believes that
several companies currently distribute products in North America in direct
competition with the Company's Packaging Products, including International
Packaging Inc., Gem Case Inc., Fuller Corporation, Rocket Jewelry Box Inc.,
Boxco Inc. and Gunther Mele Inc. Some of the Company's current customers
presently, or at some future point may, compete with the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

PRODUCTS

Sales for the Company and, historically, for Rich City's North American
operations, are illustrated below by product category. See "Management's
Discussion and Analysis of Financial Condition and Results of Operation" and the
"Audited Financial Statements for Rich City's N.A. Distribution Business."

SALES ANALYSIS OF RICH CITY IN NORTH AMERICA
FOR THE FISCAL YEARS ENDED MARCH 31, 1994, 1995 AND 1996
AND OF THE COMPANY FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996

<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR MARCH 31, ENDED
------------------------------------------------------------------ SEPTEMBER 30, 1996
PRODUCT CATEGORY 1994 1995 1996
- ------------------------------------- --------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Plastic cases........................ $5,778,769 (42.1%) $3,085,668 (49.0%) $4,192,548 (38.2%) $1,884,965 (34.0%)
Metal cases.......................... 4,733,484 (34.5) 1,295,868 (20.5) 3,203,000 (29.2) 1,754,321 (31.6)
Optical cases........................ 1,315,253 (9.6) 948,986 (15.0) 2,739,584 (24.9) 1,170,340 (21.1)
Pouches and bags..................... 1,184,797 (8.6) 536,767 (8.5) 437,623 (3.9) 438,380 (7.9)
Paper gift boxes, display items and
other products..................... 712,776 (5.2) 443,590 (7.0) 414,715 (3.8) 303,575 (5.4)
---------- --------- ---------- ---------
Total............................ $13,725,079 (100%) $6,310,879 (100%) $10,987,470 (100%) $5,551,581 (100%)
---------- --------- ---------- ---------
---------- --------- ---------- ---------
</TABLE>

The Company's Packaging Products can be broadly categorized into plastic and
metal cases, optical cases, pouches and bags, paper gift boxes and display
items. The designs and specifications for each of these products vary according
to the needs of different customers and the type of product for which they are
required. Nearly all items of jewelry, watches, eyeglasses and other luxury
products sold in the North

25
<PAGE>
American market require customized casing for their sale. Jewelry cases include
customized packaging and inserts for such diverse items as rings, earrings and
necklaces. Watches require their own special type of packaging (often different
from that of bracelets), and eyeglasses require yet a different type of case. In
addition, many of these items are merchandised on special display units for
installation in store windows and merchandise display cases.

PLASTIC AND METAL CASES

The Company sells plastic and metal cases for men's and women's accessories,
such as watches, jewelry, pens and cosmetics. Certain of the cases are designed
as boxes with separate top and bottom components. Others have their top and
bottom parts attached by a plastic or metal hinge. These boxes are usually
inserted into a paper or cardboard "sleeve", and the sleeve, containing the box,
is then inserted into an outer cardboard carton. Most of these cases contain
inside padding and inserts which are specially tailored to the items which they
will ultimately contain. Some of the cases are wrapped in a fabric exterior.
Most of them are stamped or printed with the customized logo of the manufacturer
of the item to be contained inside. Sales of plastic cases accounted for
approximately 34% of the Company's total sales for the six months ended
September 30, 1996. Metal cases accounted for approximately 32% of total North
American sales for the same period.

OPTICAL CASES

The Company also sells optical cases in a variety of styles made of metal,
plastic and fabric. The Company sells soft "slip-in" cases, soft folding cases
that snap shut, as well as hard, hinged cases. Designs of the Company's optical
cases vary from brightly colored to softer subtler prints, to metal and shiny
metallic finishes in various colors. Some cases are covered with textures such
as simulated alligator or lizard. Most metal optical cases are covered in
material (mainly leatherette) with the customer's name embossed onto the
material. The Company also sells generic optical cases without any logo for
mass-merchandising. Sales of optical cases accounted for approximately 21% of
the Company's total sales for the six months ended September 30, 1996.

POUCHES AND BAGS

Pouches and bags are used for such items as jewelry and cosmetics. They are
made mainly using artificial suede, leather or flock velvet, and are cut in
various sizes and shapes. As with the plastic and metal cases, some of the
pouches and bags contain customized logos. Most fasten by silk drawstrings.
Sales in North America of pouches and bags accounted for approximately 8% of the
Company's total sales for the six months ended September 30, 1996.

PAPER GIFT BOXES, DISPLAY ITEMS AND OTHER PRODUCTS

Paper gift boxes are used for packaging items such as jewelry, cosmetics,
pens, chocolates and cutlery. Display items used for retail merchandising
include bracelet platforms, jewelry pillows, necklace stands, ring holders and
trays. Sales of paper gift boxes, display items and other products accounted for
approximately 5% of the Company's total sales for the six months ended September
30, 1996.

FUTURE PRODUCTS

Premium and novelty items are a potential new market for the Company. This
market includes promotional and gift products such as "gifts-with-purchase" used
to promote cosmetics or gifts given by corporations to their employees or
clients with their corporate logo affixed. For example, if a company wishes to
present its employees with a commemorative item, such as a pen, the item may be
packaged in a case or box which itself has commemorative value or is reusable.
Similarly, a "gift-with-purchase" could take the form of a reusable cosmetic
pouch which contains a promotional item.

26
<PAGE>
ASSIGNMENT AND DISTRIBUTION AGREEMENT

Pursuant to the Distribution Agreement between Rich City and the Company,
Rich City has assigned to the Company all of the rights to distribute Rich
City's Packaging Products in North America, including the right to market,
warehouse and, as necessary, customize the Packaging Products. Upon payment by
the Company to Rich City of a royalty on terms at least as favorable to the
Company as those contained in the Distribution Agreement, the territorial
exclusivity which is limited to North America may be expanded to include South
America. Under the Distribution Agreement, Rich City has also granted to the
Company exclusive use of its North American customer list, as well as priority
in utilization of the manufacturing facilities, assembly line, labor force and
other applicable resources in the acceptance and fulfillment of purchase orders
issued by the Company. The Distribution Agreement has an initial term of 10
years and thereafter is automatically renewable annually. Either party can
terminate the Distribution Agreement in the event of bankruptcy, insolvency,
dissolution or liquidation of a party, or certain governmental expropriations or
condemnations of all of the assets or stock of a party, or the failure of a
party to cure its material breach under the agreement. Subject to a right of
first refusal which the Company has granted to Rich City under the Distribution
Agreement, the Company may purchase Packaging Products from any source of
supply. Under the Distribution Agreement, the Company pays to Rich City for its
supply of Packaging Products a purchase price equal to Rich City's manufacturing
cost (including direct material cost, direct labor cost and proportionate
indirect factory and office overhead) plus a mark-up of 6-8% depending on the
particular product being manufactured and Rich City's production schedule. See
"Certain Transactions."

Rich City has its own marketing and sales team based in Hong Kong. The
Distribution Agreement requires Rich City to refer to the Company all inquiries
which Rich City receives pertaining to potential sales of Packaging Products for
delivery to North America. To accommodate customers who prefer to place orders
with Rich City in Hong Kong for Packaging Products destined for North America,
Rich City will, at no charge to the Company, accept those orders for the account
of the Company and fill the order on the same terms as if the Company had placed
the order directly with Rich City. See "Certain Transactions."

STRATEGY

To effect this strategy, the Company has leased a 2,000 square-foot office
and showroom in the Empire State Building, in New York City, and a 33,000
square-foot facility in Raritan Center, Edison, New Jersey, for the Company's
warehousing, customization and distribution operations. The Company believes
that its warehousing and customizing capabilities located in the United States,
coupled with its Asian low-cost source of supply, give it an advantage over its
competitors in the North American market by enabling the Company to fill orders
and customize products on a "just-in-time" basis. The Company's source of supply
allows it to capitalize on lower production costs obtainable overseas, while
maintaining the high quality of its products.

The Company plans to expand its base of customers in the North American
market through its ability to offer Packaging Products at a relatively low price
compared with those of its competitors. Because of its arrangement with Rich
City and its U.S. warehousing and customization facilities, the Company believes
it can supply large and small orders and at a lower cost. In addition, the
Company believes that many end-users in the industry prefer to deal with North
American distributors of Asian products, rather than deal

27
<PAGE>
directly with Asian manufacturers because of the need for a letter of credit,
product quality and the availability of inventory.

The Company anticipates that its presence in North America and its strategy
to consolidate the market for Packaging Products has the potential to facilitate
the expansion of sales in the region.

PACKAGING PRODUCT CUSTOMIZATION

The Company customizes its Packaging Products both as to use (e.g., for
jewelry, eyeglasses, etc.) by adding the appropriate lining and inserts and as
to user by stamping the products with customer logos. This process will be
conducted in the Company's New Jersey facility just prior to shipment of orders.
The Company intends to manage the process with a Production Line Supervisor and
a Line Manager. The Company will use part-time assembly line workers on an
as-needed basis to conduct the customization operations. The brand name
customization process will include various techniques such as hot-stamping, pad
printing, high frequency embossing, photo imaging and metal plaque attachments.
The Company plans to consult with Rich City in the design, production and
quality control of Packaging Products.

MARKETING AND SALES

The Company's North American customers mainly consist of wholesalers and
distributors of Packaging Products and consumer product manufacturers. Consumer
product manufacturers are end-users of the Company's products, which they
purchase directly from the Company and use to package their own products.
Wholesalers and distributors of Packaging Products are companies which supply
packaging to consumer product manufacturers and retailers. As successor to Rich
City's North American customer base, which primarily consists of distributors,
the Company expects to continue sales to approximately ten principal customers,
each of whom has a relationship with Rich City. There can be no assurance,
however, that these companies will remain customers of the Company. See "Risk
Factors."

For the year ended March 31, 1996, no single customer accounted for more
than 30% of Rich City's net sales. Sales to Rocket Jewelry Box Inc., Rich City's
largest North American customer during the period, accounted for approximately
26.6% of net sales. During the six months ended September 30, 1996, sales to
Rocket Jewelry Box Inc. accounted for approximately 31.8% of net sales. Sales to
Astucci US Inc. and Viva Optique, Inc., Rich City's next largest North American
customers during the period, accounted for approximately 13.9% and 12.1% of net
sales, respectively. Sales to the ten largest customers represented
approximately 83.1% of Rich City's net sales for the same period.

The Company's Vice President of Marketing and Sales oversees the Company's
distribution process. The Company plans to organize marketing and sales into
three divisions: telemarketing, regional sales and customer service. The Company
plans to have each division headed by a salaried manager who will report
directly to the Vice President. It is anticipated that the telemarketing manager
will operate out of the Company's office in New York, with a staff of three
salaried employees, and that the regional sales manager will manage a staff of
three regional sales representatives: one for each of the Northeast, Midwest and
West coast. Sales representatives will operate on a commission basis. In
addition to its sales force, the Company plans to have a customer service
manager to address customer inquiries.

GOVERNMENT REGULATION: IMPORT/EXPORT

28
<PAGE>
the PRC, and, after transfer of sovereignty over Hong Kong, from Hong Kong to
the United States. Under the terms of the Distribution Agreement, this would
increase prices paid by the Company to Rich City for Packaging Products. If such
prices became prohibitively high, there can be no assurance that the Company
could locate substitute suppliers of Packaging Products outside of the PRC.
Failure by the Company to locate such suppliers would result in a loss of
revenues, a loss of customers due to failure to timely meet orders and/or a
total loss of the Company's inventory.

At current rates an import duty of between 5% and 20% will be payable by the
Company on the import price of metal and plastic cases imported into the U.S.
and Canada. For the year ended March 31, 1996, metal cases accounted for
approximately 29.2% of total exports of Rich City to North America; plastic
cases accounted for approximately 38.2%. If the PRC were to lose MFN status,
then the Company's products may be subject to higher tariffs and import duties
in the U.S. Although it is not possible to quantify the potential impact of
higher tariffs and duties, the Company believes that, due to the comparatively
low cost of production in the PRC, it would be able to withstand an increase in
tariffs while still being able to compete profitably in the U.S. market.

EMPLOYEES

As of October 31, 1996, the Company employs a total of six full-time
employees, including executive, sales, accounting and clerical personnel. The
Company intends eventually to hire up to 20 full-time employees, including eight
executives, six sales and telemarketing representatives, two accounting
professionals and four clerical workers. In addition, the Company plans to hire
10-25 part-time factory/assembly line workers on an as-needed basis.

FACILITIES

The Company has leased a 2,000 square-foot space for its offices and
showroom in the Empire State Building, 350 Fifth Avenue, Suite 3922, New York,
New York for a five-year period commencing July 1, 1996 at an annual rent of
$42,096. The Company also has leased for the warehousing and customization of
its products a 33,000 square-foot facility in Raritan Center in Edison, New
Jersey, for a period of five years commencing November 1, 1996, at an annual
rent of $150,336 plus 30% of certain common charges for the building in which
the facility is located. The Company has leased an apartment in Highland Park,
New Jersey, commencing September 1, 1996, for one year at an annual rent of
$15,600. The Company will use this apartment for the convenience of its sales
representatives, its officers and officers of Rich City as well as for
representatives of the Company's customers travelling to examine or purchase the
Company's products.

LITIGATION

The Company is aware of no litigation currently pending either against the
Company or against Rich City with respect to its North American operations.

29
<PAGE>
MANAGEMENT

Set forth below is certain information concerning the executive officers and
directors of the Company. Each director is elected for a term of one year at the
Company's annual meeting of stockholders and serves until the next meeting and
until his successor is duly elected and qualified. Officers are elected by, and
serve at the discretion of, the Board of Directors.

<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH THE COMPANY
- -------------------------------------- --- ---------------------------------------------------------
<S> <C> <C>
Lip-Boon Saw.......................... 39 Chairman of the Board and Chief Executive Officer
Peter Yu-Siu Chu...................... 44 President and Chief Operating Officer
Casey K. Tjang........................ 57 Director, Chief Financial Officer and Secretary
Dan Ben-Moshe......................... 39 Vice President/Marketing and Sales
Peter L. Coker........................ 54 Director
Robert B. Goergen..................... 58 Director
Richard Fung-Gea Wong................. 39 Director
</TABLE>

LIP-BOON SAW served as the Company's President from its inception through
April 1996 and has served as Chairman of the Board and Chief Executive Officer
of the Company since April 1996. From April 1994 until the time of this offering
he was also the Managing Director of Rich City, the Company's parent. Subsequent
to the offering, he will continue to serve as a director of Rich City but will
no longer serve as Managing Director. Mr. Saw is the founder and sole
stockholder of L.B. Saw & Associates, Ltd., an investment firm in Hong Kong, and
has served as its Chairman since October 1992. Mr. Saw served as the Managing
Director of Ullmann Saw Associates, an investment advisory firm, from January
1990 until October 1992. He currently serves on the boards of directors of
various privately-held manufacturing and investment advisory companies. Mr. Saw
will continue to spend a significant portion of his time in Hong Kong.

PETER YU-SIU CHU has served as President and Chief Operating Officer of the
Company since September 1996. From April 1994 until the time of this offering,
he was the General Manager of Production and Operations of Rich City, the
Company's parent. As such, he was responsible for coordinating the production of
Packaging Products by Rich City's affiliates in the PRC and the distribution
operations of Rich City, including supervision of staff dedicated to these
operations. From 1987 through March 1994, he served as General Manager of
Production of Contimach Ltd., a PRC-based manufacturer of power transmission
products, where he supervised the company's production process.

CASEY K. TJANG has served as a director and Secretary of the Company since
its inception and as Chief Financial Officer since September 1996. Mr. Tjang
served as Executive Director and President of Starlite Holdings Limited (a
public company listed on The Stock Exchange of Hong Kong, Limited), from 1993 to
1995, and was responsible for facilitating the acquisition of exclusive rights
to distribute Hallmark greeting cards in the PRC and of paper consumer products
of Warner Bros. characters in the PRC and Southeast Asia. From 1991 to 1993, Mr.
Tjang served as President and Chief Executive Officer of First Merchant Bankers,
Inc., a company specializing in corporate finance and international trading.
From 1979 to 1991, Mr. Tjang was the Managing Director and Vice President of the
International Department of Midlantic National Bank, managing corporate finance,
import-export and project financing transactions. Presently, he serves on the
board of directors of Kent Financial Services, Inc., a public company, and is
the executive director of Andrew-Case International Limited, a corporate finance
firm.

DAN BEN-MOSHE has served as Vice President/Marketing and Sales of the
Company since September 1996. From 1994 to the present, Mr. Ben-Moshe was the
President of Astucci U.S., Ltd, a wholesale distributor of packaging products,
where he was responsible for obtaining brand name optical manufacturing accounts
for the company. From 1991 to 1994, he served as a marketing agent for Jewelpak
Corp., a wholesale distributor of packaging products, where he sold packaging
products to manufacturers and retailers of jewelry, watches and eyewear.

30
<PAGE>
PETER L. COKER has served as a director of the Company since September 1996.
Mr. Coker has been a director, Executive Vice President and a member of the
Investment Policy Committee of American Asset Management Company, New York since
1978. From 1968 to 1977 he was Assistant Vice President/ Investment Officer of
Bethlehem Steel Corporation with investment responsibilities for their
self-managed pension fund. From 1977 to 1978, Mr. Coker was a senior officer at
McGlinn Investment Service, Reading, Pennsylvania. He currently sits on the
boards of directors of Remote Source Lighting International, Inc., Sweetbrier
Foods, Inc. and North Carolina State University Endowment Fund. He is also a
member of the New York Society of Security Analysts.

ROBERT B. GOERGEN has served as a director of the Company since October
1996. Since 1977, he has been the Chairman, and since 1978, the Chief Executive
Officer, of Blyth Industries, Inc., a public company and manufacturer and
importer of candles and home decorating accessories. Mr. Goergen has served as
President of Blyth Industries, Inc. since 1994. From 1990 to the present, Mr.
Goergen has served as Chairman of XTRA Corporation, a public company engaged in
the trailer leasing industry. From 1979 to the present, he has been Chairman of
The Ropart Group, a private company, whose business is investing in securities
for its own account. Mr. Goergen currently serves as a director of Blyth
Industries, Inc. and XTRA Corporation and serves on the Compensation Committee
of XTRA Corporation.

RICHARD FUNG-GEA WONG has served as a director of the Company since its
inception. From July 1994 to September 1996, Mr. Wong has served as the
Executive Director of Rich City responsible for the supervision of the
administration, logistics and finance related matters. From October 1992 through
June 1994, Mr. Wong served as Manager of L.B. Saw & Associates, Ltd. From
October 1990 until October 1992, Mr. Wong served as General Manager of Lolliman
Holdings Ltd., an investment and property holding company. Mr. Wong will
continue to spend a significant portion of his time in Hong Kong.

Lip-Boon Saw and Richard Fung-Gea Wong also serve on the board of directors
of Rich City, the Company's parent. As a result of their respective obligations
to both companies, their dual roles could lead to a potential conflict of
interest. See "Risk Factors--Management's Potential Conflict of Interest."

Under the terms of the Underwriting Agreement, the Representative has the
right to designate one member of the Company's Board of Directors. The
Representative has not exercised this right as of the date of this Prospectus.

BOARD COMMITTEES

EXECUTIVE COMMITTEE

The Board of Directors has appointed an Executive Committee consisting of
Lip-Boon Saw, as Chairman of the committee, and Peter Yu-Siu Chu and Dan
Ben-Moshe, as members. The Executive Committee is responsible for recommending
to the Board of Directors business policies and strategies for the Company.

AUDIT COMMITTEE

The Board of Directors has appointed an Audit Committee consisting of Peter
L. Coker, Robert B. Goergen and Casey K. Tjang. The Audit Committee is
responsible for recommending to the Board of Directors the engagement of
independent auditors of the Company and reviewing with the independent auditors
the scope and results of the audits, the internal accounting controls of the
Company, audit practices and the professional services furnished by the
independent auditors.

31
<PAGE>
COMPENSATION COMMITTEE

The Board of Directors has appointed an Compensation Committee consisting of
Lip-Boon Saw, as Chairman of the committee, and Peter L. Coker and Robert B.
Goergen, as members. The Compensation Committee is responsible for reviewing and
approving all compensation arrangements for officers of the Company.

EMPLOYMENT AGREEMENTS

Effective April 1, 1996, the Company entered into an employment agreement
with Lip-Boon Saw as Chairman and Chief Executive Officer for an initial term of
three years. The agreement provides for a salary of $120,000 for the first year.

The Company entered into employment agreements on September 23, 1996, with
Peter Yu-Siu Chu as President and Chief Operating Officer, and Casey K. Tjang as
Chief Financial Officer and Secretary, and, on September 24, 1996, with Dan
Ben-Moshe as Vice President/Marketing and Sales. Each of these agreements is for
an initial term of three years commencing upon the consummation of this
offering. The agreements provide for salaries for Messrs. Chu, Tjang and
Ben-Moshe of $96,000, $60,000 and $96,000, respectively, during their first year
of employment.

The employment agreements with Messrs. Saw, Chu, Tjang and Ben-Moshe each
provide that salaries for the second and third years may be determined by the
Board of Directors in its sole discretion, provided that the Board of Directors
may not fix salaries in an amount less than the employee's salary for the
preceding year and further provided that the Board may not increase the
employee's salary for any year in an amount more than the greater of 10% of the
previous year's salary or any cost of living increase. Each agreement also
provides for bonuses as may be determined by the Board of Directors in its sole
discretion. Each agreement may be terminated by either the Company or the
employee on six months' prior notice, and prohibits the employee from soliciting
other Company employees during the two-year period following his termination of
employment. Mr. Saw's employment agreement also provides that for two years
after the termination of his employment, he will not have an ownership interest
in, nor be employed by, any business which directly competes with the business
of the Company. With the exception of Mr. Saw, who is required to devote a
majority of his time and efforts to the Company's business, Messrs. Chu, Tjang
and Ben-Moshe are required to devote their full time and efforts to the business
of the Company.

COMPENSATION OF THE COMPANY'S EXECUTIVE OFFICERS AND DIRECTORS

Following the consummation of this offering, non-employee directors of the
Company will be paid a fee of $1,000 per year (payable at the end of the year)
as well as $500 per meeting attended plus costs of attending the meeting
(payable after the meeting's adjournment). In addition, certain directors are
compensated as executive officers of the Company. Directors and officers are
also entitled to participate in the Company's 1996 Incentive Stock Option Plan.

32
<PAGE>
The following table sets forth cash compensation expected to be paid to the
Executive Officers during fiscal 1997, annualized:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
--------------------------------------------
<S> <C> <C> <C> <C>
NAME AND FISCAL OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY(2) BONUS COMPENSATION(3)
- ----------------------------------------------------------- ----------- ---------- ----------- -------------------
Lip-Boon Saw............................................... 1997 $ 120,000 -- --
Chairman and Chief Executive Officer
Peter Yu-Siu Chu........................................... 1997 $ 96,000 -- --
President and Chief Operating Officer
Casey K. Tjang............................................. 1997 $ 60,000 -- --
Chief Financial Officer and Secretary
Dan Ben-Moshe.............................................. 1997 $ 96,000 -- --
Vice President/Marketing and Sales
</TABLE>

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

(1) The employment agreements with Messrs. Saw, Chu, Tjang and Ben-Moshe each
provide that the base compensation for the second and third years may be
determined by the Board of Directors in its sole discretion, provided that
the Board of Directors may not fix base compensation in an amount less than
the employee's base compensation for the preceding year and further provided
that the Board may not increase the employee's salary for any year in an
amount more than the greater of 10% of the previous year's salary or any
cost of living increase. The agreements also provide for bonuses as may be
determined by the Board of Directors in its sole discretion.

(2) This table reflects an annual salary for Lip-Boon Saw commencing on April 1,
1996. The employment agreements for Messrs. Chu, Tjang and Ben-Moshe will
become effective upon the consummation of this offering.

(3) Although the Company has adopted an Incentive Stock Option Plan for its
executive officers, no determination has yet been made regarding the award,
if any, of Common Stock under the Plan.

INCENTIVE STOCK OPTION PLAN

The named executive officers may receive, in addition to their salaries and
other compensation, options for the Company's Common Stock.

The Company has adopted the 1996 Incentive Stock Option Plan (the "Plan")
under which stock options may be granted to such officers, directors and/or,
employees of the Company as the Plan's administration committee selects. 312,500
shares of Common Stock are reserved for that purpose. Stock options entitle the
holder to acquire shares of Common Stock during a fixed period at an exercise
price equal to the greater of (i) 110% of the fair market value of the Common
Stock at the time of grant and (ii) the initial public offering price per share
in this offering. Payment by option holders upon exercise of an option may be
made only in cash. As of the date of this Prospectus, no shares of Common Stock
have been issued pursuant to the Plan.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Certificate of Incorporation includes certain provisions
permitted pursuant to the General Corporation Law of the State of Delaware (the
"DGCL") whereby officers and directors of the Company are to be indemnified
against certain liabilities. The Certificate of Incorporation also limits to the
fullest extent permitted by the DGCL a director's liability to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, including gross negligence, except liability for (i) breach of the
director's duty of loyalty, (ii) acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of the laws, (iii) the
unlawful payment of a dividend or unlawful stock purchase or redemption and (iv)
any transaction from which the director derives an improper personal benefit.
This provision of the Company's Certificate of Incorporation has no effect on
the availability of equitable remedies, such as injunction or rescission. The
Company believes that these provisions will facilitate the Company's ability to
continue to attract and retain qualified individuals to serve as directors and
officers of the Company.

33
<PAGE>
CERTAIN TRANSACTIONS

The Company has entered into an Assignment and Distribution Agreement,
effective April 1, 1996, with Rich City, the Company's sole stockholder prior to
this offering. Under the Distribution Agreement, Rich City assigned to the
Company the exclusive rights for North America to market, distribute, sell and
warehouse the Packaging Products which Rich City had supplied in the United
States and Canada. In addition, all sales of Packaging Products in North
America, as well as all sales of such products in Hong Kong or elsewhere for
delivery into North America, for which sales Rich City rendered invoices after
March 31, 1996, are for the account of the Company. The Distribution Agreement
also grants to the Company the exclusive ancillary right to customize those
products. To facilitate the assignment to the Company of these exclusive rights
under the Distribution Agreement, Rich City has also assigned to the Company its
lists of actual and potential North American customers for the Packaging
Products. Furthermore, Rich City has agreed to refer to the Company all inquires
it receives in Hong Kong with respect to sales of Packaging Products for
delivery into North America. Under the Distribution Agreement the Company can
expand those exclusive rights to South America upon payment of a one or more
annual royalty on terms at least as favorable to the Company as those contained
in the Distribution Agreement.

The Company has agreed to pay Rich City as a royalty $2,000,000, in
installments to commence with the Company's fiscal year ending March 31, 1999.
The amount of any installment should be the arithmetic average of two percent of
net sales of the Company and 10% of the Company's earnings before taxes in the
prior fiscal year. No installment is payable with respect to any fiscal year
unless the Company in the prior year has both net sales of at least $25,000,000
and earnings before taxes of at least $3,000,000. The Distribution Agreement
requires that the Company give to Rich City the right of first refusal to supply
Packaging Products on no less favorable terms and conditions than those offered
by a third party. As to any product which Rich City fails to exercise such right
of first refusal, the Company may purchase that product from any other source.
To maintain the exclusive rights, the Company must meet certain minimum sales
increases per annum specified below.

The term of the Distribution Agreement is for a period of ten years and,
thereafter, is automatically renewed for successive additional one year periods.
Either party may terminate the Distribution Agreement on notice to the other in
the event that the other party suffers a severe financial reversal, such as the
filing of a petition in bankruptcy, or a governmental expropriation or
condemnation of material assets or capital stock, or a dissolution or
liquidation. Furthermore, the Distribution Agreement can be terminated in the
event that a defaulting party breaches a material term of the Distribution
Agreement and fails to remedy such breach within a 90 day cure period. The
obligations of the Company under the Distribution Agreement include establishing
a showroom; establishing a trained sales force to promote the sales of the
Packaging Products; conducting promotional campaigns and marketing strategies to
stimulate sales of products; attending trade fairs and expositions to market the
Packaging Products; and establishing a customization capability. In turn, Rich
City is required to allocate the manufacturing facilities it uses so as to give
first priority to the acceptance and fulfillment of the Company's purchase
orders.

The Company's exclusive rights under the Distribution Agreement are
converted to non-exclusive rights in the event that (i) the Company fails to pay
timely (including a sixty day grace period running from the notice of such
non-payment) an installment of the $2,000,000 royalty described above; or (ii)
if in any given fiscal year the Company fails to increase its sales of the
Packaging Products in North America in accordance with the cost of living
formula contained in the Distribution Agreement and the parties fail to
negotiate the minimum sales requirement to a level which the Company can
satisfy. This minimum sales increase requirement is not effective if general
economic conditions in North America mitigate against such growth, or if the
Company can demonstrate good cause for the failure to meet the minimum sales for
the year in which such failure occurred.

When the Company places an order with Rich City, the Distribution Agreement
requires the Company to advance to Rich City that estimated portion of the
purchase price (between 6-8%) representing the costs of materials for the
products under that order. Rich City's invoices to the Company are to contain
appropriate credits to reflect payments made for these advances.

34
<PAGE>

The Company has funded its operations through cash advances and shipment of
goods on open account from Rich City. Rich City's total capital contribution to
the Company is $500,000. In addition, Rich City has advanced on behalf of the
Company approximately $136,000 to cover some of the costs of this offering. For
accounting purposes, this amount will be carried on the books and records of the
Company as a capitalized pre-offering expense which is to be repaid to Rich City
from the gross proceeds of the offering. See "Use of Proceeds."

During the six months ended September 30, 1996, Rich City advanced to the
Company $800,000 against inventory; this advance is to be repaid out of cash
flow from operations commencing in the three months ending December 31, 1996.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of September 30, 1996 by (i) each
director and executive officer, (ii) all stockholders known by the Company to be
the beneficial owner of more than 5% of the outstanding Common Stock and (iii)
all directors and executive officers as a group, and as adjusted to reflect the
sale of Common Stock:

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
OF COMMON STOCK BEFORE OF COMMON STOCK AFTER
THE OFFERING THE OFFERING
--------------------------- -----------------------------
<S> <C> <C> <C> <C>
PERCENTAGE OF PERCENTAGE OF
OUTSTANDING OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER(1) NUMBER SHARES NUMBER SHARES
- ----------------------------------------------------------- ---------- --------------- ---------- -----------------
Rich City International Packaging Limited(2)............... 1,875,000 100% 1,875,000 60%
Rm 402-3, Join-in Hang Sing Centre
71-75 Container Port Road
Kwai Chung, New Territories, Hong Kong
Chung Hwa Development Holdings Limited(3).................. 1,875,000 100% 1,875,000 60%
Rm 402-3, Join-in Hang Sing Centre
71-75 Container Port Road
Kwai Chung, New Territories, Hong Kong
Lip-Boon Saw(3)............................................ 1,875,000 100% 1,875,000 60%
Peter Yu-Siu Chu........................................... -- -- -- --
Peter L. Coker............................................. -- -- -- --
Robert B. Goergen.......................................... -- -- -- --
Dan Ben-Moshe.............................................. -- -- -- --
Casey K. Tjang............................................. -- -- -- --
Richard Fung-Gea Wong(3)................................... 1,875,000 100% 1,875,000 60%
All officers and directors as a group (3).................. 1,875,000 100% 1,875,000 60%
(7 persons)
</TABLE>

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

(1) Unless otherwise indicated the address of each person listed in the table is
deemed to be the principal place of business of the Company.

(2) Rich City is an indirect wholly-owned subsidiary of Chung Hwa Development
Holdings Limited, a public company whose securities are listed on The Stock
Exchange of Hong Kong Limited.

(3) Messrs. Saw and Wong are directors of Rich City. Both of them disclaim
beneficial ownership of the shares of Common Stock held by Rich City.

35
<PAGE>
DESCRIPTION OF SECURITIES

THE FOLLOWING DESCRIPTION OF THE COMMON STOCK OF THE COMPANY AND THE
COMPANY'S CERTIFICATE OF INCORPORATION AND BY-LAWS IS A SUMMARY AND IS QUALIFIED
IN ITS ENTIRETY BY THE PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
BY-LAWS WHICH ARE INCLUDED AS EXHIBITS TO THE REGISTRATION STATEMENT OF WHICH
THIS PROSPECTUS IS A PART, AND BY THE PROVISIONS OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE ("DGCL").

COMMON STOCK

The Company is authorized to issue 5,000,000 shares of Common Stock, par
value $0.01 per share, 1,875,000 of which are currently outstanding and held by
Rich City. Holders of the Common Stock are entitled to receive such additional
dividends, if any, as may be declared by and at the discretion of the Board of
Directors from assets legally available for that purpose after payment of
participating dividends required to be paid on outstanding shares of Common
Stock, and are entitled at all meetings of stockholders and upon consent
solicitations to one vote for each share held by them. The shares of Common
Stock are not redeemable and do not have any preemptive or conversion rights.
All of the Common Stock offered hereby will be, when-issued, fully-paid and
non-assessable. In the event of a voluntary or involuntary winding up or
dissolution, liquidation or partial liquidation of the Company, holders of the
Common Stock shall participate, pro rata, in any distribution of the assets of
the Company remaining after payment of liabilities. The Company has not issued
any other capital stock or class of securities.

PREFERRED STOCK

The Company is authorized to issue up to 5,000,000 shares of Preferred
Stock, par value $0.01 per share. The Board of Directors of the Company has the
authority, without further action by the holders of the outstanding Common
Stock, to issue Preferred Stock from time to time in one or more classes or
series, to fix the number of shares constituting any class or series and the
stated value thereof, if different from the par value, and to fix the terms of
any such series or class, including dividend rights, divided rates, conversion
or exchange rights, voting rights and terms of redemption (including sinking
fund provisions), the redemption price and the liquidation preference of such
class or series. The Company presently has no class or series of Preferred Stock
outstanding, and has no present plans to issue any series or class of Preferred
Stock. The designations, rights and preferences of any Preferred Stock which may
be issued would be set forth in a Certificate of Designation which would be
filed with the Secretary of the State of the State of Delaware.

LIMITATION ON LIABILITY OF DIRECTORS

The Company's Certificate of Incorporation provides that a director of the
Company will not be personally liable to the Company or its stockholders for
monetary damages for the breach of his or her fiduciary duty of care as a
director. By its terms and in accordance with the DGCL, however, this provision
does not eliminate or limit the liability of a director of the Company (i) for
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(relating to unlawful payments of dividends or unlawful stock repurchases or
redemptions) or (iv) for any transaction from which the director derived an
improper personal benefit.

ANTI-TAKEOVER PROVISIONS

The Company is governed by the provisions of DGCL Section 203, an
anti-takeover law enacted in 1988. In general, the law prohibits a public
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed

36
<PAGE>
manner. "Business combination" is defined to include mergers, asset sales and
certain other transactions resulting in a financial benefit to the stockholders.
An "interested stockholder" is defined as a person who, together with affiliates
or associates, owns (or, within the prior three years, did own) 15% or more of a
corporation's voting stock. As a result of the application of Section 203,
potential acquirors of the Company may be discouraged from attempting to effect
an acquisition transaction with the Company, thereby possibly depriving holders
of the Company's securities of certain opportunities to sell or otherwise
dispose of such securities at above-market prices pursuant to such transactions.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the offering there has not been any public market for the Common
Stock of the Company. Future sales of substantial amounts of Common Stock in the
public market by the Company or certain of its stockholders could adversely
affect the prevailing market prices.

Upon completion of the offering, the Company will have issued and
outstanding 3,125,000 (or 3,312,500 if the Underwriters exercise the
over-allotment option in full) shares of Common Stock. Of these shares, the
1,250,000 (or 1,437,500 if the Underwriters exercise the over-allotment option
in full) shares to be sold in the offering will be freely tradeable without
restrictions or future registration under the Securities Act unless purchased by
"affiliates" of the Company as that term is defined in Rule 144 under the
Securities Act ("Rule 144"). All of the remaining 1,875,000 shares will be
eligible under Rule 144 for resale beginning in March 1998.

The Representative has entered into "lock-up" agreements with all officers,
directors and the existing stockholder of the Company that prohibit such holders
from selling any shares of the Company's Common Stock (other than securities of
the Company registered pursuant to any public offering) until 24 months from the
date of this Prospectus, without the prior consent of the Underwriter. See
"Underwriting."

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least two years (including the holding period of any prior owner except
an affiliate of the Company) is entitled to sell in "broker's transactions" or
to "market makers," within any three-month period, a number of shares that does
not exceed the greater of (i) one percent of the completion of the offering) or
(ii) generally, the average weekly trading volume in the Common Stock during the
four calendar weeks preceding the required filing of a Form 144 with respect to
such sale. Sales under Rule 144 are subject to the availability of current
public information about the Company. Under Rule 144(k), a person who is not
deemed to have been an affiliate of the Company at any time during the 90 days
preceding a sale, and who has beneficially owned the shares proposed to be sold
for at least three years, is entitled to sell such shares without having to
comply with the manner of sale, public information, volume limitation or notice
provisions of Rule 144.

37
<PAGE>

UNDERWRITING

The Underwriters named below (the "Underwriters"), for whom Gilford
Securities Incorporated is acting as Representative, have severally agreed,
subject to the terms and conditions contained in the Underwriting Agreement (the
"Underwriting Agreement") to purchase from the Company, and the Company has
agreed to sell to the Underwriters on a firm commitment basis, the shares of
Common Stock set forth opposite their names:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------
<S> <C>
Gilford Securities Incorporated............................................

-----------------
-----------------
Total.................................................................. 1,250,000
</TABLE>

The Underwriters are committed to purchase all shares of Common Stock
offered hereby if any of such shares are purchased. The Underwriting Agreement
provides that the obligation of the several Underwriters are subject to
conditions precedent specified therein.

The Company has been advised by the Representative that it initially
proposes to offer the Common Stock to the public at the public offering price
set forth on the cover page of this Prospectus and may allow to certain dealers
who are members of the National Association of Securities Dealers, Inc. ("NASD")
concessions not in excess of $ per share of Common Stock, of which
amount a sum not in excess of $ per share of Common Stock may in turn be
reallowed by such dealers to other dealers. After the commencement of the
offering, the public offering price, concessions and reallowances may be
changed. The Representative has informed the Company that it does not expect
sales to discretionary accounts by the Underwriters to exceed five percent of
the securities offered by the Company hereby.

The Company has granted to the Underwriters an option, exercisable within 45
days of the date of this Prospectus, to purchase from the Company at the
offering price, less underwriting discounts and the non-accountable expense
allowance, all or part of an additional 187,500 shares of Common Stock on the
same terms and conditions of the offering for the sole purpose of covering
over-allotments, if any.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act. The Company has
agreed to pay to the Representative a non-accountable expense allowance equal to
three percent of the gross proceeds derived from the sale of the shares of
Common Stock underwritten, $50,000 of which has been paid to date.

The officers and directors of the Company and the holders of all of the
shares of Common Stock have agreed (i) not to, directly or indirectly, issue,
offer to sell, sell, grant an option for the sale of, transfer, pledge, assign,
hypothecate, or otherwise encumber or dispose of any securities issued by the
Company, including shares of Common Stock or securities convertible into or
exchangeable or exercisable for or evidencing any right to purchase or subscribe
for any shares of Common Stock for a period of twenty-four months from the
effective date of the Registration Statement (the "Lock-Up Period"), without the
prior written consent of the Representative and (ii) that, for 24 months
following the effective date of the

38
<PAGE>

Registration Statement, any sales of the Company's securities shall be made
through the Representative in accordance with its customary brokerage practices
either on a principal or agency basis. An appropriate legend shall be marked on
the face of certificates representing all such securities.

In connection with this offering, the Company has agreed to issue and sell
to the Representative and/ or its designees, at the closing of the proposed
underwriting, for nominal consideration, five year Representative's Warrants
(the "Representative's Warrants") to purchase 125,000 shares of Common Stock.
The Representative's Warrants are exercisable at a price of $ [140% of
the initial public offering price per share of Common Stock] per share of Common
Stock at any time during a period of four years commencing one year from the
date of this Prospectus and are restricted from sale, transfer, assignment or
hypothecation for a period of twelve months from the date hereof, except to
officers of the Representative. The Representative's Warrants contain
anti-dilution provisions providing for adjustment of the number of shares of
Common Stock and exercise price under certain circumstances. The
Representative's Warrants grant to the holders thereof and to the holders of the
underlying securities certain rights of registration of the securities
underlying the Representative's Warrants.

The Company has also agreed to retain the Representative as the Company's
financial consultant for a period of 24 months from the date of this Prospectus
and to pay the Representative $2,000 per month in connection therewith, the
total amount of which ($48,000) is due upon consummation of the offering.

The Company has agreed that for five years from the effective date of the
Registration Statement, the Representative may designate one person for election
to the Company's Board of Directors (the "Designation Right"). In the event that
the Representative elects not to exercise its Designation Right, then it may
designate one person to attend all meetings of the Company's Board of Directors
for a period of five years. The Company has agreed to reimburse the
Representative's designee for all out-of-pocket expenses incurred in connection
with the designee's attendance at meetings of the Board of Directors.

Prior to this offering, there has been no public market for the Common
Stock. Accordingly, the initial public offering price of the Common Stock was
determined by negotiation between the Company and the Representative. Among the
factors considered in determining such prices and terms, in addition to the
prevailing market conditions, included the history of and the prospects for the
industry in which the Company competes, an assessment of the Company's
management, the prospects of the Company, its capital structure and such other
factors that were deemed relevant. The offering price does not necessarily bear
any relationship to the assets, results of operations or net worth of the
Company.

The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to a copy
of each such agreement which are filed as exhibits to the Registration
Statement. See "Additional Information."

LEGAL MATTERS

The validity of the Common Stock offered hereby and certain other legal
matters will be passed upon for the Company by Bondy & Schloss LLP, New York,
New York. Certain legal matters as to Hong Kong law will be passed upon by
Messrs. Erving Brettell, Solicitors, Hong Kong. Orrick, Herrington & Sutcliffe
LLP, New York, New York, has acted as counsel for the Underwriters in connection
with the offering.

EXPERTS

The Company's financial statements as of March 31, 1996 included in this
Prospectus have been audited by Deloitte Touche Tohmatsu, Hong Kong, independent
auditors, as stated in their report appearing herein and are so included herein
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.

39
<PAGE>
ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act, with respect to the shares being offered
in this offering. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain items of which are omitted in
accordance with the rules and regulations of the Commission. The omitted
information may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at
Seven World Trade Center, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Such material can also be obtained at
the Commission's Web site at http://www.sec.gov. Copies of such material can be
obtained from the public reference section of the Commission at prescribed
rates. Statements contained in this Prospectus as to the contents of any
contract or other document field as an exhibit to the Registration Statement are
not necessarily complete and in each instance reference is made to the copy of
the document filed as an exhibit to the Registration Statement, each statement
made in this Prospectus relating to such documents being qualified in all
respect by such reference. For further information with respect to the Company
and the securities being offered hereby, reference is hereby made to such
Registration Statement, including the exhibits thereto and the financial
statements, notes, and schedules filed as a part thereof.

40
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
RICH CITY INTERNATIONAL PACKAGING LIMITED--NORTH AMERICAN DISTRIBUTION BUSINESS
Report of Independent Auditors............................................................................. F-2
Balance sheets as of March 31, 1995 and 1996............................................................... F-3
Statements of income for each of the three years in the period ended March 31, 1996........................ F-4
Statements of division equity for each of the three years in the period ended March 31, 1996............... F-5
Statements of cash flows for each of the three years in the period ended March 31, 1996.................... F-6
Notes to financial statements.............................................................................. F-7

LEADING EDGE PACKAGING, INC.
(Successor to Rich City International Packaging Limited's North American distribution business)
Report of Independent Auditors............................................................................. F-14
Balance sheet as of March 31, 1996......................................................................... F-15
Notes to balance sheet..................................................................................... F-16

UNAUDITED INTERIM FINANCIAL INFORMATION FOR RICH CITY INTERNATIONAL PACKAGING LIMITED--NORTH AMERICAN
DISTRIBUTION BUSINESS AND LEADING EDGE PACKAGING, INC.
Introduction to unaudited interim financial information.................................................... F-18
Audited balance sheet at March 31, 1996 and unaudited interim balance sheet at September 30, 1996.......... F-19
Unaudited interim statements of income for the six months ended September 30, 1995 and 1996................ F-20
Unaudited interim statements of division / shareholder's equity for the six months ended September 30,
1996..................................................................................................... F-21
Unaudited interim statements of cash flows for the six months ended September 30, 1995 and 1996............ F-22
Notes to unaudited interim financial information........................................................... F-23

UNAUDITED PRO FORMA STATEMENTS OF INCOME FOR RICH CITY INTERNATIONAL PACKAGING LIMITED--NORTH AMERICAN
DISTRIBUTION BUSINESS AND LEADING EDGE PACKAGING, INC.
Introduction to unaudited pro forma statements of income................................................... F-26
Unaudited pro forma statements of income for the six months ended September 30, 1995, the year ended March
31, 1996 and the six months ended September 30, 1996..................................................... F-27
Notes to unaudited pro forma statements of income.......................................................... F-28
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors

Leading Edge Packaging, Inc.

(Successor to Rich City International Packaging Limited's

North American distribution business)

We have audited the accompanying balance sheets of Rich City International
Packaging Limited ("Rich City")'s North American distribution business ("N.A.
Distribution Business") as of March 31, 1995 and 1996, and the related
statements of income, division equity and cash flows for each of the three years
in the period ended March 31, 1996. These financial statements are the
responsibility of Rich City's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

The accompanying financial statements have been prepared from the separate
records maintained by the N.A. Distribution Business and may not necessarily be
indicative of the condition that would have existed or the results of operations
if the N.A. Distribution Business had been operated as an unaffiliated company.
Portions of certain income and expenses represent allocations made from head
office items applicable to Rich City as a whole.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the N.A. Distribution Business as of March
31, 1995 and 1996, and the results of its operations and its cash flows for each
of the three years in the period ended March 31, 1996 in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE TOUCHE TOHMATSU

Hong Kong

April 30, 1996, except for Notes 1 and 12,

as to which the date is September 23, 1996

F-2
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

BALANCE SHEETS

<TABLE>
<CAPTION>
AS OF MARCH 31,
--------------------------
<S> <C> <C>
1995 1996
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents........................................................... $ 290,130 $ 35,002
Accounts receivable, net of allowance for doubtful accounts--1995, $5,020; 1996,
$5,944............................................................................ 162,322 192,199
Bills receivable (Note 3)........................................................... 354,748 169,516
Advances to head office (Note 4).................................................... -- 1,151,836
Prepaid expenses and other current assets........................................... 16,723 54,832
------------ ------------
Total current assets.............................................................. 823,923 1,603,385
Property, plant and equipment, net of accumulated depreciation--1995, $25,650; 1996,
$56,978 (Note 5).................................................................... 220,222 193,295
------------ ------------
Total assets...................................................................... $ 1,044,145 $ 1,796,680
------------ ------------
------------ ------------

LIABILITIES AND DIVISION EQUITY
Current liabilities:
Accounts payable to a related party (Note 8a)....................................... $ 601,127 $ 1,655,308
Advances from Head Office (Note 4).................................................. 362,384 --
Accrued liabilities................................................................. 80,634 141,372
------------ ------------
Total current liabilities......................................................... 1,044,145 1,796,680
Commitments and contingencies (Note 7)
Division equity....................................................................... -- --
------------ ------------
Total liabilities and division equity............................................. $ 1,044,145 $ 1,796,680
------------ ------------
------------ ------------
</TABLE>

See accompanying notes to financial statements.

F-3
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------- ------------ -------------
Net sales............................................................ $ 13,725,079 $ 6,310,879 $ 10,987,470
Cost of sales from a related party (Note 8a)......................... 9,429,109 4,021,908 6,635,318
------------- ------------ -------------
Gross profit......................................................... 4,295,970 2,288,971 4,352,152
------------- ------------ -------------
Selling expenses..................................................... 441,450 263,778 451,327
General and administrative expenses.................................. 781,893 543,644 653,283
------------- ------------ -------------
Selling, general and administrative expenses......................... 1,223,343 807,422 1,104,610
------------- ------------ -------------
Operating income..................................................... 3,072,627 1,481,549 3,247,542
Interest expense..................................................... (51,190) (65,057) (53,961)
Other income......................................................... 30,372 56,416 7,014
------------- ------------ -------------
Income before income taxes........................................... 3,051,809 1,472,908 3,200,595
Income taxes (Note 6)................................................ 33,043 -- --
------------- ------------ -------------
Net income........................................................... $ 3,018,766 $ 1,472,908 $ 3,200,595
------------- ------------ -------------
------------- ------------ -------------
</TABLE>

See accompanying notes to financial statements.

F-4
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

STATEMENTS OF DIVISION EQUITY

<TABLE>
<CAPTION>
DIVISION
EQUITY
--------------
<S> <C>
Balance as of April 1, 1993....................................................................... $ 1,221,802
Net income........................................................................................ 3,018,766
Distribution to Head Office (Note 1d)............................................................. (4,230,769)
--------------
Balance as of March 31, 1994...................................................................... 9,799
Net income........................................................................................ 1,472,908
Distribution to head office (Note 1d)............................................................. (1,482,707)
--------------
Balance as of March 31, 1995...................................................................... --
Net income........................................................................................ 3,200,595
Distribution to head office (Note 1d)............................................................. (3,200,595)
--------------
Balance as of March 31, 1996...................................................................... $ --
--------------
--------------
</TABLE>

See accompanying notes to financial statements.

F-5
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

-- NORTH AMERICAN DISTRIBUTION BUSINESS

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------ ------------ ------------
Cash flows from operating activities:
Net income............................................................ $ 3,018,766 $ 1,472,908 $ 3,200,595
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation........................................................ 16,669 26,690 31,328
Loss on sale of property, plant and equipment....................... -- 16,937 --
Changes in operating assets and liabilities:
Accounts receivable............................................... (1,194,275) 3,450,600 (29,877)
Bills receivable.................................................. -- (354,748) 185,232
Prepaid expenses and other current assets......................... (12,511) 30,068 (38,109)
Accounts payable to a related party............................... 144,930 (768,623) 1,054,181
Accrued liabilities............................................... 30,885 4,193 60,738
Income taxes payable.............................................. 33,043 (33,043) --
------------ ------------ ------------
Net cash provided by operating activities............................... 2,037,507 3,844,982 4,464,088
------------ ------------ ------------
Cash flows from investing activities:
Purchase of property, plant and equipment............................. (104,691) (228,240) (4,401)
Proceeds from sale of property, plant and equipment................... -- 90,831 --
------------ ------------ ------------
Net cash used in investing activities................................... (104,691) (137,409) (4,401)
------------ ------------ ------------
Cash flows from financing activities:
Distribution to Head Office........................................... (4,230,769) (1,482,707) (3,200,595)
Net advances from Head Office......................................... 3,066,232 -- --
Net repayments to Head Office......................................... -- (2,707,824) (1,514,220)
------------ ------------ ------------
Net cash used in financing activities................................... (1,164,537) (4,190,531) (4,714,815)
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents.................... 768,279 (482,958) (255,128)
Cash and cash equivalents at beginning of year.......................... 4,809 773,088 290,130
------------ ------------ ------------
Cash and cash equivalents at end of year................................ $ 773,088 $ 290,130 $ 35,002
------------ ------------ ------------
------------ ------------ ------------
Supplemental disclosures of cash flow information:
Interest paid......................................................... $ 51,190 $ 65,057 $ 53,961
Income taxes paid..................................................... -- 33,043 --
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

Rich City International Packaging Limited ("Rich City" or "Head Office") is
a wholly owned subsidiary of Chung Hwa Development Holdings Limited ("Chung
Hwa"), a Hong Kong listed company. Rich City is engaged in the sale and
distribution, design and warehousing of packaging products. Effective April 1,
1996, Rich City assigned all its North American sales and the exclusive rights
to carry on the North American distribution business of Rich City ("N.A.
Distribution Business") to Leading Edge Packaging, Inc. ("Leading Edge"), see
Note 12--Subsequent Events. Leading Edge was incorporated in Delaware on
December 15, 1995, and is a wholly owned subsidiary of Rich City.

During the three years ended March 31, 1996, it has been the policy of the
N.A. Distribution Business to transfer its cash earned to Rich City to finance
the operations and working capital requirements of the manufacturing and other
activities of Chung Hwa and its subsidiaries ("Chung Hwa Group").

The N.A. Distribution Business, which operates in a single industry segment,
is engaged in the sale and distribution of packaging products in North America.

The financial statements of the N.A. Distribution Business for each of the
three years in the period ended March 31, 1996, have been prepared on the
"Carved Out Basis" as if the N.A. Distribution Business had been in existence
and operating independently prior to the Assignment and Distribution agreement
referred to in Note 12 to the financial statements between Rich City and Leading
Edge, which became effective on April 1, 1996. The financial statements have
been prepared in accordance with generally accepted accounting principles in the
United States of America ("U.S. GAAP"), which do not differ significantly from
those used in the statutory accounts of Rich City.

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

The Carved Out Basis is as follows:

(a) Assets:

Property, plant and equipment, accounts receivable, bills receivable,
prepaid expenses and other current assets specifically relating to the N.A.
Distribution Business have been identified and presented in the financial
statements.

Cash and cash equivalents presented in the financial statements
represent the balance of the cash not transferred to Rich City's account.

The N.A. Distribution Business did not maintain any inventory during the
three years ended March 31, 1996 as purchases were made against specific
customer orders and title passed to customers at the same time as the N.A.
Distribution Business acquired the product.

(b) Current liabilities:

Accounts payable to a related party represents the trade payable to
Breakspear Limited, a fellow subsidiary of Rich City and its sole supplier.
Breakspear Limited is part of the Chung Hwa Group. The trade payable balance
at each year end date represents outstanding invoices for the 60 days prior

F-7
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (CONTINUED)

to each year end in accordance with Rich City's payment term to Breakspear
Limited (as defined herein) of net 60 days.

Accrued liabilities specifically relating to the N.A. Distribution
Business have been identified and presented in the financial statements.

Sales and cost of sales for the N.A. Distribution Business have been
identified and presented in the financial statements. The financial effect
of the Assignment and Distribution agreement referred to in Note 12 has not
been included in the carved out results.

Selling, general and administrative, interest and taxation expenses
relating to the N.A. Distribution Business are accounted for either on an
actual basis or estimated with reference to the circumstances of the
business based on methods that management of Rich City believes to be
reasonable. Common expenses which amounted to $268,755, $148,282 and
$172,751 in the years ended March 31, 1994, 1995 and 1996, respectively,
were allocated with reference to the ratio of transactions made or the floor
area used as appropriate.

(d) Distribution to head office

Distributions made to Rich City for the years ended March 31, 1994, 1995
and 1996 were $4,230,769, $1,482,707 and $3,200,595, respectively, and
resulted in the distribution of the entire equity balance each year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS--Cash and cash equivalents include cash on hand,
demand deposits, interest bearing savings accounts, and time certificates of
deposit with an original maturity of three months or less.

FACTORED RECEIVABLES--Transfers of receivables with recourse are recognized
as sales when the future economic benefits embodied in the receivable are
surrendered because the N.A. Distribution Business' future obligation under the
recourse provisions can be reasonably estimated and there are no repurchase
terms except under the recourse provisions.

The difference between the receivable transferred and the cash received is
recognized as a loss in the period it occurs.

PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment is stated at
cost. Depreciation is provided to write off the cost of property, plant and
equipment over their estimated useful lives using the straight line method, at
the following rates per annum:

<TABLE>
<S> <C>
Furniture, fixtures and equipment............ 10-20%
Leasehold improvements....................... 10% or over the terms of the respective
leases whichever is shorter
</TABLE>

INVENTORIES--Inventories held for resale, are stated at the lower of cost,
determined by the first-in, first-out method, or market. Cost represents
supplier cost for delivery at the designated location.

F-8
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NET SALES--Net sales represent the invoiced value of products sold less
discounts and returns. The N.A. Distribution Business recognises sales when
products are shipped to customers or when title passes, if later.

FOREIGN CURRENCY TRANSLATION--The functional currency of the N.A.
Distribution Business is Hong Kong dollar. Transactions and assets and
liabilities denominated in Hong Kong dollars have been translated to the U.S.
dollar at HK$7.80 to $1.00, which approximates the market rate at all periods
presented.

All transactions in currencies other than the functional currency during the
periods are translated at the exchange rates prevailing on the transaction
dates. Related accounts payable or receivable existing at the balance sheet date
denominated in currencies other than the functional currencies are translated at
period end rates. Gains and losses, which are immaterial for all periods
presented, resulting from the translation of foreign currency transactions and
balances are included in the income statements.

EMPLOYEE BENEFITS--Contributions payable to the N.A. Distribution Business'
defined contribution retirement benefit scheme are expensed as incurred. The
N.A. Distribution Business does not provide any post retirement benefits and
post employment benefits, if any, are not material.

3. BILLS RECEIVABLE

Bills receivable represent accounts receivable in the form of bills of
exchange, whose acceptances and settlements are handled by banks.

During each of the years ended March 31, 1994, 1995 and 1996, the N.A.
Distribution Business had factored gross bills receivable of $1,109,358,
$3,811,936 and $3,250,463, respectively, with financial institutions with
recourse to the N.A. Distribution Business. The net proceeds after discounts
during each of these years amounted to $1,076,138, $3,748,403 and $3,197,771,
respectively. There were no repurchase terms except for the recourse under the
terms of the factoring agreement in the event of customer default.

The amounts of the factored bills receivable which remained outstanding at
March 31, 1994, 1995, and 1996 were $1,012,418, $683,497 and $1,074,008,
respectively. These receivables were all collected by the financial institutions
in the following year.

F-9
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. ADVANCES (FROM) TO HEAD OFFICE

<TABLE>
<CAPTION>
MONTHLY
AVERAGE
BALANCE
DURING THE
AMOUNT YEAR
------------- --------------
<S> <C> <C>
Advances (from) to Rich City:
Balance as of April 1, 1993................................... $ (3,976)
Advances from Head Office..................................... (4,549,907)
Repayments to Head Office..................................... 1,752,430
Common expense allocations.................................... (268,755)
Balance as of March 31, 1994.................................. (3,070,208) $ (471,002)
--------------
--------------
Advances from Head Office..................................... (1,067,921)
Repayments to Head Office..................................... 3,924,027
Common expense allocations.................................... (148,282)
-------------
Balance as of March 31, 1995.................................. (362,384) $ (430,412)
--------------
--------------
Advances from Head Office..................................... (1,735,761)
Repayments to Head Office..................................... 3,422,732
Common expense allocations.................................... (172,751)
-------------
Balance as of March 31, 1996.................................. $ 1,151,836 $ 1,542,610
------------- --------------
------------- --------------
</TABLE>

Advances from and to Rich City were made on an interest free basis.

5. PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
AS OF MARCH 31,
----------------------
<S> <C> <C>
1995 1996
---------- ----------
Property, plant and equipment consists of the following:
Furniture, fixtures and equipment..................................... $ 145,359 $ 147,988
Leasehold improvements................................................ 100,513 102,285
---------- ----------
Total................................................................. 245,872 250,273
Less: Accumulated depreciation........................................ (25,650) (56,978)
---------- ----------
Net book value........................................................ $ 220,222 $ 193,295
---------- ----------
---------- ----------
</TABLE>

6. INCOME TAXES

Rich City is subject to Hong Kong taxation on its activities conducted in
Hong Kong. During the three years ended March 31, 1996, Chung Hwa and Rich
City's manufacturing operations were outside Hong Kong and the majority of
income was not subject to tax in Hong Kong or in other jurisdictions.

F-10
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES (CONTINUED)
The provision for income taxes attributable to the N.A. Distribution
Business consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
--------- --------- ---------
Hong Kong
Current.................................................... $ 33,043 $ -- $ --
--------- --------- ---------
--------- --------- ---------
</TABLE>

A reconciliation between the provision for income taxes computed by applying
the Hong Kong statutory tax rate to income before taxes and the actual provision
for income taxes is as follows:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
--------- --------- ---------
Statutory tax rate in Hong Kong................................. 17.5% 16.5% 16.5%
Income not subject to taxation.................................. (16.5) (16.5) (16.5)
--------- --------- ---------
Effective rate.................................................. 1.0% --% --%
--------- --------- ---------
--------- --------- ---------
</TABLE>

There were no significant temporary differences during the years ended March
31, 1994, 1995 or 1996 and at these dates.

The future operations of the N.A. Distribution Business will be subject to
income tax in the United States of America. United States Federal and State
income taxes payable, calculated at a rate of 38%, on the income for the years
ended March 31, 1994, 1995 and 1996, would have been $1,159,687, $559,705 and
$1,216,226, respectively. In computing the income tax liabilities, the asset and
liability method would have been used in providing for income taxes on all
transactions that have been recognised in the financial statements, which are in
accordance with Statement of Financial Accounting Standards No.109, "Accounting
for Income Taxes" ("SFAS 109"). SFAS 109 requires deferred taxes be adjusted to
reflect the tax rates at which future taxable amounts will be settled or
recognised. The effects of tax rate changes on future deferred tax liabilities
and deferred tax benefits, as well as other changes in income tax laws, are
recognised in net earnings in the period such changes are enacted.

7. COMMITMENTS AND CONTINGENCIES

At March 31, 1996, the N.A. Distribution Business had factored with
financial institutions gross bills receivable of $1,074,008 at a discount of
$14,477 with recourse to the N.A. Distribution Business. The N.A. Distribution
Business had no other capital commitments.

The N.A. Distribution Business leases premises under various operating
leases which do not contain any renewal and escalation clauses. Rental expense
under operating leases was $97,957 in 1994, $52,688 in 1995 and $57,876 in 1996.

Minimum rental commitments at March 31, 1996 under operating leases include
$13,994 due in 1997.

F-11
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. RELATED PARTY TRANSACTIONS

(a) Breakspear Limited is a fellow subsidiary and the sole supplier of
packaging products for Rich City. The N.A. Distribution Business had
purchases of $9,429,109, $4,021,908 and $6,635,318 from Breakspear Limited
for the years ended March 31, 1994, 1995 and 1996, respectively.

Accounts payable to Breakspear Limited at March 31, 1995 and 1996 were
$601,127 and $1,655,308, respectively. The accounts payable are unsecured,
non-interest bearing and repayable on demand.

(b) During the year ended March 31, 1994, the N.A. Distribution Business
paid rental expense of $59,057 to Everwell Investment Limited for the lease
of office space. Mr. Chong Kim Fu and Ms. Ong Ai Gin, directors of Rich City
at that time, have beneficial interests in Everwell Investment Limited.

During the years ended March 31, 1995 and 1996, the N.A.
Distribution Business paid rental expense of $29,800 and $36,377 to Circle
Round Limited, a fellow subsidiary of Rich City.

(c) During the years ended March 31, 1994, 1995 and 1996, in situations
where quality claims arose from customers, Breakspear Limited was required
to take up and process these claims at no cost to the N.A. Distribution
Business. During the year ended March 31, 1994, Mr. Chong Kim Fu, being the
major shareholder of Chung Hwa at that time, made a payment to a customer in
the United States of $270,000 in respect of quality claims to the Chung Hwa
Group. He has also given an indemnity to the Chung Hwa Group in respect of
another claim made by the same customer for defective products, pursuant to
which he subsequently paid $4,331,072 in November 1994 to the Chung Hwa
Group in respect of the amount of the claim and professional costs
associated with these claims. The Chung Hwa Group made a counterclaim
against these claims for which Mr. Chong Kim Fu subsequently received
substantial repayment of the above mentioned amount from the customer.

9. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

Customers accounting for 10% or more of total net sales for each of the
three years ended March 31, 1994, 1995 and 1996 are detailed as follows:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Customer A................................................... 63.7% 19.2% --
Customer B................................................... 12.1% -- --
Customer C................................................... 5.4% 38.8% 26.6%
Customer D................................................... -- 4.4% 13.9%
Customer E................................................... -- 3.9% 12.1%
</TABLE>

Details of the accounts receivable from the five customers with the largest
receivable balances at March 31, 1994, 1995 and 1996 are as follows:

<TABLE>
<CAPTION>
PERCENTAGE OF ACCOUNTS
RECEIVABLE AS AT MARCH 31,
-------------------------------
<S> <C> <C> <C>
Five largest receivable balances............................. 95.5% 88.8% 93.8%
</TABLE>

Bad debt expense was $3,613, $1,407 and $924 for the years ended March 31,
1994, 1995 and 1996, respectively.

F-12
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No.107, "Disclosures about Fair Value of
Financial Instruments". The estimated fair value amounts have been determined by
Rich City, using available market information and appropriate valuation
methodologies. The estimates presented herein are not necessarily indicative of
amounts that Rich City could realize in a current market exchange. The carrying
amounts of cash, accounts receivable, bills receivable, advances to head office
and current liabilities are short term in nature and therefore reflect their
fair value. All the financial instruments are for trade purposes.

11. RETIREMENT PLAN

On April 1, 1993, Rich City established a defined contribution retirement
plan covering substantially all employees in Hong Kong. Under this plan,
eligible employees may contribute amounts through payroll deductions which are
equal to 5% of individual salary, supplemented by employer contributions at 5%
of individual salary, for investment in various funds established by the plan.
The expense, net of forfeited contributions, related to this plan applicable to
the carved out business was $10,708, $3,653 and $3,178 for the years ended March
31, 1994, 1995 and 1996, respectively.

12. SUBSEQUENT EVENT

On September 23, 1996, an Assignment and Distribution agreement
("Agreement") was signed between Rich City and Leading Edge. Under the
Agreement, Leading Edge is designated as an exclusive distributor for Rich City
to market, distribute, sell, warehouse and subassemble, where necessary, Rich
City's packaging products in North America. The term of the agreement is for 10
years from the date of agreement and is automatically renewed for successive
additional one year periods except upon early termination by both parties.
Leading Edge will purchase packaging products from Rich City at a 6% to 8% mark
up over the manufacturing costs, which comprise material costs, labor cost and
overheads.

Under the terms of the Agreement, for the year ending December 31, 1998, and
for such subsequent years thereafter the exclusive distribution basis will be
converted to a non-exclusive basis if Leading Edge's annual gross sales rate of
increase is less than the cost of living increase when compared to the Consumer
Price Index. In addition, Leading Edge is also obligated to pay to Rich City a
royalty of $2,000,000 in one or more installments. The amount of each
installment is calculated using a formula which relates to Leading Edge's net
sales and earnings before taxes, commencing the year ending March 31, 1999. No
installment will need to be paid if both Leading Edge's earnings before taxes is
lower than $3,000,000 and net sales for the fiscal year are less than
$25,000,000. In the event that Leading Edge fails to make the installment
payments in accordance with terms under the Agreement, the exclusive
distribution basis will also be converted to a non-exclusive basis. Effective
from April 1, 1996, Rich City has assigned all its North America sales to
Leading Edge.

F-13
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors

Leading Edge Packaging, Inc.

(Successor to Rich City International Packaging Limited's

North American distribution business)

We have audited the accompanying balance sheet of Leading Edge Packaging,
Inc. (the "Company", successor to Rich City International Packaging Limited's
North American distribution business) as of March 31, 1996. This financial
statement is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement based on our audit.

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

In our opinion, such balance sheet presents fairly, in all material
respects, the financial position of the Company as of March 31, 1996 in
conformity with accounting principles generally accepted in the United States of
America.

DELOITTE TOUCHE TOHMATSU

Hong Kong

April 30, 1996, except for Notes 1 and 3,

as to which the date is September 23, 1996

F-14
<PAGE>
LEADING EDGE PACKAGING, INC.

(SUCCESSOR TO RICH CITY INTERNATIONAL PACKAGING LIMITED'S

NORTH AMERICAN DISTRIBUTION BUSINESS)

BALANCE SHEET AS OF MARCH 31, 1996

<TABLE>
<S> <C>
ASSET

Current and total asset:
Cash and cash equivalents......................................................... $ 1,500
---------
---------
SHAREHOLDER'S EQUITY

Commitments and contingencies (Note 2)
Shareholder's equity (Note 3):
Common stock no par value--1,500 shares authorized, issued and outstanding........ $ 1,500
---------
---------
</TABLE>

See accompanying notes to balance sheet

F-15
<PAGE>
LEADING EDGE PACKAGING, INC.

(Successor to Rich City International Packaging Limited's

North American distribution business)

NOTES TO BALANCE SHEET

1. ORGANIZATION

Leading Edge Packaging, Inc. (the "Company") was incorporated in Delaware on
December 15, 1995, and remained inactive during the period to March 31, 1996.
The Company is a wholly owned subsidiary of Rich City International Packaging
Limited ("Rich City") and became the successor to Rich City's North American
distribution business effective from April 1, 1996, under an Assignment and
Distribution agreement signed on September 23, 1996.

2. COMMITMENTS AND CONTINGENCIES

At March 31, 1996, the Company had no operating lease commitments, capital
commitments or contingent liabilities.

3. SUBSEQUENT EVENTS

The following transactions took place subsequent to March 31, 1996:

(a) On September 23, 1996, an Assignment and Distribution agreement
("Agreement") was signed between Rich City and the Company. Under the
Agreement, the Company is designated as an exclusive distributor for Rich
City to market, distribute, sell, warehouse and subassemble, where
necessary, Rich City's packaging products in North America. The term of the
agreement is for 10 years from the date of agreement and is automatically
renewed for successive additional one year periods except upon early
termination by both parties. The Company will purchase packaging products
from Rich City at a 6% to 8% mark up over the manufacturing costs, which
comprise material costs, labor cost and overheads.

Under the term of the Agreement, for the year ending December 31, 1998,
and for each subsequent year thereafter the exclusive distribution basis
will be converted to a non-exclusive basis if the Company's annual gross
sales rate of increase is less than the cost of living increase when
compared to the Consumer Price Index. In addition, the Company is also
obligated to pay to Rich City a royalty of $2,000,000 in one or more
installments. The amount of each installment is calculated using a formula
which relates to the Company's net sales and earnings before taxes,
commencing the year ending March 31, 1999. No installment will need to be
paid if both the Company's earnings before taxes is lower than $3,000,000
and net sales for the fiscal year are less than $25,000,000. In the event
that the Company fails to make the installment payments in accordance with
terms under the Agreement, the exclusive distribution basis will also be
converted to a non-exclusive basis. Effective from April 1, 1996, Rich City
has assigned all its North America sales to the Company.

(b) In the contemplated public offering of Common Stock by the Company,
on September 13, 1996, it was resolved by unanimous written consent that the
Company increase its authorized share capital from 1,500 common shares with
no par value to 5,000,000 common shares of $0.01 par value per share and
5,000,000 preferred shares of $0.01 par value per share. In addition, it was
also resolved that a stock split of each issued ordinary share of Common
Stock of no par value into 1,250 ordinary shares of Common Stock of $0.01
par value per share.

(c) The Company has leased an office commencing July, 1996 for a period
of 5 years, an apartment commencing September, 1996 for a period of 1 year
and a warehouse commencing

F-16
<PAGE>
LEADING EDGE PACKAGING, INC.

(SUCCESSOR TO RICH CITY INTERNATIONAL PACKAGING LIMITED'S

NORTH AMERICAN DISTRIBUTION BUSINESS)

NOTES TO BALANCE SHEET (CONTINUED)

3. SUBSEQUENT EVENTS (CONTINUED)
November, 1996 for a period of 5 years. The aggregate annual rental of these
properties amounts to approximately $208,032.

(d) The Company entered into employment agreements with its executive
officers and directors with an aggregate annual compensation for the first
year of approximately $372,000. The first year compensation will be used as
base compensation for the second and third years which may be determined by
the board of directors of the Company at their sole discretion. The
agreements also provide for bonuses which may be determined by the board of
directors of the Company at their sole discretion. The agreements may be
terminated by either the Company or the employees on six months' prior
notice.

(e) The Company has adopted an Incentive Stock Option Plan (the "Plan")
under which stock options may be granted to such officers, directors and/or,
employees of the Company as the Plan's administration committee selects.
312,500 shares of Common Stock are reserved for that purpose. Such stock
options entitle the holder to acquire shares of Common Stock during a fixed
period at an exercise price equal to the greater of (i) 110% of the fair
market value of the Common Stock at the time of grant, and (ii) the initial
public offering price per share. Payment by option holders upon exercise of
an option may be made only in cash.

F-17
<PAGE>
INTRODUCTION TO UNAUDITED INTERIM FINANCIAL INFORMATION

The unaudited financial information of Leading Edge Packaging, Inc.
("Leading Edge") for the six months ended September 30, 1996, was prepared on an
actual basis as Leading Edge was operating under the terms of the Assignment and
Distribution agreement (the "Agreement") between Rich City International
Packaging Limited ("Rich City") and Leading Edge. The Agreement was effective on
April 1, 1996, when all Rich City's North American sales were assigned to
Leading Edge. Under this agreement, Leading Edge purchases packaging products
from Rich City at the cost of production by Breakspear Limited, a fellow
subsidiary of Rich City, plus a mark up, which was charged at 6.5% during the
six months ended September 30, 1996, on the cost of production. The financial
statements of Leading Edge for the six months ended September 30, 1996 include
all costs incurred by Rich City for manufacturing and distribution.

The unaudited financial information of Rich City's North American
distribution business (the "N.A. Distribution Business") for the six months
ended September 30, 1995 (the "1995 Period"), was prepared on a "Carved Out
Basis", details of which are provided in Note 1 to the audited financial
statements of the N.A. Distribution Business on pages F-7 and F-8.

The unaudited financial information for the 1995 Period does not purport to
represent what the results of operations or the financial position of the N.A.
Distribution Business would actually have been had the events described above in
fact occurred on such date or at the beginning of the Period, or to project the
results of the operations of the N.A. Distribution Business for any future date
or period.

The unaudited financial information should be read in conjunction with the
audited financial statements of the N.A. Distribution Business and Leading Edge,
including the notes thereto, and other financial information included elsewhere
in this Prospectus.

Rich City and Leading Edge maintain their books and records in Hong Kong
dollars. The exchange rate has been fixed to the U.S. dollars at approximately
HK$ 7.80 to $1.00 since 1983. On a forward going basis, following the completion
of the public offering, the books and records of Leading Edge will be maintained
in U.S. dollars.

F-18
<PAGE>
UNAUDITED INTERIM BALANCE SHEETS

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION LEADING EDGE
BUSINESS SEPTEMBER 30,
MARCH 31, 1996 1996
CARVED OUT ACTUAL
-------------- -------------
<S> <C> <C>
(AUDITED) (UNAUDITED)
ASSETS

Current assets:
Cash and cash equivalents....................................................... $ 35,002 $ 34,655
Accounts receivable, net of allowance for doubtful accounts--March 31, 1996,
$5,944; September 30, 1996, $7,658............................................ 192,199 247,617
Bills receivable (Note 2)....................................................... 169,516 1,531,516
Inventories (Note 3)............................................................ -- 585,668
Advances to head office (Note 4)................................................ 1,151,836 --
Deposits paid to holding company (Note 5)....................................... -- 1,299,040
Prepaid expenses and other current assets....................................... 54,832 216,475
-------------- -------------
Total current assets.......................................................... 1,603,385 3,914,971
Property, plant and equipment, net of accumulated depreciation-- March 31, 1996,
$56,978; September 30, 1996, $365 (Note 6)....................................... 193,295 29,211
-------------- -------------
Total assets.................................................................. $ 1,796,680 $ 3,944,182
-------------- -------------
-------------- -------------
LIABILITIES AND DIVISION/SHAREHOLDER'S EQUITY

Current liabilities:
Accounts payable to a related party/holding company (Note 7).................... $ 1,655,308 $ 1,761,080
Accrued liabilities............................................................. 141,372 142,644
Income taxes payable (Note 9)................................................... -- 585,374
-------------- -------------
Total current liabilities..................................................... 1,796,680 2,489,098
-------------- -------------
Commitments and contingencies (Note 10)........................................... -- --
Division/shareholder's equity:
Common stock $0.01 par value--authorized 5,000,000 shares, issued and
outstanding 1,875,000 shares.................................................. -- 18,750
Additional paid-in capital...................................................... -- 481,250
Retained earnings............................................................... -- 955,084
-------------- -------------
Total division/shareholder's equity........................................... -- 1,455,084
-------------- -------------
Total liabilities and division/shareholder's equity........................... $ 1,796,680 $ 3,944,182
-------------- -------------
-------------- -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-19
<PAGE>
UNAUDITED INTERIM STATEMENTS OF INCOME

Net sales........................................................................ $ 5,210,228 $ 5,551,581
Cost of sales from a related party/holding company (Note 7)...................... 3,131,142 3,736,403
---------------- -------------
Gross profit..................................................................... 2,079,086 1,815,178
---------------- -------------
Selling expenses................................................................. 222,812 162,923
General and administrative expenses.............................................. 318,680 111,797
---------------- -------------
Selling, general and administrative expenses (Note 8)............................ 541,492 274,720
---------------- -------------
Operating income................................................................. 1,537,594 1,540,458
Interest expense................................................................. (22,237) --
Other income..................................................................... 1,057 --
---------------- -------------
Income before income taxes....................................................... 1,516,414 1,540,458
Income taxes (Note 9)............................................................ -- 585,374
---------------- -------------
Net income....................................................................... $ 1,516,414 $ 955,084
---------------- -------------
---------------- -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-20
<PAGE>
UNAUDITED INTERIM STATEMENTS OF DIVISION/
SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL DIVISION/
--------------------- PAID-IN RETAINED SHAREHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY
---------- --------- ---------- ------------ -------------

<S> <C> <C> <C> <C> <C>
Rich City's N.A. Distribution Business (audited):
Balance as of April 1, 1995...................... -- $ -- $ -- $ -- $ --
Net income for the period........................ -- -- -- 3,200,595 3,200,595
Distribution to Head Office...................... (3,200,595) (3,200,595)
---------- --------- ---------- ------------ -------------
Balance as of March 31, 1996..................... -- $ -- $ -- $ -- $ --
---------- --------- ---------- ------------ -------------
---------- --------- ---------- ------------ -------------
Leading Edge (unaudited):
Balance as of April 1, 1996...................... 1,875,000 $ 18,750 $ -- $ -- $ 18,750
Net income for the period........................ -- -- -- 955,084 955,084
Contribution by Rich City of part of accounts
payable to Rich City........................... -- -- 481,250 -- 481,250
---------- --------- ---------- ------------ -------------
Balance as of September 30, 1996................. 1,875,000 $ 18,750 $ 481,250 $ 955,084 $ 1,455,084
---------- --------- ---------- ------------ -------------
---------- --------- ---------- ------------ -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-21
<PAGE>
UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION LEADING EDGE
BUSINESS SIX MONTHS
SIX MONTHS ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1996
CARVED OUT ACTUAL
---------------- -------------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net income..................................................................... $ 1,516,414 $ 955,084
Adjustment to reconcile net income to net cash provided by operating
activities:
Depreciation................................................................. 13,335 365
Changes in operating assets and liabilities:
Accounts receivable........................................................ 104,625 (247,617)
Bills receivable........................................................... 87,788 (1,531,516)
Inventories................................................................ -- (585,668)
Deposits paid to holding company........................................... -- (1,299,040)
Prepaid expenses and other current assets.................................. 3,313 (216,475)
Accounts payable to a related party/holding company........................ 264,337 2,259,580
Accrued liabilities........................................................ 81,090 142,644
Income taxes payable....................................................... -- 585,374
---------------- -------------
Net cash provided by operating activities........................................ 2,070,902 62,731
---------------- -------------
Cash flows from investing activities:
Purchases of property, plant and equipment..................................... (1,772) (29,576)
---------------- -------------
Cash used in investing activities................................................ (1,772) (29,576)
---------------- -------------
Cash flows from financing activities:
Increase in advances to head office............................................ (2,300,248) --
---------------- -------------
Cash used in financing activities................................................ (2,300,248) --
---------------- -------------
Net (decrease) increase in cash and cash equivalents............................. (231,118) 33,155
Cash and cash equivalents at beginning of period................................. 290,130 1,500
---------------- -------------
Cash and cash equivalents at end of period....................................... $ 59,012 $ 34,655
---------------- -------------
---------------- -------------
Supplemental disclosures of cash flow information:
Interest paid.................................................................. $ 22,237 $ --
Income taxes paid.............................................................. -- --
</TABLE>

During the six months ended September 30, 1996, the holding company
contributed additional capital of $498,500 by reduction of the accounts payable
to holding company.

See accompanying notes to unaudited interim financial information

F-22
<PAGE>
NOTES TO UNAUDITED INTERIM FINANCIAL INFORMATION

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

During the six months ended September 30, 1995, the N.A. Distribution
Business adopted the same accounting policies as stated in Note 2 of its audited
financial statements on pages F-8 and F-9. During the six months ended September
30, 1996, Leading Edge has adopted the following additional accounting policy:

INCOME TAXES--The Company has adopted the liability method of accounting for
income taxes, as set forth in Statement of Financial Accounting Standards
No.109, "Accounting for Income Taxes" ("SFAS 109"). Under the liability method,
deferred taxes are determined based upon the difference between the financial
statement and tax bases of assets and liabilities at enacted tax rates in effect
in the years in which the differences are expected to reverse. Deferred tax
expense (benefit) represents the change in the deferred tax balances.

2. BILLS RECEIVABLE

Bills receivable represent accounts receivable in the form of bills of
exchange, whose acceptances and settlements are handled by banks. At September
30, 1996, bills receivable of $1,255,453 were provided as collateral for banking
facilities provided to Rich City. The Company has made no charge for providing
this collateral.

At September 30, 1996, the Company had not factored any bills receivable
with financial institutions with recourse.

3. INVENTORIES

Effective April 1, 1996, the Company maintains inventories for distribution
to customers in the United States and inventories represent finished goods held
for resale.

4. ADVANCES TO HEAD OFFICE

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION
BUSINESS
MARCH 31, 1996
CARVED OUT
--------------
<S> <C>
(AUDITED)

Advances to Rich City:
Balance as of April 1, 1995................................................... $ (362,384)
Net advances to head office................................................... 1,514,220
--------------
Balance as of March 31, 1996.................................................. $ 1,151,836
--------------
--------------
</TABLE>

The advances are unsecured, non-interest bearing and repayable on demand.

5. DEPOSITS PAID TO HOLDING COMPANY

The amount represents deposits paid to Rich City for purchase orders placed
by the Company as stipulated in the Agreement.

F-23
<PAGE>
NOTES TO UNAUDITED INTERIM FINANCIAL INFORMATION (CONTINUED)

6. PROPERTY PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION LEADING EDGE
BUSINESS SEPTEMBER 30,
MARCH 31, 1996 1996
CARVED OUT ACTUAL
-------------- -------------
<S> <C> <C>
(AUDITED) (UNAUDITED)

Property, plant and equipment consists of the following:
Furniture, fixtures and equipment............................. $ 147,988 $ 29,576
Leasehold improvements........................................ 102,285 --
-------------- -------------
Total......................................................... 250,273 29,576
Less: Accumulated depreciation................................ (56,978) (365)
-------------- -------------
Net book value................................................ $ 193,295 $ 29,211
-------------- -------------
-------------- -------------
</TABLE>

7. ACCOUNTS PAYABLE TO AND PURCHASES FROM A RELATED PARTY

AND HOLDING COMPANY

Starting from April 1, 1996, Leading Edge purchases packaging products from
Breakspear Limited, a related party, through Rich City; previously Breakspear
Limited was the sole supplier for packaging products to Rich City.

Accounts payable to Breakspear Limited and Rich City at March 31, 1996 and
September 30, 1996 were $1,655,308 and $1,761,080, respectively. Total purchases
from Breakspear Limited and Rich City during the six months ended September 30,
1995 and 1996 were $3,131,142 and $4,322,071, respectively.

8. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Because Leading Edge was still establishing its operations independently of
Rich City at September 30, 1996, the level of selling, general and
administrative expenses was low.

If full-scale operations had been implemented, during the six months ended
September 30, 1996, the estimated additional expense for office and warehouse
rentals, including building management fees, employee compensation and property
depreciation would have been approximately $114,000, $90,000 and $31,000,
respectively.

9. INCOME TAXES

No taxation has been provided for the six months ended September 30, 1995 as
the carved out business was not subject to taxation either in Hong Kong or the
United States. For the six months ended September 30, 1996, the Company is
subject to the income tax in the United States and an income tax expense has
been computed using a rate of 38% for U.S. Federal and State income taxes.

There were no significant temporary timing differences during the periods or
at the balance sheet dates.

10. COMMITMENTS AND CONTINGENCIES

(a) At March 31, 1996, the N.A. Distribution Business had factored gross
bills receivable of $1,074,008 at a discount of $14,477 with banks with
recourse.

F-24
<PAGE>
NOTES TO UNAUDITED INTERIM FINANCIAL INFORMATION (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

The N.A. Distribution Business leases premises under various operating
leases which do not contain any renewal and escalation clauses. Rental
expense under operating leases was $57,876 for the year ended March 31,
1996.

Minimum rental commitments at March 31, 1996 under operating leases
include $13,994 due in 1997. The N.A. Distribution Business had no other
capital commitments.

(b) At September 30, 1996, Leading Edge leases premises under various
operating leases which do not contain any renewal and escalation clauses.
Rental expense under operating leases included in the statement of income
was $1,300 for the six months ended September 30, 1996.

As at September 30, 1996, Leading Edge had no capital commitment but was
obligated under operating leases requiring minimum rentals as follows:

<TABLE>
<S> <C>
Year ending March 31,

1997.......................................................... 92,610
1998.......................................................... 243,721
1999.......................................................... 237,221
2000.......................................................... 237,221
2001.......................................................... 237,221
2002.......................................................... 127,855
---------
Total minimum lease payments.................................... $1,175,849
---------
---------
</TABLE>

F-25
<PAGE>

INTRODUCTION TO UNAUDITED PRO FORMA

STATEMENTS OF INCOME

The unaudited pro forma statements of income of Rich City's North American
distribution business (the "N.A. Distribution Business") for the six months
ended September 30, 1995, and for the year ended March 31, 1996 (the "Periods")
have been prepared on a "Carved-Out Basis" as discussed in Note 1 to the audited
financial statements of N.A. Distribution Business on pages F-7 and F-8, and
after making such pro forma adjustments as described in Note 1 (a) and (b) to
this unaudited pro forma statements of income on page F-28 which give effect to
the current operating structure of Leading Edge Packaging, Inc. ("Leading Edge")
as if the Assignment and Distribution Agreement ("Agreement") dated September
23, 1996 had been in place since April 1, 1995 and throughout the Periods.

The unaudited pro forma statement of income of Leading Edge for the six
months ended September 30, 1996 has been adjusted after making the pro forma
adjustment as described in Note 1 (c) to this unaudited pro forma statements of
income on page F-28.

The unaudited pro forma statements of income for the Periods do not purport
to represent what the results of operations of the N.A. Distribution Business or
Leading Edge would actually have been had the events described above in fact
occurred on such date or at the beginning of the Periods, or to project the
results of the operations of the N.A. Distribution Business or Leading Edge for
any future date or period.

The unaudited pro forma statements of income should be read in conjunction
with the audited financial statements of the N.A. Distribution Business and
Leading Edge, including the notes thereto, and other financial information
included elsewhere in this Prospectus.

F-26
<PAGE>

UNAUDITED PRO FORMA STATEMENTS OF INCOME

N.A. DISTRIBUTION BUSINESS

<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, YEAR ENDED YEAR ENDED
1995 PRO FORMA 1995 MARCH 31, 1996 PRO FORMA MARCH 31, 1996
CARVED OUT ADJUSTMENTS PRO FORMA CARVED OUT ADJUSTMENTS PRO FORMA
------------- ----------- ------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net sales...................... $ 5,210,228 $ 5,210,228 $ 10,987,470 $ 10,987,470
Cost of sales from a related 3,131,142 Not 6,635,318 Not
party/head office............. 1a) 203,524 3,334,666 1a) 431,296 7,066,614
------------- ------------- -------------- --------------
Gross profit................... 2,079,086 1,875,562 4,352,152 3,920,856
------------- ------------- -------------- --------------
Selling expenses............... 222,812 222,812 451,327 451,327
General and administrative
expenses...................... 318,680 318,680 653,283 653,283
------------- ------------- -------------- --------------
Selling, general and
administrative expenses....... 541,492 541,492 1,104,610 1,104,610
------------- ------------- -------------- --------------
Operating income............... 1,537,594 1,334,070 3,247,542 2,816,246
Interest expense............... (22,237) (22,237) (53,961) (53,961)
Other income................... 1,057 1,057 7,014 7,014
------------- ------------- -------------- --------------
Income before income taxes..... 1,516,414 1,312,890 3,200,595 2,769,299
-- Not -- Not
Income taxes................... 1b) 498,898 498,898 1b) 1,052,334 1,052,334
------------- ------------- -------------- --------------
Net income..................... $ 1,516,414 $ 813,992 $ 3,200,595 $ 1,716,965
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------
</TABLE>

LEADING EDGE

<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 PRO FORMA 1996
ACTUAL ADJUSTMENTS PRO FORMA
------------- ----------- -------------
<S> <C> <C> <C>
Net sales.................................................................. $ 5,551,581 $ 5,551,581
Cost of sales from holding company......................................... 3,736,403 3,736,403
------------- ----------- -------------
Gross profit............................................................... 1,815,178 1,815,178
------------- ----------- -------------
Selling expenses........................................................... 162,923 162,923
111,797 Not
General and administrative expenses........................................ 1c) 21,048 132,845
------------- ----------- -------------
Selling, general and administrative expenses............................... 274,720 295,768
------------- ----------- -------------
Income before income taxes................................................. 1,540,458 1,519,410
585,374 Not
Income taxes............................................................... 1c) (7,998) 577,376
------------- ----------- -------------
Net income................................................................. $ 955,084 $ 942,034
------------- -------------
------------- -------------
</TABLE>

See accompanying notes to unaudited pro forma statements of income

F-27
<PAGE>

NOTES TO UNAUDITED PRO FORMA STATEMENTS OF INCOME

1. ASSUMPTIONS AND DESCRIPTION OF PRO FORMA ADJUSTMENTS

The pro forma adjustments were made under the following assumptions:

(i) The N.A. Distribution Business purchases goods from Rich City on an
"as needed" basis, therefore, no inventories were kept by the N.A.
Distribution Business during the Periods and the N.A. Distribution Business
did not lease any warehouse.

(ii) Effective on April 1, 1995, the N.A. Distribution Business operated
under the terms of the Agreement.

A description of the pro forma adjustments is as follows:

(a) To adjust for the increase in cost of sales for goods purchased from
Rich City during the Periods in accordance with the pricing policy as
stipulated in the Agreement. This represented an average 6.5% mark-up on the
total purchases from the related party.

(b) To provide income taxes calculated using an estimated average
effective tax rate in the United States of America of 38% for U.S. Federal
and State income taxes.

F-28
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 6
The Company.................................... 14
Use of Proceeds................................ 14
Capitalization................................. 15
Dilution....................................... 16
Dividend Policy................................ 17
Selected Historical and Pro Forma Financial
Data......................................... 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 19
Business....................................... 24
Management..................................... 30
Certain Transactions........................... 34
Principal Stockholders......................... 35
Description of Securities...................... 36
Shares Eligible for Future Sale................ 37
Underwriting................................... 38
Legal Matters.................................. 39
Experts........................................ 39
Additional Information......................... 40
Index to Financial Statements.................. F-1
</TABLE>

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

UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO
THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

[LOGO]

1,250,000 SHARES OF

COMMON STOCK

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

PROSPECTUS

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

GILFORD SECURITIES INCORPORATED

----------------- , 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses incurred in connection
with the issuance and distribution of the securities being registered hereby,
other than the underwriting discount and non-accountable expense allowance,
expected to be incurred by the Company:

<TABLE>
<S> <C>
SEC registration fee........................................... $ 2,974.14
NASD fee....................................................... $ 1,362.50
State securities law fees and expenses......................... $45,600.00
Nasdaq membership listing fee.................................. $20,625.00
Printing and engraving expenses................................ $100,000.00
Legal fees and expenses........................................ $180,000.00
Accounting fees and expenses................................... $320,000.00
Transfer Agent fee............................................. $ 5,000.00
Miscellaneous.................................................. $ 4,438.36
----------
TOTAL.................................................... $680,000.00
----------
----------
</TABLE>

All amounts in the above table are estimated except the SEC registration
fee, the NASD fee and the Nasdaq membership listing fee.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation may indemnify directors and officers as well
as other employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation, a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) incurred in connection with the
defense or settlement of such actions, and the statute requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to the corporation. The statute provides that it is not
exclusive of other indemnification that may be granted by a corporation's
bylaws, disinterested director vote, stockholder vote, agreement or otherwise.

The Certificate of Incorporation of the Company, as amended, (the
"Certificate") provides that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person, or a person of whom such person is the legal
representative, is or was a director or officer of the Company or is or was
serving at the request of the Company as a director or officer of the Company or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, will be indemnified and held harmless
by the Company to the fullest extent authorized by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said

II-1
<PAGE>
law permitted the Company to provide prior to such amendment), against all
expense, liability and loss reasonably incurred or suffered by such person in
connection therewith. Such right to indemnification includes the right to have
the Company pay the expenses incurred in defending any such proceeding in
advance of its final disposition, subject to the provisions of the DGCL. Such
rights are not exclusive of any other right which any person may have or
acquire.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On March 31, 1996, the Company issued 1,500 shares of the Common Stock to
Rich City International Packaging Limited, a Hong Kong Company with limited
liability ("Rich City"). As consideration for such shares, Rich City paid
$500,000 in cash and reduction of accounts payable by the Company to Rich City.
On September 23, 1996, the Company effected a stock split allowing for the
conversion of each share of Common Stock into 1,250 shares of Common Stock.

The Company believes that issuance of the foregoing securities was exempt
from registration pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), because the securities were offered and sold in
transactions not involving a public offering.

ITEM 16. EXHIBITS AND FINANCIAL SCHEDULES.

(A) EXHIBITS.

<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
3.1 Certificate of Incorporation, as amended
3.2 Amended and Restated By-laws
4.1 Specimen Certificate for Shares of Common Stock
4.2 Form of Representative's Warrant Agreement
4.3 Form of Representative's Warrant Certificate
4.4 1996 Incentive Stock Option Plan**
5.1 Opinion and Consent of Bondy & Schloss LLP
8.1 Opinion of Erving Brettell, Solicitors
10.1 Assignment and Distribution between the Company and Rich City International Packaging
Limited, dated September 23, 1996**
10.2 Employment Agreement between the Company and Lip-Boon Saw, effective as of April 1,
1996**
10.3 Employment Agreement between the Company and Peter Yu-Siu Chu, dated September 23,
1996**
10.4 Employment Agreement between the Company and Dan Ben-Moshe, dated September 24, 1996**
10.5 Employment Agreement between the Company and Casey K. Tjang, dated September 23,
1996**
10.6 Lease between the Company and Empire State Building Company, dated April 3, 1996
10.7 Lease between the Company and Center Realty, L.P., dated August 1996
10.8 Form of Financial Advisory and Consulting Agreement
23.1 Consent of Deloitte Touche Tohmatsu
23.3 Consent of Erving Brettell, Solicitors (included in item 8.1 above)
23.5 Consent of Bondy & Schloss LLP (included in item 5.1 above)
24 Powers of Attorney (included on Company signature page)
</TABLE>

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

* To be filed by amendment.

** Previously filed.

II-2
<PAGE>
(B) FINANCIAL STATEMENT SCHEDULES.

All supplemental schedules are omitted because they are not required or
because the information is shown in the financial statements or notes thereto.

ITEM 17. UNDERTAKINGS.

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

The undersigned Registrant hereby undertakes that:

(1) For purpose of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To provide to the underwriters at the closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as required by the underwriters to permit prompt delivery to each
purchaser.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing of Form S-1 and has duly caused this Amendment No. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Hong Kong, on November 13, 1996.

LEADING EDGE PACKAGING, INC.

By: /S/ LIP-BOON SAW
-----------------------------------------
Lip-Boon Saw, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities indicated on November 13, 1996.

SIGNATURE TITLE
- ------------------------------ ---------------------------

/s/ LIP-BOON SAW Chairman of the Board and
- ------------------------------ Chief Executive Officer
Lip-Boon Saw

* President and Chief
- ------------------------------ Operations Officer
Peter Yu-Siu Chu

/s/ CASEY K. TJANG Director, Chief Financial
- ------------------------------ Officer and Secretary
Casey K. Tjang

* Vice President/Marketing
- ------------------------------ and Sales
Dan Ben-Moshe

* Director
- ------------------------------
Richard Fung-Gea Wong

* Director
- ------------------------------
Peter L. Coker

* Director
- ------------------------------
Robert B. Goergen

<TABLE>
<S> <C> <C>
*By: /s/ CASEY K. TJANG
---------------------------------------
Casey K. Tjang
ATTORNEY-IN-FACT
</TABLE>

II-4
<PAGE>
EXHIBIT INDEX

<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
3.1 Certificate of Incorporation, as amended
3.2 Amended and Restated By-laws
4.1 Specimen Certificate for Shares of Common Stock
4.2 Form of Representative's Warrant Agreement
4.3 Form of Representative's Warrant Certificate
4.4 1996 Incentive Stock Option Plan**
5.1 Opinion and Consent of Bondy & Schloss LLP
8.1 Opinion of Erving Brettell, Solicitors
10.1 Assignment and Distribution between the Company and Rich City International Packaging
Limited, dated September 23, 1996**
10.2 Employment Agreement between the Company and Lip-Boon Saw, effective as of April 1,
1996**
10.3 Employment Agreement between the Company and Peter Yu-Siu Chu, dated
September 23, 1996**
10.4 Employment Agreement between the Company and Dan Ben-Moshe, dated September 24, 1996**
10.5 Employment Agreement between the Company and Casey K. Tjang, dated September 23,
1996**
10.6 Lease between the Company and Empire State Building Company, dated April 3, 1996
10.7 Lease between the Company and Center Realty, L.P., dated August 1996
10.8 Form of Financial Advisory and Consulting Agreement
23.1 Consent of Deloitte Touche Tohmatsu
23.3 Consent of Erving Brettell, Solicitors (included in item 8.1 above)
23.5 Consent of Bondy & Schloss LLP (included in item 5.1 above)
24 Powers of Attorney (included on Company signature page)
</TABLE>

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

* To be filed by amendment.

** Previously filed.

<PAGE>

OH&S DRAFT
11/5/96
EXHIBIT A

[Form of Underwriting Agreement - Subject to Additional Review]

1,250,000 SHARES OF COMMON STOCK

LEADING EDGE PACKAGING, INC.

UNDERWRITING AGREEMENT

New York, New York
, 1996

GILFORD SECURITIES INCORPORATED
As Representative of the
Several Underwriters listed
on Schedule A hereto
850 Third Avenue
New York, New York 10022

Ladies and Gentlemen:

Leading Edge Packaging, Inc., a Delaware corporation (the "Company")
confirms its agreement with Gilford Securities Incorporated ("Gilford") and each
of the several underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 11) for whom Gilford is acting as representative
(in such capacity, Gilford shall hereinafter be referred to as "you" or the
"Representative"), with respect to the sale by the Company and the purchase by
the Representative of 1,250,000 shares of the Company's common stock, $.01 par
value per share ("Common Stock"). Such shares of Common Stock are hereinafter
referred to as the "Firm Shares."

Upon the Representative's request, as provided in Section 2(b) of this
Agreement, the Company shall also sell to the Underwriters up to an additional
187,500 shares of Common Stock for the purpose of covering over-allotments, if
any (the "Option Shares"). The Firm Shares and the Option Shares are sometimes
hereinafter referred to as the "Shares." The Company also proposes to issue and
sell to the Representative warrants (the "Representative's Warrants") pursuant
to the Representative's Warrant Agreement (the "Representative's Warrant
Agreement") for the purchase of an additional 125,000 shares of Common Stock.
The shares

<PAGE>

of Common Stock issuable upon exercise of the Representative's Warrants are
hereinafter referred to as the "Representative's Shares." The Firm Shares, the
Option Shares, the Representative's Warrants and the Representative's Shares
(collectively, hereinafter referred to as the "Securities") are more fully
described in the Registration Statement and the Prospectus referred to below.

1. REPRESENTATIONS AND WARRANTIES.

(a) The Company represents and warrants to, and agrees with, the
Representative as of the date hereof, and as of the Closing Date (hereinafter
defined) and the Option Closing Date (hereinafter defined), if any, as follows:

(i) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and an
amendment or amendments thereto, on Form S-1 (No. 333-12911), including any
related preliminary prospectus ("Preliminary Prospectus"), for the registration
of the Firm Shares and the Option Shares under the Securities Act of 1933, as
amended (the "Act"), which registration statement and amendment or amendments
have been prepared by the Company in conformity with the requirements of the
Act, and the rules and regulations (the "Regulations") of the Commission under
the Act. The Company will promptly file a further amendment to said
registration statement in the form heretofore delivered to the Representative
and will not, file any other amendment thereto to which the Representative shall
have objected in writing after having been furnished with a copy thereof.
Except as the context may otherwise require, such registration statement, as
amended, on file with the Commission at the time the registration statement
becomes effective (including the prospectus, financial statements, schedules,
exhibits and all other documents filed as a part thereof or incorporated therein
(including, but not limited to those documents or information incorporated by
reference therein) and all information deemed to be a part thereof as of such
time pursuant to paragraph (b) of Rule 430(A) of the Regulations), is
hereinafter called the "Registration Statement", and the form of prospectus in
the form first filed with the Commission pursuant to Rule 424(b) of the
Regulations, is hereinafter called the "Prospectus." For purposes hereof,
"Rules and Regulations" mean the rules and regulations adopted by the Commission
under either the Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable.

(ii) Neither the Commission nor any state regulatory authority
has issued any order preventing or suspending the use of any Preliminary
Prospectus, the Registration Statement or the Prospectus or any part of any
thereof and no proceedings for a stop order suspending the effectiveness of the
Registration Statement or any of the Company's securities have been instituted
or are pending or to the Company's knowledge, threatened. Each of the
Preliminary Prospectus, Registration Statement and Prospectus at the time of
filing thereof conformed with the requirements of the Act and the Rules and
Regulations, and none of the Preliminary Prospectus, Registration Statement or
Prospectus at the time of filing thereof contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
and necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that this representation and
warranty does not apply to statements made in reliance upon and in conformity
with written information

- 2 -

<PAGE>

furnished to the Company with respect to the Underwriters by or on behalf of the
Underwriters expressly for use in such Preliminary Prospectus, Registration
Statement or Prospectus.

(iii) When the Registration Statement becomes effective and at
all times subsequent thereto up to the Closing Date and each Option Closing
Date, if any, and during such longer period as the Prospectus may be required to
be delivered in connection with sales by the Underwriters or a dealer, the
Registration Statement and the Prospectus will contain all statements which are
required to be stated therein in accordance with the Act and the Rules and
Regulations, and will conform to the requirements of the Act and the Rules and
Regulations; neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, PROVIDED, HOWEVER, that this
representation and warranty does not apply to statements made or statements
omitted in reliance upon and in conformity with information furnished to the
Company in writing by or on behalf of any Underwriters expressly for use in the
Preliminary Prospectus, Registration Statement or Prospectus or any amendment
thereof or supplement thereto.

(iv) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the state of its
incorporation. The Company does not own an interest in any corporation,
partnership, trust, joint venture or other business entity. The Company is duly
qualified and licensed and in good standing as a foreign corporation in each
jurisdiction in which its ownership or leasing of any properties or the
character of its operations requires such qualification or licensing. The
Company has all requisite corporate power and authority, and the Company has
obtained any and all necessary authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental or regulatory
officials and bodies (including, without limitation, those having jurisdiction
over environmental or similar matters), to own or lease its properties and
conduct its business as described in the Prospectus; the Company is and has been
doing business in compliance with all such authorizations, approvals, orders,
licenses, certificates, franchises and permits and all federal, state and local
laws, rules and regulations; and the Company has not received any notice of
proceedings relating to the revocation or modification of any such
authorization, approval, order, license, certificate, franchise, or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the condition,
financial or otherwise, or the earnings, position, prospects, value, operation,
properties, business or results of operations of the Company. The disclosures
in the Registration Statement concerning the effects of federal, state and local
laws, rules and regulations on the Company's business as currently conducted and
as contemplated are correct in all material respects and do not omit to state a
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which they were made.

(v) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus, under "Capitalization" and
"Description of Capital Stock" and will have the adjusted capitalization set
forth therein on the Closing Date and the Option Closing Date, if any, based
upon the assumptions set forth therein, and the Company is not a party to or
bound by any instrument, agreement or other arrangement providing for it to

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issue any capital stock, rights, warrants, options or other securities, except
for this Agreement, the Representative's Warrant Agreement and as described in
the Prospectus. The Securities and all other securities issued or issuable by
the Company conform or, when issued and paid for, will conform, in all respects
to all statements with respect thereto contained in the Registration Statement
and the Prospectus. All issued and outstanding securities of the Company have
been duly authorized and validly issued and are fully paid and non-assessable
and the holders thereof have no rights of rescission with respect thereto, and
are not subject to personal liability by reason of being such holders; and none
of such securities were issued in violation of the preemptive rights of any
holders of any security of the Company or similar contractual rights granted by
the Company. The Securities are not and will not be subject to any preemptive
or other similar rights of any stockholder, have been duly authorized and, when
issued, paid for and delivered in accordance with the terms hereof, will be
validly issued, fully paid and non-assessable and will conform to the
description thereof contained in the Prospectus; the holders thereof will not be
subject to any liability solely as such holders; all corporate action required
to be taken for the authorization, issue and sale of the Securities has been
duly and validly taken; and the certificates representing the Securities will be
in due and proper form. Upon the issuance and delivery pursuant to the terms
hereof of the Securities to be sold by the Company hereunder, the Underwriters
will acquire good and marketable title to such Securities free and clear of any
lien, charge, claim, encumbrance, pledge, security interest, defect or other
restriction or equity of any kind whatsoever.

(vi) The financial statements, including the related notes and
schedules thereto, included in the Registration Statement, each Preliminary
Prospectus and the Prospectus fairly present the financial position, income,
changes in cash flow, changes in stockholders' equity, and the results of
operations of the Company at the respective dates and for the respective periods
to which they apply and the pro forma financial information included in the
Registration Statement and Prospectus presents fairly on a basis consistent with
that of the audited financial statements included therein, what the Company's
pro forma capitalization would have been for the respective periods and as of
the respective dates to which they apply after giving effect to the adjustments
described therein. Such financial statements have been prepared in conformity
with generally accepted accounting principles and the Rules and Regulations,
consistently applied throughout the periods involved. There has been no adverse
change or development involving a material prospective change in the condition,
financial or otherwise, or in the earnings, position, prospects, value,
operation, properties, business, or results of operations of the Company whether
or not arising in the ordinary course of business, since the date of the
financial statements included in the Registration Statement and the Prospectus
and the outstanding debt, the property, both tangible and intangible, and the
business of the Company conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus. Financial
information set forth in the Prospectus under the headings "Summary Historical
and Pro Forma Financial Information," "Selected Historical and Pro Forma
Financial Data," "Capitalization," and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," fairly present, on the basis
stated in the Prospectus, the information set forth therein, have been derived
from or compiled on a basis consistent with that of the audited financial
statements included in the Prospectus.

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(vii) The Company (i) has paid all federal, state, local, and
foreign taxes for which it is liable, including, but not limited to, withholding
taxes and amounts payable under Chapters 21 through 24 of the Internal Revenue
Code of 1986 (the "Code"), and has furnished all information returns it is
required to furnish pursuant to the Code, (ii) has established adequate reserves
for such taxes which are not due and payable, and (iii) does not have any tax
deficiency or claims outstanding, proposed or assessed against it.

(viii) No transfer tax, stamp duty or other similar tax is
payable by or on behalf of the Underwriters in connection with (i) the issuance
by the Company of the Securities, (ii) the purchase by the Underwriters of the
Securities from the Company, (iii) the consummation by the Company of any of its
obligations under this Agreement or the Representative's Warrant Agreement, or
(iv) resales of the Shares in connection with the distribution contemplated
hereby.

(ix) The Company maintains insurance policies, including, but not
limited to, general liability and property insurance, which insures the Company
and its employees, against such losses and risks generally insured against by
comparable businesses. The Company (A) has not failed to give notice or present
any insurance claim with respect to any matter, including but not limited to the
Company's business, property or employees, under the insurance policy or surety
bond in a due and timely manner, (B) does not have any disputes or claims
against any underwriter of such insurance policies or surety bonds or has not
failed to pay any premiums due and payable thereunder, or (C) has not failed to
comply with all conditions contained in such insurance policies and surety
bonds. There are no facts or circumstances under any such insurance policy or
surety bond which would relieve any insurer of its obligation to satisfy in full
any valid claim of the Company.

(x) There is no action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding (including, without
limitation, those having jurisdiction over environmental or similar matters),
domestic or foreign, pending or threatened against (or circumstances that may
give rise to the same), or involving the properties or business of, the Company
which (i) questions the validity of the capital stock of the Company, this
Agreement, the Consulting Agreement, or the Representative's Warrant Agreement
or of any action taken or to be taken by the Company pursuant to or in
connection with this Agreement, the Consulting Agreement, or the
Representative's Warrant Agreement, (ii) is required to be disclosed in the
Registration Statement which is not so disclosed (and such proceedings as are
summarized in the Registration Statement are accurately summarized in all
material respects), or (iii) might materially and adversely affect the
condition, financial or otherwise, or the earnings, position, prospects,
stockholders' equity, value, operation, properties, business or results of
operations of the Company.

(xi) The Company has full legal right, power and authority to
authorize, issue, deliver and sell the Securities, enter into this Agreement,
the Consulting Agreement, and the Representative's Warrant Agreement and to
consummate the transactions provided for in such agreements; and this Agreement,
the Consulting Agreement, and the Representative's Warrant Agreement have each
been duly and properly authorized, executed and delivered by the Company. Each
of this Agreement, the Consulting Agreement, and the Representative's Warrant
Agreement constitutes a legal, valid and binding agreement of the Company
enforceable

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<PAGE>

against the Company in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting
creditors' rights generally, (ii) as enforceability of any indemnification or
contribution provisions may be limited under applicable laws or the public
policies underlying such laws and (iii) that the remedies of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings may be brought. None of the Company's issue and sale of the
Securities, execution or delivery of this Agreement, the Consulting Agreement,
or the Representative's Warrant Agreement, its performance hereunder and
thereunder, its consummation of the transactions contemplated herein and
therein, the Prospectus, and any amendments or supplements thereto, conflicts
with or will conflict with or results or will result in any breach or violation
of any of the terms or provisions of, or constitutes or will constitute a
default under, or result in the creation or imposition of any lien, charge,
claim, encumbrance, pledge, security interest, defect or other restriction or
equity of any kind whatsoever upon, any property or assets (tangible or
intangible) of the Company pursuant to the terms of, (i) the certificate of
incorporation or by-laws of the Company, (ii) any license, contract, indenture,
mortgage, deed of trust, voting trust agreement, stockholders agreement, note,
loan or credit agreement or any other agreement or instrument to which the
Company is a party or by which it is or may be bound or to which any of its
properties or assets (tangible or intangible) is or may be subject, or any
indebtedness, or (iii) any statute, judgment, decree, order, rule or regulation
applicable to the Company of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body (including, without
limitation, those having jurisdiction over environmental or similar matters),
domestic or foreign, having jurisdiction over the Company or any of its
activities or properties.

(xii) Except as described in the Prospectus, no consent,
approval, authorization or order of, and no filing with, any court, regulatory
body, government agency or other body, domestic or foreign, is required for the
issuance of the Shares pursuant to the Prospectus and the Registration
Statement, the issuance of the Representative's Warrants, the performance of
this Agreement, the Consulting Agreement, and the Representative's Warrant
Agreement and the transactions contemplated hereby and thereby, including
without limitation, any waiver of any preemptive, first refusal or other rights
that any entity or person may have for the issue and/or sale of any of the
Shares, or the Representative's Warrants, except such as have been or may be
obtained under the Act or may be required under state securities or Blue Sky
laws in connection with the Representative's purchase and distribution of the
Shares, and the Representative's Warrants to be sold by the Company hereunder.

(xiii) All executed agreements, contracts or other documents or
copies of executed agreements, contracts or other documents filed as exhibits to
the Registration Statement to which the Company is a party or by which it may be
bound or to which any of its assets, properties or business may be subject have
been duly and validly authorized, executed and delivered by the Company, and
constitute the legal, valid and binding agreements of the Company, enforceable
against the Company, in accordance with their respective terms. The
descriptions in the Registration Statement of agreements, contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown with respect thereto by Form S-1, and there are
no contracts or other documents which are required

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<PAGE>

by the Act to be described in the Registration Statement or filed as exhibits to
the Registration Statement which are not described or filed as required, and the
exhibits which have been filed are in all material respects complete and correct
copies of the documents of which they purport to be copies.

(xiv) Subsequent to the respective dates as of which information
is set forth in the Registration Statement and Prospectus, and except as may
otherwise be indicated or contemplated herein or therein, the Company has not
(i) issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, (ii) entered into any transaction other than in
the ordinary course of business, or (iii) declared or paid any dividend or made
any other distribution on or in respect of its capital stock of any class, and
there has not been any change in the capital stock, or any material change in
the debt (long or short term) or liabilities or material adverse change in or
affecting the general affairs, management, financial operations, stockholders'
equity or results of operations of the Company.

(xv) No default exists in the due performance and observance of
any term, covenant or condition of any license, contract, indenture, mortgage,
installment sale agreement, lease, deed of trust, voting trust agreement,
stockholders agreement, partnership agreement, note, loan or credit agreement,
purchase order, or any other agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which the property
or assets (tangible or intangible) of the Company is subject or affected.

(xvi) The Company has generally enjoyed a satisfactory
employer-employee relationship with its employees and is in compliance with all
federal, state, local, and foreign laws and regulations respecting employment
and employment practices, terms and conditions of employment and wages and
hours. There are no pending investigations involving the Company by the U.S.
Department of Labor, or any other governmental agency responsible for the
enforcement of such federal, state, local, or foreign laws and regulations.
There is no unfair labor practice charge or complaint against the Company
pending before the National Labor Relations Board or any strike, picketing,
boycott, dispute, slowdown or stoppage pending or threatened against or
involving the Company or any predecessor entity, and none has ever occurred. No
representation question exists respecting the employees of the Company, and no
collective bargaining agreement or modification thereof is currently being
negotiated by the Company. No grievance or arbitration proceeding is pending
under any expired or existing collective bargaining agreements of the Company.
No labor dispute with the employees of the Company exists, or is imminent.

(xvii) Except as described in the Prospectus, the Company does
not maintain, sponsor or contribute to any program or arrangement that is an
"employee pension benefit plan," an "employee welfare benefit plan," or a
"multiemployer plan" as such terms are defined in Sections 3(2), 3(1) and 3(37),
respectively, of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") ("ERISA Plans"). The Company does not maintain or contribute, now or
at any time previously, to a defined benefit plan, as defined in Section 3(35)
of ERISA. No ERISA Plan (or any trust created thereunder) has engaged in a
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
4975 of the

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<PAGE>

Code, which could subject the Company to any tax penalty on prohibited
transactions and which has not adequately been corrected. Each ERISA Plan is in
compliance with all reporting, disclosure and other requirements of the Code and
ERISA as they relate to any such ERISA Plan. Determination letters have been
received from the Internal Revenue Service with respect to each ERISA Plan which
is intended to comply with Code Section 401(a), stating that such ERISA Plan and
the attendant trust are qualified thereunder. The Company has never completely
or partially withdrawn from a "multiemployer plan."

(xviii) Neither the Company nor any of its employees, directors,
stockholders, partners, or affiliates (within the meaning of the Rules and
Regulations) of any of the foregoing has taken or will take, directly or
indirectly, any action designed to or which has constituted or which might be
expected to cause or result in, under the Exchange Act, or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or otherwise.

(xix) Except as otherwise disclosed in the Prospectus, none of
the patents, patent applications, trademarks, service marks, service names,
trade names and copyrights, and none of the licenses and rights to the foregoing
presently owned or held by the Company are in dispute or are in any conflict
with the right of any other person or entity. The Company (i) owns or has the
right to use, free and clear of all liens, charges, claims, encumbrances,
pledges, security interests, defects or other restrictions or equities of any
kind whatsoever, all patents, patent applications, trademarks, service marks,
service names, trade names and copyrights, technology and licenses and rights
with respect to the foregoing, used in the conduct of its business as now
conducted or proposed to be conducted without infringing upon or otherwise
acting adversely to the right or claimed right of any person, corporation or
other entity under or with respect to any of the foregoing and (ii) is not
obligated or under any liability whatsoever to make any payment by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any patent, patent application, trademark, service mark, service names, trade
name, copyright, know-how, technology or other intangible asset, with respect to
the use thereof or in connection with the conduct of its business or otherwise.
There is no action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental or other proceeding, domestic or foreign, pending or
threatened (or circumstances that may give rise to the same) against the Company
which challenges the exclusive rights of the Company with respect to any
trademarks, trade names, service marks, service names, copyrights, patents,
patent applications or licenses or rights to the foregoing used in the conduct
of its business, or which challenge the right of the Company to use any
technology presently used or contemplated to be used in the conduct of its
business.

(xx) The Company owns and has the unrestricted right to use all
trade secrets, know-how (including all other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), inventions,
technology, designs, processes, works of authorship, computer programs and
technical data and information (collectively herein "intellectual property")
that are material to the development, manufacture, operation and sale of all
products and services sold or proposed to be sold by the Company, free and clear
of and without violating any right, lien, or claim of others, including without
limitation, former employers of its employees; provided, however, that the
possibility exists that other persons or

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<PAGE>

entities, completely independently of the Company, or its employees or agents,
could have developed trade secrets or items of technical information similar or
identical to those of the Company. The Company is not aware of any such
development of similar or identical trade secrets or technical information by
others.

(xxi) The Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal property stated
in the Prospectus, to be owned or leased by it free and clear of all liens,
charges, claims, encumbrances, pledges, security interests, defects, or other
restrictions or equities of any kind whatsoever, other than those referred to in
the Prospectus and liens for taxes not yet due and payable.

(xxii) Deloitte Touche Tohmatsu, whose report is filed with the
Commission as a part of the Registration Statement, are independent certified
public accountants as required by the Act and the Rules and Regulations.

(xxiii) The Company has caused to be duly executed legally
binding and enforceable agreements pursuant to which all of the officers and
directors of the Company, all holders of the Common Stock and holders of
securities exchangeable or exercisable for or convertible into shares of Common
Stock have agreed not to, directly or indirectly, offer to sell, sell, grant any
option for the sale of, assign, transfer, pledge, hypothecate, distribute or
otherwise encumber or dispose of any shares of Common Stock or securities
convertible into, exercisable or exchangeable for or evidencing any right to
purchase or subscribe for any shares of Common Stock (either pursuant to Rule
144 of the Rules and Regulations or otherwise) or dispose of any beneficial
interest therein for a period of not less than 24 months following the effective
date of the Registration Statement without the prior written consent of the
Representative. The Company will cause the Transfer Agent, as defined below, to
mark an appropriate legend on the face of stock certificates representing all of
such securities and to place "stop transfer" orders on the Company's stock
ledgers.

(xxiv) Except as described in the Prospectus under
"Underwriting," there are no claims, payments, issuances, arrangements or
understandings, whether oral or written, for services in the nature of a
finder's or origination fee with respect to the sale of the Securities hereunder
or any other arrangements, agreements, understandings, payments or issuance with
respect to the Company or any of its officers, directors, stockholders,
partners, employees or affiliates that may affect the Underwriters'
compensation, as determined by the National Association of Securities Dealers,
Inc. ("NASD").

(xxv) The Common Stock has been approved for quotation on the
Nasdaq National Market ("NNM").

(xxvi) Neither the Company nor any of its officers, employees,
agents, or any other person acting on behalf of the Company, has, directly or
indirectly, given or agreed to give any money, gift or similar benefit (other
than legal price concessions to customers in the ordinary course of business) to
any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency (domestic or foreign) or instrumentality
of any government (domestic or foreign) or any political party or candidate for

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<PAGE>

office (domestic or foreign) or other person who was, is, or may be in a
position to help or hinder the business of the Company (or assist the Company in
connection with any actual or proposed transaction) which (a) might subject the
Company, or any other such person to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign), (b) if
not given in the past, might have had a materially adverse effect on the assets,
business or operations of the Company, or (c) if not continued in the future,
might adversely affect the assets, business, operations or prospects of the
Company. The Company's internal accounting controls are sufficient to cause the
Company to comply with the Foreign Corrupt Practices Act of 1977, as amended.

(xxvii) Except as set forth in the Prospectus, no officer,
director or stockholder of the Company, or any "affiliate" or "associate" (as
these terms are defined in Rule 405 promulgated under the Rules and Regulations)
of any of the foregoing persons or entities has or has had, either directly or
indirectly, (i) an interest in any person or entity which (A) furnishes or sells
services or products which are furnished or sold or are proposed to be furnished
or sold by the Company, or (B) purchases from or sells or furnishes to the
Company any goods or services, or (ii) a beneficial interest in any contract or
agreement to which the Company is a party or by which it may be bound or
affected. Except as set forth in the Prospectus under "Certain Transactions,"
there are no existing agreements, arrangements, understandings or transactions,
or proposed agreements, arrangements, understandings or transactions, between or
among the Company and any officer, director, or Principal Stockholder (as such
term is defined in the Prospectus) of the Company or any partner, affiliate or
associate of any of the foregoing persons or entities.

(xxviii) Any certificate signed by any officer of the Company,
and delivered to the Representative or to Underwriters' Counsel (as defined
herein) shall be deemed a representation and warranty by the Company to the
Representative as to the matters covered thereby.

(xxix) The minute books of the Company have been made available
to the Representative and contain a complete summary of all meetings and actions
of the directors, stockholders, audit committee, compensation committee and any
other committee of the Board of Directors of the Company, respectively, since
the time of its incorporation, and reflects all transactions referred to in such
minutes accurately in all material respects.

(xxx) Except and to the extent described in the Prospectus, no
holders of any securities of the Company or of any options, warrants or other
convertible or exchangeable securities of the Company have the right to include
any securities issued by the Company in the Registration Statement or any
registration statement to be filed by the Company or to require the Company to
file a registration statement under the Act and no person or entity holds any
anti-dilution rights with respect to any securities of the Company.

(xxxi) The Company has as of the effective date of the
Registration Statement (i) entered into an employment agreement with each of
Lip-Boon Saw, Peter Yu-Siu Chu, Casey K. Tjang, and Dan Ben-Moshe, in the form
filed as Exhibits to the Registration

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Statement and (ii) purchased term key-man insurance on the life of Lip-Boon Saw
in the amount of $1,000,000, which policy names the Company as the sole
beneficiary thereof.

(xxxii) The Company has entered into a financial advisory and
substantially in the form filed as Exhibit ___ to the Registration Statement
(the "") with the Representative, with respect to the rendering of consulting
services by the Representative to the Company. The provides that the
Representative shall be retained by the Company commencing on the consummation
of the proposed public offering and ending 24 months thereafter, at a monthly
retainer of $2,000, all of which is payable on consummation of the proposed
public offering. The has been duly and validly authorized by the Company and
assuming due execution by the parties thereto other than the Company,
constitutes a valid and legally binding agreement of the Company, enforceable
against the company, constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws of general application relating to or
affecting enforcement of creditors rights and the application of equitable
principles in any action, legal or equitable, and except as rights to indemnity
or contribution may be limited by applicable law).

(b) Each of Rich City Packaging Limited ("Parent") and Chung Hwa
Development Holdings Limited ("Chung Hwa") represents and warrants to, and
agrees with the Representative as of the date hereof, and as of the Closing Date
and the Option Closing Date, if any, as follows:

(i) Each of Parent and Chung Hwa has taken all action required to
be taken to authorize and permit the Company to enter into this Agreement, the
Consulting Agreement, and the Representative's Warrant Agreement;

(ii) Each of Parent and Chung Hwa has obtained any and all
necessary authorizations, approvals, orders, licenses, certificates, franchises
and permits required to authorize and permit the Company to enter into this
Agreement, the Consulting Agreement, and the Representative's Warrant Agreement;

(iii) Each of Parent and Chung Hwa is in compliance with all
regulations of the Hong Kong Stock Exchange ("HKSE") and the Listing Agreement
entered into between the HKSE and Chung Hwa; and

(iv) None of the execution and delivery of this Agreement, the
Consulting Agreement, and the Representative's Warrant Agreement, and the
performance hereunder or thereunder and the consummation of the transactions
contemplated herein or therein, conflicts or will conflict with or results or
will result in any breach or violation of any terms or provisions of, or
constitute or will constitute a default under any charter document, or material
agreement of the Parent or Chung Hwa.

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2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES AND REPRESENTATIVE'S
WARRANTS.

(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, and each Underwriter
agrees to purchase from the Company at a price of $_______ [90% of the initial
public offering price] per share of Common Stock, that number of Firm Shares set
forth in Schedule A opposite the name of such Underwriter, subject to adjustment
as the Representative in its sole discretion shall make to eliminate any sales
or purchases of fractional shares, plus any additional number of Firm Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 11 hereof.

(b) In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters to purchase all or any part of an additional 187,500 shares of
Common Stock at a price of $____ [90% of the initial public offering price] per
share of Common Stock. The option granted hereby will expire 45 days after (i)
the date the Registration Statement becomes effective, if the Company has
elected not to rely on Rule 430A under the Rules and Regulations, or (ii) the
date of this Agreement if the Company has elected to rely upon Rule 430A under
the Rules and Regulations, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Firm Shares upon notice by
the Representative to the Company setting forth the number of Option Shares as
to which Representative is then exercising the option and the time and date of
payment and delivery for any such Option Shares. Any such time and date of
delivery (an "Option Closing Date") shall be determined by the Representative,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Date, as hereinafter defined,
unless otherwise agreed upon by the Representative and the Company. Nothing
herein contained shall obligate the Underwriters to make any over-allotments. No
Option Shares shall be delivered unless the Firm Shares shall be simultaneously
delivered or shall theretofore have been delivered as herein provided.

(c) Payment of the purchase price for, and delivery of certificates
for, the Firm Shares shall be made at the offices of Gilford Securities
Incorporated at 850 Third Avenue, New York, New York 10022, or at such other
place as shall be agreed upon by the Representative and the Company. Such
delivery and payment shall be made at 10:00 a.m. (New York City time) on
, 1996 or at such other time and date as shall be agreed upon by the
Representative and the Company, but not less than three (3) nor more than seven
(7) full business days after the effective date of the Registration Statement
(such time and date of payment and delivery being herein called "Closing Date").
In addition, in the event that any or all of the Option Shares are purchased by
the Underwriters, payment of the purchase price for, and delivery of
certificates for, such Option Shares shall be made at the above mentioned office
of the Representative or at such other place as shall be agreed upon by the
Representative and the Company on each Option Closing Date as specified in the
notice from the Representative to the Company. Delivery of the certificates for
the Firm Shares and the Option Shares, if any, shall be made to the Underwriters
against payment by the Underwriters of the purchase price for the Firm Shares
and the Option Shares, if any, to the order of the Company for the Firm

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Shares and the Option Shares, if any, by New York Clearing House funds.
Certificates for the Firm Shares and the Option Shares, if any, shall be in
definitive, fully registered form, shall bear no restrictive legends and shall
be in such denominations and registered in such names as the Representative may
request in writing at least two (2) business days prior to the Closing Date or
the relevant Option Closing Date, as the case may be. The certificates for the
Firm Shares and the Option Shares, if any, shall be made available to the
Representative at such office or such other place as the Representative may
designate for inspection, checking and packaging no later than 9:30 a.m. on the
last business day prior to Closing Date or the relevant Option Closing Date, as
the case may be.

(d) On the Closing Date, the Company shall issue and sell to the
Representative, Representative's Warrants at a purchase price of $.001 per
warrant, which warrants shall entitle the holders thereof to purchase an
aggregate of 125,000 shares of Common Stock. The Representative's Warrants
shall be exercisable for a period of four years commencing one year from the
effective date of the Registration Statement at a price equaling one hundred
twenty percent (120%) of the initial public offering price of the shares of
Common Stock. The Representative's Warrant Agreement and form of Warrant
Certificate shall be substantially in the form filed as Exhibit 4.3 to the
Registration Statement. Payment for the Representative's Warrants shall be made
on the Closing Date.

3. PUBLIC OFFERING OF THE SHARES. As soon after the Registration
Statement becomes effective as the Representative deems advisable, the
Underwriters shall make a public offering of the Shares (other than to residents
of or in any jurisdiction in which qualification of the Shares is required and
has not become effective) at the price and upon the other terms set forth in the
Prospectus. The Representative may from time to time increase or decrease the
public offering price after distribution of the Shares has been completed to
such extent as the Representative, in its discretion deems advisable. The
Underwriters may enter into one of more agreements as the Underwriters, in each
of their sole discretion, deem advisable with one or more broker-dealers who
shall act as dealers in connection with such public offering.

4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and
agrees with each of the Underwriters as follows:

(a)The Company shall use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
practicable and will not at any time, whether before or after the effective date
of the Registration Statement, file any amendment to the Registration Statement
or supplement to the Prospectus or file any document under the Act or Exchange
Act before termination of the offering of the Shares by the Underwriters of
which the Representative shall not previously have been advised and furnished
with a copy, or to which the Representative shall have objected or which is not
in compliance with the Act, the Exchange Act or the Rules and Regulations.

(b)As soon as the Company is advised or obtains knowledge thereof, the
Company will advise the Representative and confirm the notice in writing,
(i) when the Registration Statement, as amended, becomes effective, if the
provisions of Rule 430A promulgated under the Act will be relied upon, when the
Prospectus has been filed in accordance

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with said Rule 430A and when any post-effective amendment to the Registration
Statement becomes effective, (ii) of the issuance by the Commission of any stop
order or of the initiation, or the threatening, of any proceeding, suspending
the effectiveness of the Registration Statement or any order preventing or
suspending the use of the Preliminary Prospectus or the Prospectus, or any
amendment or supplement thereto, or the institution of proceedings for that
purpose, (iii) of the issuance by the Commission or by any state securities
commission of any proceedings for the suspension of the qualification of any of
the Securities for offering or sale in any jurisdiction or of the initiation, or
the threatening, of any proceeding for that purpose, (iv) of the receipt of any
comments from the Commission; and (v) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information. If the Commission or any state
securities commission authority shall enter a stop order or suspend such
qualification at any time, the Company will make every effort to obtain promptly
the lifting of such order.

(c)The Company shall file the Prospectus (in form and substance
satisfactory to the Representative) or transmit the Prospectus by a means
reasonably calculated to result in filing with the Commission pursuant to Rule
424(b)(1) (or, if applicable and if consented to by the Representative, pursuant
to Rule 424(b)(4)) not later than the Commission's close of business on the
earlier of (i) the second business day following the execution and delivery of
this Agreement and (ii) the fifteenth business day after the effective date of
the Registration Statement.

(d)The Company will give the Representative notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Representative in connection with the offering of the Securities which differs
from the corresponding prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the Rules and Regulations),
and will furnish the Representative with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such prospectus to which the
Representative or Orrick, Herrington & Sutcliffe LLP ("Underwriters' Counsel"),
shall object.

(e)The Company shall endeavor in good faith, in cooperation with the
Representative, at or prior to the time the Registration Statement becomes
effective, to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as the Representative may designate to permit the
continuance of sales and dealings therein for as long as may be necessary to
complete the distribution, and shall make such applications, file such documents
and furnish such information as may be required for such purpose; PROVIDED,
HOWEVER, the Company shall not be required to qualify as a foreign corporation
or file a general or limited consent to service of process in any such
jurisdiction. In each jurisdiction where such qualification shall be effected,
the Company will, unless the Representative agrees that such action is not at
the time necessary or advisable, use all reasonable efforts to file and make
such statements or reports at such times as are or may reasonably be required by
the laws of such jurisdiction to continue such qualification.

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<PAGE>

(f)During the time when a prospectus is required to be delivered under
the Act, the Company shall use all reasonable efforts to comply with all
requirements imposed upon it by the Act and the Exchange Act, as now and
hereafter amended and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealings in
the Securities in accordance with the provisions hereof and the Prospectus, or
any amendments or supplements thereto. If at any time when a prospectus
relating to the Securities or the Representative's Shares is required to be
delivered under the Act, any event shall have occurred as a result of which, in
the opinion of counsel for the Company or Underwriters' Counsel, the Prospectus,
as then amended or supplemented, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company will notify the Representative
promptly and prepare and file with the Commission an appropriate amendment or
supplement in accordance with Section 10 of the Act, each such amendment or
supplement to be satisfactory to Underwriters' Counsel, and the Company will
furnish to the Representative copies of such amendment or supplement as soon as
available and in such quantities as the Representative may request.

(g)As soon as practicable, but in any event not later than 45 days
after the end of the 12-month period beginning on the day after the end of the
fiscal quarter of the Company during which the effective date of the
Registration Statement occurs (90 days in the event that the end of such fiscal
quarter is the end of the Company's fiscal year), the Company shall make
generally available to its security holders, in the manner specified in Rule
158(b) of the Rules and Regulations, and to the Representative, an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the Act and Rule 158(a) of the Rules
and Regulations, which statement need not be audited unless required by the Act,
covering a period of at least 12 consecutive months after the effective date of
the Registration Statement.

(h)During a period of seven years after the date hereof, the Company
will furnish to its stockholders, as soon as practicable, annual reports
(including financial statements audited by independent public accountants) and
unaudited quarterly reports of earnings, and will deliver to the Representative:

(i)concurrently with furnishing such quarterly reports to its
stockholders, statements of income of the Company for each quarter in the
form furnished to the Company's stockholders and certified by the Company's
principal financial or accounting officer;

(ii)concurrently with furnishing such annual reports to its
stockholders, a balance sheet of the Company as at the end of the preceding
fiscal year, together with statements of operations, stockholders' equity,
and cash flows of the Company for such fiscal year, accompanied by a copy
of the certificate thereon of independent certified public accountants;

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<PAGE>

(iii)as soon as they are available, copies of all reports (financial
or other) mailed to stockholders;

(iv)as soon as they are available, copies of all reports and financial
statements furnished to or filed with the Commission, the NASD or any
securities exchange;

(v)every press release and every material news item or article of
interest to the financial community in respect of the Company, or its
affairs which was released or prepared by or on behalf of the Company; and

(vi)any additional information of a public nature concerning the
Company (and any future subsidiary) or its businesses which the
Representative may request.

During such seven-year period, if the Company has an active
subsidiary, the foregoing financial statements will be on a consolidated basis
to the extent that the accounts of the Company and its subsidiary are
consolidated, and will be accompanied by similar financial statements for any
significant subsidiary which is not so consolidated.

(i)The Company will maintain a Transfer Agent and, if necessary under
the jurisdiction of incorporation of the Company, a Registrar (which may be the
same entity as the Transfer Agent) for its Common Stock.

(j)The Company will furnish to the Representative or on
Representative's order, without charge, at such place as the Representative may
designate, copies of each Preliminary Prospectus, the Registration Statement and
any pre-effective or post-effective amendments thereto (two of which copies will
be signed and will include all financial statements and exhibits), the
Prospectus, and all amendments and supplements thereto, including any prospectus
prepared after the effective date of the Registration Statement, in each case as
soon as available and in such quantities as the Representative may request.

(k)On or before the effective date of the Registration Statement, the
Company shall provide the Representative with true copies of duly executed,
legally binding and enforceable agreements pursuant to which for a period of 24
months from the effective date of the Registration Statement, the officers and
directors of the Company, holders of all shares of Common Stock and holders of
securities exchangeable or exercisable for or convertible into shares of Common
Stock, agree that it or he or she will not directly or indirectly, issue, offer
to sell, sell, grant an option for the sale of, assign, transfer, pledge,
hypothecate, distribute or otherwise encumber or dispose of any shares of Common
Stock or securities convertible into, exercisable or exchangeable for or
evidencing any right to purchase or subscribe for any shares of Common Stock
(either pursuant to Rule 144 of the Rules and Regulations or otherwise) or
dispose of any beneficial interest therein without the prior written consent of
the Representative (collectively, the "Lock-up Agreements"). During the 24
month period commencing with the effective date of the Registration Statement,
the Company shall not, without the prior written consent of the Representative,
sell, contract or offer to sell, issue, transfer, assign, pledge, hypothecate,
distribute, or otherwise dispose of, directly or indirectly, any shares of
Common Stock or any options, rights or warrants with respect to any shares of
Common Stock, except

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as set forth in clause (s) of SECTION 4 hereof. On or before the Closing Date,
the Company shall deliver instructions to the Transfer Agent authorizing it to
place appropriate legends on the certificates representing the securities
subject to the Lock-up Agreements and to place appropriate stop transfer orders
on the Company's ledgers.

(l)Neither the Company, nor any of its officers, directors,
stockholders, nor any of their respective affiliates (within the meaning of the
Rules and Regulations) will take, directly or indirectly, any action designed
to, or which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any securities of the Company.

(m)The Company shall apply the net proceeds from the sale of the
Securities in the manner, and subject to the conditions, set forth under "Use of
Proceeds" in the Prospectus. Except as described in the Prospectus, no portion
of the net proceeds will be used, directly or indirectly, to acquire any
securities issued by the Company.

(n)The Company shall timely file all such reports, forms or other
documents as may be required (including, but not limited to, a Form SR as may be
required pursuant to Rule 463 under the Act) from time to time, under the Act,
the Exchange Act, and the Rules and Regulations, and all such reports, forms and
documents filed will comply as to form and substance with the applicable
requirements under the Act, the Exchange Act, and the Rules and Regulations.

(o)The Company shall furnish to the Representative as early as
practicable prior to each of the date hereof, the Closing Date and each Option
Closing Date, if any, but no later than two (2) full business days prior
thereto, a copy of the latest available unaudited interim financial statements
of the Company (which in no event shall be as of a date more than thirty (30)
days prior to the date of the Registration Statement) which have been read by
the Company's independent public accountants, as stated in its letter to be
furnished pursuant to SECTION 6(i) hereof.

(p)The Company shall cause the Common Stock to be quoted on NNM and
for a period of seven (7) years from the date hereof, use its best efforts to
maintain the NNM quotation of the Common Stock to the extent outstanding.

(q)For a period of five (5) years from the Closing Date, the Company
shall furnish to the Representative at the Representative's request and at the
Company's sole expense, (i) daily consolidated transfer sheets relating to the
Common Stock (ii) the list of holders of all of the Company's securities and
(iii) a Blue Sky "Trading Survey" for secondary sales of the Company's
securities prepared by counsel to the Company.

(r)As soon as practicable, (i) but in no event more than 5 business
days before the effective date of the Registration Statement, file a Form 8-A
with the Commission providing for the registration under the Exchange Act of the
Securities and (ii) but in no event more than 30 days from the effective date of
the Registration Statement, take all necessary and appropriate actions to be
included in Standard and Poor's Corporation Descriptions and Moody's OTC Manual
and to continue such inclusion for a period of not less than seven (7) years.

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<PAGE>

(s)The Company hereby agrees that it will not for a period of
twenty-four (24) months from the effective date of the Registration Statement,
adopt, propose to adopt or otherwise permit to exist any employee, officer,
director, consultant or compensation plan or arrangement permitting the grant,
issue or sale of any shares of Common Stock or other securities of the Company
(i) in an amount greater than an aggregate of 312,500 shares, (ii) at an
exercise or sale price per share less than the greater of (a) the initial public
offering price of the Shares set forth herein and (b) the fair market value of
the Common Stock on the date of grant or sale, (iii) to any direct or indirect
beneficial holder on the date hereof of more than 10% of the issued and
outstanding shares of Common Stock, (iv) with the payment for such securities
with any form of consideration other than cash, (v) upon payment of less than
the full purchase or exercise price for such shares of Common Stock or other
securities of the Company on the date of grant or issuance, or (vi) permitting
the existence of stock appreciation rights, phantom options or similar
arrangements.

(t)Until the completion of the distribution of the Shares, the Company
shall not without the prior written consent of the Representative and
Underwriters' Counsel, issue, directly or indirectly, any press release or other
communication or hold any press conference with respect to the Company or its
activities or the offering contemplated hereby, other than trade releases issued
in the ordinary course of the Company's business consistent with past practices
with respect to the Company's operations.

(u)For a period equal to the lesser of (i) seven (7) years from the
date hereof, and (ii) the sale to the public of the Representative's Shares, the
Company will not take any action or actions which may prevent or disqualify the
Company's use of Form S-1 (or other appropriate form) for the registration under
the Act of the Representative's Shares.

(v)For a period of five (5) years after the effective date of the
Registration Statement, the Representative shall have the right to designate for
election one (1) individual to the Company's Board of Directors (the "Board").
In the event the Representative elects not to exercise such right, then it may
designate one (1) individual to attend meetings of the Company's Board. The
Company shall notify the Representative of each meeting of the Board and the
Company shall send to such individual all notices and other correspondence and
communications sent by the Company to members of the Board. Such individual
shall be reimbursed for all out-of-pocket expenses incurred in connection with
his attendance of meetings of the Board.

(w)For a period of twenty four (24) months after the effective date of
the Registration Statement, the Company shall not restate, amend or alter any
term of any written employment, consulting or similar agreement entered into
between the Company and any officer, director or key employee as of the
effective date of the Registration Statement in a manner which is more favorable
to such officer, director or key employee, without the prior written consent of
the Representative.

(x)The Company agrees that, for a period of two (2) years beginning
with the effective date of the Registration Statement, the Representative shall
have a right of first refusal for all sales of any securities made by the
Company or any of its present or future affiliates or subsidiaries.

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5. PAYMENT OF EXPENSES.

(a)The Company hereby agrees to pay on each of the Closing Date and
the Option Closing Date (to the extent not paid at the Closing Date) all
expenses and fees (other than fees of Underwriters' Counsel, except as provided
in (iv) below) incident to the performance of the obligations of the Company
under this Agreement, the Consulting Agreement, and the Representative's Warrant
Agreement, including, without limitation, (i) the fees and expenses of
accountants and counsel for the Company, (ii) all costs and expenses incurred in
connection with the preparation, duplication, printing, (including mailing and
handling charges) filing, delivery and mailing (including the payment of postage
with respect thereto) of the Registration Statement and the Prospectus and any
amendments and supplements thereto and the printing, mailing (including the
payment of postage with respect thereto) and delivery of this Agreement, the
Agreement Among Underwriters, the Selected Dealer Agreements, and related
documents, including the cost of all copies thereof and of the Preliminary
Prospectuses and of the Prospectus and any amendments thereof or supplements
thereto supplied to the Underwriters and such dealers as the Underwriters may
request, in quantities as hereinabove stated, (iii) the printing, engraving,
issuance and delivery of the Securities including, but not limited to, (x) the
purchase by the Underwriters of the Shares and the purchase by the
Representative of the Representative's Warrants from the Company, (y) the
consummation by the Company of any of its obligations under this Agreement and
the Representative's Warrant Agreement, and (z) resale of the Shares by the
Underwriters in connection with the distribution contemplated hereby, (iv) the
qualification of the Securities under state or foreign securities or "Blue Sky"
laws and determination of the status of such securities under legal investment
laws, including the costs of printing and mailing the "Preliminary Blue Sky
Memorandum," the "Supplemental Blue Sky Memorandum" and "Legal Investments
Survey," if any, and disbursements and fees of counsel in connection therewith,
(v) advertising costs and expenses, including but not limited to costs and
expenses in connection with the "road show", information meetings and
presentations, bound volumes and prospectus memorabilia and "tomb-stone"
advertisement expenses, (vi) costs and expenses in connection with due diligence
investigations, including but not limited to the fees of any independent counsel
or consultant retained, (vii) fees and expenses of the transfer agent and
registrar, (viii) applications for assignments of a rating of the Securities by
qualified rating agencies, (ix) the fees payable to the Commission and the NASD,
and (x) the fees and expenses incurred in connection with the quotation of the
Securities on NNM and any other exchange.

(b)If this Agreement is terminated by the Underwriters in accordance
with the provisions of SECTION 6 or SECTION 11, the Company shall reimburse and
indemnify the Representative for all of its actual out-of-pocket expenses,
including the fees and disbursements of Underwriters' Counsel, less any amounts
already paid pursuant to SECTION 5(c) hereof.

(c)The Company further agrees that, in addition to the expenses
payable pursuant to subsection (a) of this SECTION 5, it will pay to the
Representative on the Closing Date by certified or bank cashier's check or, at
the election of the Representative, by deduction from the proceeds of the
offering contemplated herein a non-accountable expense allowance equal to three
percent (3%) of the gross proceeds received by the Company from the sale of the
Firm Shares, $50,000 of which has been paid to date. In the event the
Representative elects to exercise the

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over-allotment option described in SECTION 2(b) hereof, the Company agrees to
pay to the Representative on the Option Closing Date (by certified or bank
cashier's check or, at the Representative's election, by deduction from the
proceeds of the Option Shares) a non-accountable expense allowance equal to
three percent (3%) of the gross proceeds received by the Company from the sale
of the Option Shares.

6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder shall be subject to the continuing accuracy of the
representations and warranties of the Company herein as of the date hereof and
as of the Closing Date and each Option Closing Date, if any, with respect to the
Company as if it had been made on and as of the Closing Date or each Option
Closing Date, as the case may be; the accuracy on and as of the Closing Date or
Option Closing Date, if any, of the statements of the officers of the Company
made pursuant to the provisions hereof; and the performance by the Company on
and as of the Closing Date and each Option Closing Date, if any, of its
covenants and obligations hereunder and to the following further conditions:

(a)The Registration Statement shall have become effective not later
than 12:00 Noon, New York time, on the date of this Agreement or such later date
and time as shall be consented to in writing by the Representative, and, at
Closing Date and each Option Closing Date, if any, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or
contemplated by the Commission and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of Underwriters' Counsel. If the Company has elected to rely upon
Rule 430A of the Rules and Regulations, the price of the Shares and any
price-related information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) of the Rules and Regulations
within the prescribed time period, and prior to Closing Date the Company shall
have provided evidence satisfactory to the Representative of such timely filing,
or a post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the requirements of
Rule 430A of the Rules and Regulations.

(b)The Representative shall not have advised the Company that the
Registration Statement, or any amendment thereto, contains an untrue statement
of fact which, in the Representative's opinion, is material, or omits to state a
fact which, in the Representative's opinion, is material and is required to be
stated therein or is necessary to make the statements therein not misleading, or
that the Prospectus, or any supplement thereto, contains an untrue statement of
fact which, in the Representative's opinion, is material, or omits to state a
fact which, in the Representative's opinion, is material and is required to be
stated therein or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

(c)On or prior to the Closing Date, the Representative shall have
received from Underwriters' Counsel, such opinion or opinions with respect to
the organization of the Company, the validity of the Securities, the
Representative's Warrants, the Registration Statement, the Prospectus and other
related matters as the Representative may request and

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Underwriters' Counsel shall have received such papers and information as they
request to enable them to pass upon such matters.

(d)At Closing Date, the Underwriter shall have received the favorable
opinion of Bondy & Schloss LLP, counsel to the Company, dated the Closing Date,
addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:

(i)the Company (A) has been duly organized and is validly existing as
a corporation in good standing under the laws of its jurisdiction, (B) is
duly qualified and licensed and in good standing as a foreign corporation
in each jurisdiction in which its ownership or leasing of any properties or
the character of its operations requires such qualification or licensing,
and (C) has all requisite corporate power and authority; and the Company
has obtained any and all necessary authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all governmental
or regulatory officials and bodies (including, without limitation, those
having jurisdiction over environmental or similar matters), to own or lease
its properties and conduct its business as described in the Prospectus; the
Company is and has been doing business in material compliance with all such
authorizations, approvals, orders, licenses, certificates, franchises and
permits and all federal, state and local laws, rules and regulations; the
Company has not received any notice of proceedings relating to the
revocation or modification of any such authorization, approval, order,
license, certificate, franchise, or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would materially adversely affect the business, operations, condition,
financial or otherwise, or the earnings, business affairs, position,
prospects, value, operation, properties, business or results of operations
of the Company. The disclosures in the Registration Statement concerning
the effects of federal, state and local laws, rules and regulations on the
Company's business as currently conducted and as contemplated are correct
in all material respects and do not omit to state a fact necessary to make
the statements contained therein not misleading in light of the
circumstances in which they were made;

(ii)to the best of such counsel's knowledge, the Company does not own
an interest in any other corporation, partnership, joint venture, trust or
other business entity;

(iii)the Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus, and any amendment or
supplement thereto, under "Capitalization" and "Description of Capital
Stock," and the Company is not a party to or bound by any instrument,
agreement or other arrangement providing for it to issue any capital stock,
rights, warrants, options or other securities, except for this Agreement,
the Representative's Warrant Agreement and as described in the Prospectus.
The Securities, and all other securities issued or issuable by the Company
conform in all material respects to all statements with respect thereto
contained in the Registration Statement and the Prospectus. All issued and
outstanding securities of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; the holders thereof have no
rights of rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such securities were
issued in violation of

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the preemptive rights of any holders of any security of the Company. The
Shares, the Representative's Warrants and the Representative's Shares to be
sold by the Company hereunder and under the Representative's Warrant
Agreement are not and will not be subject to any preemptive or other
similar rights of any stockholder, have been duly authorized and, when
issued, paid for and delivered in accordance with the terms hereof, will be
validly issued, fully paid and non-assessable and conform to the
description thereof contained in the Prospectus; the holders thereof will
not be subject to any liability solely as such holders; all corporate
action required to be taken for the authorization, issue and sale of the
Shares, the Representative's Warrants and the Representative's Shares has
been duly and validly taken; and the certificates representing the Shares
and the Representative's Warrants are in due and proper form. The
Representative's Warrants constitute valid and binding obligations of the
Company to issue and sell, upon exercise thereof and payment therefor, the
number and type of securities of the Company called for thereby. Upon the
issuance and delivery pursuant to this Agreement and the Representative's
Warrant Agreement of the Shares and the Representative's Warrants,
respectively, to be sold by the Company, the Representative and the
Representative, respectively, will acquire good and marketable title to the
Shares and Representative's Warrants free and clear of any pledge, lien,
charge, claim, encumbrance, pledge, security interest, or other restriction
or equity of any kind whatsoever. No transfer tax is payable by or on
behalf of the Underwriters in connection with (A) the issuance by the
Company of the Shares, (B) the purchase by the Underwriters of the Shares
and the Representative's Warrants, respectively, from the Company, (C) the
consummation by the Company of any of its obligations under this Agreement
or the Representative's Warrant Agreement, or (D) resales of the Shares in
connection with the distribution contemplated hereby;

(iv)the Registration Statement is effective under the Act, and, if
applicable, filing of all pricing information has been timely made in the
appropriate form under Rule 430A, and no stop order suspending the use of
the Preliminary Prospectus, the Registration Statement or Prospectus or any
part of any thereof or suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to the best of such counsel's knowledge,
threatened or contemplated under the Act;

(v)each of the Preliminary Prospectus, the Registration Statement, and
the Prospectus and any amendments or supplements thereto (other than the
financial statements and other financial and statistical data included
therein, as to which no opinion need be rendered) comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations;

(vi)to the best of such counsel's knowledge, (A) there are no
agreements, contracts or other documents required by the Act to be
described in the Registration Statement and the Prospectus and filed as
exhibits to the Registration Statement other than those described in the
Registration Statement (or required to be filed under the Exchange Act if
upon such filing they would be incorporated, in whole or in part, by
reference therein) and the Prospectus and filed as exhibits thereto, and
the exhibits which

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have been filed are correct copies of the documents of which they purport
to be copies; (B) the descriptions in the Registration Statement and the
Prospectus and any supplement or amendment thereto of contracts and other
documents to which the Company is a party or by which it is bound,
including any document to which the Company is a party or by which it is
bound, incorporated by reference into the Prospectus and any supplement or
amendment thereto, are accurate in all material respects and fairly
represent the information required to be shown by Form S-1; (C) there is
not pending or threatened against the Company any action, arbitration,
suit, proceeding, inquiry, investigation, litigation, governmental or other
proceeding (including, without limitation, those having jurisdiction over
environmental or similar matters), domestic or foreign, pending or
threatened against (or circumstances that may give rise to the same), or
involving the properties or business of the Company which (x) is required
to be disclosed in the Registration Statement which is not so disclosed
(and such proceedings as are summarized in the Registration Statement are
accurately summarized in all material respects), (y) questions the validity
of the capital stock of the Company or this Agreement or the
Representative's Warrant Agreement, or of any action taken or to be taken
by the Company pursuant to or in connection with any of the foregoing; (D)
no statute or regulation or legal or governmental proceeding required to be
described in the Prospectus is not described as required; and (E) there is
no action, suit or proceeding pending, or threatened, against or affecting
the Company before any court or arbitrator or governmental body, agency or
official (or any basis thereof known to such counsel) in which there is a
reasonable possibility of an adverse decision which may result in a
material adverse change in the condition, financial or otherwise, or the
earnings, position, prospects, stockholders' equity, value, operation,
properties, business or results of operations of the Company, which could
adversely affect the present or prospective ability of the Company to
perform its obligations under this Agreement or the Representative's
Warrant Agreement or which in any manner draws into question the validity
or enforceability of this Agreement or the Representative's Warrant
Agreement;

(vii)the Company has full legal right, power and authority to enter
into each of this Agreement, the Consulting Agreement, and the
Representative's Warrant Agreement, and to consummate the transactions
provided for herein and therein; and each of this Agreement, the Consulting
Agreement, and the Representative's Warrant Agreement has been duly
authorized, executed and delivered by the Company. Each of this Agreement,
the Consulting Agreement, and the Representative's Warrant Agreement,
assuming due authorization, execution and delivery by each other party
thereto constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to
or affecting enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and except as
rights to indemnity or contribution may be limited by applicable law), and
none of the Company's execution or delivery of this Agreement, the
Consulting Agreement, and the Representative's Warrant Agreement, its
performance hereunder or thereunder, its consummation of the transactions
contemplated herein or therein, or the conduct of its business as described
in the Registration Statement, the Prospectus, and any amendments or
supplements thereto, or the

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<PAGE>

conversion of the Convertible Notes as set forth in the Registration
Statement, the Prospectus and any amendments or supplements thereto,
conflicts with or will conflict with or results or will result in any
breach or violation of any of the terms or provisions of, or constitutes or
will constitute a default under, or result in the creation or imposition of
any lien, charge, claim, encumbrance, pledge, security interest, defect or
other restriction or equity of any kind whatsoever upon, any property or
assets (tangible or intangible) of the Company pursuant to the terms of,
(A) the certificate of incorporation or by-laws of the Company, (B) any
license, contract, indenture, mortgage, deed of trust, voting trust
agreement, stockholders agreement, note, loan or credit agreement or any
other agreement or instrument to which the Company is a party or by which
it is or may be bound or to which any of its respective properties or
assets (tangible or intangible) is or may be subject, or any indebtedness,
or (C) any statute, judgment, decree, order, rule or regulation applicable
to the Company of any arbitrator, court, regulatory body or administrative
agency or other governmental agency or body (including, without limitation,
those having jurisdiction over environmental or similar matters), domestic
or foreign, having jurisdiction over the Company or any of its activities
or properties;

(viii)except as described in the Prospectus, no consent, approval,
authorization or order of, and no filing with, any court, regulatory body,
government agency or other body (other than such as may be required under
Blue Sky laws, as to which no opinion need be rendered) is required in
connection with the issuance of the Shares pursuant to the Prospectus, the
issuance of the Representative's Warrants, and the Registration Statement,
the performance of this Agreement, the Consulting Agreement, and the
Representative's Warrant Agreement, and the transactions contemplated
hereby and thereby;

(ix)the properties and business of the Company conform in all material
respects to the description thereof contained in the Registration Statement
and the Prospectus; and the Company has good and marketable title to, or
valid and enforceable leasehold estates in, all items of real and personal
property stated in the Prospectus to be owned or leased by it, in each case
free and clear of all liens, charges, claims, encumbrances, pledges,
security interests, defects or other restrictions or equities of any kind
whatsoever, other than those referred to in the Prospectus and liens for
taxes not yet due and payable;

(x)to the best knowledge of such counsel, the Company is not in breach
of, or in default under, any term or provision of any license, contract,
indenture, mortgage, installment sale agreement, deed of trust, lease,
voting trust agreement, stockholders' agreement, partnership agreement,
note, loan or credit agreement or any other agreement or instrument
evidencing an obligation for borrowed money, or any other agreement or
instrument to which the Company is a party or by which the Company may be
bound or to which the property or assets (tangible or intangible) of the
Company is subject or affected; and the Company is not in violation of any
term or provision of its certificate of incorporation by-laws, or in
violation of any franchise, license, permit, judgment, decree, order,
statute, rule or regulation;

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<PAGE>

(xi)the statements in the Prospectus under "BUSINESS," "MANAGEMENT,"
"PRINCIPAL SHAREHOLDERS," "CERTAIN TRANSACTIONS," "DESCRIPTION OF CAPITAL
STOCK," and "SHARES ELIGIBLE FOR FUTURE SALE" have been reviewed by such
counsel, and insofar as they refer to statements of law, descriptions of
statutes, licenses, rules or regulations or legal conclusions, are correct
in all material respects;

(xii)the Shares have been accepted for quotation on NNM;

(xiii)the persons listed under the caption "PRINCIPAL SHAREHOLDERS" in
the Prospectus are the respective "beneficial owners" (as such phrase is
defined in regulation 13d-3 under the Exchange Act) of the securities set
forth opposite their respective names thereunder as and to the extent set
forth therein;

(xiv)except as described in the Prospectus, no person, corporation,
trust, partnership, association or other entity has the right to include
and/or register any securities of the Company in the Registration
Statement, require the Company to file any registration statement or, if
filed, to include any security in such registration statement;

(xv)except as described in the Prospectus, there are no claims,
payments, issuances, arrangements or understandings for services in the
nature of a finder's or origination fee with respect to the sale of the
Securities hereunder or financial consulting arrangement or any other
arrangements, agreements, understandings, payments or issuances that may
affect the Underwriters' compensation, as determined by the NASD;

(xvi)assuming due execution by the parties thereto other than the
Company, the Lock-up Agreements are legal, valid and binding obligations of
parties thereto, enforceable against the party and any subsequent holder of
the securities subject thereto in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to
or affecting enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and except as
rights to indemnity or contribution may be limited by applicable law); and

(xvii)except as described in the Prospectus, the Company does not (A)
maintain, sponsor or contribute to any ERISA Plans, (B) maintain or
contribute, now or at any time previously, to a defined benefit plan, as
defined in Section 3(35) of ERISA, and (C) has never completely or
partially withdrawn from a "multiemployer plan".

Such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants for the Company at which
conferences such counsel made inquiries of such officers, representatives and
accountants and discussed the contents of the Preliminary Prospectus, the
Registration Statement, the Prospectus, and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Preliminary Prospectus, the

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<PAGE>

Registration Statement and Prospectus, on the basis of the foregoing, no facts
have come to the attention of such counsel which lead them to believe that
either the Registration Statement or any amendment thereto, at the time such
Registration Statement or amendment became effective or the Preliminary
Prospectus or Prospectus or amendment or supplement thereto as of the date of
such opinion contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (it being understood that such counsel need
express no opinion with respect to the financial statements and schedules and
other financial and statistical data included in the Preliminary Prospectus, the
Registration Statement or Prospectus).

Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991), or any comparable
State bar accord.

In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance satisfactory to Underwriters' Counsel) of
other counsel acceptable to Underwriters' Counsel, familiar with the applicable
laws; (B) as to matters of fact, to the extent they deem proper, on certificates
and written statements of responsible officers of the Company, and certificates
or other written statements of officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing
of the Company, provided that copies of any such statements or certificates
shall be delivered to Underwriters' Counsel if requested. The opinion shall
also state that the Underwriters' Counsel is entitled to rely thereon. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and that the Underwriters
and they are justified in relying thereon.

(e)At Closing Date, the Underwriters shall have received the favorable
opinion of Erving Brettell, special counsel to the Company, dated the Closing
Date, addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:

(i)To the best of our knowledge, after due inquiry, the
statements in the Prospectus under the headings, "RISK FACTORS -
Dependence on a Single Overseas Supplier - Transfer of Sovereignty
over Hong Kong" and "RISK FACTORS - Overseas Principals of the
Company," are accurate in all material respects, fairly represent the
information disclosed therein and do not omit to state any fact
necessary to make the statements made therein complete and accurate.

(ii)To the best of our knowledge, after due inquiry, the
statements in the Registration Statement and Prospectus do not contain
any untrue statement of a material fact with respect to the Company,
or omit to state any material fact relating to the Company which is
required to be stated in the Registration

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<PAGE>

Statement and the Prospectus or is necessary to make the statements
therein not misleading.

At each Option Closing Date, if any, the Underwriters shall have
received the favorable opinion of Bondy & Schloss LLP, counsel to the Company
and Erving Brettell, special counsel to the Company, each dated the Option
Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel confirming as of Option Closing Date the
statements made by each of Bondy & Schloss LLP, and Erving Brettell in their
respective opinions delivered on the Closing Date.

(f)On or prior to each of the Closing Date and the Option Closing
Date, if any, Underwriters' Counsel shall have been furnished such documents,
certificates and opinions as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in subsection (c)
of this SECTION 6, or in order to evidence the accuracy, completeness or
satisfaction of any of the representations, warranties or conditions of the
Company, or herein contained.

(g)Prior to each of the Closing Date and each Option Closing Date, if
any, (i) there shall have been no material adverse change nor development
involving a prospective change in the condition, financial or otherwise,
prospects, stockholders' equity or the business activities of the Company,
whether or not in the ordinary course of business, from the latest dates as of
which such condition is set forth in the Registration Statement and Prospectus;
(ii) there shall have been no transaction, not in the ordinary course of
business, entered into by the Company, from the latest date as of which the
financial condition of the Company is set forth in the Registration Statement
and Prospectus which is materially adverse to the Company; (iii) the Company
shall not be in default under any provision of any instrument relating to any
outstanding indebtedness; (iv) the Company shall not have issued any securities
(other than the Securities); the Company shall not have declared or paid any
dividend or made any distribution in respect of its capital stock of any class;
and there has not been any change in the capital stock of the Company, or any
material change in the debt (long or short term) or liabilities or obligations
of the Company (contingent or otherwise); (v) no material amount of the assets
of the Company shall have been pledged or mortgaged, except as set forth in the
Registration Statement and Prospectus; (vi) no action, suit or proceeding, at
law or in equity, shall have been pending or threatened (or circumstances giving
rise to same) against the Company, or affecting any of its properties or
business before or by any court or federal, state or foreign commission, board
or other administrative agency wherein an unfavorable decision, ruling or
finding may adversely affect the business, operations, prospects or financial
condition or income of the Company, except as set forth in the Registration
Statement and Prospectus; and (vii) no stop order shall have been issued under
the Act and no proceedings therefor shall have been initiated, threatened or
contemplated by the Commission.

(h)At each of the Closing Date and each Option Closing Date, if any,
the Underwriters shall have received a certificate of the Company signed by the
principal executive officer and by the chief financial or chief accounting
officer of the Company, dated the Closing Date or Option Closing Date, as the
case may be, to the effect that each of such persons has carefully examined the
Registration Statement, the Prospectus and this Agreement, and that:

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<PAGE>

(i)The representations and warranties of the Company in this Agreement
are true and correct, as if made on and as of the Closing Date or the
Option Closing Date, as the case may be, and the Company has complied with
all agreements and covenants and satisfied all conditions contained in this
Agreement on its part to be performed or satisfied at or prior to such
Closing Date or Option Closing Date, as the case may be;

(ii)No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued, and no proceedings for that
purpose have been instituted or are pending or, to the best of each of such
person's knowledge, after due inquiry are contemplated or threatened under
the Act;

(iii)The Registration Statement and the Prospectus and, if any, each
amendment and each supplement thereto, contain all statements and
information required to be included therein, and none of the Registration
Statement, the Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and neither the Preliminary Prospectus or any supplement
thereto included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and

(iv)Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (a) the Company has
not incurred up to and including the Closing Date or the Option Closing
Date, as the case may be, other than in the ordinary course of its
business, any material liabilities or obligations, direct or contingent;
(b) the Company has not paid or declared any dividends or other
distributions on its capital stock; (c) the Company has not entered into
any transactions not in the ordinary course of business; (d) there has not
been any change in the capital stock of the Company or any material change
in the debt (long or short-term) of the Company; (e) the Company has not
sustained any material loss or damage to its property or assets, whether or
not insured; (g) there is no litigation which is pending or threatened (or
circumstances giving rise to same) against the Company, or any affiliated
party of any of the foregoing which is required to be set forth in an
amended or supplemented Prospectus which has not been set forth; and (h)
there has occurred no event required to be set forth in an amended or
supplemented Prospectus which has not been set forth.

References to the Registration Statement and the Prospectus in this subsection
(g) are to such documents as amended and supplemented at the date of such
certificate.

(i)By the Closing Date, the Underwriters will have received clearance
from the NASD as to the amount of compensation allowable or payable to the
Underwriters, as described in the Registration Statement.

(j)At the time this Agreement is executed, the Underwriters shall have
received a letter, dated such date, addressed to the Underwriters in form and
substance satisfactory (including the non-material nature of the changes or
decreases, if any, referred to in clause (iii)

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below) in all respects to the Underwriters and Underwriters' Counsel, from
Deloitte Touche Tohmatsu;

(i)confirming that they are independent certified public accountants
with respect to the Company within the meaning of the Act and the
applicable Rules and Regulations;

(ii)stating that it is their opinion that the financial statements and
supporting schedules of the Company included in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations thereunder and that
the Underwriters may rely upon the opinion of Deloitte Touche Tohmatsu with
respect to such financial statements and supporting schedules included in
the Registration Statement;

(iii)stating that, on the basis of a limited review which included a
reading of the latest available unaudited interim financial statements of
the Company, a reading of the latest available minutes of the stockholders
and board of directors and the various committees of the boards of
directors of the Company, consultations with officers and other employees
of the Company responsible for financial and accounting matters and other
specified procedures and inquiries, nothing has come to their attention
which would lead them to believe that (A) the pro forma financial
information contained in the Registration Statement and Prospectus does not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations or is not fairly
presented in conformity with generally accepted accounting principles
applied on a basis consistent with that of the audited financial statements
of the Company or the unaudited pro forma financial information included in
the Registration Statement, (B) the unaudited financial statements and
supporting schedules of the Company included in the Registration Statement
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations or are not
fairly presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited financial statements of the Company included in the Registration
Statement, or (C) at a specified date not more than five (5) days prior to
the effective date of the Registration Statement, there has been any change
in the capital stock of the Company, any change in the long-term debt of
the Company, or any decrease in the stockholders' equity of the Company or
any decrease in the net current assets or net assets of the Company as
compared with amounts shown in the September 30, 1996 balance sheets
included in the Registration Statement, other than as set forth in or
contemplated by the Registration Statement, or, if there was any change or
decrease, setting forth the amount of such change or decrease, and (D)
during the period from October 1, 1996 to a specified date not more than
five (5) days prior to the effective date of the Registration Statement,
there was any decrease in net revenues or net earnings of the Company or
increase in net earnings per common share of the Company, in each case as
compared with the corresponding period beginning October 1, 1995 other than
as set forth in or contemplated by the Registration Statement, or, if there
was any such decrease, setting forth the amount of such decrease;

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(iv)setting forth, at a date not later than five (5) days prior to the
date of the Registration Statement, the amount of liabilities of the
Company (including a break-down of commercial paper and notes payable to
banks);

(v)stating that they have compared specific dollar amounts, numbers of
shares, percentages of revenues and earnings, statements and other
financial information pertaining to the Company set forth in the Prospectus
in each case to the extent that such amounts, numbers, percentages,
statements and information may be derived from the general accounting
records, including work sheets, of the Company and excluding any questions
requiring an interpretation by legal counsel, with the results obtained
from the application of specified readings, inquiries and other appropriate
procedures (which procedures do not constitute an examination in accordance
with generally accepted auditing standards) set forth in the letter and
found them to be in agreement; and

(vi)statements as to such other matters incident to the transaction
contemplated hereby as the Underwriters may request.

(k) At the Closing Date and each Option Closing Date, if any, the
Underwriters shall have received from Deloitte Touche Tohmatsu a letter, dated
as of the Closing Date or the Option Closing Date, as the case may be, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to SUBSECTION (i) of this Section hereof except that the specified date referred
to shall be a date not more than five days prior to the Closing Date or the
Option Closing Date, as the case may be, and, if the Company has elected to rely
on Rule 430A of the Rules and Regulations, to the further effect that they have
carried out procedures as specified in clause (v) of SUBSECTION (i) of this
Section with respect to certain amounts, percentages and financial information
as specified by the Underwriters and deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) and have found such amounts, percentages and
financial information to be in agreement with the records specified in such
clause (v).

(l) The Company shall have delivered to the Representative a letter
from Deloitte Touche Tohmatsu addressed to the Company stating that they have
not during the immediately preceding two year period brought to the attention of
the Company's management any "weakness" as defined in Statement of Auditing
Standards No. 60 "Communication of Internal Control Structure Related Matters
Noted in an Audit," in any of the Company's internal controls.

(m) On each of the Closing Date and Option Closing Date, if any,
there shall be duly tendered to the Underwriters the appropriate number of
securities.

(n)No order suspending the sale of the Securities in any jurisdiction
designated by the Underwriters pursuant to subsection (e) of SECTION 4 hereof
shall have been issued on either the Closing Date or the Option Closing Date, if
any, and no proceedings for that purpose shall have been instituted or shall be
contemplated.

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(o)On or before the Closing Date, the Company shall have executed and
delivered to the Representative, (i) the Representative's Warrant Agreement
substantially in the form filed as Exhibit 4.2 to the Registration Statement in
final form and substance satisfactory to the Representative, and (ii) the
Representative's Warrants in such denominations and to such designees as shall
have been provided to the Company.

(p)On or before the Closing Date, the Shares shall have been duly
approved for quotation on NNM, subject to official notice of issuance.

(q)On or before the Closing Date, there shall have been delivered to
the Representative all of the Lock-up Agreements, in form and substance
satisfactory to Representative's Counsel.

(r)On or before the Closing Date, the Company shall have (i) executed
and delivered to the Representative the Consulting Agreement, substantially in
the form filed as Exhibit ____ to the Registration Statement and (ii) paid the
Representative $48,000 representing the retainer fee pursuant to the Consulting
Agreement.

If any condition to the Representative's obligations hereunder to be
fulfilled prior to or at the Closing Date or the relevant Option Closing Date,
as the case may be, is not so fulfilled, the Representative may terminate this
Agreement or, if the Representative so elects, it may waive any such conditions
which have not been fulfilled or extend the time for their fulfillment.

7. INDEMNIFICATION.

(a)The Company, agrees to indemnify and hold harmless each of the
Underwriters (for purposes of this SECTION 7 "Underwriters" shall include the
officers, directors, partners, employees, agents and counsel of the
Underwriters, including specifically each person who may be substituted for an
Underwriter as provided in SECTION 11 hereof), and each person, if any, who
controls the Underwriter ("controlling person") within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, from and against any and all
losses, claims, damages, expenses or liabilities, joint or several (and actions,
proceedings, investigations, inquiries, and suits in respect thereof),
whatsoever (including but not limited to any and all costs and expenses
whatsoever reasonably incurred in investigating, preparing or defending against
such action, proceeding, investigation, inquiry or suit, commenced or
threatened, or any claim whatsoever), as such are incurred, to which the
Underwriter or such controlling person may become subject under the Act, the
Exchange Act or any other statute or at common law or otherwise or under the
laws of foreign countries, arising out of or based upon (A) any untrue statement
or alleged untrue statement of a material fact contained (i) in any Preliminary
Prospectus, the Registration Statement or the Prospectus (as from time to time
amended and supplemented); (ii) in any post-effective amendment or amendments or
any new registration statement and prospectus in which is included securities of
the Company issued or issuable upon exercise of the Securities; or (iii) in any
application or other document or written communication (in this SECTION 7
collectively called "application") executed by the Company or based upon written
information furnished by the Company filed, delivered or used in any
jurisdiction in

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<PAGE>

order to qualify the Securities under the securities laws thereof or filed with
the Commission, any state securities commission or agency, NNM or any other
securities exchange, (B) the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading (in the case of the Prospectus, in the light of the
circumstances under which they were made), or (C) any breach of any
representation, warranty, covenant or agreement of the Company contained herein
or in any certificate by or on behalf of the Company or any of its officers
delivered pursuant hereto unless, in the case of clause (A) or (B) above, such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to any Underwriter by or on
behalf of such Underwriters expressly for use in any Preliminary Prospectus, the
Registration Statement or any Prospectus, or any amendment thereof or supplement
thereto, or in any application, as the case may be.

The indemnity agreement in this subsection (a) shall be in addition to
any liability which the Company may have at common law or otherwise.

(b)Each of the Underwriters agrees severally, but not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the Registration Statement, and each other person, if
any, who controls the Company within the meaning of the Act, to the same extent
as the foregoing indemnity from the Company to the Underwriter but only with
respect to statements or omissions, if any, made in any Preliminary Prospectus,
the Registration Statement or Prospectus or any amendment thereof or supplement
thereto or in any application made in reliance upon, and in strict conformity
with, written information furnished to the Company with respect to any
Underwriter by such Underwriter expressly for use in such Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment thereof or
supplement thereto or in any such application, provided that such written
information or omissions only pertain to disclosures in the Preliminary
Prospectus, the Registration Statement or Prospectus directly relating to the
transactions effected by the Underwriters in connection with this Offering. The
Company acknowledges that the statements with respect to the public offering of
the Securities set forth under the heading "Underwriting" and the stabilization
legend in the Prospectus have been furnished by the Underwriter expressly for
use therein and constitute the only information furnished in writing by or on
behalf of the Underwriters for inclusion in the Prospectus.

The indemnity agreement in this subsection (b) shall be in addition to
any liability which the Underwriters may have at common law or otherwise.

(c)Promptly after receipt by an indemnified party under this SECTION 7
of notice of the commencement of any action, suit or proceeding, such
indemnified party shall, if a claim in respect thereof is to be made against one
or more indemnifying parties under this SECTION 7, notify each party against
whom indemnification is to be sought in writing of the commencement thereof (but
the failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this SECTION 7 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action, investigation,
inquiry, suit or proceeding is brought against any indemnified party, and it
notifies an indemnifying party or parties of the commencement thereof, the
indemnifying

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party or parties will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action at the expense of the indemnifying party, (ii) the indemnifying parties
shall not have employed counsel reasonably satisfactory to such indemnified
party to have charge of the defense of such action within a reasonable time
after notice of commencement of the action, or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to one or
all of the indemnifying parties (in which case the indemnifying parties shall
not have the right to direct the defense of such action, investigation, inquiry,
suit or proceeding on behalf of the indemnified party or parties), in any of
which events such fees and expenses of one additional counsel shall be borne by
the indemnifying parties. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action, investigation, inquiry, suit or proceeding or
separate but similar or related actions, investigations, inquiries, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances. Anything in this SECTION 7 to the contrary notwithstanding,
an indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent; PROVIDED, HOWEVER, that such
consent was not unreasonably withheld. An indemnifying party will not, without
the prior written consent of the indemnified parties, settle compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, investigation, inquiry, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action),
unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party form all liability arising out of such claim,
action, suit or proceeding and (ii) doe snot include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

(d)In order to provide for just and equitable contribution in any case
in which (i) an indemnified party makes claim for indemnification pursuant to
this SECTION 7, but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of this SECTION 7 provide for indemnification in such
case, or (ii) contribution under the Act may be required on the part of any
indemnified party, then each indemnifying party shall contribute to the amount
paid as a result of such losses, claims, damages, expenses or liabilities (or
actions, investigations, inquiries, suits or proceedings in respect thereof)
(A) in such proportion as is appropriate to reflect the relative benefits
received by each of the contributing parties, on the one hand, and the party to
be indemnified on the other hand, from the offering of the Securities or (B) if
the allocation provided by clause (A) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each of the
contributing parties, on

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<PAGE>

the one hand, and the party to be indemnified on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages,
expenses or liabilities, as well as any other relevant equitable considerations.
In any case where the Company is the contributing party and the Underwriters are
the indemnified party, the relative benefits received by the Company on the one
hand, and the Underwriters, on the other, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities (before
deducting expenses) bear to the total underwriting discounts received by the
Underwriters hereunder, in each case as set forth in the table on the Cover Page
of the Prospectus. Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, or by the Underwriters, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, expenses or
liabilities (or actions, investigations, inquiries, suits or proceedings in
respect thereof) referred to above in this subdivision (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action, claim,
investigation, inquiry, suit or proceeding. Notwithstanding the provisions of
this subdivision (d) the Underwriters shall not be required to contribute any
amount in excess of the underwriting discount applicable to the Securities
purchased by the Underwriters hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this SECTION 7, each person, if any, who
controls the Company within the meaning of the Act, each officer of the Company
who has signed the Registration Statement, and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to this subparagraph (d). Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit, inquiry,
investigation or proceeding against such party in respect to which a claim for
contribution may be made against another party or parties under this
subparagraph (d), notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have hereunder or otherwise than under this subparagraph (d), or to
the extent that such party or parties were not adversely affected by such
omission. The contribution agreement set forth above shall be in addition to
any liabilities which any indemnifying party may have at common law or
otherwise.

8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto,
shall be deemed to be representations, warranties and agreements at the Closing
Date and the Option Closing Date, as the case may be, and such representations,
warranties and agreements of the Company and the indemnity agreements contained
in SECTION 7 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, the
Company, any controlling person of any Underwriter or the Company, and shall
survive termination of this Agreement or the issuance and delivery of the
Securities to the Underwriters.

- 34 -

<PAGE>

9. EFFECTIVE DATE.

(a)This Agreement shall become effective at 10:00 a.m., New York City
time, on the next full business day following the date hereof, or at such
earlier time after the Registration Statement becomes effective as the
Representative, in its discretion, shall release the Shares for sale to the
public; PROVIDED, HOWEVER, that the provisions of SECTIONS 5, 7 and 10 of this
Agreement shall at all times be effective. For purposes of this SECTION 9, the
Shares to be purchased hereunder shall be deemed to have been so released upon
the earlier of dispatch by the Representative of telegrams to securities dealers
releasing such shares for offering or the release by the Representative for
publication of the first newspaper advertisement which is subsequently published
relating to the Shares.

10. TERMINATION.

(a)Subject to subsection (b) of this SECTION 10, the Representative
shall have the right to terminate this Agreement, after the date hereof, (i) if
any domestic or international event or act or occurrence has materially
disrupted, or in the Representative's opinion will in the immediate future
materially adversely disrupt the financial markets; or (ii) any material adverse
change in the financial markets shall have occurred; or (iii) if trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Boston Stock Exchange, the
Chicago Board of Trade, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange, the Commission or any other government authority having
jurisdiction; or (iv) if trading of any of the securities of the Company shall
have been suspended, or any of the securities of the Company shall have been
delisted, on any exchange or in any over-the-counter market; or (v) if the
United States shall have become involved in a war or major hostilities, or if
there shall have been an escalation in an existing war or major hostilities or a
national emergency shall have been declared in the United States; or (vi) if a
banking moratorium has been declared by a state or federal authority; or (vii)
if a moratorium in foreign exchange trading has been declared; or (viii) if the
Company shall have sustained a loss material or substantial to the Company by
fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not such loss shall have been insured, will,
in the Representative's opinion, make it inadvisable to proceed with the
delivery of the Securities; or (viii) if there shall have occurred any outbreak
or escalation of hostilities or any calamity or crisis or there shall have been
such a material adverse change in the conditions or prospects of the Company, or
such material adverse change in the general market, political or economic
conditions, in the United States or elsewhere as in the Representative's
judgment would make it inadvisable to proceed with the offering, sale and/or
delivery of the Securities.

(b)If this Agreement is terminated by the Representative in accordance
with the provisions of SECTION 10(a) the Company shall promptly reimburse and
indemnify the Representative for all of its actual out-of-pocket expenses,
including the fees and disbursements of counsel for the Underwriters (less
amounts previously paid pursuant to SECTION 5(c) above). Notwithstanding any
contrary provision contained in this Agreement, if this Agreement shall not be
carried out within the time specified herein, or any extension thereof granted
to the

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<PAGE>

Representative, by reason of any failure on the part of the Company to perform
any undertaking or satisfy any condition of this Agreement by it to be performed
or satisfied (including, without limitation, pursuant to SECTION 6 or SECTION
12) then, the Company shall promptly reimburse and indemnify the Underwriter for
all of their actual out-of-pocket expenses, including the fees and disbursements
of counsel for the Underwriter (less amounts previously paid pursuant to SECTION
5(c) above). In addition, the Company shall remain liable for all Blue Sky
counsel fees and expenses and filing fees. Notwithstanding any contrary
provision contained in this Agreement, any election hereunder or any termination
of this Agreement (including, without limitation, pursuant to SECTIONS 6, 10 and
12 hereof), and whether or not this Agreement is otherwise carried out, the
provisions of SECTION 5 and SECTION 7 shall not be in any way affected by such
election or termination or failure to carry out the terms of this Agreement or
any part hereof.

11. SUBSTITUTION OF THE UNDERWRITERS. If one or more of the Underwriters
shall fail otherwise than for a reason sufficient to justify the termination of
this Agreement (under the provisions of SECTION 6, SECTION 10 or SECTION 12
hereof) to purchase the Securities which it or they are obligated to purchase on
such date under this Agreement (the "Defaulted Securities"), the Representative
shall have the right, within 24 hours thereafter, to make arrangement for one or
more of the non-defaulting Underwriters, or any other Underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-hour
period, then:

(a) if the number of Defaulted Securities does not exceed 10% of the total
number of Firm Shares to be purchased on such date, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or

(b) if the number of Defaulted Securities exceeds 10% of the total number
of Firm Shares, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriters.

No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of any default by such Underwriter under
this Agreement.

In the event of any such default which does not result in a termination of
this Agreement, the Representative shall have the right to postpone the Closing
Date for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements.

12. DEFAULT BY THE COMPANY. If the Company shall fail at the Closing Date
or at any Option Closing Date, as applicable, to sell and deliver the number of
Shares which it is obligated to sell hereunder on such date, then this Agreement
shall terminate (or, if such default shall occur with respect to any Option
Shares to be purchased on an Option Closing Date, the Underwriters may at their
option, by notice from the Underwriters or the Representative to the

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<PAGE>

Company, terminate the Underwriters' obligation to purchase Option Shares from
the Company on such date) without any liability on the part of any
non-defaulting party other than pursuant to SECTION 5, SECTION 7 and SECTION 10
hereof. No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.

13. NOTICES. All notices and communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Representative shall be directed to the
Representative at 850 Third Avenue, New York, New York 10022, Attention: Ralph
Worthington IV, Chairman, with a copy to Orrick, Herrington & Sutcliffe LLP, 666
Fifth Avenue, New York, New York 10103, Attention: Lawrence B. Fisher, Esq.
Notices to the Company shall be directed to the Company at 350 Fifth Avenue,
Suite 3922, New York, New York 10118, Attention: Casey K. Tjang, with a copy
to Bondy & Schloss LLP, 6 East 43rd Street, New York, New York 10017,
Attention: Joel S. Forman, Esq.

14. PARTIES. This Agreement shall inure solely to the benefit of and
shall be binding upon, the Underwriters, the Company and the controlling
persons, directors and officers referred to in SECTION 7 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained. No purchaser of Securities from the Underwriters shall be deemed to
be a successor by reason merely of such purchase.

15. CONSTRUCTION. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without giving
effect to the choice of law or conflict of laws principles.

16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
taken together shall be deemed to be one and the same instrument.

17. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, the Consulting
Agreement, and the Representative's Warrant Agreement constitute the entire
agreement of the parties hereto and supersede all prior written or oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may not be amended except in a writing, signed by the
Representative and the Company.

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<PAGE>

If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.

Very truly yours,

LEADING EDGE PACKAGING INC.

By:
-----------------------------
Lip-Boon Saw
Chairman of the Board and Chief
Executive Officer

AND

RICH CITY PACKAGING LIMITED

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

AND

CHUNG HWA DEVELOPMENT HOLDINGS LIMITED

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

Confirmed and accepted as of
the date first above written.

GILFORD SECURITIES INCORPORATED

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

- 38 -

<PAGE>

SCHEDULE A

NUMBER OF FIRM SHARES

Gilford Securities Incorporated.................................................

1,250,000

- 39 -

<PAGE>

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

LEADING EDGE PACKAGING, INC.

Adopted in accordance with the provisions of Sections
228 and 242 of the General Corporation Law of the
State of Delaware

LEADING EDGE PACKAGING, INC., a corporation existing under the laws of the
State of Delaware (the "corporation"), does hereby certify as follows:

1. The amendments contained in this Certificate of Amendment have been
duly set forth and declared advisable by the Board of Directors of the
corporation in accordance with the provisions of Section 242(c) of the General
Corporation Law of the State of Delaware.

2. Approval of the amendments have been given by written consent of the
sole shareholder of the outstanding shares of the common stock of the
corporation in accordance with the provisions of Section 228(a).

3. The certificate of incorporation of the corporation is hereby amended by
deleting Article Fourth thereof and substituting in lieu of said Article the
following new Article:

FOURTH: The total number of shares of common stock which
this corporation is authorized to issue is five million
(5,000,000) shares, par value $.01 per share. Upon
amendment of this Article Fourth as stated, each outstanding
share of common stock, without par value, issued prior to
this amendment shall be split and converted into 1,250
Shares of common stock, par value $.01 per share.

The total number of shares of preferred stock which this corporation is
authorized to issue is five million (5,000,000) shares, par value $.01 per
share. The board of directors of the corporation shall have the authority,
without further action by the holders of the outstanding common stock, to issue
preferred stock from time to time in one or more classes or series, to fix the
number of shares constituting any class or series and the stated value thereof,
if different from the par value, and to fix the terms of any such series or
class, including dividend rights, dividend rates, conversion or exchange rights,
voting rights and terms of redemption (including sinking fund provisions), the

<PAGE>

redemption price and the liquidation preference of such class or series.

4. The certificate of incorporation of the corporation is hereby amended
to add new Articles SEVENTH and EIGHTH thereof as follows:

SEVENTH: The Corporation shall, to the full extent
permitted by Section 145 of the General Corporation Law of
the State of Delaware, as amended from time to time,
indemnify all personal whom it may indemnify pursuant
thereto.

EIGHTH: A director of the corporation shall not be liable
to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except to the
extent such exemption from liability or limitation thereof
is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be
amended.

Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect
an right or protection of the director of the corporation
existing at the time of such repeal or modification.

IN WITNESS WHEREOF, the corporation has caused this Certificate of
Amendment to be signed by its Secretary this ____ day of October, 1996.

LEADING EDGE PACKAGING, INC.

By: ____________________________
Casey K. Tjang, Secretary

<PAGE>

CERTIFICATE OF INCORPORATION

LEADING EDGE PACKAGING, INC.
_______________________________________

FIRST. The name of this corporation shall be:

LEADING EDGE PACKAGING, INC.

SECOND. Its registered office in the State of Delaware is to be located at
1013 Centre Road, in the City of Wilmington, County of New Castle, 19805, and
its registered agent at such address is CORPORATE AGENTS, INC.

THIRD. The purpose or purposes of the corporation be:

To engage in any lawful act or activity for which corporations may be
organized under the General Corp Law of Delaware.

FOURTH. The total number of shares of stock which corporation is authorized to
issue is:

One Thousand Five (1,500) Shares Without Par Value.

FIFTH. The name and mailing address of the incorporator is as follows:

Cheryl A. Lewis
Corporate Agents, Inc.
1013 Centre Road
Wilmington, DE 19805

SIXTH. The Board of Directors shall have the p adopt, amend or repeal the
by-laws.

IN WITNESS WHEREOF, The undersigned, being the incorporator hereinbefore
named, has executed, sign acknowledged this certificate of incorporation this
fifteenth day of December, A.D. 1995.

__________________________
Cheryl A. Lewis
Incorporator

<PAGE>

AMENDED AND RESTATED BY-LAWS

LEADING EDGE PACKAGING, INC.

ARTICLE I - STOCKHOLDERS

Section 1.1. ANNUAL MEETINGS. The annual meeting of the stockholders of
the Corporation shall be held for the purpose of electing Directors, at such
date, time and place, either within or without the State of Delaware, as may be
designated by resolution of the Board of Directors from time to time. Any other
proper business may be transacted at the annual meeting.

Section 1.2. SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose or purposes may be called at any time by the Board of Directors or
by a committee of the Board of Directors that has been duly designated by the
Board of Directors and whose powers and authority, as provided in a resolution
of the Board of Directors, include the power to call such meetings or as
otherwise required under the provisions of the General Corporation Law.

Section 1.3. PLACE OF MEETINGS. All meetings of stockholders shall be
held at the principal office of the Corporation, or at such other places as
shall be designated in the notices or waivers of notice of such meetings.

Section 1.4. NOTICE OF MEETINGS.

(a) Except as otherwise provided by law or the rules of any stock
exchange or the Nasdaq Stock Exchange, Inc. ("Nasdaq"), whenever
stockholders are required or permitted to take any action at a meeting, a
written notice of the meeting shall be given that shall state the place,
date and hour of the meeting, and the purpose or purposes for which it is
called, shall be served either personally or by mail, not less than ten or
more than sixty days before the meeting, upon each stockholder of record
entitled to vote at such meeting, and to any other to whom the giving of
notice may be required by law. Notice of a special meeting shall indicate
that it is being issued by, or at the direction of, the person or persons
calling the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle stockholders to receive payment for their
shares pursuant to law, the notice of such meeting shall include a
statement of that purpose and to that effect. If mailed, such notice shall
be deemed to be given when deposited in the United States mail, postage
prepaid, and directed to each such stockholder at his address, as it
appears on the records of the stockholders of the Corporation, unless he
shall have previously filed with the Secretary of the Corporation a written
request that notices intended for him be mailed to the address designated
in such request.

<PAGE>

(b) Notice of any meeting need not be given to any person who may
become a stockholder of record after the record date, as determined under
Section 1.10 of these By-laws and prior to the meeting, or to any
stockholder who attends such meeting, in person or by proxy, or to any
stockholder who, in person or by proxy, submits a signed waiver of notice
either before or after such meeting.

Section 1.5. ADJOURNMENTS. Any meeting of stockholders, annual or special,
may adjourn from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting, the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting in accordance with Section
1.4.

Section 1.6. QUORUM. Except as otherwise provided herein, or by law or the
rules of any stock exchange or Nasdaq, or in the Certificate of Incorporation,
as amended (the "Certificate of Incorporation"), at all meetings of stockholders
of the Corporation, the presence at such meetings in person or by proxy of
stockholders holding of record a majority of the total number of shares of the
Corporation then issued and outstanding and entitled to vote, shall be necessary
and sufficient to constitute a quorum for the transaction of any business. In
the absence of a quorum, the stockholders so present may, by majority vote,
adjourn the meeting from time to time in the manner provided in Section 1.5 of
these By-laws until a quorum shall attend. At any such adjourned meeting at
which a quorum is present, any business may be transacted at the adjournment
thereof which could have been transacted at the meeting as originally called if
a quorum had been present. Shares of its own stock belonging to the Corporation
or to another corporation, if a majority of the shares entitled to vote in the
election of Directors of such other corporation is held, directly or indirectly,
by the Corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
Corporation to vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity.

Section 1.7. ORGANIZATION. Meetings of stockholders shall be presided over
by the Chairman, if any, or in his absence, by the President, or in his absence
by a Vice President, or in the absence of the foregoing persons, by a chairman
designated by the Board of Directors, or in the absence of such designation by a
chairman chosen at the meeting by a majority of stockholders present. The
Secretary shall act as secretary of the meeting, but in his absence, the
chairman of the meeting may appoint any person to act as secretary of the
meeting. The chairman of the meeting shall announce at the meeting of
stockholders the date and time of the opening and the closing of the polls for
each matter upon which the stockholders will vote.

<PAGE>

Section 1.8. VOTING; PROXIES.

(a) Except as otherwise provided by law or by the Certificate of
Incorporation, any corporate action, other than the election of Directors
to be taken by vote of the stockholders, shall be authorized by a majority
of votes cast at a meeting of stockholders by the holders of shares
entitled to vote thereon.

(b) Except as otherwise provided by law or by the Certificate of
Incorporation, each stockholder of record entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held
by him which has voting power upon the matter in question.

(c) Each stockholder entitled to vote at a meeting of stockholders, or
to express consent or dissent to a corporate action in writing without a
meeting, may authorize another person or persons to act for such
stockholder by proxy; provided, however, that the instrument authorizing
such proxy to act shall have been executed in writing by the himself, or
by his attorney-in-fact thereunto duly authorized in writing. No such
proxy shall be voted or acted upon after three years from its date, unless
the person(s) executing it shall have specified therein the length of time
it is to continue in force. Such proxy shall be exhibited to the Secretary
at the meeting and shall be filed with the records of the Corporation. A
proxy shall be irrevocable if it states that it is irrevocable and if, and
only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A stockholder may revoke any proxy which is
not irrevocable by attending the meeting and voting in person or by filing
an instrument in writing revoking the proxy or by delivering a proxy in
accordance with applicable law bearing a later date to the Secretary of the
Corporation.

(d) At all meetings of stockholders for the election of Directors, a
plurality of the votes cast shall be sufficient to elect. Unless otherwise
provided by law, the Certificate of Incorporation or these By-laws, all
other elections and questions shall, be decided by the vote of the holders
of shares of stock having a majority of the votes which could be cast by
the holders of all shares of stock outstanding and entitled to vote
thereon.

Section 1.9. FIXING OF RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record is adopted by the Board of Directors and which
record date: (i) in the case of determination of stockholders entitled to vote
at any meeting of stockholders or adjournment thereof, shall, unless otherwise
required by law, the rules of any stock exchange or Nasdaq, not be more than
sixty nor less than ten days before the date of such meeting; (ii) in the case
of determination of stockholders entitled to express consent to corporate action
in writing without a meeting, shall not be more than ten days from the date upon
which the resolution fixing the record date is adopted by the Board of
Directors;

<PAGE>

and (iii) in the case of any other action, shall not be more than sixty days
prior to such other action. If no record date is fixed: (i) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day preceding the day on
which notice is given, or, if notice is waived, at the close of business on the
day preceding the day on which the meeting is held; (ii) the record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(iii) the record date for determining stockholders for any other purpose shall
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjournment.

Section 1.10. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary, after
consultation with the transfer agent, shall prepare and make, at least ten days
before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at the
place where the meeting is to be held, or at another place within the city where
the meeting is to be held, which other place shall be specified in the notice of
the meeting. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof and may be inspected by any
stockholder who is present. The stock ledger maintained by the transfer agent
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list of stockholders or the books of the Corporation, or
to vote in person or by proxy at any meeting of stockholders.

Section 1.11. ACTION BY CONSENT OF STOCKHOLDERS. Any resolution in writing
signed by all of the stockholders entitled to vote thereon shall be and
constitute action by such stockholders to the effect therein expressed, with the
same force and effect as if the same had been duly passed by unanimous vote at a
duly called meeting of stockholders and such resolution so signed shall be
inserted in the Minute Book of the Corporation under its proper date. Unless
otherwise restricted by the Certificate of Incorporation or the rules of any
stock exchange or Nasdaq, any action required or permitted to be taken at any
annual or special meeting of the stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted and shall be delivered (by hand, by
certified mail, return receipt requested, or by overnight courier from which
evidence of receipt may be obtained) to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the

<PAGE>

Corporation having custody of the Minute Book in which proceedings of minutes of
stockholders are recorded. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.

ARTICLE II - BOARD OF DIRECTORS

Section 2.1. NUMBER, ELECTION AND TERM OF OFFICE.

(a) The number of the Directors of the Corporation shall be five (5),
unless and until otherwise determined by vote of a majority of the entire
Board of Directors. The number of Directors shall not be less than three,
unless all of the outstanding shares are owned beneficially and of record
by fewer than three stockholders, in which event the number of Directors
shall not be less than the number of stockholders permitted by law.
Directors need not be stockholders.

(b) Except as may otherwise be provided herein or in the Certificate
of Incorporation, at each annual meeting of stockholders, each member of
the Board of Directors of the Corporation shall be elected by a plurality
of the votes cast at such meeting.

(c) Each Director shall hold office until the annual meeting of the
stockholders next succeeding his election, and until his successor is duly
elected and qualified, or until his prior death, resignation or removal.

Section 2.2. DUTIES AND POWERS. The Board of Directors shall be
responsible for the control and management of the affairs, property and
interests of the Corporation, and may exercise all powers of the Corporation,
except as are in the Certificate of Incorporation or by law expressly conferred
upon or reserved to the stockholders.

Section 2.3. ANNUAL AND REGULAR MEETINGS; NOTICE.

(a) A regular annual meeting of the Board of Directors shall be held
immediately following the annual meeting of the stockholders, at the place
of such annual meeting of stockholders.

(b) The Board of Directors, from time to time, may provide by
resolution for the holding of other regular meetings of the Board of
Directors and may fix the time and place thereof.

(c) Notice of any regular meeting of the Board of Directors shall not
be required to be given and, if given, need not specify the purpose of the
meeting; provided, however, that in case the Board of Directors shall fix
or change the time or place of any regular meeting, notice of such action
shall be given to each Director who shall not have been present at the
meeting at which such action was taken within the time limit, and in

<PAGE>

the manner set forth, in paragraph (b) of Section 2.4 of this Article II,
with respect to special meetings, unless such notice shall be waived in the
manner set forth in paragraph (c) of such Section 2.4.

Section 2.4. SPECIAL MEETINGS; NOTICE.

(a) Special meetings of the Board of Directors shall be held whenever
called by the President or by one of the Directors (including the
Chairman), at such time and place as may be specified in the respective
notices or waivers of notice thereof.

(b) Except as otherwise required by law, notice of a special meeting
shall be mailed directly to each Director, addressed to him at his
residence or usual place of business, at least two (2) days before the day
on which the meeting is to be held, or shall be sent to him at such place
by telegram, radio or cable, or shall be delivered to him personally or
given to him orally, not later than the day before the day on which the
meeting is to be held. A notice, or waiver of notice, except as required
by Section 2.8 of this Article II, need not specify the purpose of the
meeting.

(c) Notice of any special meeting shall not be required to be given to
any Director who shall attend such meeting without protesting prior thereto
or at its commencement, the lack of notice to him, or who submits a signed
waiver of notice, whether before or after the meeting. Notice of any
adjournment of a meeting shall not be required to be given.

Section 2.5. ORGANIZATION. At all meetings of the Board of Directors the
Chairman of the Board, if any and if present, shall preside. If there shall be
no Chairman, or he shall be absent, then the President shall preside, and in his
absence, a chairman chosen by the Directors shall preside. The Secretary shall
act as secretary of the meeting, but in his absence, the chairman of the meeting
may appoint any person to act as secretary of the meeting.

Section 2.6. QUORUM AND ADJOURNMENTS.

(a) At all meetings of the Board of Directors, the presence of a
majority of the entire Board shall be necessary and sufficient to
constitute a quorum for the transaction of business, except as otherwise
provided by law, the rules of any stock exchange or Nasdaq, by the
Certificate of Incorporation, or by these By-laws.

(b) A majority of the Directors present at the time and place of any
regular or special meeting, although less than a quorum, may adjourn the
same from time to time without notice, until a quorum shall be present.

Section 2.7. MANNER OF ACTING; TELEPHONIC MEETINGS; UNANIMOUS CONSENT
PERMITTED.

(a) At all meetings of the Board of Directors, each Director present
shall have one vote, irrespective of the number of shares of stock, if any,
which he may hold.

<PAGE>
t
(b) Members of the Board of Directors, or any committee designated by
the Board of Directors, may participate in a meeting thereof by means of
conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 2.7(b) shall constitute
presence in person at such meeting.

(c) Except as otherwise provided by law or the rules of any stock
exchange or Nasdaq, by the Certificate of Incorporation, or these By-laws,
the action of a majority of the Directors present at any meeting at which a
quorum is present shall be the act of the Board of Directors. Any action
authorized in writing, by all of the Directors entitled to vote thereon and
filed with the minutes of the Corporation, shall be the act of the Board of
Directors with the same force and effect as if the same had been passed by
unanimous vote at a duly called meeting of the Board of Directors.

Section 2.8. VACANCIES. Any vacancy in the Board of Directors occurring by
reason of an increase in the number of Directors, or by reason of the death,
resignation, disqualification, removal (unless a vacancy created by the removal
of a Director by the stockholders shall be filled by the stockholders at the
meeting at which the removal was effected) or inability to act of any Director,
or otherwise, shall be filled for the unexpired portion of the term by a
majority vote of the remaining Directors, though less than a quorum, at any
regular meeting or special meeting of the Board of Directors called for that
purpose.

Section 2.9. RESIGNATION. Any Director may resign at any time by giving
written notice to the Board of Directors, the President or the Secretary of the
Corporation. Unless otherwise specified in such written notice, such
resignation shall take effect upon receipt thereof by the Board of Directors or
such officer, and the acceptance of such resignation shall not be necessary to
make it effective.

Section 2.10. REMOVAL. Any Director may be removed with or without cause
at any time by the affirmative vote of stockholders holding of record in the
aggregate at least a majority of the outstanding shares of the Corporation at a
special meeting of the stockholders called for that purpose, and may be removed
for cause by action of the Board of Directors.

Section 2.11. SALARY. An annual fee in an amount to be determined by
resolution by the Board of Directors shall be paid to each Director, for his or
her services as such, and by resolution of the Board of Directors, a fixed sum
plus expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board; provided, however, that nothing herein
contained shall be construed to preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.

Section 2.12. CONTRACTS.

(a) No contract or other transaction between the Corporation and any
other Corporation shall be impaired, affected or invalidated, nor shall any
Director be liable in any way by reason of the fact that any one or more of
the Directors of this

<PAGE>

Corporation is or are interested in, or is a Director or officer, or are
Directors or officers of such other Corporation, provided that such facts
are disclosed or made known to the Board of Directors and the stockholders.

(b) Any Director, personally and individually, may be a party to or
may be interested in any contract or transaction of the Corporation, and no
Director shall be liable in any way by reason of such interest, provided at
the fact of such interest be disclosed or made known to the Board of
Directors and the stockholders, and provided that the Board of Directors
shall authorize, approve or ratify such contract or transaction by the vote
(not counting the vote of any such Director) of a majority of a quorum,
notwithstanding the presence of any such Director at the meeting at which
such action is taken. Such Director or Directors may be counted in
determining the presence of a quorum at such meeting. This Section 2.12
shall not be construed to impair or invalidate or in any way affect any
contract or other transaction which would otherwise he valid under the law
(common, statutory or otherwise) applicable thereto.

Section 2.13. COMMITTEES. The Board of Directors, by resolution adopted by
a majority of the entire Board, may from time to time designate from among its
members an Executive Committee, an Audit Committee, a Compensation Committee and
such other committees, and alternate members thereof, as they deem desirable,
each consisting of one or more Directors, with such powers and authority (to the
extent permitted by law and the rules of any stock exchange or Nasdaq) as may be
provided in such resolution.

ARTICLE III - OFFICERS

Section 3.1. NUMBER, ELECTION AND TERM OF OFFICE.

(a) The officers of the Corporation shall consist of a President and
Chief Operating Officer, a Secretary, a Chief Financial Officer, and such
other officers, including a Chairman and Chief Executive Officer, and one
or more Vice Presidents, as the Board of Directors may from time to time
deem advisable. The Chairman of the Board of Directors shall, and any
other officer may, be a Director of the Corporation. Any two or more
offices may be held by the same person.

(b) The officers of the Corporation shall be elected by the Board of
Directors at the regular annual meeting of the Board following the annual
meeting of stockholders.

(c) Each officer shall hold office until the annual meeting of the
Board of Directors next succeeding his election, and until his successor
shall have been duly elected and qualified, or until his death, resignation
or removal.

Section 3.2. RESIGNATION. Any officer may resign at any time by giving
written notice of such resignation to the Board of Directors, or to the
President or the Secretary of the Corporation. Unless otherwise specified in
such written notice, such resignation shall take effect upon receipt thereof by
the Board of Directors or by the President or Secretary, and the

<PAGE>

acceptance of such resignation shall not be necessary to make it effective.

Section 3.3. REMOVAL. Any officer may be removed, either with or without
cause, and a successor elected by a majority of the Board of Directors at any
time.

Section 3.4. VACANCIES. A vacancy in any office by reason of death,
resignation, inability to act, disqualification, or any other cause, may at any
time be filled for the unexpired portion of the term by the Board of Directors.

Section 3.5. DUTIES OF OFFICERS. Officers of the Corporation shall, unless
otherwise provided by the Board of Directors, each have such powers and duties
as generally pertain to their respective offices as well as such powers and
duties as may be set forth in these By-laws, or may from time to time be
specifically conferred or imposed by the Board of Directors.

Section 3.6. SURETIES AND BONDS. In case the Board of Directors shall so
require, any officer, employee or agent of the Corporation shall execute to the
Corporation a bond in such sum, and with such surety or sureties as the Board of
Directors may direct, conditioned upon the faithful performance of his duties to
the Corporation, including responsibility for negligence and for the accounting
for all property, funds or securities of the Corporation which may come into his
hands.

Section 3.7. SHARES OF OTHER CORPORATIONS. Whenever the Corporation is the
holder of shares of any other Corporation, any right or power of the Corporation
as such (including the attendance, acting and voting at stockholders' meetings
and execution of waivers, consents, proxies or other instruments) may be
exercised on behalf of the Corporation by the Chairman, the President, any Vice
President, the Chief Financial Officer, or such other person as the Board of
Directors may authorize.

ARTICLE IV - SHARES OF STOCK

Section 4.1. CERTIFICATE OF STOCK.

(a) The certificates representing shares of the Corporation shall be
in such form as shall be adopted by the Board of Directors, and shall be
numbered and registered in the order issued. They shall bear the holder's
name and the number of shares, and shall be signed by (i) the Chairman or
the President or a Vice President, and (ii) the Secretary or Chief
Financial Officer, and shall bear the corporate seal, if any. Such
signatures and corporate seal may be imprinted or facsimiles.

(b) No certificate representing shares shall be issued until the full
amount of consideration therefor has been paid, except as otherwise
permitted by law.

<PAGE>

the Board of Directors may authorize the issuance of certificates for
fractions of a share which shall entitle the holder to exercise voting
rights, receive dividends and participate in liquidating distributions, in
proportion to the fractional holdings; or it may authorize the payment in
cash of the fair value of fractions of a share as of the time when those
entitled to receive such fractions are determined; or it may authorize the
issuance, subject to such conditions as may be permitted by law, of scrip
in registered or bearer form over the signature of an officer or agent of
the Corporation, exchangeable as therein provided for full shares, but such
scrip shall not entitle the holder to any rights of a stockholder, except
as therein provided.

Section 4.2. LOST OR DESTROYED CERTIFICATES. The holder of any certificate
representing shares of the Corporation shall notify the Corporation of any loss
or destruction of the certificate representing the same. The Corporation
through its transfer agent may issue a new certificate in the place of any
certificate theretofore issued by it, alleged to have been lost or destroyed.
On production of such evidence of loss or destruction as the Board of Directors
in its discretion may require, the Board of Directors may, in its discretion,
require the owner of the lost or destroyed certificate, or his legal
representatives, to give the Corporation a bond in such sum as the Board may
direct, and with such surety or sureties as may be satisfactory to the Board, to
indemnify the Corporation against any claims, loss, liability or damage it may
suffer on account of the issuance of the new certificate. A new certificate may
be issued without requiring any such evidence or bond when, in the judgment of
the Board of Directors, it is proper so to do. The Board of Directors, by
resolution or resolutions duly adopted, may delegate to the Transfer Agent of
the Corporation, the authority to issue replacement stock certificates in such
manner and on such terms as are deemed appropriate by the Board of Directors and
specified in such resolution or resolutions.

Section 4.3. TRANSFERS OF SHARES.

(a) Transfers of shares of the Corporation shall be made on the share
records of the Corporation only by the holder of record thereof, in person
or by his duly authorized attorney, upon surrender for cancellation of the
certificate or certificates representing such shares, with an assignment or
power of transfer endorsed thereon or delivered therewith, duly executed,
with such proof of the authenticity of the signature and of authority to
transfer and of payment of transfer taxes as the Corporation or its agents
may require.

(b) The Corporation shall be entitled to treat the holder of record of
any share or shares as the absolute owner thereof for all purposes and,
accordingly, shall not be bound to recognize any legal, equitable or other
claim to, or interest in, such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof,
except as otherwise expressly provided by law.

ARTICLE V - DIVIDENDS

Subject to applicable law, dividends may be declared and paid out of any
funds available therefor, as often, in such amounts, and at such time or times
as the Board of Directors may

<PAGE>
r

determine.

ARTICLE VI - FISCAL YEAR

The fiscal year of the Corporation shall commence on the 1st day of April
of each year and end on the 31st day of March of the following year, unless and
until amended by the Board of Directors and subject to applicable law.

ARTICLE VII - CORPORATE SEAL

The corporate seal, if any, shall be in such form as shall be approved from
time to time by the Board of Directors.

ARTICLE VIII - AMENDMENTS

Section 8.1. BY-LAWS. All By-laws of the Corporation shall be subject to
alteration or repeal, and new By-laws may be made, by the affirmative vote of
stockholders holding of record in the aggregate at least a majority of the
outstanding shares entitled to vote in the election of Directors at any annual
or special meeting of stockholders, provided that the notice or waiver of notice
of such meeting shall have summarized or set forth in full therein, the proposed
amendment.

Section 8.2. BY DIRECTORS. The Board of Directors shall have power to
make, adopt, alter, amend and repeal, from time to time, By-laws of the
Corporation; provided, however, that the stockholders entitled to vote with
respect thereto as in this Article VIII above-provided may alter, amend or
repeal By-laws made by the Board of Directors, except that the Board of
Directors shall have no power to change the quorum for meetings of stockholders
or of the Board of Directors, or to change any provisions of the By-laws with
respect to the removal of Directors or the filling of vacancies in the Board
resulting from the removal by the stockholders. If any By-law regulating an
impending election of Directors is adopted, amended or repealed by the Board of
Directors, there shall be set forth in the notice of the next meeting of
stockholders for the election of Directors the By-law so adopted, amended or
repealed, together with a concise statement of the changes made.

ARTICLE IX - INDEMNIFICATION

The Corporation shall, to the full extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as amended from time to time,
indemnify all persons whom it may indemnify pursuant thereto.

A Director of the Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation thereof is not
permitted under the General Corporation

<PAGE>

Law of the State of Delaware as amended from timer to time.

Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of the
director of the Corporation existing at the time of such repeal or modification.

<PAGE>

<TABLE>
<S> <C> <C>
GRAPHIC [LEADING EDGE PACKAGING, INC. LOGO] GRAPHIC

COMMON STOCK COMMON STOCK

PAR VALUE $.01 SEE REVERSE FOR
CERTAIN DEFINITIONS

CUSIP 521708 10 7

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

THIS CERTIFIES that

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $.01 PAR VALUE, OF

LEADING EDGE PACKAGING, INC

(hereinafter called the "Corporation") transferable on the books of the Corporation only by the registered holder hereof,
in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are issued and shall be held subject to the laws of the State of Delaware, the certificate of
incorporation of the Corporation, as amended and the By-Laws of the Corporation, and all amendments thereto. This
Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.

IN WITNESS WHEREOF the Corporation has caused this Certificate to be executed by the facsimile signatures of
its duly authorized officers and sealed with the facsimile seal of the Corporation.

Dated:

LEADING EDGE PACKAGING, INC.
CORPORATE SEAL
/s/ Casey K. Tjang 1995 /s/ Lip-Boon Saw
__________________ Delaware ________________
SECRETARY AND CHIEF FINANCIAL OFFICER CHAIRMAN AND
CHIEF EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
(Jersey City, NJ)
Transfer Agent and Registrar,

BY
______________________________
AUTHORIZED OFFICER

</TABLE>

<PAGE>

LEADING EDGE PACKAGING, INC.
<TABLE>
<S> <C>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full according to applicable laws or regulations:

TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ___________Custodian______________
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_______________________________
in common (State)

Additional abbreviations may also be used though not in the above list.

For value received, __________________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________

______________________________________

_________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

_________________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________ shares
of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

_________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.

Dated__________________________________________

__________________________________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed:

______________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

</TABLE>

<PAGE>

OHS DRAFT
11/5/96

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

LEADING EDGE PACKAGING, INC.

AND

GILFORD SECURITIES INCORPORATED

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

REPRESENTATIVE'S
WARRANT AGREEMENT

DATED AS OF ________, 1996

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

<PAGE>

REPRESENTATIVE'S WARRANT AGREEMENT dated as of _______, 1996 between

LEADING EDGE PACKAGING, INC., a Delaware corporation (the "Company"), and

GILFORD SECURITIES INCORPORATED ("Gilford"). Gilford is hereinafter referred to

variously as the "Holder" or the "Representative".

W I T N E S S E T H:

WHEREAS, the Company proposes to issue to the Representative or its

designees warrants ("Warrants") to purchase up to an aggregate 125,000 shares of

common stock of the Company ("Common Stock"); and

WHEREAS, the Representative has agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of the date hereof by and
among the several Underwriters listed therein and the Company to act as the
representative of the several underwriters in connection with the Company's
proposed public offering of up to 1,250,000 shares of Common Stock at a public
offering price of $____ per share of Common Stock (the "Public Offering"); and

WHEREAS, the Warrants to be issued pursuant to this Agreement will be

issued on the Closing Date (as such term is defined in the Underwriting

Agreement) by the Company to the Representative in consideration for, and as

part of the Representative's compensation in connection with, Gilford acting as

the the Representative pursuant to the Underwriting Agreement;

NOW, THEREFORE, in consideration of the premises, the payment by the

Representative to the Company of an aggregate dollars and cents

($ ), the

<PAGE>

agreements herein set forth and other good and valuable consideration, hereby

acknowledged, the parties hereto agree as follows:

1. GRANT. The Holder is hereby granted the right to purchase, at any time

from _______, 1997 [12 months from the effective date of the registration

statement], until 5:30 P.M., New York time, on ____________, 2001 [five years

from the effective date of the registration statement], up to an aggregate of

125,000 shares of Common Stock (the "Shares") at an initial exercise price

(subject to adjustment as provided in SECTION 8 hereof) of $____ per share of

Common Stock [120% of the initial public offering price per share] subject to

the terms and conditions of this Agreement. Except as set forth herein, the

Shares issuable upon exercise of the Warrants are in all respects identical to

the shares of Common Stock being purchased by the Underwriters for resale to the

public pursuant to the terms and provisions of the Underwriting Agreement.

2. WARRANT CERTIFICATES. The warrant certificates (the "Warrant

Certificates") delivered and to be delivered pursuant to this Agreement shall be

in the form set forth in Exhibit A, attached hereto and made a part hereof, with

such appropriate insertions, omissions, substitutions, and other variations as

required or permitted by this Agreement.

3. EXERCISE OF WARRANT.

Section 3.1 METHOD OF EXERCISE. The Warrants initially are exercisable

at an aggregate initial exercise price (subject to adjustment as provided in

SECTION 8 hereof) per share of Common Stock set forth in SECTION 6 hereof

payable by certified or official bank check in New York Clearing House funds,

subject to adjustment as provided in SECTION 8 hereof. Upon surrender of a

Warrant Certificate with the annexed Form of Election to Purchase duly executed,

together with payment of the Exercise Price (as hereinafter defined) for the

shares of Common
2
<PAGE>

Stock purchased at the Company's principal offices in New York, New York

(presently located at 350 Fifth Avenue, Suite 3922, New York, New York 10118)

the registered holder of a Warrant Certificate ("Holder" or "Holders") shall be

entitled to receive a certificate or certificates for the shares of Common Stock

so purchased. The purchase rights represented by each Warrant Certificate are

exercisable at the option of the Holder thereof, in whole or in part (but not as

to fractional shares of the Common Stock underlying the Warrants). Warrants may

be exercised to purchase all or part of the shares of Common Stock represented

thereby. In the case of the purchase of less than all the shares of Common

Stock purchasable under any Warrant Certificate, the Company shall cancel said

Warrant Certificate upon the surrender thereof and shall execute and deliver a

new Warrant Certificate of like tenor for the balance of the shares of Common

Stock purchasable thereunder.

Section 3.2 EXERCISE BY SURRENDER OF WARRANT. In addition to the method

of payment set forth in Section 3.1 and in lieu of any cash payment required

thereunder, the Holder(s) of the Warrants shall have the right at any time and

from time to time to exercise the Warrants in full or in part by surrendering

the Warrant Certificate in the manner specified in Section 3.1 in exchange for

the number of Shares equal to the product of (x) the number of Shares as to

which the Warrants are being exercised, multiplied by (y) a fraction, the

numerator of which is the Market Price (as defined in Section 3.3 hereof) of the

Shares minus the Exercise Price of the Shares and the denominator of which is

the Market Price per Share. Solely for the purposes of this Section 3.2, Market

Price shall be calculated either (i) on the date on which the form of election

attached hereto is deemed to have been sent to the Company pursuant to Section

13 hereof ("Notice Date") or (ii) as the average of the Market Price for each of

the five trading
3

<PAGE>
days immediately preceding the Notice Date, whichever of (i) or (ii) results in

a greater Market Price.

Section 3.3 DEFINITION OF MARKET PRICE. As used herein, the phrase "Market

Price" at any date shall be deemed to be the last reported sale price, or, in

case no such reported sale takes place on such day, the average of the last

reported sale prices for the last three (3) trading days, in either case as

officially reported by the principal securities exchange on which the Common

Stock is listed or admitted to trading or by the Nasdaq National Market ("NNM"),

or, if the Common Stock is not listed or admitted to trading on any national

securities exchanged or quoted by NNM, the average closing bid price as

furnished by the NASD through NNM or similar organization if NNM is no longer

reporting such information, or if the Common Stock is not quoted on NNM, as

determined in good faith by resolution of the Board of Directors of the Company,

based on the best information available to it.

4. ISSUANCE OF CERTIFICATES. Upon the exercise of the Warrants, the

issuance of certificates for shares of Common Stock and/or other securities,

properties or rights underlying such Warrants, shall be made forthwith (and in

any event within five (5) business days thereafter) without charge to the Holder

thereof including, without limitation, any tax which may be payable in respect

of the issuance thereof, and such certificates shall (subject to the provisions

of SECTIONS 5 and 7 hereof) be issued in the name of, or in such names as may be

directed by, the Holder thereof; provided, however, that the Company shall not

be required to pay any tax which may be payable in respect of any transfer

involved in the issuance and delivery of any such certificates in a name other

than that of the Holder, and the Company shall not be required to issue or

deliver such certificates unless or until the person or persons

<PAGE>

requesting the issuance thereof shall have paid to the Company the amount of

such tax or shall have established to the satisfaction of the Company that such

tax has been paid.

The Warrant Certificates and the certificates representing the Shares

underlying the Warrants (and/or other securities, property or rights issuable

upon the exercise of the Warrants) shall be executed on behalf of the Company by

the manual or facsimile signature of the then Chairman or Vice Chairman of the

Board of Directors or President or Vice President of the Company. Warrant

Certificates shall be dated the date of execution by the Company upon initial

issuance, division, exchange, substitution or transfer.

5. RESTRICTION ON TRANSFER OF WARRANTS. The Holder of a Warrant

Certificate, by its acceptance thereof, covenants and agrees that the Warrants

are being acquired as an investment and not with a view to the distribution

thereof; that the Warrants may not be sold, transferred, assigned, hypothecated

or otherwise disposed of, in whole or in part, for a period of one (1) year from

the date hereof, except to officers of the Representative.

6. EXERCISE PRICE.

Section 6.1 INITIAL AND ADJUSTED EXERCISE PRICE. Except as otherwise

provided in SECTION 8 hereof, the initial exercise price of each Warrant shall

be $____ [120% of the initial public offering price] per share of Common Stock.

The adjusted exercise price shall be the price which shall result from time to

time from any and all adjustments of the initial exercise price in accordance

with the provisions of SECTION 8 hereof.

Section 6.2 EXERCISE PRICE. The term "Exercise Price" herein shall mean

the initial exercise price or the adjusted exercise price, depending upon the

context.
5

<PAGE>

7. REGISTRATION RIGHTS.

Section 7.1 REGISTRATION UNDER THE SECURITIES ACT OF 1933. The Warrants,

the Shares, and any of the other securities issuable upon exercise of the

Warrants have not been registered under the Securities Act of 1933, as amended

(the "Act"). Upon exercise, in part or in whole, of the Warrants, certificates

representing the Shares underlying the Warrants, and any of the other securities

issuable upon exercise of the Warrants (collectively, the "Warrant Securities")

shall bear the following legend:

The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act"), and may not be
offered or sold except pursuant to (i) an effective registration statement
under the Act, (ii) to the extent applicable, Rule 144 under the Act (or
any similar rule under such Act relating to the disposition of securities),
or (iii) an opinion of counsel, if such opinion shall be reasonably
satisfactory to counsel to the issuer, that an exemption from registration
under such Act is available.

Section 7.2 PIGGYBACK REGISTRATION. If, at any time commencing after the

date hereof and expiring seven (7) years from the date hereof, the Company

proposes to register any of its securities under the Act (other than in

connection with a merger or pursuant to Form S-8) it will give written notice by

registered mail, at least thirty (30) days prior to the filing of each such

registration statement, to the Representative and to all other Holders of the

Warrants and/or the Warrant Securities of its intention to do so. If the

Representative or other Holders of the Warrants and/or Warrant Securities notify

the Company within twenty (20) business days after receipt of any such notice of

its or their desire to include any such securities in such proposed registration

statement, the Company shall afford the Representative and such Holders of the

Warrants and/or Warrant Securities the opportunity to have any such Warrant

Securities
6

<PAGE>

registered under such registration statement (sometimes referred to herein as

the "Piggyback Registration").

Notwithstanding the provisions of this SECTION 7.2, the Company shall have

the right at any time after it shall have given written notice pursuant to this

SECTION 7.2 (irrespective of whether a written request for inclusion of any such

securities shall have been made) to elect not to file any such proposed

registration statement, or to withdraw the same after the filing but prior to

the effective date thereof.

Section 7.3 DEMAND REGISTRATION.

(a) At any time commencing after the date hereof and expiring five (5)

years from the date hereof, the Holders of the Warrants and/or Warrant

Securities representing a "Majority" (as hereinafter defined) of such securities

(assuming the exercise of all of the Warrants) shall have the right (which right

is in addition to the registration rights under SECTION 7.2 hereof), exercisable

by written notice to the Company, to have the Company prepare and file with the

Securities and Exchange Commission (the "Commission"), on one occasion, a

registration statement and such other documents, including a prospectus, as may

be necessary in the opinion of both counsel for the Company and counsel for the

Representative and Holders, in order to comply with the provisions of the Act,

so as to permit a public offering and sale of their respective Warrant

Securities for nine (9) consecutive months by such Holders and any other Holders

of the Warrants and/or Warrant Securities who notify the Company within ten (10)

days after receiving notice from the Company of such request.

(b) The Company covenants and agrees to give written notice of any

registration request under this SECTION 7.3 by any Holder or Holders to all

other registered Holders of the
7

<PAGE>

Warrants and the Warrant Securities within ten (10) days from the date of the

receipt of any such registration request.

subsection (a) of this SECTION 7.3, at any time commencing after the date hereof

and expiring five (5) years thereafter, any Holder of Warrants and/or Warrant

Securities shall have the right, exercisable by written request to the Company,

to have the Company prepare and file, on one occasion, with the Commission a

registration statement so as to permit a public offering and sale for nine (9)

consecutive months by any such Holder of its Warrant Securities provided,

however, that the provisions of SECTION 7.4(b) hereof shall not apply to any

such registration request and registration and all costs incident thereto shall

be at the expense of the Holder or Holders making such request.

(d) Notwithstanding anything to the contrary contained herein, if the

Company shall not have filed a registration statement for the Warrant Securities

within the time period specified in SECTION 7.4(a) hereof pursuant to the

written notice specified in SECTION 7.3(a) of a Majority of the Holders of the

Warrants and/or Warrant Securities, the Company shall have the option, upon the

written notice of election of a Majority of the Holders of the Warrants and/or

Warrant Securities, to repurchase (i) any and all Warrant Securities at the

higher of the Market Price per share of Common Stock on (x) the date of the

notice sent pursuant to SECTION 7.3(a) or (y) the expiration of the period

specified in SECTION 7.4(a) and (ii) any and all Warrants at such Market Price

less the Exercise Price of such Warrant. Such repurchase shall be in

immediately available funds and shall close within two (2) days after the later

of (i) the expiration of the period specified in SECTION 7.4(a) or (ii) the

delivery of the written notice of election specified in this SECTION 7.3(d).

<PAGE>

Section 7.4 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In

connection with any registration under SECTION 7.2 or 7.3 hereof, the Company

covenants and agrees as follows:

(a) The Company shall use its best efforts to file a registration

statement within thirty (30) days of receipt of any demand therefor, shall use

its best efforts to have any registration statements declared effective at the

earliest possible time, and shall furnish each Holder desiring to sell Warrant

Securities such number of prospectuses as shall reasonably be requested.

(b) The Company shall pay all costs (excluding fees and expenses of

Holder(s)' counsel and any underwriting or selling commissions), fees and

expenses in connection with all registration statements filed pursuant to

SECTIONS 7.2 and 7.3(a) hereof including, without limitation, the Company's

legal and accounting fees, printing expenses, blue sky fees and expenses. The

Holder(s) will pay all costs, fees and expenses in connection with any

registration statement filed pursuant to SECTION 7.3(c). If the Company shall

fail to comply with the provisions of SECTION 7.4(a), the Company shall, in

addition to any other equitable or other relief available to the Holder(s), be

liable for any or all incidental or special damages sustained by the Holder(s)

requesting registration of their Warrant Securities.

qualifying or registering the Warrant Securities included in a registration

statement for offering and sale under the securities or blue sky laws of such

states as reasonably are requested by the Holder(s), provided that the Company

shall not be obligated to execute or file any general consent to service of

process or to qualify as a foreign corporation to do business under the laws of

any such jurisdiction.
9

<PAGE>

(d) The Company shall indemnify the Holder(s) of the Warrant Securities to

be sold pursuant to any registration statement and each person, if any, who

controls such Holders within the meaning of SECTION 15 of the Act or SECTION

20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),

against all loss, claim, damage, expense or liability (including all expenses

reasonably incurred in investigating, preparing or defending against any claim

whatsoever) to which any of them may become subject under the Act, the Exchange

Act or otherwise, arising from such registration statement but only to the same

extent and with the same effect as the provisions pursuant to which the Company

has agreed to indemnify the Underwriters contained in SECTION 7 of the

Underwriting Agreement.

(e) The Holder(s) of the Warrant Securities to be sold pursuant to a

registration statement, and their successors and assigns, shall severally, and

not jointly, indemnify the Company, its officers and directors and each person,

if any, who controls the Company within the meaning of SECTION 15 of the Act or

SECTION 20(a) of the Exchange Act, against all loss, claim, damage or expense or

liability (including all expenses reasonably incurred in investigating,

preparing or defending against any claim whatsoever) to which they may become

subject under the Act, the Exchange Act or otherwise, arising from information

furnished by or on behalf of such Holders, or their successors or assigns, for

specific inclusion in such registration statement to the same extent and with

the same effect as the provisions contained in SECTION 7 of the Underwriting

Agreement pursuant to which the Underwriters have agreed to indemnify the

Company.

(f) Nothing contained in this Agreement shall be construed as requiring

the Holder(s) to exercise their Warrants prior to the initial filing of any

registration statement or the effectiveness thereof.

<PAGE>

(g) The Company shall not permit the inclusion of any securities other

than the Warrant Securities to be included in any registration statement filed

pursuant to SECTION 7.3 hereof, or permit any other registration statement to be

or remain effective during the effectiveness of a registration statement filed

pursuant to SECTION 7.3 hereof, without the prior written consent of the Holders

of the Warrants and Warrant Securities representing a Majority of such

securities.

(h) The Company shall furnish to each Holder participating in the offering

and to each underwriter, if any, a signed counterpart, addressed to such Holder

or underwriter, of (i) an opinion of counsel to the Company, dated the effective

date of such registration statement (and, if such registration includes an

underwritten public offering, an opinion dated the date of the closing under the

underwriting agreement), and (ii) a "cold comfort" letter dated the effective

date of such registration statement (and, if such registration includes an

underwritten public offering, a letter dated the date of the closing under the

underwriting agreement) signed by the independent public accountants who have

issued a report on the Company's financial statements included in such

registration statement, in each case covering substantially the same matters

with respect to such registration statement (and the prospectus included

therein) and, in the case of such accountants' letter, with respect to events

subsequent to the date of such financial statements, as are customarily covered

in opinions of issuer's counsel and in accountants' letters delivered to

underwriters in underwritten public offerings of securities.

(i) The Company shall as soon as practicable after the effective date of

the registration statement, and in any event within 15 months thereafter, make

"generally available to its security holders" (within the meaning of Rule 158

under the Act) an earnings statement
11

<PAGE>

(which need not be audited) complying with SECTION 11(a) of the Act and covering

a period of at least 12 consecutive months beginning after the effective date of

the registration statement.

(j) The Company shall deliver promptly to each Holder participating in the

offering requesting the correspondence and memoranda described below and to the

underwriter, copies of all correspondence between the Commission and the

Company, its counsel or auditors and all memoranda relating to discussions with

the Commission or its staff with respect to the registration statement and

permit each Holder and underwriter to do such investigation, upon reasonable

advance notice, with respect to information contained in or omitted from the

registration statement as it deems reasonably necessary to comply with

applicable securities laws or rules of the National Association of Securities

Dealers, Inc. ("NASD"). Such investigation shall include access to books,

records and properties and opportunities to discuss the business of the Company

with its officers and independent auditors, all to such reasonable extent and at

such reasonable times and as often as any such Holder or Underwriter shall

reasonably request.

(k) The Company shall enter into an underwriting agreement with the

underwriter selected for such underwriting by Holders holding a Majority of the

Warrant Securities requested to be included in such underwriting, which may be

the Representative. Such agreement shall be satisfactory in form and substance

to the Company, each Holder and the underwriter, and shall contain such

representations, warranties and covenants by the Company and such other terms as

are customarily contained in agreements of that type used by the underwriter.

The Holders shall be parties to any underwriting agreement relating to an

underwritten sale of their Warrant Securities and may, at their option, require

that any or all the representations, warranties and covenants of the Company to

or for the benefit of such
12

<PAGE>

underwriters shall also be made to and for the benefit of such Holders. Such

Holders shall not be required to make any representations or warranties to or

agreements with the Company or the underwriter except as they may relate to such

Holders and their intended methods of distribution.

(l) In addition to the Warrant Securities, upon the written request

therefor by any Holder(s), the Company shall include in the registration

statement any other securities of the Company held by such Holder(s) as of the

date of filing of such registration statement, including without limitation

restricted shares of Common Stock, options, warrants or any other securities

convertible into shares of Common Stock.

(m) For purposes of this Agreement, the term "Majority" in reference to

the Holders of Warrants or Warrant Securities, shall mean in excess of fifty

percent (50%) of the then outstanding Warrants or Warrant Securities that (i)

are not held by the Company, an affiliate, officer, creditor, employee or agent

thereof or any of their respective affiliates, members of their family, persons

acting as nominees or in conjunction therewith and (ii) have not been resold to

the public pursuant to a registration statement filed with the Commission under

the Act.

8. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES.

Section 8.1 SUBDIVISION AND COMBINATION. In case the Company shall at any

time subdivide or combine the outstanding shares of Common Stock, the Exercise

Price shall forthwith be proportionately decreased in the case of subdivision or

increased in the case of combination.

Section 8.2 STOCK DIVIDENDS AND DISTRIBUTIONS. In case the Company shall

pay a dividend in, or make a distribution of, shares of Common Stock or of the

Company's capital
13

<PAGE>

stock convertible into Common Stock, the Exercise Price shall forthwith be

proportionately decreased. An adjustment made pursuant to this SECTION 8.2

shall be made as of the record date for the subject stock dividend or

distribution.

Section 8.3 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of

the Exercise Price pursuant to the provisions of this SECTION 8, the number of

Warrant Securities issuable upon the exercise at the adjusted exercise price of

each Warrant shall be adjusted to the nearest full amount by multiplying a

number equal to the Exercise Price in effect immediately prior to such

adjustment by the number of Warrant Securities issuable upon exercise of the

Warrants immediately prior to such adjustment and dividing the product so

obtained by the adjusted Exercise Price.

Section 8.4 DEFINITION OF COMMON STOCK. For the purpose of this

Agreement, the term "Common Stock" shall mean (i) the class of stock designated

as Common Stock in the Certificate of Incorporation of the Company as may be

amended as of the date hereof, or (ii) any other class of stock resulting from

successive changes or reclassifications of such Common Stock consisting solely

of changes in par value, or from par value to no par value, or from no par value

to par value.

Section 8.5 MERGER OR CONSOLIDATION. In case of any consolidation of the

Company with, or merger of the Company with, or merger of the Company into,

another corporation (other than a consolidation or merger which does not result

in any reclassification or change of the outstanding Common Stock), the

corporation formed by such consolidation or merger shall execute and deliver to

the Holder a supplemental warrant agreement providing that the holder of each

Warrant then outstanding or to be outstanding shall have the right thereafter

(until the expiration of such Warrant) to receive, upon exercise of such

warrant, the kind and
14

<PAGE>

amount of shares of stock and other securities and property receivable upon such

consolidation or merger, by a holder of the number of shares of Common Stock of

the Company for which such warrant might have been exercised immediately prior

to such consolidation, merger, sale or transfer. Such supplemental warrant

agreement shall provide for adjustments which shall be identical to the

adjustments provided in SECTION 8. The above provision of this subsection shall

similarly apply to successive consolidations or mergers.

Section 8.6 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No

adjustment of the Exercise Price shall be made:

(a) Upon the issuance or sale of the Warrants or the shares of Common

Stock issuable upon the exercise of the Warrants;

(b) If the amount of said adjustment shall be less than two cents

(2CENTS) per Warrant Security, provided, however, that in such case any

adjustment that would otherwise be required then to be made shall be

carried forward and shall be made at the time of and together with the next

subsequent adjustment which, together with any adjustment so carried

forward, shall amount to at least two cents (2CENTS) per Warrant Security.

9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each Warrant

Certificate is exchangeable without expense, upon the surrender thereof by the

registered Holder at the principal executive office of the Company, for a new

Warrant Certificate of like tenor and date representing in the aggregate the

right to purchase the same number of Warrant Securities in such denominations as

shall be designated by the Holder thereof at the time of such surrender.

<PAGE>

Upon receipt by the Company of evidence reasonably satisfactory to it of

the loss, theft, destruction or mutilation of any Warrant Certificate, and, in

case of loss, theft or destruction, of indemnity or security reasonably

satisfactory to it, and reimbursement to the Company of all reasonable expenses

incidental thereto, and upon surrender and cancellation of the Warrants, if

mutilated, the Company will make and deliver a new Warrant Certificate of like

tenor, in lieu thereof.

10. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be

required to issue certificates representing fractions of shares of Common Stock

upon the exercise of the Warrants, nor shall it be required to issue scrip or

pay cash in lieu of fractional interests, it being the intent of the parties

that all fractional interests shall be eliminated by rounding any fraction up to

the nearest whole number of shares of Common Stock or other securities,

properties or rights.

11. RESERVATION AND LISTING OF SECURITIES. The Company shall at all times

reserve and keep available out of its authorized shares of Common Stock, solely

for the purpose of issuance upon the exercise of the Warrants, such number of

shares of Common Stock or other securities, properties or rights as shall be

issuable upon the exercise thereof. The Company covenants and agrees that, upon

exercise of the Warrants and payment of the Exercise Price therefor, all shares

of Common Stock and other securities issuable upon such exercise shall be duly

and validly issued, fully paid, non-assessable and not subject to the preemptive

rights of any stockholder. As long as the Warrants shall be outstanding, the

Company shall use its best efforts to cause all shares of Common Stock issuable

upon the exercise of the Warrants to be listed (subject to official notice of

issuance) on all securities

<PAGE>

exchanges on which the Common Stock issued to the public in connection herewith

may then be listed and/or quoted on NNM.

12. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement shall

be construed as conferring upon the Holders the right to vote or to consent or

to receive notice as a stockholder in respect of any meetings of stockholders

for the election of directors or any other matter, or as having any rights

whatsoever as a stockholder of the Company. If, however, at any time prior to

the expiration of the Warrants and their exercise, any of the following events

shall occur:

(a) the Company shall take a record of the holders of its shares of

Common Stock for the purpose of entitling them to receive a dividend or

distribution payable otherwise than in cash, or a cash dividend or

distribution payable otherwise than out of current or retained earnings, as

indicated by the accounting treatment of such dividend or distribution on

the books of the Company; or

(b) the Company shall offer to all the holders of its Common Stock any

additional shares of capital stock of the Company or securities convertible

into or exchangeable for shares of capital stock of the Company, or any

option, right or warrant to subscribe therefor; or

than in connection with a consolidation or merger) or a sale of all or

substantially all of its property, assets and business as an entirety shall

be proposed;

then, in any one or more of said events, the Company shall give written notice

of such event at least fifteen (15) days prior to the date fixed as a record

date or the date of closing the
17

<PAGE>
transfer books for the determination of the stockholders entitled to such

dividend, distribution, convertible or exchangeable securities or subscription

rights, or entitled to vote on such proposed dissolution, liquidation, winding

up or sale. Such notice shall specify such record date or the date of closing

the transfer books, as the case may be. Failure to give such notice or any

defect therein shall not affect the validity of any action taken in connection

with the declaration or payment of any such dividend, or the issuance of any

convertible or exchangeable securities, or subscription rights, options or

warrants, or any proposed dissolution, liquidation, winding up or sale.

13. NOTICES.

All notices, requests, consents and other communications hereunder shall be

in writing and shall be deemed to have been duly made and sent when delivered,

or mailed by registered or certified mail, return receipt requested:

(a) If to the registered Holder of the Warrants, to the address of

such Holder as shown on the books of the Company; or

(b) If to the Company, to the address set forth in SECTION 3 hereof or

to such other address as the Company may designate by notice to the

Holders.

14. SUPPLEMENTS AND AMENDMENTS. The Company and the Representative may

from time to time supplement or amend this Agreement without the approval of any

holders of Warrant Certificates (other than the Representative) in order to cure

any ambiguity, to correct or supplement any provision contained herein which may

be defective or inconsistent with any provisions herein, or to make any other

provisions in regard to matters or questions arising hereunder which the Company

and the Representative may deem necessary or desirable

<PAGE>
and which the Company and the Representative deem shall not adversely affect the

interests of the Holders of Warrant Certificates.

15. SUCCESSORS. All the covenants and provisions of this Agreement shall

be binding upon and inure to the benefit of the Company, the Holders and their

respective successors and assigns hereunder.

16. TERMINATION. This Agreement shall terminate at the close of business

on _______, 2003. Notwithstanding the foregoing, the indemnification provisions

of SECTION 7 shall survive such termination until the close of business on

_______, 2009.

17. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and each

Warrant Certificate issued hereunder shall be deemed to be a contract made under

the laws of the State of New York and for all purposes shall be construed in

accordance with the laws of said State without giving effect to the rules of

said State governing the conflicts of laws.

The Company, the Representative and the Holders hereby agree that any

action, proceeding or claim against it arising out of, or relating in any way

to, this Agreement shall be brought and enforced in the courts of the State of

New York or of the United States of America for the Southern District of New

York, and irrevocably submits to such jurisdiction, which jurisdiction shall be

exclusive. The Company, the Representative and the Holders hereby irrevocably

waive any objection to such exclusive jurisdiction or inconvenient forum. Any

such process or summons to be served upon any of the Company, the Representative

and the Holders (at the option of the party bringing such action, proceeding or

claim) may be served by transmitting a copy thereof, by registered or certified

mail, return receipt requested, postage prepaid, addressed to it at the address

set forth in SECTION 13 hereof. Such mailing shall be deemed personal service

and shall be legal and binding upon the party so served in any

<PAGE>

action, proceeding or claim. The Company, the Representative and the Holders

agree that the prevailing party(ies) in any such action or proceeding shall be

entitled to recover from the other party(ies) all of its/their reasonable legal

costs and expenses relating to such action or proceeding and/or incurred in

connection with the preparation therefor.

18. ENTIRE AGREEMENT; MODIFICATION. This Agreement (including the

Underwriting Agreement to the extent portions thereof are referred to herein)

contains the entire understanding between the parties hereto with respect to the

subject matter hereof and may not be modified or amended except by a writing

duly signed by the party against whom enforcement of the modification or

amendment is sought.

19. SEVERABILITY. If any provision of this Agreement shall be held to be

invalid or unenforceable, such invalidity or unenforceability shall not affect

any other provision of this Agreement.

20. CAPTIONS. The caption headings of the Sections of this Agreement are

for convenience of reference only and are not intended, nor should they be

construed as, a part of this Agreement and shall be given no substantive effect.

21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be

construed to give to any person or corporation other than the Company and the

Representative and any other registered Holder(s) of the Warrant Certificates or

Warrant Securities any legal or equitable right, remedy or claim under this

Agreement; and this Agreement shall be for the sole benefit of the Company and

the Representative and any other registered Holders of Warrant Certificates or

Warrant Securities.
20

<PAGE>

22. COUNTERPARTS. This Agreement may be executed in any number of

counterparts and each of such counterparts shall for all purposes be deemed to

be an original, and such counterparts shall together constitute but one and the

same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

duly executed, as of the day and year first above written.

LEADING EDGE PACKAGING, INC.

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

Attest:

- ----------------------------
Secretary

GILFORD SECURITIES INCORPORATED

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

<PAGE>

EXHIBIT A

[FORM OF WARRANT CERTIFICATE]

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii)
AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, __________, 2001

No. W-001 Warrants to Purchase
____ Shares of Common Stock

WARRANT CERTIFICATE

This Warrant Certificate certifies that Gilford Securities Incorporated, or
registered assigns, is the registered holder of Warrants to
purchase initially, at any time from __________, 1997 [twelve months from the
effective date of the Registration Statement] until 5:30 p.m. New York time on
___________, 2001 [five years from the effective date of the Registration
Statement] ("Expiration Date"), up to __________ fully-paid and non-assessable
shares of common stock, ("Common Stock") of LEADING EDGE PACKAGING, INC., a
Delaware corporation (the "Company"), (one share of Common Stock referred to
individually as a "Security" and collectively as the "Securities") at the
initial exercise price, subject to adjustment in certain events (the "Exercise
Price"), of $______ [120% of the initial public offering price] per share of
Common Stock upon surrender of this Warrant Certificate and payment of the
Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the warrant agreement dated as of _______,
1996 between the Company and GILFORD SECURITIES INCORPORATED (the "Warrant
Agreement"). Payment of the Exercise Price shall be made by certified or
official bank check in New York Clearing House funds payable to the order of the
Company.

A-1

<PAGE>

No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.

The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.

The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.

Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.

Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.

The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.

All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

A-2

<PAGE>

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.

Dated as of ___________, 1995

LEADING EDGE PACKAGING INC.

[SEAL] By:
--------------------------------
Name:
Title:

A-3

<PAGE>

[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]

The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:

shares of Common Stock;
-----------------------

and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House Funds to the order of Leading Edge
Packaging, Inc. in the amount of $____, all in accordance with the terms of
Section 3.1 of the Representative's Warrant Agreement dated as of _____, 1996
between Leading Edge Packaging, Inc. and Gilford Securities Incorporated. The
undersigned requests that a certificate for such securities be registered in the
name of whose address is and that
such Certificate be delivered to whose address is
.

Dated:
Signature
----------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)

--------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)

A-4

<PAGE>

[FORM OF ASSIGNMENT]

(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)

FOR VALUE RECEIVED hereby sells,
assigns and transfers unto

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

(Please print name and address of transferee)

this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.

Dated: Signature:
------------- ----------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)

---------------------------------------
(Insert Social Security or Other Identifying
Number of Assignee)

A-5

<PAGE>

Exhibit 5.1

[LETTERHEAD OF BONDY & SCHLOSS LLP]

November 12, 1996

Leading Edge Packaging, Inc.
Empire State Building
350 Fifth Avenue, Suite 3922
New York, New York 10118

RE: REGISTRATION STATEMENT ON FORM S-1 OF LEADING EDGE PACKAGING,
INC.
-------------------------------------------------------------

Ladies and Gentlemen:

We have acted as special counsel to and for Leading Edge Packaging, Inc., a
Delaware corporation (the "Company"), in connection with the preparation and
filing of a Registration Statement on Form S-1 (Registration No. 333-12911),
together with any and all exhibits and schedules and all heretofore filed
amendments thereto (the "Registration Statement"), filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
relating to 1,437,000 shares of its common stock, par value $0.01 per share (the
"Common Stock").

We have examined the Company's Certificate of Incorporation, as amended,
Amended and Restated By-laws, resolutions of the Board of Directors of the
Company and such other items we deem material to this opinion.

Based upon the foregoing information and examination, it is our opinion
that the shares of Common Stock of the Company covered by the Registration
Statement have been duly authorized and, when sold, issued and paid for, will be
validly issued, fully paid and nonassessable.

<PAGE>

Leading Edge Packaging, Inc.
Page 2

We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and we further consent to the reference under the caption
"Legal Matters" in the Prospectus which forms a part of the Registration
Statement to the fact that this opinion concerning the validity of the issue has
been rendered by us.

Very truly yours,

BONDY & SCHLOSS LLP

<PAGE>
Exhibit 8.1

[EB Firm Letterhead]

November 12, 1996

Leading Edge Packaging, Inc.
Empire State Building
350 Fifth Avenue, Suite 3922
New York, New York 10018
U.S.A.

RE: PUBLIC OFFERING OF 1,250,000 SHARES OF COMMON STOCK
OF LEADING EDGE PACKAGING, INC.
------------------------------------------------------------

Ladies and Gentlemen:

We have acted as Solicitors in Hong Kong to Leading Edge Packaging, Inc.,
a Delaware corporation (the "Company"), in connection with the public
offering of 1,250,000 shares of Common Stock in the United States by its
Registration Statement on Form S-1 as filed by the Company with the
Securities and Exchange Commission on September 27, 1996, together with any
and all exhibits and schedules and all heretofore filed amendments thereto
(collectively, the "Registration Statement"), under the securities laws of
the United States.

For the purpose of rendering the opinions set forth below, we have reviewed
the following (collectively, the "Documents"):

(i) the Registration Statement; and

(ii) the Company's Prospectus dated November ___, 1996 (the
"Prospectus").

We have also examined such other corporate records, documents, instruments
and agreements, and inquired into such other matters, as we have deemed
necessary or appropriate as a basis for the opinions set forth herein. Whenever
our opinion herein is qualified by the phrase "to the best of our knowledge" or
"to the best of our knowledge, after due inquiry," such language means that,
based upon (i) our inquiries of officers of the Company, (ii) our review of
the Documents, and (iii) our review of such other corporate records, documents,
instruments and agreements described in the first sentence of this paragraph, we
believe that such opinions are factually correct.

<PAGE>

To the best of our knowledge, as to all matters of fact represented to you
by the Company, we advise you that nothing has come to our attention that would
cause us to believe that such facts are incorrect, incomplete or misleading or
that reliance thereon is not warranted under the circumstances. We call to your
attention that our opinion is limited to such facts as they exist on the date
hereof and does not take into account any change of circumstances, fact or law
subsequent thereto.

Based upon and subject to the foregoing, we are of the opinion that:

1. To the best of our knowledge, after due inquiry, the statements
in the Prospectus under the headings, "Risk Factors - Dependence on a
Single Overseas Supplier, "Risk Factors - Transfer of Sovereignty Over Hong
Kong" and "Risk Factors -Overseas Principals of the Company," are accurate
in all material respects, fairly represent the information disclosed
therein and do not omit to state any fact necessary to make the statements
made therein complete and accurate.

2. To the best of our knowledge, after due inquiry, the statements
in the Registration Statement and Prospectus do not contain any untrue
statement of a material fact with respect to the Company, or omit to state
any material fact with respect to the Company which is required to be
stated in the Registration Statement and the Prospectus or is necessary to
make the statements therein not misleading.

We call your attention to the fact that the members of this firm are
licensed to practice law in Hong Kong. Accordingly, we express no opinion with
respect to the laws, rules and regulations of any jurisdictions other than Hong
Kong.

The opinions expressed herein are for the sole benefit of, and may be
relied upon only by, the Company and its counsel, Bondy & Schloss LLP. In
addition, we hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and we further consent to the reference under the
caption "Legal Matters" in the Prospectus which forms a part of the
Registration Statement to the fact that this opinion concerning Hong Kong
matters has been rendered by us.

Very truly yours,

ERVING BRETTELL, SOLICITORS

<PAGE>

Empire State Building
NEW YORK, NEW YORK 10118 (212) 736-3100

October 4, 1996

Mr. Jay Low
Leading Edge Packaging, Inc.
350 Fifth Avenue, Room 3921-3922
New York, New York 10118

Dear Mr. Low:

As per your agreement with the Empire State Building Company, Leading Edge
Packaging, Inc. will receive a rent credit in the amount of $3,508.00 to be
applied against December 1996 monthly rent exclusive of electricity. This credit
is due to a delay in the substantial completion of Landlord's work.

Sincerely,

HELMSLEY-SPEAR, INC.

/s/ Adam C. Elder

Adam C. Elder

TPS:ap

cc: Stephen A. Tole
<PAGE>

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

LEASE
between
CENTER REALTY, L.P.
and
LEADING EDGE PACKAGING, INC.

================================================================================
<PAGE>

DATE OF LEASE: AUGUST, 1996

LANDLORD: CENTER REALTY, L.P.
A New Jersey Limited Partnership
Notice Address: 300 Raritan Center Parkway
P0 Box 7815
Edison, New Jersey 08818-7815

TENANT: LEADING EDGE PACKAGING, INC.
A Delaware Corporation
Notice Address:

Federal ID#:
SIC:

Billing Address:

Contact Person:
Phone #:
Fax #:

REAL ESTATE BROKER: New Century Associates, Inc., and
New Jersey Equity

PREMISES:
Size: Approximately 33,408 square feet of
gross space
Location: Building #409
176 Northfield Avenue
Raritan Center Business Park
Edison, New Jersey
Referenced on "Exhibit A"

USE OF PREMISES: Office and Warehouse for Packaging
Products

TERM: Five (5) years

Beginning Date: November 1, 1996
Ending Date: October 31, 2001

BASE NET RENT: $12,528.00 per month net

ADDITIONAL RENT: 30% of the total additional rent
expenses for Building #409 as set forth
in Clause 2 hereinafter.

SECURITY DEPOSIT: $12,528.00

i
<PAGE>

The Landlord hereby leases the Premises to the Tenant, and the Tenant hereby
leases the Premises from the Landlord, in accordance with the terms of this
Lease, which consists of 14 pages and 3 exhibits

WITNESS/ATTEST: LANDLORD/CENTER REALTY, L.P.

By: Federal Business Centers, Inc.
Corporate General Partner

/s/ Veronica L. Nash /s/ Peter Visceglia
- ----------------------------------- -----------------------------------
By: By: Peter Visceglia
President

WITNESS/ATTEST: TENANT/LEADING EDGE PACKAGING, INC.

/s/ Casey K. Tjang
- ----------------------------------- -----------------------------------
By: By: Casey K. Tjang
Executive Director

ii
<PAGE>

TABLE OF CONTENTS

CLAUSES PAGE
- ------- ----

l. BASE RENT ............................................................... 1
2 ADDITIONAL RENT ......................................................... 1
3. LATE RENT ............................................................... 2
4. ELECTRICITY AND GAS ..................................................... 2
5. SECURITY DEPOSIT ........................................................ 2
6. LIABILITY INSURANCE ..................................................... 2
7. REAL ESTATE COMMISSION .................................................. 3
8. QUIET ENJOYMENT ......................................................... 3
9. AVAILABILITY OF PREMISES ................................................ 3
l0. USE OF PREMISES ......................................................... 3
11. ACCESS TO PREMISES ...................................................... 4
12. LANDLORD'S REPAIRS ...................................................... 5
13. TENANT'S REPAIRS ........................................................ 5
14. ALTERATIONS ............................................................. 6
15. SIGNS ................................................................... 6
16. CASUALTY ................................................................ 6
17. ASSIGNMENT AND SUBLETTING ............................................... 7
18. MORTGAGES ............................................................... 9
19. RECORDING ............................................................... 9
20. CONDEMNATION ............................................................ 9
21. RELOCATION .............................................................. 9
22. RETURN OF PREMISES ...................................................... 9
23. COMPLIANCE WITH ENVIRONMENTAL LAWS ...................................... 10
24. RELEASE AND INDEMNIFICATION ............................................. II
25. DEFAULT ................................................................. 12
26. NOTICE AND CONSENT ...................................................... 13
27. SEVERABILITY ............................................................ 13
28. GOVERNING LAW ........................................................... 13
29. BINDING EFFECT OF LEASE ................................................. 14
30. ENTIRE AGREEMENT ........................................................ 14

EXHIBITS
- --------

A. PLAN OF PREMISES AND SPECIFICATIONS ............................. EXHIBIT A
B. ADDITIONAL RENT EXPENSES ........................................ EXHIBIT B
C. GROUNDS AND LANDSCAPE MAINTENANCE PROGRAM ....................... EXHIBIT C

iii
<PAGE>

1. BASE RENT

Upon signing this Lease, the Tenant shall pay the base rent due for the first
month of the Term. After the first month of the Term, the Tenant shall pay base
rent on a monthly basis, in advance, on the first day of each month during the
remainder of the Term. Base rent shall be payable without prior demand and
without abatement, deduction, or setoff.

2. ADDITIONAL RENT

On a monthly basis, the Tenant shall pay its percentage of the additional rent
expenses for the following items related to the Premises:

(a) municipal real estate taxes,
(b) property casualty insurance for the replacement value of
the building,
(c) fire sprinkler standby charges,
(d) central station fire sprinkler water monitoring system,
(e) fire sprinkler system tests, as required to any
legislation or insurance regulation,
(f) routine maintenance and service for the heating,
ventilating, and air conditioning system, in accordance
with the manufacturer's recommendations,
(g) common road snow removal,
(h) grounds cleaning and landscape maintenance in accordance
with the program described in "Exhibit C",
(i) domestic water, including lawn sprinkler water, (unless
the Premises are served by a separate meter in which case
the Tenant shall have the meter listed in its own name,
shall arrange for direct billing, and shall make direct
payment),
(j) sewer charges,
(k) maintenance and electricity for outside lighting,
(l) intentionally deleted,
(m) security patrol, and
(n) assessments, if any, for municipal improvements related to
the building.

The Tenant's percentage of all additional rent expenses, other than municipal
real estate taxes, is based on the total gross square footage of the Premises in
relation to the total gross square footage of the building containing the
Premises.

In the case of municipal real estate taxes, the Tenant shall pay its pro rata
share of: a) taxes for office space within the building, if the Premises contain
any office space, b) taxes for warehouse space within the building, if the
Premises contain any warehouse space, c) taxes for land (the ratio of land area
to improvement area is two to one), and d) taxes for any special assessments
related exclusively to the Premises. The Landlord shall have the exclusive
right, but not the obligation, to contest or appeal any assessment.

An estimate of the Tenant's monthly additional rent expenses is attached hereto
as "Exhibit B". The Landlord shall adjust additional rent expenses on at least
an annual basis, in accordance with actual expenses incurred.

Upon signing this Lease, the Tenant shall pay the additional rent due for the
first month of the Term. After the first month of the Term, the Tenant shall pay
additional rent on a monthly basis, in advance, on the first day of each month
during the remainder of the Term. Additional rent shall be payable without prior
demand and without abatement, deduction, recoupment, or setoff.

1 of 14
<PAGE>

3. LATE RENT

If the Landlord does not receive payment f6r base rent or additional rent by the
tenth day of the month, during which payment is due, then the Tenant shall pay
an amount, equal to two percent (2%) of the payment due, as additional rent for
the month during which payment is due, and an amount, equal to two percent (2%)
of the original payment due, as additional rent for each month thereafter during
which payment remains outstanding beyond the first day of the month.

4. ELECTRICITY AND GAS

The Tenant shall have meters listed in its own name, shall arrange for direct
billing, and shall make direct payment for the following: (a) electricity for
the Premises, unless the Landlord supplies a sub-meter, in which case the Tenant
shall pay the charges for electricity to the Landlord as additional rent,
(b)gas, and (c) any other utility or service used by the Tenant. The Landlord
shall have the right, but not the obligation, to act on behalf of the Tenant to
have the electric and gas meters listed in the Tenant's name.

5. SECURITY DEPOSIT

Upon signing this Lease, the Tenant shall pay the security deposit, if any, to
the Landlord. During the Term, the security deposit shall be kept with the
Landlord's general funds and shall not be applied by the Tenant to any base rent
or additional rent. Within thirty (30) days after the end of the Term, the
Landlord shall return the security deposit to the Tenant, without any interest,
excluding any amount applied by the Landlord to any base rent or additional rent
which is outstanding at that time.

6. LIABILITY INSURANCE

The Tenant, at its own expense, shall obtain and maintain a broad form,
comprehensive or commercial general liability insurance policy, including
contractual liability coverage. The policy shall apply to claims arising upon or
in connection with the Premises or the steps, sidewalks, parking areas, or
landscaped areas which immediately adjoin and serve the Premises. The policy
shall have a combined single limit no less than five million dollars
($5,000,000.00) without any deductible. Every five (5) years after the beginning
of the Term, the Landlord may require a reasonable increase of this limit.

The insurance policy shall name the Landlord as an additional insured. It shall
be a primary policy; it shall not contribute with or be in excess of any
insurance policy maintained by the Landlord. The policy shall provide coverage
on an occurrence basis. The policy shall provide that the insurance company
shall notify the Landlord at least thirty (30) days in advance of the effective
date of any modification or termination of the policy. The policy shall be
issued by an insurance company authorized to do business in New Jersey with a
minimum A.M. Best rating of Al5.

Before the beginning of the Term, and from time to time thereafter when the
insurance policy is renewed or replaced, the Tenant shall provide the Landlord
with a certificate of insurance which states that the policy in effect is in
compliance with the terms of this Lease, a copy of the policy of insurance, and
a copy of the endorsement to the policy adding the Landlord to the policy as an
additional insured.

2 of 14
<PAGE>

7. REAL ESTATE COMMISSION

The Landlord and the Tenant represent to each other that neither of them has
consulted or negotiated with any real estate broker, salesperson, or finder with
regard to the Premises or this Lease, except for the real estate broker set
forth in this Lease. The Landlord shall pay the commission to the real estate
broker set forth in this Lease.

The Landlord shall defend, indemnify, and hold the Tenant harmless from any
claims for fees or commissions from anyone with whom the Landlord has dealt with
regard to the Premises or this Lease. The Tenant shall defend, indemnify, and
hold the Landlord harmless from any claims for fees or commissions from anyone
with whom the Tenant has dealt with regard to the Premises or this Lease, except
for the real estate broker set forth in this Lease.

8. QUIET ENJOYMENT

The Landlord shall give quiet enjoyment of the Premises to the Tenant so long as
the Tenant is not in default under the terms of the Lease.

9. AVAILABILITY OF PREMISES

The Landlord shall prepare the Premises as per the plan and specifications
referenced on Exhibit "A" hereto. The cost of such work shall be borne by the
Landlord, except as otherwise shown on Exhibit "A". The Premises shall be
available for occupancy when the Premises are in accordance with the plan and
specifications referenced on Exhibit "A", subject to incidental punch list
items, and when all conditions necessary for the issuance of a Certificate of
Occupancy have been met. The Tenant shall notify the Landlord of all punch list
items within thirty (30) days of the date on which the Tenant first occupies the
Premises. The Landlord shall remedy all punch list items as soon as reasonably
possible.

If the Premises are available for occupancy before the scheduled beginning date
of the Term set forth in this Lease, and if the Tenant takes possession of the
Premises before the scheduled beginning date, then the beginning date shall be
deemed to be changed to the actual date of occupancy, and the scheduled ending
date shall remain as set forth in this Lease. If the Premises are available for
occupancy as of the scheduled beginning date, then the scheduled beginning date
and the scheduled ending date shall remain as set forth in this Lease. If the
Premises are not available for occupancy by the scheduled beginning date, then
the beginning date shall be deemed to be changed to the actual date of
availability, and the scheduled ending date shall be deemed to be changed to the
date which is five (5) years and one-half (1/2) month after the last day of the
month during which the Premises become available for occupancy.

10. USE OF PREMISES

The Tenant shall only use the Premises for the purpose set forth in this Lease.
The Tenant, at its own expense, shall:

a) comply with all federal, state, county, and municipal
laws, ordinances, rules, and regulations related to the
Tenant's specific business and the Tenant's specific use
of the Premises;
b) use the Premises in a safe manner;

3 of 14
<PAGE>

c) keep nothing which is dangerous or explosive or which
might unreasonably increase the risk of fire or other
casualty at the Premises;
d) comply with all reasonable requirements of the
Landlord's property casualty insurance carrier;
e) provide fire extinguishers and "No Smoking" signs in
accordance with reasonable instructions from the
Landlord's property casualty insurance carrier;
f) use the Premises without causing an increase of the
Landlord's property casualty insurance rates or pay the
amount of any increase caused by the Tenant's use of the
Premises as additional rent;
g) use the Premises without causing a termination of the
Landlord's property casualty insurance policy;
h) use the Premises without causing any liens to affect
the Premises;
i) maintain the Premises in a neat, clean, habitable
condition, free of trash, vermin, and insects;
j) keep the walkways, driving aisles, parking areas, and
landscaped areas, which surround and serve the Premises,
free of trash and free of goods, except for a trash
dumpster which may be located at the rear of the parking
areas;
k) keep all trash within tied bags within a covered
dumpster or container;
l) keep no animals at the Premises;
m)use only equipment which does not damage warehouse area
floors;
n) use the Premises without disturbing the possession or
quiet enjoyment of any other tenant;
o) keep all vehicles related to its business from parking
on the street;
p) keep all vehicles related to its business from parking
on the railroad tracks, except during reasonable periods
used to load or unload goods without impeding railroad
traffic;
q) park all vehicles related to its business in the
parking areas for the building in accordance with
reasonable, nondiscriminatory regulations established from
time to time by the Landlord;
r) maintain, repair, or wash vehicles, except for material
handling equipment, outside of the Raritan Center Business
Park; and
s) use the Premises in accordance with reasonable,
nondiscriminatory regulations established from time to
time by the Landlord;
t) keep the steps, sidewalks, driving aisles, and parking
areas, which surround and serve the Premises, free of snow
and ice.

11. ACCESS TO PREMISES

After providing the Tenant with reasonable advance verbal or written notice, the
Landlord or its agents may enter the Premises during normal business hours to:
(a) inspect the Premises, (b) show the Premises to other persons, or (c)
maintain, repair, construct any improvements, or make any alterations in the
Premises or the building on behalf of the Tenant or any other purpose. The
Landlord or its agents may enter the Premises at any time in response to an
emergency. The Premises shall only have locks which can be opened by the
Landlord's master key.

4 of 14
<PAGE>

12. LANDLORD'S REPAIRS

During the first twelve (12) months of the Term, if any defect or damage arises
in the condition of any part of the Premises (excluding any broken glass), then
the Landlord, at its own expense, shall promptly repair or replace the defective
or damaged part of the Premises, unless the Tenant, its employees, its agents,
or its invitees caused the defect or damage. All mechanical systems shall be in
good working order at the beginning of the Term.

After the first twelve (12) months of the Term, if any defect or damage arises
in the condition of any of the following parts of the Premises: (a) foundation,
(b) floor, (c) outside paved area, (d) exterior walls, or (e) roof, then the
Landlord, at its own expense, shall promptly repair or replace the defective or
damaged part of the Premises, unless the Tenant, its employees, its agents, or
its invitees caused the defect or damage.

The Tenant shall promptly notify the Landlord of any defect or damage in the
condition of any part of the Premises which the Landlord is obligated to repair
or replace under the terms of this clause. The quality of all workmanship used
to make repairs and replacements shall be equal to or better than the quality of
the original workmanship. The materials used shall be identical to the original
materials, unless identical materials are unavailable in which case the
materials shall be of equal or better quality.

13. TENANT'S REPAIRS

During the first twelve (12) months of the Term, the Tenant, at its own expense,
shall promptly replace any broken glass.

After the first twelve (12) months of the Term, if any defect or damage arises
in the condition of any part of the Premises, which the Landlord is not
specifically obligated to repair or replace under the terms of this Lease, then
the Tenant, at its own expense, shall promptly repair or replace the defective
or damaged part of the Premises. After the first twelve (12) months of the Term,
the Landlord shall assign and provide the Tenant with any guarantee or warranty,
which the Landlord has obtained from a third party, related to a part of the
Premises which the Tenant is obligated to repair or replace under the terms of
this clause. The Tenant's obligations under the terms of this clause shall
include, without limitation, repairs or replacements related to the following
parts of the Premises: (a) water system, (b) plumbing system, (c) sewer system,
(d) fire sprinkler system, (e) electric system, (f) lighting system, (g) gas
system, (h) heating, ventilating, and air-conditioning system, exclusive of all
maintenance, repairs and replacements under the Landlord's service contract set
forth as item (f) on "Exhibit B" hereto, (i) windows, (j) window frames, (k)
doors, (l) door frames, (m) loading dock bumpers and seals, (n) interior
partition walls, and (o) interior office ceilings.

During the entire Term or any period of occupancy, if the Tenant, its employees,
its agents, or its invitees cause any defect or damage to any part of the
Premises, then the Tenant, at its own expense, shall promptly repair or replace
the defective or damaged part of the Premises.

The Tenant shall promptly notify the Landlord of any defect or damage in the
condition of any part of the Premises which the Tenant is obligated to repair or
replace under the terms of this clause. The quality of all workmanship used to
make repairs and replacements shall be equal to or better than the quality of
the original workmanship. The materials used shall be identical to the original
materials, unless identical materials are unavailable in which case the
materials shall be of equal or better quality.

5 of 14
<PAGE>

For the purposes of this paragraph, the Premises shall mean only the area
between the floor and the ceiling, including any roof mounted installations
which service the Premises, and the interior demising walls, inclusive of
windows, which area is occupied by the Tenant, and the Tenant's repair
obligations as indicated herein relate only to those systems within the
Premises.

14. ALTERATIONS

The Tenant shall not make any alterations, additions, or improvements to the
Premises without the Landlord's prior written consent which shall not be
unreasonably withheld or delayed.

The Tenant, at its own expense, shall obtain all necessary permits and provide
the Landlord with copies before beginning any work. All work shall be performed
at competitive union rates by union contractors selected from a list of approved
union contractors provided by the Landlord. All materials used shall be
identical to the original materials used to construct the Premises, unless
identical materials are unavailable in which case the materials shall be of
equal or better quality. The Tenant, at its own expense, shall obtain a new
certificate of occupancy or a certificate of approval, if necessary, upon
completion of any work and shall thereafter provide the Landlord with a copy.

At the end of the Term, or upon the rightful termination of this Lease, based on
written instructions from the Landlord, the Tenant, at its own expense, shall
either: (a) leave any alterations, additions, or improvements at the Premises,
in which case they shall be the property of the Landlord or (b) remove any
alterations, additions, or improvements, and restore the Premises to their
original condition, excluding normal wear and tear.

The Tenant shall promptly notify the Landlord of any lien or mechanic's notice
of intention filed by a third party in relation to work or materials for the
Tenant's alterations, additions, or improvements. The Tenant, at its own
expense, shall have any such lien or mechanic's notice of intention discharged
or bonded within thirty (30) days from the date on which the Tenant receives
notice of the filing.

The Tenant shall indemnify and hold the Landlord harmless from any damage, loss,
liability, or expense related to the Tenant1s failure to comply with the terms
of this clause.

15. SIGNS

The Tenant shall not install any sign on the roof or on the outside surface of
the building walls. If the Landlord has established a uniform sign program for
the building, then the Tenant shall only install signs in accordance with that
program. If the Landlord has not established a uniform sign program, then the
Tenant shall not install any sign without the Landlord's prior written consent
which shall not be unreasonably withheld or delayed. The Tenant, at its own
expense, shall obtain all necessary permits and shall provide the Landlord with
copies before making any installation.

16. CASUALTY

The Landlord shall obtain and maintain property casualty insurance for the
replacement value of the building, excluding any alterations, additions, or
improvements made by the Tenant.

The Tenant shall promptly notify the Landlord of any fire or casualty at the
Premises. If a fire or casualty destroys all or part of the Premises, then the
Landlord's obligation to restore the Premises and the Tenant's obligation to pay
rent shall be determined in accordance with the terms of this clause.

6 of 14
<PAGE>

If the Premises can be restored within ninety (90) days from the date of the
casualty, then the Landlord, at its own expense, shall restore the Premises,
excluding any alterations, additions, or improvements made by the Tenant.

If the Premises cannot be restored within ninety (90) days from the date of the
casualty, then the Landlord may terminate this Lease by giving notice within
thirty (30) days from the date of the casualty. If the Lease is terminated, then
the Landlord shall not restore the Premises for the Tenant, the Tenant shall
promptly vacate the Premises, and the Tenant shall only pay base rent and
additional rent due through the date of the casualty. If the Lease is not
terminated. then the Landlord, at its own expense, shall restore the Premises.
excluding any alterations, additions, or improvements made by the Tenant.

During any restoration, if the Tenant is able to use part of the Premises, then
the Tenant shall pay base rent and additional rent for the usable part of the
Premises on a pro-rata basis from the date of the casualty until the date on
which the Premises are completely usable.

If the building is completely destroyed then this Lease shall end as of the date
of the casualty.

The Tenant shall not be liable to the Landlord's property casualty insurance
company by way of subrogation or otherwise for any destruction of the Premises
or the building, except in the case of a fire or casualty caused by the Tenant's
gross negligence, intentional misconduct, or intentional breach of this Lease.

17. ASSIGNMENT AND SUBLETTING

The terms of this clause shall apply every time that an assignment arises by
operation of law and every' time that the Tenant desires to make any of the
following agreements:

a) an assignment of all or part of this Lease;
b) a sublease of all or part of the Premises; or
c) an agreement allowing a third party to use or
occupy all or part of the Premises.

If an assignment arises by operation of law, or if the Tenant desires to make
any described agreements, then the Tenant shall provide the Landlord with all of
information in writing:

a) an explanation of the circumstances of the
assignment by operation of law or the complete
terms of the proposed agreement;
b) the standard industrial classification
number(s) applicable to the proposed assignee,
sublessee, or third party user,
c) a description of any hazardous wastes or
hazardous substances, as defined under N.J.S.A.
13:1K-8 or N.J.S.A. 58:10-23.1 1b, and the
related regulations, to be used, handled, or
stored at the Premises by the proposed
assignee, sublessee, or third party user; and
d) any other reasonably requested information
about the assignment by operation of law, the
proposed agreement, or the proposed assignee,
sublessee, or third party user.

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<PAGE>

The Landlord shall respond, in writing, to the Tenant's request related to the
proposed assignee, sublessee, or third party user within fourteen (14) days
after the Tenant provides the above-described information.

If the proposed assignee, sublessee, or third party user does not have a
standard industrial classification number subject to N.J.S.A. 13:1K-6 et seq.
("ISRA"), and if no hazardous substances or hazardous wastes, as defined under
N.J.S.A. 13:lK-8 or N.J.S.A. 58:l0-23.11b, and the related regulations, are to
be used, handled, or stored at the Premises by the proposed assignee, sublessee,
or third party user, then the Landlord shall either (a) consent, (b) reasonably
withhold its consent, or (c) terminate this Lease per the terms of this clause.

If, however, the proposed assignee, sublessee, or third party user has a
standard industrial classification number subject to N.J.S.A. 13:1K-6 et seq.
("ISRA"), or if hazardous substances or hazardous wastes, as defined under
N.J.S.A. 13:1K-8 or N.J.S.A. 58:l0-23.llb, and the related regulations, are to
be used, handled, or stored at the Premises by the proposed assignee, sublessee,
or third party user, then the Landlord, in its sole discretion, which may be
reasonable or unreasonable, shall either (a) consent, (b) withhold its consent,
or (c) terminate this Lease per the terms of this clause.

The Tenant shall not permit any assignee, sublessee, or third party user to use
or take possession of all or part of the Premises, unless the Landlord has
consented in writing. In addition, before any assignment by operation of law or
any proposed agreement takes effect, the Tenant, at its own expense, shall
either comply with N.J.S.A. l3:lK-6 et seq. ("ISRA"), if applicable, or obtain
approval of a nonapplicability application.

By consenting to any assignment by operation of law or any proposed agreement,
the Landlord shall not be releasing the Tenant from any of its obligations under
the terms of this Lease.

Consent to any one assignment by operation of law or any one proposed agreement
shall not be deemed to be consent to any subsequent assignment by operation of
law or any subsequent proposed agreement and shall not be deemed to be a waiver
of any of the terms of this clause.

If the Landlord exercises its right of termination under the terms of this
clause, and if an assignment by operation of law or a proposed agreement applies
to all of the Premises, then the Landlord may terminate this Lease for all of
the Premises. If, however, an assignment by operation of law or a proposed
agreement only applies to part of the Premises, then the Landlord may terminate
this Lease for that part of the Premises covered by the assignment by operation
of law or the proposed agreement, in which case the amount of base rent and the
Tenant's share of additional rent shall be prorated. Any termination shall be
effective sixty (60) days from the date on which the Tenant receives the
Landlord's notice of termination. If the Landlord terminates this Lease for all
of the Premises, then the Landlord may lease all or part of the Premises and/or
any other space directly to the proposed assignee, sublessee, or third party
user. If the Landlord terminates this Lease for part of the Premises, then the
Landlord may lease that part of the Premises and/or any other space directly to
the proposed assignee, sublessee, or third party user.

If the Landlord exercises its right of termination under the terms of this
clause, then, within fourteen (14) days of the Landlord's notice of termination,
the Tenant may withdraw its request related to a proposed assignee, sublessee,
or third party user, by sending a written notice of withdrawal to the Landlord,
in which case the Tenant's request and the Landlord's termination with respect
thereto shall be void.

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<PAGE>

18. MORTGAGES

Any existing or future mortgage made by the Landlord shall have priority over
this Lease. Upon receipt of notice from the Tenant, the Landlord, however, shall
try to obtain an agreement from any future mortgagee, indicating that the
mortgagee shall not disturb the Tenant's possession of the Premises so long as
the Tenant is in strict compliance with the terms of this Lease. Upon request,
the Tenant shall promptly provide the Landlord's mortgagee with all reasonably
requested information and representations in writing.

19. RECORDING

The Tenant shall not record this Lease or any other document related to this
Lease or the Premises.

20. CONDEMNATION

If all or part of the Premises is taken, on a permanent or a temporary basis,
through a condemnation proceeding under the right of eminent domain, then the
Landlord shall receive the entire payment from the condemner for the taking of
the Premises. The Tenant, however, may make a claim against the condemner for
relocation expenses so long as such claim does not reduce the condemner's
payment to the Landlord. The Tenant waives all other claims against the Landlord
and the condemner on account of the taking of the Premises.

21. RELOCATION

The Landlord may relocate the Tenant to relocation premises within the Raritan
Center Business Park after providing the Tenant with a notice of relocation one
hundred twenty (120) days in advance of the relocation date. The relocation
premises shall be substantially similar to the Premises and shall contain
substantially the same improvements which exist at the Premises as of the
relocation date. The quality of all workmanship and materials used at the
relocation premises shall be equal to or better than the quality of the
workmanship and materials used at the Premises. The Landlord shall pay all of
the reasonable costs of relocating the Tenant's personal property.

22. RETURN OF PREMISES

By the end of the Term, or upon the rightful termination of this Lease, the
Tenant, at its own expense, shall return the Premises to the Landlord in the
same condition as at the beginning of the Term, excluding normal wear and tear.

The condition required by this Clause 22 shall include without limitation:

a) removal of all the Tenant's property, including signs,
phone and computer lines and equipment;
b) removal of all installations to and alterations of the
Premises made by the Tenant or its agents, excluding
specifically any initial fit-up installations made for the
Tenant, and except as otherwise agreed by the Tenant and
the Landlord;
c) removal of all paint or marking, except for decoration, on
all windows, walls, doors and floors and restoration of
surfaces affected;
d) removal of all bolts and fasteners from walls and floors
and restoration of surfaces affected;
e) repairs, as necessary, of all walls, doors and hardware,
including truck doors, loading docks and components;

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<PAGE>

f) replacement, as necessary. of all lighting including exit
signs and emergency lights, with building standard bulbs,
ballasts and fixtures;
g) repair, as necessary, of all mechanical systems, including
HVAC, plumbing and electrical systems with building
standard components;
h) return of two (2) keys for each lock cylinder, keyed to
the Landlord's master key system and keys for all restroom
facilities;
i) removal of all trash and debris from the interior and
exterior areas serving the Premises; and
j) leaving the Premises in a broom clean condition.

The Tenant shall perform all acts necessary to comply with the terms of this
clause only in accordance with the methods and materials specified by the
Landlord and shall use only such outside contractors as are authorized by the
Landlord.

If the Term ends, or if this Lease is rightfully terminated, and if the Tenant
has not substantially complied with the terms of this clause, then the Tenant
shall continue to pay additional rent and fair market value base rent, which
base rent shall be no less than the base rent set forth in this lease, until the
Tenant effects compliance, without any right to possession of the Premises.

If the Tenant leaves any property at the Premises after the end of the Term or
after the rightful termination of this Lease, then such property shall be deemed
to be abandoned. The Landlord may store, use, sell, or dispose of the abandoned
property. The Tenant shall pay all expenses related to the abandoned property as
additional rent.

23. COMPLIANCE WITH ENVIROMENTAL LAWS

The Tenant represents, to the best of the Tenant's knowledge, that the Standard
Industrial Classification ("SIC") number set forth in this Lease is the only SIC
number applicable to the Tenant. The Tenant shall promptly notify the Landlord
if that SIC number becomes inapplicable or if another SIC number becomes
applicable.

The Tenant shall not bring or keep any hazardous substances or hazardous wastes,
as defined under the provisions of N.J.S.A. 13:1K-8 and N.J.S.A. 58:10-23.11b
and the related regulations, at the Premises.

If N.J.S.A. 13:lK-6 et seq. the Industrial Site Recovery Act (S-l070) ("ISRA")
is applicable to the Premises due to the Tenant's actions or due to the
expiration or rightful termination of this Lease, then the Tenant, at its own
expense, shall comply with ISRA and effect all steps necessary to obtain
approval of a negative declaration or a completed cleanup. The Tenant, however,
shall not be responsible for any cleanup costs related to any environmental
contamination caused before the beginning of the Term or caused by the Landlord
at any time. If ISRA is not applicable to the Premises due to the Tenant's
actions or due to the expiration or rightful termination of this Lease, then, by
the end of the Term, or upon any rightful termination of this Lease, the Tenant,
at its own expense, shall obtain approval of a nonapplicability application from
the New Jersey Department of Environmental Protection ("NJDEP"). The Tenant
shall begin the process of complying with the terms of this clause no later than
six (6) months prior to the expiration of the Term. The Tenant shall promptly
provide the Landlord with copies of all communications to and from the NJDEP.

If the Term ends, or if this Lease is rightfully terminated, and if the Landlord
cannot use, lease, demolish, or improve the Premises because the Tenant has not
complied with ISRA, as required under the terms of this clause previously set
forth, or is in the process of complying with ISRA, as required under the terms
of this clause previously set forth, then the Tenant shall continue to pay
additional rent and fair market value base rent, which base rent shall be no
less than the base rent set

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<PAGE>

forth in this lease, until the Tenant effects compliance, without any right to
possession of the Premises.

If any lien, imposed under the provisions of N.J.S.A. 58:10-23.11 et seq. or
imposed under the provisions of 42 U.S.C. 9601 et seq., affects the Premises due
to the act or neglect of the Tenant, then the Tenant shall have such lien
removed within thirty (30) days from the date on which the Tenant receives
notice of the lien.

The Tenant shall defend, indemnify, and hold the Landlord harmless from any
claim, damage, loss, liability, or expense related to the Tenant's failure to
comply with the terms of this clause. The Tenant's obligations under the terms
of this clause shall survive the termination or expiration of this lease.

24. RELEASE AND INDEMNIFICATION

A) The Tenant releases the Landlord and agrees to defend, indemnify, and hold
the Landlord harmless from any claim by any person for any injury, death,
damage, loss, liability, or expense which (1) arises upon, about, or in
connection with the Premises or the steps, sidewalks, parking areas, or
landscaped areas which immediately adjoin and serve the Premises, (2) arises due
to an occurrence during the Term or any period of occupancy by the Tenant, and
(3) arises due to any of the following causes or events as set forth below as
"a)" through "j)" for purposes of the Tenant's release of the Landlord or as set
forth below as "c)" through "j)" for purposes of the Tenant's indemnification of
the Landlord:

a) as to only a release by the Tenant of the Landlord, a delay in
completing the Premises or in obtaining a certificate of occupancy
for the Premises;
b) as to only a release by the Tenant of the Landlord, a delay in the
delivery of possession of the Premises caused by an existing occupant
at the Premises;
c) the defective or damaged condition of any part of the Premises,
the building, or the steps, sidewalks, parking areas, or landscaped
areas which immediately adjoin and serve the Premises;
d) the stoppage, malfunction, or breakdown of any of the systems
serving the Premises or the building, including, without limitation,
the water system, the plumbing system, the sewer system, the drainage
system, the sprinkler system, the electric system, the lighting
system, the gas system, or the heating, ventilating, and
air-conditioning system;
e) the stoppage or reduction of any utility service;
f) the active or passive, ordinary negligence of any person,
including the Landlord, its employees, and its agents, except as
specifically set forth in paragraph B of this clause;
g) the gross negligence of any person, except for the Landlord, its
employees, or its agents;
h) the intentional misconduct or criminal act of any person, except
for the Landlord and except for the Landlord's employees or agents
acting upon the Landlord's instructions;
i) an Act of God, force majeure, or weather condition, including,
without limitation, temperature, dampness, wind, rain, lightening,
sleet, snow, hail, ice, flood, tornado, hurricane, or earthquake; or
j) falling objects, water, steam, fire, smoke, explosion, vermin,
strike, riot, insurrection, public enemy, or war.

B) Notwithstanding anything to the contrary contained in this clause, the
Tenant's agreement to defend, indemnify, and hold the Landlord harmless shall
not apply to the sole ordinary negligence of the Landlord, its employees, or its
agents, as such sole ordinary negligence relates to any obligation of the
Landlord, per this Lease, to construct, alter, repair, maintain, or service the
Premises, the building, or the steps, sidewalks, parking areas, or landscaped
areas which immediately adjoin and

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<PAGE>

serve the Premises. In all other instances of the ordinary negligence of the
Landlord, its employees, or its agents, the Tenant's agreement to defend,
indemnify, and hold the Landlord harmless shall be limited to five million
dollars ($5,000,000.00) per occurrence.

C) The Tenant's release and the Tenant's agreement to defend, indemnify, and
hold the Landlord harmless shall apply to all damages and expenses, including,
without limitation, nominal damages, direct damages. compensatory damages,
CONSEQUENTIAL DAMAGES, special damages, lost profits, incidental damages, fines,
penalties, punitive damages, attorneys fees, court costs, costs of suit,
arbitration costs, and interest.

D) The Tenant's obligations under the terms of this clause shall survive the
termination or expiration of this Lease.

E) The Landlord shall not be liable, by way of subrogation or otherwise, to any
insurance company insuring the Tenant, and the Tenant hereby waives any such
insurance company's right of recovery against the Landlord. All of the Tenant's
insurance policies shall contain an endorsement waiving the insurer's
subrogation rights against the Landlord.

25. DEFAULT

If the Tenant does not strictly comply with all of the terms of this Lease, then
the Tenant shall be in default. In addition, the Tenant shall be in default if:
a) the Tenant makes an assignment for the benefit of creditors, b) the Tenant is
decreed insolvent or bankrupt according to law, or c) a receiver is appointed
for the Tenant.

If the Tenant is in default, then the Landlord may send a written notice of
default to the Tenant, indicating why the Tenant is not in strict compliance
with the terms of this Lease. After receiving a notice of default, the Tenant
shall cure any monetary default or any non-monetary default within five (5)
days. If, however, a non-monetary default cannot be cured within five (5) days,
then the Tenant shall begin to cure the default within five (5) days and shall
continue to diligently cure the default thereafter. If the Tenant does not
perform within five (5) days after receiving a notice of default, then the
Landlord may cure any default on behalf of the Tenant, in which case the cost of
curing shall be payable as additional rent. In addition, the Landlord shall have
a right to suspend performance of its obligations under the terms of this Lease,
shall have a right of re-entry, shall have a right of termination, and shall
have all other remedies available under the law.

If the Tenant has been in non-monetary default for the same reason on two (2)
occasions during any twelve (12) month period during the Term, and if the Tenant
is in default for the same reason on any subsequent occasion at any time during
the Term, then, regardless of any cure, the Landlord shall have a right to
suspend performance of its obligations under the terms of this Lease, shall have
a right of re-entry, shall have a right of termination, and shall have all other
remedies available under the law.

If the Tenant wrongfully occupies any property owned by the Landlord or its
affiliated companies, other than the Premises, then the Tenant shall be in
default and shall pay additional rent and fair market value base rent, which
base rent shall be no less than the base rent set forth in this Lease, for the
property wrongfully occupied for the period of occupancy.

If the Tenant is in monetary default and has vacated the Premises before the end
of the Term, or if the Landlord obtains a judgment for possession of the
Premises against the Tenant before the end of the Term, then the Landlord shall
try to reasonably re-rent the Premises. The Tenant shall continue to pay base
rent and additional rent to the Landlord until the beginning date of a new lease
for the Premises or until the end of the Term, whichever comes first.

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<PAGE>

If the Landlord re-rents the Premises before the end of the Term, then, as of
the beginning date of the new lease for the Premises, the Tenant shall pay the
following costs as additional rent: a) reasonable administrative costs incurred
to advertise and show the Premises and incurred to make the new lease, b)
reasonable costs incurred to prepare the Premises for the new tenant, and c)
reasonable real estate commissions paid to a broker for finding the new tenant.
These costs shall be prorated for the remainder of the Term of this Lease in
relation to the term of the new lease.

If the Landlord re-rents the Premises for a monthly base rent amount which is
lower than the base rent amount due under the terms of this Lease, then, as of
the beginning date of the new lease, the Tenant shall pay for the entire
deficiency which will exist for the remainder of the Term. If the Landlord
re-rents the Premises for a monthly base rent amount which is higher than the
base rent amount due under the terms of this Lease, then the Tenant shall not
receive any credit for the surplus toward the rent and additional rent due
through the beginning date of the new lease.

The Landlord and the Tenant shall resolve any claim or controversy related to
this Lease or to the Premises through a binding arbitration proceeding in
Edison. New Jersey in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, except that the Landlord shall have the right
to pursue a summary dispossession action or a distraint action in the Superior
Court of New Jersey according to the laws of New Jersey. The Superior Court of
New Jersey may enter judgment upon any decision rendered through arbitration.

The Tenant shall pay all of the Landlord's reasonable costs of enforcing the
terms of this Lease as additional rent, including, without limitation,
reasonable attorneys fees and disbursements, arbitration costs, and court costs.

If the Tenant is in default, then the Landlord's delay in sending a notice of
default, the Landlord's delay in starting an arbitration proceeding or a court
action against the Tenant, or the Landlord's acceptance of rent shall not be a
waiver of the default and shall not prevent the Landlord from enforcing the
terms of this Lease.

All of the landlord's remedies set forth in this clause are cumulative and are
not exclusive of any other remedies available under the law.

26. NOTICE AND CONSENT

Except as specifically set forth in this Lease, all notices and consents given
under the terms of this Lease shall: (a) be in writing, (b) be sent by certified
mail, return receipt requested, be sent by a reputable overnight delivery
service, or hand delivered to the addresses for notices set forth in this Lease,
and (c) be deemed to have been given upon receipt. By giving notice, the
Landlord or the Tenant may hereafter designate different or additional addresses
for their respective notices.

27. SEVERABILITY

If any part of this Lease is contrary to law or otherwise unenforceable, then
the remainder of this Lease shall remain in effect.

28. GOVERNING LAW

The terms of this Lease shall be governed, interpreted, and construed according
to the laws of New Jersey.

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<PAGE>

29. BINDING EFFECT OF LEASE

This Lease binds the Landlord and all parties which rightfully succeed to its
rights or take its place. This Lease binds the Tenant and all parties which
rightfully succeed to its rights or take its place with the Landlord's consent
in accordance with the terms of this Lease.

30. ENTIRE AGREEMENT

This Lease contains the entire agreement made by the Landlord and the Tenant.
The terms of this Lease shall not be changed or amended, except by the terms of
a subsequent written agreement signed by the Landlord and the Tenant.

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<PAGE>

EXHIBIT A

TO LEASE BETWEEN
CENTER REALTY, L.P.
AND
LEADING EDGE PACKAGING, INC.

The Premises and the specifications related thereto are shown on the plan(s)
entitled AVAILABLE SPACE, 176 NORTHFIELD AVENUE IN BUILDING 409, prepared by
David Cochran, dated May 9, 1996.

<PAGE>

EXHIBIT B

TO LEASE BETWEEN
CENTER REALTY, L.P.
AND
LEADING EDGE PACKAGING, INC.

Monthly
Item Amount
======================================================================
a) MUNICIPAL REAL ESTATE TAXES $2,004.00
- ----------------------------------------------------------------------
b) PROPERTY CASUALTY INSURANCE 139.00
- ----------------------------------------------------------------------
c) FIRE SPRINKLER STANDBY CHARGES 139.00
- ----------------------------------------------------------------------
d) CENTRAL STATION FIRE SPRINKLER WATER MONITORING SYSTEM 84.00
- ----------------------------------------------------------------------
e) FIRE SPRINKLER SYSTEM TESTING 28.00
- ----------------------------------------------------------------------
f) ROUTINE MAINTENANCE AND SERVICE FOR THE HEATING, AIR
CONDITIONING, AND VENTILATING SYSTEM 445.00
- ----------------------------------------------------------------------
g) COMMON ROAD SNOW REMOVAL 56.00
- ----------------------------------------------------------------------
h) GROUNDS CLEANING AND LANDSCAPE MAINTENANCE 167.00
- ----------------------------------------------------------------------
i) DOMESTIC WATER, INCLUDING LAWN SPRINKLER WATER N/A
- ----------------------------------------------------------------------
j) SEWER CHARGES 167.00
- ----------------------------------------------------------------------
k) MAINTENANCE AND ELECTRICITY FOR OUTSIDE LIGHTING 56.00
- ----------------------------------------------------------------------
l) PARKING LOT AND SIDEWALK SNOW REMOVAL N/A
- ----------------------------------------------------------------------
m) SECURITY PATROL 84.00
- ----------------------------------------------------------------------
TOTAL $3,369.00
======================================================================

This total represents an estimate as of March, 1996, of 30% of the total monthly
additional rent expenses related to Building #409, as set forth in Clause 2 of
the Lease.

<PAGE>

EXHIBIT C

TO LEASE BETWEEN
CENTER REALTY, L.P.
AND
LEADING EDGE PACKAGING, INC.

LANDSCAPE AND GROUNDS MAINTENANCE PROGRAM
FOR THE BUILDING CONTAINING THE PREMISES
AND COMMON AREAS WITHIN THE RARITAN CENTER BUSINESS PARK

1. LAWN:

Mowing: Turf areas shall be mowed to the height of 2 1/2 inches with a
standard rotary mower. Mowing heights may be increased to 3
inches in the summer to reduce the total stress on the turf
areas.

Mowing will be accomplished approximately 35 times during the
period between April 1 and November 30.

Fertilization: All turf areas shall be fertilized in the spring and summer at
the rate of 1 pound of nitrogen per 1000 square feet and in
the late fall with a Weed and Feed at 2.0 pounds nitrogen per
1000 square feet.

Liming: All turf areas shall be limed once during the year at the rate
of 50 pounds per 1000 square feet.

Weed Control: A pre-emergent crabgrass weed control shall be applied, once
in the early spring.

Insect Control: Grub and chinch bug control shall be applied, as needed.

Re-seeding: Re-seeding and thatch removal shall be accomplished as needed.
Seeding shall be at the rate of five (5) pounds per 1000
square feet.

2. SIDEWALKS AND CURBS:

Clean-up: Clippings and other organic debris will be blown off the
sidewalks after each mowing.

Edging: Edging of sidewalks shall be performed every other mowing.

Weed Control: Weed control along the curb and rail line shall be
accomplished with a chemical called Round Up or its
equivalent.

3. TREES AND SHRUBS:

Trimming: Trimming around the trees and shrub beds will be performed
using an herbicide and/or a mechanical device.

Pruning: All trees and shrubs shall be pruned as needed.

<PAGE>

Fertilization: Fertilization for trees shall be performed using Ross Daniels
16-10-9 or equivalent tree spikes

Weed Control: Shrub beds shall be weeded every other mowing. A pre-emergent
herbicide will be applied to all beds in the spring.

Broad leaf weed control shall be applied.

Re-mulching: A top dressing of shredded bark mulch shall be applied to the
shrub beds.

Replacement: As necessary.

4. SEASONAL CLEANINGS:

Spring: Spring clean-up shall be accomplished in early April to remove
all debris that has accumulated during the winter.

Fall: Fall clean-up shall be accomplished to remove leaves and
debris that have accumulated on the turf and in the shrub
beds.

5. STREETS AND PARKING LOTS:

Parking lots and streets will be regularly swept with an FMC
Street sweeper.

Removal of heavy or constant trash or debris resulting from
the Tenants operation is not included in this program and
shall be billed separately.

6. IRRIGATION SYSTEM:

The system shall be started at the beginning of the season and
flushed at the end of the season. Heads shall be repaired and
replaced as necessary.

<PAGE>

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

THIS LEASE, made as of the 3rd day of April, nineteen hundred and ninety-six
between EMPIRE STATE BUILDING COMPANY, having an office at 350 Fifth Avenue, New
York, New York, hereinafter called "Lessor" or "Landlord" and LEADING EDGE
PACKAGING, INC., a New York corporation having an office at 350 Fifth Avenue,
New York, New York 10118, hereinafter called "Lessee" or "Tenant".

WITNESSETH: That Lessor hereby leases to Lessee and the Lessee hereby takes and
hires from Lessor the space (hereinafter called the "premises" or "demised
premises") designated as Rooms 3921-3922 and substantially as indicated in red
on the diagram hereto attached, on the 39th floor of the building known as
Empire State Building, bounded by Fifth Avenue, 34th Street and 33rd Street,
(hereinafter called the "building") in the Borough of Manhattan, City of New
York, for a term of five (5) years, to commence on the 1st day of July, 1996,
and to expire on the 30th day of June, 2001, or until such term shall sooner end
as in Article 12 and elsewhere herein provided, both dates inclusive, at a fixed
annual rental (subject to Articles 23 and 42) at the annual rate of Forty-two
Thousand, Ninety-six and No/100 Dollars ($42,096.00) payable in equal monthly
installments in advance on the first day of each month, except that the first
installment of rent due under this lease shall be paid by Lessee upon its
execution of this lease, unless this lease be a renewal.

Lessor and Lessee covenant and agree:

PURPOSE.

1. Lessee shall use and occupy the premises only as an office in the
transaction of its business of general office and they shall be used for no
other purpose by Lessee or any other person.

1(A). No manufacturing or repairing of any kind shall be done or
permitted, nor shall any merchandise be sold or displayed for sale in the
demised premises, other than Lessee's products, and then not for retail sale.

1(B). Neither the demised premises, nor the halls, corridors,
stairways, elevators or any other portion of the building shall be used by the
Lessee or the Lessee's servants, employees, licensees, invitees or visitors in
connection with the aforesaid permitted use or otherwise so as to cause any
congestion of the public portions of the building or the sidewalks or roadways
adjoining the building whether by trucking or by the congregating or loitering
thereon of the Lessee and/or the servants, employees, licensees, invitees or
visitors of the Lessee.

RENT AND ADDITIONAL RENT.

2. Lessee agrees to pay rent as herein provided at the office of Lessor
or such other place as Lessor may designate, payable in United States legal
tender, by cash or by good and sufficient check drawn on a New York City
Clearing House Bank, and without any set off or deduction whatsoever. Any sum
other than fixed rent payable hereunder shall be deemed additional rent and due
on demand.

ASSIGNMENT.

3. Neither Lessee nor Lessee's legal representatives or successors in
interest by operation of law or otherwise, shall assign, mortgage or otherwise
encumber this lease, or sublet or permit all or part of the premises to be used
by others, without the prior written consent of Lessor in each instance. The
transfer of a majority of the issued and outstanding capital stock of any
corporate lessee or sublessee of this lease or a majority of the total interest
in any partnership lessee or sublessee, however accomplished, and whether in a
single transaction or in a series of related or unrelated transactions, shall be
deemed an assignment of this lease or of such sublease. The merger or
consolidation of a corporate lessee or sublessee where the net worth of the
resulting or surviving corporation is less than the net worth of the lessee or
sublessee immediately prior to such merger or consolidation shall be deemed an
assignment of this lease or of such sublease. If without Lessor's written
consent this lease is assigned, or the premises are sublet or occupied by anyone
other than Lessee, Lessor may accept the rent from such assignee, subtenant or
occupant, and apply the net amount thereof to the rent herein reserved, but no
such assignment, subletting, occupancy or acceptance of rent shall be deemed a
waiver of this covenant. Consent by Lessor to an assignment or subletting shall
not relieve Lessee from the obligation to obtain Lessor's written consent to any
further assignment or subletting. In no event shall any permitted sublessee
assign or encumber its sublease or further sublet all or any portion of its
sublet space, or otherwise suffer or permit the sublet space or any part thereof
to be used or occupied by others, without Landlord's prior written consent in
each instance. A modification, amendment or extension of a sublease shall be
deemed a sublease.

DEFAULT.

4. Lessor may terminate this lease on three (3) days' notice: (a) if
rent or additional rent is not paid within three (3) days after written notice
from Lessor; or (b) if Lessee shall have failed to cure a default in the
performance of any covenant of this lease (except the payment of rent), or any
rule or regulation hereinafter set forth, within five (5) days after written
notice thereof from Lessor, or if default cannot be completely cured in such
time, if Lessee shall not promptly proceed to cure such default within said five
(5) days, or shall not complete the curing of such default with due diligence;
or (c) when and to the extent permitted by law, if a petition in bankruptcy
shall be filed by or against Lessee or if Lessee shall make a general assignment
for the benefit of creditors, or receive the benefit of any insolvency or
reorganization act; or (d) if a receiver or trustee is appointed for any portion
of Lessee's property and such appointment is not vacated within twenty (20)
days; or (e) if an execution or attachment shall be issued under which the
premises shall be taken or occupied or attempted to be taken or occupied by
anyone other than Lessee; or (f) if the premises become and remain vacant or
deserted for a period of ten (10) days; or (g) if Lessee shall default beyond
any grace period under any other lease between Lessee and Lessor; or (h) if
Lessee shall fail to move into or take possession of the premises within fifteen
(15) days after commencement of the term of this lease.

At the expiration of the three (3) day notice period, this lease and
any rights of renewal or extension thereof shall terminate as completely as if
that were the date originally fixed for the expiration of the term of this
lease, but Lessee shall remain liable as hereinafter provided.

RELETTING, ETC.

5. If Lessor shall re-enter the premises on the default of Lessee, by
summary proceedings or otherwise; (a) Lessor may re-let the premises or any part
thereof, as Lessee's agent, in the name of Lessor, or otherwise, for a term
shorter or longer than the balance of the term of this lease, and may grant
concessions or free rent. (b) Lessee shall pay Lessor any deficiency between the
rent hereby reserved and the net amount of any rents collected by Lessor for the
remaining term of this lease, through such re-letting. Such deficiency shall
become due and payable monthly, as it is determined. Lessor shall have no
obligation to re-let the premises. and its failure or refusal to do so, or
failure to collect rent on re-

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letting, shall not affect Lessee's liability hereunder. In computing he net
amount of rents collected through such re-letting, Lessor may deduct all
expenses incurred in obtaining possession or re-letting the premises, including
legal expenses, attorneys' fees, brokerage fees, the cost of restoring the
premises to good order, and the cost of all alterations and decorations deemed
necessary by Lessor to effect re-letting. In no event shall Lessee be entitled
to a credit or repayment for rerental income which exceeds the sums payable by
Lessee hereunder or which covers a period after the original term of this lease.
(c) Lessee hereby expressly waives any right of redemption granted by any
present or future law. "Re-enter" and "re-entry" as used in this lease are not
restricted to their technical legal meaning. In the event of a breach or
threatened breach of any of the covenants or provisions hereof, Lessor shall
have the right of injunction. Mention herein of any particular remedy shall not
preclude Lessor from any other available remedy. (d) Lessor shall recover as
liquidated damages, in addition to accrued rent and other charges, if Lessor's
re-entry is the result of Lessee's bankruptcy, insolvency, or reorganization,
the full rental for the maximum period allowed by any act relating to
bankruptcy, insolvency or reorganization.

If Lessor re-enters the premises for any cause, or if Lessee abandons
or vacates the premises, or after the expiration of the term of this lease, any
property left in the premises by Lessee shall be deemed to have been abandoned
by Lessee, and Lessor shall have the right to retain or dispose of such property
in any manner without any obligation to account therefor to Lessee. If Lessee
shall at any time default hereunder, and if Lessor shall institute an action or
summary proceeding against Lessee based upon such default, then Lessee will
reimburse Lessor for the expense of reasonable attorneys' fees and disbursements
thereby incurred by Lessor.

LESSOR MAY CURE DEFAULTS.

6. If Lessee shall default in performing any covenant or condition of
this lease, Lessor may perform the same for the account of Lessee, and Lessee
shall reimburse Lessor for any expense incurred therefor, which obligation shall
survive the expiration or sooner termination of this lease.

ALTERATIONS.

7. Lessee shall make no decoration, alteration, addition or improvement
in the premises, without the prior written consent of Lessor, and then only by
contractors or mechanics and in such manner and time, and with such materials,
as approved by Lessor. All alterations, additions or improvements to the
premises, including central air-conditioning equipment and duct work, except
movable office furniture and equipment installed at the expense of Lessee,
shall, unless Lessor elects otherwise in writing, become the property of Lessor
upon the installation thereof, and shall be surrendered with the premises at the
expiration of this lease. Any such alterations, additions and improvements which
Lessor shall designate, shall be removed by Lessee and any damage repaired, at
Lessee's expense, prior to the expiration of this lease.

LIENS.

8. Prior to commencement of its work in the demised premises, Lessee
shall obtain and deliver to Lessor a written letter of authorization, in form
satisfactory to Lessor's counsel, signed by all architects, engineers, surveyors
and designers to become involved in such work, which shall confirm that any of
their drawings or plans are to be removed from any filing with governmental
authorities on request of Lessor. With respect to contractors, subcontractors,
materialmen and laborers, and architects, engineers and designers, for all work
or materials to be furnished to Lessee at the premises, Lessee agrees to obtain
and deliver to Lessor written and unconditional waiver of mechanics liens upon
the premises or the building after payments to the contractors, etc., subject to
any then applicable provisions of the Lien Law. Notwithstanding the foregoing,
Lessee at its expense shall cause any lien filed against the premises or the
building, for work or materials claimed to have been furnished to Lessee, to be
discharged of record within ten (10) days after notice thereof.

REPAIRS.

9. Lessee shall take good care of the premises and the fixtures and
appurtenances therein, and shall make all repairs necessary to keep them in good
working order and condition, including structural repairs when those are
necessitated by the act, omission or negligence of Lessee or its agents,
employees or invitees. During the term of this lease, Lessee may have the use of
any air-conditioning equipment servicing the premises, subject to the provisions
of Article 36 of this lease, and shall reimburse Lessor, in accordance with
Article 42 of this lease, for electricity consumed by the equipment. The
exterior walls of the building, the windows and the portions of all window sills
outside same are not part of the premises demised by this lease, and Lessor
hereby reserves all rights to such parts of the building.

FIRE OR OTHER CASUALTY.

10. If the premises shall be partially damaged by fire or other
casualty, the damage shall be repaired at the expense of Lessor, but without
prejudice to the rights of subrogation, if any, of Lessor's insurer. Lessor
shall not be required to repair or restore any of Lessee's property or any
alteration or leasehold improvement made by or for Lessee at Lessee's expense.
The rent shall abate in proportion to the portion of the premises not usable by
Lessee. Lessor shall not be liable to Lessee for any delay in restoring the
premises, Lessee's sole remedy being the right to an abatement of rent, as above
provided. If the premises are rendered wholly untenantable by fire or other
casualty and if Lessor shall decide not to restore the premises, or if the
building shall be so damaged that Lessor shall decide to demolish it or to
rebuild it (whether or not the premises have been damaged), Lessor may within
ninety (90) days after such fire or other cause give written notice to Lessee of
its election that the term of this lease shall automatically expire no less than
ten (10) days after such notice is given. Notwithstanding the foregoing, each
party shall look first to any insurance in its favor before making any claim
against the other party for recovery for loss or damage resulting from fire or
other casualty, and to the extent that such insurance is in force and
collectible and to the extent permitted by law, Lessor and Lessee each hereby
releases and waives all right of recovery against the other or any one claiming
through or under each of them by way of subrogation or otherwise. The foregoing
release and waiver shall be in force only if both releasors' insurance policies
contain a clause providing that such a release or waiver shall not invalidate
the insurance and also, provided that such a policy can be obtained without
additional premiums. Lessee hereby expressly waives the provisions of Section
227 of the Real Property Law and agrees that the foregoing provisions of this
Article shall govern and control in lieu thereof.

END OF TERM.

11. Lessee shall surrender the premises to Lessor at the expiration or
sooner termination of this lease in good order and condition, except for
reasonable wear and tear and damage by fire of other casualty, and Lessee shall
remove all of its property. Lessee agrees it shall indemnify and save Lessor
harmless against all costs, claims, loss or liability resulting from delay by
Lessee in so surrendering the premises, including, without limitation, any
claims made by any succeeding tenant founded on such delay. The parties
recognize and agree that the damage to Lessor resulting from any failure by
Lessee timely to surrender the premises will be substantial, will exceed the
amount of monthly rent theretofore payable hereunder, and will be impossible of
accurate measurement. Lessee therefore agrees that if possession of the

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premises is not surrendered to Lessor within one (1) day after the date of the
expiration or sooner termination of the term of this lease, then Lessee will pay
Lessor as liquidated damages for each month and for each portion of any month
during which Lessee holds over in the premises after expiration or termination
of the term of this lease, a sum equal to three times the average rent and
additional rent which was payable per month under this lease during the last six
months of the term thereof. The aforesaid obligations shall survive the
expiration or sooner termination of the term of this lease. At any time during
the term of this lease, Lessor may exhibit the premises to prospective
purchasers or mortgagees of Lessor's interest therein, and may place upon the
premises the usual "For Sale" notices. During the last year of the term of this
lease, Lessor may exhibit the premises to prospective tenants and may place and
keep upon the premises the usual "To Let" notice.

SUBORDINATION AND ESTOPPEL.

12. Lessee acknowledges that it has been informed and understands that
Lessor's title arises out of and by virtue of a Sublease from the owner of the
Lease of the land and building of which the demised premises form a part, and a
copy of said Lease and Sublease may be examined at the office of Lessor at any
time during the regular business hours; it is agreed that anything in the within
lease to the contrary notwithstanding, the term of the within lease (including
its renewal terms) shall in no event extend beyond a date one day prior to the
end of the current term and any effective renewal term of the Lease and Sublease
of the land and building, and any attempt so to extend the term of the within
lease shall be a nullity. This lease is and shall be subject and subordinate to
all ground, overriding or underlying leases and the rights of the lessors
thereunder, and to all mortgages which may now or hereafter affect such leases,
and to all renewals, modifications, consolidations, replacements and extensions
of such leases and mortgages. This clause shall be self-operative and no further
instrument in writing to effectuate such subordination shall be necessary. In
confirmation of such subordination, Lessee shall, on demand, execute promptly
any certificate that Lessor may request. Lessee hereby irrevocably constitutes
and appoints Lessor the attorney-in-fact of Lessee to execute, acknowledge and
deliver any such certificate or certificates for and on behalf of Lessee. In the
event of the termination of this lease by the termination of any lease to which
this lease is or may be subordinate, Lessee agrees to enter into a new lease
covering the within demised premises, for the remaining term of this lease and
otherwise on the same terms, conditions and rentals as herein contained, with
and at the election of the holder of any instrument to which this lease is or
may be subordinate (including a mortgagee who shall acquire any superior lease
in foreclosure, or a lease in substitution therefor), or if there is no superior
lease in existence, then with and at the election of the holder of the fee title
to the land and building. From time to time, Lessee, on at least ten (10) days'
prior written request by Lessor, will deliver to Lessor a statement in writing
certifying that this lease is unmodified and in full force and effect (or if
there shall have been modifications, that the same is in full force and effect
as modified and stating the modifications) and the dates to which the rent and
other charges have been paid and stating whether or not Lessor is in default in
performance of any covenant, agreement or condition contained in this lease and,
if so, specifying each such default of which Lessee may have knowledge.

CONDEMNATION.

13. If the whole or any substantial part of the premises shall be
condemned by eminent domain or acquired by private purchase in lieu thereof, for
any public or quasi-public purpose, this lease shall terminate on the date of
the vesting of title through such proceeding or purchase, and Lessee shall have
no claim against Lessor for the value of any unexpired portion of the term of
this lease, nor shall Lessee be entitled to any part of the condemnation award
or private purchase price. If less than a substantial part of the premises. is
condemned, this lease shall not terminate, but rent shall abate in proportion to
the portion of the premises condemned.

REQUIREMENTS OF LAW.

14(a). Lessee at its expense shall comply with all laws, orders and
regulations of any governmental authority having or asserting jurisdiction over
the premises, which shall impose any violation, order or duty upon Lessor or
Lessee with respect to the premises or the use or occupancy thereof, including,
without limitation, compliance in the premises with New York City Local Law No.
5 or any similar or successor law. The foregoing shall not require Lessee to do
structural work.

(b) Lessee shall require every person engaged by him to clean any
window in the premises from the outside, to use the equipment and safety devices
required by Section 202 of the Labor Law and the rules of any governmental
authority having or asserting jurisdiction.

(c) Lessee at its expense shall comply with all requirements of the New
York Board of Fire Underwriters, or any other similar body affecting the
premises, and shall not use the premises in a manner which shall increase the
rate of fire insurance of Lessor or of any other tenant, over that in effect
prior to this lease. If Lessee's use of the premises increases the fire
insurance rate, Lessee shall reimburse Lessor for all such increased costs. That
the premises are being used for the purpose set forth in Article 1 hereof shall
not relieve Lessee from the foregoing duties, obligations and expenses.

CERTIFICATE OF OCCUPANCY.

15. Lessee will at no time use or occupy the premises in violation of
the certificate of occupancy issued for the building. The statement in this
lease of the nature of the business to be conducted by Lessee shall not be
deemed to constitute a representation or guaranty by Lessor that such use is
lawful or permissible in the premises under the certificate of occupancy for the
building.

POSSESSION.

16. If Lessor shall be unable to give possession of the premises on the
commencement date of the term because of the retention of possession of any
occupant thereof, alteration or construction work, or for any other reason
except as hereinafter provided, Lessor shall not be subject to any liability for
such failure. In such event, this lease shall stay in full force and effect,
without extension of its term. However, the rent hereunder shall not commence
until the premises are available for occupancy by Lessee. If delay in possession
is due to work, changes or decorations being made by or for Lessee, or is
otherwise caused by Lessee, there shall be no rent abatement and the rent shall
commence on the date specified in this lease. If permission is given to Lessee
to occupy the demised premises or other premises prior to the date specified as
the commencement of the term, such occupancy shall be deemed to be pursuant to
the terms of this lease, except that the parties shall separately agree as to
the obligation of Lessee to pay rent for such occupancy. The provisions of this
Article are intended to constitute an "express provision to the contrary" within
the meaning of Section 223(a), New York Real Property Law.

QUIET ENJOYMENT.

17. Lessor covenants that if Lessee pays the rent and performs all of
Lessee's other obligations under this lease, Lessee may peaceably and quietly
enjoy the demised premises, subject to the terms, covenants and conditions of
this lease and to the ground leases, underlying leases and mortgages
hereinbefore mentioned.

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RIGHT OF ENTRY.

18. Lessee shall permit Lessor to erect and maintain pipes and conduits
in and through the premises. Lessor or its agents shall have the right to enter
or pass through the premises at all times, by master key, by reasonable force or
otherwise, to examine the same, and to make such repairs, alterations or
additions as it may deem necessary or desirable to the premises or the building,
and to take all material into and upon the premises that may be required
therefor. Such entry and work shall not constitute an eviction of Lessee in
whole or in part, shall not be ground for any abatement of rent, and shall
impose no liability on Lessor by reason of inconvenience or injury to Lessee's
business. Lessor shall have the right at any time, without the same constituting
an actual or constructive eviction, and without incurring any liability to
Lessee, to change the arrangement and/or location of entrances or passageways,
windows, corridors, elevators, stairs, toilets, or other public parts of the
building, and to change the name or number by which the building is known.

VAULT SPACE.

19. Anything contained in any plan or blueprint to the contrary
notwithstanding, no vault or other space not within the building property line
is demised hereunder. Any use of such space by Lessee shall be deemed to be
pursuant to a license, revocable at will by Lessor, without diminution of the
rent payable hereunder. If Lessee shall use such vault space, any fees, taxes or
charges made by any governmental authority for such space shall be paid by
Lessee.

INDEMNITY.

20. Lessee shall indemnify, defend and save Lessor harmless from and
against any liability or expense arising from the use or occupation of the
premises by Lessee, or anyone on the premises with Lessee's permission, or from
any breach of this lease.

LESSOR'S LIABILITY.

21. This lease and the obligations of Lessee hereunder shall in no way
be affected because Lessor is unable to fulfill any of its obligations or to
supply any service, by reason of strike or other cause not within Lessor's
control. Lessor shall have the right, without incurring any liability to Lessee,
to stop any service because of accident or emergency, or for repairs,
alterations or improvements, necessary or desirable in the judgment of Lessor,
until such repairs, alterations or improvements shall have been completed.
Lessor shall not be liable to Lessee or anyone else, for any loss or damage to
person, property or business, unless due to the negligence of Lessor; nor shall
Lessor be liable for any latent defect in the premises or the building. Lessee
agrees to look solely to Lessor's estate and interest in the land and building,
or the lease of the building or of the land and building, and the demise
premises, for the satisfaction of any right or remedy of Lessee for the
collection of a judgement (or other judicial process) requiring the payment of
money by Lessor, in the event of any liability by Lessor, and no other property
or assets of Lessor shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Lessee's remedies under or with respect to
this lease, the relationship of landlord and tenant hereunder, or Lessee's use
and occupancy of the demised premises or any other liability of Lessor to Lessee
(except for negligence).

CONDITION OF PREMISES.

22. Lessee acknowledges that Lessor has made no representation or
promise, except as herein expressly set forth. Lessee agrees to accept the
premises "as is", except for any work which Lessor has expressly agreed in
writing to perform.

COST OF LIVING ADJUSTMENTS.

23. The fixed annual rent reserved in this lease and payable hereunder
shall be adjusted, as of the times and in the manner set forth in this Article:

(a) Definitions: For the purposes of this Article, the following
definitions shall apply:

(i) The term "Base Year" shall mean the full calendar year during which
the term of this lease commences.

(ii) The term "Price Index" shall mean the "Consumer Price Index"
published by the Bureau of Labor Statistics of the U.S. Department of Labor, All
Items, New York, N.Y.-Northeastern, N.J., all urban consumers (presently
denominated "CPI-U"), or a successor or substitute index appropriately adjusted.

(iii) The term "Price Index for the Base Year" shall mean the average
of the monthly All Items Price Indexes for each of the 12 months of the Base
Year.

(b) Effective as of each January and July subsequent to Base Year,
there shall be made a cost of living adjustment of the fixed annual rental rate
payable hereunder. The July adjustment shall be based on the percentage
difference between the Price Index for the preceding month of June and the Price
Index for the Base Year. The January adjustment shall be based on such
percentage difference between the Price Index for the preceding month of
December and the Price Index for the Base Year.

(i) In the event the Price Index for June in any calendar year during
the term of this lease reflects an increase over the Price Index for the Base
Year, then the fixed annual rent herein provided to be paid as of the July 1st
following such month of June (unchanged by any adjustments under this Article)
shall be multiplied by the percentage difference between the Price Index for
June and the Price Index for the Base Year, and the resulting sum shall be added
to such fixed annual rent, effective as of such July 1st. Said adjusted fixed
annual rent shall thereafter be payable hereunder, in equal monthly
installments, until it is readjusted pursuant to the terms of this lease.

(ii) In the event the Price Index for December in any calendar year
during the term of this lease reflects an increase over the Price Index for the
Base Year, then the fixed annual rent herein provided to be paid as of the
January 1st following such month of December (unchanged by any adjustments under
this Article) shall be multiplied by the percentage difference between the Price
Index for December and the Price Index for the Base Year, and the resulting sum
shall be added to such fixed annual rent effective as of such January 1st. Said
adjusted fixed annual rent shall thereafter be payable hereunder, in equal
monthly installments, until it is readjusted pursuant to the terms of this
lease.

The following illustrates the intentions of the parties hereto as to
the computation of the aforementioned cost of living adjustment in the annual
rent payable hereunder:

Assuming that said fixed annual rent is $10,000, that the
Price Index for the Base Year was 102.0 and that the Price
Index for the month of June in a calendar year following the
Base year was 105.0, then the percentage increase thus
reflected, i.e., 2.941% (3.0/102.0) would be multiplied by
$10,000, and said fixed annual rent would be increased by
$294.10 effective as of July 1st of said calendar year.

In the event that the Price Index ceases to use 1982-84=100 as the
basis of calculation, or if a substantial change is made in the terms or number
of items contained in the Price

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Index, then the Price Index shall be adjusted to the figure that would have been
arrived at had the manner of computing the Price Index in effect at the date of
this lease not been altered. In the event such Price Index (or a successor or
substitute index) is not available, a reliable governmental or other nonpartisan
publication evaluating the information theretofore used in determining the Price
Index shall be used.

No adjustments or recomputations, retroactive or otherwise, shall be
made due to any revision which may later be made in the first published figure
of the Price Index for any month.

(c) Lessor will cause statements of the cost of living adjustments
provided for in subdivision (b) to be prepared in reasonable detail and
delivered to Lessee.

(d) In no event shall the fixed annual rent originally provided to be
paid under this lease (exclusive of the adjustments under this Article) be
reduced by virtue of this Article.

(e) Any delay or failure of Lessor, beyond July or January of any year,
in computing or billing for the rent adjustments hereinabove provided, shall not
constitute a waiver of or in any way impair the continuing obligation of Lessee
to pay such rent adjustments hereunder.

(f) Notwithstanding any expiration or termination of this lease prior
to the lease expiration date (except in the case of a cancellation by mutual
agreement) Lessee's obligation to pay rent as adjusted under this Article shall
continue and shall cover all periods up to the lease expiration date, and shall
survive any expiration or termination of this lease.

SERVICES.

24. Tenant acknowledges that it has been advised that the cleaning
contractor for the Building may be a division or affiliate of Landlord. Tenant
agrees to employ such contractor or such other designee, for all waxing,
polishing, lamp replacement, cleaning and maintenance work of or in the demised
premises, and Tenant's furniture, fixtures and equipment, provided that the
quality thereof and the charges therefor are reasonably comparable to that of
other contractors or individuals. Tenant shall not employ any other such
contractor or individual without Landlord's prior written consent, but nothing
herein contained shall prohibit Tenant from performing such work for itself by
use of its own regular employees.

JURY WAIVER.

25. Lessor and Lessee hereby waive trial by jury in any action,
proceeding or counterclaim involving any matter whatsoever arising out of or in
any way connected with this lease, the relationship of landlord and tenant,
Lessee's use or occupancy of the premises (except for personal injury or
property damage) or involving the right to any statutory relief or remedy.
Lessee will not interpose any counterclaim of any nature in any summary
proceeding.

NO WAIVER.

26. No act or omission of Lessor or its agents shall constitute an
actual or constructive eviction, unless Lessor shall have first received written
notice of Lessee's claim and shall have had a reasonable opportunity to meet
such claim. In the event that any payment herein provided for by Lessee to
Lessor shall become overdue for a period in excess of ten (10) days, then at
Lessor's option a "late charge" for such period and for each additional period
of twenty (20) days or any part thereof shall become immediately due and owing
to Lessor, as additional rent by reason of the failure of Lessee to make prompt
payment, at the following rates: for individual and partnership lessees, said
late charge shall be computed at the maximum legal rate of interest; for
corporate or governmental entity lessees the late charge shall be computed at
two percent per month unless there is an applicable maximum legal rate of
interest which then shall be used. No act or omission of Lessor or its agents
shall constitute an acceptance of a surrender of the premises, except a writing
signed by Lessor. The delivery of keys to Lessor or its agents shall not
constitute a termination of this lease or a surrender of the premises.
Acceptance by Lessor of less than the rent herein provided shall at Lessor's
option be deemed on account of earliest rent remaining unpaid. No endorsement on
any check, or letter accompanying rent, shall be deemed an accord and
satisfaction, and such check may be cashed without prejudice to Lessor. No
waiver of any provision of this lease shall be effective, unless such waiver be
in writing signed by Lessor. This lease contains the entire agreement between
the parties, and no modification thereof shall be binding unless in writing and
signed by the parties concerned. Lessee shall comply with the rules and
regulations printed in this lease, and any reasonable modifications thereof or
additions thereto. Lessor shall not be liable to Lessee for the violation of
such rules and regulations by any other tenant. Failure of Lessor to enforce any
provision of this lease, or any rule or regulation, shall not be construed as
the waiver of any subsequent violation of a provision of this lease, or any rule
or regulation. This lease shall not be affected by nor shall Lessor in any way
be liable for the closing, darkening or bricking up of windows in the premises,
for any reason, including as the result of construction on any property of which
the premises are not a part or by Lessors's own acts.

OCCUPANCY AND USE BY LESSEE.

27(A). Lessee acknowledges that its continued occupancy of the demised
premises, and the regular conduct of its business therein, are of utmost
importance to the Lessor in the renewal of other leases in the building, in the
renting of vacant space in the building, in the providing of electricity, air
conditioning, steam and other services to the tenants in the building, and in
the maintenance of the character and quality of the tenants in the building.
Lessee therefore covenants and agrees that it will occupy the entire demised
premises, and will conduct its business therein in the regular and usual manner,
throughout the term of this lease. Lessee acknowledges that Lessor is executing
this lease in reliance upon these covenants, and that these covenants are a
material element of consideration inducing the Lessor to execute this lease.
Lessee further agrees that if it vacates the demised premises or fails to so
conduct its business therein, at any time during the term of this lease, without
the prior written consent of the Lessor, then all rent and additional rent
reserved in this lease from the date of such breach to the expiration date of
this lease shall become immediately due and payable to Lessor.

(B). The parties recognize and agree that the damage to Lessor
resulting from any breach of the covenants in subdivision (A) hereof will be
extremely substantial, will be far greater than the rent payable for the balance
of the term of this lease, and will be impossible of accurate measurement. The
parties therefore agree that in the event of a breach or threatened breach of
the said covenants, in addition to all of Lessor's other rights and remedies, at
law or in equity or otherwise, Lessor shall have the right of injunction to
preserve Lessee's occupancy and use. The words "become vacant or deserted" as
used elsewhere in this lease shall include Lessee's failure to occupy or use as
by this Article required.

(C). If Lessee breaches either of the covenants in subdivision (A)
above, and this lease be terminated because of such default, then, in addition
to Lessor's rights of re-entry, restoration, preparation for and rerental, and
anything elsewhere in this lease to the contrary notwithstanding, Lessor shall
retain its right to judgment on and collection of Lessee's aforesaid obligation
to make a single payment to Lessor of a sum equal to the total of all rent and
additional rent reserved for the remainder of the original term of this lease,
subject to future credit or repayment to Lessee in the event of any

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rerenting of the premises by Lessor, after first deducting from rerental income
all expenses incurred by Lessor in reducing to judgment or otherwise collecting
Lessee's aforesaid obligation, and in obtaining possession of, restoring,
preparing for and re-letting the premises. In no event shall Lessee be entitled
to a credit or repayment for rerental income which exceeds the sums payable by
Lessee hereunder or which covers a period after the original term of this lease.

NOTICES.

28. Any bill, notice or demand from Lessor to Lessee, may be delivered
personally at the premises or sent by registered or certified mail. Such bill,
notice or demand shall be deemed to have been given at the time of delivery or
mailing. Any notice from Lessee to Lessor must be sent by registered or
certified mail to the last address designated in writing by Lessor.

WATER.

29. Lessee shall pay the amount of Lessor's cost for all water used by
Lessee for any purpose other than ordinary lavatory uses, and any sewer rent or
tax based thereon. Lessor may install a water meter to measure Lessee's water
consumption for all purposes and Lessee agrees to pay for the installation and
maintenance thereof and for water consumed as shown on said meter. If water is
made available to Lessee in the building or the demised premises through a meter
which also supplies other premises, or without a meter, then Lessee shall pay to
lessor a reasonable charge per month for water.

SPRINKLER SYSTEM.

30. If there shall be a "sprinkler system" in the demised premises for
any period during this lease, Lessee shall pay a reasonable charge per month,
for sprinkler supervisory service. If such sprinkler system is damaged by any
act or omission of Lessee or its agents, employees, licensees or visitors,
Lessee shall restore the system to good working condition at its own expense. If
the New York Board of Fire Underwriters, the New York Fire Insurance Exchange,
the Insurance Services Office, or any governmental authority requires the
installation of, or any alteration to a sprinkler system by reason of Lessee's
occupancy or use of the premises, including any alteration necessary to obtain
the full allowance for a sprinkler system in the fire insurance rate of Lessor,
or for any other reason, Lessee shall make such installation or alteration
promptly, and at its own expense.

HEAT, ELEVATOR, ETC.

31. Lessor shall provide elevator service during all usual business
hours including Saturdays until 1 P.M., except on Sundays, State holidays,
Federal holidays, or Building Service Employees Union Contract holidays. Lessor
shall furnish heat to the premises during the same hours on the same days in the
cold season in each year. Lessor shall cause the premises to be kept clean in
accordance with Lessor's customary standards for the building, provided they are
kept in order by Lessee. Lessor, its cleaning contractor and their employees
shall have after-hours access to the demised premises and the use of Lessee's
light, power and water in the demised premises as may be reasonably required for
the purpose of cleaning the demised premises. Lessor may remove Lessee's
extraordinary refuse from the building and Lessee shall pay the cost thereof. If
the elevators in the building are manually operated, Lessor may convert to
automatic elevators at any time, without in any way affecting Lessee's
obligations hereunder.

SECURITY DEPOSIT.

32. Lessee has deposited with Lessor the sum of $10,524.00 as security
for the performance by Lessee of the terms of this lease. Lessor may use any
part of the security to satisfy any default of Lessee and any expenses arising
from such default, including but not limited to any damages or rent deficiency
before or after re-entry by Lessor. Lessee shall, upon demand, deposit with
Lessor the full amount so used, in order that Lessor shall have the full
security deposit on hand at all times during the term of this lease. If Lessee
shall comply fully with the terms of this lease, the security shall be returned
to Lessee after the date fixed as the end of the lease. In the event of a sale
or lease of the building containing the premises, Lessor may transfer the
security to the purchaser or lessee, and Lessor shall thereupon be released from
all liability for the return of the security. This provision shall apply to
every transfer or assignment of the security to a new Lessor. Lessee shall have
no legal power to assign or encumber the security herein described.

TAX ESCALATION.

33. Lessee shall pay to Lessor, as additional rent, tax escalation in
accordance with this Article:

(a) For purposes of this lease the rentable square foot area of the
presently demised premises shall be deemed to be 1754 square feet.

(b) Definitions: For the purpose of this Article, the following
definitions shall apply:

(i) The term "base tax year" as hereinafter set forth for the
determination of real estate tax escalation, shall mean the New York
City real estate tax year commencing July 1, 1996 and ending June 30,
1997.

(ii) The term "The Percentage", for purposes of computing tax
escalation, shall mean 0.0780 percent (0.0780%). The Percentage has
been computed on the basis of a fraction, the numerator of which is the
rentable square foot area of the demised premises and the denominator
of which is the total rentable square foot area of the office and
commercial space in the building project. The parties acknowledge and
agree that the total rentable square foot area of the office and
commercial space in the building project shall be deemed to be
2,248,370 sq. ft.

(iii) The term "the building project" shall mean the aggregate
combined parcel of land on a portion of which are the improvements of
which the demised premises form a part, with all the improvements
thereon, said improvements being a part of the block and lot for tax
purposes which are applicable to the aforesaid land.

(iv) The term "comparative year" shall mean the twelve (12)
months following the base tax year, and each subsequent period of
twelve (12) months (or such other period of twelve (12) months
occurring during the term of this lease as hereafter may be duly
adopted as the fiscal year for real estate tax purposes by the City of
New York).

(v) The term "real estate taxes" shall mean the total of all
taxes and special or other assessments levied, assessed or imposed at
any time by any governmental authority upon or against the building
project, and also any tax or assessment levied, assessed or imposed at
any time by any governmental authority in connection with the receipt
of income or rents from said building project to the extent that same
shall be in lieu of all or a portion of any of the aforesaid taxes or
assessments, or additions or increases thereof, upon or against said
building project. If, due to a future change in the method of taxation
or in the taxing authority, or for any other

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reason, a franchise, income, transit, profit or other tax or
governmental imposition, however designated, shall be levied against
Lessor in substitution in whole or in part for the real estate taxes,
or in lieu of additions to or increases of said real estate taxes,
then such franchise, income, transit, profit or other tax or
governmental imposition shall be deemed to be included within the
definition of "real estate taxes" for the purposes hereof. As to
special assessments which are payable over a period of time extending
beyond the term of this lease, only a pro rata portion thereof,
covering the portion of the term of this lease unexpired at the time
of the imposition of such assessment, shall be included in "real
estate taxes". If, by law, any assessment may be paid in installments,
then, for the purposes hereof (a) such assessment shall be deemed to
have been payable in the maximum number of installments permitted by
law and (b) there shall be included in real estate taxes, for each
comparative year in which such installments may be paid, the
installments of such assessment so becoming payable during such
comparative year, together with interest payable during such
comparative year.

(vi) Where more than one assessment is imposed by the City of
New York for any tax year, whether denominated an "actual assessment"
or a "transitional assessment" or otherwise, then the phrases "assessed
value" and "assessments" shall mean whichever of the actual,
transitional or other assessment is designated by the City of New York
as the taxable assessment for that tax year.

(vii) The phrase "real estate taxes payable during the base
tax year" shall mean that amount obtained by multiplying the assessed
value of the land and buildings of the building project for the base
tax year by the tax rate for the base tax year for each $100 of such
assessed value.

(c)1. In the event that the real estate taxes payable for any
comparative year shall exceed the amount of the real estate taxes payable during
the base tax year, Lessee shall pay to Lessor, as additional rent for such
comparative year, an amount equal to The Percentage of the excess. Before or
after the start of each comparative year, Lessor shall furnish to Lessee a
statement of the real estate taxes payable during the base tax year. If the real
estate taxes payable for such comparative year exceed the real estate taxes
payable during the base tax year, additional rent for such comparative year, in
an amount equal to The Percentage of the excess, shall be due from Lessee to
Lessor, and such additional rent shall be payable by Lessee to Lessor within ten
(10) days after receipt of the aforesaid statement. The benefit of any discount
for any early payment or prepayment of real estate taxes shall accrue solely to
the benefit of Lessor, and such discount shall not be subtracted from the real
estate taxes payable for any comparative year. Additionally, Lessee shall pay to
Lessor, on demand, a sum equal to The Percentage of any business improvement
district assessment payable by the building project.

2. Should the real estate taxes payable during the base tax year be
reduced by final determination of legal proceedings, settlement or otherwise,
then, the real estate taxes payable during the base tax year shall be
correspondingly revised, the additional rent theretofore paid or payable
hereunder for all comparative years shall be recomputed on the basis of such
reduction, and Lessee shall pay to Lessor as additional rent, within ten (10)
days after being billed therefor, any deficiency between the amount of such
additional rent as theretofore computed and the amount thereof due as the result
of such recomputations. Should the real estate taxes payable during the base tax
year be increased by such final determination of legal proceedings, settlement
or otherwise, then appropriate recomputation and adjustment also shall be made.

3. If, after Lessee shall have made a payment of additional rent under
this subdivision (c), Lessor shall receive a refund of any portion of the real
estate taxes payable for any comparative year after the base tax year on which
such payment of additional rent shall have been based, as a result of a
reduction of such real estate taxes by final determination of legal proceedings,
settlement or otherwise, Lessor shall within ten (10) days after receiving the
refund pay to Lessee The Percentage of the refund less The Percentage of
expenses (including attorneys' and appraisers' fees) incurred by Lessor in
connection with any such application or proceeding. If, prior to the payment of
taxes for any comparative year, Lessor shall have obtained a reduction of that
comparative year's assessed valuation of the building project, and therefore of
said taxes, then the term "real estate taxes" for the comparative year shall be
deemed to include the amount of Lessor's expenses in obtaining such reduction in
assessed valuation, including attorneys' and appraisers' fees.

4. The statements of the real estate taxes to be furnished by Lessor as
provided above shall be certified by Lessor and shall constitute a final
determination as between Lessor and Lessee of the real estate taxes for the
periods represented thereby, unless Lessee within thirty (30) days after they
are furnished shall give a written notice to Lessor that it disputes their
accuracy or their appropriateness, which notice shall specify the particular
respects in which the statement Is inaccurate or inappropriate. If Lessee shall
so dispute said statement then, pending the resolution of such dispute, Lessee
shall pay the additional rent to Lessor in accordance with the statement
furnished by Lessor.

5. In no event shall the fixed annual rent under this lease (exclusive
of the additional rents under this Article) be reduced by virtue of this
Article.

6. If The commencement date of the term of this lease is not the first
day of the first comparative year, then the additional rent due hereunder for
such first comparative year shall be a proportionate share of said additional
rent for the entire comparative year, said proportionate share to be based upon
the length of time that the lease term will be in existence during such first
comparative year. Upon the date of any expiration or termination of this lease
(except termination because of Lessee's default) whether the same be the date
hereinabove set forth for the expiration of the term or any prior or subsequent
date, a proportionate share of said additional rent for the comparative year
during which such expiration or termination occurs shall immediately become due
and payable by Lessee to Lessor, if it was not theretofore already billed and
paid. The said proportionate share shall be based upon the length of time that
this lease shall have been in existence during such comparative year. Lessor
shall promptly cause statements of said additional rent for that comparative
year to be prepared and furnished to Lessee. Lessor and Lessee shall thereupon
make appropriate adjustments of amounts then owing.

7. Lessor's and Lessee's obligations to make the adjustments referred
to in subdivision (6) above shall survive any expiration or termination of this
lease.

8. Any delay or failure of Lessor in billing any tax escalation
hereinabove provided shall not constitute a waiver of or in any way impair the
continuing obligation of Lessee to pay such tax escalation hereunder.

RENT CONTROL.

34. In the event the fixed annual rent or additional rent or any part
thereof provided to be paid by Lessee under the provisions of this lease during
the demised term shall become uncollectible or shall be reduced or required to
be reduced or refunded by virtue of any Federal, State, County or City law,
order or regulation, or by any direction of a public officer or body pursuant to
law, or the orders, rules,

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code or regulations of any organization or entity formed pursuant to jaw,
whether such organization or entity be public or private, then Lessor, at its
option, may at any time thereafter terminate this lease, by not less than thirty
(30) days' written notice to Lessee, on a date set forth in said notice, in
which event this lease and the term hereof shall terminate and come to an end on
the date fixed in said notice as if the said date were the date originally fixed
herein for the termination of the demised term. Lessor shall not have the right
so to terminate this lease if Lessee within such period of thirty (30) days
shall in writing lawfully agree that the rentals herein reserved are a
reasonable rental and agree to continue to pay said rentals, and if such
agreement by Lessee shall then be legally enforceable by Lessor.

SUPPLIES.

35. Only Lessor or any one or more persons, firms, or corporations
authorized in writing by Lessor shall be permitted to furnish laundry, linens,
towels, drinking water, water coolers, ice and other similar supplies and
services to tenants and licensees in the building. Lessor may fix, in its own
absolute discretion, from time to time, the hours during which and the
regulations under which such supplies and services are to be furnished. Lessor
expressly reserves the right to act as or to designate, from time to time, an
exclusive supplier of all or any one or more of the said supplies and services;
and Lessor furthermore expressly reserves the right to exclude from the building
any person, firm or corporation attempting to furnish any of said supplies or
services but not so designated by Lessor.

Only Lessor or any one or more persons, firms or corporations
authorized in writing by Lessor shall be permitted to sell, deliver or furnish
any food or beverages whatsoever for consumption within the demised premises or
elsewhere in the building. Lessor expressly reserves the right to act as or to
designate from time to time an exclusive supplier or suppliers of such food and
beverages. Lessor further expressly reserves the right to exclude from the
building any person, firm or corporation attempting to deliver or purvey any
such food or beverages, but not so designated by Lessor. It is understood,
however, that Lessee or its regular office employees may personally bring food
or beverages into the building for consumption within the demised premises by
the said employees, but not for resale or for consumption by any other tenant.
Lessor may fix in its absolute discretion from time to time the hours during
which, and the regulations under which, food and beverages may be brought into
the building by Lessee or its regular employees.

AIR CONDITIONING.

36. Lessor agrees to install, at its own cost and expense, all
equipment necessary to make available to Lessee the building chilled water and
warm water circulating system (summer cooling and winter ventilation).

Lessee agrees that necessary work for the installation of any such
equipment or facilities and the repair and maintenance thereof may be performed
by Lessor during regular working hours without diminution or abatement of rent
and without liability on the part of Lessor by reason of inconvenience,
annoyance or injury to business arising from the performance of said work.

The entire installation and all equipment and facilities at any time
forming a part thereof shall be and at all times remain the property of Lessor.
Any change, alteration, addition or extension of any of said equipment or
facilities shall be performed by Lessor at Lessee's expense. Lessee shall under
no circumstances make any change, alteration, addition or extension of any of
said equipment or facilities, without Lessor's prior written consent in each
instance.

Lessor agrees to operate and maintain said equipment and facilities,
provided that all repairs, substitutions or replacements caused by reason of the
carelessness, omission, neglect or improper conduct of Lessee, its servants,
employees, agents, visitors or licensees shall be made by Lessor at the expense
of Lessee. All electric current used in the operation of said equipment
servicing the premises and Lessee's share of the electric current for the
production of chilled water and its supply to the premises shall become the
obligation of Lessee in accordance with the terms of Article 42 of this lease.

Provided Lessee is not then in default of any of the terms, conditions
and covenants of this lease, Lessor agrees to supply chilled water to the
demised premises, on regular business days from 8:00 a.m. to 6:00 p.m., Mondays
through Fridays, exclusive of holidays, during any period from May 1, to October
31, when, in Lessor's reasonable judgment, cooling is required, and further
agrees to supply warm water to the demised premises in the non-cooling season,
when reasonably necessary, so as to provide "winter ventilation" on regular
business days from 9:00 a.m. to 6:00 p.m., Mondays through Fridays, exclusive of
holidays. It is understood that Lessor shall not be liable for any damage or
loss of any kind whatsoever to Lessee resulting from the inability of Lessor to
supply the chilled water and warm water by reason of forces beyond its normal
control, nor shall there be any abatement or reduction in the rent or additional
rent payable by Lessee by reason of such inability of Lessor to supply the
chilled water and warm water.

SHORING.

37. Lessee shall permit any person authorized to make an excavation on
land adjacent to the building containing the premises to do any work within the
premises necessary to preserve the wall of the building from injury or damage,
and Lessee shall have no claim against Lessor for damages or abatement or rent
by reason thereof.

EFFECT OF CONVEYANCE, ETC.

38. If the building containing the premises shall be sold, transferred
or leased, or the lease thereof transferred or sold, Lessor shall be relieved of
all future obligations and liabilities hereunder and the purchaser, transferee
or lessee of the building shall be deemed to have assumed and agreed to perform
all such obligations and liabilities of Lessor hereunder. In the event of such
sale, transfer or lease, Lessor shall also be relieved of all existing
obligations an liabilities hereunder, provided that the purchaser, transferee or
lessee of the building assumes in writing such obligations and liabilities.

RIGHTS OF SUCCESSORS AND ASSIGNS.

39. This lease shall bind and inure to the benefit of the heirs,
executors, administrators, successors, and, except as otherwise provided herein,
the assigns of the parties hereto. If any provision of any Article of this lease
or the application thereof to any person or circumstances shall, to any extent,
be invalid or unenforceable, the remainder of that Article, or the application
of such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each provision
of said Article and of this lease shall be valid and be enforced to the fullest
extent permitted by law.

CAPTIONS.

40. The captions herein are inserted only for convenience, and are in
no way to be construed as a part of this lease or as a limitation of the scope
of any provision of this lease.

LEASE SUBMISSION.

41. Lessor and Lessee agree that this lease is submitted to Lessee on
the understanding that it shall not be considered an offer and shall not bind
Lessor in any way

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unless and until (i) Lessee has duly executed and delivered duplicate originals
thereof to Lessor and (ii) Lessor has executed and delivered one of said
originals to Lessee.

ELECTRICITY.

42. Lessee agrees that Lessor may furnish electricity to Lessee on a
"submetering" basis or on a "rent inclusion" basis.

(A). Submetering: If and so long as Lessor provides electricity to the
demised premises on a submetering basis, Lessee covenants and agrees to purchase
the same from Lessor or Lessor's designated agent at charges, terms and rates
set, from time to time, during the term of this lease by Lessor but not more
than those specified in the service classification in effect on January 1, 1970
pursuant to which Lessor then purchased electric current from the public utility
corporation serving the part of the city where the building is located:
provided, however, said charges shall be increased in the same percentage as any
percentage increase in the billing to Lessor for electricity for the entire
building, by reason of increase in Lessor's electric rates or service
classifications, subsequent to January 1, 1970, and so as to reflect any
increase in Lessor's electric charges, fuel adjustment, or by taxes or charges
of any kind imposed on Lessor's electricity purchases, or for any other such
reason, subsequent to said date. Any such percentage increase in Lessor's
billing for electricity due to changes in rates or service classifications shall
be computed by the application of the average consumption (energy and demand) of
electricity for the entire building for the twelve (12) full months immediately
prior to the rate and/or service classification change, or any changed methods
of or rules on billing for same, on a consistent basis to the new rate and/or
service classification and to the service classification in effect on January 1,
1970. If the average consumption of electricity for the entire building for said
prior twelve (12) months cannot reasonably be applied and used with respect to
changed methods of or rules on billing, then the percentage increase shall be
computed by the use of the average consumption (energy and demand) for the
entire building for the first three (3) months after such change, projected to a
full twelve (12) months; and that same consumption, so projected, shall be
applied to the service classification in effect on January 1, 1970. Where more
than one meter measures the service of Lessee in the building, the service
rendered through each meter may be computed and billed separately in accordance
with the rates herein. Bills therefor shall be rendered at such times as Lessor
may elect and the amount, as computed from a meter, shall be deemed to be, and
be paid as, additional rent. In the event that such bills are not paid within
five (5) days after the same are rendered, Lessor may, without further notice,
discontinue the service of electric current to the demised premises without
releasing Lessee from any liability under this lease and without Lessor or
Lessor's agent incurring any liability for any damage or loss sustained by
Lessee by. such discontinuance of service. If any tax is imposed upon Lessor's
receipt from the sale or resale of electrical energy or gas or telephone service
to Lessee by any Federal, State, or Municipal. Authority, Lessee covenants and
agrees that where permitted by law, Lessee's pro-rata share of such taxes shall
be passed on to, and included in the bill of, and paid by, Lessee to Lessor.

(B). Rent Inclusion: If and so long as Lessor provides electricity to
the demised premises on a rent inclusion basis, Lessee agrees that the fixed
annual rent shall be increased by the amount of the Electricity Rent Inclusion
Factor ("ERIF"), as hereinafter defined. Lessee acknowledges and agrees (i) that
the fixed annual rent hereinabove set forth in this lease does not yet, but is
to include an ERIF of $3.23 per rentable square foot to compensate Lessor for
electrical wiring and other installations necessary for, and for its obtaining
and making available to Lessee the redistribution of, electric current as an
additional service; and (ii) that said ERIF, which shall be subject to periodic
adjustments as hereinafter provided, has been partially based upon an estimate
of the Lessee's connected electrical load, which shall be deemed to be the
demand (KW), and hours of use thereof, which shall be deemed to be the energy
(KWH), for ordinary lighting and light office equipment and the operation of the
usual small business machines, including Xerox or other copying machines (such
lighting and equipment are hereinafter called "Ordinary Equipment") during
ordinary business hours ("ordinary business hours" shall be deemed to mean 50
hours per week), with Lessor providing an average connected load of 41A watts of
electricity for all purposes per rentable square foot. Any installation and use
of equipment other than Ordinary Equipment and/or any connected load and/or any
energy usage by Lessee in excess of the foregoing shall result in adjustment of
the ERIF as hereinafter provided. For purposes of this lease the rentable square
foot area of the presently demised premises shall be deemed to be 1754 square
feet.

If the cost to Lessor of electricity shall have been, or shall be,
increased or decreased subsequent to May 1, 1993 (whether such change occurs
prior to or during the term of this lease), by change in Lessor's electric rates
or service classifications, or by any increase, subsequent to the last such
electric rate or service classification change, in fuel adjustments or charges
of any kind, or by taxes, imposed on Lessor's electricity purchases, or for any
other such reason, then the ERIF, which is a portion of the fixed annual rent,
shall be changed in the same percentage as any such change in cost due to
changes in electric rates or service classifications, and, also, Lessee's
payment obligation, for electricity redistribution, shall change from time to
time so as to reflect any such increase in fuel adjustments or charges, and
taxes. Any such percentage change in Lessor's cost due to changes in electric
rates or service classifications shall be computed by the application of the
average consumption (energy and demand) of electricity for the entire building
for the twelve (12) full months immediately prior to the rate and/or service
classification change, or any changed methods of or rules on billing for same,
on a consistent basis to the new rate and/or service classification and to the
immediately prior existing rate and/or service classification. If the average
consumption of electricity for the entire building for said prior twelve (12)
months cannot reasonably be applied and used with respect to changed methods of
or rules on billing, then the percentage increase shall be computed by the use
of the average consumption (energy and demand) for the entire building for the
first three (3) months after such change, projected to a full twelve (12)
months, so as to reflect the different seasons; and that same consumption, so
projected, shall be applied to the rate and/or service classification which
existed immediately prior to the change. The parties agree that a reputable,
independent electrical consultant, selected by Lessor ("Lessor's electrical
consultant"), shall determine the percentage change for the changes in the ERIF
due to Lessor's changed costs, and that Lessor's electrical consultant may from
time to time make surveys in the demised premises of the electrical equipment
and fixtures and the use of current. (i) If any such survey shall reflect a
connected load in the demised premises in excess of 41A watts of electricity for
all purposes per rentable square foot and/or energy usage in excess of ordinary
business hours (each such excess is hereinafter called "excess electricity")
then the connected load and/or the hours of use portion(s) of then existing ERIF
shall each be increased by an amount which is equal to a fraction of the then
existing ERIF, the numerator of which is the excess electricity (i.e., excess
connected load and/or excess usage) and the denominator of which is the
connected load and/or the energy usage which was the basis for the computation
of the then existing ERIF. Such fractions shall be determined by Lessor's
electrical consultant. The fixed annual rent shall then be appropriately
adjusted, effective as of the date of any such change in connected load and/or
usage, as disclosed by said survey. (ii) If such survey shall disclose
installation and use of other than Ordinary Equipment, then effective as of the
date of said survey, there shall be added to the ERIF portion of the fixed
annual rent (computed and fixed as hereinbefore described) an additional amount
equal to what would be paid

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

<PAGE>

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

under the SC-4 Rate I Service Classification in effect on May 1, 1993 (and not
the time-of-day rate schedule) for such load and usage of electricity, with the
connected electrical load deemed to be the demand (KW) and the hours of use
thereof deemed to be the energy (KWH), as hereinbefore provided, (which addition
to the ERIF shall be increased or decreased by all electricity cost changes of
Lessor, as hereinabove provided, from May 1, 1993 through the date of billing).

In no event, whether because of surveys or for any other reason, is the
originally specified $3.23 per rentable square foot ERIF portion of the fixed
annual rent (plus any net increase thereof, but not decrease, by virtue of all
electric rate or service classification changes subsequent to May 1, 1993) to be
reduced.

(C). General Conditions: The determinations by Lessor's electrical
consultant shall be binding and conclusive on Lessor and on Lessee from and
after the delivery of copies of such determinations to Lessor and Lessee,
unless, within fifteen (15) days after delivery thereof, Lessee disputes such
determination. If lessee so disputes the determination, it shall, at its own
expense, obtain from a reputable, independent electrical consultant its own
determinations in accordance with the provisions of this Article. Lessee's
consultant and Lessor's consultant then shall seek to agree. If they cannot
agree within thirty (30) days they shall choose a third reputable electrical
consultant, whose cost shall be shared equally by the parties, to make similar
determinations which shall be controlling. (If they cannot agree on such third
consultant within ten (10) days, then either party may apply to the Supreme
Court in the County of New York for such appointment). However, pending such
controlling determinations, Lessee shall pay to Lessor the amount of additional
rent or ERIF in accordance with the determinations of Lessor's electrical
consultant. If the controlling determinations differ from Lessor's electrical
consultant, then the parties shall promptly make adjustment for any deficiency
owed by Lessee or overage paid by Lessee.

At the option of Lessor, Lessee agrees to purchase from Lessor or its
agents all lamps and bulbs used in the demised premises and to pay for the cost
of installation thereof. Lessor shall not be liable to Lessee for any loss or
damage or expense which Lessee may sustain or incur if either the quantity or
character of electric service is changed or is no longer available or suitable
for Lessee's requirements. Lessee covenants and agrees that at all times its use
of electric current shall never exceed the capacity of existing feeders to the
building or the risers or wiring installation. Lessee agrees not to connect any
additional electrical equipment to the building electric distribution system,
other than lamps, typewriters and other small office machines which consume
comparable amounts of electricity, without Lessor's prior written consent, which
consent shall not be unreasonably withheld. Any riser or risers to supply
Lessee's electrical requirements, upon written request of Lessee, will be
installed by Lessor, at the sole cost and expense of Lessee, if, in Lessor's
sole judgment, the same are necessary and will not cause permanent damage or
injury to the building or demised premises or cause or create a dangerous or
hazardous condition or entail excessive or unreasonable alterations, repairs or
expense or interfere with or disturb other tenants or occupants. In addition to
the installation of such riser or risers, Lessor will also at the sole cost and
expense of Lessee, install all other equipment proper and necessary in
connection therewith subject to the aforesaid terms and conditions. The parties
acknowledge that they understand that it is anticipated that electric rates,
charges, etc., may be changed by virtue of time-of-day rates or other methods of
billing, and that the references in the foregoing two paragraphs to changes in
methods of or rules on billing are intended to include any such changes.
Supplementing Article 35 hereof, if all or part of the submetering additional
rent or the ERIF payable in accordance with Subdivision (A) or (B) of this
Article becomes uncollectible or reduced or refunded by virtue of any law, order
or regulation, the parties agree that, at Lessor's option, in lieu of
submetering additional rent or ERIF, and in consideration of Lessee's use of the
building's electrical distribution system and receipt of redistributed
electricity and payment by Lessor of consultants' fees and other redistribution
costs, the fixed annual rental rate(s) to be paid under this Lease shall be
increased by an "alternative charge" which shall be a sum equal to $3.23 per
year per rentable sq. ft. of the demised premises, changed in the same
percentage as any increases in the cost to Lessor for electricity for the entire
building subsequent to May 1, 1993, because of electric rate or service
classification changes, such percentage change to be computed as in Subdivision
(B) provided. The Lessor reserves the right, at any time upon thirty (30) days'
written notice, to change its furnishing of electricity to Lessee from a rent
inclusion basis to a submetering basis, or vice versa. The Lessor reserves the
right to terminate the furnishing of electricity on a rent inclusion,
submetering, or any other basis at any time, upon thirty (30) days' written
notice to the Lessee, in which event the Lessee may make application directly to
the public utility for the Lessee's entire separate supply of electric current
and Lessor shall permit its wires and conduits, to the extent available and
safely capable, to be used for such purpose, but only to the extent of Lessee's
then authorized load. Any meters, risers or other equipment or connections
necessary to furnish electricity on a submetering basis or to enable Lessee to
obtain electric current directly from such utility shall be installed at
Lessee's sole cost and expense. Only rigid conduit or electricity metal tubing
(EMT) will be allowed. The Lessor, upon the expiration of the aforesaid thirty
(30) days' written notice to the Lessee may discontinue furnishing the electric
current but this lease shall otherwise remain in full force and effect. If
Lessee was provided electricity on a rent inclusion basis when it was so
discontinued, then commencing when Lessee receives such direct service and as
long as Lessee shall continue to receive such service, the fixed annual rental
rate payable under this lease shall be reduced by the amount of the ERIF which
was payable immediately prior to such discontinuance of electricity on a rent
inclusion basis.

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

<PAGE>

Rider Attached to and Forming a Part of Lease dated March 1, 1996 between EMPIRE
STATE BUILDING COMPANY, Landlord and LEADING EDGE PACKAGING, INC., Tenant.

43. Anything in Article 7 to the contrary notwithstanding, Landlord will not
unreasonably withhold or delay approval of written requests of Tenant to make
nonstructural interior alterations, decorations, additions and improvements
(herein referred to as "alterations") in the demised premises, provided that
such alterations do not affect utility services or plumbing and electrical lines
or other systems of the building. All alterations shall be performed in
accordance with the following conditions:

(a) All alterations costing more than $2,500.00 shall be performed in
accordance with plans and specifications first submitted to Landlord for its
prior written approval. Landlord shall be given, in writing, a good description
of all other alterations.

(b) All alterations shall be done in a good and workmanlike manner.
Tenant shall, prior to the commencement of any such alterations, at its sole
cost and expense, obtain and exhibit to Landlord any governmental permit
required in connection with such alterations.

(c) All alterations shall be done in compliance with all other
applicable provisions of this Lease and with all applicable laws, ordinances,
directions, rules and regulations of governmental authorities having
jurisdiction, including, without limitation, the Americans with Disabilities Act
of 1990 and New York City Local Law No. 58/87 and similar present or future
laws, and regulations issued pursuant thereto, and also New York City Local Law
No.76 and similar present or future laws, and regulations issued pursuant
thereto, on abatement, storage, transportation and disposal of asbestos, which
work, if required, shall be effected at Tenant's sole cost and expense, by
contractors and consultants approved by Landlord and in strict compliance with
the aforesaid rules and regulations and with Landlord's rules and regulations
thereon.

(d) All work shall be performed with union labor having the proper
jurisdictional qualifications.

(e) Tenant shall keep the building and the demised premises free and
clear of all liens for any work or material claimed to have been furnished to
Tenant or to the demised premises.

(f) Prior to the commencement of any work by or for Tenant, Tenant
shall furnish to Landlord certificates evidencing the existence of the following
insurance:

(i) Workmen's compensation insurance covering all persons
employed for such work and with respect to whom death or bodily injury
claims could be asserted against Landlord, Tenant or the demised
premises.

(ii) Broad form general liability insurance written on an
occurrence basis naming Tenant as an insured and naming Landlord and
its designees as additional insureds, with limits of not less than
$3,000,000 combined single limit for personal injury in any one
occurrence, and with limits of not less then $500,000 for property
damage (the foregoing limits may be revised from time to time by
Landlord to such higher limits as Landlord from time to time reasonably
requires). Tenant, at its sole cost and expense, shall cause all such
insurance to be maintained at all times when the work to be performed
for or by Tenant is in progress. All such insurance shall be obtained
from a company authorized to do business in New York and shall provide
that it cannot be canceled without thirty (30) days prior written
notice to Landlord. All policies, or certificates therefor, issued by
the insurer and bearing notations evidencing the payment of premiums,
shall be delivered to Landlord. Blanket coverage shall be acceptable,
provided that coverage meeting the requirements of this paragraph is
assigned to Tenant's location at the demised premises.

(g) All work to be performed by or for Tenant shall be done in a manner
which will not unreasonably interfere with or disturb other tenants and
occupants of the building.

<PAGE>

(h) Any alterations or other work and installations in and for the
demised premises, which shall be consented to by Landlord as provided herein,
including without limitation, Tenant's initial alteration work and any further
changes in or additions to the demised premises after said initial work has been
completed, shall be effected on Tenant's behalf by Landlord, its agents or
contractors, and shall be paid for by Tenant promptly when billed, at cost plus
ten (10%) percent thereof for supervision and overhead, plus ten (10%) for
general conditions, as additional rent hereunder.

44. If and so long as Tenant is not in default under this Lease beyond any grace
period, Tenant shall be entitled to a rent credit in the amount of $3,508.00 to
be applied against the July, 1996 monthly installment of fixed annual rent
(without electricity), a rent credit in the amount of $3,508.00 to be applied
against the August, 1996 monthly installment of fixed annual rent (without
electricity), a rent credit in the amount of $3,508.00 to be applied against the
September, 1996 monthly installment of fixed annual rent (without electricity),
a rent credit in the amount of $3,508.00 to be applied against the October, 1996
monthly installment of fixed annual rent (without electricity), a rent credit in
the amount of $3,508.00 to be applied against the November, 1996 monthly
installment of fixed annual rent (without electricity), accruing under this
Lease, so that Tenant shall occupy the demised premises free of such fixed
annual rent for that period; except that Tenant shall nevertheless be obligated,
from and after the commencement date of the term, to pay additional rents
hereunder and to make payment of the ERIF portion of the fixed annual rent due
under Article 42 hereof, (anything in said Article 42 to the contrary
notwithstanding).

Anything contained hereinabove to the contrary notwithstanding, if
Tenant at any time during the term of this Lease, breaches any material
covenant, condition or provision of this Lease and fails to cure such breach
within any applicable grace period, and provided that this Lease is terminated
by Landlord because of such material default then, in addition to all other
damages and remedies herein provided and to which Landlord may be entitled,
Landlord shall also be entitled to the repayment in full of any rent credit
theretofore enjoyed by Tenant, which repayment Tenant shall make upon demand
therefor.

45. If Lessor shall consummate a Lease with Lessee in the Building known as
Empire State Building for vacant space at least fifty percent (50%) larger than
the premises demised hereunder, Lessee shall have the right to cancel this Lease
but such cancellation shall be effective only upon strict compliance with the
following terms and conditions:

(a) Lessee shall notify Lessor within five (5) days after consummating
such Lease of its intention to cancel this Lease which notice shall be sent to
Lessor by Registered or Certified Mail addressed do Helmsley-Spear, Inc., 350
Fifth Avenue, New York, New York, 10118, or at such other place hereafter
designated in writing by Lessor. The cancellation date shall be either: (i)
within ninety (90) days of the effective date of the new Lease for larger space;
or (ii) any April 30 or October 31 during the remaining period of the term of
this Lease;

(b) Lessee shall not be in default under any of the terms, conditions
and covenants of this lease upon the date of such notice and on the cancellation
date specified therein;

(c) Lessee shall vacate the premises demised hereunder and surrender
possession thereof to Lessor on or prior to the cancellation of this Lease.

46. Supplementing Articles 3 and 27 hereof, Landlord and Tenant agree that:

A. Tenant, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors and assigns, expressly
covenants that it shall not assign, mortgage or encumber this Lease, nor
underlet, or suffer or permit the demised premises or any part thereof to be
used or occupied by others, without the prior written consent of Landlord in
each instance. The merger or consolidation of a corporate lessee or sublessee
where the net worth of the resulting or surviving corporation is less than the
net worth of the lessee or sublessee

<PAGE>

immediately prior to such merger or consolidation shall be deemed an assignment
of this lease or of such sublease. If this Lease be assigned, or if the demised
premises or any part thereof be underlet or occupied by anybody other than
Tenant, Landlord may, after default by Tenant, collect rent from the assignee,
undertenant or occupant, and apply the net amount collected to the rent herein
reserved, but no assignment, underletting, occupancy or collection shall be
deemed a waiver of the provisions hereof, the acceptance of the assignee,
undertenant or occupant as Tenant, or a release of Tenant from the further
performance by Tenant of covenants on the part of Tenant herein contained. The
consent by Landlord to an assignment or underletting shall not in any way be
construed to relieve Tenant from obtaining the express consent in writing of
Landlord to any further assignment or underletting. In no event shall any
permitted sublessee assign or encumber its sublease or further sublet all or any
portion of its sublet space, or otherwise suffer or permit the sublet space or
any part thereof to be used or occupied by others, without Landlord's prior
written consent in each instance. A modification, amendment or extension of a
sublease shall be deemed a sublease. If any lien is filed against the demised
premises or the building of which the same form a part for brokerage services
claimed to have been performed for Tenant, whether or not actually performed,
the same shall be discharged by Tenant within ten (10) days thereafter, at
Tenant's expense, by filing the bond required by law or otherwise and paying any
other necessary sums, and Tenant agrees to indemnify Landlord and its agents and
hold them harmless from and against any and all claims, losses or liability
resulting from such lien for brokerage service rendered.

B. If Tenant desires to assign this Lease or to sublet all or any
portion of the demised premises, it shall first submit in writing to Landlord
the documents described in Section C hereof, and shall offer in writing, (i)
with respect to a prospective assignment, to assign this Lease to Landlord
without any payment of moneys or other consideration therefor, or, (ii) with
respect to a prospective subletting, to sublet to Landlord the portion of the
demised premises involved ("Leaseback Area") for the term specified by Tenant in
its proposed sublease or, at Landlord's option for the balance of the term of
the Lease less one (1) day, and at the lower of (a) Tenant's proposed subrental
or (b) at the same rate of fixed rent and additional rent, and otherwise on the
same terms, covenants and conditions (including provisions relating to
escalation rents), as are contained herein and as are allocable and applicable
to the portion of the demised premises to be covered by such subletting. The
offer shall specify the date when the Leaseback Area will be made available to
Landlord, which date shall be in no event earlier than ninety (90) days nor
later than one hundred eighty (180) days following the acceptance of the offer.
If an offer of sublease is made, and if the proposed sublease will result in all
or substantially all of the demised premises being sublet, then Landlord shall
have the option to extend the term of its proposed sublease for the balance of
the term of this Lease less one (1) day.

Landlord shall have a period of ninety (90) days from the receipt of
such offer to either accept or reject the same. If Landlord shall accept such
offer (i) Tenant shall then execute and deliver to Landlord, or to anyone
designated or named by Landlord, an assignment or sublease, as the case may be,
in either case in a form reasonably satisfactory to Landlord's counsel; and (ii)
if the proposed transaction is a sublease and Landlord accepts such offer,
Tenant, on demand, shall pay to Landlord or its managing agent (as Landlord
shall elect) an amount equal to the brokerage commissions which would have been
incurred by Tenant but for Landlord's accepting such offer.

If a sublease is so made it shall expressly:

(a) permit Landlord to make further subleases of all or any
part of the Leaseback Area and (at no cost or expense to
Tenant) to make and authorize any and all changes,
alterations, installations and improvements in such space as
necessary;

(b) provide that Tenant will at all times permit reasonably
appropriate means of ingress and egress from the Leaseback
Area;

(c) negate any intention that the estate created under such
sublease be merged with any other estate held by either of the
parties;

<PAGE>

(d) provide that Landlord shall accept the Lease back Area "as
is" except that Landlord, at Tenant's expense, shall perform
all such work and make all such alterations as may be required
physically to separate the Leaseback Area from the remainder
of the demised premises and to permit lawful occupancy, it
being intended that Tenant shall have no other cost or expense
in connection with the subletting of the Leaseback Area;

(e) provide that at the expiration of the term of such
sublease Tenant will accept the Leaseback Area in its then
existing condition, subject to the obligations of Landlord to
make such repairs thereto as may be necessary to preserve the
Leaseback Area in good order and condition, ordinary wear and
tear excepted.

Landlord shall indemnify and save Tenant harmless from all obligations
under this Lease as to the Leaseback Area during the period of time it is so
sublet, except for fixed annual rent and additional rent, if any, due under that
within Lease, which are in excess of the rents and additional sums due under
such sublease.

Subject to the foregoing, performance by Landlord, or its designee,
under a sublease of the Leaseback Area shall be deemed performance by Tenant of
any similar obligation under this Lease and any default under any such sublease
shall not give rise to a default under a similar obligation contained in this
Lease, nor shall Tenant be liable for any default under this Lease or deemed to
be in default hereunder if such default is occasioned by or arises from any act
or omission of the Tenant under such sublease or is occasioned by or arises from
any act or omission of any occupant holding under or pursuant to any such
sublease.

C. If Tenant requests Landlord's consent to a specific assignment or
subletting, it shall submit in writing to Landlord (i) the name and address of
the proposed assignee or sublessee, (ii) a duly executed counterpart of the
proposed agreement of assignment or sublease, (iii) reasonably satisfactory
information as to the nature and character of the business of the proposed
assignee or sublessee, and as to the nature of its proposed use of the space,
and (iv) banking, financial or other credit information relating to the proposed
assignee or sublessee reasonably sufficient to enable Landlord to determine the
financial responsibility and character of the proposed assignee or sublessee.

D. If Landlord shall not have accepted Tenant's offer, as provided in
Section B, then Landlord will not unreasonably withhold or delay its consent to
Tenant's request for consent to such specific assignment or subletting, where
Tenant will not move the conduct of its business to another building in New York
City. Any consent of Landlord under this article shall be subject to the terms
of this article and conditioned upon there being no default by Tenant, beyond
any grace period, under any of the terms, covenants and conditions of this Lease
at the time that Landlord's consent to any such subletting or assignment is
requested and on the date of the commencement of the term of any proposed
sublease or the effective date of any proposed assignment.

E. Tenant understands and agrees that no assignment or subletting shall
be effective unless and until Tenant, upon receiving any necessary Landlord's
written consent (and unless it was theretofore delivered to Landlord) causes a
duly executed copy of the sublease or assignment to be delivered to Landlord
within ten (10) days after execution thereof. Any such sublease shall provide
that the sublessee shall comply with all applicable terms and conditions of this
Lease to be performed by the Tenant hereunder. Any such assignment of lease
shall contain an assumption by the assignee of all of the terms, covenants and
conditions of this Lease to be performed by the Tenant.

F. Anything herein contained to the contrary notwithstanding:

1. Tenant shall not advertise (but may list with brokers) its
space for assignment or subletting at a rental rate lower than
the greater of the then building rental rate for such space or
the rental rate then being paid by Tenant to Landlord.

<PAGE>

2. The transfer of a majority of the issued and outstanding
capital stock of, or a controlling interest in, any corporate
tenant or subtenant of this Lease or a majority of the total
interest in any partnership tenant or subtenant, however
accomplished, and whether in a single transaction or in a
series of related or unrelated transactions, shall be deemed
an assignment of this Lease or of such sublease. The transfer
of outstanding capital stock of any corporate tenant, for
purposes of the Article, shall not include sale of such stock
by persons other than those deemed "insiders" within the
meaning of the Securities Exchange Act of 1934 as amended, and
which sale is effected through "over-the-counter market" or
through any recognized stock exchange.

3. No assignment or subletting shall be made:

(a) to any person or entity which shall at that time
be a tenant, subtenant or other occupant of any part
of the building of which the demised premises form a
part, or who dealt with Landlord or Landlord's agent
(directly or through a broker) with respect to space
in the building during the six (6) months immediately
preceding Tenant's request for Landlord's consent;

(b) By the legal representatives of the Tenant or by
any person to whom Tenant's interest under this Lease
passes by operation of law, except in compliance with
the provisions of this Article;

(c) To any person or entity for the conduct of a
business which is not in keeping with the standards
and the general character of the building of which
the demised premises form a part.

G. Anything hereinabove contained to the contrary notwithstanding, the
offer back to Landlord provisions of Section B hereof shall not apply to, and
Landlord will not unreasonably withhold or delay its consent to an assignment of
this Lease, or sublease of all or part of the demised premises, to the parent of
Tenant or to a wholly-owned subsidiary of Tenant or of said parent of Tenant,
provided the net worth of the transferor or sublessor, after such transaction,
is equal to or greater than its net worth immediately prior to such transaction,
and provided also that any such transaction complies with the other provisions
of this Article.

H. Anything hereinabove contained to the contrary notwithstanding, the
offer back to Landlord provisions of Section B hereof shall not apply to, and
Landlord will not unreasonably withhold or delay its consent to an assignment of
this Lease, or sublease of all or part of the demised premises, to any
corporation (i) to which substantially all the assets of Tenant are transferred
or (ii) into which Tenant may be merged or consolidated, provided that the net
worth, experience and reputation of such transferee or of the resulting or
surviving corporation, as the case may be, is equal to or greater than the net
worth experience and reputation of Tenant and of any guarantor of this Lease
immediately prior to such transfer and provided, also, that any such transaction
complies with the other provisions of this Article.

No consent from Landlord shall be necessary under Subdivisions G or H
hereof where (i) reasonably satisfactory proof is delivered to Landlord that the
net worth and other provisions of G or H, as the case may be, and the other
provisions of this Article, have been satisfied and (ii) Tenant, in a writing
reasonably satisfactory to Landlord's attorney, agrees to remain primarily
liable jointly and severally with any transferee or assignee, for the
obligations of Tenant under this Lease.

I. If Landlord shall not have accepted any required Tenant's offer
and/or Tenant effects any assignment or subletting, then Tenant thereafter shall
pay to Landlord a sum equal to (a) any rent or other consideration paid to
Tenant by any subtenant which (after deducting the costs of Tenant, if any, in
effecting the subletting, including reasonable alteration costs, commissions and
legal fees) is in excess of the rent allocable to the subleased space which is
then being paid by Tenant to Landlord pursuant to the terms hereof, and (b) any
other profit or gain (after deducting any necessary expenses incurred) realized
by Tenant from any such

<PAGE>

subletting or assignment. All sums payable hereunder by Tenant shall be payable
to Landlord as additional rent upon receipt thereof by Tenant.

J. In no event shall Tenant be entitled to make, nor shall Tenant make,
any claim, and Tenant hereby waives any claim, for money damages (nor shall
Tenant claim any money damages by way of set-off, counterclaim or defense) based
upon any claim or assertion by Tenant that Landlord has unreasonably withheld or
unreasonably delayed its consent or approval to a proposed assignment or
subletting as provided for in this Article. Tenant's sole remedy shall be an
action or proceeding to enforce any such provision, or for specific performance,
injunction or declaratory judgment.

47. Lessee will be entitled to four (4) listings on the building lobby directory
board, without charge. Any additional directory listing (if space is available),
or any change in a prior listing, with the exception of a deletion, will be
subject to a fifteen dollar ($15.00) service charge, payable as additional rent.

<PAGE>

"EXHIBIT A"

NOTES:

1. - DEMOLISH AND REMOVE (2) BLOCK WALLS - PLASTER PATCH AS REQUIRED, PREPARE
SURFACE FOR PAINT.

2. - REMOVE (1) EXISTING DOOR AND BUCK.

3. - FURNISH AND INSTALL NEW SHEETROCK WALLS AS SHOWN ON PLAN - PLASTER
PATCH AS REQUIRED. PREPARE SURFACE FOR PAINT.

4. - FURNISH AND INSTALL (2) NEW BUILDING STANDARD OUTLETS: LOCATIONS TO BE
DETERMINED.

5. - PATCH CARPET AS REQUIRED IN AREA OF WORK.

6. - PATCH CEILING AS REQUIRED TO CONFORM WITH NEW LAYOUT.

7. - RECIRCUIT LIGHTING AS REQUIRED TO CONFORM WITH NEW LAYOUT.

8. - NEW WALLS TO BE PAINTED TO MATCH EXISTING.

9. - RESKIMMED WALL TO BE PAINTED TO MATCH EXISTING.

[FLOOR PLAN IN ORIGINAL]

<PAGE>

SEE RIDER(S) ANNEXED HERETO AND MADE A PART HEREOF

IN WITNESS WHEREOF, the said Lessor, and the Lessee have duly executed these
presents as of the day and year first above written.

EMPIRE STATE BUILDING COMPANY
BY: HELMSLEY-SPEAR, INC., Agent L.E.P., INC.

By: /s/ Stephen A. Tole
Attest: ---------------------------------- (L.S.)
Stephen A. Tole
_____________________________ Vice President Lessor

Attest: By: /s/ Lip-Boon Saw
---------------------------------- (L.S.)
_____________________________ Lessee
By: President, CEO
---------------------------------- (L.S.)
Print Name & Title Lessee
LESSOR

STATE OF NEW YORK ) ss.:
County of New York ) ss.:

On the day of , in the year 19 , before me personally came
to me known, who being by me duly sworn, did depose and
say that he resides at ; that he is the
of Helmsley-Spear, Inc., agent for EMPIRE STATE
BUILDING COMPANY as Lessor and executed the above instrument as agent for
Lessor, and that he signed his name thereto by order of the Board of Directors
of said corporation.

___________________________
Notary Public

FIRM OR PARTNERSHIP LESSEE

STATE OF NEW YORK ) ss.:
County of New York ) ss.:

On the day of , in the year 19 , before me personally came
to me known, and known to me to be one of the members of
the firm or parntership described in the foregoing instrument and the person who
on behalf of said firm or partnership executed the foregoing instrument, and he
thereupon acknowledged to me that he executed the same as and for the act and
deed of said firm or partnership.

___________________________
Notary Public

CORPORATE LESSEE

STATE OF NEW YORK ) ss.:
Count of New York ) ss.:

On the day of , in the year 19 , before me personally came
to me known, who, being by me duly sworn, did depose and
say that he resides at ; that he is the
of , the corporation
described in and which executed the above instrument as Lessee, and that he
signed his name thereto by order of the Board of Directors of said corporation.

___________________________
Notary Public

INDIVIDUAL LESSEE

STATE OF NEW YORK ) ss.:
County of New York ) ss.:

On the day of , in the year 19 , before me personally came
to me known, and known to me to be the individual
described in and who executed the above instrument as Lessee, and acknowledged
to me that he executed the same.

___________________________
Notary Public

GUARANTY

For Value Received and in consideration of the letting of the premises
within mentioned to the within named Lessee, the undersigned do hereby covenant
and agree, to and with the Lessor and the Lessor's legal representatives, that
if default shall at any time be made by the said Lessee in the payment of the
rent and the performance of the covenants contained in the within lease, on the
Lessee's part to be paid and performed that the undersigned will well and truly
pay the said rent, or any arrears thereof, that may remain due unto the said
Lessor, and also pay all damages that may arise in consequence of the
non-performance of said covenants, or either of them, without requiring notice
of any such default from the Lessor. The undersigned hereby waives all right to
trial by jury in any action or proceeding hereinafter instituted by Lessor, to
which the undersigned may be a party.

IN WITNESS WHEREOF , the undersigned has set hand and
seal this day of , 19

WITNESS:

- ---------------------------------- --------------------------------(L.S.)

STATE OF NEW YORK )ss.:
Count of New York ) ss.:

On this day of , in the year 19 , before me personally came
to me known and known to me to be the individual
described in, and who executed the foregoing Guaranty and acknowledged to me
that he executed the same.

___________________________
Notary Public

<PAGE>
================================================================================
LEASE NO. D-2-418

EMPIRE STATE
BUILDING COMPANY

LEADING EDGE PACKAGING., INC.

================================================================================
LEASE
================================================================================

Date April 3, 1996

Space Rooms 3921-3922

From July 1, 1996

To June 30, 2001

Annual Rent $42,096.00

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

HELMSLEY-SPEAR, INC.

Real Estate and Insurance
EMPIRE STATE BUILDING
NEW YORK, N.Y. 10118
Phone (Area Code 212) 736-3100

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

RULES AND REGULATIONS MADE A PART OF THIS LEASE

1. The sidewalks, entrances, passages, courts, vestibules, stairways,
corridors and halls shall not be obstructed or encumbered by any tenant or used
for any purpose other than ingress and egress to and from the demised premises
and if said premises are situated on the ground floor of the building the tenant
thereof shall further at the tenant's expense keep the sidewalks and curb
directly in front of said premises clean and free from snow and ice, dirt and
rubbish.

2. No awnings or other projections or any article or thing whatsoever shall
be attached or placed upon the outside walls of the building.

3. No sign, advertisement, notice or other lettering shall be inscribed,
painted or affixed by any tenant on any part of the outside of the building or
on any window or on any curtain, shade or on any other thing or device visible
through any window from the outside of the building, or without the prior
consent in writing of Lessor, on any part of the inside of the demised premises.
Interior signs or lettering on doors shall be inscribed, painted or affixed for
each tenant by Lessor or by an approved contractor at the expense of such tenant
and shall be of a size, color and style acceptable to Lessor.

4. The sashes, sash doors, windows, skylights and doors that reflect or
admit light into the halls or other places of the building shall not be covered
or obstructed, nor shall anything be placed upon or hung from the window sills.
The water and wash closets and other plumbing fixtures shall not be used for any
other purpose than the purposes for which they were respectively designed, and
no sweepings, rubbish, rags or other substances shall be thrown therein. The
expense of any breakage, stoppage or damage resulting from a violation of this
rule shall be borne by the tenant or tenants, who, or whose agents, employees,
visitors or licensees shall have caused the same. No bicycles, vehicles or
animals of any kind shall be brought into or kept in or about the premises, and
no cooking shall be done on the premises.

5. No tenant shall sell, or permit the sale, at retail, of newspapers,
magazines, periodicals or theatre tickets in or from its premises; nor shall the
premises be used for a public stenographer or typist; barber or beauty shop;
telephone, secretarial or messenger services; employment, travel or tourist
agency; school or classroom; commercial document reproduction; or for any
business other than specifically provided for in the tenant's lease. No tenant
shall make, or permit to be made, any unseemly or disturbing noises or interfere
with other tenants or those having business with them, or throw anything out of
the doors, windows or skylights or down the passages. Medical or dental waste is
extraordinary refuse which shall be separated by Lessee, properly identified and
removed as directed by Lessor. No tenant, or any agents, employees, licensees,
invitees or visitors of any tenant, shall, in any manner, in any part of the
demised premises, do or permit any acts whatsoever which may be in any way
noxious, injurious, dangerous or offensive, or suffer or permit any nuisance
thereon, and no tenant shall suffer or permit the demised premises, or any part
thereof, to be occupied or used for any purpose or purposes which shall be
unlawful, disreputable, immoral or extra-hazardous on account of fire or
otherwise, and no tenant shall suffer or permit any article to be brought in, or
any act to be done on said premises, which would make void any policy of fire or
other insurance of Lessor, or give any insurer of Lessor an option or privilege
to cancel its policy or render payable by Lessor any increase or extra premium
of insurance. No tenant shall engage or pay any employees on the demised
premises, except those actually working for such tenant on said premises, nor
advertise for laborers, giving an address at said premises.

6. No tenant shall mark, paint, drill into, or in any way deface the walls,
ceilings, partitions, floors, wood, stone or ironworks. No boring, cutting or
stringing of wires shall be permitted, except with the prior written consent of
Lessor and as it may direct; no tenant shall lay linoleum or other similar floor
covering, so that the same shall come in direct contact with the floor of the
demised premises, and, if linoleum or other similar floor covering is desired to
be used, an interlining of builder's deadening felt shall be first affixed to
the floor, by a paste or other material which may be easily removed with water,
the use of cement or other similar adhesive material being expressly prohibited.

7. No space in the building shall be used for manufacturing, for repairing,
for the storage or display for retail sale of merchandise, or for lodging.
Smoking or carrying lighted cigars, pipes or cigarettes in the elevators of the
building is prohibited.

8. No tenant, nor any of said tenant's agents, employees, licensees,
invitees or visitors shall at any time bring, or keep upon the demised premises
any kerosene, camphene, benzine, naphtha, gasoline or any inflammable or
combustible fluid, chemical or explosive.

9. No addition locks or bolts of any kind shall be placed upon any of the
doors or windows by any tenant, and each tenant shall, upon the termination of
his tenancy, restore to Lessor all keys of stores, offices and toilet, either
furnished to, or otherwise procured by such tenant, and, in the event of the
loss of any keys so furnished, such tenant shall pay to Lessor the cost thereof.

10. When the tenants are permitted to make repairs or to do painting,
lettering, interior moving and other similar work on the demised premises, the
workmen of Lessor, or contractors or mechanics approved by Lessor, must be
employed by the tenants therefor.

11. Only entities authorized by Lessor will be permitted to furnish ice,
drinking water, food, towel and other similar services or supplies to tenants,
and only at hours and under regulations fixed by Lessor. Lessor shall have the
right to act as or to designate, at any time, an exclusive supplier of all or
any one of said supplies and services.

12. Lessor shall have power to prescribe the weight and position of safes,
which shall, if considered necessary by Lessor, stand on two inch thick plank
strips to distribute the load. All damage done to the building by taking in or
putting out a safe or any other article of any tenant's office equipment, or due
to its being on the premises, shall be repaired at the expense of the tenant.
The moving of safes shall occur only between the hours of 7 A.M. and 8:45 A.M.
and 5:30 P.M. and 7:00 P.M. upon previous notice to the janitor, and the persons
employed to move the safes in and out of the building must be acceptable to
Lessor. No freight, furniture or bulky matter of any description will be
received into the building or carried in the elevators, except during hours
approved by Lessor.

13. No tenant shall cause unnecessary labor by reason of carelessness or
indifference to the preservation of good order and cleanliness in its premises
and in the building.

14. Lessor shall have the right to prohibit any advertising by any tenant,
which, in the opinion of Lessor, tends to impair the reputation of the building
or its desirability as a building for offices, and upon written notice from
Lessor tenants shall refrain from or discontinue such advertising.

15. The building will be closed daily at 7 P.M., after which hour Lessor
will have the right to prevent any person from entering or leaving the building
unless provided with a pass issued by Lessor and any person found in the
building after that hour without such pass will be subject to the surveillance
of the employees and agents of Lessor. On written application by any tenant,
passes will be issued enabling him to enter or depart from the building after
said hour upon presenting same to the watchman.

16. Whenever any tenant shall submit to Lessor any plan, agreement or other
document for Lessor's consent or approval, that tenant agrees to pay Lessor as
addition rent, on demand, a sum equal to the reasonable fees of any architect,
engineer or attorney employed by Lessor to review said plan, agreement or
document.

17. The use or installation in the demised premises of auxiliary beating or
cooling devices, such as portable electric heaters, heat lamps, window or
central air conditioning equipment or other devices whose principal function at
the time of operation is to produce space heating or cooling, is prohibited.

================================================================================
<PAGE>

THIS IS A LEGALLY BINDING LEASE THAT WILL BECOME FINAL WITHIN THREE BUSINESS
DAYS. DURING THIS PERIOD YOU MAY CHOOSE TO CONSULT AN ATTORNEY WHO CAN REVIEW
AND CANCEL THE LEASE. SEE SECTION ON ATTORNEY REVIEW FOR DETAILS.*

HOUSE LEASE

The Landlord and the Tenant agree to lease the House for the Term and at the
Rent stated, as follows:

The words Landlord and Tenant include all landlords and all tenants under this
Lease

Landlord China Inter-Ocean Transport, Inc.
----------------------------------------------------------------------
(Print or type)

701 East Linden Ave, Linden, NJ
- --------------------------------------------------------------------------------
(Address)

- --------------------------------------------------------------------------------
(City) (State) (Zip)

Tenant
- --------------------------------------------------------------------------------
(Print or type names of all adult Tenants who will live in the Apartment. Each
must sign.)

Leading Edge Packaging Inc.
- --------------------------------------------------------------------------------

House (including grounds on which it is located)
River Edge Terrace, Apt. 3K, Highland, NJ
- --------------------------------------------------------------------------------
(Address)

Date of Lease 8/19/96
-------------------------------------------------------------------

Term One Year
----------------------------------------------------------------------------

Beginning Sept. 1st, 1996
--------------------------------------------------------------

Ending Aug. 31st, 1997
--------------------------------------------------------------

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

Security $1,950.00 deposited at Landlord's account
-------------------- -------------------------------------

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

Broker. The Landlord and the Tenant recognize NEW CENTURY ASSOCIATES, INC.
--------------------------------
as the Broker who brought about this Lease. The one month rent shall pay the
------------------
Broker's commission.

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

Rent for the Term is $1,300/month, $15,600/year.
-----------------------------------------------------------
The Rent is payable in advance on the 1st day of each month, as follows:
See Rider
- --------------------------------------------------------------------------------

Additional agreements See Rider
-----------------------------------------------------------

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

Table of Contents

Clauses Page
- ------- ----
Access 4
Alteration 4
Assignment 2
Attorney Review 6
Binding 6
Damages 2
Full Agreement 6
Furniture 6
Landlord's Repairs 3
Lease Violation 3
Liability 5
Loss 5
Notices 5
Possession and Use 2
Quiet Enjoyment 3
Rent 1
Security Deposit 2
Subordination 5
Survival of Terms of The Lease 5
Tenant's Repairs and Maintenance 3
Termination 6
Utilities and Services 3
Waiver 5

1. Rent

The Tenant shall pay the Rent to the Landlord at the Landlord's address
written above or as the address is changed by the Landlord.

2. Possession and Use

For the entire length of the Term the Landlord shall give possession of the
House to the Tenant. The Tenant shall use the House only as private residence.
The only individuals permitted residence and occupation of the House are the
Tenant and the children of that Tenant. The Tenant may not allow the House to be
vacant for extended periods of time.

3. Assignment

The Tenant may not assign this Lease, sublet the whole or any part of the
House, or permit any other person use of the

<PAGE>

House except as a temporary guest, without the Landlord's prior written consent.

4. Security Deposit

The Tenant has paid to the Landlord the Security stated on page 1 of this
Lease. It shall be deposited in a federally insured New Jersey bank or savings
and loan association (as stated in the Lease). The account shall bear interest
at the current rate at the time of the deposit and interest on the deposit shall
belong to the Tenant, less 1% per year to cover the Landlord's administrative
expenses. Security shall be held in trust by the Landlord for the Term of the
Lease. The Landlord may deduct costs incurred by the Tenant's failure to comply
with any agreement in the Lease. If any of the costs incurred are greater than
the Security deposit, the Tenant shall pay that additional amount to the
Landlord. In addition, if the Landlord uses any of the Security during the Term,
the Tenant shall pay the Landlord that amount used so that at all times during
the Term of the Lease, the Security Deposit held by Landlord shall be in the
amount listed on page 1 of this Lease. The Tenant may use the Security for
payment of Rent only upon written consent of the Landlord.

Within thirty (30) days after the expiration of the Term, the Landlord
shall return to the Tenant the amount of the Security plus the Tenant's portion
of the interest less any deductions made under the Lease and a statement
itemizing the interest and the deductions. The statement and the balance of the
Security Deposit shall be delivered by either personal delivery, certified mail
or registered mail.

If the Landlord transfers his ownership in the House during the Term of the
Lease, the Landlord shall turn over the Security plus the Tenant's portion of
the interest to the new Landlord and shall notify the Tenant of the name and
address of the new Landlord. This notice will be sent within five (5) days after
the transfer of ownership. Upon the Landlord's transfer of ownership, the
Landlord shall no longer have any liability to the Tenant for the Security plus
the Tenant's portion of the interest. The new Landlord assumes liability for the
return of the Security plus the Tenant's portion of the interest.

5. Damages

The Tenant is liable for any and all damages which Tenant causes by
violating any agreement in this Lease. Damages shall include reasonable
attorney's fees and costs of collection.

After eviction, the Tenant shall pay rent for the remainder of the Lease or
until the House is re-rented. If the House is re-rented for an amount that is
less than the Rent due under this Lease, Tenant will pay the difference between
the rent they were paying and the new rent, through the end of the Term of the
Lease. If the House is rented for an amount in excess of the rent under this
Lease the Tenant is not entitled to the excess rent. Tenant shall also be
responsible for all reasonable expenses incurred in preparing the House for a
new tenant and the commission paid to a broker for re-rental to a new tenant.

6. Lease Violation

If the Tenant violates any agreement in this Lease or gives the Landlord
good cause for removal as provided by law, the Landlord has the right to
terminate this Lease and regain possession of the House by pursuing an eviction
procedure in Landlord/Tenant court for removal of the Tenant from the House.
This procedure is begun by the filing of a complaint in Landlord/Tenant court
and service of the summons on the Tenant. If the court subsequently orders
eviction and compliance with that warrant of removal, the Landlord may re-enter
the premises and re-claim possession of the House. Prior to eviction procedures,
the Landlord must give the Tenant the notice required by law before filing the
complaint, except in cases of non payment of Rent.

7. Utilities and Services

The Tenant shall arrange and pay for all utilities and services supplied to
the House which shall include but not be limited to heat, hot and cold water,
electricity and gas. Should there be a stoppage or reduction of utility services
beyond the Landlord's control, the Landlord is not liable for any damage
suffered by Tenant as a result of the stoppage or reduction and the Tenant
cannot refuse to pay Rent because of the stoppage or reduction of these
services.

8. Quiet Enjoyment

If the Tenant complies with this Lease the Landlord will provide Tenant
with undisturbed possession of the House.

9. Landlord's Repairs

The Landlord shall make any necessary structural repairs as well as
necessary repairs to the plumbing, heating, and electrical systems of the House.

10. Tenant's Repairs and Maintenance

The Tenant shall:

(a) Pay for all repairs, damages and replacements, including repairs,
damages and replacements to the plumbing, heating and electrical systems, which
are caused by the act, neglect or negligence of the Tenants, the Tenant's
family, its agents, employees or guests.

(b) Maintain the House and grounds in a neat, clean and sanitary
condition.

(d) Keep the furnace clean.

(e) Maintain walks and driveways in such a condition that they are free
of dirt, garbage, snow and ice.

(f) Refrain from keeping or storing flammable or dangerous materials in
the House, and refrain from doing or storing anything in the House which would
cause a cancellation or an increase in the cost of Landlord's fire or liability
insurance on the House.

(g) Promptly notify the Landlord when there are conditions which need
repair.

(h) Promptly remove all garbage from the House and make it available for
collection.

(i) Use only amounts of electricity that the wiring or feeders to the
House can safely carry.

(j) Refrain from engaging in any activity that would result in the
destruction, defacing, or damage to any part of the House.

(k) Refrain from destroying the peace and quiet of the Landlord and other
individuals in the neighborhood.

(l) Comply with all orders and rules of the Board of Health or other
authorities which govern the House.

11. Alterations

The Tenant may not make any changes or additions to the House without the
Landlord's written consent. These changes include but are not limited to the
installation of panelling or flooring installation of fixtures drilled or
attached to floors, walls or ceilings; installation of locks; painting or
wallpapering; renovation to the plumbing, cooking, air-conditioning, if any,
heating and/or electrical systems. Any changes made without the Landlord's
written consent shall be removed by Tenant at Tenant's cost, upon demand of the
Landlord. Any changes made with the Landlord's written consent shall become the
property of the Landlord when completed and paid for by the Tenant, and shall
remain on and in the House on the expiration of the Lease. If any lien or claim
is filed against the House as a result of any changes or additions to the House
made by the Tenant, the Tenant shall have them promptly removed, at Tenant's
cost.

12. Access

Upon reasonable notice to the Tenant, the Landlord shall have access to the
House to inspect, make repairs and show the House to possible buyers, lenders,
contractors and insurers.

The Landlord may show the House to rental applicants at reasonable hours on
notice to the Tenant within three (3) months

<PAGE>

before the termination of the Term.

In case of emergency the Landlord may enter the House at any time without
notice.

13. Liability

The Landlord is not liable for any damage unless caused by the Landlord's
act or neglect. Likewise the Tenant is liable for damage caused by the Tenant's
act or neglect or the act or neglect of the Tenant's family, agents, employees
or guests.

14. Loss

The Tenant shall notify the Landlord of any fire or casualty loss in the
House. The Tenant shall not pay Rent while the House is in an uninhabitable
condition. If the Tenant is able to inhabit part of the House, he shall pay to
the Landlord rent for that part of the House which is habitable on a
proportionate basis. If the House is partially damaged by fire, the Landlord
shall repair it within a reasonable period of time. Landlord shall not be
required to repair or replace anything installed by the Tenant.

If the House is totally destroyed, this Lease shall terminate as of the
date of destruction. If the House is partially destroyed and in the opinion of
Landlord the House cannot be repaired within ninety (90) days either party shall
have the right to terminate this Lease upon thirty (30) days notice to the
other. If the damage or destruction is caused by the Tenant the Tenant's family,
agents, employees or guests the Tenant shall pay for all repairs.

15. Notices

All notices given under this Lease must be in writing and each party to
whom a notice is given must accept and claim delivery of the notice. Notices
shall be sent to the Landlord at the address on page 1 of this Lease, or at such
other address as Landlord notifies Tenant in writing and to Tenant at the
address of this Lease. Notices shall be sent by either personal delivery,
certified mail return receipt requested or registered mail.

16. Subordination

All mortgages which affect the House now or in the future have priority
over this Lease. The holder of such mortgages shall have the ability to
terminate this Lease upon a foreclosure sale.

17. Survival of Terms of the Lease

If any term or agreement in the Lease is contrary to law, that portion
shall be void and the remainder of the Lease shall remain valid and in full
force and effect.

18. Waiver

The Landlord's failure to enforce an agreement in this Lease shall not
constitute a waiver of its right to enforce any part of this Lease and the
Landlord shall have the right to enforce the agreement for any future
violations.

19. Termination

At the end of the Term of this Lease the Tenant shall remove his property
and shall leave the House in a clean condition. In addition Tenant shall repair
all damage caused by moving or otherwise caused by the Tenant during the Term of
this Lease, except for normal wear and tear. If the Tenant leaves any property
in the House, the Landlord may either store or dispose of the property and
charge the Tenant for the cost of the storage disposal or keep the property as
abandoned property.

20. Furniture

If the House is leased to the Tenant in a furnished condition, the
furniture shall be maintained in the same condition in which is was supplied. A
list of the furniture supplied shall be attached to the Lease as a rider. The
Tenant's signature on the rider shall constitute his agreement that all the
items on the rider are present in the House and are in good and proper
condition.

21. Binding

This Lease is binding on the Landlord and Tenant and all parties who
lawfully succeed to their rights or take their places.

22. Full Agreement

The parties have read this Lease and it constitutes their full agreement.

23. Attorney Review*

1. The Tenant or the Landlord may choose to have an attorney study this
Lease. If an attorney is consulted, the attorney must complete his or her review
of the Lease within a three (3) day period. This contract will be legally
binding at the end of this three (3) day period unless an attorney for the Buyer
or Seller reviews and disapproves of this Lease.

2. You count the three (3) days from the date of delivery of the signed
contract to the Tenant and the Landlord. You do not count Saturdays, Sundays or
legal holidays. The Tenant and the Landlord may agree in writing to extend the
three (3) day period for attorney review.

3. If an attorney for the Tenant or the Landlord reviews and disapproves of
this Lease, the attorney must notify the Realtor(s) and the other party named in
this Lease within the three (3) day period. Otherwise, this Lease will be
legally binding as written. The attorney must send the notice of disapproval to
the Realtor(s) by certified mail, by telegram or by delivering it personally.
The telegram or certified letter will be effective upon sending; the personal
delivery will be effective upon delivery to the Realtor's office. The attorney
may also, but need not, inform the Realtor(s) of any suggested revision(s) in
the contract that would make it satisfactory.
<PAGE>

Signatures

The Landlord and the Tenant agree to the terms of this Lease by signing below.
If a party is a corporation, that party represent that the Lease is signed by
its proper corporate officers and its corporate seal is affixed.

Witnessed or
attested by: [ILLEGIBLE]
-------------------------------------SEAL
Landlord

- ---------------------------------- -------------------------------------SEAL
As to Landlord Landlord

[ILLEGIBLE]
-------------------------------------SEAL
LEADING EDGE PACKAGING, INC. Tenant

- ---------------------------------- -------------------------------------SEAL
As to Tenant Tenant
<PAGE>

RIDER TO LEASE AGREEMENT

DATED: 8/19/1996

BETWEEN China Inter-Ocean Transport Inc, LANDLORD AND
K.C. Tjeng, Director, Leading Edge Packaging Inc. TENANT

PREMISES: River Ridge Terrace, Apt. 3K, Highland Park, NJ

1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE PRINTED FORM
OF LEASE AGREEMENT TO WHICH THIS IS A RIDER.

2) Tenant agrees to pay for repairs of all damage which he or his
guests have caused.

3) Landlord expects Tenant to pay rent promptly. The due date for the rent
is on or before the first day of every calendar month. Should
exceptional circumstances prevent prompt payment, Tenant agrees to
pay a late fee of $10.00 per day after the fifth day.

4) Tenant may house no pet of any kind on the premises, even temporarily.

5) Tenant agrees not to keep any liquid-filled furniture in premises.

6) Although there may be appliances and furniture in the dwelling, these
items are provided by the Landlord gratuitously. If Tenant wishes to
use these appliances, they agree to assume all responsibility for
care and maintenance.

7) Tenant agrees that he will not change the locks on any door without
first obtaining Landlords' permission.

8) Condominium fee shall be paid by the Landlord, Tenant agrees to
maintain the existing interior of the premises.

9) Tenancy is restricted to the undersigned and members of his cooperation
or family only.

10) The Tenant shall arrange and pay for all utilities and service
supplied to the house that shall include but not limited to heat,
hot and cold water, electricity, and gas, and sewer charge (if
applied). Should there be a stoppage or reduction of utility service
beyond the Landlord's control, the Landlord is not liable for any
damage suffered by the Tenant as the result of the stoppage or
reduction and the Tenant can not refuse to pay rent because of the
stoppage or reduction of these services.

11) In case of emergence the Landlord may enter the premises at any time
without notice.
<PAGE>

12) Tenant agrees to conduct no business on the premises.

13) Tenant shall obtain a Tenant's insurance policy to cover all
liability of personal injuries and damage to or loss of his own
possessions, as well as losses resulting from their negligence.
Tenant agrees to show Landlord evidence of such policy.

14) Tenant agrees to accept the Dwelling "as is" having already inspected
it. Landlord will shampoo the carpeting and keep the premises in a
"broom clean" condition prior to beginning of lease.

15) The lease term shall be one year commencing on 1 day of Sept, 1996.
In the event Tenant shall desire to a renewal lease and he is not in
default of any provisions of this lease, he may notify his intention
to Landlord 90 days prior to the expiration of the present term.

16) Landlord hereby recognizes New Century Associates, Inc. Realtors as
Broker for service rendered in connection with this lease, a
commision of one month rent shall he due and payable to Broker by
the Landlord.

17) Tenant hereby authorizes and pays New Century Associates, Inc. an
amount of $30.00 per person for obtaining credit report if requested
by the Landlord.

18) Tenant agrees to comply with all the by-laws, rule. and regulations of
RIVER RIDGE TERRACE PROPERTY ASSOCIATION.

Signed [ILLEGIBLE]
-------------------------------
Landlord, FOR C.I.T.

Signed [ILLEGIBLE]
-------------------------------
LEADING EDGE PACKAGING, INC.

<PAGE>

11/4/96 2:05 PM

DATE OF LEASE: AUGUST, 1996

LANDLORD: CENTER REALTY, L.P.
A New Jersey Limited Partnership
NOTICE ADDRESS: 300 Raritan Center Parkway
PO Box 7815
Edison, New Jersey 08818-7815

TENANT: LEADING EDGE PACKAGING, INC.
A Delaware Corporation
NOTICE ADDRESS:

FEDERAL ID#:
SIC:

BILLING ADDRESS:

CONTACT PERSON:
PHONE #:
FAX #:

REAL ESTATE BROKER: New Century Associates, Inc., and
New Jersey Equity

PREMISES:
SIZE: Approximately 33,408 square feet of gross space
LOCATION: Building #409
176 Northfield Avenue
Raritan Center Business Park
Edison, New Jersey
Referenced on "Exhibit A"

USE OF PREMISES: Office and Warehouse for Packaging Products

TERM: Five (5) years

BEGINNING DATE: November 1, 1996
ENDING DATE: October 31, 2001

BASE NET RENT: $12,528.00 per month net

ADDITIONAL RENT: 30% of the total additional rent expenses
for Building #409 as set forth in Clause 2 hereinafter.

SECURITY DEPOSIT: $12,528.00

i
<PAGE>

WITNESS/ATTEST: LANDLORD/CENTER REALTY, L.P.

By: Federal Business Centers, Inc.
Corporate General Partner

/S/Veronica Nash /S/Peter Visceglia
- --------------------------- ---------------------------------
By: By: Peter Visceglia
President

WITNESS/ATTEST: TENANT/LEADING EDGE PACKAGING, INC.

/S/Jay Lo /S/Casey K. Tjang
- --------------------------- ---------------------------------
By: By: Casey K. Tjang
Executive Director

ii
<PAGE>

TABLE OF CONTENTS

CLAUSES PAGE

1. BASE RENT. . . . . . . . . . . . . . . . . . . . . . . 1
2. ADDITIONAL RENT. . . . . . . . . . . . . . . . . . . . 1
3. LATE RENT. . . . . . . . . . . . . . . . . . . . . . . 2
4. ELECTRICITY AND GAS. . . . . . . . . . . . . . . . . . 2
5. SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . 2
6. LIABILITY INSURANCE. . . . . . . . . . . . . . . . . . 2
7. REAL ESTATE COMMISSION . . . . . . . . . . . . . . . . 3
8. QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . . . 3
9. AVAILABILITY OF PREMISES . . . . . . . . . . . . . . . 3
10. USE OF PREMISES. . . . . . . . . . . . . . . . . . . . 3
11. ACCESS TO PREMISES . . . . . . . . . . . . . . . . . . 4
12. LANDLORD'S REPAIRS . . . . . . . . . . . . . . . . . . 5
13. TENANT'S REPAIRS . . . . . . . . . . . . . . . . . . . 5
14. ALTERATIONS. . . . . . . . . . . . . . . . . . . . . . 6
15. SIGNS. . . . . . . . . . . . . . . . . . . . . . . . . 6
16. CASUALTY . . . . . . . . . . . . . . . . . . . . . . . 6
17. ASSIGNMENT AND SUBLETTING. . . . . . . . . . . . . . . 7
18. MORTGAGES. . . . . . . . . . . . . . . . . . . . . . . 9
19. RECORDING. . . . . . . . . . . . . . . . . . . . . . . 9
20. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . 9
21. RELOCATION . . . . . . . . . . . . . . . . . . . . . . 9
22. RETURN OF PREMISES . . . . . . . . . . . . . . . . . . 9
23. COMPLIANCE WITH ENVIRONMENTAL LAWS . . . . . . . . . .10
24. RELEASE AND INDEMNIFICATION. . . . . . . . . . . . . .11
25. DEFAULT. . . . . . . . . . . . . . . . . . . . . . . .12
26. NOTICE AND CONSENT . . . . . . . . . . . . . . . . . .13
27. SEVERABILITY . . . . . . . . . . . . . . . . . . . . .13
28. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . .13
29. BINDING EFFECT OF LEASE. . . . . . . . . . . . . . . .14
30. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . .14

EXHIBITS

A. PLAN OF PREMISES AND SPECIFICATIONS. . . . . . EXHIBIT A
B. ADDITIONAL RENT EXPENSES . . . . . . . . . . . EXHIBIT B
C. GROUNDS AND LANDSCAPE MAINTENANCE PROGRAM. . . EXHIBIT C

iii
<PAGE>

1. BASE RENT

2. ADDITIONAL RENT

On a monthly basis, the Tenant shall pay its percentage of the additional rent
expenses for the following items related to the Premises:

(a) municipal real estate taxes,
(b) property casualty insurance for the replacement value of the building,
(c) fire sprinkler standby charges,
(d) central station fire sprinkler water monitoring system,
(e) fire sprinkler system tests, as required to any legislation or
insurance regulation,
(f) routine maintenance and service for the heating, ventilating, and air-
conditioning system, in accordance with the manufacturer's
recommendations,
(g) common road snow removal,
(h) grounds cleaning and landscape maintenance in accordance with the
program described in "Exhibit C",
(i) domestic water, including lawn sprinkler water, (unless the Premises
are served by a separate meter in which case the Tenant shall have the
meter listed in its own name, shall arrange for direct billing, and
shall make direct payment),
(j) sewer charges,
(k) maintenance and electricity for outside lighting,
(l) intentionally deleted,
(m) security patrol, and
(n) assessments, if any, for municipal improvements related to the
building.

Upon signing this Lease, the Tenant shall pay the additional rent due for the
first month of the Term. After the first month of the Term, the Tenant shall
pay additional rent on a monthly basis, in advance, on the first day of each
month during the remainder of the Term. Additional rent shall be payable
without prior demand and without abatement, deduction, recoupment, or setoff.

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3. LATE RENT

If the Landlord does not receive payment for base rent or additional rent by the
tenth day of the month, during which payment is due, then the Tenant shall pay
an amount, equal to two percent (2%) of the payment due, as additional rent for
the month during which payment is due, and an amount, equal to two percent (2%)
of the original payment due, as additional rent for each month thereafter during
which payment remains outstanding beyond the first day of the month.

4. ELECTRICITY AND GAS

5. SECURITY DEPOSIT

6. LIABILITY INSURANCE

The Tenant, at its own expense, shall obtain and maintain a broad form,
comprehensive or commercial general liability insurance policy, including
contractual liability coverage. The policy shall apply to claims arising upon
or in connection with the Premises or the steps, sidewalks, parking areas, or
landscaped areas which immediately adjoin and serve the Premises. The policy
shall have a combined single limit no less than five million dollars
($5,000,000.00) without any deductible. Every five (5) years after the
beginning of the Term, the Landlord may require a reasonable increase of this
limit.

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7. REAL ESTATE COMMISSION

8. QUIET ENJOYMENT

The Landlord shall give quiet enjoyment of the Premises to the Tenant so long as
the Tenant is not in default under the terms of the Lease.

9. AVAILABILITY OF PREMISES

10. USE OF PREMISES

The Tenant shall only use the Premises for the purpose set forth in this Lease.

The Tenant, at its own expense, shall:

a) comply with all federal, state, county, and municipal laws,
ordinances, rules, and regulations related to the Tenant's
specific business and the Tenant's specific use of the Premises;
b) use the Premises in a safe manner;

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c) keep nothing which is dangerous or explosive or which might
unreasonably increase the risk of fire or other casualty at the
Premises;
d) comply with all reasonable requirements of the Landlord's
property casualty insurance carrier;
e) provide fire extinguishers and "No Smoking" signs in accordance
with reasonable instructions from the Landlord's property
casualty insurance carrier;
f) use the Premises without causing an increase of the Landlord's
property casualty insurance rates or pay the amount of any
increase caused by the Tenant's use of the Premises as additional
rent;
g) use the Premises without causing a termination of the Landlord's
property casualty insurance policy;
h) use the Premises without causing any liens to affect the
Premises;
i) maintain the Premises in a neat, clean, habitable condition, free
of trash, vermin, and insects;
j) keep the walkways, driving aisles, parking areas, and landscaped
areas, which surround and serve the Premises, free of trash and
free of goods, except for a trash dumpster which may be located
at the rear of the parking areas;
k) keep all trash within tied bags within a covered dumpster or
container;
l) keep no animals at the Premises;
m) use only equipment which does not damage warehouse area floors;
n) use the Premises without disturbing the possession or quiet
enjoyment of any other tenant;
o) keep all vehicles related to its business from parking on the
street;
p) keep all vehicles related to its business from parking on the
railroad tracks, except during reasonable periods used to load or
unload goods without impeding railroad traffic;
q) park all vehicles related to its business in the parking areas
for the building in accordance with reasonable, nondiscriminatory
regulations established from time to time by the Landlord;
r) maintain, repair, or wash vehicles, except for material handling
equipment, outside of the Raritan Center Business Park; and
s) use the Premises in accordance with reasonable, nondiscriminatory
regulations established from time to time by the Landlord;
t) keep the steps, sidewalks, driving aisles, and parking areas,
which surround and serve the Premises, free of snow and ice.

11. ACCESS TO PREMISES

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Landlord or its agents may enter the Premises at any time in response to an
emergency. The Premises shall only have locks which can be opened by the
Landlord's master key.

12. LANDLORD'S REPAIRS

13. TENANT'S REPAIRS

During the first twelve (12) months of the Term, the Tenant, at its own expense,
shall promptly replace any broken glass.

After the first twelve (12) months of the Term, if any defect or damage arises
in the condition of any part of the Premises, which the Landlord is not
specifically obligated to repair or replace under the terms of this Lease, then
the Tenant, at its own expense, shall promptly repair or replace the defective
or damaged part of the Premises. After the first twelve (12) months of the
Term, the Landlord shall assign and provide the Tenant with any guarantee or
warranty, which the Landlord has obtained from a third party, related to a part
of the Premises which the Tenant is obligated to repair or replace under the
terms of this clause. The Tenant's obligations under the terms of this clause
shall include, without limitation, repairs or replacements related to the
following parts of the Premises: (a) water system, (b) plumbing system, (c)
sewer system, (d) fire sprinkler system, (e) electric system, (f) lighting
system, (g) gas system, (h) heating, ventilating, and air-conditioning system,
exclusive of all maintenance, repairs and replacements under the Landlord's
service contract set forth as item (f) on "Exhibit B" hereto, (i) windows, (j)
window frames, (k) doors, (l) door frames, (m) loading dock bumpers and seals,
(n) interior partition walls, and (o) interior office ceilings.

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materials, unless identical materials are unavailable in which case the
materials shall be of equal or better quality.

14. ALTERATIONS

The Tenant shall not make any alterations, additions, or improvements to the
Premises without the Landlord's prior written consent which shall not be
unreasonably withheld or delayed.

The Tenant shall indemnify and hold the Landlord harmless from any damage, loss,
liability, or expense related to the Tenant's failure to comply with the terms
of this clause.

15. SIGNS

16. CASUALTY

The Landlord shall obtain and maintain property casualty insurance for the
replacement value of the building, excluding any alterations, additions, or
improvements made by the Tenant.

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and the Tenant's obligation to pay rent shall be determined in accordance with
the terms of this clause.

If the Premises cannot be restored within ninety (90) days from the date of the
casualty, then the Landlord may terminate this Lease by giving notice within
thirty (30) days from the date of the casualty. If the Lease is terminated,
then the Landlord shall not restore the Premises for the Tenant, the Tenant
shall promptly vacate the Premises, and the Tenant shall only pay base rent and
additional rent due through the date of the casualty. If the Lease is not
terminated, then the Landlord, at its own expense, shall restore the Premises,
excluding any alterations, additions, or improvements made by the Tenant.

If the building is completely destroyed, then this Lease shall end as of the
date of the casualty.

17. ASSIGNMENT AND SUBLETTING

The terms of this clause shall apply every time that an assignment arises by
operation of law and every time that the Tenant desires to make any of the
following agreements:

a) an assignment of all or part of this Lease;
b) a sublease of all or part of the Premises; or
c) an agreement allowing a third party to use or occupy all or part
of the Premises.

If an assignment arises by operation of law, or if the Tenant desires to make
any of the above-described agreements, then the Tenant shall provide the
Landlord with all of the following information in writing:

a) an explanation of the circumstances of the assignment by
operation of law or the complete terms of the proposed agreement;
b) the standard industrial classification number(s) applicable to
the proposed assignee, sublessee, or third party user,
c) a description of any hazardous wastes or hazardous substances, as
defined under N.J.S.A. 13:1K-8 or N.J.S.A. 58:10-23.11b, and the
related regulations, to be used, handled, or stored at the
Premises by the proposed assignee, sublessee, or third party
user; and
d) any other reasonably requested information about the assignment
by operation of law, the proposed agreement, or the proposed
assignee, sublessee, or third party user.

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If the proposed assignee, sublessee, or third party user does not have a
standard industrial classification number subject to N.J.S.A. 13:1K-6 ET SEQ.
("ISRA"), and if no hazardous substances or hazardous wastes, as defined under
N.J.S.A. 13:1K-8 or N.J.S.A. 58:10-23.11b, and the related regulations, are to
be used, handled, or stored at the Premises by the proposed assignee, sublessee,
or third party user, then the Landlord shall either (a) consent, (b) reasonably
withhold its consent, or (c) terminate this Lease per the terms of this clause.

If, however, the proposed assignee, sublessee, or third party user has a
standard industrial classification number subject to N.J.S.A. 13:1K-6 ET SEQ.
("ISRA"), or if hazardous substances or hazardous wastes, as defined under
N.J.S.A. 13:1K-8 or N.J.S.A. 58:10-23.11b, and the related regulations, are to
be used, handled, or stored at the Premises by the proposed assignee, sublessee,
or third party user, then the Landlord, in its sole discretion, which may be
reasonable or unreasonable, shall either (a) consent, (b) withhold its consent,
or (c) terminate this Lease per the terms of this clause.

The Tenant shall not permit any assignee, sublessee, or third party user to use
or take possession of all or part of the Premises, unless the Landlord has
consented in writing. In addition, before any assignment by operation of law or
any proposed agreement takes effect, the Tenant, at its own expense, shall
either comply with N.J.S.A. 13:1K-6 ET SEQ. ("ISRA"), if applicable, or obtain
approval of a nonapplicability application.

By consenting to any assignment by operation of law or any proposed agreement,
the Landlord shall not be releasing the Tenant from any of its obligations under
the terms of this Lease.

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18. MORTGAGES

Any existing or future mortgage made by the Landlord shall have priority over
this Lease. Upon receipt of notice from the Tenant, the Landlord, however,
shall try to obtain an agreement from any future mortgagee, indicating that the
mortgagee shall not disturb the Tenant's possession of the Premises so long as
the Tenant is in strict compliance with the terms of this Lease. Upon request,
the Tenant shall promptly provide the Landlord's mortgagee with all reasonably
requested information and representations in writing.

19. RECORDING

The Tenant shall not record this Lease or any other document related to this
Lease or the Premises.

20. CONDEMNATION

If all or part of the Premises is taken, on a permanent or a temporary basis,
through a condemnation proceeding under the right of eminent domain, then the
Landlord shall receive the entire payment from the condemner for the taking of
the Premises. The Tenant, however, may make a claim against the condemner for
relocation expenses so long as such claim does not reduce the condemner's
payment to the Landlord. The Tenant waives all other claims against the
Landlord and the condemner on account of the taking of the Premises.

21. RELOCATION

22. RETURN OF PREMISES

The condition required by this Clause 22 shall include without limitation:

a) removal of all the Tenant's property, including signs, phone and
computer lines and equipment;
b) removal of all installations to and alterations of the Premises made by
the Tenant or its agents, excluding specifically any initial fit-up
installations made for the Tenant, and except as otherwise agreed by
the Tenant and the Landlord;
c) removal of all paint or marking, except for decoration, on all windows,
walls, doors and floors and restoration of surfaces affected;
d) removal of all bolts and fasteners from walls and floors and
restoration of surfaces affected;
e) repairs, as necessary, of all walls, doors and hardware, including
truck doors, loading docks and components;

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f) replacement, as necessary, of all lighting including exit signs and
emergency lights, with building standard bulbs, ballasts and fixtures'
g) repair, as necessary, of all mechanical systems, including HVAC,
plumbing and electrical systems with building standard components;
h) return of two (2) keys for each lock cylinder, keyed to the Landlord's
master key system and keys for all restroom facilities;
i) removal of all trash and debris from the interior and exterior areas
serving the Premises; and
j) leaving the Premises in a broom clean condition.

If the Term ends, or if this Lease is rightfully terminated, and if the Tenant
has not substantially complied with the terms of this clause, then the Tenant
shall continue to pay additional rent and fair market value base rent, which
base rent shall be no less than the base rent set forth in this Lease, until the
Tenant effects compliance, without any right to possession of the Premises.

23. COMPLIANCE WITH ENVIRONMENTAL LAWS

If N.J.S.A. 13:1K-6 ET SEQ. the Industrial Site Recovery Act (S-1070) ("ISRA")
is applicable to the Premises due to the Tenant's actions or due to the
expiration or rightful termination of this Lease, then the Tenant, at its own
expense, shall comply with ISRA and effect all steps necessary to obtain
approval of a negative declaration or a completed cleanup. The Tenant, however,
shall not be responsible for any cleanup costs related to any environmental
contamination caused before the beginning of the Term or caused by the Landlord
at any time. If ISRA is not applicable to the Premises due to the Tenant's
actions or due to the expiration or rightful termination of this Lease, then, by
the end of the Term, or upon any rightful termination of this Lease, the Tenant,
at its own expense, shall obtain approval of a nonapplicability application from
the New Jersey Department of Environmental Protection ("NJDEP"). The Tenant
shall begin the process of complying with the terms of this clause no later than
six (6) months prior to the expiration of the Term. The Tenant shall promptly
provide the Landlord with copies of all communications to and from the NJDEP.

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forth in this Lease, until the Tenant effects compliance, without any right to
possession of the Premises.

If any lien, imposed under the provisions of N.J.S.A. 58:10-23.11 ET SEQ. or
imposed under the provisions of 42 U.S.C. 9601 ET SEQ., affects the Premises due
to the act or neglect of the Tenant, then the Tenant shall have such lien
removed within thirty (30) days from the date on which the Tenant receives
notice of the lien.

24. RELEASE AND INDEMNIFICATION

a) as to only a release by the Tenant of the Landlord, a delay in
completing the Premises or in obtaining a certificate of occupancy for the
Premises;
b) as to only a release by the Tenant of the Landlord, a delay in the
delivery of possession of the Premises caused by an existing occupant at
the Premises;
c) the defective or damaged condition of any part of the Premises, the
building, or the steps, sidewalks, parking areas, or landscaped areas which
immediately adjoin and serve the Premises;
d) the stoppage, malfunction, or breakdown of any of the systems serving
the Premises or the building, including, without limitation, the water
system, the plumbing system, the sewer system, the drainage system, the
sprinkler system, the electric system, the lighting system, the gas system,
or the heating, ventilating, and air-conditioning system;
e) the stoppage or reduction of any utility service;
f) the active or passive, ordinary negligence of any person, including the
Landlord, its employees, and its agents, except as specifically set forth
in paragraph B of this clause;
g) the gross negligence of any person, except for the Landlord, its
employees, or its agents;
h) the intentional misconduct or criminal act of any person, except for the
Landlord and except for the Landlord's employees or agents acting upon the
Landlord's instructions;
i) an Act of God, force majeure, or weather condition, including, without
limitation, temperature, dampness, wind, rain, lightening, sleet, snow,
hail, ice, flood, tornado, hurricane, or earthquake; or
j) falling objects, water, steam, fire, smoke, explosion, vermin, strike,
riot, insurrection, public enemy, or war.

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C) The Tenant's release and the Tenant's agreement to defend, indemnify, and
hold the Landlord harmless shall apply to all damages and expenses, including,
without limitation, nominal damages, direct damages, compensatory damages,
CONSEQUENTIAL DAMAGES, special damages, lost profits, incidental damages, fines,
penalties, punitive damages, attorneys' fees, court costs, costs of suit,
arbitration costs, and interest.

D) The Tenant's obligations under the terms of this clause shall survive the
termination or expiration of this Lease.

25. DEFAULT

If the Tenant is in default, then the Landlord may send a written notice of
default to the Tenant, indicating why the Tenant is not in strict compliance
with the terms of this Lease. After receiving a notice of default, the Tenant
shall cure any monetary default or any non-monetary default within five (5)
days. If, however, a non-monetary default cannot be cured within five (5) days,
then the Tenant shall begin to cure the default within five (5) days and shall
continue to diligently cure the default thereafter. If the Tenant does not
perform within five (5) days after receiving a notice of default, then the
Landlord may cure any default on behalf of the Tenant, in which case the cost of
curing shall be payable as additional rent. In addition, the Landlord shall
have a right to suspend performance of its obligations under the terms of this
Lease, shall have a right of re-entry, shall have a right of termination, and
shall have all other remedies available under the law.

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If the Landlord re-rents the Premises for a monthly base rent amount which is
lower than the base rent amount due under the terms of this Lease, then, as of
the beginning date of the new lease, the Tenant shall pay for the entire
deficiency which will exist for the remainder of the Term. If the Landlord re-
rents the Premises for a monthly base rent amount which is higher than the base
rent amount due under the terms of this Lease, then the Tenant shall not receive
any credit for the surplus toward the rent and additional rent due through the
beginning date of the new lease.

The Landlord and the Tenant shall resolve any claim or controversy related to
this Lease or to the Premises through a binding arbitration proceeding in
Edison, New Jersey in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, except that the Landlord shall have the right
to pursue a summary dispossession action or a distraint action in the Superior
Court of New Jersey according to the laws of New Jersey. The Superior Court of
New Jersey may enter judgment upon any decision rendered through arbitration.

The Tenant shall pay all of the Landlord's reasonable costs of enforcing the
terms of this Lease as additional rent, including, without limitation,
reasonable attorneys' fees and disbursements, arbitration costs, and court
costs.

All of the Landlord's remedies set forth in this clause are cumulative and are
not exclusive of any other remedies available under the law.

26. NOTICE AND CONSENT

27. SEVERABILITY

If any part of this Lease is contrary to law or otherwise unenforceable, then
the remainder of this Lease shall remain in effect.

28. GOVERNING LAW

The terms of this Lease shall be governed, interpreted, and construed according
to the laws of New Jersey.

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<PAGE>

29. BINDING EFFECT OF LEASE

30. ENTIRE AGREEMENT

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<PAGE>

OH&S DRAFT
11/5/96

FINANCIAL ADVISORY AND CONSULTING AGREEMENT

This Agreement is made and entered into as of this __ day of ________,
1996, [the effective date of the Registration Statement] by and between LEADING
EDGE PACKAGING, INC., a Delaware corporation (the "Company"), and GILFORD
SECURITIES INCORPORATED (the "Consultant").

In consideration of and for the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:

1. PURPOSE. The Company hereby retains the Consultant during the
term specified in SECTION 2 hereof to render consulting advice to the Company as
an investment banker relating to financial and similar matters, upon the terms
and conditions as set forth herein.

2. TERM. Subject to the provisions of SECTIONS 8, 9 and 10 hereof,
this Agreement shall be effective for a period of twenty-four (24) months
commencing _______ __, 1996 [the effective date of the Registration Statement].

3. DUTIES OF CONSULTANT. During the term of this Agreement, the
Consultant will provide the Company with such regular and customary consulting
advice as is reasonably requested by the Company, provided that the Consultant
shall not be required to undertake duties not reasonably within the scope of the
consulting advisory service contemplated by this Agreement. In performance of
these duties, the Consultant shall provide the Company with the benefits of its
best judgment and efforts. It is understood and acknowledged by the parties
that the value of the Consultant's advice is not measurable in any quantitative
manner, and that the Consultant shall be obligated to render advice, upon the
request of the Company, in good faith, but shall not be obligated to spend any
specific amount of time in doing so. The Consultant's duties may include, but
will not necessarily be limited to:

A. Providing sponsorship and exposure in connection with the
dissemination of corporate information regarding the Company to the investment
community at large under a systematic planned approach.

B. Rendering advice and assistance in connection with the
preparation of annual and interim reports and press releases.

C. Arranging, on behalf of the Company and its representatives, at
appropriate times, meetings with securities analysts of major regional
investment banking firms.

D. Assisting in the Company's financial public relations, including
discussions between the Company and the financial community.

<PAGE>

E. Rendering advice with regard to internal operations, including:

(1) advice regarding formation of corporate goals and their
implementation;

(2) advice regarding the financial structure of the Company and
its divisions or subsidiaries or any programs and projects of
such entities;

(3) advice concerning the securing, when necessary and if
possible, of additional financing through banks, insurance
companies and/or other institutions; and

(4) advice regarding corporate organization and personnel.

F. Rendering advice with respect to any acquisition program of the
Company.

G. Rendering advice regarding a future public or private offering of
securities of the Company or of any subsidiary.

4. RELATIONSHIPS WITH OTHERS. The Company acknowledges that the
Consultant and its affiliates are in the business of providing financial
services and consulting advice (of all types contemplated by this Agreement) to
others. Nothing herein contained shall be construed to limit or restrict the
Consultant or its affiliates from rendering such services or advice to others.

5. CONSULTANT'S LIABILITY. In the absence of gross negligence or
willful misconduct on the part of the Consultant, or the Consultant's breach of
this Agreement, the Consultant shall not be liable to the Company, or to any
officer, director, employee, shareholder or creditor of the Company, for any act
or omission in the course of or in connection with the rendering or providing of
advice hereunder. Except in those cases where the gross negligence or willful
misconduct of the Consultant or the breach by the Consultant of this Agreement
is alleged and proven, the Company agrees to defend, indemnify and hold the
Consultant harmless from and against any and all reasonable costs, expenses and
liability (including, but not limited to, attorneys' fees paid in the defense of
the Consultant) which may in any way result from services rendered by the
Consultant pursuant to or in any connection with this Agreement.

6. EXPENSES. The Company, upon receipt of appropriate supporting
documentation, shall reimburse the Consultant for any and all reasonable
out-of-pocket expenses incurred by the Consultant in connection with services
rendered by the Consultant to the Company pursuant to this Agreement, including,
but not limited to, hotel, food and associated expenses, all charges for travel
and long-distance telephone calls and all other expenses incurred by the
Consultant in connection with services rendered by the Consultant to the Company
pursuant to this Agreement. Expenses payable under this SECTION 6 shall not
include allocable overhead expenses of the Consultant, including, but not
limited to, attorneys' fees, secretarial charges and rent.

<PAGE>

7. COMPENSATION. As compensation for the services to be rendered by
the Consultant to the Company pursuant to SECTION 3 hereof, the Company shall
pay the Consultant a financial consulting fee of two thousand dollars ($2,000)
per month for twenty-four (24) months commencing on ______ __ 1996 [the
effective date of the Registration Statement]. Forty-Eight Thousand Dollars
($48,000), representing payment in full of all amounts due the Consultant
pursuant to this Section 7, shall be paid by the Company on _______ __, 1996
[the closing of the initial public offering].

8. OTHER ADVICE. In addition to the duties set out in SECTION 3
hereof, the Consultant agrees to furnish advice to the Company in connection
with the acquisition of and/or merger with other companies, joint ventures with
any third parties, license and royalty agreements and any other financing (other
than the private or public sale of the Company's securities for cash),
including, but not limited to, the sale of the Company itself (or any
significant percentage, subsidiaries or affiliates thereof).

In the event that any such transactions are directly or indirectly
originated by the Consultant for a period of five (5) years from the date
hereof, the Company shall pay fees to the Consultant as follows:

LEGAL CONSIDERATION FEE

1. $ -0- - $3,000,000 5% of legal consideration

2. $ 3,000,001 - $4,000,000 Amount calculated pursuant to line
1 of this computation, plus 4% of
excess over $3,000,000

3. $ 4,000,001 - 5,000,000 Amount calculated pursuant to lines
1 and 2 of this computation, plus
3% of excess over $4,000,000

4. above $ 5,000,000 Amount calculated pursuant to lines
1, 2 and 3 of this computation,
plus 2% of excess over $5,000,000.

Legal consideration is defined, for purposes of this Agreement, as the
total of stock (valued at market on the day of closing, or if there is no public
market, valued as set forth herein for other property), cash and assets and
property or other benefits exchanged by the Company or received by the Company
or its shareholders (all valued at fair market value as agreed or, if not, by
any independent appraiser), irrespective of period of payment or terms.

9. SALES OR DISTRIBUTIONS OF SECURITIES. If the Consultant assists
the Company in the sale or distribution of securities to the public or in a
private transaction, the Consultant shall receive fees in the amount and form to
be arranged separately at the time of such transaction.

<PAGE>

10. FORM OF PAYMENT. All fees due to the Consultant pursuant to
SECTION 8 hereof are due and payable to the Consultant, in cash or by certified
check, at the closing or closings of a transaction specified in such SECTION 8
or as otherwise agreed between the parties hereto; PROVIDED, however, that in
the case of license and royalty agreements specified in SECTION 8 hereof, the
fees due the Consultant in receipt of such license and royalty agreements shall
be paid as and when license and/or royalty payments are received by the Company.
In the event that this Agreement shall not be renewed for a period of at least
twelve (12) months at the end of the five (5) year period referred to in SECTION
8 hereof or if terminated for any reason prior to the end of such five (5) year
period then, notwithstanding any such non-renewal or termination, the Consultant
shall be entitled to the full fee for any transaction contemplated under SECTION
8 hereof which closes within twelve (12) months after such non-renewal or
termination.

11. LIMITATION UPON THE USE OF ADVICE AND SERVICES.

(a) No person or entity, other than the Company or any of its
subsidiaries, shall be entitled to make use of or rely upon the advice of the
Consultant to be given hereunder, and the Company shall not transmit such advice
to others, or encourage or facilitate the use of or reliance upon such advice
by others, without the prior written consent of the Consultant.

(b) It is clearly understood that the Consultant, for services
rendered under this Agreement, makes no commitment whatsoever as to making a
market in the securities of the Company or to recommend or advise its clients to
purchase the securities of the Company. Research reports or corporate finance
reports that may be prepared by the Consultant will, when and if prepared, be
done solely on the merits or judgment of analysts of the Consultant or senior
corporate finance personnel of the Consultant.

(c) The use of the Consultant's name in any annual report or other
report of the Company, or any release or similar document prepared by or on
behalf of the Company, must have the prior written approval of the Consultant
unless the Company is required by law to include the Consultant's name in such
annual report, other report or release, in which event the Consultant will be
furnished with a copy of such annual report, other report or release using
Consultant's name in advance of publication by or on behalf of the Company.

(d) Should any purchases of securities be requested to be effected
through the Consultant by the Company, its officers, directors, employees or
other affiliates, or by any person on behalf of any profit sharing, pension or
similar plan of the Company, for the account of the Company or the individuals
or entities involved, such orders shall be taken by a registered account
executive of the Consultant, shall not be subject to the terms of this
Agreement, and the normal brokerage commission as charged by the Consultant will
apply in conformity with all rules and regulations of the New York Stock
Exchange, the National Association of Securities Dealers, Inc. or other
regulatory bodies. Where no regulatory body sets the fee, the normal
established fee as used by the Consultant shall apply.

<PAGE>

(e) The Consultant shall not disclose confidential information which
it learns about the Company as a result of its engagement hereunder, except as
such disclosure as may be required for Consultant to perform its duties
hereunder.

12. INDEMNIFICATION. Since the Consultant will be acting on behalf
of the Company in connection with its engagement hereunder, the Company and
Consultant have entered into a separate indemnification agreement substantially
in the form attached hereto as EXHIBIT A and dated the date hereof, providing
for the indemnification of Consultant by the Company. The Consultant has
entered into this Agreement in reliance on the indemnities set forth in such
indemnification agreement.

13. SEVERABILITY. Every provision of this Agreement is intended to
be severable. If any term or provision hereof is deemed unlawful or invalid for
any reason whatsoever, such unlawfulness or invalidity shall not affect the
validity of the remainder of this Agreement.

14. MISCELLANEOUS.

(a) Any notice or other communication between the parties hereto
shall be sent by certified or registered mail, postage prepaid, if to the
Company, addressed to it at Empire State Building, 350 Fifth Avenue, Suite 3922,
New York, New York 10118, Attention: Casey K. Tjang, with a copy to Bondy &
Schloss LLP, 6 East 43rd Street, New York, New York 10017, Attention: Joel S.
Forman, Esq., or if to the Consultant, addressed to it at 850 Third Avenue, New
York, New York, 10022, Attention: Ralph Worthington IV, Chairman, with a copy to
Orrick, Herrington & Sutcliffe, 666 Fifth Avenue, New York, New York 10103,
Attention: Lawrence B. Fisher, Esq., or to such address as may hereafter be
designated in writing by one party to the other. Such notice or other
communication shall be deemed to be given on the date of receipt.

(b) If, during the term hereof, the Consultant shall cease to do
business, the provisions hereof relating to the duties of the Consultant and
compensation by the Company as it applies to the Consultant shall thereupon
cease to be in effect, except for the Company's obligation of payment for
services rendered prior thereto. This Agreement shall survive any merger of,
acquisition of, or acquisition by the Consultant and, after any such merger or
acquisition, shall be binding upon the Company and the corporation surviving
such merger or acquisition.

(c) This Agreement embodies the entire agreement and understanding
between the Company and the Consultant and supersedes any and all negotiations,
prior discussions and preliminary and prior agreements and understandings
related to the central subject matter hereof.

(d) This Agreement has been duly authorized, executed and delivered
by and
on behalf of the Company and the Consultant.

(e) This Agreement shall be construed and interpreted in accordance
with laws of the State of New York, without giving effect to conflicts of laws.

<PAGE>

(f) This Agreement and the rights hereunder may not be assigned by
either party (except by operation of law) and shall be binding upon and inure to
the benefit of the parties and their respective successors, assigns and legal
representatives.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date hereof.

LEADING EDGE PACKAGING, INC.

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

GILFORD SECURITIES INCORPORATED

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

<PAGE>

EXHIBIT A

_________________, 1996

GILFORD SECURITIES INCORPORATED
850 Third Avenue
New York, New York 10022

Ladies and Gentlemen:

In connection with our engagement of GILFORD SECURITIES INCORPORATED
(the "Consultant") as our financial advisor and investment banker, we hereby
agree to indemnify and hold the Consultant and its affiliates, and the
directors, officers, partners, shareholders, agents and employees of the
Consultant (collectively the "Indemnified Persons"), harmless from and against
any and all claims, actions, suits, proceedings (including those of
shareholders), damages, liabilities and expenses incurred by any of them
(including, but not limited to, fees and expenses of counsel) which are (A)
related to or arise out of (i) any actions taken or omitted to be taken
(including any untrue statements made or any statements omitted to be made) by
us, or (ii) any actions taken or omitted to be taken by any Indemnified Person
in connection with our engagement of the Consultant pursuant to the Financial
Advisory and Consulting Agreement, of even date herewith, between the Consultant
and us (the "Consulting Agreement"), or (B) otherwise related to or arising out
of the Consultant's activities on our behalf pursuant to the Consultant's
engagement under the Consulting Agreement, and we shall reimburse any
Indemnified Person for all expenses (including, but not limited to, fees and
expenses of counsel) incurred by such Indemnified Person in connection with
investigating, preparing or defending any such claim, action, suit or proceeding
(collectively a "Claim"), whether or not in connection with pending or
threatened litigation in which any Indemnified Person is a party. We will not,
however, be responsible for any Claim which is finally judicially determined to
have resulted exclusively from the gross negligence or willful misconduct of any
person seeking indemnification hereunder. We further agree that no Indemnified
Person shall have any liability to us for or in connection with the Consultant's
engagement under the Consulting Agreement except for any Claim incurred by us
solely as a direct result of any Indemnified Person's gross negligence or
willful misconduct.

We further agree that we will not, without the prior written consent
of the Consultant settle, compromise or consent to the entry of any judgment in
any pending or threatened Claim in respect of which indemnification may be
sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such Claim), unless such settlement,

<PAGE>

compromise or consent includes a legally binding, unconditional, and irrevocable
release of each Indemnified Person hereunder from any and all liability arising
out of such Claim.

Promptly upon receipt by an Indemnified Person of notice of any
complaint or the assertion or institution of any Claim with respect to which
indemnification is being sought hereunder, such Indemnified Person shall notify
us in writing of such complaint or of such assertion or institution, but failure
to so notify us shall not relieve us from any obligation we may have hereunder,
unless, and only to the extent that, such failure results in the forfeiture by
us of substantial rights and defenses, and such failure to so notify us will not
in any event relieve us from any other obligation or liability we may have to
any Indemnified Person otherwise than under this Agreement. If we so elect or
are requested by such Indemnified Person, we will assume the defense of such
Claim, including the employment of counsel reasonably satisfactory to such
Indemnified Person and the payment of the fees and expenses of such counsel. In
the event, however, that such Indemnified Person reasonably determines in its
sole judgment that having common counsel would present such counsel with a
conflict of interest or such Indemnified Person concludes that there may be
legal defenses available to it or other Indemnified Persons different from or in
addition to those available to us, then such Indemnified Person may employ its
own separate counsel to represent or defend it in any such Claim and we shall
pay the reasonable fees and expenses of such counsel. Notwithstanding anything
herein to the contrary, if we fail timely or diligently to defend, contest, or
otherwise protect against any Claim, the relevant Indemnified Party shall have
the right, but not the obligation, to defend, contest, compromise, settle,
assert crossclaims or counterclaims, or otherwise protect against the same, and
shall be fully indemnified by us therefor, including, but not limited to, for
the fees and expenses of its counsel and all amounts paid as a result of such
Claim or the compromise or settlement thereof. In any Claim in which we assume
the defense, the Indemnified Person shall have the right to participate in such
defense and to retain its own counsel therefor at its own expense.

We agree that if any indemnity sought by an Indemnified Person
hereunder is held by a court to be unavailable for any reason, then (whether or
not the Consultant is the Indemnified Person) we and the Consultant shall
contribute to the Claim for which such indemnity is held unavailable in such
proportion as is appropriate to reflect the relative benefits to us, on the one
hand, and the Consultant, on the other, in connection with the Consultant's
engagement by us under the Consulting Agreement, subject to the limitation that
in no event shall the amount of the Consultant's contribution to such Claim
exceed the amount of fees actually received by the Consultant from us pursuant
to the Consultant's engagement under the Consulting Agreement. We hereby agree
that the relative benefits to us, on the one hand, and the Consultant, on the
other hand, with respect to the Consultant's engagement under the Consulting
Agreement shall be deemed to be in the same proportion as (a) the total value
paid or proposed to be paid or received by us or our stockholders as the case
may be, pursuant to the transaction (whether or not consummated) for which the
Consultant is engaged to render services bears to (b) the fee paid or proposed
to be paid to the Consultant in connection with such engagement.

<PAGE>

Our indemnity, reimbursement and contribution obligations under this
Agreement shall be in addition to, and shall in no way limit or otherwise
adversely affect any rights that an Indemnified Part may have at law or at
equity.

Should the Consultant, or any of its directors, officers, partners,
shareholders, agents or employees, be required or be requested by us to provide
documentary evidence or testimony in connection with any proceeding arising from
or relating to the Consultant's engagement under the Consulting Agreement, we
agree to pay all reasonable expenses (including but not limited to fees and
expenses of counsel) in complying therewith and one thousand dollars ($1,000)
per day for any sworn testimony or preparation therefor, payable in advance.

We hereby consent to personal jurisdiction and service of process and
venue in any court in which any claim for indemnity is brought by any
Indemnified Person.

It is understood that, in connection with the Consultant's engagement
under the Consulting Agreement, the Consultant may be engaged to act in one or
more additional capacities and that the terms of the original engagement or any
such additional engagement may be embodied in one or more separate written
agreements. The provisions of this Agreement shall apply to the original
engagement and any such additional engagement and shall remain in full force and
effect following the completion or termination of the Consultant's
engagement(s).

Very truly yours,

LEADING EDGE PACKAGING, INC.

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

CONFIRMED AND AGREED TO:

GILFORD SECURITIES INCORPORATED

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

<PAGE>
EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to the Registration Statement No.
333-12911 of Leading Edge Packaging, Inc. on Form S-1 of our reports on Rich
City International Packaging Limited's North American Distribution Business and
Leading Edge Packaging, Inc., both dated April 30, 1996, appearing in the
Prospectus, which are a part of this Registration Statement. We also consent to
the reference to us under the heading "Experts" in such Prospectus.

/s/ DELOITTE TOUCHE TOHMATSU
Deloitte Touche Tohmatsu
Hong Kong
November 12, 1996